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Management, nature and scope

Introduction Not unexpectedly, the variety of approaches to the theoretical background of management has produced a number of versions of what is meant by such key words as management and organisation. This paper looks at the most typical interpretations of such words and offers some explanation The meaning of management There is no generally accepted definition of management as an activity, although the classic definition is still held to be that of Henri Fayol To manage is to forecast and plan, to organise, to command, to coordinate and to control. H Fayol !"#"$% Management is a social process... the process consists of ...planning, control, coordination and motivation. & F ' (rench !"#)*% +omeone defined management as the process of ac,uiring and combining human, financial, and physical resources to attain the organisations primary goal of producing a product or service desired by some segment of society This process is essentially of the functioning of all organisations - profit or non profit. essential resources must be ac,uired and combined in some way to produce an output Deciding what should be done and getting others to do it. /osemary +tewart Sensible working arrangements 2orking with and through other people 0int3berg has attempted to move away from this generalised approach towards a more detailed and behaviour oriented analysis of what managers actually do 0int3berg highlights key roles that seem to appear regularly in a managers 4ob He describes these roles as organised sets of behaviours identified with a position and gathers them into three main grouping5 Interpersonal Figure Head 'eader 'iaison Informational roles 0onitor 6isseminator +pokesman Decisional roles &ntrepreneur 6isturbance Handler /esource 7llocator
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0ary 1arker Follet


Differences between management and leadership LEADE !"I# A$D MA$A%EME$T 7t times management and leadership are seen as synonymous There is, however, a difference between the two and it does not follow that very leader is a manager 0anagement is more usually viewed as getting things done through other people in order to achieve stated organi3ational ob4ectives The manager may react to specific situations and be more concerned with solving relatively short8term problems 0anagement is regarded as relating to people working within structured organisations and with prescribed roles To people outside of the organi3ation the manager might not be seen in a leadership role 9n the other hand, leaderships emphasis is on interpersonal behaviour in a broader context :t is often associated with the willing and enthusiastic behaviour of followers 'eadership does not necessarily take place within the hierarchy structure of the organi3ation 0any people operate as leaders without their role ever being clearly established or defined 7 leader often has sufficient influences to bring about long8term changes in peoples attitudes and to make change more acceptable 6istinction between 'eadership and 0anagement5 6istinction between 'eadership and 0anagement 'eaders take a personal and active interest in achieving goals whereas managers tend to play a relatively passive role in accomplishing the goals 0anagers need power to be entrusted to them by the organi3ation to deal with people 'eaders have power within themselves and the re,uired drive to lead people and motivate them to work enthusiastically towards achieving goals 0anagers limit their interactions with people to the minimum extent re,uired to carry out their managerial responsibilities 'eaders interact with people fre,uently and in a more natural way :n the process they inspire people, motivate them and lead them 'eadership and management must go hand in hand They are not the same thing (ut they are necessarily, and complimentary 7ny effort to separate the two is likely to cause more problems than it solves :n his "#;# book <9n (ecoming a 'eader,= 2arren (ennis composed a list of the differences5 Leader innovates 7n original Focuses on people :nspires trust Has long8range perspectives 7sk what and why Manager administers copy >imitates Focuses on systems and structure /elies on control Has short8range perspective 7sk how and when
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&ye is on the hori3on ?hallenges the status ,uo :s his>her own person 6oes the right thing

&ye always is on the bottom line 7ccepts status ,uo ?lassic good soldier 6oes things right

&rganisation Organisations are s stems of inter!dependent human beings. "ugh #$%%&' 7 group !of two or more people who are% working together towards a common goal or ob4ective over a certain period of time 0anagement is not an activity that exists in its own right These activities have generally been grouped in terms of planning, organising, motivating and controlling activities

Arts, !cience ' #rofession, which combing ma(es MA$A%EME$T

Firstly we will take 7rts and where it is in 0anagement a% 7rt re,uires skills whereas in management re,uires conceptual, technical, human relations and decision making skills b% 7rt re,uires knowledge whereas in management re,uires learning and ac,uiring knowledge such as 0arketing, Finance, Technical and production etc c% 7rt is creative whereas in management as a discipline is the function of creativity :n this creativity is facing the challenges of competition ?onsider if we want to introduce our new product in market, then we must make our self8ready for competition, i e ?ompetition in sale, production, advertising and price +o that to survive in the market d% 7rt is personali3ed whereas in management different people do a particular task in a different way &very individual has its own management style 2e can categories them as 6emocratic, 7utocratic, 1aternalistic, (eurocratic etc e% 7rt is a performance whereas in management performance is seen by profit, growth and development management as good or bad
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These are the indicators, which decide the

$ow we come to science where it is in management a% +cience is a body of organi3ed knowledge whereas in management as +ocial +cience consists of history of management thought b% +cience is developed over a period of time whereas management is also developed over a period of time 7s consider that in many companies, :n "#)@s the productivity is )@A but in #@s it exceeds to ;@A and in B@@@ it exceeds to #)A :t is 4ust due to management :n which changes come in various disciplines like human relations, services, finance, technical etc during the whole interval c% +cience establishes cause and effect relationship whereas in management if we put more worker on work, than there will be more productivity Here the cause is workers and the effect is in the productivity d% +cience has predictive power. in management also we can do predictions 'ike if the stock exchange rises then the rate of particular share may or may not rise e% /ules>/egulations are verified from time to time whereas in management new rules are established and old rules are changed, so that to have full use of resources in a management At last we come to # &)E!!I&$, and how it is related to management. (efore relating management and profession, we must know what is profession 7s in profession we re,uire definite period of learning, it needs certificate of practice, centrali3ed rule making authority and social commitment>obligation>accountability

These are in case of academic one that sometimes wont applicable in case of management like anyone can become manager without any specific ,ualification or period of learning :t doesnt need any certificate of practice These are not in forcible under any law :f we come to practical approach of
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profession, which is very close to practice of management (y these we can know the roles of profession manager as5 a% Cnowledge base decision instead of any intuition or predictions b% (ased on experience and expertise in re,uire field c% Help in meeting compitiveness challenges d% 7pply theories of management in solving organi3ational problems e% +eparation of ownership from management
At last by discussing the Arts, Science and Profession role in management. It is combination of all the three and it should be a ay of life.

The process of Management 7s 6rucker !"#))% first put it, over forty years ago management is concerned with the systematic organisation of economic resources and its task is to make these resources productive 0anagement is a description of a variety of acti*ities !functions% carried out by those members of organisations whose role is that of a manager, i e someone who either has formal responsibility for the work of one or more persons in the organisation, or who is accountable for specialist advisory duties in support of key management activities These activities have generally been grouped in terms of planning, organising, motivating and controlling activities. The grouping of management acti*ities !functions% can be summarised as follows5 #lanning 6eciding the ob4ectives or goals of the organisation and preparing how to meet them

1lanning is an activity which involves decisions about ends !organisational aims>ob4ectives%, means !plans>strategies%, conduct !policies% and results !outcomes% :t is an activity which takes place against a background of5 " B The organisations external environment, and The organisations internal strengths and weaknesses

#lanning can be long+term, as in strategic and corporate planning , or short+term, as in the setting of annual departmental budgets , work plans etc 'ong8term usually implies a time8hori3on of about five years, although this may be ten or twenty years in certain industry !e g oil extraction, pharmaceuticals etc% +hort8term can be any period from immediate future !crisis management% up to about one year
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&rganising determining activities and allocating responsibilities for the achievement of plans. coordinating activities and responsibilities into appropriate structures 1lans have to be put into operation This involves detailed organisation and coordination of tasks and the human and material resources needed to carry them out 7 key issue here is that of formal communication Moti*ating meeting the social and psychological needs of employees in the fulfilment of organisational goals The motivating activities of managers, however, are essentially practical in their intent for, in setting plans and executing them, managers have to gain the commitment of their employees This is primarily a ,uestion of leadership, or style of management ,ontrolling mechanisms monitoring and evaluating activities, and providing corrective

:t has to be recognised that these traditional groupings - the 190? approach8 are the ones chosen to represent the framework for this paper :t is appreciated that they do not tell the whole story about what constitutes management, but they are a convenient way of describing most of the key aspects of the work of managers in practice ,ontrolling ?ontrolling activities are concerned essentially with measuring progress and corrective deviations The basic functions of control are5 to establish standard of performance to measure actual performance against standards to take corrective measures where appropriate ?ontrol activities acts as the feedback mechanism for all managerial activities Their use is, therefore, crucial to the success of management

Frederick Winslow Taylor - Theory of Scientific Management

F.W.Tylor is considered as the "Father of scientific management" and his contributions mark a new era in Modern Management Thought. The concepts propounded by him have an impact on management service practice as well as on management thought up to the present day.. Taylor formali ed the principles of scientific management!and the fact-finding approach put forward and largely adopted was a replacement for what had been the old rule of thumb. "e also developed a theory of organi ations ! which has been largely accepted by subse#uent Management $hilosophers

%b&ectives of Scientific Management

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The four ob&ectives of management under scientific management were as follows' The development of a science for each element of a man(s work to replace the old rule-ofthumb methods. The scientific selection! training and development of workers instead of allowing them to choose their own tasks and train themselves as best they could. The development of a spirit of hearty cooperation between workers and management to ensure that work would be carried out in accordance with scientifically devised procedures The division of work between workers and the management in almost e#ual shares! each group taking over the work for which it is best fitted instead of the former condition in which responsibility largely rested with the workers. Self-evident in this philosophy are organi ations arranged in a hierarchy! systems of abstract rules and impersonal relationships between staff.

F.W. Taylor(s )ontribution to %rgani ational Theory

This re#uired an organi ation theory similar for all practical purposes to that advocated by those organi ational theorists who followed. These theorists developed principles of management which included much of Taylor(s philosophy "is framework for organi ation was' clear delineation of authority responsibility separation of planning from operations incentive schemes for workers management by e*ception task speciali ation

)riticism %f Theories +*pounded by Taylor

Taylor(s $hilosophy though gained immense popularity! was also widely criticised on three grounds. ,. Scientific management ignored human side of organi ation.. Taylor viewed on average worker as a machine that could be motivated to work hard through economic incentives. Workers and Trade -nions opposed his views strongly on the plea that it was e*ploitative. .. Taylor(s theory is narrow in scope having direct application to factory &obs at the Shop Floor /evel. Taylor and his disciples were called "+fficiency +*perts" because they concentrated attention on improving efficiency of workers and machines. Scientific management is therefore restricted in scope as a theory of 0ndustrial +ngineering or 0ndustrial Management! rather than a general theory of management. 1. Taylor advocated e*cessive use of specialisation and separation of planning from doing. +*cessive division of labour had disastrous conse#uences in the form repetitive and monotonous &obs and discontent among workers. 2evertheless! Taylor(s theory and principles have e*ercised considerable influence on modern management thought. "is emphasis on use of scientific methods in solving work-related problems is widely accepted by modern e*perts on management. Taylor(s impact has been so great because he developed a concept of work-measurement! production control and other functions! that completely

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changed the nature of industry. 3efore scientific management! such departments as work-study! personnel! maintenance and #uality control did not e*ist. "Scientific Management focuses on &ob-productivity at the shop floor! in particular upon techni#ues that could be used on manual workers. Scientific management principles continue to be widely applied today. 0n a typical manufacturing orgni ation one will see scientific managment ideas and techni#ues being applied to the shop floor! and bureaucratic principles of organi ation being used in the office areas".4

Fayols principles of management -. Di*ision of Labour /educes the span of attention or effort for any one personal for any one person or group 6evelops practice and familiarity .. Authorit/ The right to give !lawful% orders reference to responsibility 0. Discipline 9utward marks of respect in accordance with formal or informal agreements between firm and its employees 1. 2nit/ of command 9ne man one superior 3. 2nit/ of direction 9ne head and one plan for a group of activities with the same ob4ective 4. !ubordinate of indi*idual interest to the general interest The interest of individual or one group should not prevail over the general good 5. emuneration 1ay should be fair to both the employee and firm 6. ,entralisation :s always present to a greater or lesser extent, depending on the si3e of company and ,uality of its managers 7. !calar chain The line of authority from top to bottom of the organisation
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7uthority should not be considered without

-8. &rder 7 place for everything and everything in its place. the right man in the right place --. E9uit/ 7 combination of kindliness and 4ustice towards employees -.. !tabilit/ of tenure of personnel &mployees need to be given time to settle into their 4obs, even though this may take a length period in case of managers -0. Initiati*e 2ithin the limits of authority and discipline, all levels of staff should be encouraged to show initiatives -1. Esprit de corps Harmony is the great strength to the organisation. teamwork should be encouraged

:n your opinion, are the "D principles of management advocated by Henri Fayol still relevant in the todays B"st century of modern managementE 6iscuss

ele*ance of )a/ols #rinciples of Management Fayols Feneral 1rinciples have been adopted by the later followers of the classical school such as Grwick and (rech 1resent theorist, however, would not find much of substance in these precepts From our present day view point, the following general comments may be made5 " The reference to division of work, scalar chain, unity of command and centralisation, for example are descriptive of the (ind of formal organisation that has come to be (nown as bureaucrac/ Fayol, in true classical fashion, was emphasising the structural nature of organisation :ssues such as individual versus general interests, remuneration and e,uity were considered very much from the point of view of a paternalistic management Toda/s 9uestions concerns fairness, or the bona fide conflict of interest between groups, ha*e to be wor(ed out between management and organised labour, often with third part/ in*ol*ement b/ the !tate 7lthough emphasising the hierarchical aspects of the business enterprise, Fayol was well aware of the need to avoid an excessive mechanistic approach towards
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employees Thus reference to initiative and esprit de corps indicated his sensitivity to peoples needs as individuals and as groups +uch issues are of ma4or interest to theorists of today, the key difference being that whereas Fayol saw these issues in the context of a rational organisation structure, the modern organisation de*elopment specialist sees them in terms of adapting structures and changing peoples beha*iour to achie*e the best fit between organisation and its customers D Fayol was the first to achieve a genuine theory of management based on a number of principles which could be passed on to others Man/ of these principles ha*e been absorbed into modern organisations. Their effect on organisational effecti*eness has been sub:ect to increasing criticism o*er the last twent/ /ears, howe*er, mainl/ because such principles were not designed to cope with modern conditions of rapid change, flatter structures, and increased emplo/ee participation in the decision process of the organisation


)o-ordination is the process of synchroni ing activities of various persons in the organi ation in order to achieve goals. )o-ordination undertaken at every level of management. 6t the top level the chief e*ecutive will co-ordinate the activities of functional or departmental managers. 0f there is lack of co-ordination between production and sales departments then either production will suffer or sales will suffer. Similarly 0 personnel department will like to know the manpower needs of various departments. 2o department will be able to function with a proper co-ordination with finance department. 6t middle7lower levels of management the deputy managers 7 foreman 7 supervisors will co-ordinate the work of persons working under them. The purpose of co-ordination is to create team work and harmony in the enterprise. 0t is the blending of human efforts in order to achieve better organi ation goals.

)o-ordination crease a mental awareness among all employees and their efforts are directed in unison. 6n organi ation is like a human body. 6s various parts o the body combine together to do a work! similarly the different segments of the organi ation should work in unison so that task is completed in a better way.


6 number of authors have defined co-ordination differently. The views of some of them are given here in order to know its e*act nature. 10 Page 10 of 90

HENRY FAYOL: "To co-ordinate is to harmoni e all the activities of a person in order to facilitate its working and its success." )o-ordination is necessary to enable a person to improve his functioning. Without co-ordination! working cannot be harmoni ed.

ORDWAY TEAD: ")o-ordination is the effort to assure a smooth interplay of the functions and forces of all the different component parts of an organi ation to the end that its purpose win be reali e with minimum of friction and ma*imum of collaboration effectiveness." The purpose of the co-ordination is to synchroni e the functions of various departments for achieving organi ational goals with minimum efforts.


)o-ordination cannot be achieved through orders. 0t is a process which can be achieved through managerial functions. 0t is a by-product of good management. When all the functions are carried out properly then co-ordination will come by itself. )o-ordination may be achieved through following processes'

,. Through Plann ng: The planning is the elementary stage of achieving co-ordination. When various functions are properly planned and various policies are integrated then co-ordination will be easily achieved. 0f the production manager is to plan for his development then it will be better to consult purchase manager! personnel manager! finance manager! sales manager also. When production is planned with the consent of other concerned managers then co-ordination takes place at planning level. 0f other managers feel some difficulties then they will e*plain it and mutually accepted decisions will resolve the differences. )o-ordination can certainly be achieved at planning stage. 6ccording to Mary. Follett! planning stage is the ideal time to bring about co-ordination and they must see to it that various plans are properly interrelated. .. Through Organ !a" on: )o-ordination is an essential part of organi ation. Money considers co-ordination as the very essence of organi ation. When a manager groups and assigns various activities to subordinates! the thought of co-ordination will be upper most in this mind. The related activities are placed together to avoid delays 8 confusions. 1. Through D r#$" ng: When a manager directs his subordinates he will be coordinating their work. "e will give them directions! guidelines and instructions for doing a &ob assigned to them. "e will direct in such a way that the achievement of overall organi ational ob&ectives is ensures 9. Through Con"roll ng: The manager is re#uired to control the work of everyone in the organi ation so that all efforts are directed towards main goals. There may be instances when performance of subordinates is not up to the mark or it is not in the 11 Page 11 of 90

direction in which it should have been. The manager will take corrective measures as and when re#uired. :. Through S"a%% ng: The staffing function can also help in proper coordination. While staffing! the manager should keep in mind the nature of &obs and the type of persons re#uired for managing! them. "e should- ensure the right number of e*ecutives in various positions for proper performance of their functions. The e*ecutives are of such a .#uality or are given such a training that they are able to co-operate and co-ordinate their efforts. ;. Through &ro&#r $o''un $a" on: +ffective communication is of utmost importance for achieving better co-ordination. There should be a regular flow of information among various persons so that they are given re#uired information for proper co-ordination. The personal contact is the most effective type of communication. %ther methods like reports! procedures! bulletins! etc.! can also be used properly. FEAT(RES OR CHARACTERISTICS OF CO-ORDINATION

6n analysis of the above definitions indicates that co-ordination has certain characteristics. They are!

,. .. 0t provides unity o faction in pursuit of a common purpose. -nity of action is considered to be the heart of the co-ordination process 1. 0t aims at achieving the common purpose of the enterprise through the orderly synchroni ation of the efforts of the subordinates. 9. 0t is a process whereby an e*ecutive develops an orderly pattern of group efforts for accomplishing the common ob&ectives of the enterprise. :. The task of co-ordination is a managerial responsibility< co-ordination can be made effective only if an e*ecutive makes conscious efforts ;. 0t is a continuous process TECHNI)(ES o% CO-ORDINATION / METHODS

Some of the important techni#ues of co-ordination are as follows'

,. Co-or* na" on o% $o''an*: 0n this techni#ue! the superior or manager by directing! commanding and controlling the efforts! of his subordinates achieves co- ordination. 0n the words of /.6. 6llan! =6 manager! in managing! must co-ordinate the work for which he is accountably balancing timing and integrating it."

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.. Co-or* na" on "hrough grou& '##" ng+: 0n a group meeting! the officials are brought together for discussing common problems of organi ation. Such meetings help in achieving co-ordination 1. Co-or* na" on "hrough l#a*#r+h &, *#l#ga" on #"$.: Some of the management functions such as leadership! authority delegation and communication contribute towards co-ordination. 9. H #rar$h-: "ierarchy or chain of command is the simplest design for achieving coordination. 02 hierarchy! interdependent units are placed under one boss and by this co-ordination can be achieved. :. Rul#+, &ro$#*ur#+ an* &ol $ #+: Standard policies! procedures and rules are laid down by the management and these help in achieving co-ordination in the repetitive activities of sub-units ;. Co-or* na" on "hrough l a +on '#n: /iaison men help in securing particularly e*ternal co-ordination. Many large organi ations depend on 8 liaison .officer to maintain relations with government and other outside agencies and organi ations. >. In$#n" .#+: $roviding incentives ?e.g.! profit-sharing@ to the interdependent units also help in securing co-ordination among those units. 0ncentive plans promote better team spirit and co-operation among the employees! and this ensures better co-ordination. $. /olun"ar- $o-or* na" on: 3rown and Simon have advocated voluntary co- ordination. They have stated that an ideal co-ordination is voluntary co-ordination and this can be secured by encouraging informal contacts among people and by providing for interpersonal and interdepartmental contacts. /.A-/0)B and -CW0)B have stated that the leader should inculcate in the minds of those who are associated with him in any activity the desire and will to work together for a purpose. D. Plann ng: $lanning is a way of anticipating interdependencies and thus forestalling or mitigating the coordinating difficulties. To the e*tent that contingencies not anticipated in the plan arise! co-ordination re#uires communication to give notice of deviations from planned or predicted conditions! or to give instructions for changes in activity to rectify these deviations. ,E. Co'' ""##+: )onstituting committees for decision-making is another common device used by business concerns. This device greatly eased the rigidity of the hierarchical structure! promotes effective communication and understanding of ideas! encourages the acceptance of and commitment to policies and makes their implementation more effective. 11. Cl 'a"# o% 'u"ual "ru+" an* $olla0ora" on: Fostering of a climate of mutual trust and collaboration is also a coordinating mechanism. M6CF $6CB+C F%//+T suggests that co-ordination cannot be achieved merely by giving orders or commands because they invariably lead to opposition loss of pride and irresponsibility ."er solution is to "depersonali e" the giving of orders! to unite all concerned in a study of the situation and obey that! "%ne person should not give orders to another person but both should agree to take their orders from the situation." 12. In*o$"r na" on: 0ndoctrinating organi ational members with the goals and mission of the organi ation! a device used commonly in religious and military organi ations! is still another coordinating device. PRINCIPLES OF CO-ORDINATION OR RE)(ISITIES FOR EFFECTI/E COORDINATION 13 Page 13 of 90

0n order to make co-ordination effective! it should be based on certain fundamental principles. They are' 1. Earl- +"ar": There should be co-ordination even in the early stages of planning and policy-making. For e*ample! there should be mutual consultation among the concerned officials while preparing the plan itself. 2. D r#$" $on"a$": )o-ordination is easier by direct personal contract among the people concerned. %ne special advantage of direct personal contact is that the concerned persons can avoid misunderstanding or misinterpretation. 1. Con" nu "-: )o-ordination is the basis of an organi ation structure and so long as the enterprise continues to function! co-ordination is a must )o-ordination must start from the stage of planning and should go on all the time as it is a continuous process. 4. D-na' +': There may be changes in the e*ternal environment which influences the activities of the business. Further! internal actions and decision may be changed or altered depending upon circumstances. 0n %ie of this, co-ordination to modified to suit the changes in the e*ternal environment and internal actions and decisions. 0n other words! co-ordination should not be rigid. :. S '&l % #* organ !a" on: 6nother principle which facilitated effective co- ordination is the simplified organi ation structure. The management may consider a rearrangement or reorgani ation of departments in order to have better co-ordination among the departmental heads. ;. Cl#ar-$u" o01#$" .#+: 6nother re#uisite for securing effective co ordination in an enterprise is the clear-cut ob&ective. The manager of different departments should be clearly e*plained the ob&ectives of the enterprise and also they should be prevailed upon to work for the achievement of the common ob&ective of the enterprise. 6 clearcut ob&ective and its effective communication to the heads of different departments is bound to produce uniformity of action. >. G#ar *#% n " on o% au"hor "- an* r#+&on+ 0 l "-: 6 clear definition of authority and responsibility for each individual and department also facilitates effective coordination in an enterprise. Aear-cut authority helps in reducing conflicts among the different officers and also helps in making them carry out their &ob with unit of purpose. Further! a clearly defined authority helps the manager in case they violate the limits and also for any other' irregularities. G. E%%#$" .# $o''un $a" on: For proper co-ordination! there is also a need for effective communication. Through communication! individual and departmental differences can be resolved. Further! effective communication helps in discussing changes! ad&ustments of programmers! programmers future! etc. D. E%%#$" .# L#a*#r+h &: +ffective leadership also helps in proper communication. 3y effective leadership! co-ordination of the activities of the people at all stages is ensure. Further! it creates confidence in the subordinates and enhances their morale. ,E. E%%#$" .# +u&#r. + on: Though it is the duty of the top e*ecutive to see that the subordinates perform their work as planned! he may entrust this task to the supervisors. With- the help of supervisors! any deviation from the planned course of action can be easily located and immediate steps may be taken to ensure that the 14 Page 14 of 90

activities of subordinates conform to the planned activities. Thus! supervisors can also play an important role in achieving effective co-ordination. PLANNING

N##* %or &lann ng: The need for planning in business arises because of a number of factors or reasons. Those factors or reasons are'

,. .. 1. 9. :.

Arowing comple*ities of modem business. Capid technological changes Arowing competition. Capid economic! social and political changes. Fluctuations in demand for products.

These forces of challenges can be met by management only through proper planning. 3usiness activities without proper planning are likely to be ineffective! and may fail to achieve success. So! planning is a must for every business organi ation. 0n fact! the ma*im in management is "First plan your work! and then work your plan".

D#% n " on+

6ccording to Ho*g# and 2ohn+on "$lanning is the determination in advance of a line of action in order to achieve better performance".

0n other words of 3oon"! and O4Donn#ll! "$lanning is deciding in advance what to do! how to do! when to do it and who is to do it. $lanning bridges the gap from where we are! to where we want to go. 0t makes it possible for things to occur which would no otherwise happenH.

6ccording to R.N. Far'#r and 5.M. R $h'an! "$lanning is essentially decision-making since it involves choosing from among alternatives".

Na"ur# an* Chara$"#r +" $+ o% Plann ng

,. Pr 'a$- o% &lann ng or &r 'ar- %un$" on: .$lanning is a primary function. That is! it is a primary re#uisite to the managerial functions of organi ing! staffing directing! 1! Page 1! of 90

motivating! coordinating! communicating and controlling. 6 manager must do planning before he can undertake the other managerial functions. .. Goal-or #n"#* or %o$u+ on o01#$" .#+: $lanning is goal-oriented. That is! planning is linked with certain goals or ob&ectives. 6 plan starts with the setting of ob&ectives< and then! develops policies! procedures! strategies! etc. to achieve the ob&ectives. 1. P#r.a+ .#n#++ o% &lann ng: $lanning pervades all levels of management. That is planning is done at all levels of .management. 0n other words! every manager! whether he is at the top! in the middle or at the bottom or organi ational structure! plans. 9. E++#n" all- a *#$ + on-'a6 ng &ro$#++: $lanning is essentially a decision-making process! since it involves careful analysis of various alternative courses of action and choosing the best. :. In"#gra"#* &ro$#++: $lanning is an integrated process. That is it facilitates and integrates all other functions of management. ;. S#l#$" .# Pro$#++: $lanning is a selective process. That is! it involves the selection of the best course of action after a careful analysis of the various alternative courses of action. >. Fl#7 0l#: $lanning must be fle*ible. That is! generally! the process of pi1nning must be capable of being adapted to the changes in the environment. 0n fact! successful planning should be fle*ible. G. For'a" on o% &r#' +#+: $lanning re#uires the formation of premises ?i.e.! assumptions@. 0t is only on the basis of premises or assumptions regarding the future ?i.e.! the future political! social and economic environments@ that the plans will be ultimately formulated. D. D r#$"#* "o8ar*+ #%% $ #n$-: The main purpose of planning is to increase the efficiency of the enterprise. That means! planning is directed to wards efficiency. ,E. Con" nuou+ Pro$#++: $lanning is a continuous process. That is! the management has to keep itself engaged in planning at the times because If the uncertainties of the future. ,,. Plann ng an* $on"rol ar# n+#&ara0l#: $lanning! which is looking ahead! and control! which 0s looking back! are inseparable. They are the Siamese twins of management. -nplanned action cannot be controlled! for control involves keeping activities in course by correcting deviations from plans. ,.. Fu"ur# Or #n"#*: $lanning is future-oriented. ,ts essence is looking ahead. 0t is undertaken to handle future events effective and achieve some ob&ectives in the future. ,1. A$" on or #n"#*: $lanning is action-oriented. That is! planning should be undertaken in the light of organi ational preferences. The course of action determined must be realistic. That is it should be neither impossible nor too easy to achieve. ,9. In"#r-*#&#n*#n" &ro$#++: $lanning is an inter-dependent process. 0t re#uires the )o-operation of the various sections and sub-sections of the organi ation. ,:. In.ol.#+ &ar" $ &a" on: $lanning involves the participation of all the managers as well as the subordinates. 0n the words of Boont and %(Jonnell! "$lans must be formulated in an atmosphere of close participation and high degree of concurrence". ,;. A '#an+, an* no" an #n*: $lanning is riot an end. 0t is only a means to achieve an end. i.e.! the accomplishment of the pre-determined ob&ectives or goals of the organi ation. I'&or"an$# an* A*.an"ag#+ o% Plann ng

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,. Manag#'#n" 0- o01#$" .#+: 0t facilitates management by ob&ectives. That is! it makes the management formulate the ob&ectives of the organisation in clear-cut terms and take the right course of action to reali e the specific ob&ectives. .. Fa$ l " #+ un "- o% * r#$" on an* $o-or* na" on: $lanning facilitates coordination. Through its we-defined ob&ectives. well-publicised policies! programmes and procedures! planning facilitates the co-ordination of all the interconnected activities and avoids duplication of activities and delays in the e*ecution of activities 1. R#*u$#+ %u"ur# un$#r"a n" #+ an* $harg#+: 6 business concern has to work in an environment Which is uncertain and ever-changing! $lanning helps the concern in foreseeing the risks and uncertainties in the future and in advance in the best possible way and in preparing the plan on the basis of its decisions in the past and present. 9. Fa$ l "a"#+ $on"rol: $lanning facilitates control. $lanning determines in advance the work to be done! the person responsible for doing it! the time to be taken to do the work and the costs to be incurred. This makes it easy to compare the actual performance with the planed performance. 0n case there are deviations. corrective actions are taken to remove the deviations. Thus planning facilitates control. :. Fo$u++#+ a""#n" on on organ !a" onal goal+ an* %a$ l "a"#+ 'anag#'#n" 0o01#$" .#+: 6n organisation has definite goals or ob&ectives! and all the activities of the organi ation are directed towards the achievement of those ob&ectives. ;. I'&ro.#+ a*a&"a0 l "-: planning improves adaptability. That is! planning helps the organi ation in coping with the changing business environment. The anticipation of future events and changing conditions! implied in planning! prepares the organi ation to meet them effectively. >. I'&ro.#+ $o'&#" " .# +"r#ng"h: $lanning improves the competitive strength of the organi ation by anticipating technological changes and tastes and preferences of people for discovering new opportunities for e*pansion and. providing for changes in work methods! improvement in #uality of products! etc. G. Plann ng 'o" .a" on: $lanning improves motivation. $lanning ensures the participation of managers in the determination of the goals! policies! programmes! etc. of the organi ation. This improves the motivation and morale of the managers. D. En$ourag#+ nno.a" on an* $r#a" . "-: $lanning promotes or encourages innovation and creativity on the part of managers! in the sense that many new ideas come to the minds of managers during planning! which basically a deciding function of management. ,E. En+ur#+ #%% $ #n" u+# o%% r#+our$#+: $lanning ensures efficient use of all resources at the disposal of the concern to achieve organi ational ob&ectives. 0n planning! management evaluates alternative courses of action on the basis of efficiency! and selects only that course of action which is considered most efficient. ,,. 5r ng+ a0ou" #$ono'- n o&#ra" on: $lanning brings about economy in operation by determining the one best way of doing things. ,.. Gu *#+ *#$ + on-'a6 ng: The success of any organi ation depends to a great e*tent on the types of decision made at the various levels of the organi ation.

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Jecision-making is the making of choice from the various available alternatives after evaluating each of them. ,1. Fa$ l "a"#+ 'anag#'#n" 0- #7$#&" on: $lanning facilitates management by e*ception. That is! planning ensures that top management is not involved in each and every activity! and intervenes only when things are not going as per planning. ,9. Fa$ l "a"#+ *#l#ga" on: $lanning facilitates delegation of authority. 2ot only managers but also their subordinates take part in planning. The involvement of subordinates in planning necessarily re#uires delegation of authority to them for getting the things done. Pr n$ &l#+ o% Plann ng

6 number of fundamental principles have been devised over the year for guiding managers undertaking planning. Some of these principles are discussed as under!

,. Pr n$ &l# o% $on"r 0u" on "o o01#$" .#: 6ll types of plans are prepared to achieve the ob&ectives of the organi ation. 3oth ma&or and derivative plans are prepared to contribute to the ob&ectives of the enterprise. $lanning is used as a means to reach the goals. .. Pr n$ &l#+ o% &r 'a$- o% Plann ng: This principle states that planning is the first or primary function of every manager! "e has to plan first and then proceed to carry out other functions. %ther managerial function are organi ed to reach the ob&ectives se in planning. 1. Pr n$ &l# o% Plann ng Pr#' +#+: 0n order to make planning effective! some premises or presumptions have to be made on the basis of which planning has to be undertaken. $lans are! generally not properly structures. The reason being that planning premises are not properly developed. This principle lays emphasis on properly analy ing the situation which is going to occur in future. 9. Pr n$ &l# o% Al"#rna" .#+: $lanning process involves developing of many alternatives and then selecting one which will help in achieving desired business goals. 0n the absence of various alternatives proper planning will be difficult. :. Pr n$ &l# o% T ' ng: $lans can contribute effectively to the attainment of business goals if they are property timed. $lanning premises and policies are useless without proper timing. ;. Pr n$ &l# o% Fl#7 0 l "-: This principle suggests fle*ibility in plans if some contingencies arise. The plans should be ad&usted to incorporate new situations. The dangers of fle*ibility should be kept in mind. The changes may upset the earlier commitments. So the cost of changes should be compared to the benefits of fle*ibility. >. Pr n$ &l# o% Co'' "'#n": There should be a time frame for meeting the commitments made. This will ensure the achieving of targets in time. G. Pr n$ &l# o% Co'&#" " .# S"ra"#g #+: While formulating own. $lans a manager should keep in mind the plans of competitors. The plans should be framed by thinking of what the. competitors will do in similar situations. 1$ Page 1$ of 90

L ' "a" on+ o% Plann ng

,. La$6 o% R#l a0l# Da"a: $lanning is based on various facts and figures supplied to the planners. 0f the data on which decisions are base are not reliable then decisions base on such information will also be unreliable. .. T '# Con+u' ng Pro$#++: $ractical utility of planning is sometimes reduceK by the time factor. $lanning is a time consuming process and actions on various operations may be delayed because proper planning has not yet been done. -nder certain circumstances an urgent action is needed then one cannot wait for the planning process to complete. 1. +*pensive' The planning process is very e*pensive. The gathering of information and testing of various courses of action involve greater amounts of money. Sometimes! e*penses are so prohibitive that small concerns cannot afford to use planning 9. E7"#rnal %a$"or+ 'a- r#*u$# (" l "-: 3esides internal factors these are e*ternal factors too which adversely affect planning. These factors may be economic! social! political! technological or legal. The general national and international climate also acts as limitation on the planning process. :. Su**#n E'#rg#n$ #+: 0n case certain emergencies arise then the need of the hour is #uick action and not advance planning. These situations may not be anticipated. 0n case emergencies are anticipated or they have regularity in occurrence then advance planning should be undertaken for emergencies too. ;. R#+ +"an$# "o Chang#: Most of the persons! generally! do not like any change. Their passive outlook to new ideas becomes a limitation to planning. McFarland writes! "The principal psychological barrier is that the future. The present is not only more certain than the future! it is also more desirable. Cesistance to change is commonly e*perienced phenomenon in the business world. $lanning often implies changes which the e*ecutive would like to ignore! hoping they would not materiali e." Plann ng Pro$#++

$lanning process involves the setting up of business ob&ectives and allocation of resources for achieving them. $lanning determines the future course of action for utili ing various resources in a best possible way. 0t is a combination of information handling and decision making systems based on information inputs! outputs and a feedback loop.

S"#&+ n Plann ng Pro$#++

,. R#$ogn + ng N##* %or A$" on: The first step in planning process is the awareness of business opportunity and the need for taking action. $resent and future opportunities must be found so that planning may be undertaken for them. The trend 19 Page 19 of 90

of economic situation should also be visuali ed. 3efore venturing into new areas the pros and cons of such pro&ects should be evaluated. 6 beginning should be made only after going through a detailed analysis of the new opportunity. .. Ga"h#r ng N#$#++ar- In%or'a" on: 3efore actual planning is initiated relevant facts and figures are collected. 6ll information relating to operations of the business should be collected in detail. The type of customers to be dealt with! the circumstances under which goods are to be provided! value of products to the customers! etc. should be studied in detail. The facts and figures collected will help in framing realistic plans. 1. La- ng Do8n O01#$" .#+: %b&ectives are the goals which the management tries to achieve. The ob&ectives are the end products and all energies are diverted to achieve these goals. Aoals are a thread which bind the whole company. $lanning starts with the determination of ob&ectives. 9. D#"#r' n ng Plann ng Pr#' +#+: $lanning is always for uncertain future. Though nothing may be certain in the coming period but still certain assumptions will have to be made for formulating plans. Forecasts are essential for planning even if all may not prove correct. 6 forecast means the assumption of future events. The behaviour of certain variables is forecasted for constituting planning premises. Forecasts will generally be made for the following' a. The e*pectation of demand for the products. b. The likely volume of production. c. The anticipation of costs and the likely prices at which products will be marked. d. The supply of labour! raw materials etc. :. E7a' n ng Al"#rna" .# Cour+# o% A$" on: The ne*t step in planning will be choosing the best course of action. There are a number of ways of doing a thing. The planer should study all the alternatives and then a final selection should be made. 3est results will be achieved only when best way of doing a work is selected. ;. E.alua" on o% A$" on Pa""#rn+: 6fter choosing a course of action! the ne*t step will be to make an evaluation of those courses of actions. +valuation will involve the study of performance of various actions. Larious factors will be weighed against each other. 6 course of action may be suitable but it may involve huge investments and the other may involve less amount but it may not be very profitable. >. D#"#r' n ng +#$on*ar- Plan+: %nce a main plan is formulated then a number of supportive plans are re#uired. 0n fact secondary plans are meant for the 0mplementation of principal plan. For e*ample! once production plan is decided then a number of plans for procurement of raw materials! purchase of plant and e#uipment! recruitment of personnel will be re#uired. 6ll secondary plans will be a part of the main plan. G. I'&l#'#n"a" on o% Plan+: The last step in planning process is the implementation part. The planning should be put into action so that business ob&ectives may be achieved. The implementation will re#uire establishment of policies! procedures! standards and budgets. These tools will enable a better implementation of plans. T-&#+ o% Plan+

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9. S"an*ar* or R#&#a"#*-(+# Plan+ an* S ngl# (+# Plan+: Standing or repeated-use plans are plans which are to be used repeatedly ?i.e.! over and over again@ over a long period of time for tackling fre#uently recurring problems and issues. They give ready-made answers to issues which occur again and again. Standing plans serve as guideline for managerial decision-making and actions. They make managerial decisions and actions easy and increase managerial efficiency! as they offer standard procedures for tackling similar and fre#uently recurring problems and issues.

S"an* ng &lan+ n$lu*#+: ?a@ ?b@ ?c@ ?d@ ?e@ ?f@ %b&ectives $olicies $rocedures Methods Cules Strategies

.. F nan$ al &lan+ an* Non-% nan$ al Plan+: Financial plans or cash plans are plans which relate to the monetary or financial resources of the concern. They determine the sources from which finance can be secured and the amounts which can be allocated to various purposes. 2on-financial plans or non cash plans are plans which relate the physical resources! and not to financial resources! and for the concern. 0t may be rioted that through financial plans are more important than non-financial plans. 0t is as 0mportant as financial plans.

1. For'al Plan+ : In%or'al Plan+: Formal plans are plans which are reduced to black and white ?i.e.! put on paper@. 0n other words, formal plans are plans which specify in writing the specific ob&ectives to be achieved and the steps to be taken to achieve those ob&ectives. Formal plans are systematic and rational. They are #uite necessary for the successful running of a concern. 0nformal plans are mere thinking by some individuals of a concern. %f course! informal plans in future. 0nformal plans promote unhealthy tendencies like carelessness! ineffective employee performance! etc. informal plans are not ?<(f much use for the smooth running of the enterprise.

;. S&#$ % $ &lan+ : Rou" n# &lan+:

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Specific plans are plans for specified or particular purposes. $reparation of specific plans &s a difficult task! because the methods to be deIeril,ined for specific purposes have to be specially planned and formulated.

Coutine plans ware plans which are routine or mechanical are called routine plans. $reparation of routine plans is not difficult. 0n the case of the routine plans! the methods determined for accomplishing the ob&ectives of the organi ation will remain the same during a particular period without ma&or changes

:. A*' n +"ra" .# &lan+ : O&#ra" .# &lan+: 6dministrative plans are plans which determine the basis of action for the whole organi ation as well as for the various segments of the organi ation for a particular period. 6dministrative plans are done by the middle- level management! and they provide guidelines for operative plans. %perative plans are plans which are concerned with the actual e*ecution of day-today operations of the concern. %perative plans are! generally! for a short period. They are prepared by the lower level of management who put the administrative plans into action. %perative or operating plans cover aspects! such as preparation of sales programme! planning of production activities! etc.

;. Shor"-rang# &lan+ : Long-rang# &lan+: Short range plans are plans which! generally! cover a period of one year. Short range or short term plans are concerned with the determination of short term activities to accomplish long term ob&ectives. 6s short term plans are intended to achieve long term ob&ectives! short range plans have to be consistent with long range plans. Short range plans are more actionoriented! more detailed! specific and #uantitative. /ong range plans which cover a period of years or more. The length of the period varies from one concern to another depending upon the nature of the business! the risks and uncertainties! government control< etc. they care concerned with the formulation of long-term goals of enterprise and the determination of the ways and means of achieving those goals.

>. S"ra"#g $ &lan+ : Ta$" $al &lan+: Strategic plans are plans designed to achieve the overall or general ob&ectives of the organi ation. Strategic plans are done by the top level management. They are concerned with the enterprise! the formulation of policies and the determination of strategies to be adopted and other steps to be taken to accomplish those ob&ectives. Tactical plans are plans which are concerned with the planning of detailed operations needed to achieve the organi ational goals. Tactical plans are intended to meet any changes in internal organi ation and e*ternal environment. For instance! difficulty in procuring raw materials! changes in prices of products! 22 Page 22 of 90

une*pected moves by the competitors and other unforeseen situations are met with the help of tactical plans.

Co'&on#n"+ o% Plann ng

,. O01#$" .#+: 0n the words of Boont and %(Jonnell! "Management terminology! ob&ectives are the end-point(s of a management programme whether stated in general or specific terms". Chara$"#r +" $+ o% O01#$" .#+

,. .. 1. 9. :. ;. >. G. D.

%b&ectives are multiple in nature %b&ectives have a hierarchy %b&ectives form a network %b&ectives are both long range and short range 3usiness ob&ectives are verifiable 3usiness ob&ectives may be specific or general %b&ectives may be tangible or intangible %b&ectives have priority %b&ectives may clash with one other

.. Pol $ #+: 0n the words of Aeorge C! Terry! "$olicy is a verbal! written or implied overall guide setting up boundaries that supply the general limits and directions in which the managerial action will take place". They are the guidelines or e*ecutive action at all levels of management. Jifferences between ob&ectives and policies' a. %b&ectives are the end points of planning. That is! ob&ectives can be regarded as the places which have to be approached through roads ?i.e.! policies@. 3ut policies are the means. That is! policies are the broad ways or roads through which the places ?i.e.! the ob&ectives@ have to be reaches b. %b&ectives are basic to his e*istence and functioning of an organi ation. 3ut policies are not basic to the e*istence and functioning of an organi ation. c. There is no room for discretion in the case of ob&ectives on .the other hand! policies may leave some room for discretion on the part of those who are to be guided by them. d. %b&ectives are determined by the top management! where as policies are left to be determined! to some e*tent by the lower levels of management. e. %b&ectives may! sometimes! remain! only on paper. %n the other hand! policies reflect the true intents of the organi ation. f. %b&ectives have to be achieved! while policies have to be observed.

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1. Pro$#*ur#+: 6ccording to Aeorge C. Terry "a procedure is a series of related tasks that make up the chronological se#uence and established way of performing the work to be established". 9. M#"ho*+: 6 method is a specified or prescribed process! or manner or the way in which a particular task or operation is to be performed. :. Rul#+: Cules are a plan that lay down a re#uired course of action with respect to a given situation. 0n other words! rules are established principles for carrying out the activities in a systematic manner. 0n short! they are the prescribed behaviour of the people in the organi ation. ;. S"ra"#g #+: 0n the words of 6.J. )handler! "Strategy is the determination of the basic long-term goals and ob&ectives of an enterprise and the adoption of courses of action and the allocation of resources to carry out these goals". >. Progra''#+: $rogrammes are the concrete scheme of the action designed to implement the policies and reali e the ob&ectives. 0n other words! they are the actionsteps necessary to achieve the ob&ectives. 0n short' they are the specific and precise plan which lays down the operations to be carried out to accomplish a given task! with a specified I@i of time. G. S$h#*ul#+: Schedules are the dates and timings fi*ed for completing the programmed activities. 0n short! schedules are the time-table for the work to be done. D. Pro1#$"+: 6 pro&ect is an individual part of a general programme. 0n other words! it is part of the &ob that is re#uired to be done in connection with a genera programme. ,E. 5u*g#"+: The institute of cost and management accountants! /ondon! has defined a budge as "a financial and7or #uantitative statement! prepared prior to a defined period of time! of the policy to be pursued during that period for the purpose of attaining a given ob&ective"! ORGANI<ING OR ORGANI<ATION


The term (%rgani ation( can be used in different senses. 0t can be used as a group of person working together to as a structure of relationships or as a process of management.

When it is used to refer to a group of person working together! it means a concern! an undertaking or as enterprise.

When it is used to refer to a structure of relationships! it means the structural relationships among the positions and &obs and person ?i.e.! the framework of responsibility and authority@ through which the enterprise functions! and it is called organi ation structure.


,. Th#o Ha 'ann' "%rgani ing is the process of defining and grouping the activities< of the enterprise and establishing authority relationships among them". .. Boont and %(Jonnell' "%rgani ation involves the grouping of activities necessary to accomplish goals and plans! the assignment of these activities to appropriate departments end tl,e provision for authority! delegation and co - ordination. 1. /ouis 6. 6llen' "%rgani ing is the process of identifying and grouping the work to be performed! defining and delegating responsibility and authority! and establishing relationship the purpose for enabling people to work most efficiently together in accomplishing ob&ectives". NAT(RE : CHARACTERISTICS OF ORGANI<A TION:

The main characteristics and nature of organi ation are' %rgani ing or organi ation is a management process ?i.e.! a managerial function@ %rgani ation is concerned with groups of peop,D. 6n organi ation cannot be constituted by a single person. 0t comes into e*istence only a group of persons come together. %rgani ation is! concerned with identification and grouping of activities into logical pattern so as to secure homogeneous groups of activities. Jivision of work of division of labors the basis of organi ation. 0ntegration or-coordination of the various activities of the enterprise is another important feature of organi ation. 6n organi ation structure has no meaning unless it can contribute to the accomplishment to the common ob&ectives! i.e.! the goal or ob&ectives of the enterprise. 6n organi ation structure consists of various positions arranged in a hierarchy with clear definition of authority and responsibility associated with each of the positions. %rgani ation process involves taking a number to steps! such as the identification of the activities to be performed to attain the ob&ective of the enterprise! the appropriate groping of activities into logical pattern! assignment to activities to appropriate departments and people! delegation of authority! creation of authority -responsibility relationships! etc. PRINCIPLES OF SO(ND ORGANI<ATION:

There are many principle of organi ation. The main principles are'

,. Pr n$ &l# o% O01#$" .#+: The principle of %b&ectives stresses the need for setting the ob&ectives of the enterprise. The setting of the ob&ectives of the enterprise is necessary! because the formulation of the organi ation structure s very much influence by ob&ectives of the enterprises .. Pr n$ &l# o% (n "- 4o% O01#$" .#+: The $rinciple of unity of ob&ectives implies that 7 every part of the organi ation and the organi ation as a whole should be geared to 2! Page 2! of 90

1. 9.





the basic ob&ectives of the enterprise! in other words the main ob&ectives of the enterprise. Pr n$ &l# o% * . + on o% 8or6 an* +&#$ al !a" on: Speciali ation has become the 7 order of the day. So! sound and effective organi ation must be built on the principle of speciali ation Pr n$ &l# o% Fun$" onal *#% n " on: The principle of functional definition implies that 7 the functions! duties and responsibilities of the different departments and position in the organi ation their authorities and their relationships with other departments and position must be clearly defined. Pr n$ &l# o% 0alan$# o% .ar ou+ %a$"or+: The principle of balance of various factors suggests that there should be popper balance in the formal structure of the organi ation in regard to various factors< For instance! there should be proper balance among the< different segments or departments( of the undertaking. That ism! the work- load should be properly distributed among the various departments to maintain balance and harmony the working of the organi ation. There should be balance in authority allocation to different departments. Pr n$ &l# o% + '&l $ "-: The principle of simplicity means that the organi ation structure should be simple with a minimum number of managerial levels. 0f there are a large number of managerial levels in the organi ation structure! there may raise the problem of effective co-ordination and communication Pr n$ &l# o% S&an o% Con"rol or S&an o% Manag#'#n": Span of control or span of management refers ,E (numbers of subordinates a superior can direct! guide and control effectively. The span of control should be minimum! because there is a limit to the number of subordinates that can be effectively supervise by a superior. Th# S$alar Pr n$ &l#, "h# +$alar $ha n, "h# $ha n o% "h# $o''an* or l n# o% au"hor "-: Scalar chain is the chain of superiors. the line of command or the line of authority form the highest rank to the lowest rank in the organi ation established for the purpose of communication in both the directions! it establishes the channel through" which communications should pass! and also states the superiorsubordinate relationships in the organi ation. When the strict following of the line of authority becomes detrimental! and there is a need of swift action! the scalar chain can be short-circuited by taking the permission of their immediate superiors. Through this arrangement! the scalar chain principle is safeguarded! and at the same time! the subordinate officers are enabled to take swift action. Such an arrangement is known as Aang $lank. 0n this conte*t! it must be noted that the short circuiting of the scalar chain is permitted only on routine matters. 3ut matters pertaining to decision -making should be routed through the usual scalar chain.

D. Pr n$ &l# o% r#+&on+ 0 l "-: Cesponsibility is the obligation of performing the duties assigned. Cesponsibility is fi*ed with different positions in the organi ation. Cesponsibility cannot be shifted to others. The $rinciples of responsibility implies that the superior cannot avoid responsibility by delegating authority to his subordinates. "e ?i.e.! the superior@ must be held responsibi,ity for the acts of his subordinates to whom he has delegate authority. ,E. Pr n$ &l#+ o% *#l#ga" on o% au"hor "-: With the allocation of duties and responsibilities! u(,ere must logically go the grant of necessary authority to the subordinates so as to enable him to perform his duties efficiently. The $rinciple of delegation of authority emphasi es that the organi ation structure should provide for the delegation of authority to the subordinates. ,,. Pr n$ &l# o% un "- o% $o''an*: The principle of unity of command suggests that each subordinate should have only one superior. 0n other words there should not be 2" Page 2" of 90

dual subordination. Jual subordination results in undermining of authority! delay! confusion! disorder and indiscipline of subordinates. ,.. Pr n$ &# o% un "- o% * r#$" on: The principle of unity of direction suggests that! for a group of activities having the same ob&ective! there should be one plan of action and one ob&ective. This would facilitate co-ordination of activities and the completion of the task as per the schedule. 0f each person in a department is made to work under a different plan or programme of action! there will be nothing but confusion. ,1. Pr n$ &l# o% $oor* na" on: 6s the organi ation is divided into a number of departments! it is necessary that there should be co-ordination between the different departments. The principle of co-ordination emphasi es that co-ordination between the different departments is #uite essential to bring unity of action and commonness of purpose in the organi ation. ,9. Pr n$ &l# o% $o''un $a" on: The principle of communication suggests that their should be a good communication network in the organi ation to achieve the ob&ectives of the enterprise. Further! there should be effective two-way communication. i.e.! downward communication and upward communication. ,:. Pr n$ &l# #7$#&" on or #7$#&" onal 'a""#r+: The principle of e*ception implies that the organi ation should be so designed that only e*ceptional or comple* matters are referred to e*ecutives at higher levels for their decision and routine meters are decided by the subordinates themselves. ,;. Pr n$ &l# o% %l#7 0 l "- or $on" nu "-: 6n organi ation is built not &ust for today or tomorrow. 0t is built to stand and serve for a long time. The principle of fle*ibility means that the organi ation structure should be capable of adapting itself to the needs or changing circumstances. ,>. Pr n$ &l# o% #%% $ #n$-: The principle of efficiency means that the organi ation structure formulated should enable the undertaking to function efficiently and achieve the ob&ectives of the enterprises with minimum cost and effort. ,G. Pr n$ &l# o% %a$ l "a" on o% l#a*#r+h &: the principle of facilitation of leadership implies that the organi ational structure should be so designed that there is enough opportunity for the management to give effective leadership to the undertaking. ,D. Pr n$ &l# o% %l#7 0 l "-: The principle of fle*ibility suggests that the organi ation must be fle*ible so that it can easily adapt itself to the changing environment without changing the basic organisation design.


In"ro*u$" on:

0n the organi ational structure of every enterprise! botl, formal and informal organisations e*ist. So! it is necessary for us to have some idea about the formal and informal organisations e*isting in every concern.


2# Page 2# of 90


0n the words of )hester 3arnard! " 6n organisation is formal when the activities of two or more persons are consciously co-ordinated towards a common ob&ective".

F#a"ur#+ o% For'al Organ +a" on:

The main features of formal organisation are'

?a@ 0n a formal organisation! the position! authority! responsibilities! accountability of each level are clearly defined. ?b@ 0t prescribes the relationships amongst the people working in the organisation. ?c@ The formal relations in the organisation arise from the pattern of responsibilities that are created by the management. ?d@ The structure is consciously designed to enable the people of the organisation to work together for accomplishing the common ob&ectives of the enterprise. ?e@ 6 formal organisation is bound by rules@ regulation and procedures. ?f@ 0t is deliberately impersonal. ?g@ 0t is base on ideal relationship arid the common,MyCIthesis of the nature of man. 6dvantages of Formal organisation'

Formal organisation has certain-advantages. They are'

?0@ ?00@ ?000@

0t makes everybody responsible for a given task. 0t ensures law -and order in the organisation by prescribing rules! regulations and procedures. 0t contributes to accomplishment of the common ob&ectives of the enterprise.

Dra80a$6+ or Cr " $ +'+ o% For'al Organ +a" on:

)ertain criticisms are leveled against forn,al organisation. They are'

?a@ Formal %rganisation is impersonal. So! emotions and sentiments of individuals are ignored in determining the interactions! communication and accountability. 2$ Page 2$ of 90

?b@ Formal %rganisation is deliberately designed to achieve the goals of the enterprise. 0t does not consider the goals of the individuals. ?c@ The rules and regulations prescribed in a formal organisation may be rigid! and so! it may become difficult to achieve goals. INFORMAL ORGANISATION

M#an ng o% In%or'al Organ +a" on:

0n the words of 3# "h Da. +! =0nformal organisation is a network of personal and social relations not established or re#uired by the formal organisation but arising spontaneously as people associate with one anotherH.

F#a"ur#+ o% In%or'al Organ +a" on:

The chief features of informal organisation are'

?a@ 0nformal %rganisation is not established by any formal authority. 0t arises from the personal and social relations amongst the people working in the organisation. ?b@ 0nformal %rganisation arises spontaneously! and not by deliberate or conscious efforts. ?c@ 0t is influenced by the personal attitudes! emotions! whims! likes and dislikes! etc. of the people in the organisation. ?d@ 0t is based on rules! regulations and procedures. ?e@ The inter-relations amongst the people in an informal organisation cannot be charted ?i.e.! cannot be shown in an organisation chart@. 5#n#% "+ o% In%or'al organ +a" on:

0nformal organisation has certain benefits. They are<

?a@ ?b@ ?c@ ?d@ ?e@ ?f@ ?g@

0t helps the formal organisation to make a workable system to get the work done. 0t assists the formal organisation to become humanistic. 0t helps the group members to attain specific personal ob&ectives. 0t provides social satisfaction to group members. 0t acts as a means by which the workers achieve a sense of security and belonging. 0t is best means of employee communication. 0t serves as an agency for social control of human behaviour.

29 Page 29 of 90

?h@ 0t acts as a safety valve for the emotional problems and the frustrations of the workers of the enterprise. ?i@ 0t lightens the work-load of the formal managers. ?&@ Many things which cannot be achieved through formal organisation can be achieved through informal organisation. ?k@ The presence of informal organisation in an enterprise makes the managers plan and act more carefully. Dra80a$6+ o% In%or'al Organ +a" on:

0nformal organisation is not free from drawbacks. 0t suffers from certain drawbacks. They are'

?a@ The communication in informal organisation may! son,etirnes! lead to rumours. ?b@ 0nformal organisation may put resistance to changes and innovations. ?c@ 0t may not effectively contribute to the attachment of the ob&ectives of the enterprise. Con$lu+ on:

Formal organisation alone is not capable of accomplishing the organi ational ob&ectives. 0t needs the help of informal organisation. 0nformal organisation supplements the formal organisation in achieving the organi ational ob&ectives. 0n the words of Ch#+"#r I. 5arnar*! "0nformal organisation brings cohesivencss to a formal organisation. 0t brings to the members of a formal organisation! a feeling of belonging! of status! of self-respect and of gregarious satisfaction". 0n the words of Beith Javis! "6n informal organisation is (a powerful influence upon productivity and &ob satisfaction 3oth formal and informal system are necessary for group activity! &ust as two blades are essential to make a pair of scissors workable".


The main types of integral organisation are'

?0@ /ine! military or scalar organisation. ?00@ Functional %rganisation. ?000@ /ine and staff organisation. ?0L@)ommittee form of organisation. 9. LINE ORGANISATION, SCALAR ORGANISATION 30 Page 30 of 90


In"ro*u$" on:

/ine organisation is< a direct type of internal organisation. 0t is the oldest and the simplest form of integral organisation.

M#an ng o% L n# Organ +a" on:

/ine organisation is a type of internal organisation in which there are direct vertical authority relationships ?i.e.! superior-subordinate relationships@! connecting the positions at each level with those above and those below in the hierarchy. 0n other word! it is a form of organisation in which the relationships between the various levels of management form a hierarchy of authority or chain of command.

Char" +ho8 ng "h# l n# organ +a" on:

The following chart depicts the line organisation'

31 Page 31 of 90

Au"hor "G#n#ral Manag#r

Pro*u$" on Manag#r

A++ +"an" Pro*u$" on 'anag#r


Su&#r. +or+


F#a"ur#+ o% L n# Organ +a" on

The chief features of line organisation are'

R#+&on+ 0 l "-

32 Page 32 of 90

?0@ The line organisation forms a vertical line relationship from the top to the bottom of the organisation. ?00@ There is authority relationship or superior-subordinate relationship in the line organisation. +ach position in the organisation structure has authority over its subordinate! and is accountable to his superior. ?000@ -nder this system! authority flows from the top of the structure to its bottom level step by step through downward delegation of authority! while responsibility flows upward from the bottom of the structure to the top step by step. ?0L@There is no provision for staff officers ?i.e.! e*perts or specialists@ to offer advice to the line officers under this system. A*.an"ag#+ o% L n# Organ +a" on:

L n# organ +a" on ha+ $#r"a n a*.an"ag#+. Th#- ar#:

,. This system is simple to establish and operate. .. -nder this system! responsibility and authority are clearly defined. +very member of the organisation knows his e*act position! to whom he is responsible and who are responsible to him. 3ecause of the clear fi*ation of responsibility! no person can escape from his liability. 1. There is unity of command and control under this system. That is! a subordinate receives orders from only one superior and is responsible only to one superior. 9. The unified authority and control implicit in this system ensures better discipline among the employees. :. The unification of authority and responsibility present in this system facilitates #uick and prompt decisions. ;. 6s all the activities relating to one department or division are managed by one e*ecutive! there can be effective co-ordination of activities. >. -nder this system! communication is easy and #uick. G. This system is fle*ible or elastic! in -the sense that! as each e*ecutive has sole responsibility in his own position and sphere of work! he can easily ad&ust the organisation to changing conditions. D. This system is less e*pensive! as there are no staff specialist to advise the line authorities D +a*.an"ag#+ o% L n# Organ +a" on:

/ine organisation is not free from defects. 0t suffers from several drawbacks. The main drawbacks are'


-nder this system! as only one e*ecutive manages all the activities in his department! there is no scope for speciali ation. .. 6s only one e*ecutive is re#uired to manage all the activities in his department! he is over-burdened! 6s a result! he may not be able to direct and control the efforts of his subordinates! properly. 33 Page 33 of 90

1. 6s all the decisions relating to a department are taken by only one e*ecutive! there is unitary administration. )onse#uently! the successful functioning of the department depends on the abilities of the departmental head. 9. -nder this system! only one e*ecutive controls all the activities of department and gets undue importance. The importance of the other people in the department is not recognised. 6s a result! there may be lack of co-operation and team-spirit. :. Since only one e*ecutive controls all the activities in his department! there is much scope for nepotism and favouritism. ;. -nder this system! the subordinates should follow the orders of their superior without e*pressing their opinion on the orders. That means! there" is limited communication. >. -nder this system! the lower level managers lose their initiatives and interest! as they have to merely carry out the orders and instructions of their superiors. G. When there are too many levels of management! the process of communication may become difficult under this system. D. There is the danger that the line authorities may become autocratic or dictatorial. ,E. /ine organisation is rigid and infle*ible. Su "a0 l "- o% L n# Organ +a" on:

0t is true that line organisation suffers from many limitations. 3ut its importance has not been reduced. 0t is considered suitable for'

?a@ ?b@ ?c@ ?d@ ?e@ ?f@

Small concerns! i.e.! concern which carry on their operations on a small scale. )oncerns which have a small number of subordinates. )oncerns which are engaged in operations which ate mainly of routine type. )oncerns which has straight and simple methods of machines. )oncerns where activities are performed by automatic machines. 0ndustries where continuous processes are followed. =. F(NCTIONAL ORGANISATION

M#an ng o% Fun$" onal Organ +a" on:

Functional organisation is a type of organisation in which the work of the whole enterprise is divided into a number of specialised functions like production! purchasing! marketing! office management! personnel relations! etc. and each of these spcciI,,ised functions is entrusted to a functional e*pert or specialist.

F#a"ur#+ o% Fun$" onal Organ +a" on:

34 Page 34 of 90

Functional organisation has certain characteristic features. The main features of functional organisation are'

?,@ Functional organisation is a comple* type of organisation when compared to line organisation and line and staffing organisation. ?.@ There is speciali ation in functional organisation! as the work of the concern as a whole is divided into different specialised functions like production! purchasing! marketing! finance! personnel relations! etc. and each specialised function is entrusted to a functional e*pert or specialist. ?1@ 0n this type of organisation! the line e*ecutive receives instructions not only from his line boss but also from one or more specialists. For instance! a foreman in the production department may receive orders and instructions from the superintendent! who is his line boss! and also from the specialists like the personnel manager! marketing managers! financial manager! etc. ?9@ -nder this system! the principle of unity of command is not observed! as a single worker has to get instructions from more than one specialist. ?:@ 0n this type of organisation! more importance is given to staff specialists or functional e*perts. The functional e*perts are given even some line authority. ?;@ 0n this type of organisation! Iere are three type of authority relationships! vi .! ?i@ line authority relationship! ?ii@ staff authority relationship and ?iii@ functional authority relationship. ?>@ -nder this type! the e*ecutive have to perform limited number of operations. A*.an"ag#+ o% Fun$" onal Organ +a" on:

Functional organisation has certain advantages. They are'

,. .. 1. 9. :. ;. >.

This system ensures ma*imum use of the principle of specialisation at every work point and helps the enterprise to en&oy the benefits of specialisation of functions. 6s the workers have to perform only a limited number of functions under this type of organisation! this system contributes to higher efficiency of the workers. 6s there is no scope for one-man control in this form of organisation! this system ensures co-operation and team-work among the workers. -nder this system! the line officers are freed from the worries of technical problems faced by the workers! as instruction regarding the technical problems flow to the workers directly from the specialists. This system is fle*ible! in the sense that any change in the organisation can be introduced without disturbing the whole organisation. This system is #uite suitable for training young specialists. This system ensures the separation of mental functions ?i.e.! planning@ from manual functions ?i.e.! functions at the workshop@! and thereby! simplifies managerial control.

D +a*.an"ag# o% Fun$" onal organ +a" on:

3! Page 3! of 90

Functional organisation suffers from some drawbacks. They are'

,. -nder this type of organisation!( there are many supervisory staff of e#ual rank. This may lead to conflicts among them. .. 6s the workers have to work under many bosses under this system! it is difficult to maintain discipline among the workers. 1. 6s there are several functional e*perts in the organisation under this system! there may be the difficult or co-ordination. 9. The speed of action may be hampered under this system! as the control is divided among several specialists. :. 6s there are several functional e*perts under this system! the top management may find it difficult to fi* responsibility! when there is unsatisfactory progress. ;. 6s the workers have to carry out the orders of many posses or specialists! there is no unity of command under this system. >. 6s a large number of specialists! there e*perts are re#uired to be appointed under this type organisation! this system is very e*pensive. G. 0t is very difficult to put this system into operation. D. This system makes relationship more comple*. Su "a0 l "- o% Fun$" onal Organ +a" on:

Functional organisation is #uite good for division of work at the top. 3ut for the division in the various departments! this system is not very successful! as there is no clear line of authority.

Char" +ho8 ng Fun$" onal Organ +a" on

5oar* o% D r#$"or+

Manag#r Manag#r



3" Page 3" of 90

Pro*u$" on P#r+onn#l

Mar6#" ng

F nan$#

S#$" on S#$" on O%% $#r I O%% $#r I/

S#$" on O%% $#r II

S#$" on O%% $#r III


In"ro*u$" on:

0n line organisation! there is unity of command! hut there is no speciali ation. 0n functional organisation! there is e*treme specialisation! hut there is no unity of command. To overcome the defects and to take advantage of the merits of both line organisation and functional organisation! line and staff organisation has been evolved. /ine and staff organisation is the -sual fonn of organisation found in modern enterprise.

M#an ng o% L n# an* S"a%% Organ +a" on:

/ine and staff organisation is a combination of line organisation and functional organisation. 0t is a type of organisation in which there arc two sets of officers for administration! vi .! ?,@ line officers who have the authority and command over the subordinates and are responsible for the accomplishment of the results! and-?.@ staff officers or specialists who render e*perts advice to the line officers to help them to discharge their functions efficiently.

F#a"ur#+ o% L n# an* S"a%% Organ +a" on: 3# Page 3# of 90

The main features of line and staff organisation are' ,. /ine and Staff organisation is a combination of line organisation and functional ?i.e.! staff@ organisation. -nder this system! there are line officers who have authority and command over the subordinates and are accountable for the tasks entrusted to them! and there are staff officers or specialists to offer e*pert advice to the line officers to perform their tasks efficiently. .. /ine and staff organisation clear distinction between the two aspects of administration. Li . planning and e*ecution. The staff personnel prepare the plans and give advice to the line officials! and line officials e*ecute the plans with help of the departmental personnel. 1. The line and staff organisation is based on the principle of speciali ation! in the sense that the staff officers speciali e in the planning function and the line officers specialisation in the e*ecution or doing function of the administration. A*.an"ag# o% L n# an* S"a%% Organ +a" on:

/ine and staff organisation en&oys certain advantages. They are' ,. Specialisation is ensured under the line and staff organisation. as the staff officers specialise in the planning function! and the line officers specialise in the e*ecution or doing function. .. /ine and staff organisation has greater fle*ibility ! in the sense that new specialised activities can be added to the line activities without disturbing the line procedure. 1. The e*pert advice and guidance given by the staff officers to the line officers benefits the entire organisation. 9. 6s the decisions are made by e*perts or specialists! there will be sound managerial decisions under this system. :. 6s the staff officers look after t,,e detailed analysis of each important managerial activity! the line officers get a big relief. ;. -nder this system! many varieties of responsible &obs are available. That means! more opportunities are there for the advancement of the workers under this system. D +a*.an"ag# o% L n# an* S"a%% Organ +a" on:

/ine and staff organisation also is not free from drawbacks. 0t suffers from a number of limitations. They are'

,. 0f the pattern of authority relationship between the line officers and the staff officers is not clearly indicated! there will be considerable confusion in the organisation. Further! there may be conflicts between the line officers and the staff officers. .. 6s the staff officers do not have the authority to put their recommendations into practice! their advice may be ignored by line officers.

3$ Page 3$ of 90

1. 6s the staff officers are not (concerned with the e*ecution of the plan! they may not take proper care before they advice the line officers. That means! this system may encourage carelessness on the part of the staff officers. 9. This type of organisation re#uires the appointment of a large number of staff officers or e*perts in addition to the line officers. 6s a result! this system becomes #uite e*pensive. :. 6s the line system is e*pensive! small concerns cannot afford

39 Page 39 of 90


,. /ine organisation is a simple form of organisation. 3ut functional organisation and line and staff organisation are complicated. .. 0n the case of the line organisation! there is clear-cut line of authority .m the case of functional organisation! there is no clear-cut line of authority .0n the case of line and staff organisation! there is clear-cut division of authority for the line officers! but staff officers do not have any authority. 1. 0n the case of line organisation! there is clear-cut responsibility .0n the case of functional organisation and line and staff organisation! there is clear-cut responsibility for the line officers! but staff officers do not have any responsibility. 9. 3ecause of clear-cut line authority! there is unity of command in the case of line organisation. There is no unity of command in the case of functional organisation! as a worker has to take instructions from several authorities. There is unity of command in the case of line and staff organisation because of the e*istence of the line officers. :. 0n the case of line organisation! there is fle*ibility in the sense that #uick decisions and prompt actions can be taken to ad&ust to changing situations because of the e*istence of full authority. Functional organisation is rigid and infle*ible. 0n the case of line and staff organisation! fle*ibility is difficult. ;. Strict discipline is enforced in the case of line organisation. 0n the case of functional organisation! enforcement of discipline is difficult because of lack of unity of command. 0n the case of line and staff organisation! there is discipline enforced by line officers. >. 0n the case of line organisation! there can be prompt and #uick decisions. 0n the case of functional organisation! there cannot be #uick decisions. 0n the case( of line and staff organisation! there can be better decisions by the line officers with the help of staff advice. G. There is no specialisation in the case of line organisation. There is ma*imum specialisation in the case of functional organisation. There is certain amount of 40 Page 40 of 90

specialisation in the case of line and staff organisational because of the presence of staff officers. D. 0n the case of line organisation! there is heavy work load on the e*ecutive or managers. There is less work load in the case of functional organisation. The work load is not heavy in the case of line and staff organisation. ,E. There is a good communication system in the case of line organisation. There is overlapping of communication in the case of functional organisation. There is a good communication system in the case of line and staff organisation. ,,. 0n the case of line organisation! there can be better co-ordination within the department! but inter- department co-ordination becomes difficult. 0n the case of functional organisation! there is lack of effective co-ordination because of e*treme specialisation. 0n the case of line and staff organisation! there can be co-ordination through staff officers. ,.. +fficiency is lacking in the case of line organisation! as one e*ecutive is entrusted with many activities in which he is not efficient. 0n the case of functional organisation! there is greater efficiency! as each e*ecutive is entrusted with limited duties. There is ma*imum efficiency in the case of line and staff organisation because of the clear-cut duties of the line officers and the availability of e*pert advice from the staff officers. ,1. /ine organisation is suitable for small enterprises! trading as well as industrial. Functional organisation is suitable for large industrial enterprises. /ine and staff organisation is suitable for medium- si ed industrial enterprises. ;. Co'' ""## For' o% Organ +a" on

6 number of persons may come together to take decision! decide a course of action! advise line officers on some matters! it is a committee form of organisation. 0t is a method of collective thinking! corporate &udgement and common decision. 6 committee may be assigned some managerial functions or some advisory or e*ploratory service may be e*pected from it.

N##* %or Co'' ""##:

The main reason for committee is to secure common &udgement on administrative matters. The committees are set up for the following reasons. ,@ The committees provide a forum for e*changing ideas among organisational members. .@ The e*change of ideas among members may generate some suggestions and recommendations which may be useful for the organisation. 1@ There can be proper discussion on present problems and efforts are made to find the solutions. 9@ The committees may also be needed in establishing and developing organisational policies. T-&#+ o% Co'' ""##?

41 Page 41 of 90

Jifferent committees maybe formed with different ideas and purposes. Some committees may be only advisory while some may perform managerial functions. There may be following types of committees'

,@ For'al an* In%or'al Co'' ""##+: 0f a committees is formed as a part of organisation structure and is delegated some duties and authority! it is a formal committee. 6n informal committee may be formed to tackle some problem. 6 manager may call some e*perts to help him in analy ing a problem and suggesting a suitable solution. .@ A*. +or- Co'' ""##: These are the committees to advice line head on certain issues. /ine officers may refer some problems or issues to a committee foe advice. 1@ L n# Co'' ""##: There may be committees with managerial powers. 0nstead of giving work to one person it may be assigned to a number of e*ecutives. A*.an"ag#+ o% $o'' ""## %or' o% organ +a" on:

The committee form of organisation has the following has the following advantage'

,. Pool ng o% o& n on+: the members of committees come from different background and areas or e*pertise and have different view points and values. When persons with varied abilities sit together and discuss a problem! various aspects of the case are highlighted and pros and cons are assessed. The pooled opinion will help in taking a realistic view of the problems. .. 5#""#r $o-or* na" on: )ommittee form of organisation brings more co-ordination among different segments of the organisation when representatives of different departments sit together! they understand and appreciate the difficulties faced by others. This type of frank discussions help on fi*ing the targets of different departments and better coordination is achieved through this type of decision making. 1. 5alan$ ng o% / #8+: this type of organisation helps in balancing the views e*pressed by different persons. There is a tendency to over emphasise the aspects of one(s own departmeM,t by ignoring the inter dependent character of problems of different departments. 6 committee helps to bring out an agreed view of the problems by taking into account divergent views e*presses in such meetings. 9. Motivation' The committees consist of managers as well as subordinates. The views of subordinates are given recognition and importance. 0t gives them encouragement and makes them feel as an integral part of decision making process. Such committees boost the morale of subordinates and motivate them to improve their performance. :. Jispersion of power' The concentration of power in few persons may lead to misuse of authority and wrong decisions. 3y spreading powers among committee members this problem can be solved. W#a6n#++ o% Co'' ""## For' o% Organ +a" on

This form of organisation suffers from the following weakness'

42 Page 42 of 90

,@ D#la-: The main drawback of committee form of organisation is delay in taking decisions. 6 number of persons e*press their view points in meetings and a lot of time is taken oh reaching a decisions. .@ Co'&ro' +#: Aenerally! efforts are made to reach consensus decisions. The view point of the ma&ority is taken as a unanimous decision of the committee. The taking of the ma&ority may be valid but it may not be pursued for being singled out. 1@ No A$$oun"a0 l "-: 2o individual accountability can be fi*ed if these decisions are bad. +very member of the committee tries to defend himself by saying that he suggested a different solution. 0f accountability is not fi*ed Ihen it is the weakness of the organisation. 9@ Do' na" on 0- +o'# '#'0#r+: .Some members try to dominate in the committee meetings. They try to thrust their view point on -others. :@ S"ra n#* R#la" on+: Some times relations among committee members or with others become strained. 0f some members take divergent stands on certain issues! some may feel offended. 0t affects relations of employees not only on the &ob but at personal level also.

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M#an ng o% C#n"ral +a" on:

0n the words of "enry Fayol! @E.#r-"h ng 8h $h go#+ "o n$r#a+# "h# '&or"an$# o% "h# +u0or* na"#4+ rol# + *#$#n"ral +a" on, #.#r-"h ng 8h $h go#+ "o r#*u$# " + $#n"ral +a" onA.

I'&or"an" F#a"ur#+ o% $#n"ral !a" on:

)entrali ation has the following features'

,@ )oncentration and reservation of the decision-making power with regards to various management functions with the top level management. .@ +*ecution of the decisions taken by the top level management ?i.e.! performance of operative functions@ by with the middle and lower levels of management. 1@ Functioning of the lower levels of management under the direct command! direction and control of the top level management. DECENTRALISATION

M#an ng o% D#$#n"ral +a" on:

6ccording to "enry Fayol! "+verything which goes to increase the importance of the subordinate(s role( is decentralisation! everything which goes to reduce it is centralisation.

A*.an"ag#+ or D#$#n"ral +a" on:

Jecentralisation has several advantages. They are'

,. Jecentralisation relieves the top e*ecutive from routine works! and enables them to concentrate on more important works. .. 3y giving responsibility! authority and initiative to the subordinates! and thereby! widening the scope of their activities! decentralisation contributes to the development of e*ecutives or management m the organisation. 44 Page 44 of 90

1. 3y giving power! prestige and status to the subordinates! decentralisation increases the morale of the subordinates and motivates them to put forth their best. 9. 3y giving authority for decision-making to the lower levels where actions take place! decentralisation facilities #uick decisions. :. -nder decentralisation! the performance of each unit is &udged by the management on the basis of the profitability. This ensures mDf.e! effective control by the management over each unit. ;. 0n a decentralised enterprise! each of the different divisions or departments is made a separate profit centre. This contributes to healthy competition between the different divisions or departments to improve their performance. >. 0n a decentralised enterprise! the division or departments are independent of one another. This is helpful to the management to e*periment with new ideas in one division or depa,,ment without adversely affecting the functioning of the other divisions or departments. G. 0n a decentralised enterprise! the employees have greater opportunity to come into close contact with one another. This contributes to personal intimate relationship between them. D. Jecentralisation contributes to the diversification of activities and products. D +a*.an"ag#+ o% D#$#n"ral +a" on:

Jecentralisation is! no doubt! good .3ut it is not free from drawbacks or limitations. The various drawbacks or disadvantages of decentralisation are'

,. Jecentralisation re#uires competent managers to run the various departments independently. 3ut it is difficult to find competent managers. .. Jecentralisation re#uires the employment of highly-paid managers. The employment of highly-paid managers will increase the administrative costs of the enterprise. 1. 0n a decentralised enterprise! every unit may try to ma*imi e its performance at cost of the other units. This may lead to unhealthy competition among the different units of the enterprise. 9. 0n a decentralised enterprise! authority lies dispersed widely throughout the organisation. +ach division or department en&oys complete freedom in the formulation of policies. This may increase the problem of co-ordination. :. Jecentralisation may result in duplication of functions and wastage of resources. ;. Jecentralisation may! sometimes! become a handicap in the case of #uick emergency decisions. >. Jecentralisation is not suitable for the development of specialised services! .such as personnel! accounting! statistical departments! etc. G. 0n a decentralised enterprise! establishment of ade#uate and effective controls over the various divisions or departments becomes difficult. Con$lu+ on:

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+*cessive centralisation kills the initiative and enthusiasm of the subordinates. Similarly! e*cessive decentralisation reduces the importance of the superiors. 6gainst complete centralisation is impossibility! as management will be impossible without some measure of delegation of authority. Similarly! complete decentralisation will amount to virtual decentralisation. So! too munch of centralisation or too much of decentralisation must not be resErted to. 6 proper balance must be maintained between e*cessive centralisation and e*cessive decentralisation.

Fa$"or+ D#"#r' n ng "h# E7"#n" or D#gr## o% D#$#n"ral +a" on:

Jecentralisation is not an absolute term. So! the e*tent or degree of decentralisation varies from concern to concern. The degree of decentralisation in an enterprise is determined by a number of factors. They are'

,. The si e of the organisation determines the e*tent of decentralisation. 6s the si e of the organisation increases. it becomes necessary to decentralise and divide the organisation into a number of semi-autonomous units. 0n fact the larger is the si e of the organisation@ the greater is the e*tent of decentralisation. .. Jecentralisation re#uires a number of able middle level managers to run the various divisions or departments of the enterprise. That means! the e*tent of decentralisation is determined by the availability of competent middle level managers. Where such managers are not available! decentralisation is not possible. 1. The e*tent of decentralisation is also determined by the management philosophy ?i.e.! the outlook of the top management@. 0f the top management believes in centralisation of authority! there will not be much decentralisation. %n the other hand! if the top management believes in greater .autonomy and freedom to the subordinate! the e*tent of decentralisation will be great. 9. The nature of the growth and e*pansion of the business also determines the degree of decentralisation. 0f the enterprise has growth through internal e*pansion! generally! there will be centralised control! and so! there may not be much decentralisation. %n the other hand if the concern has growth through amalgamation or absorption! generally there will be greater decentralisation. :. The physical dispersion of operations of the enterprise also influences the e*tent of decentralisation. When the operations of an enterprise are widely dispersed in different territories! generally! there will be greater decentralisation for better results. ;. Aovernment policies and regulations also determine the e*tent of decentralisation. >. The product lines of the enterprise influence the e*tent of decentralisation. Where the product lines of the enterprise are #uite different! decentralisation is resorted to. G. Technological changes also may create conditions favourable for decentralisation. D. The costliness and the significance of the decisions to be taken also influence the e*tent of decentralisation. Where the decisions to be taken involve heavy investment or cost! generally! decentralisation is not thought of. 0nstead! centralisation is thought of. Jifference between Jelegation and Jecentralisation'

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Jelegation and Jecentralisation seem to be identical terms. 3ut they are not identical terms. They differ from each other in many respects. The main differences between them are'

,. Jelegation is a process or act whereas decentralisation is the end result of delegation. .. Jelegation refers to the relati;nship between two individuals! vi .! a superior and his immediate subordinate. 3ut decentralisation refers to the relationship between the top management and the various divisions departments of the organisation. 1. Jelegation is #uite essential in the management process! as no manager can get things done through his subordinates unless he delegates to them the re#uisite authority for the performance of the work assigned. 3ut decentralisation is optional ?i.e.! it mayor not be resorted to by the management@. 9. 0n the case of delegation! only authority is delegated! and responsibility is not delegated. 3ut in the case of decentralisation! even the responsibility is delegated ?i.e.! the superior is relieved of his responsibility for the work decentralised. :. 0n the delegation! the control over the subordinate(s performance of the &ob rests entirely with the delegator ?i.e.! the superior who has delegated the authority@. %n the other hand! in the case of decentralisation! the top management may e*ercise the minimum control in a broad way and delegate even the power to control to the divisions or the departments concerned. Organ +a" on Char"+

%rganisation charts is a diagrammatical presentation of relationships in an enterprise. The functions and their relationships! the channels of authority and relative authority of different managers etc. are depicted in an organisational chart.

T-&#+ o% Organ +a" on $har"+

There are three ways in which organisation charts can be shown' ?i@ Lertical ?ii@ "ori ontal ?iii@ )ircular.

0. /#r" $al or To& 0o""o': 0n this chart ma&or functions are shown at the top and subordinate functions in successive lower positions. 0n this chart scalar levels run hori ontally and functions run vertically. The supreme authority is shown at the top while lowest authority at the bottom.

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00. Hor !on"al or L#%" "o R gh": 0n this chart highest positions are put on the left side and those with diminishing authority move towards the right. The organisational levels are represented by vertical columns! the flow of authority from higher to lower levels being represented by movement from left to right.

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000. C r$ular: In $ r$ular $har" the centre of the circle represents the position of supreme authority and the functions radiate in all directions from the centre. The higher the positions of authority the nearer they are to the centre and the lesser the positions of authority. more distant they are from the centre. The positions of relative e#ual importance are located at the same distance from the centre.

Pr n$ &l#+ o% Organ +a" on Char"+:

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The top management should faithfully follow the line of authority while dealing with subordinates. 6ny attempt to bye pass the organisation chart will make it meaningless. The chart should define lines of position. The lines of different individuals should be so defined so that there is no overlapping and no two persons should given the same position. The undue concentration of duty at any point should be avoided. The organisation chart should not be influenced by personalities. 3alance of organisation should be given more importance than the individuals. The organisation chart should be simple and fle*ible. A*.an"ag#+ o% Organ +a" on Char"+:

6n organisation chart is a managerial tool. 0t helps in specifying authority and responsibility of every .position. The relationships among different persons are also established for smooth working of the organisation. 6s organisation chart specifically defines authority and responsibility of people in the enterprise there will be no duplication and overlapping of duties etc. The organisation chart will help in pointing out the faults! deficiencies! dual command etc. in the organisation. The organisation chart acts as an information centre to the new entrants and they can easily understand different levels of authority and responsibility. The charts are also helpful in decision making process. They ct as a guide to the decision makers. L ' "a" on+ o% Organ +a" on Char"+:

The organisation charts suffer from the following drawbacks.

The organisation charts show the relationship of different positions and not the degree of authority and responsibility. The si e of bo*es or circles in the chart cannot show the level of authority etc. 6 chart only depicts formal organisational relationship whereas informal organisation is ignored. $ractically informal organisation is an useful as formal organisation. 0nformal organisation greatly helps management in knowing the reactions of the people and is an important channel of communication. 6 chart shows organisational position and status at different levels. 0t gives rise to superior-inferior feeling among people and it retards the feeling of team work. D#l#ga" on

Jelegation is an administrative process of getting things done by others by giving them responsibility. 6ll important decisions are taken at top level by 3oard of Jirectors. !0 Page !0 of 90

The e*ecution is entrusted to )hief +*ecutive. The )hief +*ecutive assigns to the work to departmental managers who in turn delegate the authority to their subordinates. +very superior delegates the authority to subordinates for getting a particular work done. The process goes to the level-Ihere actual work is e*ecuted. The person who is made responsible for a particular work is given the re#uisite authority for getting it done. There is a limit up to which a person can supervise the subordinates. When the number of subordinates increases beyond it then he will have to delegate his powers to others who perform supervision for him. 6 manager is not &udged by the work he actually performs on his own but the work he gets done through others. D#% n " on+:

6llen. "The entrustment or a part of the work! or responsibility and authority to another! and the creation of accountability for performances".

Chara$"#r +" $+ o% D#l#ga" on:

Jelegation has following )haracteristics'

,@ Jelegation takes place when a manager grants some of his powers to subordinates. .@ Jelegation occurs only when the person delegating the authority himself as that authority i.e. a manager must possess what he wants to delegate. 1@ %nly a part of authority is delegated to subordinates. 9@ 6 manager delegating authority can reduce! enhance or take it back. "e e*ercises full control over the activities of the subordinates even after delegation. :@ 0t is only the authority which is delegated and not the responsibility. 6 manager cannot abdicate responsibility by delegating authority to subordinates. El#'#n"+ o% D#l#ga" on

Jelegation involves three elements'

,@ A++ gn'#n" o% r#+&on+ 0 l "-: the first step in delegation is the assignment of work or duty to the subordinate i.e. delegation of authority. .@ Gran" o% Au"hor "-: the grant authority is the second element of delegation. The delegator grants authority to the subordinates so that the assigned tack is accomplished. The delegation of responsibility with authority is meaningless' The subordinates can only accomplish the work when he has the authority re#uired for completing that task. 6uthority is derived from responsibility. !1 Page !1 of 90

1@ )reation of 6ccountability' 6ccountability is the obligation of a subordinate to perform the duties assigned to accomplish the task assigned to him by the superior. When a work is assigned and authority is delegated then accountability is the by-product of this process. The authority is transferred so that a particular work is completed as desired. The subordinate should be made accountable to only one superior. Pr n$ &l#+ o% D#l#ga" on:

The following are the principles of delegation'

,@ Pr n$ &l# o% Fun$" onal D#% n " on: The related or similar activities should be grouped together according to enterprise function. When the definition of a position is clear then delegation of authority becomes simple. .@ Pr n$ &l# o% (n "- o% Co''an*: the basic management principle is that of unity of command. This principle states that a subordinate should report only single superior. This will give a sense of personal responsibility. 1@ Pr n$ &l# o% D#l#ga" on 0- R#+ul"+ E7&#$"#*: The delegation of authority should be based on the basis of results e*pected. The .authority should be sufficient to achieve the desired results. 9@ Pr n$ &l# o% A0+olu"#n#++ o% R#+&on+ 0 l "-: The responsibility of subordinates! once he has accepted the work! is absolute to his superior. The responsibility of the superiors does not decrease once he has delegated authority. 6 person can delegate authority and not responsibility ."e will remain accountable for the work even if it is delegated to the subordinate. So the responsibility of superior and subordinate remains absolute. :@ Au"hor "- L#.#l Pr n$ &l#: The managers delegate authority to subordinates but have the temptation to make decisions for them. They should allow the subordinates to take their own decisions as per the authority delegated to them. T-&#+ o% *#l#ga" on:

Jelegation may be of the following types'

G#n#ral or S&#$ % $ D#l#ga" on: when authority is given to perform general managerial functions like planning. %rganising! directing! etc.! the subordinate managers perform these functions and en&oy the authority re#uired to carry out these responsibility. The chief e*ecutive e*ercises overall control and guides the subordinates from time to time. The specific delegation may relate to a particular functions or an assigned task. The authority delegated to the productions manager for carrying out these functions will be specific delegation. For'al or In%or'al D#l#ga" on: Formal delegation of authority is the part of organisational structure. Whenever a task is assigned to a person then the re#uired authority is also given to him. 0nformal delegation does not arise due to position but according to circumstances. 6 person may undertake a pa,,icular task not because he has been assigned" it but it is necessary to do his normal work.

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La"#ral D#l#ga" on: When a person is delegated an authority to accomplish a task! he may need the assistance of a number of persons. 0t may take time to formally get assistance from these persons. "e may indirectly contact the persons to get their help for taking up the work by cutting short time of formal delegation. When the authority is delegated informally it is called lateral delegation. R#+#r.#* Au"hor "- an* D#l#ga"#* Au"hor "-: 6 delegator may not like to delegate every authority to the subordinates. The authority which he keeps with him is called reserved authority and the authority which is assigned to the subordinates is delegated authority. PRE-RE)(ISITES FOR DELEGATION

,. W ll ngn#++ "o D#l#ga"#: The first prere#uisite to delegation is the willingness of the superior to part with his authority .-nless the superior! is psychologically prepared to leave his authority! delegation will not be effective. .. Cl 'a"# o% Tru+" an* Con% *#n$#: There should be a climate of trust and confidence among! superiors and subordinates. 1. Fa "h n +u0or* na"#+: Sometimes the superiors do not delegate authority with the fear that subordinates will not be able to handle the &ob independently. They are not confident of the #ualities of subordinates and do not want to take risks. 9. F#ar o% Su&#r. +or+: There is often a fear among superiors that their subordinates may not over take them! once they are given higher responsibility. This is a case of interiority comple*. The supervisors may give many logics for delegating authority but this fear is one of the important causes. DIFFIC(LTIES IN/OL/ED IN DELEGATION OF.A(THORITY

There may be certain defects in organisational structure which hamper proper delegation of authority. Some of the difficulties involved in delegation are as such'

,. O.#r Con% *#n$# o% Su&#r or: The feeling in a superior that only he can do certain work effectively than others is the main difficulty in delegation. When a manager is of the opinion that his subordinates will not be able to make proper decisions then he will concentrate all powers with him and will not like to delegate his authority. .. La$6 o% Con% *#n$# n Su0or* na"#+: The superior may be of the view that subordinates are not competent to carry out certain things of their own. "e may lack confidence in his subordinates. -nder these circumstances superior will hesitate to delegate authority. 1. La$6 o% A0 l "- n Su&#r or: 6 superior may lack the ability to delegate authority to subordinates. The manager may not be able to identify the areas where delegation is re#uired. /ack of $roper )ontrols' There may not be proper controls in the organisation which help the manager to keep in touch with performance of subordinates. 9. La$6 o% Pro&#r T#'&#ra'#n" o% Su&#r or: The chief e*ecutive may be over-cautious or conservative by nature. 6n element of risk cannot altogether be ruled out but certain risk will have to be taken. :. Ina0 l "- o% Su0or* na"#+: The fear of committing mistakes or lack of confidence on the part of subordinates may also act as a barrier in delegation of authority. !3 Page !3 of 90

I'&or"an$# o% D#l#ga" on:

Jelegation is a universally accepted principle. 6n industrial undertaking benefits by delegation in the following ways'

,. .. 1. 9. :.

Celieving Top +*ecutives. 0mproved Functioning. -se of Specialists. "elps in +mployee Jevelopment. "elps in +*pansion and Jiversification.

Fa$"or+ In%lu#n$ ng D#gr## o% D#l#ga" on

6 number of factors influence the decision about delegation. Some of these are discussed as follows'

,. .. 1. 9. :. ;. >.

)ompany(s "istory. 6vailability of )apable $ersons. 0mportance and )ostliness of Jecisions. Si e of the +nterprise. 6vailable )ontrols. Types of +nterprise. +nvironmental Factors. SPAN OF MANAGEMENT

0n the words of Spriegal! "Span of control means the number of people reporting directly to an authority. The principle of span of control implies that no single e*ecutive should have more people looking to him for guidance and leadership than he can reasonably be e*pected to serve.

The span of supervision is also known as span of control! span of management! span of responsibility! span of authority and span of direction.

Fa$"or+ n%lu#n$ ng "h# +&an o% +u&#r. + on

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There are number of factors that influence or determine the span of supervision in a particular organisation! the most important of these are as follows'

,. Th# $a&a$ "- an* a0 l "- o% "h# #7#$u" .#: The characteristics and abilities such as leadership! administrative capabilities< ability to communicate! to &udge! to listen! to guide and inspire! physical vigour! etc. differ from person to person. 6 person having better abilities can manage effectively a large number of subordinates as compared to the one who has lesser capabilities. .. Co'&#"#n$# an* "ra n ng o% +u0or* na"#+: Subordinates who are skilled! efficient! knowledgeable! trained and competent re#uire less supervision! and therefore! the supervisor may have a wider span in such cases as compared to ine*perienced and untrained subordinates who re#uires greater supervision. 1. Na"ur# o% Wor6: 2ature and importance of work to be supervised is another factor that influences the span of supervision. The work involving routine! repetitive! unskilled and standardi ed operations will not call much attention and time on the part of the supervisor. 9. T '# a.a la0l# %or +u&#r. + on: The capacity of a person to supervise and control a large number of persons is also limited on account of time available at his disposal to supervise them. The span of control would be generally narrow at the higher level of management because top manager have to spend their ma&or time on planning! organising! directing and controlling and the time available at their disposal for supervision will be less. :. D#gr## o% D#$#n"ral +a" on an* E7"#n" o% D#l#ga" on: 0f a manager clearly delegates authority to undertake a well-defined task! a well trained subordinate can do it with a minimum of supervisor(s time and attention. ;. E%%#$" .#n#++ o% $o''un $a" on +-+"#': Faulty communication puts a heavy burden on manager(s time and reduces the span of control. >. )ual "- o% Plann ng: +ffective planning helps to reduce fre#uent calls on the superior for e*planation! instructions and guidance and thereby saves in time available at the disposal of the superior enabling him to have a wider span. G. D#gr## o% Ph-+ $al D +&#r+ on: 0f all persons to be supervised are located at the same place and within the direct supervision of the manager! he can supervise relatively more people as compared to the one who has to supervise people located at different places. D. A++ +"an$# o% E7&#r"+: the span of supervision may be wide where the services of e*perts are available to the subordinate on various aspects of work. 0n case such services are not provided in the organisation! the supervisor has to spend a lot of time in providing assistance to the workers himself and a such the span of control would be narrow. T-&# o% +&an o% +u&#r. + on

3roadly speaking there are two types! of span of supervision'

?a@Wider span of supervision ?b@ 2arrow span of supervision.

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?a@ W *#r S&an o% Su&#r. + on: 0n this type of span! the supervisor controls and guides the activities of subordinates directly under his control. Wider span or supervision is fanoured where workers are competent and trained. ?b@ 2arrow Span of Supervision' under this type of supervision! there are many levels and more supervisors are re#uired to perform the &ob of guidance and control for different activities. 0t increases the efficiency of supervision but the cost of supervision is very high as compared to wider span of supervision. This type of supervision is favoured at higher levels of management where all the other activities of planning! organising! directing! and controlling are also to be performed. 3ut more the levels of supervision! more difficult is the task of coordinating the activities of various groups of people. MANAGEMENT 5Y O52ECTI/ES, BM.5.OC

Management by ob&ectives is a process in which the manager and his subordinates &ointly agree upon a set of activities! targets and goal! keeping in view the overall ob&ectives of the organisation. and use these as the criteria for evaluating the performance of the subordinates.

F#a"ur#+ o% 'anag#'#n" 0- O01#$" .#+:

,. Management by ob&ectives is an approach and philosophy to-management! and is not &ust a techni#ue of management. .. The basic emphasis of management by ob&ectives is on setting of ob&ectives or goals of an organisation. 1. Management by ob&ectives focuses on the integration of goals 0t relates the long-range goals of the organisation with the short-range goals! overall systems goals of the enterprise with the goals of the society. 9. M3% $laces emphasis not only on the settings of goals but also on their achievement ?i.e.! effective performance and tangible results@. :. The techni#ue of M3% recognises the fact that the goals setting and achievement process is a co-operative and participative endeavour of the superiors and subordinates. ;. The ob&ectives enshrined in management by ob&ectives provide guidelines for appropriate systems! procedures! delegation of authority! allocation of resources! etc. >. Management by ob&ectives provides for substantial transfer of authority from a small group of top managers to the large group of subordinate managers. G. $eriodic review of performance is an essential feature of management by ob&ectives. The review of performance is done regularly! generally! once in a year. D. The philosophy of M3% views organisation as a dynamic entity. ,E. -nder the techni#ue of M3%! consultation replaces e*ercise of authority! interaction and communication replaces isolation! and self-control by subordinates replaces imposed control by superiors. %b&ectives of Management by ob&ectives'

To relate individual goals to organisational goals. !" Page !" of 90

To clarify the &obs to be done a0,d the results e*pected to be accomplished. To evaluate the performance (of the subordinates. To enhance the communication between the superiors and the subordinates. To stimulate the subordinates motivation. To serve as a device for integration. To serve as a device for organisational control.

S"#&+ n.ol.#* n Manag#'#n" 0- o01#$" .#+:

,. .. 1. 9. :.

Jefining the overall specific corporate ob&ectives. Setting of sub-goals for each unit. Setting performance targets for each individual manager. Matching of goals and resources. +valuation or appraisal of performance! and re-appraisal

5#n#% "+ o% Manag#'#n" 0- o01#$" .#+:

,. 0t increases the participation and involvement of the subordinates in decision-making. .. 0t provides the subordinates with an opportunity to be self-motivating by setting their ob&ectives. 1. 6s the managers at all levels are involved in setting their ob&ectives! they are more committed to the goals fi*es. That means! the chance of accomplishment of ob&ectives are much brighter. 9. -nder the M3% approach! the managers at all levels become more aware of the overall ob&ectives. This helps them in understanding their role in the total organisation. :. M3% implies that the ob&ectives of each department and each individual are consistent with the overall ob&ectives of the organisation. This ensures the integration of individual goals with the goals of the organisation. L ' "a" on+ o% Manag#'#n" 0- o01#$" .#+:

,. The M3% approach is too pressure-oriented and time consuming. .. $articipation of the subordinates in goal-setting is the corner-stone of M3%. 3ut this may not be feasible in every organisation. 1. M3% re#uires the setting of verifiable goals. 3ut it is difficult to set verifiable goals. 9. M3% will be successful only if the ob&ectives are set in measurable and verifiable terms. 0f the ob&ectives cannot be set in #uantitative terms! it will be difficult to &udge the performance of the individuals. :. The ,v03% approach over-emphasises #uantification. Therefore! it is likely to overlook the #ualitative aspects of the performance of the organisation. Con$lu+ on:

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0t is true that M3% is sub&ect to certain limitations. 3ut if it is implemented sincerely and seriously! it will yield good dividends.

Su&#r. +or- Manag#'#n"

,. Supervisory management level is above the operatives and below the middle management in an organi ation. .. This level can be classified into three categories! particularly in a larged-si ed organi ation' senior supervisor! intermediate supervisors! and front Nline supervisors. 1. Supervisory Management is concerned with efficiency in using resources of the organi ation. 9. 0t is an e*ecutor of policies and procedures making a series of decisions with welldefined and specified premises. :. Aenerally a supervisor is .called a marginal man is the organi ation. "e concerned with e*plaining the views of management to workers and the views of workers to management. ;. 3ecause of this reason! the &ob of a supervisor becomes more comple* than other levels of management. Management treats him the man of workers which workers treat him the man of management. A +u&#r. +or +&#$ % $all- &#r%or'+ "h# %ollo8 ng %un$" on+.

,. $lanning the activities of his section! classifying and assigning &obs to workers. .. Auiding workers about work procedure 1. Managing and arranging necessary materials! toots! etc.! for the workers 9. +nsuring maintenance of machineries! etc. :. $roviding on the' &ob training to workers ;. Supervision and control of functioning of workers >. Solving problems of workers relating to &obs G. )ommunicating the problems of workers! which are not solved at his level D. $roviding feedback.! to management about the nature of work environment in his section ,E. Maintaining discipline among workers! developing in them right type of approach! and maintaining good human relations. Larious functions performed by different levels of management suggest that managers at every level have to perform all five functions. "owever! the relative importance of a function may differ from level to level. For e*ample@ planning is the most crucial function at the top level while routine and direct control becomes most important at supervisor level.

E%%#$" .# Su&#r. + on

,. L#a*#r+h &: /eadership is a process of influencing the activities of an individual or group for goal -achievement in a given situation. Through this process! individual or !$ Page !$ of 90






group contributes willingly to the goal -achievement. +ffective supervisors perform functions related to leadership instead of doing the same work as the subordinates do. This style of supervision leads to higher morale and more productivity. The leadership process will be described later in detail. Clo+#n#++ o% Su&#r. + on: The degree of closeness of supervision may vary from highly close -supervision to highly free-.supervision. Successful supervisors follow the style of less close supervision. 6 closed supervision is defined as fre#uently checking up on .subordination! providing them fre#uent and detailed instruction! and limiting their freedom to perform the work in their own way. 2ormally close supervisor causes low morale and motivation because it blocks the gratification of some strongly felt needs of subordinates. /ess close supervision! on the other hand produces motivation and morale! which are essential for high productivity. E'&lo-## -or #n"a" on or Hu'an R#la" on+: Taking into account both employees and work being performed by them! there can be two style employee-oriented and production-oriented. The employee-oriented style stresses the relationship aspects .of employee(s &obs. 0t emphasi es that every individual is! important and takes interest in every one! accepting their individuality and. personal need. $roduction-oriented style emphasi es production and .technical aspects of the &obs and employees are taken as tools for accomplishing the &obs. +ffective supervisors follow employee-oriented style and take more personal interest in their men! understand their problems! and punish them less fre#uently when mistakes occur. Grou& $oh#+ .#n#++: +ffective supervision relates to group cohesiveness. Aroup cohesiveness is characteri ed by the group situation in which all members work together for a common goal! or where every one is ready to take responsibility for group chores. Aroups with high cohesiveness produce more as compared to groups with less cohesiveness. D#l#ga" on: Though delegation of authority is applicable to all types of superiorsubordinate relationships and all levels of management! it becomes important at the supervision level because supervision management is considered to be the last level for delegation of authority. O"h#r Fa$"or+: There are certain other factors! besides the above! which go to make the supervision effective. Fro e*ample! supervisors who can influence their superiors and satisfy the needs of their Subordinates for promotion recognition! and work-center benefits are considered better by their subordinates. They inspire higher morale in work groups and more satisfaction to the employees. They also perform functions like on-the&ob training! informing their subordinates their duties and relevant organi ation matters! and present model behavior for their subordinates


,. Co'&an-4 + H +"or-: The history of the company influences the degree of delegation 6 company grow-n over a period of time has a tendency to centrali e powers. When a concern is small then most of the decision-making is done by the owner. With the growth of business" the tendency to centrali e powers remains. %n the -other hand if a concern is the outcome of a merger! amalgamation or combination! there may be a great amount of decentrali ation. .. A.a la0 l "- o% Ca&a0l# P#r+on+: The element of delegation is linked to the availability of subordinate managers. 0f sufficient persons are available who can take responsibility then delegation can easily be done. Aenerally! managers complain that sufficient subordinate managers are not available who can be assigned important! duties. -nless subordinates are delegated the powers they win not learn the art of management.

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1. I'&or"an$# an* Co+"l n#++ o% D#$ + on: The importance and costliness of decisions greatly influences the degree of delegation. Aenerally speaking! the costlier and more important the decision! the greater the probability of its being made at the upper level of the managerial hierarchy. Jecision-making also re#uires various facts and figures about the issue. 6 manager will ensure that he gets all re#uired information for deciding the issue. This type of information is easily available at higher levels of management. 9. S !# o% "h# En"#r&r +#: The e*-tent of delegation is linked to the si e of the enterprise. 0n a large unit more decision making is needed at various levels of management. The problems of communication and co-ordination often arise in such units. 0f decision making is closer to the place of action it will save time! paper work is reduced! misunderstandings in con-,0n-llication can largely be eliminated. :. A.a la0l# $on"rol+: 6 manager delegating authority want to be sure that it is used in accordance with his intentions and the general ob&ectives of theM organi ation. 0n order to achieve this there must be control devices. Aenerally! managers hesitate to delegate due to the reason that they do not know how to control. ;. T-&#+ o% #n"#r&r +#: The degree of delegation of authority may also be influenced by the type of enterprise. 0f the enterprise is in an industry which is rapidly e*panding! as in the electronic field! top. management will have to delegate otherwise it will be over burdened with many decisions 0f the enterprise operates in a static industry then all decision-making is done at the central level 0n cage! of banking and insurance the growth is slow and decision-making remains at the top. >. En. ron'#n"al %a$"or+: 0n addition to internal factors delegation may be influenced by internal factors too. These factors may be natural unions! government control over business and ta* policies. Some large concerns have to deal with workers unions at national level. 6ll the negotiations are done and decisions are taken at national level. 0n such a situation the things are decided at head #uarter level and are applicable at all levels. STAFFING

M#an ng:

Staffing basically involves matching &obs and individuals. This may re#uire functions like manpower planning! recruitment! selection! training! development! performance appraisal! transfers! promotions etc.

Na"ur# o% S"a%% ng:

S"a%% ng ha+ "h# %ollo8 ng '&or"an" %#a"ur#+:

,. Staffing is a basic function of management. .. 0t is concerned with human resources management in the organi ation.

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1. Staffing function is performed continuously. +very manager has to guide and train employees and also evaluate their performance on a continuous basis. 9. The main purpose of this function is to make optimum utili ation of human resources and also to provide proper satisfaction to employees. :. Staffing is performed by all managers. 0n big concerns there is a separate personnel department to deal with this function! but even here this department advises line managers regarding different aspect of human resources. ;. Since staffing deals with human beings who have their own needs! emotions and aspirations this function is different from other managerial functions. Pro$#++ o% S"a%% ng

The purpose of staffing is to employ most suitable and competent persons as per the re#uirements of the organi ation. With this aim in view- the following staff process is followed' ,. E+" 'a" ng Man &o8#r N##*: The first thing in staffing process is to estimate manpower needs. These needs are influenced by the type and si e of the organi ation. Total manpower re#uirements are properly assessed. 0t is also ascertained at what time different persons are needed. .. R#$ru "'#n" an* S#l#$" on o% S"a%%: Cecruitment is the process of searching prospective employees and pursuading them to apply in the organi ation. Selection is the procedure of spotting most suitable candidates out of those who are interested to get employment in the enterprise. The purpose of recruitment and selection is to employing right man for the right &ob. There are internal as well as e*ternal sources of recruitment. 1. Tra n ng an* D#.#lo&'#n": Training is meant to improve the skill and knowledge of employees. 0t is beneficial to both employer and employees. 6 well trained worker improves his efficiency and productivity. Suitable training methods should be devised for different categories of employees. 6 formal training will avoid the risk of trial and error and will also minimi e the cost and wastage involved in training. Jevelopment refers to the training of managerial staff. Jevelopment helps the growth of an individual in all respects through development managerial staff does not increase its capabilities to perform the present work but also enhances their ability to meet challenges in future. 9. Pro'o" on an* Tran+%#r: +mployees are promoted to higher rank on the basis of their merit and seniority .Staffing also involves transfer of persons form one &ob to another! from one place to another on the basis of their ability! competence and ability. :. R#'un#ra" on: Cemuneration is paid for the services of labour. +mployee motivation mainly depends upon the wage and salary structure prevalent in an organi ation. +mployees should be paid fair remuneration so that they feel encouraged to contribute ma*imum in their efforts. The wages are normally paid on the basis of time spent or piece rate. ;. P#r%or'an$#+ A&&ra +al: 6fter selecting and training an employer for a particular &ob! management would like to see how he performs high work. $erformance appraisal is a systematic evaluation of employees contribution to the organi ation in performance of their .&obs. This evaluation is normally done by immediate superior in the organi ation "1 Page "1 of 90

and it is reviewed in turn by his superior. 2ot only the #ualities but deficiencies are also evaluated to improve the performance of employees.

N##* an* I'&or"an$# o% S"a%% ng:

,@ E'&lo- ng +u "a0l# &#r+on+: The employment of suitable persons is essential for every enterprise. The procedure of recruitment! tests for selection and methods of training are decided by the staffing team. 6 properly laid down scheme will ensure the employment of right persons. .@ 3##& &a$# W "h N#8 D#.#lo&'#n": 2ew development are taking place everyday. 6 business will have to keep pace with new changes. This will be possible only if competent persons are employed who can ad&ust as per the new situation. 1@ Man&o8#r D#.#lo&'#n": Manpower planning will have to be done in advance. The future re#uirements of personnel will be estimated #uite in advance. The new staff will be recruited people will be prepared for taking up higher responsibility &obs! all this will be possible only with a well planned staffing function. 9@ O&" 'u' (" l !a" on o% Man&o8#r: the cost of recruiting! selecting and training the staff is very high. The remuneration is also paid at high rates. The manpower should be utili ed to the ma*imum capacity .0t will help in controlling cost also. :@ En+ur ng 2o0 Sa" +%a$" on: The staffing function will ensure &ob satisfaction to employees. The e*ecutive should be involved in decision-making process. They should also be suitably rewarded for their contribution to the organi ation a good staffing function will devise methods which will ensure &ob satisfaction to everyone.

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R#$ru "'#n"

M#an ng:

Cecruitment is the process of searching for prospective employees and stimulating them to apply for &obs in the organi ation. When more persons apply for &ob then there will be a scope for recruiting better persons. The &ob-seekers too on the other hand! are in search of organi ations offering them employment. Cecruitment is a linkage activity bringing together those with &obs and those seeking &obs.

0n the words of Forder! "Cecruitment is a process to discover the sources of manpower to meet the re#uirements of the staffing schedule and to employ effective measures for attracting that manpower in ade#uate numbers to facilitate effective selection of an efficient working force." Cecruitment is the process which promotes people to offer for selection in an organi ation. This involves locating sources of manpower to meet &ob re#uirements. 0n his words! "it is a process of searching for prospective employees and stimulating and encouraging them to apply for &ob in an organi ation. 0t is often termed positive in that it stimulates people to apply for &obs to increase the hiring ratio! i.e.! the number of applicants for a &ob."

Pro$#++ o% R#$ru "'#n":

Cecruitment process passes thought the following stages' ,@ Finding out the sources where suitable person will be recruited. +*.' colleges .@ Jeveloping the techni#ues to attract the desired candidates. The goodwill of an organi ation in the market may be one techni#ue. The publicity about the company being a good employer may also help in stimulating candidates to apply. 1@ +mploying of techni#ues to attract candidates. There may be offers of attractive salaries! proper facilities for development! etc. 9@ The ne*t stage in this process is to stimulate as many candidates as possible and ask them to apply for &obs. 0n order to increase the selection ratio! there is a need to attract more candidates. Fa$"or+ A%%#$" ng R#$ru "'#n":

,. S !# o% "h# organ !a" on: The number of persons to be recruited will depend upon the si e of the organi ation. 6 big enterprise needs more persons at regular intervals while a small undertaking employs sometimes only. 6 big business house will always be in touch with sources of supply and shall try to attract more and more persons for making a

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proper selection. 0t can afford to spend more amounts in locating prospective candidates. So the si e of an enterprise will influence the process of recruitment. .. E'&lo-'#n" Con* " on+: The employment conditions in a country greatly influence recruitment process. 0n under-developed countries employment opportunities are limited and there is no dearth of prospective candidates. 1. Salar- +"ru$"ur# an* 8or6 ng $on* " on+: The wages offered and working conditions prevailing in an enterprise greatly influence the supply of personnel. 0f higher wages are paid as compared to similar concerns! then the organi ation will not face any difficulty in making recruitments. 6 concern offering low wages will always face the problem of labour turnover. 9. Ra"# o% Gro8"h: The growth rate of an enterprise also influences recruitment process. 6n e*panding concern will re#uire regular employment of new employees. There will also be promotions of e*isting employees to higher &obs necessitating the filling up of those vacancies' 6 stagnant enterprise will recruit persons only when present incumbent vacates his position on retirement! etc. Sour$#+ o% R#$ru "'#n":

The finding out where suitable candidates are available and informing them about the openings in the organi ation is the most important aspect of recruitment process. The candidates may be available inside ,he organi ation as well outsider it. Cecruitment sources can be described as' internal and e*ternal sources. o o o Transfers $romotions $resent employees

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A. In"#rnal Sour$#+:

0nternal source is one of the important sources of recruitment the employees already working in the organi ation may be more suitable for higher &obs than those recruited from ,. 6dvertisement .. +mployment +*changes 1. +ducation 0nstitutions 9. -nsolicited 6pplicants :. $rofessional %rgani ations ;. Jata 3anks >. Similar %rgani ations G. )asual )allers D. /abour )ontractors ,E. ,E. Trade -nions

outside. The present employees may help in the recruitment of new persons also internal sources are discussed as follows' ,. Tran+%#r+: Transfer involves shifting of persons from present &obs to other similar places. These don(t involve any change in rank! responsibility and prestige. The numbers of persons don(t increase with transfer but vacant posts may be attended to. .. Pro'o" on+: $romotions refers to shifting of persons to positions carrying better prestige! higher responsibilities and more salaries. The higher positions falling vacant may be filled up from within the organi ation. 6 promotion doesn(t increase the number of persons in the organi ation. 6 person going to get a higher position will vacate his present position. $romotion avenues motivate employees to improve their performance so that they get promotions to higher position.

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1. Pr#+#n" E'&lo-##+: The present employees of an enterprise may be informed about likely vacant position. The employees recommend their relations or persons intimately known to them. Management is relieved of botheration for looking out prospective candidates. The persons recommended by the employees will be suitable for the &ob because they know the needs 8 re#uirement of various positions. The e*isting employees take full responsibility for those recommended by them and try to ensure their proper behavior and performance. This method of recruiting employees is suitable for lower position only. 0t may create nepotism and favoritism. The workers may be employees on the basis of their recommendations and not suitability.

M#r "+ o% In"#rnal Sour$#+:

,. I'&ro.#+ Moral#: The internal sources of recruitment will boost morale of employees. They are assured of higher positions whenever vacancies arise. +*isting employees are given preferences in promotions. %utsiders are employed only when suitable candidates are not available from within. .. Pro&#r E.alua" on: The management is in a better position to evaluate the performance of e*isting employees before considering them for higher positions. 6n outside employed &ust on the basis of an interview may not prove suitable later on. The service records of e*isting employees will be a guide to study their suitability for ensuring vacancies. 1. E$ono' $al: The method of internal recruitment is economical also. The cost incurred in selecting a person is saved. Moreover! internal candidates do not re#uired any training since they are well ac#uainted with various &obs in the organi ation. 9. Pro'o"#+ Lo-al"-: 0nternal sources of recruitment promote loyalty among employees. They are preferred to consider at the time of filling up higher positions. They will feel a part and parcel of the organi ation and will always try to promote its interests. D#'#r "+ o% In"#rnal Sour$#+:

,@ L ' "#* O&" on+: The recruitment of only internal candidates restricts the choice of management. The present employees may not be suitable to take up position of higher responsibility but there will be no option. 6 person will be selected only out of the available candidates. The outside candidates! even though they may be suitable! will not get a chance to show their talent. 0nternal sources may dry up in the meantime and filling up of higher position will bbecome a problem. .@ La$6 o% Or g nal "-: The present employees may not be able to bring new ideas. They will be accustomed to carry on things in the same old ways. 2ew persons will bring fresh thinking and new methods may be tried.

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5. E7"#rnal Sour$#+:

+very enterprise has to use e*ternal sources for recruitment to higher positions when e*isting employees are not suitable. More person are needed when e*pansion are undertaken. +*ternal methods are discussed as follows.

,. A*.#r" +#'#n": 6dvertisement is the best method of recruiting persons for higher and e*perienced &obs. The advertisements are given in local or national press! trade or professional &ournals. The re#uirements of &obs are given in the advertisement. The prospective candidates evaluate themselves against the re#uirement of &obs before sending their applications. Management gets a wider range of candidates for selection. The flood of applications may create difficulties in the process. .. E'&lo-'#n" E7$hang#+: +mployment +*changes run by the government are also a good source of recruitment. -nemployed persons get themselves registered with these e*changes. The vacancies may be notified with the e*changes! whenever there is a need. The e*change supplies a list of candidates fulfilling re#uired #ualification. +*changes are a suitable source of recruitment for filling unskilled! semi-skilled! skilled and operative posts. The &ob seekers and &ob- givers are brought into contact by the employment e*changes. $rivate agencies also help in recruiting #ualified and e*perienced person. These agencies remain in contact with employees and persons seeking change in &obs for higher posts.

1@ E*u$a" on In+" "u" on+: The &obs in trade and industry are becoming technical and comple*. These &obs re#uire certain amount of educational and technical #ualifications. The employers maintain a close liaison with universities and technical institutions. The students are spotted during the course of their studies. Ounior level! e*ecutives or managerial may be recruited in this way. 9@ (n+ol $ "#* A&&l $an"+: $ersons in search of employment may contact employers through telephone! by post or in person. Aenerally! employers with good reputation get unsolicited applications. 0f an opening is there or is likely to be there then these persons are considered for such &obs. $ersonnel department may maintain a record of unsolicited applications. When &obs suitable for these persons are available these persons are available these are considered for employment. :@ Ca+ual Call#r+: Management may appoint persons who casually call on them for meeting short-term demands. This will avoid following a regular procedure of selection. These persons are appointed for short periods only. They need not be paid retrenchment or layoff allowance. This method of recruitment is economical because management does not incur a liability in pensions! insurance and fringe benefits. ;@ La0our Con"ra$"or+: 0t is #uite common to engage contractors for the supply of labour. When workers are re#uired for short period and are hired without going through the full procedure of selection etc..! contractors maintain regular contracts with works at their

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places and also bring them to the cities at their own e*pense. The persons hired under this system are generally unskilled workers. >@ La0our (n on+: /abour unions are one of the sources of e*ternal recruitment. The &ob seekers are re#uired to register with labour unions! 8 the labour unions are re#uire to supply the names of persons for filing the vacancies. This method may encourage good co-operation between business firms and labour unions! active participation of persons in labour unions! the development of leadership #ualities in workers! etc.! G@ Con+ul" ng Ag#n$ #+: )onsulting agencies are one of the important sources of recruitment! especially for big companies. )onsulting agencies are speaclised agencies which recruit people on behalf of their clients. They invite application for &obs specified by their clients from &ob seekers through advertisements! screen the application! interview the candidates and select the suitable candidate. They do these services for their clients for some Fees. D@ E*u$a" onal In+" "u" on+: -niversities! )olleges 8 Management institute are also one of the sources of recruitment of personnel! particularly for the posts of Scientists! +ngineers 8 Management specialist. They have there own employment bureaus to help business organi ations in recruiting the students for various &obs. ,E@ Wa " ng L +": Waiting list maintained by a business firm is one of the sources of recruitment. Many business firms prepare waiting list of candidates who have already been interviewed and considered suitable for employment! but could not be appointed for lack of vacancies. When vacancies arise! the candidates in the waiting list are appointed. ,,@ Pr#+#n" E'&lo-##+: $resent +mployees are also one of the sources of recruitment of personnel. The present employees of the concern are asked by the management to recommend suitable persons for employment in the concern. ,.@ 5u+ n#++ Fr #n*+: 3usiness Friends are one of the sources of recruitment. 3usiness Friends are! some times! re#uested by a concern to recommend suitable persons for employment. ,1@ R#-#'&lo-'#n" o% %or'#r #'&lo-##+ ho8 ha.# 0##n la * o% or ho8 ha.# r#+ gn#* %or &#r+onal r#a+on+: These people re#uire less induction training! as they know the policies and the activities of the concern. ,9@ 5an6+ an* O"h#r F nan$ al In+" "u" on+: 3anks and %ther Financial 0nstitutions are one of the sources of recruitment. These financial institutions are asked by there customers! namely! 3usiness "ouses! to recommend suitable personnel of employment. ,:@ Su&&l #r+ o% Goo*+: Suppliers of goods are one of the important sources of recruitment. They are asked by their customers! namely business houses! to recommend suitable persons for employment. ,;@ L#a+ ng: /easing is one of the sources of recruitment! particularly for public sector undertakings. 0t is resorted to for securing managerial personnel at higher levels from civil services! accounts services and defense services! for specific periods. M#r "+ o% E7"#rnal Sour$#+:

,@ A.a la0 l "- o% Su "a0l# P#r+on+: 0nternal sources! sometimes! may not be able to supply suitable persons from within. +*ternal sources will give a wide choice for selection to the management. 6 larger number of applicants may be willing to &oin the organi ation. They will also be suitable as per the re#uirements of skill! training and education. "$ Page "$ of 90

.@ 5r ng+ N#8 I*#a+: The selection of persons from outside sources will have the benefit of new ideas. The persons having e*perience in other concerns will be able to suggest new things and methods. This will keep the organi ation in a competitive position. The present employees may not be able to infuse new thinking because their ways of thinking will remain the same. 1@ E$ono' $al: This method of recruitment may prove economical because new employees may not re#uire much training for the &obs. D#'#r "+ o% E7"#rnal Sour$#+:

,@ D#'oral !a" on: When new persons from outside &oin the organi ation then present employees feel demorali ed because these positions should have gone to them. There will be a heart burning among old employees. Some employees may even leave the enterprise to find out better avenues in other concerns. .@ La$6 o% Co-o&#ra" on: The old staff may not co-operate with the new employees because they feel that their right has been snatched away by them. This problem will be acute especially when persons for higher positions are recruited from outside. 1@ E7&#n+ .#: The process of recruiting from outside is very e*pensive. 0t starts with giving costly advertisements in the media and then arranging written tests and conducting interviews. 0n spite of all this if suitable persons are not available among the applicants then the whole process will have to be repeated. 9@ Pro0l#' o% Mala*1u+"'#n": There may be a possibility that the new entrants have not been able to ad&ust in the new environment. They may not temperamentally ad&ust with the new persons. 0n such cases either the persons may leave themselves or management may have to replace them. These things have adverse effect on the working of the organi ation. D %%#r#n$# 0#"8##n n"#rnal an* #7"#rnal +our$#+ o% r#$ru "'#n"

5a+#+ o% In"#rnal Sour$#+ D %%#r#n$# , . 1 9 Meaning 3ases Time involved )ost Cecruitment is form within the organi ation. 0t is generally based on seniority cum merit. 0t is less time consuming. 0t is a cheap source of recruitment.

E7"#rnal Sour$#+ 0t is the recruitment from outside employees. 0t is strictly based on merit and #ualifications. 0t is a time consuming e*ercise. 0t is an e*pensive source of recruitment. 0t involves time! e*pense and resources.


2o reference of the employees Since enterprise does not is needed since all his records know about person! "9

Page "9 of 90

are available with the concern.

references about previous work! conduct and character are needed.


There is a limited choice from There is a wide choice from among the present employees. a large number of applicants.

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S#l#$" on

M#an ng:

Selection is a process of choosing duly #ualified persons according to the re#uirement of the &ob. 0n recruitment an effort is to attract more and more applicants while in selection the effort is to eliminate unsuitable persons. The number of applicants will be much more than the positions vacant. 0t becomes important to scruitinise applications properly and cal for interview only those persons who are suitable for &obs. The selection of a right person will improve will #uantity and #uality of performance.

D#% n " on:

Jabyoder "Selection is the process in which candidates for employment are divided in two classes! those who are to be offered employment and those who are not."

S#l#$" on Pro$#++:

The selection procedure consists of a series of methods or steps or stages by which additional 0nformation is secured about an applicant. 6t cash stage facts may come to light which may lead to the re&ection of an applicant. Selection procedure is re#uired to cross before he is finally selected. The following steps are generally followed in a selection process' ,@ .@ 1@ 9@ :@ ;@ >@ G@ D@ Ceceipt and scrutiny of applications. $reliminary interview. 3lank application form. Tests. 0nterviews. )hecking references. $reliminary and final selection. $hysical e*amination. $lacement and orientation.

,@ R#$# &" an* S$ru" n- o% A&&l $a" on+: The receipt and scruting of applications is the first step in the process of selection. 6 receptionist in the personnel department gives information about new opening to the visitors and receives their application. The scrutiny of applications is essential to take out those applications which do not fulfill the re#uirements of posts. Some people send applications even when they do not #1 Page #1 of 90

possess the re#uired e*perience and #ualifications. These applicants! if called for preliminary interview! will waste their own time and that of the company. These applications should out rightly be re&ected and information should be sent to the applicants in this regard. .@ Pr#l ' nar- In"#r. #8: $reliminary interview is the first occasion when applicants come into contact with company officials. This interview is to see whether applicants are suitable for the company both mentally and physically. The candidates are asked #uestions regarding his education #ualifications! e*perience! age! hobbies! etc. Since re&ection rate is high at preliminary interview should be courteous! kind! receptive and informal. "e should give a good account of the company so that the applicant takes a good view of it and hopes to apply again whenever new opening comes. The applicants selected at preliminary interview are given blank application forms for supplying detailed information.

1@ 5lan6 A&&l $a" on For': 6 blank application form is a widely accepted device for getting information from a prospective applicant. This is away of getting written information about candidate(s particulars in his own handwriting. 0t enables the personnel department to draw tentative inferences about the applicant(s suitability for employment. The information collected in the application form may also be circulated to various members of selection committee for enabling them to make a view about different applicants. The information collected in blank application relates to the following particulars< i. 5 o-*a"a: 3io-data includes name of the applicant! father(s name! date of birth! place of birth! permanent adders! height! weight! identification mark! marital status! physical disability! etc. ii. E*u$a" on Dual % $a" on+: This part of educational #ualifications relates to education ac#uired! institutions attended! percentage of marks! distinctions achieved! technical education ac#uired! sub&ects studied! areas of speciali ation. iii. Wor6 #7&#r #n$#: 6pplication blank also en#uires about previous e*perience! similar or other &obs held! nature of duties! salaries received! name of previous employers! reasons for leaving the present &ob. iv. Curr $ular a$" . " #+: The information about participation in e*tracurricular activities like 2.S.S.! 2.).).! debates and declamations! sports" etc is also received in blank application form. v. R#%#r#n$#+: The applicant is also asked to give some references from where an en#uiry may be made about his nature and work. The references are normally the persons with whom the applicant has worked but are hot related to him. vi. Salar- *#'an*#*: The salary demanded by the applicant is also given in the application blank. 6n attempt is made to elicit ma*imum information in application blank. The information asked for should be relevant and specific. 0t should have relevance to the post he has applied for. The information collected should be brief and to the point. Puestions re#uiring essay-type answer should be avoided..

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TESTS 9@ T#+"+: The use of tests for making selection is the most controversial step. Some persons are of the view that tests do not serve any purpose and do not improve selection process. %n the other< "hand! some persons are of the view that tests give a valid &udgment about the traits of applicants. Within these views! the use of tests is becoming important these should not be used &ust for the sake of use. The selection of appropriate tests may give good results and help in appointing suitable persons. The worth of test will be &udged from its ability to re&ect unsuitable persons and help in selecting appropriate persons. Chara$"#r +" $+ o% Goo* T#+":

6 good test has the following characteristics' ,@ R#l a0 l "-: a test should be reliable. Celiability of test means that it gives same results when applied to a person at different time. 6 test will not be reliable if it gives varied results when applied to the same person. For e*ample! an intelligence test is applied to a person on Sunday and he gets a score of ,EE. The test is applied again to the same person on Wednesday and it given a score of ,.E. This test will not be called reliable because it has given varied results. .@ O01#$" . "-: the test should be similarly applicable to different persons. The results of the test should not have a bias in favour of persons with particular education or technical background. 0t should be so constructed that two or more persons can score the responses to items! #uestions or tasks in the same way. 1@ Con+ +"#n$-: a good test should give consistent results when carried out on different persons at different times. For e*ample! a test shows * superior to y when it is applied on a particular day. 0f the test is repeated on the same persons on a different day it should again show the superiority of Q over F. 0f this is so the test will be consistent. 9@ S"an*ar* !a" on: a good test must be standardi ed. 0t may be administered under standard conditions to a group of persons who are representatives of the individual for whom it is intended. The methods and procedures for conducting and measuring results should also be standardi ed. T-&# o% "#+": 6 variety of tests may be used to get results at different times. $sychologists have devised a number of tests which are fre#uently used. Some of the psychological tests are as follows' ,. $roficiency tests .. 6ptitude tests

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6. Pro% $ #n$- "#+"+: These tests measure the skill or training which the applicant possesses at the time of testing. The claims of the applicants about his ability to perform a particular &ob are tested on actual work conditions in the factory .0f the applicant is a candidate for the post of a foreman! he may be asked to e*plain the working of different machines. 6n applicant for the post of a sales e*ecutive may be asked to e*plain a procedure he will follow for promoting the sales of a product. These tests may be conducted in writing! orally or on the &ob. ,. D#7"#r "- T#+"+: These tests are designed to find out how efficiently and swiftly an applicant uses his hands! fingers! eyes or other parts of body. These tests are useful where work re#uires the swift movement of parts of body. 3. A&" "u*# "#+"+: Such tests measure the skill and ability which a person may develop later on. These measure the talent 7 ability of a candidate to learn new &ob or skill. The aptitude for learning and bent of mind is assessed in these tests. ,@ In"#ll g#n$# T#+": These tests measure the overall intellectual activity or intelligence #uotient ?0.P.@ of the applicants. We can know about the capability of a person in dealing with new problems. 6pplicant(s word fluency! memory! reasoning are also determined with these tests. 0ntelligence tests! generally! consist of a long list of #uestions! problem solving #uestions! reasoning! multiple-choice #uestions which are to be answered in a given time. The score of persons is &udged against pre-decided scales. These tests are very useful for selecting persons for &obs re#uiring e*ecutive responsibilities. .@ P#r+onal "- T#+"+: $ersonality tests are designed to know about the nonintellectual aspect of the candidate. "is mi*ing with people! temperament! likings and disliking! capacity to get co-operation from others! behaviour! confidence! initiative are studied with the help of these tests. $ersonality tests are essential for selecting persons for middle and higher level positions.

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$ersonality test also help to discover individual(s value system! his emotional reaction and maturity ! his reaction under certain conditions! his ad&ustability to new situation and his characteristic mood. These tests are widely used in industry because they provide a well-rounded personality of the applicant. 1@ Mo.#'#n" T#+"+: These measure the speed and precision of movement in an applicant. The nature of &ob may re#uire swift movements of the person working there. These tests are essential for person undertaking technical &obs. 9@ In"#r#+" T#+"+: These tests are aimed to find out the type of work in which an applicant is interested. The liking and disliking of the persons are also &udged. These tests are helpful in assigning different &obs to the persons. 0f a person is assigned the &ob of his liking he is likely to contribute more. "e may also find out better ways of doing that &ob. The efficiency and &ob satisfaction will be more if the &obs are according to the tastes of the persons. A*.an"ag#+ o% "#+"+:

Tests can prove useful if used properly and under appropriate conditions. Some of these advantages are as follows' ,@ Pro&#r A++#++'#n": Test provide a basis for finding out the suitability of candidates for various &obs. The mental capability ! aptitude! linking and interests of the candidates enable the selectors to find out whether a particular person is suitable for the &ob for which he is a candidate or not. .@ O01#$" .# A++#++'#n": Tests provide more ob&ective criteria than any other method. Sub&ectivity of every type is almost eliminated. 1@ -niform 3asis' Tests provide a uniform basis for comparing the performance of applicants. Same tests are given to the candidates and their score will enable selectors to see their performance. 9@ S#l#$" on o% 5#""#r P#r+on+: The aptitude! temperament and ad&ustability of candidates are determined with the help of tests. This enables their placement on those &obs where they will be most suitable. This will improve their efficiency and &ob satisfaction. :@ La0our Turno.#r R#*u$#*: $roper selection of person will greatly reduce labour turnover. 0f suitable persons are not selected then they will leave the &ob sooner or later. Tests are helpful in finding out the suitability of person for the &obs. 0nterest tests will help in knowing the liking of applicants for different &obs. When a person gets a &ob according to his temperament and interest he will not leave it. D +a*.an"ag#+ o% T#+"+:

The tests suffer from the following disadvantages' ,@ (nr#l a0l#: The inference drawn in the tests may not be correct in some cases. The skill and ability of a candidate may not be correct in some cases. The skill and ability of a candidate may not be properly &udged with the help of tests. #! Page #! of 90

.@ Wrong (+#: The test may not be properly used by the employees. 0t is also possible that persons applying these tests may be biased towards certain persons. This will falsify the results of tests. Tests may also give unreliable results if used by incompetent persons. 1@ F#ar o% E7&o+ur#: Some persons may not submit to the tests for fear of e*posure. They may be competent but may not like to be assessed though the tests. The enterprise may be deprived of the services of such personnel who are not willing to appear for the tests but otherwise may be suitable for the concern. E. In"#r. #8+

T-&#+ o% n"#r. #8+: 0nterviews may be of many types but some of these are discussed here'

,@ Pa""#rn#* or S"ru$"ur#* In"#r. #8: this is the most common method of (interview is systematically planned in advance. The type of information to be asked! details to be en#uired! information to be given! time allotted for! it are all planned properly. The interview is conducted in a pre-planned se#uence. 0f the candidate makes some #ueries and the se#uence is disturbed! the #uestions are started again from where these were left. These interviews are called standardi ed interviews. .@ Fr## In"#r. #8: this is unstructured interview and is not planned as to its format. The candidate is asked to e*press his views on general topics interview is not directed as to #uestions but the candidate e*presses his views on his upbringing! interests! motivations! etc. the interviewers make &udgement as to the strengths and weakness of the candidate. The interviewer should be an e*perienced person because it is very difficult to make &udgement on such interviews. 1@ A$" on In"#r. #8: This is semi-structured interview where #uestions are asked on the sub&ects studied by the candidate. "e is also asked #uestions about his previous e*perience! aptitude! hobbies etc. the interview gives information about the nature of &ob the candidate will be e*pected to perform! salary offered! avenues for promotion etc. the replies of candidates are used to assess the potentiality of the candidate and his suitability for the &ob. 9@ Grou& In"#r. #8: 0n group interview! a group of candidates is interviewed at a time. They are given some problems for discussion. The candidates e*press their views on the problems. Someone initiates the discussion and someone may wind it up. The interviews &udge the views! initiative taken! way of e*pression of candidates. The candidates are &udged by performance in the group discussion. :@ Pan#l or 5oar* In"#r. #8: 0n his interview the candidates is interviewed by a panel of selectors. Jifferent interviewers put #uestions on separate topics. For e*ample! first interviewer may ask #uestions about the educational #ualifications! second may put #uestion on previous e*perience! third may ask general knowledge #uestions and so no. the candidate is selected or re&ected on the basis of combined rating by the panel. #" Page #" of 90

;@ S"r#++ In"#r. #8: The stress interview is to see how a candidate behaves in a difficult situation. The interviewer assumes a hostile attitude towards the candidate. The candidate may be asked #uestions in rapid succession! #uestions may be put on his answers! he may be critici ed for some of his answers! his arguments may be re&ected outrightly and so on. The purpose of such an interview is to see whether a candidate keeps his cool under stress situations! what is his reaction to hostile situations! etc.! The interviewer must be an e*perienced person otherwise such interviews will not prove useful. ;. Ch#$6 ng R#%#r#n$#+: The references may provide significant information about the candidate if they happened to be his former employers or with whom he might have been working earlier. The applicants are normally asked to name two or three persons who know about his e*perience! skill! ability! etc.! but should not be related to him. >. Pr#l ' nar- an* F nal S#l#$" on: -pto this stage selection is handled by personnel department or staff e*ecutives. Since the persons employed are to work under line officers! the candidates are referred to them. /ine officers will finally decide about the work to be assigned to them. 0f line officer is a production manager or foreman he may assess on the &ob performance of the candidates. 0f the candidate is not suitable for one &ob then he is tried at some other. 0f candidateRs performance is not upto the mark then he may be kept as apprentice for some time. 2ormally! a candidate is not re&ected at this stage. G. Ph-+ $al E7a' na" on: The &obs may re#uire certain physical standards as to height! eyesight! hearing etc. 6fter the final selection! candidates are re#uired to appear for medical e*amination. For civil services and military &obs! the candidates are appointed only when they clear medical test. +ven for &oining a government &ob! a medical fitness certificate from the )ivil Surgeon or State Medical 3oard is essential. $rivate organisations too re#uire a medical fitness certificate. D. Pla$#'#n" an* Or #n"a" on: +ven after going through the rigorous procedure as e*plained in various steps! the selection procedure is not complete. The placement and orientation of the employee is also an important in this direction. D %%#r#n$# 0#"8##n R#$ru "'#n" an* S#l#$" on:

5a+#+ o% In"#rnal Sour$#+ D %%#r#n$# , . Na"ur# M#an ng 0t is positive in nature. 0t involves the identification of sources of potential employees and encouraging them to apply. Cecruitment process starts

E7"#rnal Sour$#+ 0t is negative in nature. 0t is the selection from amongst the #ualified applicants. Selection starts after the


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before selection. 9 Cla++ % $a" on The sources of recruitment are classified as internal and e*ternal. O01#$" 0ts main ob&ect is to create a large pool of candidates.

process of recruitment. There is no such classification. 0ts ob&ect is to select the most appropriate person after eliminating others.

R#+"r $" on

There is no restriction on the %nly restricted number of number of persons applying persons are selected. for the &ob

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Tra n ng an* D#.#lo&'#n"

In"ro*u$" on 6fter suitable candidates are selected for various &obs! there is a need for the management to provide for training and development. Training and Jevelopment of the personnel is #uite essential in these days when the process and techni#ues of the management have become highly complicated. Training and Jevelopment is essential for the improvement of the personnel and for making them fit into their &obs. The efficiency of an organi ation depends on the training and development of the personnel.

M#an ng o% Tra n ng an* D#.#lo&'#n":

Training is the act of imparting information and special skills to trainee for the purpose of increasing his knowledge and skills for doing the particular &ob. Training is mainly &ob oriented. 0t is given to both new and old personnel throughout their stay in the organi ation.

%n the other hand! development includes the process by which the personnel ac#uire not only skills and competence in their present &obs! but also capacities for future tasks or positions. Jevelopment includes all those activities and programmes! when recogni e and controlled! have substantial influence in changing the capacity of the individual to perform is assignment better! and in so doing! are likely to increase potential for future higher assignments. 0n short! development refers to the programmes which contribute to the growth of the personnel to all respects.

N##*+ %or, an* '&or"an$# an* 0#n#% "+ o% Tra n ng:

Training and Jevelopment of the personnel is #uite essential for the successful working of any concern. 3. Flippo has highlighted the importance of training in the following words =2o organi ation as a choice of whether to train or not! the only choice is that of methodsH.

Training offers several benefits. They are'

,. Training increases the knowledge and skill of the personnel! and there by helps them to increase the #uantity and #uality of the output. .. Training helps the trainee to utili e and develop is full potential 1. When there is training! a person doesnRt take much time to achieve the re#uired level of the performance. This gives him &ob satisfaction. #9 Page #9 of 90

9. When training is imparted to personnel! they feel that they are taken care of by the management. This will increase moral of the personnel. :. Training enables the personnel to make the best and the most economical use of the resources of the organi ation. This result in reduction in cost of production. ;. Trained personnel needs less supervision. That means! training contributes to increase in the span of the management. That is! when personnel are trained! a superior can supervise more subordinates. This result is reduced cost of supervision. >. Training helps in building a second in line of competent officers or managers. 6s a result! there will be competent replacement for more responsible positions. G. The availability of trained personnel ensures the long Nterm stability and fle*ibility of the organi ation. D. 3uy e*posing the personnel to the latest concept! information and techni#ues! trainings makes the personnel better #ualified! and thereby ! increases there employability Si.e.! their market value and earning power. ,E. Training gives an employee personnel confidence in handling the &ob assigned to him. T-&#+ o% "ra n ng &rogra''#+ Training programmes are four types .There are' ,. 0nduction or orientation training. .. Oob training 1. $romotional training 9. Cefresher training Tra n ng an* D#.#lo&'#n" M#"ho*+: There are a number of training and developed methods for different types of personnel at different levels. The various training and development methods can be broadly classified into two categories. They are ?,@ %n N the N&ob methods and ?.@ off-the-&ob methods.

%n-the-&ob methods' Cefers to the methods which re#uired the trainee to undergo training! while he is actually engaged in work.

There are many on-the-&obs methods of training. There are' ,. .. 1. 9. :. ;. 6pprenticeship training 0nternship training Training on specific &ob Oob rotation Special pro&ect or task force on special assignment Lisible training ?i.e.! giving training to a employee by the specialists of the concern by duplicating as nearly place as possible the actual working conditions of the work@ >. )ommittees and &unior boards O%%-"h#-1o0 '#"ho*+:

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%ff-the-&ob methods refers to methods which re#uire the trainee to leave his work place for under going training programmes. The training programmes may be conduct by the enterprise itself or by the e*ternal agencies.

%ff-the-&ob methods include' ,. .. 1. 9. :. Special courses and lectures )onferences and Seminars )ase studies Simulation-role playing Sensitivity training

-nder simulation role playing! instead of taking of the trainees to the field! the real situation of the work environment in an organi ation is presented to the trainees in the training session itself! and the trainee and made to act on samples of real business situation in order to practice in decision-making. Cole-playing is one of the common simulation method of training.

Sensitivity training or T-group training means the development of awareness and sensitivity to behavioural pattern of oneself and another. 0n other words! it is an e*periences in interpersonnel relationship which result in a change in feeling an attitudes towards oneself and another. -nder this method! the trainees are unable to see themselves as other see them! and develop an understanding and others views and behavior.

This method aims to influence an individual behaviour through group discussion. This method helps the participants to understand how groups actually work and gives them a chance to discuss how they are interpreted by others. 0t also aims to increasing tolerance for the points of individuals and his ability to understand others.

P#r%or'an$# A&&ra +al, E'&lo-## A&&ra +al, E'&lo-## Ra" ng or M#r " Ra" ng

In"ro*u$" on:

$erformance appraisal means the systematic appraisal or evaluation of the performance of personnel by some #ualified person. 0n other words! it is the systematic evaluation of the personality! performance and potential of each of the personnel by his superior or by some other #ualified person. 0n short! it is the systematic evaluation of an +mployeeRs performance of his &ob in terms of its re#uirements

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I'&or"an$# an* A*.an"ag#+ o% P#r%or'an$# A&&ra +al

,. 0t helps the management to appraise the performance of the personnel! which of immense help to the running of the organi ation. .. 0t is helpful to the management to rate all the personnel on the same method of measurement. 1. 0t forms a scientific basis for management decisions like increase in pay! transfer! promotion! etc.! 9. 0t provides the personnel with information relating to their strong and week points. This provides and incentive to the personnel to improve there performance. :. 0t serves as an guidance for the management to consider the types of training! which should be imparted to the personnel. ;. 0t helps the management in the proper placements of the personel. >. 0t will help in preventing the grievances of the personnel! if it is conducted scientifically and systematically. G. 0t provides &ob satisfaction to the personnel! and there by! improves the morale of the personnel. D. The records of performance appraisal will be available permanently! and there will protect the management against subse#uent charges of discrimination. ,E. 0t helps management to ensure that the personnel or assigned &obs for which they are best suited. ,,. 0t helps to evaluate the suitability of the selection policy and procedure of the organi ation ,.. 0t helps to evaluate the suitability of the training and development methods adopted by the concern ,1. 0t helps in improving the employer-employee relations. P#r%or'an$# A&&ra +al M#"ho*+:

,. .. 1. 9.

)heck /ist Method Man-to-man comparison Method +asy Method )onfidential Ceport Method DIRECTING

M#an ng:

Jirection is called management in action. 0n the words of Thco "aimann! "0n order to make any managerial decision really meaningful! it is necessary to directingH. D#% n " on:

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0n the words of Boont and %(Jonnel! "Jirecting is the interpersonal aspect of managing by which subordinates are led to understand and contribute effectively and efficiently to the attainment of enterprise(s ob&ectives".

Na"ur# or Chara$"#r +" $+ o% * r#$" on:

,@ .@ 1@ 9@ :@

0t is a Jynamic Function 0t 0nitiates 6ction 0t $rovides 2ecessary /ink 3etween Larious Managerial Function 0t is a -niversal Function 0t is )oncerned With "uman Celationships'

Pr n$ &l#+ o% #%%#$" .# * r#$" on:

+ffective direction leads to greater contribution of subordinates to organi ation goals. The directing function of management can be effective only when certain well accepted principles are followed. The following are the basic principles of effective direction'


Har'on- o% O01#$" .#+: it is an essential function of management to make the people reali e the ob&ectives of the group and direct their efforts towards the achievement of their ob&ectives. The interest of the group must always prevail over individual interest. +ffective direction fosters the sense of belongingness among all subordinates in such a way that they always identify themselves with the enterprise and tune their goals with those of the enterprise. 00@ (n "- o% Co''an*: This principle states that one person should receive orders from only one superior! in other words! one person should be accountable to only one boss. 0f one person is under more than one boss then there can be contradictory orders and the subordinate fails to understand whose order to be followed. 0n the absence of unity of command! the authority is undermined! discipline weakened! loyalty divided and confusion and delays are caused. 000@ (n "- o% D r#$" on: To have effective direction! there should be one head and one plan for a group of activities having the same ob&ectives. 0n other words! each group of activities having the same ob&ectives must have one plan of action and must be under the control of one supervisor. 0L@ D r#$" Su&#r. + on: The directing function of management becomes more effective if the superior maintains direct personal contact with his subordinates. Jirect supervision infuses a sense of participation among subordinates that encourages them to put in their best to achieve the organi ational goals and develop all effective system of feedback.

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L@ Par" $ &a" .# or D#'o$ra" $ Manag#'#n": The function of directing becomes more effective if participative or democratic style of management is followed. 6ccording to this principle! the superior must act .according to the mutual consent and the decisions reached after consulting the subordinates. 0t provides necessary motivation to the workers by ensuring their participation and acceptance of work methods. L0@ E%%#$" .# Co''un $a" on: To have effective direction! it is very essential to have an effective communication system which provides for free flow of ideas! information! suggestions! complaints and grievances. L00@ Follo8-(&: 0n order to make direction effective! a manager has to continuously direct! guide! motivation and lead his subordinates. 6 manager has not only to issue order and instructions but also to follow-up the performance so as to ensure that work is being performed as desired. "e should intelligently oversee his subordinates at work and correct them whenever they go wrong. I'&or"an$# o% D r#$" on:

Jirecting various employees in an organi ation is an important managerial task. 0t is indispensable for achieving enterprise ob&ectives. +ffective direction provides the following advantages' ,@ In " a"#+ A$" on: Jirection is re#uired to initiate action. The function of planning! organi ing! staffing etc.! will be taken up only when direction is given to initiate them. Jirection starts the actual work for achieving enterprise ob&ectives. .@ I'&ro.#+ E%% $ #n$-: 6 manager tries to get ma*imum work from his subordinates. This will be possible only through motivation and leadership and these techni#ues are a part of direction. 1@ En+ur#+ Co-or* na" on: Jirection helps in ensuring mutual understanding and team work. The individual efforts are directed in such a way that personal performances help in achieving enterprise ob&ectives. The integration of various activities is possible through direction. 9@ H#l&%ul n I'&l#'#n" ng Chang#+: 6 business operates in a changing environment. 2ew situation develop every now and then. 6 proper system of motivation will help employees in taking up new challenges. :@ Pro. *#+ S"a0 l "-: +ffective leadership! supervision and motivation will help in the smooth growth of an enterprise. 6 growing concern will provide stability to its activities. ;@ Mo" .a" on: Motivation is an important element of direction. Motivation is a factor which encourages person to give their best performance and help in achieving enterprise goals. 6 strong positive motivation will enable the increased output of employees. 6 key element in direction is motivation. 0t helps in getting willing co-operation of employees. +very organi ation makes efforts that its employees contribute ma*imum for achieving goals. >@ Su&#r. + on: Jirection involves giving instruction to employees for undertaking some work in order to see whether employees are doing the thing as per targets or not there is a need for supervision. 0n supervision all the activities of the employees are controlled $4 Page $4 of 90

and efforts are made to ensure proper achievement of targets. 0n case the performance is less than the targets then remedial steps are taken for improving the performance. So supervision is an integral part of direction. G@ Co-or* na" on: Jirection will be effective only when there is a proper co- ordination. 0n direction! different persons are asked to perform specific task. 0n order to see that efforts of every employee are in the direction of achieving organi ational goals there is a need to co-ordinate various activities. 0n the absence of co-ordination every person will go in his own direction without bothering for the enterprise target. When various activities are co-originated then overall enterprise ob&ectives will be easily achieved.

&ontrol is one of the managerial functions. 'hese functions start ith (lanning and end at controlling. 'he other functions li)e organi*ing, staffing, directing act as the connecting li)e bet een (lanning and controlling. Planning ill be successful only if the (rogress (lanning and controlled, Planning in%ol%es setting u( of goals and ob+ecti%es hile controlling see)s to ensure


Knootz and O'Donnel: ,'he measurement and correction of the (erformance of acti%ities of subordinates in order to ma)e sure that enter(rise ob+ecti%es and (lan de%ised to attain them are being accom(lished.- 'he accom(lishment of organi*ational goals is the main aim of e%ery management. 'he (erformance of subordinates should be constantly atched to ensure (ro(er im(lementation of (lans. &o.ordination is the channel through hich goals can be achie%ed and necessary

Henry Fayol:

-In an underta)ing, control consists in %erifying hether e%erything occurs in conformity ith the (lan ado(ted, the instructions issued and (rinci(les established-. It has to (oint out ea)ness and errors in order to rectify them and (re%ent recurrence. It o(erates on e%erything/

Characteristics of Control 1. 0anagerial 1unction 2. 1or ard 2oo)ing $! Page $! of 90

3. &ontinuous Acti%ity 4. &ontrol is related to (lanning !. 3ssence of &ontrol is Action te!s in Controllin" #rocess 1. Setting of &ontrol Standards 2. 0easurement of Performance 3. &om(aring Actual and Standard Performance 4. 'a)ing &orrecti%e Action.

Techni$%es of Control or &ethods of 'sta(lishin" Control

A number of techni4ues or tools are used for the (ur(ose of managerial control. Some of the techni4ues are used for the control of the o%erall (erformance of the organisation, and some are used for controlling s(ecific areas or as(ects li)e costs, sales, etc.

)* +%d"etary control techni$%e ,* Non-(%d"etary control techni$%es

)* +%d"etary control techni$%e 'he techni4ue of budgetary control refers to the use of budgets as the means for controlling the acti%ities of a business.

,* Non-(%d"etary control techni$%es 5on.budgetary control techni4ues refer to all techni4ues of control other than the techni4ue of budgetary control. 5on.budgetary control techni4ues include techni4ues such as/ a. Standard &osting b. 6rea).e%en analysis c. In%entory &ontrol d. Internal Audit e. Statistical data analysis f. Personal obser%ation g. Production (lanning and control

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h. 1inancial statement analysis i. +. l. 7eturn on in%estment control 0anagement information system P37' 8 &P0

). 0anagement audit m. 9uman resources accounting n. 7es(onsibility accounting

It may be noted that this ty(e of classification of control techni4ues :i.e., classification of control techni4ues into budgetary control techni4ue and non.budgetary control techni4ues; is not 4uite common.

Techni$%es of Control are: 1. 'raditional or &on%entional 'echni4ues 8 2. 0odern or &ontem(orary 'echni4ues

Classification of Control Techni$%e into Traditional and &odern Techni$%es: As stated abo%e, the %arious techni4ues of control can be classified into categories, %i*., :1; 'raditional or &on%entional techni4ues and :2; 0odern or &ontem(orary techni4ues.

The i-!ortant Traditional or Con.entional techni$%es are: 1. 6udgetary &ontrol 2. Standard &osting 3. 6rea).e%en Analysis 4. In%entory &ontrol !. Internal Audit ". Statistical <ata Analysis #. Personal =bser%ation $. Production Planning and &ontrol

The I-!ortant &odern or Conte-!orary techni$%es are: 1. 1inancial Statement Analysis 2. 7eturn on In%estment &ontrol 3. 0anagement Information System $# Page $# of 90

4. 0anagement Audit !. >ero.base 6udgeting ". Pert 8 &P0 #. 9uman 7esources Accounting $. 7es(onsibility Accounting.


1. +%d"etary Control: According to 2*/* management control and accounting in (lanned ones?. 2.

cott, ,6udgetary control is the system of ith the forecasted and

hich all o(erations are forecasted and so far as

(ossible (lanned ahead, and the actual results com(ared

tandard Costin": According to the IC&/, 3ngland, ,Standard cost is a (re.determined cost hich is calculated from management@s standards of efficient o(eration and the rele%ant necessary eA(enditure?.

3. +rea3-e.en /nalysis or Cost-4ol%-e-#rofit /nalysis: &ost.Bolume.Profit Analysis or 6rea).e%en Analysis is the study of the interrelationshi( bet een the cost :i.e., cost of (roduction;, %olume :i.e., the %olume of (roduction and sales;, the (rices and the sales %alue, and the (rofits. In other selling (rices; and (rofits. 4. In.entory Control: In%entory is the stoc) of ra materials, or).in.(rogress, finished ords, it is the study of the inter.relationshi( bet een the cost :i.e., cost of (roduction;, %olume :i.e., %olume of (roduction and sales;, (rices :i.e.,

goods, consumable stores and s(are (arts and com(onents at any gi%en (oint to time. So, in%entory control means control o%er different items of in%entory or stoc). 5It is defined as !hysical control of stoc3 ite-s and i-!le-entin" the !rinci!les and !olicies relatin" thereto6* !. Internal /%dit: Internal audit is a continuous and systematic re%ie management for the (ur(ose. In other of the accounting,

financial and other o(erations of a concern by the staff s(ecially a((ointed by the ords, it is the auditing for the management or) of the conducted by the staff s(ecially a((ointed for the (ur(ose to ensure that the concern is going on smoothly, efficiently and economically. ". tatistical Data /nalysis: It is a techni4ue under hich statistical data of the (ast and

the (resent relating to the im(ortant as(ects of the business are used for managerial control. 'he statistical data are collected from boo)s and registers of the concern and (resented to the management in a systematic manner in the form of tables, charts, gra(hs, etc.,

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#. #ersonal O(ser.ation: Cnder the techni4ue of (ersonal obser%ation, the managers )ee( a close (ersonal obser%ation of the em(loyees. In other ords, the manager obser%es hether the or)ers are doing hat they are eA(ected to do. $. #rod%ction #lannin" and Control: According to * 'lon, ,Production (lanning and

control may be defined as the direction and co.ordination of the firm@s material and (hysical facilities to ards the attainment of (re.s(ecified (roduction goals in the most efficient and %aluable ay?.


1. Financial tate-ent /nalysis: 1inancial statements are a means of managerial control. 'hey can be used by the management for measuring and controlling the (rofitability, li4uidity and the financial (osition of the business. 6y com(aring the financial statement of the current year ith those of the (re%ious years and also by com(aring the financial statement of their concern ith those of other concerns engaged in the same industry. 2. Ret%rn on In.est-ent Control: Profits are the measure of o%erall efficiency of business. Profit earned in relation to the ca(ital em(loyed in a business is an im(ortant control de%ice. 7=I is used to measure the o%erall efficiency of a concern. It re%eals ho ell the resources of a concern are used, higher the return better are the results. 3. &ana"e-ent Infor-ation yste- 7&I 8: 0anagement Information System :0IS; is an a((roach of (ro%iding timely, ade4uate and accurate information to the right (erson in the organisation hich hel(s in ta)ing right decisions. 4. &ana"e-ent /%dit: 0anagement audit is an in%estigation by an inde(endent organisation to find out hether the management is carried out most effecti%ely or not. In case there are dra bac)s at any le%el then recommendations should be gi%en to im(ro%e managerial efficiency. !. 9ero-+ase +%d"etin" 79++8: In the ords of Peter A Pyher, ,>ero.base budgeting is a

(lanning and budgeting (rocess hich re4uires each manager to +ustify his entire budget re4uest in detail from scratch and shifts the burden of (roof to each manager to +ustify hy he should s(end money at all. 'he a((roach re4uires that all acti%ities be analysed in Ddecision (ac)ages@ im(ortance?. 1rom his definition, it is clear that >ero.base budgeting is a techni4ue of (re(aring the budget in ne hich the (re%ious year is not ta)en as the base, and e%ery year is ta)en as a year for (re(aring the current year@s budget. hich are e%aluated by systematic analysis and ran)ed in order of

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". #ro"ra--e '.al%ation and Techni$%e 7#'RT8 ; Critical #ath &ethod 7C#&8: #'RT: It is useful at se%eral stages 8 (ro+ect management starting from early (lanning stages hen %arious alternati%e (rogrammes ha%e been considered to the hen time and resources schedules are laid to final hen used as control de%ice to measure actual against (lant schedule (lace,

stage in o(eration,

(rogrammes. It is useful com(leting a (ro+ect on schedule :time; by co.ordinating different +obs in%ol%ed in its com(letion. Feed +ac3 < Control: It is a system 8 controlling hich tries to rectify the de%iations after they ha%e occurred. It is li)e a (ost.mortem analysis hich aims at identifying the (oint 8 cause of de%iation.

Feed For:ard < Control It tries to (re%ent the de%iations rather than correcting them, critical areas are identified at the (lanning stage itself here de%iations may occur and s(ecial care is ta)en to a%oid such de%iations. 'he a((roach is diagnostic rather than (ost.mortem. #. H%-an Reso%rces /cco%ntin": 'he /-erican /cco%ntin" /ssociation has defined human resources accounting as ,the (rocess of identifying and measuring data about human resources and communicating this information to interested (arties?. $. Res!onsi(ility /cco%ntin": Res!onsi(ility /cco%ntin" is defined as ,a system designed to accumulate and re(ort costs by indi%idual le%els of res(onsibility. 3ach su(er%isory area is charged only it has control.? ith the cost for hich it is res(onsible and o%er hich

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