National Institute of Business Management

Chennai - 020
FIRST SEMESTER EMBA/ MBA
Subject : Principles and Practices of Management
Enrollment No:

1.

MBA1/MAY15N/66821432379211F

Roll No:

N15NOV/6682

What are the fundamentals of staffing and manpower? Explain the

different methods of selection recruitment, training and development.
FUNDAMENTALS OF STAFFING

Organizations require the services of a large number of personnel. These

personnel occupy the various positions created through the process of organizing.
Each position of the organization has certain specific contributions to achieve
organizational objectives. Hence the person occupying the position should involves
matching have sufficient ability to meet its requirements. Staffing basically
involves matching jobs and individuals. This may require a number of functions
like manpower planning, recruitment, selection, training and development,
performance appraisal promotion, transfer, etc. Various authors look at staffing as
one of the elements of organizing Process.
The responsibility for Staffing rests on all managers at all levels of the
organization. It increases as one goes up in the organizational hierarchy. For
example chief executive takes active interest in the selection of personnel
particularly at higher levels. Similarly managers at other levels are involved in
some form of staffing function for example, Besides selection of subordinates for
their departments, they are involved in their Raining performance appraisal ,etc.
Normally, managers try to ensure two things. First, they want that they get
subordinates who are capable of performing the work of their departments .Second,
they want that their subordinates re trained and developed appropriately so that

their performance increases and there is suitable replacement of personnel whose

positions fall vacant because of any reason.
In order to facilitate the effective performance of staffing function, personnel
department is created in large organizations. This department is basically staff
department. Its primary responsibility is to take those aspects of staffing which
cannot he performed well by line managers either because discharge of such a f
action requires the use of specific skills not adequately possessed by line managers
or because line managers may not get enough time to go through these aspects.
MANPOWER PLANNING
Planning for manpower resources major managerial responsibility to ensure
adequate supply of personnel are the right time both in terms of their quality and
aptitude and effective utilization of these personnel.
Objectives of Manpower Planning
1. Man power planning enables an organization forecast its manpower
requirement
2. Manpower planning helps the organization to match its power with skills
necessary for achieving its objectives
3. Manpower planning helps organization to know how its personnel are
employed and how their skills are being used
4. Systematic manpower planning facilities similar approach in other aspects of
staffing
MANPOWER PLANNING PROCESS
Manpower planning considers matching all jobs and individuals in future. Since
there is enough time, the organization can achieve this by taking systematic
manpower planning. The process of manpower planning entails consideration of
several steps with relevant inputs before the manpower demand can be arrived

at, on the one hand, and identification of the sources of supply to meet the
demand taking into account the several constraints on the other hand.

1.Projecting Manpower Requirements

The first essential step in manpower planning is to forecast
organization structure that will meet the future needs of the
organization. The basic exercise that has to be undertaken in this
context is to arrive at the scale of business activity over a time period.
2.

Job Analysis
Job analysis can be directed along the following lines:
(i) What is the basic objective of the job? What is the purpose of the
segment of the organization to which the job is related?

3.

(ii)

What types of plans and projects are undertaken in this job?

(iii)

What types of decisions are to be made by the incumbent on the

job?

(iv)

What is the authority of the job? How many subordinates will

work
under him? Can this job alter the present organization
structure? If yes, in what way?

(v)

What type of personnel does the incumbent contact?

(vi)

What are the requirements of personal attributes of incumbent in

terms of education, training, experience, apprenticeship, physical
strength, mental capabilities, social skills, etc.

Manpower Inventory
Manpower inventory is related to the identification of key personnel in
the organization and cataloguing their characteristics without reference to

the present positions held by them. It provides information about present

and future personnel being available in the organization.
(i)

The first step in manpower inventory is the determination of

personnel whose inventory is to be prepared.

(ii)

After determination of personnel to be included in manpower

inventory, detailed information about them is collected. The
information may be factual regarding age, education, experience,
employment records, merit rating history, health status, retirement
data, results of psychological and other tests etc.

(iii)

The third step of manpower inventory involves appraisal of

personnel included in inventory. This will give the information
about present and potential talents of each individual.

(iv)

After appraising all personnel included in manpower inventory,

detailed study will be made of those individuals who have high
potential for promotion and holding of key positions in the
organization.

4. Identification of Gap between Available and Required Manpower

When all these exercises arc undertaken, the organization is in a position
to determine the actual needs of personnel and their availability. These
factors will, however, be affected by the rate of loss of personnel.
Therefore, the additional requirement of personnel will be equal to
manpower required and manpower available without considering loss of
personnel.
RECRUITMENT AND SELECTION
Recruitment and selection process starts after the identification of
vacancies to be filled up. While recruitment is concerned with the
identification of sources from where the personnel can be employed and
motivating them to offer for the employment, selection takes care of
choosing the most suitable personnel for employment. Flippo has defined

recruitment as follows: "Recruitment is the process of searching for

prospective employees and stimulating them to apply for jobs in the
organization".
Sources of Manpower Supply
Normally, an organization can fill up its vacancies either through
promotion of people available in the organization or through the selection
of people from outside. Thus there can be two sources of supply of
manpower - external and internal. The first problem is to identify outside
sources. Normally, following outside sources are utilized for different
positions.
1. Advertisement-Advertisement is the most effective means to search
potential employees from outside the organization.
2. Employment Agencies - Many organizations get the information
about the prospective candidates through employment agencies. In our
country, two types of employment agencies are operating: public
employment agencies and private employment agencies. There are
employment exchanges run by the government almost in all districts. The
employment seekers get themselves registered with these exchanges.
3. On Campus Recruitment Many organizations conduct preliminary
search of prospective employees by conducting interviews at the
campuses of various institutes, universities, and colleges. This source is
quite useful or selecting people to the posts of management trainees,
technical supervisor, scientist, and technicians.
4. Deputation Many organizations take people on deputation from
other organizations. Such people are given choice either to return to their
original organization after a certain time or to opt for the present
organization.
5. Employee Recommendations Employee recommendations can be
considered to employ personnel particularly at the lower levels.

6. Labour Unions In many organizations, labour unions are used as

source of manpower supply, though at the lower levels.
7. Gate Hiring The concept of gate hiring is to select peor te who
approach on their own for employment in the organization. This happens
mostly in the case of unskilled and semi-skilled workers.
SELECTION
Selection is a deliberate effort of the organization to select a fixed
number of personnel from a large number of applicants.
Selection Process
A selection process involves a number of steps. The basic idea is to
solicit maximum possible information about the candidates to ascertain
their suitability for employment. Since the type of information required
for various positions may vary, it is possible that selection process may
have different steps for various positions. For example, more information
is required for the selection of managerial personnel as compared to
workers. Similarly, various steps of selection process may be different for
various organizations because their selection practices may differ. For
example, some organizations conduct selection tests of various types
while others may not use these. However, a standard selection process
has the following steps: screening application forms, selection tests,
interview, checking of references, physical examination, approval by
appropriate authority and placement. Below is a discussion of the various
steps.
1. Screening of Applications Prospective employees have to fill up
some sort of application forms. These forms have variety of information
about the applicants like their personal bio-data, achievements,
experience, etc.

2. Selection Tests Many organizations hold different kinds of

selection tests to know more about the candidates or to reject the
candidates who cannot be called for interview etc.
3. Interview Selection tests are normally followed by personal
interview of the candidates.
4. Checking of References - Many organizations ask the candidates to
provide the names of referees from whom more information about the
candidates can be solicited.
5. Physical Examination - Physical examination is carried out to
ascertain he physical standards and fitness of prospective employees. The
practice of physical examination varies a great deal both in terms of
coverage and timing.
6. Approval by Appropriate Authority - On the basis of the above
steps, suitable candidates are recommended for selection by the selection
committee or personnel department.
7. Placement -After all the formalities are completed, the candidates are
placed on their jobs initially on probation basis. The probation period
may range from three months to two years.
TRAINING AND DEVELOPMENT
The term training is concerned with imparting specific skills for
particular purposes. For example, Flippo has defined training as "the act
of increasing the knowledge and skills of an employee for doing a
particular job". Development has been defined as follows: "Management
development is all those activities and programmes when recognized and
controlled, have substantial influence in changing the capacity of the
individual to perform his assignment better and in so doing are likely to
increase his potential for future management assignments".
Role of Training and Development

No organization has a choice of whether to train its employees or not, the

only choice is that of methods. The primary concern of an organization is
its viability, and hence its efficiency. There is continuous environment
pressure for efficiency, and if the organization does not respond to this
pressure, it may find itself rapidly losing whatever share of market it has.
Training can play the following roles in an organization.
1. Increase Efficiency- Training plays active role in increasing efficiency
of employees in an organization. Training increases skills for doing a job
in better way.
2. Increase in Morale of Employees -Training increases morale of
employees. Morale is a mental condition of an individual or group which
determines the willingness to cooperate.
3. Better Hunan Relations - Training attempts to increase the quality of
human relations in an organization.
4. Reduced Supervision - Trained employees require less supervision.
They require more autonomy and freedom.
5. Increased Organizational Viability and Flexibility - Trained people
are necessary to maintain organizational viability and flexibility. Viability
relates to the survival of the organization during bad days, and flexibility
relates to sustain its effectiveness despite the loss of its key personnel and
making short-term adjustment with the existing personnel.
Identifying Training Needs
The basic aim of training is to induce a suitable change in the individual
concerned.
1. Organization Analysis - Organization Analysis is the first factor for
identifying training needs. It is a systematic effort to understand where
training effort needs to be emphasized in the organization.

2. Task Analysis - Task analysis entails a detailed examination of a job,

its various operations, and the conditions under which it has to be
performed.
3. Man Analysis - The focus of man analysis is on the individual
employee, his abilities, his skills, aria the inputs required for job
performance, or individual growth and development in terms of career
planning. Man analysis helps to identify whether the individual employee
requires training and, if so, what kind of training.
TRAINING METHOD
The range of training methods is such that they can provide opportunity
to unskilled to become skilled; they offer people to be promoted at
various levels of the organization. Training methods are means of
attaining the desired objectives in a learning situation. These methods can
be grouped in some categories on various bases.
On-the job training methods
1. On specific job:
A. Experience
B. Coaching
C. Understudy
2. Position rotation
3. Special projects, task forces, etc.
4. Apprenticeship
5. Vestible school
Off-the job training methods
1 . Special courses and lectures

2. Conference
3. Cases
4. Role playing
5. Management games
6. Brainstorming
7. In-basket exercise
8. Sensitivity training
9. Transactional analysis.
On-the-job Training Methods
1. On Specific fob - On specific job method is the most common form of
training for all individuals. A person can learn when he is put on a
specific job. He can develop skills for doing the job in better way over
the period of time.
2. Position Rotation - In position rotation, a person is given jobs in
various departments of the organization. The major objective of job
rotation training is to broaden the background of the trainee.
3. Special Projects. Task Forces, etc. - Assignment of people on special
projects, task forces, committees, etc. works like position rotation.
4. Apprenticeship - Apprenticeship is like understudy in which the
trainee is put under the supervision of person who may be quite
experienced in his field.
5. Vestibule School - The concept of vestibule school is that people will
learn and develop skills while working in the situations similar to what
they will face after they are put on actual jobs.
Off-the-job Training Methods

In off-the-job training, a trainee has to leave his place of working and

devote his entire time for training purpose. During this period, the trainee
does not contribute anything to the organization.
1. Special Courses and Lectures - Special courses and lectures are
knowledge based training methods. In these programmes, an effort is
made to expose participants to concepts and theories, basic principles,
and pure and applied knowledge in any subject area.
2. Conference - In order to overcome the limitations of lecture method
which emphasizes only one way of communication, that is, from trainer
to trainee, many organizations have adopted guided-discussion type of
conferences in their training programmes.
3. Cases - Case method of training has been developed by Harvard
Business School of U.S.A. It is one of the most commonly used training
methods not only for business executives but also for management
institutes.
4. Role Playing - Role playing is a (mining technique which can be used
very easily as a supplement to various training techniques. The concept
of role playing has been drawn from drama and play in which actors play
the various roles.
5. Management Games - Management games are used to stimulate the
thinking of people to run an organization or its department. The game can
be used for developing skills for a variety of purposes like investment
strategy, marketing strategy, production strategy, collective bargaining,
etc.
6. Brainstorming - Brainstorming is a technique to stimulate for idea
generation. Originally applied by Osborn in 1938 in an American
company, the technique is now widely used by many companies,
educational institutions, and other organizations for building ideas.

7. In-basket Exercise - In-basket exercise is a simulation technique

designed around the 'incoming mail' of a manager. A variety of situations
is presented in this exercise which would usually be dealt by a manager
in his typical working day.
8. Sensitivity Training - Probably no other training technique has
attracted so much attention or controversy in recent years as sensitivity
training. Many of its advocates have an almost religious zeal in their
enchantment with the training experience. Some of its critics match this
fervor in their attacks on the technique. In part as a result of criticisms
and experience, a somewhat revised approach, often described as team
development training, has appeared.
9. Transactional Analysis Transactional analysis (TA) is used to
develop better interpersonal interactions among individuals. It involves
understanding of personality factors of individuals and their ego with
which they interact.

4.

Explain the nature and functions of Directing.

NATURE AND FUNCTION OF DIRECTING

Etymologically directing is to point or aim to point out the proper course; to
guide; to order, to plan and superintend; to command; to counsel. Directing
may thus be conceived as a vector with two dimensions namely (a)
magnitude and (b) aim or direction. Therefore directing must have an aim
which in fact is the goal of the enterprise. Without an aim there is no
direction and therefore, no directing. The areas that are directed are the
enterprise as a whole, the total system, lock stock and barrel-the enterprise
structure and the human elements that man it.
The Human Element
Human element is emphasized in the task of directing. The enterprise must
produce tangible goods and services of a quality and at a price that must sell
in the competitive Market. And this managing has to be achieved through
the human element of the enterprise. Without harnessing the manpower to
its full productive capacity, good work done in the other managerial
functions, such as planning, organizing and staffing, would remain sterile
and unproductive. The human clement itself is a productive factor, whether
employees at lower levels or managers from bottom upward. Each worker is
thinking and feeling unit. Each has a compulsion (wages and discipline) to
work; each also has a will (the natural human passion for fulfillment) to
work. It is the task of the directing function that the will and the compulsion
are not at loggerheads. More than this, each man is either a co-operator or a
contender. A man is seldom a piece, alone; he is always the member of a

group, and then the manager. He is the more complex man by education
and environment. He occupies a higher centre of power and influence in the
organization hierarchy. He is closer to the enterprise goal-has more access to
it-wields more influence on it, for good or evil.
Individual - and the Group
The Universe of the directing functions is the world of men within the
enterprise. Its subject is the man as the unit. We will attempt here a survey of
the human behavior individually and in groups which has a distinct
relevance to their status as participants in the process of enterprise
management and therefore, a direct bearing on the directive function. Man is
a bundle of conflicts. This conflict shapes his conduct within the enterprise,
in his interpersonal relationships, how he works for the enterprise, how he
discharges his obligations to other groups and to the enterprise. Second man
is self-inconsistent. It is both a strength and weakness in hispartnership in
the enterprise effort. It is also a challenge and opportunity of the directing
authority. He can be changed, directed, managed or developed. Third man is
primarily emotional, egoistic. He is logical to a point. But if you can rouse
him (and muse is an emotional word) he can work wonders beyond normal
boundaries. Negatively, if he is hurt, affronted, his wrath is roused, he can be
a nuisance. The range between his use and uselessness is enormous.
Managing the ego (and the ego status) of the human element of the
enterprise need to be consciously pursued by the directing function. Every
man has a secret life; and this is not only in his emotional and psychological
self but in his way of life. Part of it need not concern us, as the enterprise

manager, but quite a part reveals itself in his in-enterprise behaviour which
cannot be overlooked. This element decides between his openness, candour,
cooperative team spirit and his secretiveness, slyness, subterfuge, habit of
pulling strings and spreading stench and foul air all around. It should be
understood that the organizational man cannot be all open, direct,
straightforward. Secretiveness should not be encouraged; it is the one surest
way how dysfunctional conflicts raise their heads. Sixth, there are formal
groups within the enterprise, functions divisions, departments, cadres,
grades and others. These groups function openly with assigned tasks, within
the recognized organizations structure. There are other groups, many of
which are unobserved-only felt and perceived. The inner logic of such
informal grouping may be divided into six motives:
(i)

Survival. As in nature, so in an enterprise, the group is a more

effective unit than the lone individual in the struggle for survival.

(ii) A genuine fondness, commonness of likes and dislikes may provoke

an informal group, although the cementing of such a group is often
looser apt to snap under stress and strain.
(iii) The motive of gain is a good bond holding together a group. It is one
step more active than the survival group.
(iv) A group often functions for revenge.
(v) A man also forms or joins a group for sport and pleasure, to combat
boredom and drudgery of the workplace. Such a group is

comparatively harmless and neutral to enterprise interest but may still

cause waste and dissipation of enterprise time and direction.
(vi) Finally, a man seeks a group where he can feel important, here he can
show off, where he has others who praise him for qualities of which
he seeks to boast and which he desires to possess.
Two important points need to be remembered by the directing functionary.
(i)

Such informal groups often spell potential harm to the enterprise. They
have to be watched, spotted and discouraged.

(ii) The groups do not work within the rigid boundaries under which they
have been described. Seventh, no man is free from worries and
frustrations. He does not leave these behind, at home, when he
centers the work place; he carries the stress and strain into it. Eight,
the employee is not interested in the organization unless it is for what
the organization can give him. The lesson of this observation is that
the enterprise and the job must be made worthwhile for the man.
Ninth, the man is usually skeptical about the senior. This is not an
intrinsic situation but a derived one. Tenth, both the managerial staff
and others can be
changed and for the benefit of the enterprise. Eleventh, the unit of the
enterprise man is his family. More precisely, the man's world is
composed of three concentric spheres. The inner sphere is he and his
family. The interest of this inner group is paramount. It will easily
oven ide the interest-all that concern the enterprise. The second

sphere of his interest comprehends his friends and closest associates.

He will use his position in the enterprise to work for this group. The
third

sphere

includes

the

man's

wide

social

contract-his

acquaintances with whom he may have a bond of shifting quid pro

quo give and take. Finally, directing and leadership consist in
directing and leading people. In all walks of life, leaders are few,
followers are many. Hero worship is a trait not uncommon in human
nature.
The Average Man The concept of the average man-the average
economic man or the average social man-can be traced to the
classical economic theorists. The economic behavior of the common
man was postulated and theorized on assumptions on how the
average economic man would behave, given certain economic
environmental conditions. Later studies and empirical testing
established that there are many ifs and but's and exceptions in the
application of the classical economic theories in real life situations.
Directing men is no substitute for directing the man as he is. The
enterprise man contributes to the work and objective of the group to
which he belongs (and through the group, to the enterprise objective)
his own work and attitudes, Group dynamics, in which the members
of the group combine and participate disclose a pattern of group
behaviour, but no two groups behave alike nor does the same getup
behave or react to environment identically at different times or under
different sets of impulses.

The Directing Function and the Followers It needs to be emphasized

that the directing function directs, guides, harmonizes and manages
the human element-not as power or wisdom from outside the zone of
operation. The truth is far from it. The followers and subordinates are
very much part of him and of his function. He appraises through their
experience and their own assessment of situations. He gleans their
wisdom and their skills( much as a skilled gardener gleaning flowers)
puts the string of harmony round them and synthesizes their effortslabor, initiative, resourcefulness and gives them a direction, a goal to
achieve, and avenue to reach the goal. His followers and subordinates
are his raw materials his bricks and mortar, clay and timber, the
colour and the brush out of which all, he must raise the architecture, a
work or art and achievement. The elements are all there, bonded,
recreated as it were, into a new weapon of power and success.
Some Theories and Concepts of Man and his Nature Psychologist,
Edgar H. Schein, in his book, 'Organizational Psychology',
formulated four concepts of the developing man. These in summary
are, (i) Man is basically an economic animal and will pursue the aim
of maximizing his economic gain.

5.Explain the methods of Departmentation.

(iv) The demand on the major departments like production, marketing, finance
etc, for adjustments to cater to the needs of the customer-wise departmental
setup, often cause overall managerial problems. (8) By Process or Plant This
method is similar to product-based departmentation. Instead of the product
forming a major division of the enterprise, a major process or composite plant or
equipment constitutes a significant segment (centre) of enterprise operation. (9)
By Committees Committees sometimes are placed in charge of functions and
take the place of department. This method of depirlmentation is seen in
operation in academic and research institutions and universities, although in any
organization where the major functions are mainly deliberative and directive and
where the output of the function demands independent specialist views to be
brought to bear on it, this method may be adopted. (10) Matrix or Grid Method
of Departmentation The Matrix (or Grid) structure is a mosaic of task and
functions. Often the situation is, as in a sizeable program or project the task is
large and rewarding, yet temporary, as all programmed must be completed.

The advantages of the method are: (i) Unity of command so far as the project is
concerned; the project leader or manager is accountable for the success of the
project. (ii) The project manager can draw on the specialist (functional) services
of the other departments to complete the network. (iii) As individual projects are
completed and wound up, the functional services are released, with ease and
flexibility. These may join other projects which may replace the completed ones
or attend to other basic objectives of the Institution. (iv) The method provokes
functional (as opposed to dysfunctional) conflicts which is healthy especially
in academic institution. (v) It produces economy of efforts and expenses. (vi) It
helps speed and flexibility in organizing projects and consultation services.
Among its limitations may be mentioned: (i) Inter functional (interdisciplinary)
dysfunctional conflicts cannot be ruled out. (ii) Discordance between the project
manager and the functional hands is likely. (iii) When the organization has other
demands on the functional services for its other objectives besides the projects,
competing claims (and quarrels) on the functional resources may result.
DEPARTMENTATION
The logic of departmentation is two-fold: (a) the size of an enterprise, (b) the
growth of specialization (division of labour) in the activities of the enterprise.
Normally, a manager can (directly) control up to a limit of the size of activities.
Logically, it helps a manager to control the subordinate activities in the form of
logically bound (homogeneous) tasks and functions. Departmentation, then is
the process of dividing the enterprise activities into manageable units (by size),
grouped on the logic of their internal similarity (homogeneity).
Methods of Departmentation- Pattern and Criteria

(I) By Simple Numbers The number of persons pursuing a set of activities can
be the basis of departmentation. This method is limited and is suitable in
situations where the work is repetitive where manpower is the most important
condition, where group efforts are as important as individual efforts and where
the group task (output) can be related to number in the group.
(2) By Time This method of forming groups has limited applicability. It often
goes with the first methods so that number in the group working for a defined
period makes the joint criterion of grouping.
(3) By Function A function stands for a composite concept which includes:
(a) (b) (c) (d)
the task (homogenous) the skill (specialization) required for the task the servicediscrete and well defined, and clear cut objective.
Functional departmentation offers one of the most logical method of divisioning
(grouping) enterprise activities. It is one of the most commonly used methods,
either independently or in combination with others. The major functional
divisions are production, marketing, finance and personnel. Note that these are
linked with the major(divisions) objectives of an enterprise; demand specific
skill and training for their operation; possess a well-laid-out task set apart from
each; and cover discrete, well demarcated areas of activities within the
enterprise.
The merits of the functional method of departmentation are; (a) It is most logical
and consistent with the natural division of the enterprise task and objective. (b) It
gives necessary status to these functions by placing their heads high in the
organizational echelon.

(c) It gives full weightage to the skill and specialization required in the discharge
of the several functions. (d) The major functions need cooperation and team
work, starting from the highest level, for effective implementation of enterprise
goal. The limitations of this method are not so much inherent as situational and
empirical. These are: (i) An excessive emphasis on the functions rather than on
the operational goals. The functions are sometimes misconceived as an end in
themselves rather than as the means to an end. (ii) Functional goals and group
interests tend to develop, cutting across organizational goal. (ii) As
specialization grows, each function seems to carve out a niche, ruling out
communication with other department. (iv) It confuses (often) the line of
operational authority. Conflicts arise when a functional director vetoes the line
general manager's suggestions on functional grounds.
(v) A serious doubt exists whether the functional heads like finance, personnel,
etc. should not be located one step below in the organizational echelon, say
under the second level of the main line authority, for example, general
manager( production), in a manufacturing organization. (4) By Products or
Service This method may work well when a few major products or services
absorb most of the activities (manufacture, sales profits) of the enterprise. Each
of these products is then constituted into a major Division, which functions
largely on independent basis.
The merits of this arrangement are: (i) The operational integrity and
accountability of the line management is not blurred or underrated. (ii) Each
major product constitutes a cost and profit-centre. It is proper that functional
services should be placed subordinate to the divisional(line) chief as subfunctions, in the organization structure. (iii) This method helps product

development, diversification, innovation and products research. (iv) The pattern

is suited to rapid growth and product and market expansion. It helps the Chief
(Chairman or President) of the enterprise to divest himself of responsibility,
transfer a high degree of autonomy to the Divisions and enforce aggressive
profit and growth targets. The limitations of this methods coincide with the
problems of (a) duplication of functional services, (b) high overheads, (c)
divisional goals overriding enterprise goals (when the two diverge), (d) it
requires more manpower and skilled managers- which often is a constraint, and
(e) in certain functional areas, especially, finance, personnel and industrial
relations, product-wise division of these functions leads to basic difficulties of
harmony and uniform standards.
(5) By Geographical Region Departmentation by geographical region is
sometimes seen as a compulSion when the enterprise produces and sells in the
wide national market, often in intemational markets.
DEPARTMENTATION
The logic of departmcntation is two-fold: (a) the size of an enterprise, (b) the
growth of specialization (division of labour) in the activities of the enterprise.
Normally, a manager can (directly) control up to a limit of the size of activities.
Logically, it helps a manager to control the subordinate activities in the form of
logically bound (homogeneous) tasks and functions. Departmentation, then is
the process of dividing the enterprise activities into manageable units (by size),
grouped on the logic of their internal similarity (homogeneity).
Methods of Departmentation- Pattern and Criteria

(1) By Simple Numbers The number of persons pursuing a set of activities can
be the basis of departmentation. This method is limited and is suitable in
situations where the work is repetitive where manpower is the most important
condition, where group efforts are as important as individual efforts and where
the group task (output) can be related to number in the group.
(2) By Time This method of forming groups has limited applicability. It often
goes with the first methods so that number in the group working for a defined
period makes the joint criterion of grouping. (3) By Function A function stands
for a composite concept which includes: (a) the task (homogenous) (b) the skill
(specialization) required for the task (c) the service-discrete and well defined,
and (d) clear cut objective. Functional departmentation offers one of the most
logical method of divisioning (grouping) enterprise activities. It is one of the
most commonly used methods, either independently or in combination with
others. The major functional divisions are production, marketing, finance and
personnel. Note that these are linked with the major(divisions) objectives of an
enterprise; demand specific skill and training for their operation; possess a welllaid-out task set apart from each; and cover discrete, well demarcated areas of
activities within the enterprise. The merits of the functional method of
departmentation arc; It is most logical and consistent with the natural division of
the enterprise task and objective. It gives necessary status to these functions by
placing their heads high in the organizational echelon.

6.Explain the different approaches to leadership and its role in management.

The reader after going through the chapter gets an opportunity

to understand what leadership is, the different approaches
to leadership, and role of leadership in management.
INTRODUCTION
It has been the experience of the business world that, given all
other
variables
internal
and
environmental
the
management input (good and sound management) makes
all the difference between enterprise's success and failure.
Leadership occupies a central position in management.
Leadership in administration is one of the most investigated
spheres of management . Leadership (when it exists and
when it does not) is visible, yet seems to baffle diagnosis-its
construction and synthesis from out of the perceived
elements. George R.Terry believed leadership is the activity
of influencing people to strive willingly for group objectives
(emphasis supplied by us). According to Robert Tannebaum,
Irving R,Weschler and Fred Massarik, leadership is
interpersonal influence exercised in a situation and
directed, through the communication process toward the
attainment of a specialized goal or goals (emphasis ours). In
the terms of Harold Koontz and Cyril O. Donne!, leadership
is influencing people to follow the achievement of a
common goal. The two common elements in all these
perceptions of leadership are:
(i) Influencing People (ii) To pursue a common goal. To influence
people to move toward a common goal is common to all
management forms. Goal setting, communicating and
motivating, are all essential elements of management.

What distinguishes a leader from the common run of

manager is the measure of willingness on the part of the
followers (the led) that the leader can bring into the system.
Tannebaum's (and his colleagues) definition quietly
introduces the term in a situation in its formulation. This has
the quality of bringing in the situational variable which
differentiates contingency models of leadership from the
absolute models. It emphasizes leadership effectiveness as
distinct from leadership qualities (or traits) perceived
absolutely irrespective of the situational variables.
The Trait Approach
Traits are innate, inherent personal qualities. It follows that (by
this approach) if a leader is seen to possess certain traits,
his leadership index can be read (almost) off a leadership
meter. Three necessary and sufficient conditions which
must be satisfied if traits should be unique determinants of
the leadership index. These may be summarized thus:
(i) The trait quality should follow a descending order as one
traverses from the highest (top executives in leadership
position) to the lowest (employees) levels of the enterprise
system. (ii) There must be a high correlation between the
level of a manager's traits and the level of his success. (iii)
The correlation between success (achievement) and traits
should be higher as one goes up the management hierarchy
from bottom (employees) level upward to top executive
levels. There is a large measure of consensus that certain
essential traits are common elements of leadership as
observed from different surveys and investigations. These
are:
(a) Intelligence (b) Confidence (c) Initiative (d) Urge for
achievement (e) Strong power need

Attitude Criterion Approach to Leadership

The leader-attitude approach to leadership studies registers
and appraises the variables in terms of attitudes
(orientation to or concern fro) conditioning leadership
behaviour and effectiveness. Studies defined two variables
(attitudes) which were termed employees orientation and
production orientation. A parallel set of concepts was
evolved by Donvin Cartwright and Alving Zandar as a result
of a number of research studies. They identified the aim of a
group as a composite of two elements (group dynamics).
(i) Achieving a group goal
(ii) Service of the group itself
The goal-oriented manager will set tasks, improve
techniques and productivity and structure his activities
toward the group goal. The manager, on the other hand,
who concentrates on group service and group maintenance,
will be relations oriented, with concern for people,
cultivating popular participation, fostering and trusting
informal group behaviour, trustful and communicative. Still
another parallel concept may be observed under what may
be styled Authoritarian Democratic behaviour tapering off
into the laissez faire leadership style. In terms of the group
dynamics phraseology (discussed above), authoritarian
leader style is set parallel to achieving the group goal as
against group maintenance or service which approximates
to the democratic leader style. The authoritarian leader will
decide and tell his followers what to do; the democratic
leaders will opt for a participative style of decision making.
Management and Leadership All management includes (and
needs) leadership, but leadership exists and is called into
play even where management, strictly is not involved.
Management is a weapon of achieving group or enterprise
influencing followers to move toward the goal leadership is

involved. But leadership is a much more universal attribute.

The followers to a leader are not necessarily his junior or
subordinates. Leadership is an instrument of management
but its content is neutral to management.
Position of Power
Positional power of a leader falls into two groups-classified
according to their source and nature. These are: (i) coercive
power and (ii) persuasive power. Broadly speaking, coercive
leader (manager) power flows from the owner's position of
authority, his power to do good positive power and to do
harm negative power. Coercive power works by imposition
external to the followers. The exercise of coercive power as
perceived by the followers may be actual or threatened.
Actualized coercive power is a spent force. Coercive power
likewise, must carry a continued element of expectancy.
Coercive power that has exhausted and realize its full
potential for good is dislodged from its power position. Oilier
attributes of coercive power and its exercise that help
sustain its potency are;
(i) Fairness of punishment and reward. (ii) Adequacy of the
nature and degree of the award should be seen to be linked
and commensurate with the performance of the follower (in)
Promptness in the implementation of the award, reward or
punishment.
Persuasive power reveals and reflects the leader influence
on the followers. It largely stems from personalized leader
qualities. A third kind of power can be distinguished which
may be called the monopoly or specialist power. A leader
manager who commands skill and expertise not shared by
any other can use his special knowledge and skill for
extracting acceptance and follower behaviour from his
associated juniors, peers and superiors.

Leadership
Variables

and

Change-Output

and

the

Intervening

Any social system is inherently dynamic in character. This

maneuvering and manipulating change is mainly a function
of leadership. Leadership success must build at least four
elements into the leader-effectiveness model. These include
success in the following areas:
(i) Profitability or short term goal
Stability and innovative growth from long-term goal,
success of the output variables; and What is perhaps
the most important element, development of the
intervening variables.
Leader Effectiveness and Force Field Analysis
Kurt Lewin gave a diagrammatic expression to an
equilibrium situation (of productivity or effectiveness )
under the two opposite system of forces influencing
change. We have seen that the three input variables in
the leader effectiveness function are:
(i) The leader's task (structure) behaviour (ii) The
leader's relations (considerations) behaviours (iii) The
situation (environment) which has two major
subcomponents: (a) the positional power-dynamics (b)
followers style and behaviour
It has been also observed that the first two inputs
leader task and leader relations style while they are
coexistent, in varying mix in any observed leader-style,
include a degree of inter se hostility, an excess of one
element in the synthetic leader-style causing an
erosion in the other and vice versa.
Leader Style (perceived Behaviour) Versus Leader
Expectation (Intended Behaviour)

We have seen that we need to make a distinction

between the leaders own perception of his leader
behaviour and his leader style (or behaviour) as it is
observed by others, mainly the followers. It is difficult
yet important, to help a leader to see how his leader
style appears to others; how as a leader, he is
observed to behave. Leader expectation may be
defined as the leader style that the leader seeks to
reproduce to his environment of subordinates, peers,
associates and superiors. For achieving most effective
leader style, the leader expectation needs to be
adjusted with the environment which comprises,
mainly, followers expectation, superiors expectation
and the organizations expectation. There is also a
triangular dichotomy between (a) leaders self
perceived behaviour (b) leader-behaviour as perceived
by others, and (c) leader-expectation.
Task Structure and Leadership effectiveness
According to Fred E.Fielder, there is a relation between
the nature of the job (task structure) and the most
desirable
leader
style
for
maximum
leader
effectiveness. His conclusion was that a highly
structured situation, where jobs and performance are
well specified, needs a task. Situational leadership
Theory postulated that there is a complex empirical
functional relationship between leader behaviour and
the situational environment, symbolized by followers
behaviour.