MBA DEPARTMENT

ETHIRAJ COLLEGE FOR WOMEN

CHENNAI

COURSE MATERIAL FOR SELF STUDY PAPER

MANANGEMENT PRINCIPLES

I YR STUDENTS

Contents:

Objective:
This course provides an overview of management. It covers
theory, process and practice of the four fundamental management
skills: Planning, Organizing, Leading and Controlling as well as the
role of managers in organizations.

Unit I:
Concepts:
The Evolution of Management Science Classical neo
classical and modern theories of management Management Defined
Basic Principles and Process of Management Planning: Basic
Techniques Key factors Business environment Business
environment Micro-Macro relevant techniques for environment
scanning

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Unit II:
Policies Formulation Classifications Strategy Concepts
Process Organization: Hierarchy factors to be considered &
classifications Methods of grouping typical patterns used
Organization charts & manuals

Unit III:
Authority: Authority relationships Delegation of authority &
relationship Centralization & decentralization Span of control: Pros and
cons of narrow and wide spans of control Optimum span

Unit IV:
Communication Introduction to managerial communication
Traits of good communication Formal and informal channel-follow up

Unit V:
Co-ordination need techniques Control: process
performance standards measurement of performance remedial actions

Unit VI:
Management by objectives Management by exception
Trends New perspectives in Management

Outcome:
Use management terms as they relate to business situations
Understand and apply management principles and concepts
as they apply to business situations
Understand the role of management in making business
decisions

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 MANAGEMENT

Management in all business and human organization activity is simply the

act of getting people together to accomplish desired goals and objectives.
Management comprises planning, organizing, staffing, leading or directing,
and controlling an organization (a group of one or more people or entities) or
effort for the purpose of accomplishing a goal. Resources encompasses the
deployment and manipulation of human resources, financial resources,
technological resources, and natural resources

Some Definitions of management are:

Organization and coordination of the activities of an enterprise in

accordance with certain policies and in achievement of clearly defined
objectives. Management is often included as a factor of production
along with machines, materials, and money. According to the
management guru Peter Drucker (19092005), the basic task of a
management is twofold: marketing and innovation.

Directors and managers who have the power and responsibility to

make decisions to manage an enterprise. As a discipline, management
comprises the interlocking functions of formulating corporate policy
and organizing, planning, controlling, and directing the firm's
resources to achieve the policy's objectives. The size of management
can range from one person in a small firm to hundreds or thousands of
managers in multinational companies. In large firms the board of
directors formulates the policy which is implemented by the chief
executive officer.

Basic functions of management

Management operates through various functions, often classified as

planning, organizing, leading/motivating, and controlling.

Planning: Deciding what needs to happen in the future (today, next

week, next month, next year, over the next 5 years, etc.) and
generating plans for action.
Organizing: (Implementation) making optimum use of the resources
required to enable the successful carrying out of plans.

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 Staffing: Job analyzing, recruitment, and hiring individuals for
appropriate jobs.
Leading: Determining what needs to be done in a situation and
getting people to do it.
Controlling: Monitoring, checking progress against plans, which
may need modification based on feedback.
Motivating: the process of stimulating an individual to take action
that will accomplish a desired goal.

Management hierarchy:

Senior management (or "top management" or "upper management")

Middle management

Lower-level management, such as supervisors or team-leaders

Top-level management

Require an extensive knowledge of management roles and skills.

They have to be very aware of external factors such as markets.
Their decisions are generally of a long-term nature
Their decisions are made using analytic, directive, conceptual and/or
behavioral/participative processes
They are responsible for strategic decisions.
They have to chalk out the plan and see that plan may be effective in
the future.
They are executive in nature.

Middle management

Mid-level managers have a specialized understanding of certain

managerial tasks.
They are responsible for carrying out the decisions made by top-level
management.

Lower management

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 This level of management ensures that the decisions and plans taken
by the other two are carried out.
Lower-level managers' decisions are generally short-term ones.

Principles of Management:

The Principles of Management are the essential, underlying factors that form the
foundations of successful management. According to Henri Fayol (1841-1925) in his
book General and Industrial Management (1916), there are fourteen 'principles of
management'.

The Principles of management

Management principles are statements of fundamental truth. These principles serve as

guidelines for decisions and actions of managers. They are derived through observation
and analysis of events which managers have to face in practice.

1. Division of Work

The specialization of the workforce, creating specific personal and professional

development within the labour force and therefore increasing productivity; leads to
specialization which increases the efficiency of labour. By separating a small part of
work, the workers speed and accuracy in its performance increases. This principle is
applicable to both technical as well as managerial work.

2. Authority and Responsibility-

The issue of commands followed by responsibility for their consequences. Authority

means the right of a superior to give order to his subordinates; responsibility means
obligation for performance. This principle suggests that there must be parity between
authority and responsibilty.. They are co-existent and go together, and are two sides of
the same coin.

3. Discipline-

Discipline refers to obedience, proper conduct in relation to others, respect of authority,

etc. It is essential for the smooth functioning of all organizations.

4. Unity of Command -

This principle states that every subordinate should receive orders and be accountable to
one and only one superior. If an employee receives orders from more than one superior, it
is likely to create confusion and conflict.

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Unity of Command also makes it easier to fix responsibility for mistakes.

5. Unity of Direction -

All those working in the same line of activity must understand and pursue the same
objectives. All related activities should be put under one group, there should be one plan
of action for them, and they should be under the control of one manager.

It seeks to ensure unity of action, focusing of efforts and coordination of strength.

6. Subordination of Individual Interest

The management must put aside personal considerations and put company objectives
first. Therefore the interests of goals of the organization must prevail over the personal
interests of individuals.

7. Remuneration -

Workers must be paid sufficiently as this is a chief motivation of employees and therefore
greatly influences productivity. The quantum and methods of remuneration payable
should be fair, reasonable and rewarding of effort.

8. The Degree of Centralization -

The amount of power wielded with the central management depends on company size.
Centralization implies the concentration of decision making authority at the top
management. Sharing of authority with lower levels is called decentralization. The
organization should strive to achieve a proper balance.

9. Scalar Chain -

Scalar Chain refers to the chain of superiors ranging from top management to the lowest
rank. The principle suggests that there should be a clear line of authority from top to
bottom linking all managers at all levels. It is considered a chain of command. It involves
a concept called a "gang plank" using which a subordinate may contact a superior or his
superior in case of an emergency,defying the hierarchy of control.However the imediate
superiors must be informed about the matter

10. Order -

Social order ensures the fluid operation of a company through authoritative procedure.
Material order ensures safety and efficiency in the workplace.

11. Equity -

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Employees must be treated kindly, and justice must be enacted to ensure a just
workplace. Managers should be fair and impartial when dealing with employees.

12. Stability of Tenure of Personnel -

The period of service should not be too short and employees should not be moved from
positions frequently. An employee cannot render useful service if he is removed before
he becomes accustomed to the work assigned to him.

13. Initiative -

Using the initiative of employees can add strength and new ideas to an organization.
Initiative on the part of employees is a source of strength for the organization because it
provides new and better ideas. Employees are likely to take greater interest in the
functioning of the organization.

14. Esprit de Corps -

This refers to the need of managers to ensure and develop morale in the workplace;
individually and communally. Team spirit helps develop an atmosphere of mutual trust
and understanding.

These can be used to initiate and aid the processes of change, organization, decision
making, skill management and the overall view of the management function.

Scientific management

Taylor believed that the industrial management of his day was amateurish, that
management could be formulated as an academic discipline, and that the best results
would come from the partnership between a trained and qualified management and a
cooperative and innovative workforce. Each side needed the other, and there was no need
for trade unions.

Taylors approach is also often referred to, as Taylor's Principles, or frequently

disparagingly, as Taylorism. Taylor's scientific management consisted of four principles:

1. Replace rule-of-thumb work methods with methods based on a scientific study of

the tasks.
2. Scientifically select, train, and develop each employee rather than passively
leaving them to train themselves.
3. Provide "Detailed instruction and supervision of each worker in the performance
of that worker's discrete task" (Montgomery 1997: 250).
4. Divide work nearly equally between managers and workers, so that the managers
apply scientific management principles to planning the work and the workers
actually perform the tasks.

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Managers and workers

Taylor had very precise ideas about how to introduce his system:

It is only through enforced standardization of methods, enforced adoption of the best

implements and working conditions, and enforced cooperation that this faster work can
be assured. And the duty of enforcing the adoption of standards and enforcing this
cooperation rests with management alone.

Workers were supposed to be incapable of understanding what they were doing.

According to Taylor this was true even for rather simple tasks.

The introduction of his system was often resented by workers and provoked numerous
strikes. The strike at Watertown Arsenal led to the congressional investigation in 1912.
Taylor believed the labourer was worthy of his hire, and pay was linked to productivity.
His workers were able to earn substantially more than those in similar industries and this
earned him enemies among the owners of factories where scientific management was not
in use.

Management Theories:

Scientific Management Theory

(1890-1940)

At the turn of the century, the most notable organizations were large and industrialized.
Often they included ongoing, routine tasks that manufactured a variety of products. The
United States highly prized scientific and technical matters, including careful
measurement and specification of activities and results. Management tended to be the
same. Frederick Taylor developed the: scientific management theory which espoused
this careful specification and measurement of all organizational tasks. Tasks were
standardized as much as possible. Workers were rewarded and punished. This approach
appeared to work well for organizations with assembly lines and other mechanistic,
routinized activities.

Bureaucratic Management Theory

(1930-1950)
Max Weber embellished the scientific management theory with his bureaucratic theory.
Weber focused on dividing organizations into hierarchies, establishing strong lines of
authority and control. He suggested organizations develop comprehensive and detailed
standard operating procedures for all routinized tasks.

Human Relations Movement

Eventually, unions and government regulations reacted to the rather dehumanizing effects
of these theories. More attention was given to individuals and their unique capabilities in

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the organization. A major belief included that the organization would prosper if its
workers prospered as well. Human Resource departments were added to organizations.
The behavioral sciences played a strong role in helping to understand the needs of
workers and how the needs of the organization and its workers could be better aligned.
Various new theories were spawned, many based on the behavioral sciences (some had
name like theory X, Y and Z).

Mary Parker Follett (1868-1933), on the other hand focused more on human relations
rather than on scientific type approaches in order to increase production. Follett's studies
allowed for other theorists to study new areas, including Chester I. Barnard (1886-1961).
His contribution was the introduction of the informal organization concept. He believed
that if properly managed, this could be a powerful tool in helping the organization
achieve its' goals (Daft and Marcic, 1998).

UNIT-II
POLICIES

BUSINESS POLICY Meaning and Definition:-

Policy-making is one of the most important components of business

planning. Policies may be defined as the mode of thought and the principles underlying
the activities of an organization or an institution.

Terry says, A business policy is an implied overall guide setting up boundaries that
supply limits and direction in which managerial action will take place.

FEATURES OF BUSINESS POLICY:-

Policies are a general statement of principles fro the attainment of objectives.

Policies have a hierarchy.
The policies delimit the area within which a decision is to be made and ensure
that the decision will be consistent with and contribute to the objectives.
Policies in general are meant for mutual application by subordinates.

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 Policies tend to predecide issues, avoid repeated analysis and give a unified
structure to other types of plans.
Policies are found in all functional areas and at various levels within these areas.
Policies serve an extremely useful purpose.
A policy is a positive declaration band a command to its followers.

MECHANICS OF POLICY MAKING/ELEMENTS:-

Identification of the situation.

Development of policy.
Dissemination of the policy.
Explanation of the policy.
Acceptance of the policy.
Feed back.

CLASSIFICATION OF POLICIES:-

1. Classification according to the level of formulation:-

Business policies are of different levels they are:-
Top management policies
Middle level management policies
- upper middle management
- middle management
lower level management policies
operating force policies

2. Classification according to the functional areas:-

Production policies

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 Marketing and sales policies
Financial policies
Personnel policies

3. Classification according to the expression:-

Expressed
- Oral
- Written
Implied

4. Classification according to the nature of origin:-

Originated policies
Appealed policies
Imposed policies
Derivative policies

5. Classification according to the scope of organization:-

Basic policies
General policies
Departmental or specific policies

6. Classification according to the nature of management function:-

Planning policies
Organizing policies
Actuating policies
Controlling policies

STRATEGY:-

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 Strategy is the complex plan for bringing the organization from a given posture
to a desires position in a future period of time.
NATURE OF STRATEGY:-

Characteristics:-
Long-term plan provides the directions in which human and physical resources will
be deployed for achieving organizational goals primarily concerned with expected trends
in the markets an interpretative plan is forward looking mainly the job of top
management.

TYPES OF STRATEGIES:-

1. GRAND OR MASTER STTRATEGY:- It determines the nature and scope of the

enterprise.

(a) Stability strategy:-

An organization which follows this strategy is satisfied with its performance
and wants the same rate of growth.

(b) Growth strategy:-

This means an enterprise wants to raise its level of performance or rate of
growth.

(c) Integration strategy:-

Taking over or combining with other business firms is called integration
strategy.

(d) Turnaround or Retrenchment Strategy:-

This means reduction in the level of performance.

(e) Divestment or closure strategy:-

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 This implies giving up operations altogether or closing down.

2. FUNCTIONAL STRATEGY OR SUB- STRATEGY:-

These strategies are used for development of resources to achieve specific
objectives.

ESSENTIALS OF A GOOD STRATEGY:

(1) Internal consistency.

(2) Consistency with environment.
(3) Appropriate time horizon.
(4) Realistic.
(5) Acceptable degree of risk.
(6) Feasibility.

STRATEGY-MAKING PROCESS:

a.Environmental analysis:- The external environment of enterprise is

analyzed.
b. Self- Appraisal:- The internal environment of the enterprise
is examined
c.Strategic Alternatives:- Alternative strategies are developed.
d. Strategic Choice:- The most appropriative strategy is
chosen.
e.Strategy Implementation:- Detailed operational plans are developed and
communicated to employees so as to execute the chosen strategy.

ORGANISATIONAL HIERARCHY:-

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 Organizational hierarchy is the vertical representation of ranks of personnel
within an organization, each layer subordinate to the one above it. Organization hierarchy
is often shown in the form of an organization chart. An extended hierarchy is typical of a
bureaucracy, but during the later 20th and early 21st centuries the layers of hierarchical
positions within large organizations have often been reduced as part of downsizing
exercises. These result in the shallow or nonexistent hierarchies of flexible, flat
organizations, within which there is greater employee empowerment and autonomy.

Top
leve Strategic decisions
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Middle level Administration

Operating level Operation

Top level management:-

This level comprises of the various top level CEOs, CFOs and the Board of
Directors, etc. Their job is to make the strategic decisions that will effect the companys
operations in the long run.
Middle level management:-
This level of employees consists of the managers and the supervisors that
manage the lower level employees but are still under the top management and their job is
administrative.
Operating level management:-
This level of employees consists of the work shop employees and their job
is routine.

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FACTORS TO BE CONSIDERED ARE AS FOLLOWS:-

Specialization and division of labor:-

The organizational hierarchy depends on the specialization level and the
division of labor as the lesser administrative work is required for a highly specialized job.

Department:-
This means dividing large and complex organizations into smaller and
flexible administrative units. The more the number of departments the more the
administrative work of the middle level.

Chain of Command:-
The flow of command (authority) from the top level to the lowest level of
management does decide the organization hierarchy.

Span of Management:-
This refers to the number of sub-ordinates that are directly under a
supervisor. This takes into consideration the number of sub-ordinates that a single
supervisor can effectively manage at one time.

DEFINITION OF GROUP:-

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 A group consists of two or more persons who are interacting with one
another in such a manner that each person influence and is influenced by others.
Members of a group have a common goal; interact with one another and corporate work
together to achieve a common goal. Group is different from a mere aggregation or
assembly of persons.
TYPES OF GROUPS:-

Groups may be classified into the following categories:-

1. Formal and informal groups

2. Primary and secondary groups
3. Membership and reference groups
4. In-groups and out-groups

Formal and informal groups:-

Formal groups are deliberately created by management to achieve the goals
of the organization. Formal groups may be (a) command groups consisting of managers
and subordinates, or (b) tasks groups consisting of members performing similar tasks, e.g.
a committee. Informal groups spontaneously emerge when people regularly interact
with one another on personal or social basis. Informal groups tend to be stable and
smaller than formal groups.

Primary and Secondary groups:-

In a primary group individual members are in close face to- face relationship
over a relatively long time period.
In a secondary group, on the other hand interactions between members are
loose and general. Government, municipality and university are examples of secondary
groups.

Membership and reference groups:-

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 A membership group consists of persons who actually belong to the group.
They may or may not be satisfied with being members of the group. A reference group
is a group with which a person identifies himself or to which he would like to
belong. There may be a conflict between the norms and values of membership and
reference group.

In-groups and Out-groups:-

An in-group comprises persons who religiously abide by prevailing norms
and values of the society. An out-group consists of persons whose norms and
values differ from those prevailing in the society .

REASONS FOR FORMATION OF INFORMAL GROUPS:-

The main causes leading to the formation of informal groups are as

follows:-

1. Desire to associate with others:-

Formal organizations is impersonal and does not satisfy the natural
social needs of people . Informal organizations provides them opportunity to
interact and socialize outside the formal organizational relationship.

2. Job Specialization:-
In large organizations there is narrow specialization. It causes burden and
fatigue Employees are unable to understand how they contribute to the main job
and goals of the organization. They develop informal relationships to release their
tension.

3. Hierarchical Control and Communication:-

In a large organizations , there is a hierarchical or formal chain of
communication and control. There exist a large gap between superiors and
subordinates. The organization becomes impersonal due to social distance.

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MERITS OF INFORMAL GROUPS:-

Informal groups offer the following benefits to their members:-

Sense of Belonging: -
In a formal organization, an employee is one among thousands and feels no
sense of belonging. Informal groups fill this void by providing a social structure and
status.
Safety Value for Emotional Problems:-
The daily work routine causes tension and frustration to workers.

Assistance on the Job:-

Members of an informal group help one another in case of accident or
illness. The informal groups protect its members from external pressures such as a change
in work methods.

Communication Channel:-
In a formal organizations, employees receive important information about
the company only when it is officially released.

Breeding Ground for Innovation and creativity:-

Informal groups provide the environment necessary for individual creativity
and innovation.
Check on Authority:-
Informal groups force managers to plan and act more carefully Informal
groups provide feeling of security and status to members.

Social Control:-

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 Every informal group has its norms which serve as guides to correct
behavior for members.

Self-policing:-
When the informal group is cooperative, management is relieved of the
burden of supervision. Informal groups may help to promote organization objectives by
strengthening the ties of their members with the organization.

Fill gaps in Managers Abilities:-

More competent members of an informal group may help in areas in which
the superior is week.

Provide Feedback:-
Informal groups provide feedback about employees and their work
experiences to management

DEMERITS OF INFORMAL GROUPS:-

Informal groups suffer from following limitations:

Resistance to Change:-
An informal group has its own culture conventions and work methods. The
group resists those demands of management which are perceived as a threat to its culture.

Sub-optimization:-
Members of an informal group give preference to their own needs and goals
over the objective of the organization.

Role Conflict:-
When a person is a member of both formal and informal groups the faces a
conflict.

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Rumor:-
Informal groups are often the source of rumors. An outbreak of rumor can be
very harmful to the company.

Group Think:
Many members come to believe that whatever the group decides is good
any idea however useful which decides from the group philosophy is rejected.

HOW TO MANAGE INFORMAL GROUPS:-

Management does not create informal groups. Therefore, management should take steps
to harmonize these groups with formal organizations. The following steps may be taken
for this purpose:-

(i) Where informal group norms are acceptable they should be institutionalized.
(ii) Management should make constructive us of informal lines of
communication
(iii) When informal leaders develop, they may be appointed to positions of formal
authority.
(iv) All major cliques comprising the informal organizations should be catalogued.

Organizational Charts & Manuals

Definition:
An organizational chart is a diagrammatical form, which shows important aspects of an
organization including the major functions and their respective relationships, the channels
of supervision, and the relative authority of each employee who is in charge of each
respective function.

Types: All organization charts may be classified into three broad categories:

1. Vertical Charts:

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 Shows the organization structure in the form of a pyramid from top to
bottom in vertical lines

Hence known as top to down chart also

It is the most widely used chart

2. Horizontal charts:

Pyramid lies horizontally

Hence called left to right chart

Highest position is shown in the extreme left and lowest in extreme right

3. Concentric or Circular Charts:

Highest position is shown in the centre and lowest in the outermost circle

Distance of a position from the centre indicates the degree of closeness to

the top position

Position of equal status lie at the same distance from the centre

More difficult to draw and confusing

4. Pfiffner and Sherwoods classification:

Skeleton Chart: Its a mere graphic representation of the hierarchical

framework. Contains the principal units and sub-units in the form of
squares and rectangles. Solid black lines represent lines of command while
broken lines indicate staff or functional relationships.

Functional Chart: Consists of sub-units; boxes represents divisions and

sections.

Personnel Chart: same process of functional chart is used but boxes here
contain personnel information.

Master and supplementary charts:

A master chart shows the whole structure of the organization and provides a clear picture
of the entire structure.
A supplementary chart depicts the various units within a department and authority
relationship among them.

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Advantages and uses:
Shows clearly the various positions in the organization, the lines of authority and
responsibility.

Provides a basis of planning organizational change

Guidance to outsiders as to whom to contact

Guidance to new personnel into the total organization

Identify overlapping relationships

Facilitates communication

Limitations:

Shows only formal relationships

Does not represent flexibility

Updating of chart is difficult

Fail to show the extent of authority

Poor design may cause confusion

Does not show actual relationship in the organization

Organization manual:-

Definition: A small handbook or booklet containing detailed information about the

objectives, policies, procedures, rules etc of the enterprise.

Contents of the manual:

1. Introductory

Name

Nature

Objectives

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 Location

Purpose of the organization

2. Administrative

Organization structure

Job descriptions

Policies

Rules and regulations

3. Procedural

Procedures and practices

Specimen forms to be used

Standard instructions

Methods

Glossary of important terms

Types:
1. Policy Manual:

Contains basic policies of the company, decisions and resolutions of the

top management

Describes overall limitations

Serves as useful guide to action

2. Company organization manual:

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 Gives the set-up of the Co.

Describes duties and responsibilities

Outlines the formal chain of command

3. Operations manual:

Describes established stds, procedures, methods

Gives overall view

4. Departmental practice manual:

Contains detailed information about the orgn, policies, and procedures of

one dept.

Inter-departmental relations are also shown

5. Rules and Regulations Manual:

Describes operating rules and employment regulations

Eg: hrs of work, timings, library, recreation, etc.

Explain employee benefit plans housing, safety, hospitalization etc.

Advantages:
Written form

Useful in the orientation and training of new employees

Permits quick decisions at lower levels

Helps to avoid jurisdictional conflicts

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 Provides uniformity and consistency in operations

Drawbacks:
Expensive and time consuming

Creates rigidity in the organization

Manuals may put on record those relationships which should not be exposed

UNIT-III

DECENTRALISATION
Decentralisation refers to the systematic effort to delegate to the lowest level all authority
except that which can only be exercised at central points. Decentralisation refers to the
systematic delegation of authority in an organisation context. Effective decentralization
requires a proper balance between dispersal of authority among lower levels and adequate
control over them.

MEASURING THE DEGREE OF DECENTRALISATION:

Number of decisions

Importance of decisions

Effects of decision

Checking of decisions

ADVANTAGES OF DECENTRALISATION:

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 Relief to top executives

Motivation of subordinates

Quick decisions

Growth and diversification

Executive development

Effective communication

Efficient supervision and control.

DISADVANTAGES OF DECENTRALISATION:

Expensive

Difficulty to coordinate

Lack of uniformity

Narrow product lines

External constrains

FACTORS DETERMINING DECENTRALISATION AND DELEGATION:

Size and complexity of the organisation

Dispersal of operations

Degree of diversification

History of the enterprise

Outlook of top management

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 Availability of competent personnel

Nature of functions

Communicative system

Complexities of the situation

DISTINCTION BETWEEN DELEGATION AND DECENTRALISATIIION:

Delegation means transfer of authority from one individual to another

Decentralisation means diffusion of authority throughout the organisation.

Delegation is a process or an act, but decentralisation is the end result of

delegation.

Delegation denotes the relationship between a superior and a subordinate. But

decentralisation denotes the relationship between the top management and various
departments.

Delegation is an essential management process but delegation is optional.

The delegator exercise control over the subordinate, but the control may be
delegated to the departmental heads.

Delegation is a technique of management; decentralisation is a philosophy of

management.

MAKING DECENTRALISATION EFFECTIVE:

Appropriate centralisation

Development of the managers

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 Open communication

Coordination

Adequate controls

CENTRALISATION

Centralisation is the systematic and consistency reservation of authority at central points

within an organisation.

Centralisation implies the concentration of authority at the top level of the organisation
while decentralisation means dispersal of authority throughout the organisation.

Centralisation and decentralisation are relative terms

Everything that goes to increase the importance of the subordinates role is

decentralisation; everything which goes to reduce it is centralisation.

ADVANTAGES:

Personal leadership

Uniformity of action

Flexibility

Integration

Handling emergencies

Utilisation of personnel

DISADVANTAGES:

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 Problem in decision making

Overburdening

Lack of executive development

Low morale

DELEGATION

Delegation is a skill of which we have all heard - but which few understand. It can be
used either as an excuse for dumping failure onto the shoulders of subordinates, or as a
dynamic tool for motivating and training your team to realize their full potential.

To delegate means to entrust authority to a deputy so as to enable him to the tasks

assigned to him.

In the words of Louis A. Allen, Delegation is the dynamics of management; it is the

process a manager follows in dividing the work assigned to him so that he performs that
part which only he, because of his unique organizational placement can perform
effectively, and so that he can get others to help him with what remains.

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OBJECTIVE OF DELEGATION

The objective of delegation is to get the job done by someone else. Not just the simple
tasks of reading instructions and turning a lever, but also the decision making and
changes which depend upon new information. With delegation, the staff have the
authority to react to situations without referring back to the superior all the time.

To enable someone else to do the job, one must ensure that:

they know what is wanted of them

they have the authority to achieve it
they know how to do it.

These all depend upon communicating clearly the nature of the task, the extent of their
discretion, and the sources of relevant information and knowledge.

ELEMENTS OF DELEGATION

In any scheme of delegation the following 4 elements stand out:

1. Assigning of duties or tasks.
2. Delegation of authority.
3. Accountability for performance of duties.
4. Accountability for exercise of authority.

PRINCIPLES OF DELEGATION

Delegation can be effective only if it confirms to certain well-established principles like:

1. Delegation to confirm to desired objectives.

2. Responsibility cannot be delegated.
3. Authority to match duties.
4. Unity of command.
5. Limits to authority to be well-defined.

TYPES OF DELEGATION

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Delegation may assume various forms. For example, it may be:

1. General (or) Specific.

2. Written (or) Unwritten.
3. Formal (or) Informal.
4. Downward, Upward (or) Sideward.

ADVANTAGES OF DELEGATION

Delegation offers several advantages. Important among these are:

1. It is the basis for effective functioning.

2. It helps in the reduction of managerial load.
3. It helps to enjoy the benefits of specialized services.
4. It helps in the efficient running of branches.
5. It aids in employee development.
6. It aids in expansion and diversification of business.
7. It helps in maximizing organizational effectiveness
8. It helps in better and speedier decision-making
9. It helps to inculcate self-confidence and initiative among subordinates.

BARRIERS TO DELEGATION

Barriers could be in the form of organizational barriers and psychological barriers.

Why managers do not delegate:

1. Feeling of superiority.
2. Habit pattern.
3. Fear of exposure.
4. Feeling of indispensability.
5. Risk avoidance.
6. Loss of importance.

31
Why subordinates do not accept delegation:

1. Insecurity and fear of criticism.

2. Inadequacy of information and resources.
3. Lack of self-confidence.
4. Inadequate incentives.

STEPS TO MAKE DELEGATION EFFECTIVE

The following are the guidelines based on classical principles, to make delegation
effective and productive of the desired results:

1. Determination of specific goals.

2. Accountability.
3. Authority and responsibility.
4. Chain of command.
5. Unity of command.
6. Motivation.
7. Training.

SPAN OF CONTROL:

Meaning:
Number of subordinates who report directly to a single manager or supervisor.

THEORY OF GRAICUNAR:
French management consultant.
Mathematical formula for analyzing superior subordinate relationship.
No of subordinates increases arithmetically there is exponential increase in the no
of possible relationship.
3 types of superior subordinate relationship.

1. DIRECT SINGLE RELATIONSHIP:

2 direct relationship
For e.g. A with X and
A with Y.
2. DIRECR GROUP RELATIONSHIP:
These relationships arise between the manager and group of his
subordinates in all possible combinations.

32
 3. CROSS RELATIONSHIPS:
Relationship that arise among the subordinates working under a
common superior.
For e.g. X with Y
Y with X.
FORMULA FOR THIS THREE TYPE IS AS FOLLOWS.
1. Direct group relationship:

n (2^n / 2-1)
2. Cross relationship:
n (n-1 )
3. Total relationship=
n (2 ^ n / 2-1) + n (n-1)
n(2^n/2+n1)
Were N = no of subordinates.
No of subordinates No of relationship
1 1
2 6
3 18
4 44
5 100
6 222
7 490

MERITS:
1. Effective method of finding relationship
2. 6 subordinate 222 relationships
3. Indication to manager to think twice before increase in subordinates.
DEMERITS:
1. Ignore the intensity of relationships
2. Factors which determine span not taken into consideration.

FACTORS DETERMING SPAN OF CONTROL:

Nature of work
Type of technology
Ability of manager
Capacity of subordinates
Degree of decentralization
Planning

33
 Staff assistance
Communication technology
Time available for supervision
Geographical dispersion of subordinates.

Optimum Span of Control

An important task in structuring organizations, especially large ones, is

determining what the span of control of managers or supervisors should be. The span of
control, or span of management, refers to the number of persons who report to one
superior and includes the functions of planning, organizing and leading. The span of
management has a direct beating upon the number of levels in an organization, which is a
measure of the length of that organization's lines of communications. There are several
factors to consider in order to establish the proper span of control for managers. In
addition, the span of control will affect the attitudes and behavior of the organizational
members.

Historically, the concern over span of control was based on the idea that some optimal
number of manageable subordinates should exist. Researchers in the past, such as Col.
Urwick, stated that the optimal span of control was five or six. This as based on the
assumption that managers have a limited span of attention, energy and time. If a manager
was responsible for more than five or six subordinates, it was felt that the manager would
loose track of what was happening. Although only a small percentage of these
interactions actually occur on a daily basis, the message conveyed is that at some point
the addition of one more subordinate could create some serious problems for the
manager.

Basis that has been used to establish an optimal span of management is through applying
what appears to work for military organizations or very old organizations such as the
Catholic Church. The problem with this method and the other traditional views is that

34
they have a tendency to look for a single number answer without considering all the
different factors that contribute to the effective span of control. Examining all these
different factors is very important before determining a proper span of control.

Generally, if workers are involved in work of a trivial or routine nature, the supervisor
will tend to require less application of control than if they perform work of greater
significance or complexity. In addition, spans may be limited by where people are and by
the problems of control and communication over distance. Also, a supervisor can exercise
more effective control over a broader span in a stable situation than under dynamic
conditions.

Effective delegation of authority will allow a manager's span of control to increase by

reducing the frequency and severity of time-consuming relationships with subordinates.
Probably the most important way to achieve a wider span of control is to practice Theory
Y management methods, thereby encouraging employees to be as productive as possible.
Using budget control systems also permits the supervisor to increase the size of his span.
Another way of expanding the span of control is to introduce staff assistants who can act
as a screening mechanism and perform the more routine tasks.

Competent and well-trained subordinates tend to make fewer mistakes and require less
correction and counseling from their supervisors, thus allowing the span of management
to increase. Furthermore, if the job requires nominal training and all workers know what
to do, spans can be very broad.

Managers who are well-liked and inspire subordinates to work hard should have larger
spans. Likewise, subordinates that respond well to orders will make a larger span of
control possible.

As the immediate goals of subordinates become congruent with the goals of other
subordinates and with the goals of the organization, the span of management may be
increased.

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Since large firms typically face a greater volume of important problems, large firms tend
to have larger spans than medium-size firms. The optimal span will measure the relative
advantages and disadvantages of retaining supervisory responsibility as opposed to
delegation.

Many professional people, such as doctors, lawyers, professors and engineers, perform
work without much supervision, so spans can be very broad. Firms that insist on close
supervision of responsible professionals will tend to lose them since few good
professionals appreciate working in a tightly controlled environment.

The primary advantages of having a narrow span of control are that it should provide
close supervision, close control and fast communication between subordinates and
superiors. The major disadvantages of a narrow span include:

* Superiors tend to get too involved in subordinates' work;

* Many levels of management, which leads to high costs; and

* Excessive distance between lowest level and top level.

The advantages of having a wide span of management are that superiors are forced to
delegate, clear policies must be made and subordinates must be carefully selected. Some
of the disadvantages of a wide span of control are the tendency of overloaded superiors to
become decision bottlenecks, the danger of a superior's loss of control, and requires
exceptional quality of managers. It should be emphasized that quite frequently the
advantages of flat structures, such as information flow and individual satisfaction, are
offset by the advantages of narrow spans in faster and more effective problem resolution.

There appears to be several positive effects on individual attitudes and behavior when the
span of control is large. Employee morale will improve with a broader span since
subordinates will be subjected to a lesser degree of detailed supervision. In fact, one of
the worst aspects of a narrow span of control is the opportunity it gives a manager to
harass his subordinates. Wider spans will generally entail more responsibility be given to
subordinates, thereby making the job more fulfilling. At the same time, a flatter structure

36
will provide more growth for the subordinates and create more reliance and trust from the
supervisor.

UNIT-4
COMMUNICATION

MEANING OF COMMUNICATION:

According to Theo Haimann, communication is the process of passing information and

understanding from one person to another.it is the process of imparting ideas and
making oneself understood by another.

ELEMENTS OF COMMUNICATION PROCESS:

The communication process consists of the following steps

1. SENDER: The person who sends the message is known as the source. He initiates the
process of communication. The sender may be a speaker, writer or an actor.

2. MESSAGE: Is the subject-matter of communication. It may contain facts, ideas or

feelings. It exists in the mind of the reader.

SENDER MESSAGE ENCODING CHANNEL RECEIVER

DECODING

FEEDBACK

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3. ENCODING: It is the act of translating the message into words, pictures, symbols,
signs or others.

4. CHANNEL: It is the media through which the message passes from the sender to the
receiver. Channel may be formal or informal.

5. RECEIVER: The person who receives the message is called the receiver. He may be
a listener or observer. Receiver is also known as communicate.

6. DECODING: The receiver interprets the message to draw meaning from it. He
converts symbols, signs or pictures into meaning.

7. FEEDBACK: It is the response, reaction or reply by the receiver. It is directed to the

sender. When the sender receives the feedback, the communication process is said to
be complete.

IMPORTANCE OF COMMUNICATION:
Communication is the responsibility of every executive to develop and maintain the
system of communication. Major portion of the time is spent communicating. Without
proper communication no organization can survive.
ADVANTAGES OF SOUND COMMUNICATION:
Improves managerial performances
Communication enables a manager to diagnosis the various problem and
to secure information for the decision making. Helps in logical planning , to
organize systematically , to direct effectively and to control effectively.
Facilitates leadership
The modern concept of the leadership exercise through persuasion rather
than command places a great premium on communication.
Increases job satisfaction
Develops interest and motivation in work by communicating effectively.

38
 Reduces time and effort
Communication can be done through the reports etc. Such economy in
time and efforts help to ensure efficiency and effectiveness in the organization.
Enhances Co-ordination
Individuals working in the organization perform different duties and
activities. It is necessary to integrate and unify these activities and human efforts.
Help public relations
A business enterprise comes in contact with several social groups, e.g., customers,
shareholders, government and public. It must maintain harmonious relationship with
these groups of external environment.
CHANNEL OF TYPES OF COMMUNICATION
A channel of communication is the path through which messages are
transmitted from the sender to the receiver. Channels of communication may be formal or
informal.

FORMAL COMMUNICATION
Formal communication follows the routes formally laid down in the organization
structure of the enterprise. Formal channels are the paths of communication which are
institutionally determined and which are associated with status and position of the sender
and receiver. The formal channels are deliberately created to regulate the flow of
communication. An attempt is made to make the flow of information orderly so that it
flows smoothly and timely to the points where it is required. The officially prescribed
path of communication is orderly in nature.
Disadvantages in flow of formal communication:
organizational distance
screening at various points
Narrow route
Three forms of formal communications,
Downward(Vertical communication)
Upward(Vertical communication)

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 Horizontal

VERTICAL COMMUNICATION
Downward communication:

It refers to the flow of information from the superior to the subordinate (the
orders).It also involves communication of policies procedures and programmes of the
organization.

Upward communication:

It implies the flow of communication from subordinates to the superiors of the

organization. It involves reports suggestions, recommendation, inquiries , appeals
,grievance etc. It generally improves the morale of the employees.

Difference between downward and upward communication:

Downward
1.From higher to lower levels
2.Flow is downwards
3.Directive in nature
4.Purpose is to get plans implemented
5.Travels fast
6.Orders, instruction lectures, manuals,
handbooks etc. are the main examples
Upward
From lower to higher level
Flow is upwards
Non directive in nature
Purpose is to provide feedback on results
Travels slowly
Reports, suggestions, grivences, protects,
surveys are the main examples

HORIZONTAL COMMUNICATION:

Transmission of information among the positions at the same level of

the organization. Person with same status exchange information and ideas for achieving
coordination among different departments or divisions. Such communication is also
known as lateral or sideward communication. It takes the form of memoranda, letters,
telephone talks, face-to-face contacts, and inter departmental committee meetings.

40
INFORMAL COMMUNICATION OR GRAPEVINE
Informal communication or grapevine implies communication among people
through informal contacts or relations. It coexists with the formal communication
system. People resort to informal communication when there are barriers in the formal
channels.
Benefits of Informal communication:
Informal communication is easier and faster than formal communication.
It fills in the gaps existing in the formal communication system.
It is a primary means of developing identification with the group and interest in work.
It is the main source of information about the feelings and attitudes of employees.
It also helps to satisfy the information needs of employees.
It is a powerful medium to transmit messages at great speed.
It can transmit confidential information, which is unavailable in formal channels.
Informal channels partially replace and often supplement formal channels.
When formal channels break down, informal channels are the only rescue and
alternative.
Finally, Informal channels prove to be more effective and are more human & homely.

On the other hand, informal communication tends to carry inaccurate and baseless
information. It contains rumours and gossips; the best way to deal with rumour is to
supply true facts in face-to-face contacts. Grapevine has no definite origin and direction.
Distinction between Formal and Informal communication

Formal Communication Informal Communication

1. Official channels. 1. Unofficial channel.

2. Deliberately planned and systematic. 2. Unplanned and spontaneous.
3. Part of organization structure. 3. Cuts across formal relationship.

41
4. Oriented towards goals and tasks of the 4. Directed towards goals and need
Enterprise. Satisfaction of individuals.
5. Impersonal. 5. Personal and social.
6. Stable and rigid. 6. Flexible and instable.
7. Slow and structured 7. Fast and unstructured.

METHODS OF COMMUNICATION:

There are three important types of communication media:

1) Oral Communication
2) Written Communication
3) Gestural Communication

Each of there media may be used either exclusively or in combination with other
media.

ORAL COMMUNICATION:

Oral Communication involves exchange of messages through spoken words. It

may be take place (i) through mechanical devices like telephone.

Face-to-face conversation is the most natural way of transmitting the message. it

is very speedy and helps to interchange feelings and attitudes. This Communication may
take place through lectures, group discussions, interview, committee meetings, broadcast
and social gatherings.

These days mechanical devices like alarm bell, telephone, intercom system etc.,
are becoming increasingly popular for communicating messages.

MERITS:

1. Economical - Oral Communication is relatively less expensive both in terms of

time and money.

2. Personal touch - Oral Communication is more effective due to direct contact

between the sender and the receiver.

3. Speed - Oral Communication is faster as compared to written Communication.

42
4. Flexibility - Oral Communication is more flexible because the mode of delivery
and the tone can be adjusted according to the type of listener or the audience.

5. Quick response - In Oral Communication, response or reaction to the message can

be obtained on the spot.

DEMERITS:

1. Lack of record - Oral Communication does not provide an authentic and permanent
record of Communication unless the conversation is tape-recorded.

2. Time Consuming - Oral Communication in the form of face-to-face talk may

become time consuming and costly.
3. Lengthy message - If the subject - matter to be communicated is quite lengthy, Oral
Communication may not produce satisfactory results.
4. Physical distance - when there is a long physical distance between the speaker and
the listener, Oral Communication may be ineffective.
5. Misunderstanding - Oral Communication may be misunderstood or not heard due to
mutual distant or suspicion between the speaker and the listener.

WRITTEN COMMUNICATION:

Written Communication is transmitted through written words in the form of letters,

circulars, memos, bulletins, instruction cards, manuals, handbooks, reports, returns etc.

MERITS:

1. Effectiveness - written messages are more carefully formulated than oral messages.
Therefore, Written Communication tends to be a more dear and specific.
2. Lengthy messages - Written Communication is more appropriate when the message
is quite lengthy.
3. Economical - Written Communication is cheaper when the sender and the receiver
are situated at distant places.
4. Repetition - Written Communication can be used again and again.
5. Permanent record - Written Communication provides a reliable record for future
reference.
6. Better response - Response is generally well thought out to this communication
because the receiver gets sufficient time to understand and evaluate the message.

DEMERITS:

1. Time Consuming - Written Communication requires greater time in the preparation

and transmission of message.

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2. Expensive - As it takes long time to convey the message, Written Communication
is more expensive.
3. Inflexibility - A Written message once transmitted cannot be withdrawn, also for
the rent message there is no scope left for making amends for inaccuracy that may
have crept into it.
4. Little secrecy - It is difficult to maintain complete secrecy about written messages.
5. Lake of personal touch - Written Communications tends to be very formal and lack
personal touch.
6. Misunderstanding - If the Written Message is poorly drafted it may create
confusion and conflict.

GESTURAL COMMUNICATION:

Communication through gestures or postures is known as Gestural

Communications. It is often used to supplement Oral Communication. Gestural
Communication is very useful in conveying feeling, emotions and attitudes.

BARRIERS TO COMMUNICATION
Communication is successful only when the receiver understands the message intended
by the sender. Managers often complain that one of their greatest problems is
communication breakdown. Specialists have made serious studies of this and have
isolated certain factors that cause barriers to effective communication. They are:

NOISE:
Noise is the first and foremost barrier to communication. It means interference that
occurs in a signal and prevents one from hearing sounds properly. Noise does not mean
only this. It also encompasses many other factors that may exist at the end of sender as
well as that of the receiver. The sender may resort to ambiguous or confusing signals.
The receiver may mess up the message owing to inattention or may spoil decoding
because of wrong or unexpected interpretation. The receivers prejudices may also come
in the way of his understanding the message in the right spirit. Some of the sources
contributing to noise are:
Poor Timing - A last moment communication with deadline may put too much
pressure on the receiver and may result in resentment.

44
 Inappropriate channel - Poor choice of channel of communication can also be
contributory to the misunderstanding of the message.
Network Breakdown - Sometime staff may forget to forward a letter or there
may be professional jealousy resulting in closed channel.

LACK OF PLANNING:
Communication is not a casual affair. Unfortunately many people take it lightly. The
result is that the message to be sent across may not be carefully planned. There are
innumerable examples of people who would give an ill-planned, long-winding lecture
while a short presentation with tables or graphs would be sufficient. Such an event would
turn into one of miscommunication. In the same way some people may not care to choose
a suitable time and place that are so very necessary for effective communication.

SEMANTIC PROBLEMS:
Semantics is the systematic study of meaning. That is why the problems
arising from expression or transmission of meaning in communication are called
semantic problems. Oral or written communication is based on words. And words,
limited in number, may be used in unlimited ways. The meaning is in the mind of the
sender and also in that of the receiver. But it is not always necessary for the meaning in
the mind of the sender to be the same as in the mind of receiver.

CULTURAL BARRIERS:
We live in a culturally diverse world. People will encounter individuals from different
races, religions, and nationalities in their day to day encounters. There is oftenanxiety
surrounding unfamiliar cultures and cultural differences often come up as communication
barriers. The same category of words, phrases, symbols, actions, colours may mean
different things to people of different countries or different cultural backgrounds.

45
WRONG ASSUMPTIONS:
Quite often we act on assumptions, without caring to seek clarification for them. We
should make all possible efforts to maintain our goodwill and not act impulsively on
assumptions. If, for example, a customer writes to us that he would like to visit our office
or factory without telling us that he would like to be picked up and we assume that he
will manage to come on his own it may lead to loss of goodwill. So it is necessary to be
circumspect in such matters.

SOCIO-PSYCHOLOGICAL BARRIERS:
The attitudes and opinions, place in society and status consciousness arising from ones
position in the hierarchical structure of the organization, ones relations with peers,
seniors, juniors and family background -all these deeply affect ones ability to
communicate both as a sender and receiver. Status consciousness is widely known to be a
serious communication barrier in organizations. It leads to psychological distancing
which further leads to breakdown of communication or miscommunication. Often it is
seen that a man high up in an organization builds up a wall around himself. This restricts
participation of the less powerful in decision making. In the same way ones family
background formulates ones attitude and communication skills.

EMOTIONS:
Emotions play a very important role in our life. Both encoding and decoding of messages
are influenced by our emotions. A message received when we are emotionally worked up
will have a different meaning for us than when we are calm and composed. Anger is the
worst emotion and enemy of communication.

SELECTIVE PERCEPTION:
Perception provides each of us with a unique view of the world a view some times
related to, but not necessarily identical with that held by others. Selective perception
means that the receivers selectively see and hear depending upon their needs,
background, motivations, experience and other personal characteristics.

46
While decoding the messages, most of the receivers protect their own interests and
expectations into the process of communication leading to a particular kind of feedback
that may become a communication problem.

FILTERING:
Filtering means that the sender of a message manipulates information in such a way that
it will be seen more favorably by the receiver. A manager, for example, likes to tell his
boss what he feels his boss wants to hear. In this process he is filtering information. The
net result is that the man at the top never gets objective information. In the same way, the
people at the lower levels condense and synthesize information so as to get maximum
benefits for themselves. They hold back or ignore some important part of information.

INFORMATION OVERLOAD:
Unchecked inflow of information very often becomes another barrier to communication.
When people are bogged down with too much information they are likely to make errors.
They may also delay processing or responding to information/message and delay may
become a habit, causing serious communication problems.

FRAME OF REFERENCE:
This is another barrier to clear communication. Every individual has a unique frame of
reference formed by a combination of his experiences, education, culture, attitude and
many other elements, resulting in biases and different experiences in a communication
situation.
POOR RETENTION:
People are also likely to forget messages reaching them. There from arises
the necessity to repeat the message and use more than one medium to communicate the
same message.

POOR LISTENING:
Poor listening may lead to serious communication problems. Too many people are
interested in talking, and mostly talking about themselves. They are so much involved

47
with themselves that they do not have patience to listen. The result is that they are not
interested in the speaker whose words go waste. Everybody knows about the importance
of listening, but very few actually practise patient, active and empathic listening. That is
why so many communication problems crop up. Poor listening accounts for incomplete
information and also poor retention. One may simply not get the desired result if this
keeps on happening.

OFFENSIVE STYLE OF COMMUNICATION:

It is quite obvious that offensive style of communication leads to communication
breakdown. It is a rather sensitive point. If a manager sends a message in such a way that
the workers/juniors become defensive the relations get strained and communication
suffers. Hence it is absolutely necessary for the management to adopt a persuasive style
of communication.

TRAITS OF A GOOD COMMUNICATION:

1. CLARITY OF MESSAGE: The message must be clear and free from all ambiguity. It
should be encoded in the direct and simple language which the receiver can
understand easily and quickly.

2. COMPLETENESS OF MESSAGE: The message must be adequate and complete.

The process of communication must ensure that various individuals in the
organization get all the required information for proper discharge of their duties.

3. CONSISTENCY OF MESSAGE: All messages must be consistent with the

objectives, policies, and rules of the organization.

48
4. PROPER TIMINGS: The communication system should ensure that the message
reaches the receiver when it is required. The utility of the message depends upon its
timeliness.

5. CREDEBILITY: Actions speak louder than words. Therefore, the communicator

must follow in action what he says in a message. This will ensure believability and
seriousness in communication.

6. EMPATHY: The format, the mode, frequency and the media of communication
should not hurt the feelings of the communicates.

7. FOLLOW-UP: All communications should be followed up systematically. The

communicator must try to ascertain through some signals whether or not he is
properly understood. This is known as the principle of feedback in communication.

8. ECONOMY: The communication system must be economical keeping in view its

efficiency. The cost of communication should be kept under check.

UNIT-V

DEFINITION OF CO-ORDINATION

According to Henry Fayol to co-ordinate is to harmonize all the activities of a concern

so as to facilitate its working and its success

NATURE AND CHARACTERISTIC OF CO-ORDINATION

co-ordination is not a distinct function but the very essence of management.

It is a basic responsibility of management.

Co-ordination does not arises spontaneously or by force.

Heart of co-ordination is the unity of purpose.

49
 Co-ordination is a continuous or an on going process.

Co-ordination is required in group efforts not in individual effort.

Co-ordination is the responsibility of each and every manager.

PROBLEMS IN CO-ORDINATION
INCREASE IN SIZE AND COMPLEXITY OF OPERATIONS

SPECIALISATION

Division of work into specialised functions and departments leads to diversity

and lack of uniformity

CLASH OF INTEREST

Often individual fail to appreciate how the achievements of organisation goals

will satisfy their own goal.

DIFFERENT OUTLOOK OF WORKING AND APPROACH TOWARDS

PROBLEMS

CONFLICT BETWEEN LINE AND STAFF SPECIALIST

EMPIRE BUILDING

Some employees tend to over emphasis their own departments and sections. They
try to get maximum possible share of total resources

PERSONAL RIVALRIES

Members from rival groups try to settle personal scores in organisation activities.
Such rivalry is disastrous to teamwork.

NEED AND IMPORTANCE OF COORDINATION

EFFECIENCY AND EFFECTIVENESS

50
 Coordination helps to improve the efficiency of operations by avoiding
overlapping efforts and duplication of work. Quality of coordination determines
the effectiveness of organized efforts.
UNITY OF DIRECTION

Coordination helps to ensure unity of action in the face of disruptive forces. It

helps unity of action and helps to avoid conflicts between line and staff elements
HUMAN RELATION

Coordination helps to improve team spirit and morale of employees. In a well

coordinated organization, organizational goals and personal goals of people are
reconciled.
QUNITESSENCE OF MANAGEMENT

Coordination is all inclusive concept and the end result of management process.
Coordination helps in the accomplishment of organizational goals.

TYPES OF COORDINATION
Coordination may be decided on different bases,
On the basis of scope or coverage, coordination can be internal of external on the basis of
flow, it is classified as vertical and horizontal and coordination may also be procedural
and substantive
INTERNAL AND EXTERNAL COORDINATION

Coordination between the different units of an organization is known as internal

coordination. External coordination refers to coordination between an
organization and its external environment customers, investors etc.
VERTICAL AND HORIZONTAL COORDINATION

51
 Vertical coordination implies coordination between different levels of
organization. Vertical coordination is ensured by top management through
delegation of authority. Coordination between different departments and other
units at the same level of management hierarchy is called horizontal
coordination.
PROCEDURAL AND SUBSTANTIVE COORDINATION

Procedural coordination implies the specification of the organization in itself.

Substantive coordination is concerned with the content of the organizations
activities.

PRINCIPLES OF COORDINATION

Mary Parker Follet has laid down four principles of effective coordination
1) DIRECT PERSONAL CONTACT
Coordination is best achieved through direct personal contact with people. Direct face
to face contact communication is most effective.
2) EARLY BEGINNING
Coordination can be achieved more easily in early stages of planning and policy making.
Plans should be based on mutual participation. Early coordiantin also improves the
quality of plans.
3) RECIPROCITY
It states that all factors in a given situation are interdependent and interrelated. When
People appreciate reciprocity of relations, they avoid unilateral action and
coordination becomes easier.
4) CONTINUITY

It is an on-going or never ending process. Sound coordination resolves conflicts as it

arises.

TECHNIQUES OF COORDINATION
Main techniques of effective coordination arE

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 SOUND PLANNING

Planning is the ideal stage for coordination. Clear cut objectives, harmonized
policies and unified procedures and rules ensure uniformity of action.
SIMPLIFIED ORGANISATION

A simple and sound organization is an important means of coordination. Clear

cut authority relationships help to reduce conflicts and to hold people
responsible.
EFFECTIVE COMMUNICATION

Open and regular communication is the key to coordination. Effective

interchange of opinions and information helps in resolving difference and in
creation mutual understanding.
EFFECTIVE LEADERSHIP AND SUPERVISION

Effective leadership ensures coordination both at the planning and the execution
stage. Sound leadership can persuade subordinates to have identity of interest and
too adopt a common outlook.

CHAIN OF COMMAND

Authority is the supreme coordinating power in an organization. Exercise of

authority through the chain of command or hierarchy is the traditional means of
coordination.
VOLUNTARY COORDINATION

When every organizational unit appreciates the working of related units and
modifies its own functioning to suet them, there is self coordination. It is possible
in a climate of dedication and mutual cooperation.

53
MEANING OF CONTROL
Controlling may be defined as the process of analysing actual operation seeing that actual
performances is guided towards expected performance.
NATURE AND PURPOSE OF CONTROL
Main characteristics of control
1) Essential function of management
2) Ongoing process
3) Forward working
4) Involves measurement
5) The essence of control is action
6) Control is an integrated system

ELEMENTS OF CONTROL
1) Planning
2) Information feedback
3) Delegation of authority
4) Remedial action
NEED FOR CONTROL
Control is an indispensable function of management.
A manager cannot do the complete of managing without any control.
Organizational activities are directed towards the attainment of pre-determined
objectives through control.
Management ensures that resources are obtained and utilized economically and
efficiently for the accomplishment of organizational objectives through control.

THE CONTROL PROCESS

1. Fixation of standards:
Standards of desired performance should be established.
It serves as the criteria by which actual results are to be evaluated.
Different standards are set up for various operations.
Standards should be accurate, precise, objective, acceptable and workable.

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 They should be flexible.
They should be measurable.
Desired level of performance should be reasonable and feasible.
It should be in terms of range maximum and minimum so as to maintain
flexibility.
THE CONTROL PROCESS

Meets
standards

Standards Performanc
Operations e
(Planning) (organizing Does not
and meet
directing) standards

Corrective
action

2. Measurement of performance.
After fixation of standards, the actual performance of various individuals,
groups and departments is measured.
It involves setting up the methods of collecting accurate and up-to-date
information on the progress of, work.
Performance should be measured in quantitative terms.
Measurement of performance against standards should be on a future basis so
that deviations are anticipated and necessary corrective actions are taken to
prevent them.

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3. Comparing performance standards:
The actual results are compared with standards to check deviations, if any.
Such comparisons are if the standards and actual performance are expressed in
quantitative terms.
When deviations are beyond permissible limits, an analysis is made to identify the
cause of deviations.
The deviations and their causes are reported to the manager and he will take the
necessary corrective actions.
Only exceptional deviations are reported to the top management.
Reports should be clear.
They should not only show results but also reasons.

4. Correction of deviations:
The final step in the control process involves taking corrective action so that
deviations do not recur.
Corrective action may involve review and revision of goals or standards, change
assignment of tasks, provision for additional resources or new facilities,
improvement in the selection and training of workers or reform in the techniques
of direction.
It requires changes in all other managerial functions.
This shows the unity of the managers job and the integrated nature of
management process

PROBLEMS IN CONTROL PROCESS

1. MAGNITUDE OF CHANGE: control system is designed to cope with changes of a

certain magnitude. The corrective actions are programmed into the decision rules of the
foremen.
2. TIME RATE OF CHANGE: due to time lag in feedback, the control system cannot
respond quickly to change in the situation .as a result there is slow down in the adaptive
process.
3. ERRONEOUS STANDARDS: A mistake in setting standards is perhaps the most
critical problem in a control system.
4. WORKERS RESISTANCE: opposition arises at every step in the control process.

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5. COMMUNICATION PROBLEMS: semantic and other barriers to communication
can distort the information flow.

CHARACTERISTICS OF AN IDEAL CONTROL SYSTEM

1. SUITABLE: The control system should be appropriate to the nature, needs, and
circumstances of the enterprise and each level of activity inside it.

2. FLEXIBLE: Only a flexible system can be pragmatic or critical.

3. ECONOMICAL: The control system must be worth its cost and should justify
the expenses involved.

4. SIMPLE: Control system should be easy to understand and simple to maintain.

5. OBJECTIVE: A sound control system must be objective and impersonal rather

than subjective and arbitrary.

6. PROMPT: deviations in the control system must be reported quickly.

7. FORWARD LOOKING: a control system is ideal only when it points outs

deviations even before they take place.

8. SUGGESTIVE: solutions to the problems caused by the deviations should also

be indicated.

9. STRATEGIC POINT CONTROL: a good control system should focus

attention on critical or key points that need to be regulated.

10. MOTIVATIONAL: control system should aim at motivating people by fulfilling

their needs.

UNIT-VI

TECHNIQUES OF MANAGEMENT

MANAGEMENT BY OBJECTIVE:

Management by objective (MBO) is known by several names e.g., management by

objective, Management by goals and results, Goals management etc. In 1954 Peter F.
Drucker suggested the concept of Management by objectives and self control. Later
several pioneers suggested the use of MBO for performance appraisal, for long-range
planning and for integrating the individual with the organization. As management
philosophy MBO has now become a way of life for business managers.

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Concept of MBO:

MBO has be defined as a process whereby superior and subordinates jointly identify the
common objectives, set the results that should be achieved by the subordinates, assess the
contributions of each individual in terms of the results expected of him, and integrate
individuals with the organization so a to make best use of organizational resources.

The forgoing definition reveals the following characteristics of MBO:

1. MBO is both a philosophy and a technique of management.

2. MBO is a goal-oriented process and not a work-oriented process.
3. Self-direction and self-control are the built-in features of MBO.
4. It lays down an evaluative mechanism through which the contribution of each
individual is measured.
5. Under MBO a linkage is created between organizational goals and individual
goals.
6. Performance of individual is periodically evaluated in the light of pre-determined
targets.
7. MBO is a continuous process or a never-ending process.

STEPS IN MBO PROCESS:

The main steps in the process of MBO are as follows:

1. Setting Objectives: The first step in installing the MBO system is to establish
verifiable objectives for the organization as a whole and for various positions in
the organization. Under MBO, objectives are established in several stages. First,
top management sets the goals for the total enterprise in certain key areas.
Second, objectives for each department are laid down in consultation with the
department heads. Then this process of goal-setting is repeated at lower levels of
management until goals for each and every individual are established. The
superior must play a supportive role in helping his subordinates to develop

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 consistent and feasible objectives for themselves. The goal-setting process is
complete when agreement is reached between superior and subordinates as to
what is to be accomplished and why.

2. Developing action plans: Once the goals are established, responsibility for the
achievement of each goal is specified. Job descriptions for various positions must
define the goals to be attained. Resources required for goals attainment are
identified and allocated. Then the means for the implementation of plans are
decided. Goals and resources must be matched together.

3. Conducting periodic reviews: At frequent intervals actual performance is

reviewed jointly by the superior and the subordinates. Such periodic evaluation
progress serves as a checkpoint. If necessary, the goals are modified. Ways and
means are identified to overcome problems and to improve performance in future.

4. Appraising annual performance: A thorough evaluation of individual

performance is done at the end of the year. At annual reviews, achievements are
carefully analyzed against the given objectives. Rewards are decided on the basis
of annual appraisal.

Thus, the MBO process comprises preliminary goal-setting, setting subordinates

objectives, matching goals with resources, recycling objectives and periodic
appraisal of performance.

THE MBO PROCESS

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 1.
SETTING OBJECTIVES

4. 2.
APPRAISING DEVELOPING
ANNUAL ACTION
PERFORMANCE PLANS

3.
CONDUCTING
PERIODIC
REVIEWS

MANAGEMENT BY EXCEPTION:

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 It is a management style wherein managers intervene only when their employees fail to
meet their performance standards. If the personnel are performing as expected, the
manager will take no action. The term is also used to describe provision of information to
management in which only significant deviations from budgets or plans are reviewed as
the basis for corrective action. The object is to reduce the quantity of detail contained in
management reports and statistics to date on which action can be taken.

Advantages of MBE:

It saves the time of managers because they deal only with exceptional matters.
It focuses managerial attention on major problems.
It facilitates delegation of authority.
It keeps management alert to opportunities and threats.
It provides better yardstick for judging results.

Limitations of MBE:

Non critical and non exceptional areas may be crucial and may damage the
system before remedial action is taken.
Subordinates may misuse the permissive atmosphere.

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Trends In Management

Tourism Management Dynamics

As the global tourism industry continues to expand and to become more complex, it is
vital that those in the industry identify trends early and design proactive strategies to gain
competitive advantage. Tourism Futures: dynamics, challenges and tools helps one with a
comprehensive insight of the changes in the external business environment, and equips
them with new managerial techniques and tools in order to adapt and profit from these
changes and into the future. It provides the manager of tomorrow with the ability to look
beyond normal planning horizons and identify potential opportunities from change.

Quality control method, quality control support system and trend management
program for manufacturing operation

A product quality control method for a manufacturing operation comprising:

storing part-by-part data related to equipment used in a manufacturing process in a
storage device using an inputting device; outputting the stored data from the storage
device via a processing device to an outputting device as a quality maintenance matrix;
measuring characteristic values of a product manufactured by implementing an inspection
and manufacturing operation based on the quality maintenance matrix, and additionally
storing the obtained characteristic values in the quality maintenance matrix; performing
factor analysis on a part related to the quality characteristic item showing an
impermissible characteristic value in the above measurement and setting new conditions
so as to improve the impermissible characteristic values and storing the quality
maintenance matrix revised by the newly set conditions; implementing an inspection and
manufacturing operation based on the thus revised quality maintenance matrix prepared
in the first step.

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Brightsizing-new technique in management:

Management trends come and go. They are good or bad depending on many variables:
industry; company culture; education level of workers; existing contracts and laws; etc.
Mostly, however, they are good or bad depending on how well they are applied.

Re-engineering is a solid business management tool, but applied incorrectly it can cause
more harm than good. Downsizing, when done improperly, is appropriately called
dumbsizing.

The latest management buzzword isn't really a trend. It is more a reaction to the last few
trends. The new buzzword is brightsizing. While it provides more opportunity for comic
relief, courtesy of Dilbert, it is no laughing matter. Brightsizing is downright dangerous
and you need to protect your organization from it.

Brightsizing is defined, by Paul McFedries, as "corporate downsizing in which the

brightest workers are let go. This happens when a company lays off those workers with
the least seniority, but its those young workers who are often the best trained and
educated."

Sometimes brightsizing is blamed on union contracts, which enforce seniority-based

hiring/firing practices. It is, unfortunately, just as common in non-union companies.

Many companies have policy statements in their employee handbooks that state that in
layoff decisions "among equally qualified candidates preference will be given to the
employee with the greatest seniority."

When faced with decisions that will result in a reduction in staff, make sure you first
evaluate the value of the employee to the organization and THEN look at other mitigating
factors, such as length of time with the company. For example: One company I worked
with kept an individual with them because he was one of their first employees. They kept
finding jobs he could do as the company grew rapidly and outgrew his capabilities.

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Eventually, they made him responsible for picking up dignitaries at the airport and
bringing them to the office.

While I believe in company loyalty and retraining employees, you have to draw the line
somewhere based on performance and value to the company. The driver had gotten old,
was nearly blind, and could not even converse socially with the dignitaries he picked up.
He did not make a good first impression for the company.

This individual, incidentally, became an even greater liability to the company because he
never adjusted to the changing social rules on interpersonal conduct. His remarks and
actions were usually dismissed because "hes just a harmless old man", but the potential
for a harassment lawsuit was significant.

Remember, your first obligation is to the health of your company, not to any individual.
While it is important that you respect your employees as a group, and always treat them
fairly, you can not sacrifice the company for any individual. If the company suffers as a
result of poor personnel decisions on your part, it may result in further downsizing and
more employees would have to be released.

Recommended Text Books:

Koontz O.Donnell ,Principles Of Management, McGraw Hill

Peter Druker The Practice of Management, Allied Publications
Louis.A.Allen,: Management and Organization, McGraw Hill

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