Syllabus: MANAGEMENT PROCESSES

1. Evolution of Management Thought - Three areas: Pre- Scientific, Scientific, Human

Relations - Systems and contingency framework -Integration of Behavioral and
Rational Streams - Patterns of Analysis.
2. Management- A set of processes- Organization as a System. Subsystems of Organization -
Operations, Resources & Management.
3. Manager -Different Roles - Empirical Work.
4. Conceptual scheme of Management Processes - Planning, Organizing, Directing, Controlling.
Study of each of the Management functions.

Chapter 1: Evolution of Management Thought

Industrial Revolution in India: The transformation of India has occurred from an

agricultural to an industrially progressing nation. The Industrial Revolution period during
late 18th and early 19th centuries saw rapid development in technology enabling large-scale
production through mechanization and production methods influencing agriculture,
manufacturing, mining, and transportation. This period also witnessed emergence of the
factory system of production, in which workers were brought together in one plant and
supplied with tools, machines, and materials with which they worked in return for wages.

Causes of Industrial Revolution in India:

a. Congenial Atmosphere: Inculcated from British style, sprit of individual freedom,

freedom of speech and expression of views was encouraging factor.

b. Development of Trade: In the 18th century the scope of trade largely increased in
England & new trade routes to India and America were discovered. Thus England
developed their trade by using those sea routes. The colonies supplied raw materials
the extension of trade of England. The new ways of production helped in the
outbreak of Industrial Revolution.

c. Availability of Coal and Iron: These were necessary for the development & able to
manufacture various items at a very cheap rate within the country.

d. Availability of Cheap Worker: The abolition of serfdom gave the people to choose
their own professions. Prior to Industrial Revolution a great change was also noticed
in agriculture. This was known as the Enclosure Movement. Surplus worker of the
rural areas now migrated to the towns for earning their bread. As a result, labor
becomes cheaper. They now found their livelihood in different factories.

Graphical summary of industrial revolution in our country is as follows:

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Evolution of Operations concepts: An overview:

a. The industrialization resulted in dramatic changes in economy. The economic

growth rate was never fantastic but it was never dismal too. Initially under socio
economic & protected trend, India has opened up its economy for liberalization
almost 2 decades ago.

b. Post liberalization, the impact has been thrown up many challenges in sustenance
of Manufacturing & Quality management. As a result focus on making available the
products/ services in right quantity/quality, at right time, at right price to customers
are very intense.

Thus,

a. The firm always seeks continuously to improve upon output by better utilization of
4 Ms: men, Machines, Materials & methods and strive to decrease rate of rejection
by controlling 4 Ms.

b. A firm continuously is aware of and strives to have control mechanism to review &
manage financials/service levels which mater to business objectives such as:

Inventory, Finance, Customer satisfaction, Futuristic approach

Pre-scientific management era refers to the period immediately preceding the Scientific
Management started by Mr. F.W.Taylor and his associates. Prominent among the
pioneers who made significant contributions to management thought were

1. Robert Owen (1771-1858)

He believed workers performance was influenced by the total environment in which
they worked. Throughout his life Owen worked for the building up of cooperation
between the workers and the management. He believed and practiced the idea that
the worker should be treated as human beings. Owen suggested that investment in
human beings is more profitable than investment in machinery and other physical

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 resources. He introduced new ideas of human relations, e.g. shorter working hours,
housing facilities, education of children, provision of canteen, rest pauses, training of
workers in hygiene etc. Owen is known as the father of personal management. His
ideas and philosophy may be considered as a prelude to the development of behavior
approach to management
2. Charles Babbage (1792-1891): Babbage was a professor of mathematics at
Cambridge University from 1828 to 1839. Babbage perceived that the methods of
science and mathematics could be applied to operations of factories. He made
several contributions expounding his ideas and theories. Babbage was a pioneer of
operations research and industrial engineering techniques. He laid considerable
emphasis on specialization, work measurement, optimum utilization of machines,
cost reduction and wage incentives. His emphasis on the application of science and
mathematics laid the foundation for the formulation of a science of management.

3. Henry Vamun Poor: Poor advocated a "managerial system" with a clear organization
structure in which people could be held completely accountable and the need for a
set of operating reports summarizing costs, revenues and rates. He recognized the
danger such a system might make people feel like cogs in a machine. To overcome
this, he suggested a kind of leadership, beginning at the top of an enterprise that
would overcome routine and dullness by instilling in the organization a feeling of
unity, an appropriation of the work, and an esprit de corps. Thus Poor called for a
system before Taylor. He called for the recognition of human factor before Mayo. He
also suggested leadership to overcome the rigidities of the formal organization much
before Chris Argyris.

4. Henry Robinson Towne (1844-1924): H.R.Towne was president of the famous 'Yale
and Towne', a lock manufacturing company. He took particular interest in studying
about efficient management of the business. He applied his ideas successfully in his
own company. In 1886, he presented a paper the "Engineer as an Economist",
wherein he urged the association of engineers and economists as industrial
managers. The combination of the knowledge along with at least some skill as an
accountant is essential for the successful management of industry. He suggested
organized exchange of experience among managers and an organized effort to pool
accumulated knowledge in the art of workshop management.

5. Captain Henry Metcalfe (1847-1917): Metcalfe published a famous book "The Cost of
Manufacture and Administration of Workshop: Public and Private" in 1882. Metcalfe
suggested "new systems control" covering the following

1. The science of management is based on principles that are evolved by

recording observations and experiences.

2. The art of management should be based on several recorded and

accumulated observations, which are presented systematically

3. The management should make certain cost estimates on the basis of these
observations

4. However management should maintain only relevant and crucial information.

A manager should prepare the details of work which will then be
communicated to foreman and workers.

Metcalfe suggested a system of cards. Under this system managers prepare two
types of cards, i.e., time cards and material cards. This system is intended to assure

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 the workers that good work done by them would be known to management. It also
provides a method for gauging their work. The American Management Association
has put Metcalfe's system of management on record.

Systems of management were practiced in one form or other ever since men started
forming groups and living in civilized society. The Sumerian civilization dating back to
300 B.C. had an efficient system of tax collection. The pyramids of Egypt, The
Chinese Civil Service, the Roman Catholic Church and military organizations also
offer good examples of early application of management. However a systematic
study and analysis of management as a science began only in the twentieth century
after the industrial revolution. By far the most influential person of the time and
someone, who has had an impact on management service practice as well as on
management thought up to the present day, was F. W. Taylor. Taylor formalized the
principles of scientific management, and the fact-finding approach put forward and
largely adopted was a replacement for what had been the old rule of thumb. He also
developed a theory of organizations, which served as the forerunner for many
subsequent writers on management science.

The Classical Theory of Management (Classical Approach): It forms the foundation

for the field of management. It includes the following three streams of thought: (i)
Scientific Management; (ii) Bureaucracy, and (iii) Administrative Management

Major Contributors of Scientific Management: In Principles of Scientific Management (1911),

Mr. F W Taylor advocated use of scientific method to define one best way for a job to be
done Believed that increased efficiency could be achieved by selecting the right people for
the job and training them to do it precisely in the one best way. To motivate workers, he
favored incentive wage plans and separated managerial work from operative work. Further
two major managerial practices put forth by Mr. Taylor are: Piece-rate incentive system.

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Time-and-motion study: Taylor introduced new concepts like time study, motion study and
work study in the field of industrial management such concepts are for the introduction of
new methods which will be more quick, scientific and less troublesome to workers.

Frank and Lillian Gillbreth: They were instrumental in revising an approach to Motion
study involved in industrial management. The motion study involves finding out the best
sequence and minimum number of motions needed to complete a task. Frank and Lillian
Gillbreth explored new ways for eliminating unnecessary motions and reducing work fatigue.
This further led to a separate branch in Engineering called Ergonomics.

Henry Gantt: Incentive compensation systems Gantt chart for scheduling work operations

Well known for Task and - bonus system -The Gantt chart
If the worker completed the work fast, i.e., in less than the standard time, he
received a bonus.
It is a Simple chart that compares actual and planned performances.

Limitations of Scientific Management:

1. Do not focus on the management of an organization from a managers point of view.

2. People were rational and were motivated primarily by desire for material gain.
3. It also ignored the human desire for job satisfaction.

General Administrative Theory: It focused on principles that could be used by managers

to coordinate the internal activities of organizations. General administrative scientists who
developed general theories of what managers do and what constitutes good management
practice are:

Henri Fayol (France) Fourteen Principles of Management: Fundamental or universal

principles of management practice

Max Weber (Germany) Bureaucracy: Ideal type of organization characterized by division of

labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal
relationships.

Henry Fayol (1841-1925) is rightly treated as the father of modern theory of general and
industrial management. The credit of suggesting the basic principles of management in an
orderly manner goes to Henry Fayol. In due course of time, Henry Fayol came to be
recognized as the founder of modern management theory. His analysis of management
process acts as the foundation of the whole management theory and the present super-
structure of management has been built on it.

Henry Fayol suggested important qualities of managers and stressed the need for raising
such qualities. He developed fourteen principles of management out of his practical
experience. These principles are universal in character and are applicable to all types of
organizations. The management principles suggested by him in 1916 are universally
accepted by modern authorities on management and are treated as valid even to this day.

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This is because these principles are practical in nature and also result-oriented. The
functions of management according to Fayol are,

Planning Organizing Staffing Commanding Coordinating Controlling

Mr. Fayol divided general and industrial management into following six groups:-

a. Technical activities (production, manufacture, adaptation).

b. Commercial activities (buying, selling and exchange).

c. Financial activities (search for and optimum use of capital).

d. Security activities (protection of property and persons).

e. Accounting activities (stock taking, balance sheet, cost, and statistics).

f. Managerial activities (planning, organizing, command, coordination and control).

Mr. Henry Fayol also suggested 14 principles of management. These principles are:-

1. Division of work,
2. Authority and responsibility,

3. Discipline,

4. Unity of command,

5. Unity of direction,

6. Subordination of personal interest to organizational interests,

7. Remuneration,

8. Centralization,

9. Scalar chain,

10. Order,

11. Equity,

12. Stability of tenure,

13. Span of co-operation and

14. Initiative

Webers Ideal Bureaucracy: Mr. Weber tried to suggest different approach to the
Management which became well known as Webers ideal Bureaucracy. In this approach he
took forward many previously tried principles and bring in systematic approach and
discipline that was essential for Management functioning. In this process the approaches
were refined for betterment. A few of them are:

a. Work specification and division of labor:

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 b. Abstract rules and regulations:

c. Impersonality of managers:

d. Hierarchy of organization structure:

Limitations of Bureaucratic Management and Administrative Theory:

1. Not universally applicable to todays complex organizations.

2. Fayols principles like that of specialization were frequently in conflict with the
principle of unity of command.

3. Principle characteristic of bureaucracy changes in the global environment.

4. Classical theorists ignored the problems of leadership, motivation, power or

information relations.

Behavioral Approach: The behavioral approach to management emphasized individual

attitudes and behaviors and group processes, and recognized the significance of
behavioral process in the workplace. This approach is covered by following theories:

Contribution of Mr. Peter F. Drucker MBO: Drucker is highly respected mgmt thinker.
He is a prolific writer & has published several books & articles on the mgmt practices. His
views on mgmt may be summarized as follows:

1. Nature of mgmt: peter Drucker is against bureaucratic mgmt & has emphasized mgmt
with creative & innovative characteristics. The basic objective of mgmt is to lead towards
innovation. The concept of innovation is quite broad. It may include development of new
ideas, combining of old & new ideas, adaptation of ideas from other fields or even to act as
a catalyst & encouraging other to carry out innovation. He has treated mgmt as a discipline
as well as a profession.

2. Mgmt functions: Peter Drucker opined that the, mgmt is the organ of its institution. It
has no functions in itself, & no existence in itself. He sees mgmt through its tasks.
Accordingly, there are three basic functions of a manager which he must perform to enable
the institution to make its contributions for a) the specific purpose & mission of the
institution, whether business, hospital or university.

3. Organization Structure: Peter Drucker has described bureaucratic structure because of

its too much dysfunctional effect. Hence, it should be replaced. He has emphasized three
basic features of an effective organization structure. These are a) enterprise should be
organized for performance b) it should contain the least possible number of managerial level
and c) it must make possible the training & testing of tomorrows top mangers giving
responsibility to a manager while still he is young.

4. Federalism: the concept of federalism has been advocate by Peter Drucker. Federalism
refers to centralized control in decentralized structure. De centralized structure goes far
beyond the delegation of authority. It creates a new constitution, & new ordering principle.

5. Mgmt by Objective: Mr. P. Druckers most important contributions to the discipline of

management are Management by objective (MBO). He introduced this concept in a 1952.
MBO has further between modified by Schley which has been termed as management by
results. MBO includes method of planning setting standards performance appraisals, &

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motivation. According to Drucker, MBO is not only a technique of mgmt but it is philosophy
of managing.

6.Organisational Changes: P Drucker has visualizes rapid changes in the society because
of rapid technological development. Though he is not resident to change, he feels concerned
for the rapid changes & their impact on human life. Normally, some changes can be
absorbed by the organization but not the rapid changes. Since rapid changes are occurring
in the society, human beings should develop philosophy to face the changes & take them as
challenges of making the society better.

Human Resources Approach:

Mr. Robert Owen is a Scottish businessman, reformer and advocated for better treatment of
workers. He claimed that a concern for employees was profitable for management and
would relieve human misery. Further Ms. Mary Parker Follett Recognized that organizations
could be viewed from the perspective of individual and group behavior. It believed that
individual potential could only be released by group association. Mr. Chester Barnard saw
organizations as social systems that require human interaction and cooperation.

This approach is an effort to make managers more sensitive to their employees needs. It
arose out of the influences of

The threat of unionization: The Wagner Act of 1935 legalized union-management

collective bargaining, promoting the growth of unions and union avoidance by firms.
This helped to stop and curb the exploitation of labor and brought in awareness in
labor class. The unionization provided them with necessary social security and
protection that was necessary for quite some time.
The Hawthorne studies: A series of studies done during the 1920s and 1930s that
provided new insights into group norms and behaviors. Hawthorne effect Social
norms or standards of the group are the key determinants of individual work
behavior. It changed the prevalent view of the time that people were no different
than machines. The studys results that productivity was strongly affected by
workers attitudes turned management toward the humanistic and realistic viewpoint
of the social man model.

It says that the discovery that paying special attention to employees motivates them
to put greater effort into their jobs.

Hawthorne Studies are primarily responsible for consideration of non financial incentives in
improving productivity. Mayo pointed out that the organization is a social system and
informal organization is a reality. The knowledge of human nature can solve many problems
of management. He emphasized that successful human relations approach can easily create
harmony in an organization, higher employee satisfaction and great operational efficiency.
Central to this approach was an increased understanding of the individual worker with
emphasis on motivation, needs, interpersonal relationships and group dynamics Mayo
believed that a factory is not only a workplace but also a social environment in which the
employees interact with each other. This gave rise to the concept of the 'social man' whose
interaction with others would determine the quality and quantity of the work produced.
Some of the major findings of Hawthorne Studies we as noted below:

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 1. Employee's behavior is influenced by mental attitudes and emotions including
prejudices.
2. The workers in a group develop a common psychological bond uniting them as a
group in the form of informal organization.

3. In managing and motivating employee groups, human and social motivation plays
greater role then financial incentives.

4. Management must understand that a typical group behavior can dominate or even
supersede individual propensities and preferences.

5. When workers are given special attention by management, the productivity is likely
to increase irrespective of actual changes in the working conditions.

The Philosophy of Industrial Humanism:

Elton Mayo: (1880-1949) is recommended as the Father of Human Relations School. He

introduced human relations approach to management thought. His contribution to the
development of management thought is unique and is also treated as human relations
approach to management. It was Mayo who led the team for conducting:

1. The amount of work to be done by a worker is not determined by his physical

capacity but by the social norms.
2. Non-economic rewards play a significant role in influencing the behavior of the
workers.

3. Generally the workers de not reacts as individuals, but as members of group.

4. Informal leaders play an important part in setting and enforcing the group norms.

Mayo discussed the factors that cause a change in human behavior. He concluded that the
cause of increase in the productivity of the workers is not a single factor like rest pauses or
changing working hours but a combination these and several other factors such as less
restrictive supervision, giving autonomy to workers, allowing the formation of small
cohesive groups of workers and so on. Today, as a result of the efforts of Mayo and his
associates, the managers in different organizations recognize that workers' performance is
related to psychological, sociological and physical factors. He rightly suggested the
importance of democratic leadership and participative management style for running
business activities efficiently. Management will get positive response from its employees
when their actions, sentiments and expectations are given due attention.

Another way of thinking, Mary Parker Follett (18681933), defined management as "the art
of getting things done through people". She described management as philosophy. Some
people, however, find this definition useful but far too narrow. The phrase "management is
what managers do" occurs widely, suggesting the difficulty of defining management, the
shifting nature of definitions and the connection of managerial practices with the existence
of a managerial cadre or class. Managers should be aware of how complex each employee is
and how to motivate employees to cooperate rather than to demand performance from
them. Power, according to Ms. Follet, was the ability to influence and bring about a change.
She also professed concept of integration, which involves finding a solution acceptable to all
group members.

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Douglas McGregor: He developed Theory X and Theory Y which indicate an approach to
work and workmen by Management.

Theory X: Managements traditionally negative view of employees as unmotivated

and unwilling workers. Most people dislike work & must be coerced and threatened
before they work. Most people prefer to be directed, avoid responsibility and have
little ambition.
Theory Y: The positive view of employees as energetic, creative, and willing
workers. Work is a natural activity and people are capable of self direction and self
control. People become committed to organizational objectives if they are rewarded.

Contributions of Behavioral Thinkers to Management Thought:

Abraham Maslow: His theory rested on these assumptions.

1. Physiological needs;
2. Safety or security needs

3. Belongingness or social needs;

4. Esteem or status needs

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 5. Self actualization or self-fulfillment needs.

Chris Argyris: He Classified organizations based on the employees set of values. This has
further led to Maturity immaturity theory. It advocates that People progress from a stage
of immaturity and dependence to a state of maturity and independence.

a. Model I and Model II organization analysis.

b. Model I organization are manipulative
c. Model II organization are open to learning

Quantitative Approach: The Quantitative Approach Operations Research (Management

Science) evolved out of the development of mathematical and statistical solutions to military
problems during World War II. It includes the application of statistics, optimization models,
information models and computer simulations. More specifically, this approach focuses on
achieving organizational effectiveness. There are three main branches:

1. Management Science: It stresses the use of mathematical models and

statistical methods for decision-making. Another name is the Operations
Research.
2. Operations Management: It deals with the effective management of the
production process and the timely delivery of an organizations products and
services.
3. Management Information Systems: Management information systems focus
on designing and implementing computer-based information systems for
business organizations.

Modern Approaches to Management:

Contingency Approach to Management: A common deficiency of the classical,

behavioral and quantitative schools is that they have stress one aspect of the
organization at the cost of others. The classical approach emphasizes on 'task' while

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behavioral approach emphasizes on 'people. The stress of quantitative approach is
on 'mathematical decision-making. However, it is difficult to understand precisely
which aspect is most useful and appropriate in a given practical situation. This brings
the need to develop broad conceptual framework that can help a manager diagnose
a problem and decide which tool or tools will best do the job. The contingency
/situational approach attempts to integrate the various schools of management
thought in an orderly manner. The basic theme of contingency approach is that
organizations have to deal with different situations in different ways. There is no
single best way of managing applicable to all situations. In order to be effective, the
internal functioning of the organization must be consistent with the needs and
demands of the external environment. In other words internal organization should
have the capacity to face any type of external situation with confidence.

Features of the Contingency:

a. Management is entirely situational. The management has to use the

measures/techniques as per the situation from time to time.
b. Management should match its approach as per the requirements of the
situation. The policies and practices used should be suitable to environmental
changes.

c. The success of management depends on its ability to cope up with its

environment. Naturally, it has to make special efforts to anticipate and
comprehend the possible environmental changes. Managers should realize
that there is no one best way to manage. They have to use management
techniques as per the situation which they face.

Merits of Contingency Approach:

1. Contingency approach is pragmatic and open minded It discounts

preconceived notions, and universal validity of principles.
2. Theory relieves managers from dogmas and set principles. It provides
freedom/choice to manage to judge the external environment and use the
most suitable management techniques. Here, importance is given to the
judgment of the situation and not the use of specific principles.

3. The contingency approach has a wide-ranging applicability and practical utility

in, organization and management. It advocates comparative analysis of
organizations to bring suitable adjustment between organization structure and
situational peculiarities.

4. The contingency approach focuses attention on situational factors that affect

the management strategy. The theory combines the mechanistic and
humanistic approaches to fit particular/specific situation. It is superior to
systems theory as it not only examines the relationships between sub-
systems of an organization but also the relationship between the organization
and its external environment.

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 Limitations of Contingency Approach:

1. It is argued that the contingency approach lacks a theoretical base.

2. Under contingency approach, a manager is supposed to think through all
possible alternatives as he has no dried principles to act upon. This brings the
need of more qualities and skills on the part of managers. The responsibility
of a manager increases as he has to analyze the situation, examine the
validity of different principles and techniques to the situation at hand, make
right choice by matching the technique to the situation and finally execute his
choice. The areas of operation of a manager are quite extensive under this
theory.

ADVOCATES OF QUALITY:

Walter A. Shewhart : Introduced the concept of statistical quality control

Kaoru Ishikawa: Proposed a preventive approach to quality and developed
fishbone diagram approach to problem solving

W E Deming: Based his 14 principles on reformed management style,

employee participation, and striving for continuous improvement

Joseph M. Juran: Proposed the concept of internal customers, teamwork,

partnerships with suppliers, and brainstorming, Developed Pareto analysis
(the 80/20 rule) as a tool for separating major problems from minor ones

Armand V. Feigenbaum: Developed the concept of total quality control

Philip B. Crosby: Promoted the idea of zero defects (doing it right the first
time)

Need theory, also known as Three Needs Theory, proposed by psychologist David
McClelland, is a motivational model that attempts to explain how the needs for
achievement, power and affiliation affect the actions of people from a managerial context.
McClelland stated that we all have these three types of motivation regardless of age, sex,
race, or culture.

Need for achievement: People prefer working on tasks of moderate difficulty,

prefer work in which the results are based on their effort rather than on anything
else, and prefer to receive feedback on their work. Achievement based individuals
tend to avoid both high risk and low risk situations. Low risk situations are seen as
too easy to be valid and the high risk situations are seen as based more upon the
luck of the situation rather than the achievements that individual made. This
personality type is motivated by accomplishment in the workplace and an
employment hierarchy with promotional positions.
Need for affiliation: People have a need for affiliation prefer to spend time creating
and maintaining social relationships, and have a desire to feel loved and accepted.
People in this group tend to adhere to the norms of the culture in that workplace and
typically do not change the norms of the workplace for fear of rejection. This person
favors collaboration over competition and does not like situations with high risk or
high uncertainty.

Need for power: People in this category enjoy work and place a high value on
discipline. The downside to this motivational type is that group goals can become

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 zero-sum in nature, that is, for one person to win, another must lose. However, this
can be positively applied to help accomplish group goals and to help others in the
group feel competent about their work.

Effect on management: McClelland's research showed that 86% of the population

is dominant in one, two, or all three of these three types of motivation. His
subsequent research, published in the 1977 Harvard Business Review article "Power
is the Great Motivator", found that those in top management positions had a high
need for power and a low need for affiliation. His research also found that people
with a high need for achievement will do best when given projects where they can
succeed through their own efforts. Although individuals with a strong need for
achievement can be successful lower-level managers, they are usually weeded out
before reaching top management positions. He also found that people with a high
need for affiliation may not be good top managers but are generally happier.

Adamss Theory of Inequity: Mr. John Adams introduced the idea that fairness and equity
are key components of a motivated individual. Equity theory is based in the idea that
individuals are motivated by fairness, and if they identify inequities in the input or
output ratios of themselves and their referent group, they will seek to adjust their
input to reach their perceived equity. Adams' suggested that the higher an individual's
perception of equity, the more motivated they will be and vice versa: if someone
perceives an unfair environment, they will be de-motivated.

The easiest way to see the equity theory at work, and probably the most common way it
does impact employees, is when colleagues compare the work they do to someone else that
gets paid more than them. Equity theory is at play anytime employees say things like, 'I get
paid a lot less than xxx, but this place couldn't operate without me!' In each of those
situations, someone is comparing their own effort-to-compensation ratio to someone else's
and is losing motivation in the process.

Importance of Referent Groups: A referent group is a selection of people an individual

relates to or uses when comparing themselves to the larger population. If a
salesperson compares themselves to the rest of the sales staff, the referent group is
the sales staff. As it relates to equity theory, there are four basic referent groups that
people use:

1. Self-inside: your own experience within your current organization ('When I worked
for XYZ, things were better?)
2. Self-outside: your own experience within another organization ('When I did this
same job for XYZ, I was paid a lot less?)

3. Others-inside: other people within your current organization (the manager just sits
around a conference table all day, and gets paid way too much?)

4. Others-outside: other people outside your current organization (our competitor has
some pretty benefits?)

END OF CHAPTER # 1

Chapter 2: Management- A set of processes

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Definition: A social unit of people that is structured and managed to meet a need or to
pursue collective goals. All organizations have a management structure that
determines relationships between the different activities and the members, and
subdivides and assigns roles, responsibilities, and authority to carry out different
tasks. Organizations are open systems--they affect and are affected by their
environment. All organizations have relationships between activities and members via
roles, responsibilities, and authority to carry out different tasks.

Mission, Vision, Values, Objectives and Philosophy of an Organization: Setting of

organizational objectives is the starting point of managerial actions. An organizations end
results for which an organization strives is termed as mission, purpose, objective, goal,
target etc. Many times these terms are used interchangeably as all these denote end
results.

MISSION STATEMENTS: defines the organization's purpose and primary objectives. Its
prime function is internal to define the key measure or measures of the organizations
success and its prime audience is the leadership team and stockholders. Mission
statements are the starting points of an organizations strategic planning and goal setting
process. They focus attention and assure that internal and external stakeholders understand
what the organization is attempting to accomplish. Mission and purpose are used
interchangeably, though at theoretical level, there is a difference between two. Mission has
external orientation and relates the organization to the society in which it operates. A
mission statement helps the organization to link its activities to the needs of the society and
legitimize its existence. Purpose is also externally focused but it relates to that segment of
the society to which it serves; it defines the business which the institution will undertake.

Dimensions of Mission statements:

According to Bart, the strongest organizational impact occurs when mission statements
contain 7 essential dimensions.

Key values and beliefs

Distinctive competence

Desired competitive position

Competitive strategy

Compelling goal/vision

Specific customers served and products or services offered

Concern for satisfying multiple stakeholders

According to Vern McGinnis, a mission should:

Define what the company is

Define what the company aspires to be

Limited to exclude some ventures

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 Broad enough to allow for creative growth

Distinguish the company from all others

Serve as framework to evaluate current activities

Stated clearly so that it is understood by all

OBJECTIVES: Objectives are the ends toward which activity is aimed-they are the end
results to ward which activity is aimed.

Objectives are goals, aims or purposes that organizations wish over varying periods
of time-McFarland
A managerial objective is the intended goal that prescribes definite scope and
suggests direction to the planning efforts of a manger-Terry and Franklin

GUIDELINES FOR OBJECTIVE SETTING

Objectives

Must be clearly specified

Must be set taking into account the various factors affecting their achievement

Should be consistent with organizational mission

Should be rational and realistic rather than idealistic

Should be achievable but must provide challenge to those responsible for

achievement

Should start with to and be followed by an action verb

Should be consistent over the period of time

Should be periodically reviewed

Should have hierarchy

Organizational objectives

Should have social sanction

An organization may have multiple objectives

Can be changed

NATURE OF OBJECTIVES

Each organization or group of individuals have some objectives

Objectives may be broad or they may be specifically mentioned

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 Objectives may be clearly defined

Objectives have hierarchy.

Organizational objectives have social sanction, that is, they are created within the
social norms.

An organization may have multiple objectives.

Organizational objectives can be changed

FUNCTIONS OF OBJECTIVES

To define an organization
To provide directions for decision making

To set standards of performance

To provide a basis for decentralization

Integrate organization, group and individual

Characteristics of Sound Objectives:

While developing sound personnel policies, management should pay attention to the
following:

1) Related to objectives: Policies must be capable of relating objectives to functions,

physical factors and company personnel.
2) Easy to understand: Policies should be stated in definite, positive, clear and
understandable language.
3) Precise: Policies should be sufficiently comprehensive and prescribe limits and yardsticks
for future action,
4) Stable as well as flexible: Personnel policies should be stable enough to assure people
that there will not be drastic overnight changes. They should be flexible enough to keep the
organization in tune with the times.
5) Based on facts: Personnel policies should not be built on the basis of facts and sound
judgment and not on personal feelings or opportunities or decisions.
6) Appropriate number: There should be as many personnel policies as necessary to cover
conditions that can be anticipated, but not so many that they become confusing or
meaningless.
7) Just, fair and equitable: Personnel policies should be just, fair and equitable to internal as
well as external groups. For example, a policy of recruitment from within my limit
opportunities to bright candidates from outside and a policy of recruitment from outside
only would limit promotional avenues to promising internal candidates. To ensure justice, it
is necessary to pursue both the policies scrupulously and to apply them carefully.
8) Reasonable: Personnel policies must be reasonable and capable of being accomplished.
To gain acceptance and commitment from employees, they should be conditioned by the
suggestions and reactions of those who will be affected by the policy.
9) Review: Periodic review of personnel policies is essential to keep in tune with the
changing times and to avoid organizational complacency or managerial stagnation. For
instance if the current thinking is in favor of workers participation in management , the

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personnel policy should be suitably adjusted to accommodate the latest fad, accepted by
many in the organization.

Personnel policies to be sound should also have broad coverage in addition to satisfying the
above conditions. Hence, it would be appropriate to discuss the coverage of personnel
policies here.

Coverage of Personnel Policies:

The coverage of personnel policies has been classified on the basis of functions of HRM by
Michael Armstrong and is outlined as:

Social responsibility>>>

1) Equity: Treating employees fairly and justly by adopting an even handed approach.
2) Consideration: Considering individual circumstances when decisions affect the employees
prospects, seniority or self respect.
3) Quality of work life: increase the interest in the job and organization by reducing
monotony increasing variety of responsibility avoiding stress and strain

Employment policies: Provision of equal employment opportunities involves selecting the

candidates based on job requirements and encouraging them to put in their 100%.

Promotion policies: Promotion policies should reconcile the demands of employees for
growth and the organizations demands for fresh and much more promising talent.
Promotion policy should be fair and just to all.

Development policies: Policies should cover the kind of employees to be trained, the span of
training programs, techniques, rewarding and awarding system, qualifications and
experience of the trainer, encouraging the employees for self advancement, etc. These
policies also cover areas like career planning and development, performance appraisal,
organizational change and organizational development.

Relations policies: Relations policies cover different aspects of human relations like: policies
regarding motivation, morale, communication, leadership styles, grievance procedure,
disciplinary procedure, employee counseling etc. These policies also cover the areas of
industrial relations like union recognition, union representation, collective bargaining,
prevention and settlement of industrial disputes and participative management. In order to
be effective they must be written on the basis of authentic information available from
different sources.

Hierarchy of Sound Objectives: Setting clear objectives is an essential, and often

overlooked, component of sound resource management. Objectives hierarchies take this
one step further by expressing how all the pieces fit together from broad vision or mission
statements down to specific objectives. Tiered sets of management goals or objectives are
not uncommon in organizations, but seldom are they used to their full potential for strategic
planning. They also seldom cross over disciplinary boundaries so as to make the connection
among resource management, planning, and science.

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Contribution of Mr. Peter F. Drucker MBO: Drucker is highly respected mgmt thinker.
He is a prolific writer & has published several books & articles on the mgmt practices. His
views on mgmt may be summarized as follows:

1. Nature of mgmt: peter Drucker is against bureaucratic mgmt & has emphasized mgmt
with creative & innovative characteristics. The basic objective of mgmt is to lead towards
innovation. The concept of innovation is quite broad. It may include development of new
ideas, combining of old & new ideas, adaptation of ideas from other fields or even to act as
a catalyst & encouraging other to carry out innovation. He has treated mgmt as a discipline
as well as a profession.

2. Mgmt functions: Peter Drucker opined that the, mgmt is the organ of its institution. It
has no functions in itself, & no existence in itself. He sees mgmt through its tasks.
Accordingly, there are three basic functions of a manager which he must perform to enable
the institution to make its contributions for a) the specific purpose & mission of the
institution, whether business, hospital or university.

3. Organization Structure: Peter Drucker has described bureaucratic structure because of

its too much dysfunctional effect. Hence, it should be replaced. He has emphasized three
basic features of an effective organization structure. These are a) enterprise should be
organized for performance b) it should contain the least possible number of managerial level
and c) it must make possible the training & testing of tomorrows top mangers giving
responsibility to a manager while still he is young.

4. Federalism: the concept of federalism has been advocate by Peter Drucker. Federalism
refers to centralized control in decentralized structure. De centralized structure goes far
beyond the delegation of authority. It creates a new constitution, & new ordering principle.

5. Mgmt by Objective: P.Drucker most important contributions to the discipline of mgmt

are mgmt by objective (MBO). He introduced this concept in a 1952. MBO has further
between modified by Schley which has been termed as mgmt by results. MBO includes
method of planning setting standards performance appraisals, & motivation. According to
Drucker, MBO is not only a technique of mgmt but it is philosophy of managing.

6. Organisational Changes: P Drucker has visualizes rapid changes in the society because
of rapid technological development. Though he is not resident to change, he feels concerned
for the rapid changes & their impact on human life. Normally, some changes can be
absorbed by the organization but not the rapid changes. Since rapid changes are occurring
in the society, human beings should develop philosophy to face the changes & take them as
challenges of making the society better.

Coordination: Effective coordination and also integration of activities of different

departments are essential for orderly working of an Organization. This suggests the
importance of coordinating as management function. A manager must coordinate the work
for which he is accountable. Co-ordination is rightly treated as the essence of management.
It may be treated as an independent function or as a part of organisms function.
Coordination is essential at all levels of management. It gives one clear-cut direction to the
activities of individuals and departments. It also avoids misdirection and wastages and
brings unity of action in the Organization. Co-ordination will not come automatically or on
its own Special efforts are necessary on the part of managers for achieving such
coordination.

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Thus simply speaking it is synchronization of group efforts to goal. Mr. E F L Breech feels
that coordination is balancing & ensuring team cohesiveness with task allocation, review and
performance by team members. On the other hand, Mr. McFarland is of the view that
coordination develops orderly pattern of group efforts and secure unity of action to common
goal.

The nature and characteristics of Coordination: following are features of coordination:

(i) Coordination is not a distinct function but the very essence of management.

(ii) Coordination is the basic responsibility of every manager and it can be achieved
through the managerial functions. No manager can evade or avoid this responsibility.
Coordination is essential whenever people work together to achieve some common
objective.

(iii) Coordination does not arise spontaneously or by force. It is the result of

conscious and concerted action by management.

(iv)The heart of coordination is the unity of effort and action which involves fixing
the time and manner of performing various activities so that individual efforts are
blended into a productive team.

(v) Coordination is a continuous, never ending or on-going process. It is also a

dynamic process. Some amount of coordination exists in every organization though it
may not be adequate.

(vi) Coordination is required in group efforts not in individual effort. It involves the
orderly arrangement of group efforts. There is no need for coordination when an
individual works in isolation without affecting anyone's functioning. Coordination
becomes essential when people form organizations.

(vii) The object of coordination is to lend unity of purpose to group efforts. Unity of
effort requires an understanding of common purpose by all the members of the
group.

(viii) Coordination has a common purpose of getting organizational objectives

accomplished.

(ix) Balancing, timing and integrating are the three elements of coordination.
Balancing is ensuring that enough of one thing is available to support or counter-
balance the other.

It implies creating a balance between the resources of different departments and

individuals Timing means bringing together different activities under a common time
schedule so that they support and reinforce each other. Integrating involves
unification of diverse interests under the common purpose.

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Need of Coordination: Coordination is required whenever and wherever a group of
persons work together to achieve common objectives. It is the basic cementing force in an
organization. Coordination becomes necessary because of the following disintegrating
forces.

1. Increase in size and complexity of operations:

Growth in the number and complexity of activities is the major factor requiring coordination.
Need for coordination arises as soon as the operations become multiple, diversified and
complex. In a large organization, a large number of individuals are employed. These people
may work at cross purposes if their efforts and activities are not properly coordinated.
Increasing scale of operations may also increase geographical distance among the members
of the organization. Several layers of authority create problem of communication.

Personal contact is not possible and formal methods of coordination become essential.
Operations are multifarious and there are too many centrifugal forces. Therefore, constant
efforts are required to ensure harmonious functioning of the enterprise. As the size of
organization increases, the task of coordination becomes increasingly difficult.

2. Specialization:

Division and subdivision of work into specialized functions and departments leads to
diversity; of tasks and lack of uniformity. Specialists in charge of various departments focus
on their own functions with little regard to other functions. For example, production
department may insist on the manufacture of those products which are convenient and
economical to produce overlooking their suitability to consumers. It becomes necessary to
synchronies the diverse and specialized activities of different units to create unity in the
midst of diversity.

Generally, greater the division of labor. More is the need for coordination. Specialization will
not yield desired results unless specialized efforts are 'effectively integrated. Where division
of labor is inevitable, coordination becomes mandatory. Need to specialize, leads to
horizontal and vertical differentiation of organizational activities. The greater the
differentiations, more serious are the problems of communication and coordination.

3. Clash of interests:

Individuals join an organization to fulfill their personal goals, i.e., their physiological and
psychological needs. Often individuals fail to appreciate how the achievement of
organizational goals will satisfy their own goals. They may pursue their own specialized
personal interests often at the expense of the larger organizational goals. They tend to work
at cross-purposes. Coordination helps to avoid conflict between individual and organizational
goals. It brings about harmony between the two types of goals by making individuals see
how their jobs contribute to the common goals of the organization. Coordination avoids all
splintering efforts that may destroy the unity of action.

4. Different outlook:

Every individual in the organization has his own way of working and approach towards
problems. Capacity, talent and speed of people differ widely. It becomes imperative to
reconcile differences in approach, timing and effort of different departments to secure unity

21
of action. Cooperation serves as the binding force in an organization in the face of narrow
and sectional outlook. Coordination becomes difficult due to differences in the attitudes and
working styles of personnel.

5. Interdependence of units:

Various units of an organization depend upon one another for their successful functioning.
For instance the spinning plant supplies yarn to the weaving plant. The output of one unit
serves as the input of another unit. James D. Thompson has identified three types of
interdependence, namely, (a) pooled interdependence, (b) sequential interdependence, and
(c) reciprocal interdependence.

Pooled interdependence refers to the situation wherein the various departments of an

organization function as autonomous units and do not depend on each other for the
performance of their day-today-activities. In sequential interdependence, the work of
different units forms a sequence and one unit cannot do its work until the work in preceding
unit has been com pelted.

In reciprocal interdependence, different units are reciprocally related and there is a give and
take relationship among them. The need for coordination increases with an increase in the
interdependence between organizational units. It is highest in reciprocal interdependence,
higher in sequential interdependence and high in pooled interdependence.

6. Conflicts:

In an organization, conflicts may arise between line managers and staff specialists or
between management and workers. Human nature is such that a person emphasizes his
own area of interest and does not want to get involved in the activities of others.
Coordination avoids potential sources of conflict.

7. Empire-building:

In order to boost up self-importance and personal ego, some members of the organization
tend to over-emphasize their own activities. Such empire-builders try to get maximum
possible share of the total resources for their own units as if the units were separate
entities. This empire building tendency does not allow cooperation and self-coordination.
Special efforts become necessary to coordinate the activities and efforts of empire-builders.

8. Personal jealousies and rivalries:

Personality clashes are quite common in human organizations. Members of rival groups
deliberately sabotage coordination. In their efforts to settle personal scores, some persons
do not permit harmonious action or team work. Such rivalry is often accentuated by lack of
clear-cut goals and specific authority limits.

Types and Principles of Coordination: In the words of Haimann, Co-ordination is the

orderly synchronization of efforts of the subordinates to provide the proper amount, timing
and quality of execution so that their unified efforts lead to the stated objective, namely the
common purpose of the enterprise.

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Types of co-ordination:

The co-ordination may be divided on different bases, namely;

1. Scope on the basis of scope or coverage, co-ordination can be.

Internal refers to co-ordination between the different units of an organization

within and is achieved by integrating the goals and activities of different departments
of the enterprise.
External refers to co-ordination between an organization and its external
environment comprising government, community, customers, investors, suppliers,
competitors, research institutions, etc. It requires proper match between policies
and activities of the enterprise and the outside world.

2. Flow on the basis of flow, co-ordination can be classified into:

Vertical implies co-ordination between different levels of the organization and has
to ensure that all the levels in the organization act in harmony and in accordance
with the goals and policies of the organization. Vertical co-ordination is assured by
top management through delegation of authority.
Horizontal or lateral refers to co-ordination between different departments and
other units at the same level of the management hierarchy. For instance, co-
ordination between production department and marketing department is horizontal
or lateral co-ordination.

Co-ordination may also be:

3. Procedural and substantive which according to Herbert A. Simon, procedural co-

ordination implies the specification of the organization in itself, i.e. the generalized
description of the behavior and relationship of the members of the organization. On the
other hand, substantive co-ordination is concerned with the content of the organizations
activities. For instance, in an automobile plant an organization chart is an aspect of
procedural co-ordination, while blueprints for the engine block of the car being
manufactured are an aspect of substantive co-ordination.

Techniques of co-ordination:

The main techniques of effective co-ordination are as follows.

1. Sound planning unity of purpose is the first essential condition of co-ordination.

Therefore, the goals of the organization and the goals of its units must be clearly
defined. Planning is the ideal stage for co-ordination. Clear-cut objectives,
harmonized policies and unified procedures and rules ensure uniformity of action.
2. Simplified organization a simple and sound organization is an important means
of co-ordination. The lines of authority and responsibility from top to the bottom of
the organization structure should be clearly defined. Clear-cut authority
relationships help to reduce conflicts and to hold people responsible. Related
activities should be grouped together in one department or unit. Too much
specialization should be avoided as it tends to make every unit an end in itself.

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 3. Effective communication open and regular communication is the key to co-
ordination. Effective interchange of opinions and information helps in resolving
differences and in creating mutual understanding. Personal and face-to-face
contacts are the most effective means of communication and co-ordination.
Committees help to promote unity of purpose and uniformity of action among
different departments.

4. Effective leadership and supervision effective leadership ensures co-ordination

both at the planning and execution stage. A good leader can guide the activities of
his subordinates in the right direction and can inspire them to pull together for the
accomplishment of common objectives. Sound leadership can persuade subordinates
to have identity of interest and to adopt a common outlook. Personal supervision is
an important method of resolving differences of opinion.

5. Chain of command authority is the supreme co-coordinating power in an

organization. Exercise of authority through the chain of command or hierarchy is the
traditional means of co-ordination. Co-ordination between interdependent units can
be secured by putting them under one boss.

6. Indoctrination and incentives indoctrinating organizational members with the

goals and mission of the organization can transform a neutral body into a committed
body. Similarly incentives may be used to create mutuality of interest and to reduce
conflicts. For instance, profit-sharing is helpful in promoting team-spirit and co-
operation between employers and workers.

7. Liaison departments where frequent contacts between different organizational

units are necessary, liaison officers may be employed. For instance, a liaison
department may ensure that the production department is meeting the delivery
dates and specifications promised by the sales department. Special co-coordinators
may be appointed in certain cases. For instance, a project co-coordinator is
appointed to co-ordinate the activities of various functionaries in a project which is to
be completed within a specified period of time.

8. General staff in large organizations, a centralized pool of staff experts is used for
co-ordination. A common staff group serves as the clearing house of information
and specialized advice to all department of the enterprise. Such general staff is very
helpful in achieving inter-departmental or horizontal co-ordination. Task forces and
projects teams are also useful in co-ordination.

9. Voluntary co-ordination when every organizational unit appreciates the

workings of related units and modifies its own functioning to suit them, there is self-
co-ordination. Self-co-ordination or voluntary co-ordination is possible in a climate of
dedication and mutual co-operation. It results from mutual consultation and team-
spirit among the members of the organization. However, it cannot be a substitute
for the co-coordinative efforts of managers.

Principles of co-ordination (requisites for effective co-ordination)

Mary Parker Follett has laid out four principles for effective co-ordination;

Direct personal contact according to this principle co-ordination is best achieved

through direct personal contact with people concerned. Direct face-to-face

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 communication is the most effective way to convey ideas and information and to
remove misunderstanding.
Early beginning co-ordination can be achieved more easily in early stages of
planning and policy-making. Therefore, plans should be based on mutual
consultation or participation. Integration of efforts becomes more difficult once the
uncoordinated plans are put into operation. Early co-ordination also improves the
quality of plans.

Reciprocity this principle states that all factors in a given situation are
interdependent and interrelated. For instance, in a group every person influences all
others and is in turn influenced by others. When people appreciate the reciprocity of
relations, they avoid unilateral action and co-ordination becomes easier.

Continuity co-ordination is an on-going or never-ending process rather than a

once-for-all activity. It cannot be left to chance, but management has to strive
constantly. Sound co-ordination is not fire-fighting, i.e., resolving conflicts as they
arise.

Nature and Characteristics of Planning

1. Planning is a Primary Function of Management: - Planning is a Primary Function

of Management. Setting of goals and lines of action precedes the organization, direction,
supervision and control. Planning precedes other functions of management. It is primary
requisite but all functions are inter-connected.

2. Thinking and intellectual process: - Planning is intellectual process of predetermined

thinking. It is a process of deciding about future actions. It includes the process where a
number of steps are to be taken to decide the future course of action. Managers consider
various courses of action which is necessary to achieve the desired goals and learn about
the merits and demerits of every course of action and then finally decide what course of
action may suit them best.

3. Planning is a continuous process: - Planning is a continuous process of a manager

upon some assumptions. Therefore, the manager has to revise and adjust plans in the
changing circumstances. Planning is a continuous process It involves continuous collection,
evaluation and selection of data, and scientific investigation and analysis of the possible
alternative courses of action and the selection of the best alternative.

4. Pervasiveness of planning: - Planning follows pervasiveness of planning. It is the

function of every managerial personnel. The character, nature and scope of planning may
change from personnel to personnel. It is universal activity. It is important to all managers
in all levels as planning is required in all levels.

5. Based on facts: - Planning is not guess work but highly based on facts, realities,
objectives and forecasting.

6. Goal oriented/ future oriented: - Planning is requires achieving objectives because

any formulated objectives are meaningless without plans. It identifies actions that would
lead to the desired objectives quickly and economically.

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7. Coordination: - Planning helps to coordinate various levels of activities .it provides
guidelines to do work to all managers and staffs of all levels.

8. Others: - Planning is a selective process. It helps in increasing the efficiency.

Advantages of Planning:

There are numerous advantages of planning that should encourage all managers at all levels
of any organization to focus more time and effort on planning.

1. Makes for purposeful and orderly objectives: All efforts are pointed toward the
desired result and an effective sequence of efforts is accomplished. Unproductive
work is minimized. The usefulness of the achievement is given importance. Planning
distinguishes between action and accomplishment.
2. Points out need for future change: Planning helps the manager to visualize future
possibilities and to evaluate key fields for possible change.

3. Answers what if Questions: Such answers permit a planner to see through a

complexity of variables that affect what action he or she decides to take.

4. Provides a basis for control: The twin of planning is controlling, which is

performed to make sure the planning is bringing about result sought.

5. Encourages achievement: The act of putting thoughts down on the paper provides
the planner guidance and a drive to achieve. Planning reduces random activity
overlapping efforts and irrelevant action.

6. Increases and balances utilization of facilities: Many managers point out that
planning provides for a greater utilization of the available facilities of an enterprise.

7. Assist manager in gaining status: Proper planning helps a manager to provide

confident and aggressive leadership. It enables a manager to have all essential
affairs at hand.

Disadvantages of planning: Planning has some disadvantages also. These are -

1. Planning is limited by the accuracy of information and future facts: Planning

is limited by the accuracy of information and future facts. The usefulness of a plan is
affected by both the current and correctness of the information used.
2. Planning costs too much: Some argue the cost of planning work exceed its actual
benefit. They believe that, money could better be spent in actually performing the
physical work to be done.

3. Planning delays action: Emergencies and sudden uprising of unusual situation

demands on the spot decision. Valuable time cannot be spent thinking over the
situation and designing a plan.

4. Planning is over done by planners: Some critics state that those who perform
planning tend to overdo their contribution.

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Principles of Planning: Planning is a dynamic process, it is very essential for every
organization to achieve their ultimate goals, but, there are certain principles which are
essential to be followed so as to formulate a sound plan. They are only guidelines in the
formulation and implementation of plans. These principles are as follows:
1. Principle of Contribution: The purpose of planning is to ensure the effective and
efficient achievement of corporate objectives, in-fact, and the basic criteria for the
formulation of plans are to achieve the ultimate Objectives of the company. The
accomplishment of the objectives always depends on the soundness of plans and the
adequate amount of contribution of company towards the same.
2. Principle of Sound and Consistent Premising: Premises are the assumptions
regarding the environmental forces like economic and market conditions, social,
political, legal and cultural aspects, competitors actions, etc. These are prevalent
during the period of the implementation of plans. Hence, Plans are made on the
basis of premises accordingly, and the future of the company depends on the
soundness of plans they make so as to face the state of premises.

3. Principle of Limiting factors: The limiting factors are the lack of motivated
employees, shortage of trained personnel, shortage of capital funds, government
policy of price regulation, etc. The company requires monitoring all these factors and
needing to tackle the same in an efficient way so as to make a smooth way for the
achievement of its ultimate objectives.

4. Principle of Commitment: A commitment is required to carry-on the business that

is established. The planning shall has to be in such a way that the product
diversification should encompass the particular period during which entire investment
on that product is recovered.

5. Principle of Coordinated Planning: Long and short-range plans should be coordinated

with one another to form an integrated plan, this is possible only when latter are
derived from the former. Implementation of the long-range plan is regarded as
contributing to the implementation of the short-range plan. functional plans of the
company too should contribute to all others plans i.e. implementation of one plan
should contribute to all the other plans, this is possible only when all plans are
consistent with one another and are viewed as parts of an integrated corporate plan.

6. Principle of Timing: Number of major and minor plans of the organization should
be arranged in a systematic manner. The plans should be arranged in a time
hierarchy, initiation and completion of those plans should be clearly determined.

7. Principle of Efficiency: Cost of planning constitutes human, physical and financial

resources for their formulation and implementation as well. Minimizing the cost and
achieving the efficient utilization of resources shall have to be the aim of the plans.
Cost of plan formulation and implementation, in any case, should not exceed the
organizations output's monetary value. Employee satisfaction and development, and
social standing of the organization are supposed to be considered while calculating
the cost and benefits of plan.

8. Principle of Flexibility: Plans are supposed to be flexible to favor the organization to

cope-up with the unexpected environments. It is always required to keep in mind
that future will be different in actuality. Hence companies, therefore, require
preparing contingency plans which may be put into operation in response to the
situations.

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 9. Principle of Navigational Change: Since the environment is always not the same
as predicted, plans should be reviewed periodically. This may require changes in
strategies, objectives, policies and programs of the organization. The management
should take all the necessary steps while reviewing the plans so that they efficiently
achieve the ultimate goals of the organization.

10. Principle of Acceptance: Plans should be understood and accepted by the employees,
since the successful implementation of plans requires the willingness and cooperative
efforts from them. Communication also plays a crucial role in gaining the employee
understanding and acceptance of the plans by removing their doubts and
misunderstanding about the plans also their apprehensions and anxieties about
consequences of plans for achievement of their personal goal.

Types of Plans: Planning is the part of management concerned with creating procedures,
rules and guidelines for achieving a stated objective. Planning is carried out at both the
macro and micro level. Managers need to create broad objectives and mission statements
as well as look after the day to day running of the company.

Strategic Plan: A strategic plan is a high-level overview of the entire business, its vision,
objectives, and value. This plan is the foundational basis of the organization and will dictate
decisions in the long-term. The scope of the plan can be two, three, five, or even ten years.
Managers at every level will turn to the strategic plan to guide their decisions. It will also
influence the culture within an organization and how it interacts with customers and the
media. Thus, the strategic plan must be forward looking, robust but flexible, with a keen
focus on accommodating future growth. The crucial components of a strategic plan are:

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 1. Vision: Where does the organization want to be five years from now? How does it
want to influence the world? These are some of the questions you must ask when
you delineate your organizations vision. Its okay if this vision is grandiose and
idealistic. If there is any room to wax poetic within a plan, it is here. Holding
ambitions to make a dent in the Universe (Apple/Steve Jobs) is acceptable, as is a
more realistic vision to create the most customer-centric company on Earth
(Amazon).

2. Mission: The mission statement is a more realistic overview of the companys aim
and ambitions. Why does the company exist? What does it aim to achieve through its
existence? A clothing company might want to bring high street fashion to the
masses, while a non-profit might want to eradicate polio.

3. Values: Inspire. Go above & beyond. Innovate. Exude passion. Stay humble.
Make it fun These values will guide managers and influence the kind of employees
you hire. As you can see, there are really no rules to writing the perfect strategic
plan. This is an open-ended, living document that grows with the organization. You
can write whatever you want in it, as long as it dictates the future of your
organization. For inspiration, just search for the value/mission/vision statement of
your favorite companies on Google. Or, consider taking this course on business
planning for average people.

II. Tactical Plan: The tactical plan describes the tactics the organization plans to use to
achieve the ambitions outlined in the strategic plan. It is a short range (i.e. with a
scope of less than one year), low-level document that breaks down the broader
mission statements into smaller, actionable chunks. If the strategic plan is a response
to What? the tactical plan responds to How? Creating tactical plans is usually
handled by mid-level managers.

The tactical plan is a very flexible document; it can hold anything and everything required to
achieve the organizations goals. That said, there are some components shared by most
tactical plans:

1. Specific Goals with Fixed Deadlines

Suppose your organizations aim is to become the largest shoe retailer in the city.
The tactical plan will break down this broad ambition into smaller, actionable goals.
The goal(s) should be highly specific and have fixed deadlines to spur action
expand to two stores within three months, grow at 25% per quarter, or increase
revenues to $1mn within six months, and so on.

2. Budgets

The tactical plan should list budgetary requirements to achieve the aims specified in
the strategic plan. This should include the budget for hiring personnel, marketing,
sourcing, manufacturing, and running the day-to-day operations of the company.
Listing the revenue outflow/inflow is also a recommended practice.

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 3. Resources

The tactical plan should list all the resources you can muster to achieve the
organizations aims. This should include human resources, IP, cash resources, etc.
Again, being highly specific is encouraged.

4. Marketing, Funding, etc.

Finally, the tactical plan should list the organizations immediate marketing, sourcing,
funding, manufacturing, retailing, and PR strategy. Their scope should be aligned
with the goals outlined above.

If youre struggling to create a strong tactical plan, this course on drafting great
business plans will point you in the right direction.

III. Operational Plan: The operational plan describes the day to day running of the
company. The operational plan charts out a roadmap to achieve the tactical goals
within a realistic timeframe. This plan is highly specific with an emphasis on short-
term objectives. Increase sales to 150 units/day, or hire 50 new employees are
both examples of operational plan objectives. Creating the operational plan is the
responsibility of low-level managers and supervisors. Operational plans can be either
single use, or ongoing, as described below:

1. Single Use Plans: These plans are created for events/activities with a single
occurrence. This can be a one-time sales program, a marketing campaign, a
recruitment drive, etc. Single use plans tend to be highly specific.

2. Ongoing Plans: These plans can be used in multiple settings on an ongoing basis.
Ongoing plans can be of different types, such as:
Policy: A policy is a general document that dictates how managers should
approach a problem. It influences decision making at the micro level. Specific
plans on hiring employees, terminating contractors, etc. are examples of
policies.
Rule: Rules are specific regulations according to which an organization
functions. The rules are meant to be hard coded and should be enforced
stringently. No smoking within premises, or Employees must report by 9
a.m., are two examples of rules.

Procedure: A procedure describes a step-by-step process to accomplish a

particular objective. For example: most organizations have detailed guidelines
on hiring and training employees, or sourcing raw materials. These guidelines
can be called procedures.

Ongoing plans are created on an ad-hoc basis but can be repeated and changed as
required.

Operational plans align the companys strategic plan with the actual day to day running of
the company. This is where the macro meets the micro. Running a successful company
requires paying an equal attention to now just the broad objectives, but also how the
objectives are being met on an everyday basis, hence the need for such intricate planning.

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Manager: Dilemma
There are different roles which a good manager has to play for efficient management. The
ten roles are categorized into three groups including Interpersonal roles, Informational roles
and Decisional roles.

a) Authority: To make decisions which others are to follow. It is usually conferred to

Position.
b) Responsibility: An obligation which an individual has perform in their assignment
effectively.
c) Accountability: An individual is totally answerable for the satisfactory completion of
assignment

There are 10 different roles which manager has to play for mgmt.:

Roles in interaction: Interpersonal

1. Head of an organization

2. Leader

3. Center of communication

Communicative roles: Informational

4. Surveillant

5. Information sharer

6. Spokesperson

Roles in decision making: Decisional

7. Entrepreneur

8. Problem solver

9. Resource allocator

10. Negotiator

Role as change agent: Innovation

Identification of Alternatives: As you can see, there are seven steps in effective
decision making.

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 Step 1: Identify the decision to be made. You realize that a decision must be
made. You then go through an internal process of trying to define clearly the nature
of the decision you must make. This first step is a very important one.

Step 2: Gather relevant information. Most decisions require collecting pertinent

information. The real trick in this step is to know what information is needed, the
best sources of this information, and how to go about getting it. Some information
must be sought from within yourself through a process of self-assessment; other
information must be sought from outside yourself-from books, people, and a variety
of other sources. This step, therefore, involves both internal and external work.

Step 3: Identify alternatives. Through the process of collecting information you

will probably identify several possible paths of action, or alternatives. You may also
use your imagination and information to construct new alternatives. In this step of
the decision-making process, you will list all possible and desirable alternatives.

Step 4: Weigh evidence. In this step, you draw on your information and emotions
to imagine what it would be like if you carried out each of the alternatives to the
end. You must evaluate whether the need identified in Step 1 would be helped or
solved through the use of each alternative. In going through this difficult internal
process, you begin to favor certain alternatives which appear to have higher
potential for reaching your goal. Eventually you are able to place the alternatives in
priority order, based upon your own value system.

Step 5: Choose among alternatives. Once you have weighed all the evidence, you
are ready to select the alternative which seems to be best suited to you. You may
even choose a combination of alternatives. Your choice in Step 5 may very likely be
the same or similar to the alternative you placed at the top of your list at the end of
Step 4.

Step 6: Take action. You now take some positive action which begins to implement
the alternative you chose in Step 5.

Step 7: Review decision and consequences. In the last step you experience the
results of your decision and evaluate whether or not it has solved the need you
identified in Step 1. If it has, you may stay with this decision for some period of
time. If the decision has not resolved the identified need, you may repeat certain
steps of the process in order to make a new decision. You may, for example, gather
more detailed or somewhat different information or discover additional alternatives
on which to base your decision.

Organization Structure: The typically hierarchical arrangement of lines of authority,

communications, rights and duties of an organization. Organizational structure determines
how the roles, power and responsibilities are assigned, controlled, and coordinated, and how
information flows between the different levels of management. A structure depends on the
organization's objectives and strategy. In a centralized structure, the top layer of
management has most of the decision making power and has tight control over
departments and divisions. In a decentralized structure, the decision making power is
distributed and the departments and divisions may have different degrees of independence.
A company such as Proctor & Gamble that sells multiple products may organize their

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structure so that groups are divided according to each product and depending on
geographical area as well. An organizational chart illustrates the organizational structure.

How to Create & Maintain a Healthy Organizational Structure: A healthy

organizational structure allows its employees to focus on producing quality products and
services. Effective organizations provide opportunities to its employees to develop new
skills. This allows the staff to constantly improve business operations and ensures that
the company maintains a competitive edge required to thrive in a dynamic global
marketplace. Creating a healthy organizational structure begins by assessing your
companys needs. Sustaining the structure involves running events and programs to
maintain a productive workplace.

Step 1: Analyze your policies and procedures. Structure your management

framework to support efficient production. For example, to create an effective
organization, arrange your personnel into functional groups, such as Finance,
Purchasing, Marketing, Sales and Human Resources. Align each groups
performance goals with your companys strategic objectives. Create or revise
your organizations mission, vision and goals. Account for social and economic
changes.
Step 2: Document your companys hierarchical structure and publish it on your
companys website, through email or in print form. This allows everyone in your
company to see the reporting structure, associated roles and responsibilities.
Step 3: Use the resources provided by the Society of Human Resource
Management website to learn about industry trends. For example, use the State
and Local Resources website to get information about state law updates for your
state. Ensure your business adheres to regulations, such as family leave laws or
hours of rest required in your state. These contribute to maintaining a healthy
organization.
Step 4: Conduct an annual survey using online questionnaires, Invite employees
to respond anonymously to your survey to gauge how well the environment
supports employees. A comprehensive survey allows you to measure employee
perceptions of company operations. By running your survey annually, you can
compare results from year to year and determine the success of intervention
programs you run.
Step 5:Identify areas that need improvement to maintain a healthy and safe
workplace. Using tools available from websites, such as the Mind Tools Problem
Solving Techniques website, create cause and effect diagrams to isolate
problems.
Step 6:Help your employees adapt to change by communicating regularly with
your staff. For example, publish a monthly newsletter that describes upcoming
events, changes in personnel and new company directions. Ensure that all
employees respect and support the people around them by facilitating sessions in
valuing cultural diversity, handling workplace conflict and time management.
Professional development enables employees to act appropriately in todays often
turbulent world.

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 Step 7:Encourage employees to share their skills and knowledge using social
media technology such as wikis, blogs and forums. In addition to providing
meaningful connections to people who may not work in the same location, online
communication documents knowledge attained, such as troubleshooting
procedures and solutions.
Step 8: Provide opportunities for personnel to receive coaching and mentoring to
further their careers. A healthy organization recognizes the value of individual
achievements. By providing feedback and advice, executive leaders can groom
new personnel to take on additional responsibilities. This helps the companys
bottom line as well.
Step 9: Implement performance-based management. Evaluating employees on
their ability to achieve their own goals establishes personal accountability. By
retaining and developing motivated employees, your company can maintain its
competitive edge.
Step 10: Establish professional skills development programs to help all
employees at every level do their jobs better. Encourage employees to take and
pass exams associated with professional credentials, such as the Project
Management Professional, Microsoft Certified Professional or other certifications
associated with your industry.

Mechanistic Organization vs. Organic Organization: For the most part, mechanistic
organization is applied to most all business structures but is predominant in
manufacturing while organic organization is best applied to businesses that apply a
more open business structure such as online business platforms.

MECHANISTIC ORGANIZATION DEFINITION: According to Blacks Law Dictionary

mechanistic organization is the organization is hierarchical and bureaucratic. It is
characterized by its (1) highly centralized authority, (2) formalized procedures and
practices, and (3) specialized functions. Mechanistic organization is relatively easier and
simpler to organize, but rapid change is very challenging. Contrast to organic organization.

CHARACTERISTICS: Employees are found to work separately and on their own assigned
tasks. There is a definite chain of command and decisions are kept as high up the chain as
possible. Communication is a process between managers and supervisors up to executives,
there is little daily interaction if any. There are strict company policies or operating
standards with an abundance of documentation. This structure is considered the more
stable of the two structures.

STRUCTURE: Companies in a mechanistic organization structure typically hold tight control,

over processes and employees; with an iron fist so to speak. Rules are implemented and
rarely deviated from while there is also a very clear chain of command to delegate
responsibilities and power throughout the organization. Again, it is manufacturing
companies that are well known for this type of structure but there are other groups that
benefit from mechanistic organization; like universities.

ORGANIC ORGANIZATION DEFINITION: According to BusinessDictionary.com, organic

organization is characterized by (1) Flatness: communications and interactions are

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horizontal, (2) Low specialization: knowledge resides wherever it is most useful, and (3)
Decentralization: great deal of formal and informal participation in decision making.

CHARACTERISTICS: Employees are often found working in groups and share input on
tasks. There are usually teams that handle one task. Communication is open between
employees, managers and executives though they are typically just known as the owner.
There is a greater scale of verbal communication between parties. There is also more face-
to-face time within the hierarchy of power.

STRUCTURE: Companies in an organic organization structure typically have a more open

communication and contribution to tasks at hand. The structure of the business is more
adaptable and flexible to changes. The environment is unpredictable but because of the
freedom afforded the employees and management it is better maintained.

Mechanistic Organic

Individual specialization: Joint Specialization:

Employees work separately Employees work together and
and specialize in one task coordinate tasks

Complex integrating mechanisms:

Simple integrating mechanisms:
task forces and teams are primary
Hierarchy of authority well-defined
integrating mechanisms

Centralization: Decentralization:
Decision-making kept as high as possible. Authority to control tasks is delegated.
Most communication is vertical. Most communication lateral

Standardization: Mutual Adjustment:

Extensive use made of rules & Standard Face-to-face contact for coordination.
Operating Procedures Work process tends to be unpredictable

Much written communication Much verbal communication

Informal status in org based on size of Informal status based on perceived

empire brilliance

Organization is a network of positions, Organization is network of persons or

corresponding to tasks. Typically each teams. People work in different capacities
person corresponds to one task simultaneously and over time

Organizational structure types:

Pre-bureaucratic structures: This structure is most common in smaller organizations

and is best used to solve simple tasks. The structure is totally centralized. The
strategic leader makes all key decisions and most communication is done by one on
one conversations. It is particularly useful for new (entrepreneurial) business as it
enables the founder to control growth and development. They are usually based on

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 traditional domination or charismatic domination in the sense of Max Weber's tripartite
classification of authority

Bureaucratic structures: Weber gives the analogy that the fully developed bureaucratic
mechanism compares with other organizations exactly as does the machine compare
with the non-mechanical modes of production. Precision, speed, unambiguity,
strict subordination, reduction of friction and of material and personal costs- these
are raised to the optimum point in the strictly bureaucratic administration. The
Weberian characteristics of bureaucracy are:
Clear defined roles and responsibilities
A hierarchical structure

Respect for merit

Bureaucratic Structures has many levels of management ranging from senior executives to
regional managers, all the way to department store managers. Since there are many levels,
decision-making authority has to pass through more layers than flatter organizations. In
bureaucratic organization have rigid and tight procedure, policies and constraints. This kind
of structure reluctant to adapt or change what they have been doing since the company
started. Organizational charts exist for every department, and everyone understands who is
in charge and what his responsibilities are for every situation. Decisions are made through
an organized process, and a strict command and control structure is present at all times. In
bureaucratic structures, the authority is at the top and information is then flowed from top
to bottom. This causes for more rules and standards for the company which operational
process is watched with close supervision. Some advantages for bureaucratic structures for
top-level managers are they have a tremendous control over organizational structure
decisions. This works best for managers who have a command and control style of
managing. Strategic-decision making is also faster because there are less people it has to
go through to approve. Some disadvantages in bureaucratic structures are it can discourage
creativity and innovation in the organization. This can make it hard for a company to adapt
to changing conditions in the marketplace.

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Post-bureaucratic: Another smaller group of theorists have developed the theory of the
Post-Bureaucratic Organization., provide a detailed discussion which attempts to
describe an organization that is fundamentally not bureaucratic. Charles Heckscher
has developed an ideal type, the post-bureaucratic organization, in which decisions
are based on dialogue and consensus rather than authority and command, the
organization is a network rather than a hierarchy, open at the boundaries (in direct
contrast to culture management); there is an emphasis on meta-decision making
rules rather than decision making rules.

Functional structure: A functional organizational structure is a structure that consists of

activities such as coordination, supervision and task allocation. The organizational
structure determines how the organization performs or operates. The term
organizational structure refers to how the people in an organization are grouped and
to whom they report. One traditional way of organizing people is by function. Some
common functions within an organization include production, marketing, human,
resources and accounting.

This organizing of specialization leads to operational efficiencies where employees become

specialists within their own realm of expertise. The most typical problem with a functional
organizational structure is however that communication within the company can be rather
rigid, making the organization slow and inflexible. Therefore, lateral communication
between functions becomes very important, so that information is disseminated, not only
vertically, but also horizontally within the organization.

Divisional structure: The Divisional structure or product structure is a configuration of an

organization, which breaks down the company into divisions that are self-contained.
A division is self-contained and consists of collections of functions which work to
produce a product. It also utilizes a plan to compete and operate as a separate
business or profit center. Employees who are responsible for certain market services
of types of products, are placed in divisional structure in order to increase their
flexibility. The process can be further broken down into geographic and product
services for different consumers; companies or households.

The advantage of divisional structure is that it uses delegated authority so the performance
can be directly measured with each group. This results in managers performing better and
high employee morale. Another advantage of using divisional structure is that it is more
efficient in coordinating work between different divisions, and there is more flexibility to
respond when there is a change in the market. Also, a company will have a simpler process
if they need to change the size of the business by either adding or removing divisions. When
divisional structure is organized by product, the customer has their own advantages
especially when only a few services or products are offered which differs greatly. The
disadvantage of the divisional structure is that it can support unhealthy rivalries among
divisions. This type of structure may increase costs by requiring more qualified managers
for each division. Also, there is usually an over-emphasis on divisional more than
organizational goals which results in duplication of resources and efforts like staff services,
facilities, and personnel.

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Matrix structure: The matrix structure groups employees by both function and product.
This structure can combine the best of both separate structures. A matrix
organization frequently uses teams of employees to accomplish work, in order to
take advantage of the strengths, as well as make up for the weaknesses, of
functional and decentralized forms. An example would be a company that produces
two products, "product a" and "product b". Using the matrix structure, this company
would organize functions within the company as follows: "product a" sales
department, "product a" customer service department, "product accounting, "product
b" sales department, "product b" customer service department, "product b"
accounting department. Matrix structure is amongst the purest of organizational
structures, a simple lattice emulating order and regularity demonstrated in nature.
Weak/Functional Matrix: A project manager with only limited authority is assigned to
oversee the cross- functional aspects of the project. The functional managers
maintain control over their resources and project areas.
Balanced/Functional Matrix: A project manager is assigned to oversee the project.
Power is shared equally between the project manager and the functional managers.
It brings the best aspects of functional and projectile organizations. However, this is
the most difficult system to maintain as the sharing of power is a delicate
proposition.

Strong/Project Matrix: A project manager is primarily responsible for the project.

Functional managers provide technical expertise and assign resources as needed.

Matrix structure is only one of three major structures such as Functional and Project
structure. Matrix management is more dynamic then functional management in that it is a
combination of all the other structures and allows team members to share information more
readily across task boundaries. It also allows for specialization that can increase depth of
knowledge in a specific sector or segment.

There are both advantages and disadvantages of the matrix structure; some of the
disadvantages are an increase in the complexity of the chain of command. This occurs
because of the differentiation between functional managers and project managers, which
can be confusing for employees to understand who is next in the chain of command. An
additional disadvantage of the matrix structure is higher manager to worker ratio that
results in conflicting loyalties of employees. However the matrix structure also has
significant advantages that make it valuable for companies to use. The matrix structure
improves upon the silo critique of functional management in that it diminishes the vertical
structure of functional and creates a more horizontal structure which allows the spread of
information across task boundaries to happen much quicker. Moreover matrix structure
allows for specialization that can increase depth of knowledge & allows individuals to be
chosen according to project needs. This correlation between individuals and project needs is
what produces the concept of maximizing strengths and minimizing weaknesses.

Span of Management: Span of management refers to the number of subordinates that a

manger can efficiently manage. Number of subordinates directly reporting to a manager is
known as span. Span of management is important for

Determining the complexity of an individual managers job and

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 Determining shape and structure of the organization

Fewer the number of subordinates reporting to a manger larger the number of managers
required. Therefore span for control should be fixed.

Factors determining the span of management:

Capacity of manager: Each manager has different capacity and ability in terms of
decision making, leadership, communication, judgment, guidance and control etc.
mangers having more abilities in respect to these factors may have more number of
subordinates.

Capacity of subordinates: capacity of subordinates also affects the span of a

manager. Efficient and trained subordinates may work without much help of their
manager. They may just need broad guidelines and they will perform accordingly.
They would require lesser time from their superior due to which manager can have
large number of subordinates under him.

Nature of work: If subordinates are performing similar and repetitive routine work
they can do their work without having much time of the manager. Frequent changes
in work would require more detailed instructions from manager whenever there is
change in work. Type of technology used also affects the span of control.

Degree of Decentralization: degree of centralization or decentralization affects the

span by affecting the involvement in decision making process. If manager clearly
delegates his authority and defines it fully this would require less time to devote to
manage his subordinates as subordinates will take most of the actions by their own.
Hence manager can have wider span.

Degree of Planning: If the planning is effectively done particularly if standing plans

procedures rules methods are clear then subordinates can make their decisions on
their own. If they have to make their own plans they would require more guidelines
by superiors and manager can handle narrow span in the case of improper planning.

Communication System: If communication system is modern i.e. tools like

electronic devices will save time of face to face interaction, which require more time,
span of manager can be increased

Level of Management: level of management also affects the span. Higher the level
of management lesser the number of subordinates as higher level management does
not have much time to supervise. They spend their most of time in planning and
other functions. Lower level managers can have wider span than the higher level
managers.

Physical location: If all the persons to be supervised are located at same place
within the direct supervision of manager, he can supervise more number of people. If
subordinates are at different locations then manager can supervise less number of
spans.

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Span of Management Types: Span of management directly affects the number of levels
in the organization. Span of management is of two types; Wider span of
management and Narrow span of management. Wider span of management
leads to flat organization whereas narrow span of management result in tall
organization structure. The principle of span of management does not by itself
resolve the conflict between the advantages to tall organization and that of a
flat one.

Narrow spans lead to many levels in the organization and thus required a larger number of
managers. This, in turn, leads to larger expenses in the form of executive remuneration.
Expenses are further increased on account of additional clerical and office staff needed as a
result of there being large number of managers. The process of control also gets
complicated when there are narrow spans and too many levels in the organization structure.
Another serious problem in having too many levels in the organization is posed by the
practice that communication must flow through proper channels only. The more the levels in
the organization through which the communication must passes, the greater will be the
danger of its being misunderstood, misinterpreted or distorted. Since the number of levels
through which orders, plans and policies must pass increases, there is also the real damage
of subordinates away from the top leadership losing even their desire to understand them
properly. Narrow spans also adversely affect employee morale. A subordinated who finds
himself submerged at the bottom of the organization pyramid feels sensitive about the fact
that he hears nothing from the top leadership. Moreover, due to such placement he gets
very few opportunities to develop self-reliance and initiative and enjoys hardly any feeling of
belongingness. All these factors make the employees less enthusiastic in their jobs and
greatly reduce their morale. Narrow spans also reduce opportunities for management
development. Too many levels hardly allow for delegation of any real authority and greatly
limit the supervision to a very few activities at lower levels. The result is that the
subordinate is deprived of the benefit of managing a larger number of related activities.
Supervision of too many people on the other hand, can also lead to trouble, supervision will
become less effective because the manager will not have sufficient time and energy to
attend to each of his subordinates. Large number of contacts required may also distract him
to the extent of neglecting important questions of policy.

The above considerations of narrow and wide spans of management point to the imperative
need for a balance. Advantages and disadvantages of these two situations should be
carefully examined in terms of tangible as well as intangible factors; and actual span of
management should be determined keeping in view the entire pertinent factor in a
particular situation and at a given time.

Graicunas Theory: Theories about the optimum span of control go back to V. A.

Graicunas. In 1933 he used assumptions about mental capacity and attention span to
develop a set of practical heuristics. Lyndall Urwick (1956) developed a theory based on
geographical dispersion and the need for face to face meetings. In spite of numerous
attempts since then, no convincing theories have been presented. This is because the
optimum span of control depends on numerous variables including organizational structure,
available technology, the functions being performed, and the competencies of the manager
as well as staff.

Graicunas (Gulick and Urwick, 1937) distinguished three types of interactions direct single
relationships, cross-relationships, and direct group relationships each of them contributing
to the total amount of interactions within the organization. According to Graicunas, the

40
number of possible interactions can be computed in the following way. Let n be the number
of subordinates reporting to a supervisor. Then, the number of relationships of direct single
type the supervisor could possibly engage into is

The number of interactions between subordinates (cross relationships) he has to monitor is

and the number of direct group relationships is

The sum of these three types of interactions is the number of potential relationships of a
supervisor. Graicunas showed with these formulas, that each additional subordinate
increases the number of potential interactions significantly. It appears natural, that no
organization can afford to maintain a control structure of a dimension being required for
implementing a scalar chain under the unity of command condition. Therefore, other
mechanisms had to be found for dealing with the dilemma of maintaining managerial
control, while keeping cost and time at a reasonable level, thus making the span of control a
critical figure for the organization.

Factors affecting Span of Management: These are the factors affecting span of control:

1. Geographical dispersion, if the branches of a business are widely dispersed, then the
manager will find it difficult to supervise each of them, as such the span on control
will be smaller.
2. Capability of workers, if workers are highly capable, need little supervision, and can
be left on their own, e.g.: Theory Y type of people, they need not be supervised
much as they are motivated and take initiative to work; as such the span of control
will be wider.

3. Capability of boss, an experienced boss with good understanding of the tasks, good
knowledge of the workers and good relationships with the workers, will be able to
supervise more workers

4. Value added of the boss, a boss that is adding value by training and developing new
skills in the workers will need a narrow span of control than one who is focused only
on performance management (this is the reverse of the capability of workers point
above)

5. Similarity of task, if the tasks that the subordinates are performing are similar, then
the span of control can be wider, as the manager can supervise them all at the same
time.

6. Volume of other tasks, if the boss has other responsibilities, such as membership of
committees, involvement in other projects, liaising with stakeholders, the number of
direct reports will need to be smaller

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 7. Required administrative tasks, if the boss is required to have regular face to face
meetings, complete appraisal and development plans, discuss remuneration benefits,
write job descriptions and employment contracts, explain employment policy
changes and other administrative tasks then the span of control is reduced

Delegation of authority

Meaning of Delegation of Authority: Delegation of authority is one vital organizational

process. It is inevitable along with the expansion and growth of a business enterprise.
Delegation means assigning of certain responsibilities along with the
necessary authority by a superior to his subordinate managers. Delegation
does not mean surrender of authority by the higher level manager. It only means
transfer of certain responsibilities to subordinates and giving them the necessary
authority, which is necessary to discharge the responsibility properly. Delegation is
quite common in all aspects of life including business.

In delegation, an attempt is being made to have meaningful participation and cooperation

from the subordinates for achieving certain well-defined results. Due to delegation, the
routine responsibilities of the superior are reduced. As a result, he concentrates on more
urgent and important matters. Secondly, due to delegation, subordinate becomes
responsible for certain functions transferred to him. Delegation is a tool, which a superior
manager uses for sharing his work with the subordinates and thereby raising his efficiency.
The person who delegates does not divorce himself from the responsibility and authority
with which he is entrusted. He remains accountable for the overall performance and also for
the performance of his subordinates. Delegation is needed when the volume of work to be
done is in excess of an individual's physical and mental capacity.

Delegation involves the following three basic elements:

a. Assignment of duties to subordinates,

b. Granting of authority to enable the subordinates to perform the duties assigned, and

c. Creation of obligation on the part of subordinate to perform duties in an orderly

manner.

Definitions of Delegation of Authority

i. According to F.C. Moore, "Delegation means assigning work to the others and giving
them authority to do so."
ii. According to O. S. Miner, "Delegation takes place when one person gives another
the right to perform work on his behalf and in his name and the second person
accepts a corresponding duty or obligation to do that is required of him."

iii. According to Louis 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

42
 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."

Objectives of Delegation of Authority:

1. To reduce the excessive burden on the superiors i.e., executives and managers
functioning at different levels.
2. To provide opportunities of growth and self development to junior executives.

3. To create a team of experienced and matured managers for the Organization. It acts
as a technique of management and human resource development.

4. To improve individual as well as overall efficiency of the Organization.

Process of Delegation of Authority : Delegation process involves four distinct stages.

The process of delegation moves through these stages. The following figure shows the
stages in the process of delegation of authority.

Four Stages In Process of Delegation of Authority:

(A) Assignment of duties to subordinates : Before delegating, the delegator has to

decide precisely the duties which are to be delegated to the subordinate or a group of
subordinates. The authority is delegated accordingly and the subordinate is told what is
expected from him. The usual practice is to list the functions to be performed by the
subordinate. If necessary, targets to be achieved by the subordinate are also spelt out.
Subordinates may be assigned tasks either in terms of activities or results. The manager
(delegator) must communicate clearly his expectations. Competent and responsible
employees may be given general guidelines about what needs to be accomplished. Their
less competent and responsible counter-parts need more specific guidelines. In brief, in the
first stage of delegation process, duties are assigned to the subordinate.

43
(B) Transfer of authority to perform the duty : In the second stage of delegation
process, the authority is granted by the delegator to his subordinate (delegate). Authority
must be delegated strictly to perform the assigned duty. The performance of duties suffers
serious setback when required authority is not delegated along with the duty. In brief, the
transfer of authority should be adequate considering the duties assigned to the subordinate.

(C) Acceptance of the assignment : In this third stage of delegation process, the
subordinate/delegate has to accept or reject the task assigned to him in the first stage
along with the authority given in the second stage. If the delegates refuse, the delegator
has to make fresh plan of delegation or may consider some other subordinate who is
capable and is willing to accept the assignment. On the other hand, the process of
delegation will move to the fourth and the last stage, if the first delegates accept the
assignment of work accompanying the authority.

(D) Creation of Obligation / Accountability / Responsibility: The fourth stage in the,

delegation of authority is the creation of obligation on the part of the subordinate to perform
duties assigned to him in a satisfactory manner by using the authority given. When
subordinate accepts a task and the authority is given, an obligation is created. He has to
perform the assigned task by using the authority granted to him. A subordinate is also
responsible/accountable for completing the assigned work. He is held answerable to a
superior for the satisfactory performance of that work assigned. The delegator has to help
his subordinate as and when necessary as he is responsible to his superior/organization.

Advantages / Importance of Delegation of Authority:

1. Relieves manager for more challenging jobs : Delegation makes it possible for the
managers to distribute their workload to others. Thus, managers are relieved of
routine work and they can concentrate on higher functions of management like
planning, organizing, controlling, etc.
2. Leads to motivation of subordinates : Subordinates are encouraged to give their best
at work when they have authority with responsibility. They take more initiative and
interest in the work and are also careful and cautious in their work. Delegation leads
to motivation of employees and manpower development.

3. Facilitates efficiency and quick actions : Delegation saves time enabling tile
subordinates to deal with the problems promptly. They can take the decisions quickly
within their authority. It is not necessary to go to the superiors for routine matters.
This raises the overall efficiency in an Organization and offers better results in terms
of production, turnover and profit.

4. Improves employee morale : Delegation raises the morale of subordinates as they

are given duties and supporting authority. They feel that they are responsible
employees. The attitude and outlook of subordinates towards work assigned
becomes more constructive.

5. Develops team spirit : Due to delegation, effective communication develops between

the superiors and subordinates. The subordinates are answerable to superiors and
the superiors are responsible for the performance of subordinates. This brings better
relations and team spirit among the superiors and subordinates

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 6. Maintains cordial relationships : The superiors trust subordinates and give them
necessary authority. The subordinates accept their accountability and this develops
cordial superior-subordinate relationships.

7. Facilitates management development : Delegation acts as a training ground for

management development. It gives opportunity to subordinates to learn, to grow
and to develop new qualities and skills. It builds up a reservoir of executives, which
can be used as and when required. Delegation creates managers and not mere
messengers.

The advantages of delegation will not be available easily and automatically. They will be
available only when the process of delegation moves smoothly. Problems may develop, if
the delegation is not introduced with proper planning and in proper spirit. For example, the
authority given to subordinate is inadequate or the subordinate is not competent to
discharge the responsibilities assigned or the superior fails to monitor the whole process of
delegation effectively. In all such cases, the delegation will be ineffective and the expected
advantages will not be available to the Organization and also to concerned parties.

Obstacles / Barriers to Effective Delegation of Authority

(A) Obstacles / Barriers on the Part of Manager / Superior / Delegator:

1. Unwillingness of the manager to delegate authority : Some superiors/managers

tend to think that they can do the job better when they themselves handle the
job. The attitude that 'I can do it better myself' on the part of superior acts as
an obstacle to delegation. Some managers (superiors) who are autocratic and
power worshippers feel that delegation will lead to reduction of their influence in
the Organization. A manager may feel that if he has a competent subordinate
and if he delegates authority to the subordinate, quite likely he will outshine him
(manager) and may be promoted.
2. Fear of competition : A manager may feel that if he has a competent subordinate
and if he delegates authority to the subordinate, quite likely he will outshine him.
Fear of subordinate's excellence may come in the way of delegation.

3. Lack of confidence in subordinates : A manager may hesitate to delegate

authority, if he feels that his subordinate is not competent to deal with the
problem and take decisions. Even fear of losing control over the subordinates
acts as an obstacle to delegation. In addition, fear of being exposed due to
personal shortcomings may act as an obstacle in the process of delegation.

4. Lack of ability to direct : Sometimes, a manager may experience difficulty in

directing the efforts of his subordinates because of his inability to identify and
communicate the essential features of his long-range plans and programs.

5. Absence of controls that warn of coming troubles : An Organization might not

have developed the controlling techniques to know in advance the serious
problems lying ahead. It may happen due to concentration of power in the hands
of few people. As a result, manager may resist delegation.

45
 6. Conservative and cautious temperament of the manager : If a manager has a
conservative and over-cautious approach, there will be psychological barrier in
the way of delegation. A manager avoids delegation as he feels that something
may go wrong even when the instructions given are clear and the subordinates
are reliable.

7. Desire to dominate subordinates : Managers (Superiors) normally, have a desire

to dominate the subordinates functioning under their control. They feel that their
domination will reduce if the powers are delegated to subordinates. They also feel
that due to delegation, the subordinates will know their managerial deficiencies.
In order to maintain their superior status and in order to dominate the
subordinates, they avoid delegation itself.

(B) Obstacles / Barriers on the Part of Subordinates:

1. Too much dependence on the manager for decisions : Some subordinates avoid
responsibility even when the superior/manager is prepared to delegate authority.
They want the manager to tackle problems and take decisions. A subordinate
who is not confident about his performance/ability will certainly try to shirk
responsibility even though his superior is prepared to delegate functions and
authority.
2. Fear of criticism : Subordinates express unwillingness to accept delegated
authority because of the fear of criticism in the case of mistakes. They fear that
they may be criticized by others if they commit mistakes. Such subordinates have
the following feeling in their mind, "Why should I stick my neck out for my boss?"

3. Lack of information : A subordinate may hesitate to accept a new assignment,

when he knows that necessary information to perform the job is not likely to be
made available to him. He is reluctant to accept delegated functions and
authority as he feels that he will not be able to perform well due to inadequate
information available.

4. Absence of positive incentives : Positive incentives like recognition of work and

rewards go a long way in building up the morale of subordinates. In the absence
of such incentives in the form of recognition, appreciation or monetary benefit, a
subordinate may not be prepared to accept delegation of authority.

5. Absence of self-confidence : A subordinate may lack self-confidence about his

ability to take quick and correct decisions. He may not like to accept new
challenging functions as he lacks self-confidence. Thus, lack of self-confidence on
the part of subordinates is one obstacle which comes in the way of delegation of
authority.

6. Difficulty in decision-making : A subordinate may not have the skill and the
expertise to take quick and correct decisions. He prefers to go to his superior
(boss) and ask for his guidance or opinion. Such psychology acts as a cause for
non-acceptance of delegation. A subordinate avoids delegation due to such
mental tension or inferiority complex.

7. Poor superior-subordinate relations : Absence of cordial relations in between the

superior and the subordinates hampers the process of delegation of authority.

46
 The attitude of the superior towards subordinate may not be friendly but hostile.
There may be undue interference in the work assigned to the subordinate. Even
the good work of subordinate may not be appreciated by the superior. Such
situation creates unfavorable attitude of subordinate towards delegation. He
avoids delegation as and when offered.

8. Undue interference by superior : A superior should not interfere in the duties

delegated to the subordinate. He may offer guidance as and when asked for.
Some superiors interfere in the work of his subordinate and try to control him
often and again. In the absence of legitimate freedom, the subordinate becomes
uneasy and prefers to remain away from the process of delegation.

9. Fear of being exposed : Some subordinates may have inferiority complex. They
feel that they have limited capacity to accept the challenges which are bound to
come out to delegation. They feel that their inability to deal with new problems
will be exposed due to delegation. This fear acts as an obstacle to delegation.

Principles of Effective Delegation of Authority:

1. Knowledge of Objectives: Before delegating authority, the subordinates should be

made to understand their duties and responsibilities. In addition, knowledge of
objectives and policies of the enterprise should be provided to them. This will enable
them to discharge their roles purposefully in the process of delegation.
2. Parity of Authority and Responsibility: This principle of delegation suggests that when
authority is delegated, it should be commensurate with the responsibility of the
subordinate. In fact, the authority and responsibility should be made clear to the
subordinate so that he will know what he is expected to do within the powers
assigned to them. There should be proper balance/parity or co-existence between
the authority and responsibility. A subordinate will not function efficiently, if
authority given to him is inadequate. On the other hand, if the excess authority is
given, he may misuse the same. For avoiding this, the subordinates who are
assigned duties should be given necessary/ adequate authority enables them to
carry out their duties.

3. Unity of Command : This principle of delegation suggests that everyone should have
only one boss. A subordinate should get orders and instructions from one superior
and should be made accountable to one superior only. This means 'no subordinate
should be held accountable to more than one superior'. When a subordinate is asked
to report to more than one boss, it leads to confusion and conflict. Unity of command
also removes overlapping and duplication of work. In the absence of unity of
command, there will be confusion and difficulty in fixing accountability.

4. The Scalar Principle : The scalar principle of delegation maintains that there should
be clear and direct lines of authority in the Organization, running from the top to the
bottom. The subordinate should know who delegates authority to him and to whom
he should contact for matters beyond his authority. They (subordinates) should also
know what is expected from them. This principle justifies establishment of the
hierarchical structure within the Organization.

5. Clarity of Delegation : The principle of clarity of delegation suggests that while

delegating authority to subordinates, they should be made to understand the limits
of authority so that they know the area of their operation and the extent of freedom

47
 of action available to them. Such clarity guides subordinates while performing their
jobs.

6. Absoluteness of Responsibility : This principle of delegation suggests that it is only

the authority which is delegated and not the responsibility. The responsibility is
absolute and remains with the superior. He cannot run away from the same even
after delegation. Even when the manager delegates authority to his subordinate, he
remains fully accountable to his superiors because responsibility cannot be divided
between a superior and his subordinate. No superior can delegate responsibilities for
the acts of his subordinates. He is responsible for the acts and omissions of his
subordinates.

7. Use of Exception Principle : This principle of delegation indicates that when authority
is delegated, it is expected that the subordinate will exercise his own judgment and
take decisions within the purview of his authority. He is to be given adequate
freedom to operate within his authority even at the cost of mistakes. He should refer
the problems to the top level management only when he is unable to take decisions.
Unnecessary interference in the work of delegates should be avoided. This normal
rule can be given up under exceptional circumstances. Here, the superior can
interfere in the work of his subordinate and even withdraw the delegated duties and
authority. The superior takes this decision under exceptional circumstances.

8. Completeness of Delegation : This principle of delegation suggests that there should

be completeness in the process of delegation. The process of delegation should be
taken to its logical end. Otherwise, there will be confusion of authority and
accountability.

9. Effective Communication Support System : This principle suggests that there should
be continuous flow of information between the superior and the subordinates with a
view to furnishing relevant information to subordinate for decision-making. This
helps him to take proper decisions and also to interpret properly the authority
delegated to him. Delegation system may not work smoothly in the absence of
effective communication between the superior and subordinates.

10. Reward for Effective Delegation : This principle suggests that effective delegation
and successful assumption of authority should be rewarded. This will facilitate fuller
delegation and effective assumption of authority within the Organization. Reward for
effective delegation will provide favorable environmental climate for its fair
introduction.

Centralization & decentralization of authority:

Centralization is the systematic and consistent reservation of authority at central points in

the organization. The implication of Reservation of decision making power centralization can
be :-

o Reservation of operating authority with the. middle level

o Reservation of operation at lower level at managers of the top level.

Different Kinds of Centralization:

Centralization of performance

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 Departmental centralization

Centralization of management

Advantage of Centralized Organizational Structure:

Focused Vision

Fast Execution

Reduced Conflict

Control and Accountability

Decentralization is a systematic delegation of authority at all levels of management and in

all of the organization. Everything that increasing the role of subordinates is
decentralization and that decreases the role is centralization Authority in retained by the
top management for taking major decisions. Decentralization pattern is wider is scope.

Implication of Decentralization:

a) Fewer burdens on the Top management as in the case of

centralization.
b) Subordinates get a chance to decide and act independently.
c) Operations can be coordinated at divisional level.
d) Co-ordination to some extent is difficult to maintain.

Advantage of Decentralized Organizational Structure:

Empowering Employees

Relieving the Burden

Preparing for Emergencies

More Efficient Decision-Making

Ease of Expansion

Factor affecting the centralization and decentralization:

a) Art of Delegation: Most failures in effective delegation occur not because managers
do not understand the nature and principles of delegation but because they are
unable or unwilling to apply them. Delegation is in a way, an elementary act,
indicating that managerial failures almost invariably find the poor or input delegation
as one of the causes. Much of the reason lies in personal attitudes toward delegation.
b) Personal Attitudes Toward Delegations: Although charting an organization and
outlining managerial goals and duties will help in making delegations and knowledge

49
 of the principles of delegation will furnish a basis for it; certain personal attitudes
under lie real delegation.
c) Receptiveness: An underlying attribute of managers who will delegate authority is a
willingness to give other peoples ideas a chance. Decision making always involves
some discretion, and a subordinates decision is not likely to be exactly the one a
superior would have _ made. The manager who knows how to delegate must have a
minimum of the not inventor here factor and must be able not only to welcome the
ideas of others but also to help others and to compliment then on their ingenuity.
d) Willingness to let go: A manager who will effectively delegate authority must be
willing to release the right to make decisions to subordinates. A major fault of some
managers who move up the executive ladder or of the pioneer who has built a
large business from the small beginning of, say, a garage machine shop-is that they
want to continue to make decisions for the positions they have left. Corporate
Presidents and Vice Presidents, who insist on confirming every purchase or approving
the appointment of every laborer or secretary do not realize that doing so takes their
time and attention away from far more important decisions.
e) Willingness to let others make mistakes: Although no responsible manager
would sit idle and let a subordinate make a mistake that might endanger the
company or the subordinates position in the company, continual checking on the
subordinate to ensure that no mistakes are ever made will make true delegation
impossible. Since everywhere makes a mistakes a subordinate must be allowed to
make some, and their cost must be considered an investment in personal
development.
f) Serious or Repeated mistakes can be largely avoided without multiplying delegation
or hindering the development of a subordinate. Patient counseling assuring leading
or discerning questions, and carefully explaining the objectives and policies are some
of the methods available to the manager who would delegate well. None of these
techniques involve discouraging subordinates with intimidating criticism or harping
on their shortcomings.

Advantages:

1. Relieves top management of some burden of decision making and forces upper level
manager to let go.
2. Encourage decision making and assumption of authority and responsibility.

3. Gives managers more freedom and independence in decision making.

Disadvantages:

1. Makes it more difficult to have a uniform policy.

2. Increases complexity of co-ordination of decentralized organizational units.

3. May result in loss of some control by upper level managers.

4. May be limited by inadequate control techniques.

Benefits of Centralization:

1. Top management can take vital decisions affecting the entire organization.
2. Having a, uniform policy and co-ordination of all activities are possible.

50
 3. Higher-level people in the organization can take more effective and intelligent
decision.

Limitations of Centralization:

1. Decisions are not taken by the people who face situations and problems in this area.
2. Lower and middle level management will not have interest and initiative in the Job.

3. Top management unnecessarily has to waste a lot of time and energy on

unimportant and routine

What are the features of line and staff organization: Line and staff organization refers
to a pattern in which staff specialists advise line managers to perform their duties.

Line people perform the functions of decision-making, issuing orders and controlling while
Staff people perform the functions of advising, assisting and providing expert & specialized
services. There is unity of command and scalar chain.

Merits:
This form of organization came to existence as an improvement over the line
organization. Line and staff organization has removed serious drawbacks of the line
organization.

SpecializationIt is based on planned specialization, line managers get the benefit of

specialized knowledge of staff specialists at various levels.

Encouragement to research and development programsThe growth of an enterprise

depends largely on various research and development programs. The staff provides
this service to the line departments.

Balanced decisionsLine managers may not have specialized knowledge in all areas
and due to this line managers may sometimes give wrong orders or pass wrong
judgment. The suggestions and advice given by staff manager help them in making
rational judgment and balanced decisions.

Less burden on line managersStaff managers relieve the line managers from the
botheration of concentrating on the specialized functions like accounting, selection
and training of employees, public relations etc. Thus there is a less burden on line
managers. Many problems that are ignored or poorly handled in the line
organization, can be properly covered. It is more flexible.

Demerits: Demerits of line and staff organization are as follows:

(1) ConfusionIt is very difficult to clearly establish the authority and responsibility
relationship between line and staff executives. This creates confusion among them.

(2) Ineffectiveness of the staffThe role of the staff is purely advisory. Since they do
not have the power to get their recommendations implemented, the staff services
may prove to be ineffective.

51
 (3) Conflict between line and staffThere is generally a conflict between line and
staff executives, line authorities feel that staff executives do not always give right
type of advice and therefore reject even some very good schemes. Line authorities
do not want to give an impression to the management that they are in any way
inferior to staff. Thus there is conflict between line and staff.

Conflict between line and staff:

Staff and line are names given to different types of functions in organizations. A "line
function" is one that directly advances an organization in its core work. This always includes
production and sales, and sometimes also marketing. A "staff function" supports the
organization with specialized advisory and support functions. For example, human
resources, accounting, public relations and the legal department are generally considered to
be staff functions. Both terms originated in the military.

Line - staff conflicts: It is also important to keep the relationship between line and staff
healthy all the time. There is always a chance for disharmony since line and staff personnel
have different backgrounds. Some of the most common reasons for line-staff conflict are
given below:

The line managers may think that staff personnel are not accountable for their actions as
they have no direct responsibility in core functions of the organizations. The line positions
may not give due consideration to the advice of the staff personnel thinking that they have
no experience in operational activities and hence their recommendations and ideas may lack
applicability.

At this, staff managers may feel that line managers do not make the right use of talents of
the staff personnel and are not open to new ideas. Since staff personnel lack authority, they
may not be able to implement their solutions for problems. This creates and embarrassing
situation for the staff personnel. Thus conflicts between line & staff organization take place
when one considers self more qualified and skillful and never give proper attention what the
other suggest. i.e. they are different in nature of thoughts. However, with greater
participation and involvement from management and the passing of confidentiality laws,
conflict resolution has become an accepted part of the work field.

Causes

o Line and staff conflicts usually occur because of competitiveness. Each

department feels the other does not have their best interests at heart.
However, outside factors can influence conflicts as well. Personality issues,
mental health difficulties, finances or family stressors can impact employee
relationships.
o Complaints by Line executives:

a) Staff overstepping authority: interfere with line work & not confine to
role.

b) Staff not giving sound advice: More theoretical than practical

c) Stealing credit

52
 d) Lesser objectivity: emphasize expertise than illustration

e) Complex: Superior v/s ignorable.

o Complaints by Staff :

a) Feel responsibility without authority: Powerless/frustration

b) Expertise not used timely and as a last resort

c) Line people ego: Worked up with slow pace of implementation.

Resistance to change out of security/ego.

Solutions: If employees cannot resolve conflicts themselves, the employee assistance

program can intervene. Depending on the scope of the program, they can provide mediation
for employees or other effective strategies to resolve work-related conflict.

Methods for Achieving Coordination:

Mutual Adjustment
Achieving coordination through face-to-face interpersonal interaction.

Use Rules and Procedures

Standardize

Exercise Direct Supervision: Use the Chain of Command

Divisionalize

Appoint Staff Assistants

Appoint Liaisons

Appoint Committees

Organize Independent Integrators

An individual or a group that coordinates the activities of several interdependent

departments, but is independent of them.

END OF CHAPTER # 2

Chapter 3: Manager -Different Roles

53
Characteristics of Decision making: It is end product of deliberations & reasoning. It is
selection of best possible option for action & involves evaluation of alternatives. It aims at
achieving end objectives for organization and involves commitment of decision maker.
Decision can be positive or negative. This needs a capability to perform risk analysis and its
impact on final outcome.

Manager: Dilemma
There are different roles which a good manager has to play for efficient management. The
ten roles are categorized into three groups including Interpersonal roles, Informational roles
and Decisional roles.

d) Authority: To make decisions which others are to follow. It is usually conferred to

Position.
e) Responsibility: An obligation which an individual has perform in their assignment
effectively.
f) Accountability: An individual is totally answerable for the satisfactory completion of
assignment

There are 10 different roles which manager has to play for mgmt.:

Roles in interaction: Interpersonal

4. Head of an organization

5. Leader

6. Center of communication

Communicative roles: Informational

7. Surveillant

54
 8. Information sharer

9. Spokesperson

Roles in decision making: Decisional

11. Entrepreneur

12. Problem solver

13. Resource allocator

14. Negotiator

Role as change agent: Innovation

In addition, the Managers play an Interpersonal roles those grow directly out of the
authority of a managers position and involves developing and maintaining positive
relationships with significant others. The roles prominently seen are:

1. Figurehead: engage in ceremonial and symbolic activities such as presiding over

an event honoring an employees etc. By virtue of position as head of an
organizational unit, every manager must perform some duties of an ceremonial
nature. e.g. The president greets the touring dignitaries, the foreman attends the
wedding of a lathe operator, Sales manager takes an important customer to lunch.
The duties that involve interpersonal roles may sometimes be routine, involving little
serious communication and no important decision-making. Nevertheless, they are
important to the smooth functioning of an organization and cannot be ignored by the
manager.

2. Leader: (influencer), builds relationships with subordinates and communicates

with, motivates, and coaches them. Leaders usually influence others by example. By
virtue of being in charge of organizational unit, manager is responsible for work of
the people of that unit. His actions in this regard constitute the leader role. Some of
these actions involve leadership indirectly/directly: e.g.: responsible for hiring and
training his staff, must motivate and encourage his employees, Reconcile their
individual needs with goals of organization. Formal authority vests with leaders and
has great potential power. Leadership determines largely how much will realize.

3. Liaison, maintain formal and informal external and internal network of contacts,
for the purpose of providing help and information. In liaison role the manager makes
contacts out-side his vertical chain of command. Managers spend as much time with
peers and other people outside their units as they do with their own subordinates,
and surprisingly little time with their own superiors. Manager cultivates such contacts
largely to find information. In effect, the liaison role is devoted to building up the
managers own external information system informal, private, verbal, but
nevertheless effective.

55
 Informational Roles relate to receiving and sending information so that managers can
serve as the nerve centers of their organizational unit. Three roles emerge out of
this:

7. Monitor : Monitoring is an intermittent (regular or irregular) series of

observations in time, carried out to show the extent of compliance with a
formulated standard or degree of deviation from an expected norm.
Monitoring is like watching where you are going while riding a bike, you can
adjust as you go along and ensure that you are on the right track.

It seeks internal and external information about issues that can affect the
organization. As a monitor, the manager perpetually scans his environment
for information, interrogates his liaison contacts and his subordinates. Thus
he receives unsolicited information, much of it as a result of the network of
personal contacts he has developed. A good part of the information the
manager collects in his monitor role arrives in verbal form, often as gossip,
hearsay, and speculation. By virtue of his contacts, the manager has a natural
advantage in collecting this soft information for his organization.

8. Disseminator Role: To transmit information internally that is obtained from

either internal or external sources. In his disseminator role, the manager
passes some of his privileged information directly to his subordinates, who
would otherwise have no access to it. When his subordinates lack easy
contact with one another, the manager will sometimes pass information from
one to another.

9. Spokesperson role: It transmits information about the organization to

outsiders. In this role, the manager sends some of his information to people
outside his unit. As part of his spokesman role, every manager must inform
and satisfy influential people who control his organizational unit.

Decisional Roles: These are Roles that involve making significant decisions that affect
the organization. Four roles emerge out of this:

10. Entrepreneur (change agent), acts as initiator, designer, and encourager of

change and innovation. As entrepreneur, the manager seeks to improve his
unit and to adopt it to changing conditions in the environment. In his monitor
role, the president is constantly on the lookout for new ideas. When a good
one appears, he initiates a development. The manager has to use these as
an inventory & at various intervals; he puts new projects on-stream and
discards old ones.

11. Disturbance handler takes corrective action when organization faces

important, unexpected difficulties. The disturbance handler role is opposite of
entrepreneurial role. There manager is voluntary initiator of change, while in
disturbance handler role depicts him involuntarily responding to pressures.

56
 Here change is beyond the managers control. He must act because pressures
of situation are too severe to be ignored: strike looms, a major customer has
gone bankrupt, or a supplier reneges on his contract. Disturbances arise not
only because poor managers ignore situations until they reach crisis
proportions, but also because good managers cannot possibly anticipate all
the consequences of actions they take.

12. Resource allocator distributes resources of all types, including time, funding,
equipment, and human resources. Access to the manager constitutes
exposure to the units nerve center and decision-center. The manager is also
charged with designing his units structure, that pattern of formal
relationships that determines how work is to be divided and coordinated. Also
in his role as resource allocator the manager authorizes important decisions
before they are implemented. By retaining this power, the manager can
ensure that decisions are inter-related; all must pass through a single brain.

13. Negotiator involves interacting with superiors, persons in other departments,

and subordinates. Negotiation affects resource allocation, resolution of
disturbances, implementation of change, and interpersonal behavior. Studies
of managerial work at all levels indicate that managers spend considerable
time in negotiations are duties of managers job; perhaps routine, they are
not to be shirked. They are an integral part of his job, for only he has the
authority to commit organizational resources in real time, and only he has
the nerve-centre information that important negotiations require.

Characteristics of Decision making: It is end product of deliberations & reasoning. It is

selection of best possible option for action & involves evaluation of alternatives. It aims
at achieving end objectives for organization and involves commitment of decision maker.
Decision can be positive or negative.

57
Classification of Decisions to be taken by Manager/s:

A. Based on effect on future course:

Tactical decision: Affects the organization short term
e.g. Selection of candidate, Supplier share
Strategic Decision: Affects the organization long term in far
reaching manner as it involves commitment of resources.
e.g. New product launch, Automation, Location
B. Based on Financial impact:
Minor decision: Involves small amount of money
e.g. Rework tools, Cash purchase of Cartridge
Major Decision: Involves large amount of money & needs pre
sanction.
e.g. New machinery, High end office automation
equipments
C. Based on Frequency of occurrence:
Routine decision: Are highly repetitive decisions
e.g. Allocation of work, Recruit low level staff
Basic Decision: One time & involves long term commitment.
e.g. Travel policy, Wage agreement (LTS)
D. Based on extent of judgment:
Programmed decision: Are based on SOPs & precedence.
e.g. Deduction of leave for late coming, SCN
Non Programmed Decision:
For sporadic issues & need judgment & ability.
e.g. Sudden tool down, Fire
E. Based on Level at which decision is taken:
Policy decision: Are taken by top executives.
e.g. Air travel policy, Car/Perks policy,
Operating Decision: By operating level as a fall out of policy.
e.g. Air travel agency, Sanction of loan
F. Based on Capacity of employee: Level at which decision is taken:
Personal decision: Taken in individual capacity
e.g. Proceeding on long leave, Quit
Organizational Decision: Taken in official capacity.
e.g. Change of source, Layoff/Block closure
G. Based on Number of people involved:
Individual decision: Taken by single individual & generally
guided.
e.g. Outcome of suspension enquiry
Group decision: Taken by group/committee for a purpose.
e.g. Change of power source, Change of contractor
H. Based on Time criterion:
Single stage or Static decision: Taken one time for longer
effect.
e.g. Make or buy decision, Selection of ERP
Sequential decision:
Outcome of First decision & affects the choices available
e.g. Capacity planning, Agency for ERP

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 I. Based on Complexities & Number of variables involved:
Addresses variables related to problem: # of variables in
situation complicating the problem
Certainty of outcome about the decision :

EMPIRICAL APPROACH: It is Study of managerial experiences and cases in Management.

Features

Study of Managerial Experiences

Managerial experience passed from participation for continuity in knowledge

management.

Study of Successful & failure cases help practicising managers.

Theoretical research combined with practical experiences.

Uses

Learning through experience of others

Limitations

No Contribution for the development of management as a discipline

Situations of past not the same as present.

SOCIAL SYSTEM APPROACH: This puts a stress on understanding the behavior of groups &
individuals.

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 Features

1. Social System, a system of cultural relationship

2. Relationship exists between external and internal environment of the

organization.

3. Formal Organization - Cultural relationships of social groups

working within the organization.

4. Co-operation necessary

5. Efforts directed - harmony between goals of organization & goals of groups.

It uses Organizational decisions should not be based on desires of one group alone
but should reflect the interests of all the parties.

Limitations: It is broader than management & its practice. It overlooks many

management concepts principles & techniques that are important to practicing
managers.

MATHEMATICAL APPROACH: It believes that Management is a logical entity and

performs through actions like Mathematical symbols, Relationships and measurable data. It
uses provided Exactness in management discipline.

Features

1. Problem solving mechanism with the help of mathematical tools and

techniques.

2. Problems Expressed in mathematical symbols.

3. Variables in management quantified.

4. Scope - Decision making, system analysis & some aspect of human behavior.

5. Tools - Operations research, simulation etc.

Limitations

Not a separate school of thought exists.

Technique in decision making.

END OF CHAPTER # 3

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 Chapter 4 : Conceptual scheme of Management Processes

The performance of organizations depends to a large extent on how their resources are
allocated and their ability to adapt to changing conditions. Successful organizations know
how to manage people and resources efficiently to accomplish organizational goals and to
keep those goals in tune with changes in the external environment. A firm can be efficient
by making best use of people, money, physical plant, and technology. A firm is ineffective if
goals do not provide sustained competitive advantage. Even if it does, it would fail if it hired
wrong people, lost key contributors, relied on outdated technology, and made poor
investment decisions. Traditionally, the term management is referred to individuals who are
responsible to allocate resources and with formal authority to direct others.

The Four Functions of Management: The art of creating an environment in which people
can perform as individuals and yet cooperate towards attainment of organizational goals.
Principles of Management Should are Flexible Used with intelligence. Principles of
Management Division of work Authority and responsibility Discipline Unity of command Unity
of direction Subordination of individual to general interest.
A role is an organized set of behaviors associated with a particular office or position because
of its authority and status. A function is work that can be identified and distinguished from
other work. Traditional classification of mgmt functions describe how they perform the
activities to accomplish objectives (achieve work results) through people and utilization of
other resources.

Roles:

a. Planning: Planning is determining what shall be done Goals and objectives are
determined Policies formulated Procedures are defined Preparation of schedules,
programmes and budget. It is a technical managerial function that enables to deal
with the present and anticipate the future. It involves deciding what to do as well as
when and how to do it. Simply put planning is setting goals and objectives and
deciding how best to achieve them.

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 b. Organizing: Identification of activities for the achievement of objectives and
implementation of plans Grouping of activities so as to create well defined jobs
Assignment of jobs to employees Delegation of authority to subordinates
Establishment of authority responsibility relationships. Organizing means
establishing authority and responsibility relationships, and formal structure and
reporting relationships. It focuses on grouping activities and resources in a logical
manner, including division of work and job design, work methods and processes,
coordination among units, and use of information and feedback systems.

c. Directing: It means issuing instructions and indicating plans to those who are
responsible for carrying out the activities. It is a social-behavioral in nature and
focuses on initiating action in the organization--it is people oriented. It includes
motivating, leading, and communicating as well as other activities such as conflict
resolution, behavior modification, and integrating people with structure and tasks.

d. Controlling: Controlling is to see that operating results conform as nearly as possible

to the plans it involves - establishment of standards - comparison of results with
preset standards - necessary corrective action when performance deviates from the
plan. It is technical and focuses on monitoring, adjusting, and improving
performance. It means establishing performance standards to measure results, as
well as the techniques and systems to monitor and intervene.

Management Defined: The goal of the Management System and Organization

Optimization is to introduce a new organization and management system at the level of
a selected company or a group of companies (holding), as the case may be. The solution's
standard subject matter is the conceptual preparation of the client's new organization and
the implementation thereof, which is broken down into detailed organizational and

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functional patterns including job structure and category. Other steps include a preparation
of the company's (holding) management rules, setting the basic functions, competencies,
powers and responsibilities for individual management levels of a company (holding), and
the preparation of a company's (holding) basic internal policies. The organization is a group
of people having come together voluntarily to work together in achievement of common
goal. The organization does so via a set of activities and procedures across the
organization. The Basic Tasks of Organization are:

Achieving high levels of productivity requires i.e. SPECIALIZATION. This leads to

Specialization by individuals necessitates: COORDINATION leading to

For coordination to be effective requires COOPERATION which results in

Management issues if goals of employees are not same as goals of management

finally posing:

THE ORGANIZATIONAL CHALLENGE to design structure & systems that:

a. Permit specialization
b. Facilitate coordination by grouping individuals & link groups with systems of
communication, decision making, & control
c. Create incentives to align individual & firm goals

Thus Management is

I. Problem solving process:

a. Internal and External forces

b. Routine matters

c. Unique matters

II. Organizational goals:

a. Based on vision/mission statement

b. SMART.. Specific/Stretched, Measurable, Achievable, Realistic. Time bound

c. Short term and Long term

d. Periodic review for conformance

e. Integrate personal and company objectives

III. Efficiency:

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 a. Measure of working correctly without waste.

b. Right things right way at right time

IV. Scarce resources:

a. Men/Time

b. Machines

c. Materials/Money

V. Changing/dynamic environment:

a. Technology/IT

b. Telecommunication

c. IT

Nature of Management: Nature of management can be described as follows:

a) Continuous Process: Management is a never ending process. It will remain the

part of organization till the organization itself exists. Management is an unending
process as past decisions always carry their impact for the future course of action.
b) Universal in Nature: Management is universal in nature i.e. it exists everywhere in
universe wherever there is a human activity. The basic principles of management can
be applied any where whether they are business or non-business organization.
c) Multidisciplinary: Management is basically multidisciplinary. Though management
has developed as a separate discipline it draws knowledge and concepts of various
other streams like sociology, psychology, economics, statistics etc. Management
links ideas and concepts of all these disciplines and uses them for good-self of the
organization.
d) Management is a group activity. Management is a vital part of group activity. As
no individual can satisfy all his needs himself, he unites with his co-workers and work
together as an organized group to achieve what he can not achieve individually.
e) Management is goal oriented: Management is a goal oriented activity. It works to
achieve some predetermined objectives or goals which may be economic or social.
f) Dynamic: Management is dynamic in nature i.e. techniques to mange business
changes itself over a period of time.
g) System of authority: Authority is power to get the work done by others and compel
them to work systematically. Management can not perform in absence of authority.
Authority and responsibility depends upon position of manager in organization.
h) Management is an art: Management is considered as art as both requires skills,
knowledge, experience and creativity for achievement of desired results.

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i) Management is Science. Management is considered as science. Science tells about
the causes and effects of applications and is based on some specific principles and
procedures. Management also uses some principles and specific methods. These are
formed by continuous observations.

Scope of Management/ Functional areas of management: Various functional areas

of management are:

Production management: Production means creation of utilities by converting raw

material in to final product by various scientific methods and regulations. It is very
important field of management. Various sub-areas of the production department are
as follows.
Plant lay out and location: This area deals with designing of plant layout,
decide about the plant location for various products and providing various plant
utilities
Production planning: Managers has to plan about various production policies
and production methods.
Material management: This area deals with purchase, storage, issue and
control of the material required for production department.
Research and Development: This area deals with research and developmental
activities of manufacturing department. Refinement in existing product line or
develop a new product are the major activities.
Quality Control: Quality control department works for production of quality
product by doing various tests which ensure the customer satisfaction.

Marketing management Marketing management involves distribution of the

product to the buyers. It may need number of steps. Sub areas are as follows
Advertising: This area deals with advertising of product, introducing new
product in market by various means and encourage the customer to buy thee
products.
Sales management: Sales management deals with fixation of prices, actual
transfer of products to the customer after fulfilling certain formalities and after
sales services.
Market research: It involves in collection of data related to product demand and
performance by research and analysis of market.

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 Financial management Financial and accounting management deals with
managerial activities related to procurement and utilization of fund for business
purpose. Its sub areas are as follows
Financial accounting: It relates to record keeping of various financial
transactions their classification and preparation of financial statements to show
the financial position of the organization.
Management accounting: It deals with analysis and interpretation of financial
record so that management can take certain decisions on investment plans,
return to investors and dividend policy
Taxation: This area deals with various direct and indirect taxes which
organization has to pay.
Costing: Costing deals with recording of costs, their classification, analysis and
cost control.

Human Resources: Personal management Personnel management is the phase

of management which deals with effective use and control of manpower. Following
are the sub areas of Personnel management
Personnel planning: This deals with preparation inventory of available
manpower and actual requirement of workers in organization.
Recruitment and selection: This deals with hiring and employing human being
for various positions as required.
Training and development: Training and development deals with process of
making the employees more efficient and effective by arranging training
programmes. It helps in making team of competent employees which work for
growth of organisation.
Wage administration: It deals in job evaluation, merit rating of jobs and
making wage and incentive policy for employees.
Industrial relation: It deals with maintenance of overall employee relation,
providing good working conditions and welfare services to employees.

Need of Management: Management in all business and organizational activities is the act
of getting people together to accomplish desired goals and objectives using available
resources efficiently and effectively. Since organizations can be viewed as systems,
management can also be defined as human action (including design) to facilitate the
production of useful outcomes from a system. Therefore, management is needed in order to
facilitate a coordinated effort toward the accomplishment of the organization's goals.

Since most managers are responsible for more work than one person can normally perform,
a good manager delegates and integrates his or her work (or the work of others). A
manager does this by acting as a clear channel of communication within the business that
he or she serves. Good management is needed to inject motivation, creativity, discipline,
and enthusiasm into areas in which they either dont exist or theyre not necessarily wanted.

66
The various functions of management are classified as:

Planning
Organizing

Staffing

Leading/Directing

Controlling/Monitoring

Motivation

Management is also responsible for the formation and implementation of business policies
and strategies.

Administration: Administration is the interpretation and implementation of the policy set

by an organisation characterised by control. It can be appointed by the courts, the holder of
the assets of a business or a company. Administration is concerned with policy
framework, directing, coordination, methods & responsibilities of implementation.
Mr. Ordway Tead indicates elements of Administration process as:

Establish Objectives
Leading to policies

Stimulation of organisation

Reviews/Evaluation

Way ahead

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Levels of Management:

Levels of management: Most organizations have three management levels: first-level,

middle-level, and top-level managers. These managers are classified in a hierarchy of
authority, and perform different tasks. In many organizations, the number of managers in
every level resembles a pyramid. Each level is explained below in specifications of their
different responsibilities and likely job titles.

Top-level managers (Strategic): Consists of board of directors, president,

vice-president, CEO, etc. They are responsible for controlling and overseeing
the entire organization. They develop goals, strategic plans, company policies,
and make decisions on the direction of the business. In addition, top-level
managers play a significant role in the mobilization of outside resources and
are accountable to the shareholders and general public.

Middle-level managers (Tactical): Consist of general managers, branch

managers and department managers. They are accountable to the top
management for their department's function. They devote more time to
organizational and directional functions. Their roles can be emphasized as
executing organizational plans in conformance with the company's policies
and the objectives of the top management, they define and discuss
information and policies from top management to lower management, and
most importantly they inspire and provide guidance to lower level managers
towards better performance.

First-level managers (Operational): Consist of supervisors, section leads,

foremen, etc. They focus on controlling and directing. They usually have the
responsibility of assigning employees tasks, guiding and supervising
employees on day-to-day activities, ensuring quality and quantity production,

68
 making recommendations, suggestions, and up channeling employee
problems, etc.

Management Functions: The art of creating an environment in which people can perform
as individuals and yet cooperate towards attainment of organizational goals. Principles of
Management Should are Flexible Used with intelligence. Principles of Management Division
of work Authority and responsibility Discipline Unity of command Unity of direction
Subordination of individual to general interest.

A role is an organized set of behaviors associated with a particular office or position because
of its authority and status. A function is work that can be identified and distinguished from
other work. Traditional classification of mgmt functions describe how they perform the
activities to accomplish objectives (achieve work results) through people and utilization of
other resources.

Roles:

a. Planning: Planning is determining what shall be done Goals and objectives are
determined Policies formulated Procedures are defined Preparation of schedules,
programmes and budget. It is a technical managerial function that enables to deal
with the present and anticipate the future. It involves deciding what to do as well as
when and how to do it. Simply put planning is setting goals and objectives and
deciding how best to achieve them.

b. Organizing: Identification of activities for the achievement of objectives and

implementation of plans Grouping of activities so as to create well defined jobs
Assignment of jobs to employees Delegation of authority to subordinates
Establishment of authority responsibility relationships. Organizing means
establishing authority and responsibility relationships, and formal structure and
reporting relationships. It focuses on grouping activities and resources in a logical
manner, including division of work and job design, work methods and processes,
coordination among units, and use of information and feedback systems.

c. Staffing: People are the most important asset identifying the right type of person,
training and assigning the activities to be carried out. Staffing is acquiring and
retaining human resources & has both a technical and social aspects. Technical
aspects include human resources planning, job analysis, recruitment, testing,
selecting, performance appraisal, compensation and benefits administration,
employee assistance, and safety and health. Social aspects are that influence the
behavior and performance of organization members: training and development,
promotions, counseling, and discipline

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 d. Directing: It means issuing instructions and indicating plans to those who are
responsible for carrying out the activities. It is a social-behavioral in nature and
focuses on initiating action in the organization--it is people oriented. It includes
motivating, leading, and communicating as well as other activities such as conflict
resolution, behavior modification, and integrating people with structure and tasks.

e. Controlling: Controlling is seeing that operating results conform as nearly as

possible to the plans it involves - establishment of standards - comparison of results
with preset standards - necessary corrective action when performance deviates from
the plan. It is technical and focuses on monitoring, adjusting, and improving
performance. It means establishing performance standards to measure results, as
well as the techniques and systems to monitor and intervene.

f. Decision Making: It is process of identifying and choosing alternative courses of

action in a manner appropriate to the demands of the situation. Decision making is a
technical management function. It is a part of all other management functions.
Managers are decision makers and make decisions when they monitor and control
work, When plan, establish/ or change organizational arrangements and work
process and content, when they acquire and assign personnel, and when they direct
efforts of others.

Management Skills: Research into Management Development Programs ongoing has

identified need for personal development plans to:

Develop skills that are critical to learning and work,

Effective analytical thinking

Identify strengths and areas for Development Manual.

The rapidly changing business environment requires:

Flexible, adaptable, multi-skilled workers

People who can embrace change , learn effectively and efficiently

People who update their skills continuously & work globally

The resources are generally dealt with through techniques of:

a. SWOT analysis Strengths Weaknesses Opportunities Threats : How you see

yourself confident enterprising humorous ambitious helpful forceful
competitive flexible thorough tolerant focused supportive generous How
others see you arrogant exploitative frivolous ruthless controlling bullying
combative wishy-washy obsessive indifferent tunnel-visioned interfering
irresponsible
b. Johari Window

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c. Unknown Blind Spot

d. Self Feedback

e. Working in Teams: Commonality of objective or purpose Belonging and being

part of something successful Synergy achieving more collectively than can
be achieved by individuals acting outside a team environment. Stages of
Team Development: 1.Forming 4.Performing 5.Mourning 2.Storming
3.Norming
f. Group Decision Making Techniques
g. Critical Reflection Model:

i. Stage 1: Background what did I do? Why did I do it? How did I handle
the situation?

ii. Stage 2: Review experience what did I do well? What didnt I do right?
What could I have done differently?

iii. Stage 3: Self evaluation what did I learn from this experience? What
did I learn about my strengths and needs? How have I applied my new
learning in terms of knowledge, skills and approaches?

iv. Stage 4: Action planning what do I intend to do differently as a result

of my learning? What action do I want to take? What support and
resources do I need?

h. Goal setting in action plans Goals should be:

i. S pecific, e.g. to improve report writing

ii. M easurable, e.g. by 10%

iii. A chievable, e.g. high scores achieved in past

iv. R ealistic, e.g. ability to develop skills needed

v. T imely, e.g. meet goal by next semester

END OF CHAPTER # 4

ALL THE BEST !!!!!

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