Principlesofmanagement book @ bec doms bagalkot mba


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Principlesofmanagement book @ bec doms bagalkot mba

  2. 2. OBJECTIVE: This material attempts to give you an understanding of the conceptManagement approaches.Planning : Planning – Nature and importance – forms – strategic and Tactical –Type of plans – Steps I Planning, Decision – Making – Type of Decision – DecisionMaking process – Rationality in decision – making.Organization: Organization – Procts of organizing – Organization structuredepartmentalization – Span of Management – Delegation – Authority, Responsibility,Accountability – Decentralization.Direction : Direction – Principles – elements – Motivation – Maslow, Hexrzberg,Varoom models – Communication : Process – Forms – Network – Barriers – Measuringeffectiveness – Co-ordination.Leadership : Leadership theories – Style – Managerial Grid – Control – Controllingand Planning – Types of control – Concurrent and forward control – Principles ofcontrol – Areas of control – Control techniques. BSPATIL 2
  3. 3. CONTENTSSl. No. Lessons Pg.No. 1. Introduction to Management 4 2. Planning 14 3. Organisation 21 4. Direction 33 5. Motivation 35 6. Communication 41 7. Leadership 52 8. Co-ordination 57 9. Control System and Process. 59 BSPATIL 3
  4. 4. LESSON – 1 INTRODUCTION TO MANAGEMENTMANAGEMENTManagement is the process of designing and maintaining an environment in whichindividuals working together in groups to accomplish selected aims efficiently. It connotes different meaning indifferent contexts. The concept managementmay be used asCollective noun - Board of directors or Executive CommitteeField of study - A branch of knowledge including the principles, techniques, functions and problem management.Function - Functions to be performed to attain the organizational objectives-planning, organizing direction, co-ordination and controlIn a more important sense, management is a vital function concerned wth all aspectsof the working of an enterprise. Here the management is considered as a body ofknowledge consisting of several concepts, principles, techniques and theories whichcan be adopted in any group Endeavour.DEFINITIONS“Management is an art of knowing what do you want to do and then seeing that is isdone in the best and cheapest way.” -F. W. TAYLOR“To manage is to forecast, to plan, to organize, to command to co-ordinate andcontrol. - HENRY FAYOL“Management is a distinct process consisting of planning, organizing, actuating andcontrolling performance t determine and accomplish the objectives by the use ofpeople and resources,” - GEORGE R. TERRY“Management is the creation and maintenance of internal environment is anenterprise where individuals working in groups can perform efficiently and effectivelytoward the attainment of group goals. It is an art of getting the work done throughand with people in formally organized groups.” - KOONTZ ANDO’DONNELFEATURES OF MANAGEMENT BSPATIL 4
  5. 5. The important characteristics of management as a business function are: 1. It is an art of getting things done through and with people. 2. Art and science of decision making and leadership. 3. It is a universal process for achieving results. 4. It is an profession which involves specialized training and is governed by an ethical code. 5. It coordinates human factor and physical resources for the accomplishment of group objectives. - by balancing and integration (or) - by innovation and adaptationIMPORTANCE OF MANAGEMENT STUDYThe need and significance of management functions in the modern organizations aregiven below. 1. To increase the efficiency 2. to give a definite shape to management function. 3. to improve research in management. 4. to attain social goals by effective utilization of resources.NATURE OF MANAGEMENT FUNCTIONS1. Universality : It has universal application in all kinds/nature and size of business activities. 2. Dynamism : This body of knowledge is going on changing continuously with respect changes that are taking place in the organizational environment. 3. Relativity : It embraces all business functions at different levels. 4. Regularity of human nature :It helps to shape the human behaviour in the work environment.APPROACHES TO THE STUDY OF MANAGEMENTA brief discussion about different approaches of management is given below.EMPIRICAL APPROACHThe empirical school of management bases its methods on a close study of pastmanagerial experiences and management cases. As such, it is also known as caseapproach or management experience approach. According to this approach, management is considered a study of managerin practice. The intention of studying experience is to draw generalizations and todevelop means to teaching experiences to other practitioners and students. Attemptsare made to duplicate successful experiences while avoiding unsuccessful ones. This approach offers the most conventional way of acquiring skills inmanagement, that is, learning through the experience of others. This approach alsohelps in classroom, situations for developing diagnostic and analytical skills inmanagement students. Following limitations of this approach are quite obvious. - This empirical approach, basing its generalizations on cases and pastexperiences has not contributed anything fundamental to the development of BSPATIL 5
  6. 6. management as discipline because of obvious contradictions in various managementexperiences.HUMAN BEHAVIOR APPROACHThe human behavior approach is the outcome of the thoughts developed bybehavioral scientists who look at the organization as collectivity of people. Sincemanagement involves getting things done with and through people, the study onmanagement must revolve round human behavior. This approach can be divided intogroups interpersonal behavior approach and group behavior approach. Thisapproach suggestion how the knowledge of human behavior can be used in makingpeople more effective in the organization.However, this approach is not free from limitations. It is true that manage can bebetter placed by understanding human behavior but equating management withhuman behavior is untenable. There is something more than mere human relationsmanagement. Human behavior approach provides only the diagnosis for humanproblems but problems have to be solved by taking many more factors which are notexplained by this approach.SOCIAL SYSTEM APPROACHClosely resembling the human behavior approach and often confused intermixedwith it is the social system approach. The real pioneer of social system approach isVilfred Pareto, a sociologist. His ideas were later developed by Chest Bernard whohas really developed the concept of social systems approach management. Accordingto this approach, the organization is essentially a culture system composed ofpeople who work in cooperation. As such, for achieves organization goals, aco-operative system of management can be developed only understanding thebehavior of people in groups. The social system approach has real significance to the practicingmanagers in the sense that all managers operate n a social system and theorganization is likely to succeed if the demands of the society in which it operates asfully recognized. The approach, however, spreads the boundary and application ofmanagement beyond the true concept of organizations.SOCIAL TECHNICAL SYSTEMS APPROACHThis approach believes that to solve organizational problems, it is not enough tolook at the cooperative social systems alone but technical systems (methods andmachines) and how it affects and is affected by social systems and a technical system.The real pattern of behavior in the organization is determined by the interaction ofthe two. The major contribution of this approach is that while analyzingmanagement problem of getting things done by people, adequate considerationshould be given to technology as well as informal interactions of people. Thus anychange in technology must be viewed in subsequent change in social interactions atthe workplace. However, this approach is more suitable for managing the problemsat the shop floor leave rather thandandling the total management problems. BSPATIL 6
  7. 7. DECISION THEORY APPROACHThe major emphasis of this approach is that decision making is the job of everymanager. The manager is a decision maker and organization is a decision-makingunit. Therefore, the basic problem in managing is to make rational decision. The approach contributes to the sharpening of managerial tools speciallyfor making suitable decisions in the organization. The approach demonstrates howmanagers can discharge their functions effectively. Decision-making is vital in everyschool of management. The vital aspect cannot be denied but management is morethan mere decision making.MANAGEMENT SCIENCE APPROACH Management science approach also known as mathematical orquantitative measurement approach, visualizes management as a logical entity, theaction of which can be expressed in terms of mathematical symbol relationships andmeasurement data. Management science approach is a fast developing one in analyzing andunderstanding management. This has contributed significantly in developing orderlythinking in management which has provided exactness in management discipline.Various mathematical tools like sampling, linear programming, games theory, timeseries analysis, emulation, waiting line theory etc, have provided more exactness insolving managerial problems. However, it is very difficult to call it a separate schoolof management because it does not provide the answer for the total managerialproblems, Moreover, many managerial activities are not really capable of beingquantified because of involvement of human being who are governed by manyirrational factors also.SYSTEMS APPROACH This approach is of comparatively recent origin, starting late 1950, it haassumed considerable importance in analyzing the phenomena of management. It isan integrating approach which considers management in its totality based onempirical data. The basic idea of systems approach is that any object must rely on amethod of analysis involving simultaneous variations of mutually dependentvariables. The implication of systems approach are given below. System approach of management provides and integrated approach ofmanaging. This considers management in its totality. System approach of management provides an integrated approach ofmanaging. This considers management in its totality. System approach possesses the conceptual level of managerial analysismuch higher than any other approach. It provides a framework through whichorganization – environment interaction can be analyzed and facilitatesdecision-making, since the system within which managers make decisions can beprovided as a more explicit framework decision-making is easier to handle. It is often suggested that system approach is too abstract to be of muchuse to practicing managers. It merely indicate that various parts of the organizationare interrelated. System approach of management lacks universality and its preceptscannot be applied to all organizations. BSPATIL 7
  8. 8. CONTINGENCY OR SITUATIONAL APPROACH The basic idea of contingency approach is that there cannot be aparticular management action which will be suitable for all situations. Rather, andappropriate action is one which is designed on the basis of external environment andinternal states and needs. Contingency approach tries to fill this gap by suggestingwhat should be done in response to an event in the environment. Contingency approach, on the other hand suggests an activeinterrelationship between the variables in a situation and the managerial actionsdevised. The implications of the contingency approach are given below. It is the sophisticated approach to understand the increasingcomplexity of organizations. It emphasizes the multivariate nature of organizationsand attempts tounderstand how organizations operate under varying conditions. Theapproach is directed towards suggesting organizational designs and managerialactins most appropriate to specific situations. Inspite of the various contributions, contingency approach has notbeen acknowledged as a unified theory of management because it suffers from somelimitations. 1. Inadequate Literature Contingency approach suffers from inadequacy of literature. 2. Complex : Determination of situation in which managerial action is to be taken involves analysis of a large number of variables with multifarious dimensions. 3. Reactive not Proactive: Contingency approach is basically reactive in nature. It merely suggests what managers can do in given situation.OPERATIONAL APPROACH This approach attempts to draw together the pertinent knowledge ofmanagement by relating it to the functions of managers, commonly known asmanagement process. As such this approach is also known as management processapproach. This approach views the management as a social process comprising aseries of actions leading to the accomplishment of certain objectives. Thesignificance of operations approach is given below. 1. Operational approach offers a broad, easy to understand conceptual framework of management. The approach includes the entire scope of management and recognizes it as a separate discipline. 2. This approach suggests that management is a universal phenomenon irrespective of the type of organizations or levels of an organization. 3. Operational approach provides useful concepts for practicing managers. It helps the managers to put their knowledge to use. It offers practical suggestions by providing classification of managerial functions at first level into planning, organizing, staffing, directing and controlling. However the BSPATIL 8
  9. 9. operational approach has been criticized on the following grounds. 1. The basic tenets of operational management that is , various management functions, are not universally accepted. 2. Another criticism against operational approach is that various terms used in this approach are not commonly shared. 3. The analysis of various approaches suggests that no approach is fully free from shortcomings. However, a positive sign is emerging in the form of convergence of various approaches. The convergence is provided by operational approach as compared to any other approach.FUNCTIONS OF MANAGEMENT The basic aim of managing is to achieve certain objectives or goals. The managermust be sure of the objectives he desires to attain or of the end result to be ensured.The precise and the complete statement in this regard would make the objectivesclear and understood by all concerned who have ot divert their activities towards itsattainment. The desired result, objective or goal is attained by performing certainfundamental management functions which can be grouped under basic heads,namely 1. Planning 2. Organizing 3. Staffing 4. Motivating 5. Directing 6. Coordinating 7. ControllingPLANNING It means “Preparing a sketch or an outline of any proposed plan of actions”. Itimplies considering and arranging in advance a projected course of action. It canalso be definedas determining what is to be done, making the decisions to do it, anddevising a procedure, method and time table to do it. Planning is a general activity. Itis a necessary part of all operations of an enterprise, and for the operations of eachof the departments and sections. It stimulates people to action and also determinestheir mode of action.For eg. Sales manager plans his sales campaignThe purchasing Manager plans his purchasing and transporting operationsThe production Manager plans his production programs.Planning is an exercise in forecasting and decision making. It involves forecast offuture conditions and an estimate of how the proposed plans would be affected bythem.Thus planning involves two aspects. First it involves mental formulations of an ideaof what is desired to be achieved. Upto this, it remains at the thinking level and isbased on forecasts and estimates. Secondly it determines the mode of action to be BSPATIL 9
  10. 10. pursued to achieve what has been thought up. At this stage, the idea takes a definiteshape with a due regard to the ordinary and immediate circumstances facing theenterprise.ORGANISATION To organize means to put into working order and arrange in a system.In this sense, an organization is an organized body or persons. Organising may bedefined as arranging a number of complex tasks into manageable units and definingthe formal relationship among the people who are assigned the various units oftasks. This definition is in the context of attainment of the goals and objectives of anundertaking. Generally, identifiable units of tasks are put under the charge of adepartment, section or division. The head of that department, section or unit beinggiven with the authority to perform those tasks. For eg. Business activities in anindustrial concern may be grouped under : 1. Production 2. Sales 3. Finance and 4. PersonnelAfter classification and analysis of functions to be performed by each department,persons possessing requisite qualifications and experience may be appointed ashead of each of these departments. Such persons should also be given properauthority to discharge their functions efficiently.. Thus basically organization is concerned with grouping the activitiesrequired to attain the planned objectives, defining responsibilities of the people inthe organization, delegating the appropriate authority to them to discharge therespective responsibilities and establishing structural relationships to enableCo-ordination of the individual efforts towards accomplishment of the enterpriseobjectives. The main objective of organization is to establish well definedrelationships as between individuals and groups of individuals and between theactivities performed by them.STAFFINGIt has been defined as manning and keeping manned the positions provided by theorganization structure. Thus staffing involves four things:Assessment of personnel needs of the enterprise and selection and training ofemployees.Determination of employees remuneration.Evaluation of employees performance.Establishment of effective communication skills.Staffing is a difficult managerial function, because it is concerned with selection ofproperly qualified and mentally well-adjusted persons and their retention in theenterprise as a contented and motivated work force. BSPATIL 10
  11. 11. DIRECTINGTo direct means to guide and supervise any action or conduct. It implies guidance orinstructions about what to do and how to do it. We have seen that in organisatinexecutives assign responsibilities and duties to their subordinates and delegate tothem with requisite authority to perform the assigned responsibilities of duties. Thisin fact is of very essence of management the art and process of getting things doneby others. No doubt, executives have the authority to force their subordinates tocomply with their directives. In case any subordinates faisl or refuses to comply, bemay be thrown out or punished in some other manner. But this a wrong view of theenterprise entire process of management. On any case, with strong trade unions anda number of labour laws to protect the worker, it would not be wise to demandcompliance from one’s subordinated. For securing whole-hearted compliance fromsubordinated, the function of direction assumes considerable significance.Direction function involves 1. Issuing orders and instructions to subordinated. 2. Guiding, training, energizing and leading the subordinates to perform the work methodically. 3. Exercising supervision over the work done by subordinates to ensure tat it is n conformity with aims and objectives of the enterprise.From all accounts, the function of directions is very important. Thus to make theorganization click, it becomes necessary to direct one’s subordinates in a mannerthat they become effective instruments in the realization of enterprise goods. Theprocess of direction comprises of the following elements viz. i. Leadership ii. Communicationiii. Motivation andiv. SupervisionA detailed discussion about these aspects is given in the subsequent chapters.CO-ORDINATIONSome authorities emphasis co-ordination as a separate function of Management.This approach has not been adopted here because it is felt that co-ordination isemphasized in each of the functions of management process. Co-ordination must besought from the very first step, namely, planning, so that plans of all departmentsare integrated into a master plan, issuing the adequate co-ordination. Similarlyorganizing of people into groups and work into activities involves adequateco-ordination. It can also be secured through proper motivation of the workerstowards organized efforts in terms of organizational objectives and personalobjectives of the employees through an integration of such objectives. Finally thecontrolling aspect also indicates further co-ordination is required resulting inimprovements and fresh plans. BSPATIL 11
  12. 12. CONTROL Controlling can be defined as “comparing results with plans and takingcorrective actin when results deviate from plans.” In an organizational set up, It every Manager’s responsibility to control theperformance of work and workers places under his charge.Pre-requisites of control: 1. Control is possible only where is there is a plan according to which actual performance is intended to proceed. 2. The second requirement of control to measurement of the results of actual operations. 3. The third requirement of control is taking corrective action as soon as deviation from the plan is discovered. Fundamentally, control is any process that guides activity towards some pre-determined goal. The essence of this concept is in determining in whether the activity is achieving the desire results. This is what control is all about. For control to be effective and fruitful, it must be based on a plan. Then on the basis of information received from the operational level, there must be measurement of actual performance to ascertain deviations. Thus the above functions are said to be the important functions of Management. ADMINISTRATION AND MANAGEMENT The two terms administration and management are being used interchangeably for all practical purposes. However these two terms are different from each other. Oliver Sheldon summaries the distinction as follows. Administration is the function in the industry concerned in the determination of corporate policy, the co-ordination of finance production and distribution, the settlement of complaints of the organization and ultimate control of executive”. “Management is the function in the industry concerned in the execution of policy within the limits setup by the administration and the employment of the organization for the particular object set before it”. William sprigeal distinguishes “Administration as the determinate function and “management” as the executive function. Management is primarly concerned with carrying out of the broad policies laid down by the administration”. Thus the administration is concerned with the thinking function and management with doing function. The essence of management is highlighted by the definition given by KOONTZ and O’ DONEL and by DONALD CLAGH. The later describe management a the art and science of decision making and leadership. Art of getting things done BSPATIL 12
  13. 13. through people and with people. Human factor in industry has endless capacity for work provided planning and resources are made available to it. The manager’s goal of attainment of enterprise objectives in the more efficient manner can be accomplished only when the people in the enterprise work to the best of their ability in the spirit of cooperation and zeal. MANAGEMENT : AN ART OR SCIENCE MANAGEMENT AN ART According to G. TERRY; Art is “Bringing about a desired result through the application of will in any activity is called as an art,’ The emphasis is on applying skills with knowledge and accomplishing an end through deliberate effort. Thus the function of the art is accomplishing concrete ends efforts, results; predict situations that would not come about without the deliberate effort, to secure them. MANAGEMENT IS A SCIENCE Science has been defined as “body of systemized knowledge accumulated and accepted with respect to the under standing of general tools concerning particular phenomenon subject or object of study. It is absolutely necessary that it should have codified principles and techniques that explains certain truth with respect to basic phenomenon. In this sense management is certainly regarded as science as it has also develop in to a systemized knowledge regarding a particular phenomenon, namely, managerial function. MANAGEMENT AS PROFESSION Profession is defined as an occupation based upon the specialized intellectual study and training, the purpose of which is to supply skilled service or advice to others for the definite fee or salary. CHARACTERISTICS OF PROFESSION 1. Existence of knowledge :Profession emerges from the establishment of fact that there is a body of knowledgewhich cannot started around but has to be studied for being a successfulprofessional. 2. Acquisition of knowledge :An individual can enter profession only after acquiring knowledge and skills throughformal training for example, only the law graduates can enter the profession of legalpractice. 3. Professional association : BSPATIL 13
  14. 14. An occupation which claims to be profession should have an association. Howevermanager do not have single unified professional group like Indian medical councilfor medical practitioners from this new management cannot be termed as tradeprofession. 4. Ethical code :For every profession some ethical standards are provided and every individual of theprofession is expected to maintain conformity with these standards. In managementalso, code of conduct has been formulated to suggest the behavioral pattern forprofessional managers. 5. Service motive:It is essential because the monetary value of professional service cannot bemeasured easily in absence of market mechanism except the competition among theprofessionals themselves. The success of any profession is measured not in terms ofmoney. It earns but by the amount of social service it provides. Similarlycontributions of management cannot be measured in terms of money alone becausewithout integrating effort of management, resources worth millions of rupees maybe useless.Once organization grows beyond certain size, changes in the nature of managementprocess demands that ownership and management should be divorced. Somanagement positions should be held by persons who have professional skill andadequate training. BSPATIL 14
  15. 15. LESSON – 2 PLANNINGMEANINGIt means determining what is to be done, how, when and by whom it is to be done. Itlays down and object to pursuit and chalks out a specific course of action to achieveit. It is the first step in the management process concerned with establishment ofobjectives and goals to be attained in the future in the light of an analysis of presentlimitations for attaining such goals with a views to their removal or reduction,anticipation and designing the course of action and programmes for attaining suchpre-determined goals.DEFINITION“Planning is the selecting and relating of facts and the making and using ofassumptions regarding the future in the visualization to achieve desire results.” GEORGE TERRY“Planning is deciding advance what to do, how to do it, when to do it, who is to do it.It bridges the gap form where we are, to where we want to go. It makes it possiblefor things to occur which would not otherwise happen.” - KOONTZ & O’DONNEL“Planning is the thinking process, the organized, foresight, the vision based on factsand experience that is required for intelligent action.” - ALFORD & BEATTYFEATURESAs a process, planning has certain features as given below.- It s the thinking process.- “Choosing” is at the root of planning.- It is pervasive – prevailing in all activities- Accomplishment of enterprise objectives.- Primacy of planning – Prime- It is all embracing.- It leads to increase in efficiency.- It is an integrated process consisting of objectives, policies, proceduresIMPORTANCE OF PLANNINGThe significance of planning function could be indentified from the follows- To tackle increasing complexity in modern business.- To face increasing competition.- To provide for complex technological changes.- To insure against business failure.- To meet the changing economic and political situations. BSPATIL 15
  16. 16. - To exercise effective control.- To bring greater economy.Merits of planningPlanning process facilities the managerial function on the following ways:-Selection of best objectives can be made with the help of planning Profits, prestige,Favourable consumer reaction, High morale of workers, Man-power development.- Unity of action could be ensured.- Aid to co-ordination and control- Aid to growth and Expansion.- Aid to employee co-operation.- Aid to economy.- Aid to foreseeing the future.- Increases the effectiveness of manager.Limitations of planningThe effectiveness of planning process may be affected on the following reasos1. Uncertainty Planning is based on forecasted results which will not Hold good in uncertain situations.2. Rigidity Prior determination of policy, programme, etc. Makes it regid.3. Unsuitability Business is a dynamic activity and hence plan May not be suitable in all situations.4. Costly Planning is time consuming and costly affairKINDS OF PLANNINGOn the basis of the time factor, planning may be Long Ranging planning - 5 – 10 years Short Range planning - Not more than one yearOn the basis of business function for when planning is to be drawn Product planning,project and activity planning.DECISION MAKING“It is ht process selection an alternative from two or more alternatives to determinean opinion or a course of action.” - GEORGE TERRYFactors involved in decision making : Tangible factors: Profits, Quality of output and all other quantitative factors Such as Man-hours, Machine hours. BSPATIL 16
  17. 17. Intangible factors: a.) Employee morale. b.) The prestige of business concern. c.) Consumer behaviour. d.) Such other abstract factors.Need : Weighing the consequences of each alternative course of action.Steps in Decision-making process: Defining and analyzing the problem, Finding relevant facts. Developing alternative solutions. Selecting the best solution. Converting the decision into effective action.Decision-making Process Formulation Selection Deliberation Investigation Conception PtionCRITERIASome of the rationales to be adopted indecision-making process are:Reduction of cost, Maximization of profit, saving of time, development of managerialskill, increasing productivity etc.TYPES OF PLANS 1. Standing or repeated use plans 1. Objectives 2. Policies 3. Procedures. 4. Rules 5. Strategies. BSPATIL 17
  18. 18. 2. Single use of plans: 1. Programmes. 2. BudgetsA brief description about these sub-types of plans are given below: a.) ObjectivesIt may be defined as the specific goals or targets to be accomplished viz., profitmaking, cost reduction, increase in productivity goodwill, personnel development.Healthy employee relations, social responsibility.Fixing of objectives in an organizational planning function ensures the followingadvantages.It is vital to planning function.It helps to Integrate planning.It ensure performance control.Limitations :However, fixation of objectives is subject to certain limitations viz.,Difficult to define the objectives.Difficult to devise suitable means.Difficult to avoid conflict.Remedies: 1. Objectives should be specific, 2. Objective should be realistic, 3. Objective should be backed by suitable sub-goals. 4. Objectives should be flexible. b. PoliciesIt may be defined as a guide to thinking and action of those who have to makedecisions in the course of accomplishment of the enterprise objectives. They areformulated in broad forms and provide a compressive and flexible course of actionto be pursued to attain the given objectivesFEATURESIt is a broad outlines about the things to be done and the way in which they an to edone.It is Consistent with that of the organizational plan.It is to be adequate in number to achieve organisationals goals.It should be a sound one. BSPATIL 18
  19. 19. It must ensure flexibility.KINDS OF POLICIES 1. Internal or originated polices. 2. External or imposed policies. 3. Addealed policies. 4. State or explicit policies. 5. Unstated or implied policies.Factors to be considered while formulation policies are : 1. Values, Beliefs, Ambitions, and Foresight of the owners and members of the top management. 2. Prevalent Technology. 3. Finance availability. 4. Employee reaction. 5. Accomplishment and activities of competitors, 6. Governmental regulation and control. 7. General business environment. 8. Price levels. 9. Public attitudes and behaviour.Merits : 1. Guide to think and act. 2. Ensures Consistency in all actions. 3. Broader applicability. 4. Confidence booster.Demerits : 1. It won’t help to solve all problems. 2. Instant solutions to problems may not be available. 3. It cannot substitute human judgment. 4. It may nor encourage initiative.c. Procedures“The process of establishing time sequences for work to be done.”They may be described as plans prescribing the exact chronological sequence ofspecific tasks required to perform designated work.To determine the specific tasks to be performed.The time when those tasks will be performed.The person who will perform them.Merits : 1. Basis of control 2. Standardisation of activities can be done. BSPATIL 19
  20. 20. 3. Ensure consistency in all operations. 4. Aid to communication and co-ordination.Limitations : 1. Redundacy may takes place in course of time. 2. Updating becomes must.d. Rule :It is decision made by the management regarding what is to be done and what is notto be done in a given situation. It applies to specific situations. Rules do not leaveany scope for decision making nor do they permit any deviation.e. Strategies :It is derived form the greek word strategies, meaning general,It means the art of projecting and planning the choice of means by which theenterprises forces ay be employed most effectively in order to accomplish it’sintended goal. It is said to be formulated only to meet the challenge posed bycompetitions policies and activity. The following factors may be considered forformulating strategies.- Correct assessment of reaction of the parties concerned.- What human and physical resources are available to draw up a strategy.- Temperamental make-up of the persons to check-mate whom the strategy isbeing would up.TYPES OF STRATEGIES- Strike while the iron is hot-act prompt a while the action is likely to getresults.- Camel’s head in the tent – creation of confidence regarding plan to some- Unity is strength- Time is greater heater.- Offence if the best form of a defence.- Divide and rule.Successful implementation of strategies : 1. Communicating strategies to all key decision-making managers. 2. Developing and communicating planning premises. 3. Ensuring that action plans contribute to and reflect major objectives and strategies. 4. Reviewing strategies regularly. 5. Developing contingency strategies and program. 6. Making the organization structure fit planning needs. 7. Continuing to emphasis planning implementing strategy. 8. Creating a company climate that forces planning. BSPATIL 20
  21. 21. f. ProgrammeIt lays down the operation to be carried out to accomplish a given work. It prescribeshow enterprise resources should be used.Merits 1. Action based – practical guide to managerial action. 2. Greater motivation.Demerits 1. Greater risk of failure 2. Inadequate motivation. g. BudgetIt is a plan relating to a period of time expressed in numerical terms. “as apre-determined statement of management policy, during a given period, whichprovide a standard for comparison with the results actual achieved.Objectives of Budgeting : 1. To ensure effective planning. 2. to facilitate Co-ordination function. 3. To exercise Controlling effective and achieving desire goals. 4. To motivate the workforce for achieving desired results.Merits :Instrument of management policy 1. Time bound 2. Specific targets. 3. Synthesis of past, present and future. 4. Right motivation. 5. Basis of control.Limitations 1. Cabined and confined. 2. Excessive reliance on past experience. 3. Danger of inaccuracy in estimates. 4. Hampers initiative – rational and pragmatic initiative is stiffed.PLANNING PREMISES BSPATIL 21
  22. 22. Managerial plans are based on certain assumptions which are called planningpremises. They constitute the ground on which plans will stand. Meaningful premisesfacilitate consistency and coordination of plans. The premises may be ofNon-controllable premises such as economic conditions, political situations, tastes,preferences of people etc.Semi-controllable premises such as firms market shares, union managementrelations etc.Controllable premises such as policies of the organization, procedures, rules etc.Effective Premising :To effectuate the planning premises following guidelines may be adopted.Selection of the premises that bear materially on program.Development of alternative premises for contingency planning.Verification of the consistency of premisesCommunication of the premises. BSPATIL 22
  23. 23. LESSON – 3 ORGANISATIONThe term organization is derived form the word “organism” which means structurewith parts so integrated that their relation to each other is governed by their relationto whole.The term organization is used both structural and functional sense. As a structure itmeans a developed enterprise being operated t achieve the given goals. As afunction it refers to establishing relationship between activities and authoritypertaining to an enterprise.Organization is nothing but a process of integrating and co-ordinating the efforts ofmen and materials for the accomplishment of a set objective.DEFINITION“Orgnisation is the process of identifying and grouping work to be performeddefining and delegating responsibility and authority and establishing relationship forthe purpose of enabling people to work most effectively together in accomplishingobjectives. -ALLENOrganisation thus is an arrangement for internal administration of the enterprise. Itdescribes the part which each employee is intended to play in the operation of anenterprise and ensures that concerned endeavour of all of them will be conductive tothe full implementation of the plans of the enterprise.FACTORS INCLUDED IN THE CONCEPT OF ORGANIZATION a) Assembly of business elements such as men, money and materials. b) Creation of formal relationships between men employed at different levels through a hierarchy of authority. c) Defining the functional role of the personnel and laying down the range of their responsibility for business performance. d) Operating the organizational activities in conformity with the establishment objectives of the enterprise.PRINCIPLES OF ORGANIZATION 1. Principles of objectives. 2. Principles of authority. 3. Principles of ultimate authority. 4. Principles of formal authority 5. Principles of the span of control 6. Principles of decision 7. Principles of Exception BSPATIL 23
  24. 24. 8. Principles of Definition 9. Principles of Balance 10. Principles of Continuity 11. Principles of Organisation cost 12. Principles of Effective communication.ELEMENTS OF ORGANIZATION 1. Division of work 2. Grouping of activities. 3. Assignment of Duties. 4. Delegation of Authority 5. Establishment of relationship.Hence internal organization, implies designing an administrative set-up consisting ofindividuals with defined task and responsibility to be performed according to anorderly sequence procedures for attaining the result.ORGANISATIONAL CHARTIt is important tool for portraying net work of an organization structure. It shows 1. The main portion, nature of relationship between 2. Levels of management.“It is diagrammatic form which shows important aspects of an organization,including the major function and their respective relationship, the channels ofsupervision and the relative authority of each employees who is incharge of eachrespective functions.” -FEORGE TERRYTYPES OF CHARTS 1. Vertical chart 2. Horizontal chart 3. Circular chart 4. Tree chartMerits of Organisational Chart : 1. Clarity in relationship 2. Easy to understand at a glance 3. Familiarizing new employees 4. Helps in formulating training programme 5. Helps to organizational change 6. It serves as a better method of visualizing the tone and character of an organisation.Limitations 1. Likely to be outdated 2. Rigidity BSPATIL 24
  25. 25. 3. It shows only relationships 4. Shifting of responsibility to somebody else 5. Does not show extents of authority or responsibility. 6. It may go against teamsprit 7. It ignores the informal aspects of orgnisation.TYPES OF ORGANIZATIONThe problem of organization is to select and combine the efforts of men of propercharacteristics so as to produce the desired result. Although character and type oforganization would depend largely on the size and nature of enterprise, thefollowing broad patterns of organizing the personnel have been evolved.Line organization Staff OrganisationFunctional Organisation Line and Staff OrganisationMatrix Organisation Projectised OrganisationA brief outline about the three basic organization structures are given belowLINE ORGANISATIONIt is the oldest type of organisation in use in which authority flows from the men atthe top to the lowest man vertically. i.e., the directionsare issued by the personincharge of the whole organization and are directly conveyed to the personsresponsible forhte execution of the work. The advantages of this structure are: Simple to understand and develop. Clear-cut division of authority and responsibility is possible Discipline can be easily maintained. It makes for quick actionHowever, this structure has following shortcomings: Makes the organization more regid and inflexible Lack of expert advice may be there. Key man are loaded heavily. Loss of one or two capable men may mar the organisatioin. Line Organisation Chart General Manager Manager Manager Eastern Region Western Region BSPATIL 25
  26. 26. Manager 1 Manager 2 Manager 3 Manager 4 Manager Manager 6 5LINE AND STAFF ORGNISATIONA manager today cannot hope to think of all possible factors in a given situation.Therefore, he hs a set of expert advisers. Those functions which have directresponsibility for accomplishing the major objectives of the firm are called linefunctions. The staff functions are supposed to help and assist the line in dischargingtheir responsibility. The staff position established as a measure of support for theline organization may be of personal staff, specialished staff and general staff. Thisform has certain advantages and limitations. They are It is based planned specialization It brings expert knowledge to bear upon management It provides more opportunity for advancement for able workers.Limitations:Relationship between line and staff member may creates confusion.Lack of authority may affect the interest of the staff member.Prestige and influence of line member ay suffer in front of specialist.FUNCTIONAL ORGANISATIONHere the whole task of management and direction of subordinates should bedivided according to the type of the work involved. The functional managementcarries this idea to its logical limit and divides up management into a number offunctions such as production, sales, finance and personae, and research anddevelopment etc. Each of these departments would serve its best for theorganization. Its advantages are;Itensures a greater division of labourItImproves the efficiency of the organization.Itbrings specialization and innovations.Itfacilitates mass productin. However, it has certain limitations as given below;Strict enforcement of discipline is questionable.Creates complexity in structuring activities.Responsibility cannot be fixed effectively.A model of line staff and functional organization structure is given below.Chairman PA to Chairman BSPATIL 26
  27. 27. Director Personal Director Production Director Director Finance PurchasingGM 1 GM 2 Manager Manager Manager Manager Manager Manager Personal Production Finance Personal Production FinanceFORMAL ORGANISATION“A Network of personal and social relation not established or required by the formalorganization but arising spontaneously as people associate with one another.”Types of informal groups 1. Social overlays 2. Functional overlays 3. Decision overlays 4. Power overlays 5. Communication overlaysBenefits 1. Sense of belonging 2. Safety value for emotional problem 3. Aid to the job 4. Breeding ground for innovation and originality 5. Important channel of communication 6. Social control 7. Check of authority 8. Self – policing 9. Fills gaps in a managers abilities 10. Gives the managers feedback about employees and their work experienceLimitations 1. Resistance to change 2. Suboptimization 3. Rumor 4. Group think philosophyAUTHORITY AND RESPONSIBILITY Authority is the basis of organization in as much as organization is describedas a system of authority relationships. Authority is the power to command others to BSPATIL 27
  28. 28. act in a manner deemed by the possessor of the authority to further enterprise ordepartmental purpose. It is the power to make decisions which guide the actions ofothers. The person who makes the decisions is the superior and the person whoaccepts them and is guided by them is called one subordinate.Authority is the right to give orders and the power to exact obedience. - HENRI FAYOLAuthority may be of formal authority, acceptance authority, authority of situation,position authority, and technical authority. Authority Power1 It is the institutionalized right It is the ability of a person to of a superior to command and influence another person to compel his subordinates to perform an act. perform a certain act.2 It rests in the chair It rests in the person3 It is delegated It is earned by own efforts4 It is well defined It is undefined5 It is what exists in the eye It exists in fact. It is a dejure concept It is defacto concept6 Basis for formal organization Basis for informal organResponsibility is an obligation of the individual to perform assigned duties to thebest of his ability under the direction of his executive leader. - KEITH DAVISResponsibility refers to duty, activity or sometimes even authority. It really meansthat the obligation of a subordinate to perform the duty assigned to him. Theessence of responsibility is, then obligation. In the normal functioning of anenterprise much of the responsibility in the nature of continuing obligation whichmeans that the subordinate has an obligation to discharge his functions as requiredby the superior continually. Responsibility involves Compliance, obedience andDependability. A failure to observe these elements may call forth a penalty,punishment or disciplinary action against the erring subordinate. The term accountability can also be used as a substitute for responsibility.Accountability refers to the liability of a subordinate for a proper discharge of hisfunctions. It includes responsibility and arises from it. But accountability cannot bedelegated. Thus to be accountable is to be answerable for the fulfillment ornon-fulfillment of the authority or responsibility assigned.DELEGATION BSPATIL 28
  29. 29. To delegate means to grant or confer. Delegation means conferring authorityfrom one manager to organizational unit to another in order to accomplish particularassignments. Delegation determines the effectiveness of the manager in his work.The way in which delegation will influence the relationship between the subordinateand his superior and through it the performance of the subordinate. In the absenceof delegation, he may receive orders from many people and may, therefore, beunsure of his job.ELEMENTS OF DELEGATIONThe process of delegation involves three basic actions whether expressed or implied.They areThe delegator should assign duties to subordinates.He has to grant authority to subordinates to the delegated part of his work.Delegation should create obligation on the part of subordinate to complete the job.Merits 1. Relieves manager’s workload. 2. Leads to better decisions. 3. Speed up decision – builds up morale. 4. Train subordinates and 5. Helps to create formal organization structure.BARRIERS TO DELEGATION.On the manager’s side: 1. Fear of loss of power 2. Lack of confidence in subordinates. 3. Fear of being exposed. 4. Difficulty in briefing.On the subordinates side: 1. Fear of criticism 2. Lack of adequate information 3. Lack of self confidence and initiative and resources. 4. No positive personal gain.GUIDELINES FOR EFFECTIVE DELEGATION 1. Clarity in assigning the task 2. Proportionate authority. 3. Limits of subordinates authority. 4. Positive incentive for accepting responsibility. 5. Proper training of subordinates. 6. Create climate for mutual trust and goodwill 7. No over laps or slips in delegation.STEPS IN DELEGATION BSPATIL 29
  30. 30. The entire process of delegation of authority can be completed through the followingsteps.Determination of results protected.Assignment of duties.Authorization for action.Creation of obligation.SPAN OF MANAGEMENTIt is one of the organization principle. It refers to the number of subordinates forwhose activities an executive should be held responsible. The limit to the number ofsubordinates who can be effectively managed by a manager.The factors determining span of control of a superior are: 1. Nature of activities involved. 2. Ability of the superior (knowledge) 3. Nature and ability of subordinates. 4. Time available. 5. Place available etc.GRAICUNA’S FORMULAFrench management consultant V. A. Graicuna offer analyzing subordinate andsuperior relationship developed a mathematical formula. His theory identifies threetypes of the subordinates & superior relationships namely. 1. Direct single relationships. 2. Direct group relationships. 3. Cross relationship between subordinates.These relationships vary (considenancy) with the size of the subordinates groupwhile the supervisions own direct relationship with individuals increase n (proption)to the addition to subordinates the groups and cross relationships increase muchmore than proportionately.He said the total number of relationships grows in geometrical ratio, every time anew subordinates is added.FORMULA R= Nx [2n-1+(n-1) Where N = Number of subordinates R= Total relations. 1. When two subordinates R=6 2. 4 Subordinates R = 44 BSPATIL 30
  31. 31. = 4 x ( 24-1+(4-1)) = 4 x [23+(3)} = 4 x{8+3} = 44 Span of supervision require following skills : Supervision requires attention. Supervision requires Emotional stability. Supervision requires time. Supervision requires ability of subordinates. Supervision requires nature of work.USE OF GRAICUNAS FORMULA It clearly shows complexity and difficulty of wider spans. 1. It reminds manager of wisdom of striking to narrower spans.Limitation 1. Mathematical precision is debatable 2. Direct group relation may be far – fetched. 3. The main problem is not number of RL but their frequency and the volume of stress and strain they generate. 4. It does apply in cases of cross relations of a big enterprise.Limited span of control ensures the following 1. Tighter control and closer supervision 2. Ease of managing fewer. 3. Availability of time to think and planOn the other hand limited span of control has some shortcomings also as givenbelow 1. Additional costs having more manager 2. Complexities in communication will arise 3. Prevention of democratic participationDECENTRALIZATIONIt is the situation which exists as a result of systematic delegation of authoritythrough out the organization.The term decentralization carries different meanings to different people. BSPATIL 31
  32. 32. Decentralization is an extension of delegation.Decentralization implies a systematic delegation of authority through out the wholeorganization.WHY DECENTRALIZATION ?Large companies having independent product or service lines may adopt a form ofdecentralization.Under decentralization the whole organization is divided in to self-sufficientdivisions.Having experienced many difficulties in the smooth running of such centralizesorganizations, decentralizations of authority has been suggested and largelyresorted to particularly to achieve the following purposes. - Easing burden of chief executive. - Facilitating diversification, - Providing product of market emphasis. - Developing managers and - Improving motivation.ADVANTAGES OF DECENTRALIZATION- Decentralization leads to specialization.- Encourages decision making and assumption of authority and responsibility.- Decentralization makes the sub – ordinates to work with involvement- Facilitates diversification in large scale.- Promote the development of general managers.- Aids in adoption of fast changing Environment.DISADVANTAGES OF DECENTRALIZATION- Makes it more difficult to have a uniform policy.- Decentralization leads to problem in co – ordination.- May be limited to External forces.- Leads to increase in cost.- May some time leads to mis-use of power in high levels.- Leads to expenses in training a manager.- May be limited by the availability of qualified managers.DELEGATION Vs DECENTRALIZATION 1. Delegation is the process while decentralization is the end result. 2. Superior is responsible for delegation where as in decentralization subordinates are responsible. 3. Delegation is vital and decentralization is optional. BSPATIL 32
  33. 33. DEPARTMENTATIONFirst task in designing an organization structure is the identification of activities andto group them properly. The process of grouping activities is commonly known asdepartmentation.NEED AND IMPORTANCE OF DEPARTMENTATINThe basic need for departmentation arises because of specialization of work and thelimitation on the number of subordinates controlled by a superior. 1. Advantages of specialization :Thus if the managerial function is conceived as a set of activities facilitating the workof organization, these activities can be carried out more efficiently and effectivelythrough the division of work leading to a specialization of managerial function. 2. Fixation of responsibilityDepartmentation helps in fixing the responsibility and consequently accountabilityfor the results. 3. Developed of managersDepartmentation helps in the development of managers. 4. Facility in AppraisalManagerial performance can be measured when the area of activities can bespecified and standards in respect of these can fixed. Depertmentation provideshelps in both these areas. 5. Feeling of Autonomy :Deprtmentation provides motivation by developing feeling of autonomy to the extentpossible. There are several bases of departmentation. The more commonly usedbases are function, produt, territory, process, customer, time etc. Some of thesebases are internal-operation – oriented like function, process, time while others likeproduct, territory and customer are output-oriented.FUNCTIONAL DEPARTMENTATION The grouping of common or homogeneous activities to form an organizationunit is known as functional departmentation. Functional departmentation is the mostwidely used basis for organizing activities and is present almost in every large BSPATIL 33
  34. 34. organization at some level. Functional departmentation is most commonly used because it offers certainadvantages which include advantages of specialization, ensuring performance ofactivities necessary for the achievement of organizational objectives, elimination ofun-necessary activities, easier control over functions, easier way for pinpointingtraining need of the managers and maintaining the relative importance of functionsin the organization.PRODUCT WISE DEPARTMENTATION Product departmentation involves the grouping together of all actibitiesnecessary to manufacture a product or product line. Product departmentation ispreferred for product expansion and diversification when manufacturing andmarketing characteristics of each product are of primary concern. Productdepartmentation offers several advantages places attention to product lines, reducesproblems of coordination for different products, provides opportunities for furtherdiversification and expansion of organization and provides product specializationnecessary for managers specially when each product is different from other.TERRITORY – WISE DEPARTMENTATION Territorial or geographical departmentation is specially useful to large-sizedorganizations having activities which are physically or geographically spread such asbanking, insurance, transportation etc., Territorial departmentatin provides certainefficiency in operation. Local factors such as customers, culture, styles, preferencesetc., always affect organizational functioning.PRODUCTION PROCESSES – WISE DEPARTMENTATION In process departmentation, processes involved in production or varioustypes of equipments used are taken as basis for departmentation. When theproduction activities involve the use of several distinctive processes, these can beused as the base for grouping of activities. Such activities may be textiles, oilproduction etc., The process are set in such a way that a series of operations isfeasible making operations economic. It provides advantages of specializationrequired at each level of total processes, maintenance of plant can be done in betterway, and manpower can be utilized effectively.CUSTOMER – WISE DEPARTMENTATIONCustomer based departmentation is basically market – oriented in whichdepartments are created around the markets served or around marketing channels.The basic idea of this departmentation is to provide services to clearly identifiedgroups of customers. Each group of customers has different purchase behavior,payment schedule, demand pattern etc., Therefore they can be attracted to theorganization’s business by satisfying them by providing services, payment scheduledemand pattern etc.CHOICE OF BASES FOR DEPARTMENTATION BSPATIL 34
  35. 35. The selection of bases for departemntation involves a consideration of the relativeadvantages of each base for the organization. Ideally speaking, a suitable basis ofdepartmentation is one which facilitates the performance of organizational functionsefficiently and effectively so that its objective are achieved. 1. Specialization:The basis of departmentation should reflect the specialization in performing thework. 2. Coordination:Coordination involves that all the related activities are performed in a way that theirperformance is synchronized so that each activity contributes to others. 3. EconomyA balance should be maintained between the cost of creating a department and itscontribution. The existence of a department is desirable only when it contributesmore than its cost. 4. Focus on ResultThose activities which contribute to the achievement to these results should be givenproper attention. 5. Local Conditions :Local requirements of the organization should also the taken into account whilecreating departments. 6. Human Considerations :Departments should be created on the basis of availability of personnel, theiraspirations and value systems, informal work groups and attitudes of people towardsvarious forms of organization structure. BSPATIL 35
  36. 36. Lesson – 4 DirectionDirection is instructing the subordinates to follow a certain process to attain a giveobjectives. It is getting the work done through instructions and orders. It is thefunction of diversion in the management process to get the work from thesubordinates by means of guiding, motivation, communication, supervising, leadingand if need be commanding.It is sum of total of managerial efforts that is applied for guiding and inspiring theworking teams to make better accomplishments in the organization.It is the heart and soul of management.PROCESS OF DIRECTION 1. Defining the objectives. 2. Organizing the efforts. 3. Measuring the work. 4. Developing the people.Ever manager in the organization gives direction to his subordinates as superior andreceives direction s subordinate from his superior.Direction may be defined as the function of management which is related withinstructing, guiding and inspiring human factor in the organization to achieveorganization objective. The direction is not merely issuing orders and instructions bya superior to his subordinates, but is includes the process of guiding and inspiringthem. The analysis of definition reveals that direction function consist of threeelements.- Motivation- Leadership- CommunicationDirection has the following characteristics- Direction is an important managerial function. Through direction managementcan initiates actions in the organization.- Direction function is performed at every level of management.- Direction is a continuous process and it continuous through out the life of theorganization.- Direction initiates at the top level in the organization follows and bottomthrough there hierarchy. It emphasizes that a subordinates is to be directed by hisown superior only.IMPORTANCE OF DIRECTIONThe importance of direction function in the organization can be presented as follows. BSPATIL 36
  37. 37. - Direction initiates action.- Direction integrates employees efforts.- Direction attempts to get maximum out of individuals.- Direction facilitates charges in the organization.- Direction provides stability and balance in the organization.PRINCIPLES OF DIRECTIONDirection is one of the most complex function of the management as it ideals withpeople whose nature itself is quite complex and unpredictable.1. Principles of relating to the purpose of directing a. Principles of maximum individual contribution. b. Principle of harmony of objectives. c. Principle of efficiency of direction.2. Principle relating to direction process: a. Principle of unity of command. b. Principle of appropriateness of direction technique. c. Principle of managerial communication. d. Principle of comprehension. e. Principle of use of informal organization. f. Principle of leadership. g. Principle of follow through.Thus one of the basics functions of management is direction. Direction means theuse of leadership and motivation to guide the performance of subordinates towardsthe achievement of the organization’s goals. Important requirements for effectivedirection are : Harmony of objectives, Unity of command, direct supervision, efficientcommunication and follow-up. BSPATIL 37
  38. 38. LESSON – 5 MOTIVATIONMotivation is an art of stimulating someone or oneself or oneself to get designedcourse of action, to push the right button to get desire action. Motivation is an act ofinducement.Motivation Results Satisfaction M = is a drive t satisfy a want S = is experienced when the outcome has been achieved.The basic principle of motivation is based upon the following policy i.e., carrot orstick policy.“Put a carrot in front of donkey to make it move or Jab his with a stick being.”NATURE OF MOTIVATION- It is a psychological concept- It is total not piecemeal.- Determined by human needs.- May be financial or non financial.- Constant processNEED FOR MOTIVATION* Maximum utilization of factors of production.* Reduce labour turnover.* Easy availability of right personnel.* Increased the efficiency and output.* Create sense of belonging.KINDS OF MOTIVATION 1. Positive motivation 2. Negative motivation 3. Financial motivation 4. Non-financial motivationTHEORIES OF MOTIVATIONManagement experts have formulated different theories on motivation at differentdimensions. They are : BSPATIL 38
  39. 39. 1. Maslow’s theory of motivation. 2. Herzberg’s theory 3. Mcgegor’s theory 4. Vrooms theory.Need hierarchy theory: Abraham Maslow’s book on motivation and personalityemphasizes multiplicity of human needs are arranged in an order.* Physiological needs* Safety needs* Social needs* Esteem needs* Self actualization.The first two sets of needs are called Lower order needs (1,2)The other sets of needs are called Higher order needs (3,4)According to him when one needs fulfils another need will emerge automatically.While going for achieving the particular need, people like to give priority to thepressing needs first and the rest in next.Short – coming of Maslow’s theory are:- Order cannot be regarded as rigid.- No indication regarding satisfaction of needs.- It may not have universal applicatibility.- Motivation is piecemeal exercise by means of splitting of human needs.HERZBERGS’ THEORYAccording to Herzberg, factors that give real satisfaction to an individual aremotiators. He classified the factors in to two viz,Factors that prevent dissatisfaction - Hygiene factors.Factors that give satisfaction - Motivators (feeling of achievement, significance of growth) Maintenance factors Motivators1. Fair co policy and administration Opportunity to accomplish something significant.2. Supervisor knows the work Recongnition.3. Supervisors relationship Chance for development4. Peers relationship Opportunity to grow5. Fair salary Chance for increased BSPATIL 39
  40. 40. responsibility6. Job security The job inself7. Subordinates relationship8. Personal life9. Status10. Good working conditionNeeds priority, to a great extent, characterizes the types of behavior. It will be eitherdirected towards achieving certain desirable positive goals, or conversely, towardsavoiding other undesirable negative consequences. Thus, a question may arise as towhat variables are perceived to be desirable goals to achieve and converselyundesirable conditions to avoid. In this connection a research study was conductedby Frederick. Herzbergls of Case-Western reserve University and associates. Thisstudy consisted of an intensive analysis of the experiences and feeling of 200Engineers and accountants in 9 different companies in Pittsbrug area, U.S.A. Duringthe structured interview. They were agreed to desirable a few previous jobexperience in which they felt exceptionally good or exceptionally bad about jobs.They were also agreed to rate the degree to which their feelings were influenced forbetter or worse by each experience which they described.In concluding the information from the interview, Herzberg concluded that therewere two categories of needs essentially independent of each other affectingbehavior indifferent ways. His findings are that there are some job conditions whichoperate primarily to dis-satisfy employees when the conditions are absent, theirpresence does not motivate them in a strong way. Another set of job conditionsoperates primarily to build strong motivation and high job satisfaction, but theirabsence carely proves strongly dissatisfying. The first 80 job conditions has refusedto as maintain or hygiene factors and second set job conditions as motivationalfactors.HYGIENE FACTORS According to Herzberg there are 10 maintenance or hygiene factors. Theyare company policy and Administration technical supervision, inter-personalrelationship with supervisors with peers, with subordinates, salary, job security,personal life, working conditions and status. These are not intrinsic part of job butthey are related to conditions under which a job is performed. They produce nogrowth in a worker’s output; they only prevent prevent losses in workersperformance due to work restrictions. These maintenance factors are necessary tomaintain a reasonable level to satisfaction employees; however any cut below thislevel will dis-satisfactory them. As such these are also called dis-satisfiers since anyincrease to these factors will not affect employee’s level of satisfaction. Hence, theseare in no way motivation them.MOTIVATIONAL FACTORS These factors are capable of having a positive effort on job satisfactionoften resulting in an increasing one’s total output. Herzberg includes 6 factors thatmotivate employees. These are achievement, recognition, advancement work itself,possibility of growth and responsibility. Most of these factors are related with job BSPATIL 40
  41. 41. contents. An increase in these factors will satisfy the employees; however, anydecrease will not affect their level of satisfaction. Since, thee increase level ofsatisfaction in the employees can be used in motivating them for higher output.Herzgerg maintains that potency to various factors is not entirely a function tofactors themselves. It is also influenced by the personality characteristics to theindividuals. From this point of view, individuals may be classified into two parts.Motivation seekers, maintenance seekers. The motivation seekers generally areindividuals who are primarily motivated by the satisfier’s such as advancement,achievement and other factors associated with work itself. On the other-hand, themaintenance seekers tend to be more concerned with factors surrounding the jobsuch as supervision; working conditions, pay etc.The shortcomings of Herzberg’s theory are: 1. Infact job satisfaction and dis-satisfaction are two opposite points on a single continuum Individuals on the job are affected by any change either in the job environment or in the job content. 2. Herzberg model is method bound and a number of other methods used for similar study have shown different results not supporting his contentions other the theory has limitation is general acceptability. 3. This theory does not attach much importance to pay, status, or inter-personal relationships which are help generally as important contents of satisfaction.Comparison of maslows and herzberg theoryMASLOW’S NEED THEORY HERZBERG THEORY M1. Self actualization O Challenging work, achievement, T growth in the job. I V2. Esteem or status A Responsibility, Advancement and T O recognition R M3. Social needs A Status, Interpersonal, working I conditions. N F5. Physiological needs T A Job security, salary E C BSPATIL 41
  42. 42. N U A L N T C Y EMC GREGORE’S THEORYProf. Douglas Mc. Gregore has introduced a fresh dimension in the discussion ontheories relating to motivation. He has classified the prevalent theories into twogroups viz., 1. Traditional or X theory and 2. Modern or y theory.Traditional or X theory. It completely excludes workers from the process of managerial decision makingthe theory stress that would here only when forced to do so through ruthlessexercise of managerial authority over them through constant rebuking scoldingreprimanding. Decisions whether right or wrong have to be made by managers only,the only rule assigned to workers being to mainly incline the decision.Assumptions of X theory 1. Lack of inclination to work. 2. Fear can alone force action. 3. Inbuilt dislike for responsibility 4. Living – off others. 5. Obession with security. 6. Money alone can make the people to work. 7. Labour is only a factor of production. 8. Authority is synonymous with control.Modern theory or Y theoryIt is the exact opposite of x theory, it gives workers a pride of place in the processof management. It emphasis fuel and active cooperation, between workers andmanagement to accomplish the enterprise objectives as per theory if workers areproperly maturated, they would willingly accept responsibility and show the sense ofcreativity and imagination in their work performance. It can be said to be positiveand optimistic outlook.Assumptions of Y theory 1. Work is reward in itself 2. Inherent sense of responsibility 3. Recongnition. 4. Sense of security. 5. Financial reward is not the only inspiration. 6. Decision – making ability is not the monopoly 7. Democratically inclined BSPATIL 42
  43. 43. GROUP DYNAMICS Essentially dynamics is a branch of physics which means any matter inmotion. It also means a moral force that produce activity or change. Group dynamicsmeans the action of a group engaged in a common endeavor. The world dynamicscomes from the Greek work meaning force. The phrase Group Dynamics thus meansa study of cohesive and disruptive force operating within a group. The importance of group dynamic to a manager lies in the fact that manypeople tent to behave differently as individual and member of a group. The managermust thus study them both as individual and as group, as these are two interrelatedelements of a motivational situation. The group dynamic will be structured aroundthe three key element such as basic element of group behaviour, group cohesivenessand the group structure. The three basic elements which generally of use in understanding thebehavior of a group are activities, interactions and sentiments. Group cohesivenessrefers to the degree to which its members are attracted to the group, are motivatedto remain in the group, and mutually influence on another. Highly cohesive groupsare more likely to conform to group pressures than are members of low-cohesivegroups. Group structure if meant that the nature and characteristics of theinterrelationships among the members of a group and the roles they play in it.THE EXPECTANCY THEORY OF MOTIVATION – VICTOR H. VROOM People will be motivated to do things to reach a goal if they believe in theworth of that goal and if they can see that what they do will help them in achieve it. Vroom makes the point that motivate is a product of the anticipated worththat an individual places on a goal and the chances the or she sees of achieving thatgoal. He states that: FORCE = VALENCE * EXPECTANCY Force = Strength of the person motivation. Valence = Strength of an individual preference for an outcome. Expectancy = Probability that a particular action will lead to a desired outcomes.Basic concepts of the theory are : 1. First and second level outcomes. 2. Instrumentality 3. Expectancy 4. Motivation.Motivation is the multiplicative function of the valence for each first level outcome (Vi)and the believed expectancy (E) that a given effort will be followed by a particularfirst level outcome.Merits of Vrooms Theory are: BSPATIL 43
  44. 44. 1. It recognizes the importance of various individual needs and motivations. 2. It fits the concept of harmony of objectives 3. It is completely consistent with the system of management by objectives.Demerits of Vrooms Theory are 1. Perception of value vary among individuals at different times and in various places. 2. Difficulty to apply the practice.THE PORTER AND LAWLER MODELLyman W Porter and Edward Lawler III derived a substantially more complete modelof motivation.The strength of motivation and energy exected = value of reward + amount ofenergy required + probability of receiving reward.Motivation is an extremely significant subject for managers get work done throughothers. Important characteristics of motivation are individual differ in theirmotivation, individuals are unaware of motivation sometimes, motivation maychange and vary, motivation is a complex one. Maslow, Herzberg, Mc Gregore, VRoom and Porter and Lawler are some the important writers on motivation. BSPATIL 44
  45. 45. LESSON – 6 COMMUNICATIONThe word communication originates from the latin word “communis” denotingcommon. It involves imparting a common idea or understanding and covers any typeof behavior resulting in an exchange of facts, ideas, opinions, or emotions by two ormore persons.Management tasks of planning, directing, coordinating and motivation can be carriedout by the process of receiving issuing recording and interpreting.The information of facts and figures related to the varied aspects of businessactivities necessarily implies transmission of information intended to convey the ideaof what is desired or required to be done. This would necessitate determination ofinformation to link all the leavels and enable the concerned officers and operative toact upon such information. This process of transmitting information as betweendifferent levels of authority and among the officers at the same level is calledcommunication. - Louise AllenCHARACTERISTICS OF COMMUNICATION 1. Giving information on matters regarding things done or to be done. 2. Receiving information on matters of actins expedited or yet to be expedted 3. Creating under standing in others about their responsibility and position and prospects of a situation concerning then. 4. Making others listen attentively to the facts, figures, views, opinions under transmissions. 5. Identifying the common intentions and interest by interaction of views through channels of commutations.IMPORTANCE OF COMMUNICATIONS Communication is described as one of the crucial fouls of management. It helps in handling the major managerial tasks of planning direction coordination motivating and controlling. It enables the top management. To formulate the comprehensive plans and policies on scientific basis. To put the policies and decisions into action results in accurate and efficient performance. Helps the management to remain informed to the problems difficulties, grievances of personnel. They arise mainly due to communication gap. It is essential for coordination which is the essence of management. It brings about mutual understanding between the officers and personnels at all levels and fosters the sprit of cooperation. BSPATIL 45
  46. 46. It helps in securing largest possible participation or consumption indecision making, planning and general administration. This will give democratic character to managerial process and strengthen the moral of the staff.ELEMENTS OF COMMUNICATION Communicator or sender or issuer. Communicate or rece4iver or addressee Message – orders reports Communication channel. Response – reply reaction.ESSENTIALS OR PRINCIPLES OF GOOD COMMUNICATION 1. Principle of clarity - It must give clear message n simple words and easily understandable form. 2. Principle of attention - 3. Principle of adequacy - It should be consistent with plans, policies program and objective of the enterprise. 4. Principle of adequacy - It must be a complete one. 5. Principle of time - It should be give at proper time. 6. Principle of integration - It should ensure cooperation at all levels. 7. Principle of informality 8. Principle of feed back- Communication must be a two way traffic message polices, programs, direction, opinions etc are communicated downwardGrievances, complaints and suggestions etc are communicated upward.TYPES OF COMMUNICATION On the basis of nature of passing information - Formal communication - Informal communication On the basis of direction i.e. flow of message : On the basis of mode of operation - Oral communication - Written communication - Gesture communication Each business house is concerned with two types of communication, external and internal. Externally, it has to communicate with the other business houses, banks, government officers. The press the customers and the general public Internal BSPATIL 46
  47. 47. communication consists in transmitting information with in the organization. Here we discuss about internal communication. Internal communication may again the be f two types. 1. Formal or official 2. InformalFormal communication flows along prescribed channel which all members desires ofcommunicating with one another are obliged to follow. Formally a clerk in any of thesections cannot directly communicate with the managing director.He must talk to his supervisor who wil pass on the passage to departmentalmanagers, from where it will go to the managing director. Formal communicationmay more vertically or horizontally.Vertical communication can flow downward or upward. Horizontal communicationflows between employees of equal or comparable status. When a number of peopleirrespective of status sit down and confer with another to arrive at a decisionacceptable to all. It is called consensus. The format for this communication ispredetermined and cannot be altered.In addition to this formal channels of communication, there exists in everyorganization an informal channel, often called a grape vine, that does not arise outof the organizational needs but that is never the less, an integral part of hiscommunication system.DOWNWARD COMMUNICATION As explained earlier communication flows from a superior to a subordinate.The managing director communicating with the departmental heads. A managergiving a directive an assistant manager or supervisor, a foreman instructing a worker.Orders, individual instructions policies, a statement job sheets, circular etc fall underdownward communication. It is eminently suited to an organization in which the lineof authority runs distinctly downwards with each tank clearly below another t whichit is directly related.Main objectives of downward communication 1. To give specific direction about the job being entrusted to a subordinate. The decision fallen at managerial levels are transmitted to states in the form of directives so an action may be initiated. 2. To explain the policies and organizational procedures. A clear understanding of policies given the lower state. A wider perspective so that they can grasp and relay their role more meaningfully. 3. To appraise the subordinates of their performance: BSPATIL 47
  48. 48. If the performance of the subordinates is objectively assessed and the assessmentcommunicated to him in a considerate tone, it will definitely promote efficiency.Appreciation to good work will raise his morale and strengthen his dedicationpointing out has shortcomings will enable him to over come them. 4. To give information about the rational of the job.i.e. To explain to a subordinate the significance of the job assigned to him and whyhe has been entrusted with it. The importance of the objective of downwardcommunication has only been recently recognized.MEDIA FOR DOWNWARD COMMUNICATIONDownward communication may be both oral and written. Important directives toinitiate action may be communicated through letters policies and procedures may beannounced house organs, manuals, bulletins etc, But the downward follow ofcommunication is dominated by oral means.It is more natural to the foreman to issue oral instructions to his workers.LIMITATION OF DOWNWARD COMMUNICATION 1. Under – Communication and over communicationDownward communication is often made by either under – communication or overcommunication i.e. a superior may either talk to little or too much about a job undercommunication may also involved incomplete instructions, which will inevitably leadto unsatisfactory performance over communication or talking too much, on the otherhand may lead to the leakage of confidential information. 2. Delay :The lines of communication in downward communication being very longtransmitting information to the lowest worker in time – consuming process. By thetime information reaches him it may have lost much of as significance, or it mayhave caused damaging delay. 3. Loss of information :Unless the communication is fully written, it is not likely to be transmitteddownwards in its entirely. A part of it is almost contains to be lost. 4. DistortionIn long lines of communication, information is not only distorted. Exaggeratingmaking under statements giving unconscious taints to facts are a part of humannature. 5. Built – in resistance BSPATIL 48