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Principles and Process of Management
Vision & Mission statements
Central Bank of India
Date of Submission: 15-09-2010 Submitted by
Bhaskar Goswami MBA0510
Deepanjol Sawra MBA1010
Flora Biswas MBA1310
Khrawpyrkhad Rymnong MBA1810
Maidangshree Brahma MBA2210
Rajesh Sohmat MBA2710
MBA 1st Semester
NEHU, Tura Campus- 794002
♦ To transform the customer banking experience into a fruitful and enjoyable
♦ To leverage technology for efficient and effective delivery of all banking
♦ To have bouquet of product and services tailor-made to meet customers’
♦ The pan-India spread of branches across all the state of the country will be
utilized to further the socio economic objective of the Government of India
with emphasis on Financial Inclusion.
To emerge as a strong, vibrant and pro-active Bank/Financial Super Market and
to positively contribute to the emerging needs of the economy through
consistent harmonization of human, financial and technological resources and
effective risk control systems.
Established in 1911, Central Bank of India was the first Indian commercial bank
which was wholly owned and managed by Indians. The establishment of the
Bank was the ultimate realization of the dream of Sir Sorabji Pochkhanawala,
founder of the Bank. Sir Pherozesha Mehta was the first Chairman of a truly
'Swadeshi Bank'. In fact, such was the extent of pride felt by Sir Sorabji
Pochkhanawala that he proclaimed Central Bank of India as the 'property of the
nation and the country's asset'. He also added that 'Central Bank of India lives
on people's faith and regards itself as the people's own
Organization structure denotes the pattern of relationship among the
positions and jobs within an organization. It is the structure of human
relationships or the network of horizontal and vertical dimension designed to
achieve common goals. It is a systematic combination of people, functions and
facilities which may take the form of line, staff, and line and staff.
The structure of an organization is generally shown in the organization
chart. It shows the authority and responsibility relationship between various
positions in the organization. A good organization structure should be dynamic
and capable of changing in accordance with the situation or conditions.
FORMS OF ORGANIZATION STRUCTURE:-
Line organization is the oldest and simplest form of organization. Line
structure is generally found in small business units, although this is the basic
framework of organization in large business units. Under this system, authority
flows vertically from top to bottom. On the other hand, responsibility goes
upwards. Everyone is responsible for his work and is accountable to his boss.
Since authority and responsibility flows in an unbroken straight line, this type of
organization is strictly based on the principle of ‘unity of command’ and ‘scalar
Type of line organizations: There are two kinds of line organizations.
Pure: In pure line organisation all the activities of one level are
the same. They are grouped into departments or division solely
for control and direction.
Departmental: In departmental line organisation, all the
activities of the business are divided into departments. Each
department is a self-sufficient units
Mechanical Engineer Production Engineer Electrical Engineer
Design Engineer Superintendent Powerhouse
Functional organization is a means of putting the specialists in
top positions throughout the organization. They have a limited power
of command. Their functional authority remains confined to
functional guidance of different departments. Under this system the
whole work of management and directions of subordinates are
divided in accordance with the type of work involved.
Superintendent Superintendent Foremen
3.LINE AND STAFF ORGANISATION
A line and staff organization is one that has line manager with
direct, vertical relationships between different levels in the
organization in addition to the specialists responsible for advising and
assisting the line managers.
Board of Directors
Foreman machine shop Foreman assembly shop Foreman receiving and shipping
operators operators operators
Project organization is a temporary structure designed to
accomplish a specific task or project with the help of specialists
drawn from different functional departments within the organization.
Is a permanent organization structure designed to accomplish specific
projects by using teams of specialist drawn from different functional
departments within the organization.
Is a group of two or more appointed, nominated or elected persons
to consider, discuss, decide, recommend or report on some issue or
matter assigned to it.
The organizational structure of Central Bank of India in India level is
The Central Bank of India in Tura level follows the line
organizational structure as follows:
Peon & guard
Finding and Analysis at Tura Level:
In the Branch level of Central Bank of India in Tura level the pure line structure
is followed. The head of the branch is the Branch Manager who is a Scale II
officer. He has the duty to maintain the branch and manage the other
hierarchical employees under him. Then comes the Assistant Manager who
manages the operations and loans facilities. Thereafter follows the Head
Cashier and then the Computer Terminal Officer (CTO) who is responsible for
the operations of Networking and Management of the computer systems. After
this follows the Head Peon who is responsible for receiving and dispatch of
documents and letters. Then the Security Guard and the Peon who fall in the
last hierarchical position of the organization.
Direction means issuance of orders and leading and motivating subordinates as
they go about executing orders. According to Haiman “Directing consists of the
process and techniques utilized in issuing instructions and making certain that
operation are carried on as originally planned.
Requirements of Effective direction:
Some effective principles of effective direction may be outlined as follows;
Harmony of objectives.
Unity of command.
Thus direction is a vital managerial function. Without it the planning, organizing
and staffing functions will go useless .Still the manager must ensure proper
proclamation of orders and be ready to motivate employees.
Direction system in Central Bank of India:
In Central Bank of India, the higher level managers have the power and
authority in directing the lower level employees. Further upper level managers
have been empowered upto certain limits of money power which they can use
for the proper functioning and development of their concerned branches. As of
today, the Zonal offices can take decisions for maintenance function and
development up-to Rs 5 Crores, the Regional offices can take decisions up-to Rs
2.5 Crores and the Branch office Scale II officer can take decide expenses for
maintenance and development and functioning up-to Rs 1 Crore.
Communication is a social process which means exchange of ideas, facts,
opinions, information and understanding between two or more persons. It may
be defined as the transfer of information from a sender to a receiver, with the
information being understood by the receiver. It can be said that the purpose
of communication are:
To provide the information and understanding, necessary for group
effort (i.e. the skill to work).
To provide the attitudes necessary for motivation, co-operation and job
satisfaction (i.e. the will do work).
Thought Encoding Reception Decoding Understanding
COMMUNICATION FLOW IN ORGANIZATION
In an effective organization, communication flows in various directions. The
different kinds of information flows are as follows.
a) Upward-downward communication
Communication flows both from people at higher levels to those
at lower levels in the organizational hierarchy and from subordinates to
superiors and continues up the organizational hierarchy.
b) Horizontal communication
Communication includes the flow of information among the
people on same or similar organizational levels.
c) Diagonal/crosswise communication
Communication flow among the persons at different level who have no
direct reporting relationship .This kind of information is used speed
information flow, to improve understanding and to coordinate efforts for
the achievement of organizational objectives.
Diagram for flow of communication
D E F G
a) Upward downward communication :- A-B,A-C,B-D,B-E,C-F,C-G
b) Horizontal communication:- B-C,D-E,F-G
c) Diagonal/Crosswise communication:- F-B,D-C
Communication flow in Central Bank of India in Tura level
The communication system followed in Central Bank of India is Upward-
Downward communication. For example; suppose the Head Cashier of any
branch wants to communicate with the Regional Office, and then he/she can
communicate the same via the Branch Manager only. Similarly if the Corporate
Office wants to communicate to all the Branch offices of the organization, then
it has to communicate the information via the Zonal offices, after that they will
communicate with the Regional offices and then they will communicate the
same information to all the Branch offices. The other way employees also have
the right to directly communicate with their department or branch head
regarding any problems or needs.
Motivation can be defined as an inner urge or feeling which drives a person
towards achievement of a set of goals. It is the most important factor for the
performance of an individual.
In management circle probably, the most popular explanations of motivation
are based on the need of the individual .In short, all people have needs that
they want satisfied. Some are primary needs such as those for food, shelter,
sleep needs that deal with physical aspects of behavior. Secondary needs are
psychological needs which are learned primarily through experience. This
needs vary significantly by culture and by individuals. Secondary needs consist
of internal states such as the degree for power, achievement and love.
Several theorists including Abraham Maslow, Fredrick Herzberg, David
McCelland, Clayton Alderfer and Victor Vroom have provided theories to
explain need such as source of explanation.
Abraham Maslow's hierarchy of needs theory
HIGHER LEVEL NEEDS TO SATISFY,OFFER:
Self-actualization needs Creative and challenging work
Participation in decision making
Job flexibility and autonomy
Esteem Needs Responsibility of an important job
Promotion to higher status job
Praise and recognition from boss
LOWER LEVEL NEEDS TO SATISFY ,OFFER:
Social Needs Friendly coworkers
Interaction with customers
Safety Needs Safe working conditions
Base compensation and benefits
Physiological Needs Rest and refreshment breaks
Physical comfort on the job
Reasonable work hours
HERZBERG’S TWO FACTOR THEORY
Hygiene or Maintenance factors Motivators or Satisfiers
Job Security Recognition
Working conditions Work itself
Organizational policies Growth opportunities
Quality of supervision Responsibility
ALDERFER’S ERG THEORY
· Existence needs are desires for physiological and material well being.
· Relatedness needs are for satisfying interpersonal relationships.
· Growth needs are desires for continued psychological growth and
Mc Celland’s acquired needs Theory
Need for achievement is the drive to excel.
Need for power for is the desire to cause others to behave in a way that
they would not have behaved in a way that they would not have
Need for affiliation is the desire for friendly, close interpersonal
relationship and conflict avoidance.
Motivation practice in Central Bank of India
In the case of Central Bank of India which is a Public Sector Undertaking(PSU)
by the Government of India and is functioning in India since 1911, with 3563
Branches and 34826 employees, motivation has played an exceptional role for
this organization. Out of the total number of employees about half of them are
lowly educated and many lower level managers might be non-professionals.
However while moving towards the factor of motivation, these large number of
Indian masses who are just surviving with minimum needs, getting any kind of
a job in a PSU like Central Bank of India is itself a motivating factor for them.
The lower level employees give their time and energy to complete their duties
in whatever post may be. As we rise towards middle and higher level managers,
definitely they have the caliber but most of all what drives them is to out-shine,
out-perform and live a standard life. With the implementation of the Sixth pay
Commission in India in 2008, the salaries of the employees in public sector has
been raised which is a very motivating factor. There is always a matter of job
security among employees which is very secure while working in Central Bank
of India. Apart from these every employee gets benefits like holdays, pension,
perks and so on facilities.
In the branch level the Branch Managers motivate the lower level employees in
their branches. They will have to allow for leaves, give incentives and seminars
and get trained the lower level employees according to their needs.
Controlling consists of verifying whether everything occurs in conformities
with the plans adopted, instructions issued and principles established.
Controlling ensures that there is effective and efficient utilization of
organizational resources so as to achieve the planned goals. Controlling
measures the deviation of actual performance from the standard performance,
discovers the causes of such deviations and helps in taking corrective actions.
According to Brech, “Controlling is a systematic exercise which is called as a
process of checking actual performance against the standards or plans with a
view to ensure adequate progress and also recording such experience as is
gained as a contribution to possible future needs.”
Controlling has got two basic purposes
¨ It facilitates co-ordination.
¨ It helps in planning.
Features of Controlling Function:
Controlling is an end function- A function which comes once the
performances are made in conformities with plans.
Controlling is a pervasive function- which means it is performed by
managers at all levels and in all type of concerns.
Controlling is forward looking- because effective control is not possible
without past being controlled. Controlling always looks to future so that
follow-up can be made whenever required.
Controlling is a dynamic process- since controlling requires taking
reviewable method; changes have to be made wherever possible.
Controlling is related with planning- Planning and Controlling are two
inseparable functions of management. Without planning, controlling is a
meaningless exercise and without controlling, planning is useless. Planning
presupposes controlling and controlling succeeds planning.
Basic Control Techniques
The basic control techniques involve three steps:-
a) Establishment of Standards:
The first step in the control process logically would be to establish plans.
However, since plans vary in detail and complexity standards are simply criteria of
performance. Standards should reflect the various positions in an organization
b) Measurement of Performance:
Although such measurement is not always practicable the measurement of
performance against standards should ideally be done on a forward-looking basis
so that deviations may be detected in advance of their occurrence and avoided by
appropriate actions. If standards are appropriately drawn and if means are available
for determining exactly what sub-ordinates are doing, appraisal of actual or
expected performance is fairly easy.
c) Correction of Deviation:
Correction of deviations is the point at which control can be seen as a part of the
whole system of management and can be related to the other managerial functions.
Managers may correct deviations by redrawing their plans or by modifying their
goals or by exercising their organizing function through reassignment or
clarification of duties.
Findings and Analyses in Controlling at Tura level:
Controlling as seen from the Branch manager’s point of view, he has duty to
justify the goal and targets assigned to him in the office. The following measures
are taken by the branch manager in Tura level while controlling the employees.
· For absenteeism; it is very common problem happening in any
organization. Whenever any employee is absent over his/her casual leave
and goes absent without permission which hampers the proper functioning
of the branch for that reason some amounts are deducted from their
· For underperformance; now a day’s almost all employees are recruited
on fair and merit basis. However, due to any reason whenever the
employees are unable to perform their tasks up to the standard, the branch
manager enquires the matter personally and gives help by his own hands. If
more is required, they also sent for training and development programs.
· Breach of rules and regulations; it is a universal affair for people of
any organization to behave dynamically and so employees often may find
ways and means to break some rules and regulations like coming late to
office, smoking in office premises or other misconducts. The branch
manager has every right to speak face to face with these kinds of
employees and give warning on repeated mistakes. If an employee makes a
bad track record, his/her chances of getting promotion will be minimized.
Overall all managers have to attain leadership and motivational seminars to
keep self and other employee motivated.
· Tripathi P.C, Reddy P.N, “Principles of management”, 4th edition, Chapter
· Cannice Heinz Weihrich, Mark V, Koontz Harold, “Management A global
and entreprenurial perspective”, 12th edition, Chapter 17.
· Nolakha R.L, ”Principles of Management”, 2nd Edition, Chapter 13.
· Bose D.Chandra,”Principles of Management and Administration”, 2nd
Edition, Chapter 9.
· Interview of the Branch Manager, Central Bank of India, Tura
Branch on 8th September 2010.