Management Principles and Practices.ppt.pptx

MANAGEMENT PRINCIPLES AND
PRACTICES

Management – definition
• A manager’s task is to solve problems innovatively, and management
is thus “the art of getting things done through the efforts of other
people.”
• The principles of management, get things done through others
individually, in groups.

• Management is the accomplishment of results through the efforts of other people.
(Lawrence. A. Appley).
• Management is the art of getting things done through and with the people in formally
organized groups. (Koontz. H).
• Management is a process of planning, organising, actuating and controlling to
determine and accomplish the objectives by the use of people and resources. (Terry
G)
• Management is the process by which managers create, direct, maintain and operate
purposive organisations through systematic, coordinated, cooperative human effort.
(Mc Fariand)
• Henri Fayol (1841–1925) stated: "to manage is to forecast and to plan, to organise, to
command, to co-ordinate and to control"

Nature of Management
Management is related to regulating human and physical resources in order to achieve organisational goals.
The nature of management can be highlighted as:
• Management is Goal-Oriented
• Management integrates Human, Physical and Financial Resources
• Management is Continuous
• Management is all Pervasive
• Management is a Group Activity
• Principles are Dynamic in Nature
• Principles are Relative, not absolute
• Management is a Science, Art and Profession
• Management is Decision-Making

Management FunctionS
• As a social process - responsible for economic and fulfilling desired request of an
organisation.

FunctionS
• Planning
• Organising
• Staffing
• Directing
• Controlling

Importance of ManagemenT
• Effective Utilisation of Resources
• Development of Resources
• To Incorporate Innovations
• Integrating Various Interest Groups
• Stability in the Society

1. Optimum utilisation of resources:
A good manager secures maximum results, in terms of production, sales, profits and
employees satisfaction with maximum inputs, in terms of physical resources and manpower
efforts. Thus, management results in optimum utilisation of resources.
2. Leadership and motivation:
Organisational goals cannot be achieved by using force. Management creates
willingness and motivates workers to work towards the achievement of pre-determined
organisational objectives. Thus, management leads and motivates employees in the right
direction.
3. Initiative and innovation:
Management is a group activity. A good manager works with a common consensus
and creates an environment in which everyone get as an opportunity to express his/her
views. This gives an opportunity to subordinates to come forward with innovative ideas.

4. Minimizes wastages:
Along with ensuring judicious use of resources, a good management also aims at
cutting down wastage, both human as well as non-human management plans, organises,
direct and controls the activities of the organisation and thereby helps in controlling wastage.
5. Industrial peace:
Management helps to develop a healthy environment within the organisation by
promoting a two-way communication between superiors and subordinates. This develops
cordial relations between them and promotes industrial peace and harmony.
6. Builds competitive strength:
In today’s competitive environment quality of performance determinants the
profitability of the organisation. Sound management enables the enterprise to achieve higher
levels of productivity and profitability , which in turn build competitive strength.

7. Improves standard of living:
A sound management helps to improve standard of living of both- the workers and
consumers by improving its productivity and profitability. Due to increased profitability, workers
get higher wages and consumers get better quality products at lower prices.
8. Growth, expansion and diversification:
In modern commercial fields, growth and expansion are necessary for making an
enterprise stable, profit-making and economically viable. A sound management helps
organisation to grow, expand and diversify and make it a going concern.
9. Social consciousness:
Business is a part of society. Thus, a sound management shoulders social responsibilities
of business and contributes towards the welfare of different segments of the society, viz.,
consumers, workers, investors, shareholders, government and the society at large.

Levels of ManagemenT
With its nature and activities involved in the levels of management can be classified in
three broad categories:
 Top level / Administrative level
 Middle level / Executor level
 Low level / Supervisory / Operative / First-line managers
Different levels has different work area and functions.

The role of managers at all the three levels ARE discussed
below

Development of management thought:
Management has always existed in some form or the other, probably as early as the
beginning of human civilisation.
The pattern of management has been undergoing change with the varying social
and technological factors.
Management has been growing with the development of social, economic, political
and scientific institutions.
The management thought has passed through various stages to reach its present
level.
So, for the purpose of study, it is divided into three stages, each covering different
period and ideology of the contributions.

Schools of Management Thought
There are main three approaches as prescribed by Donnelly, Gibson
and Ivancevich which offered management thought as:
The classical approach
The behavioural approach
The management approach

Approaches in Management Thought
I. The classical theory of management:
The systematic study of management as a separate field of activity started
only during the second half of the 19th century even though there are evidences of
the application of managerial techniques in handling different affairs. It was only in
the second half of 18th century that James Watt Jr., Boulton, Robert Owen and
Charles Babbage gave serious thought to problems of management. The period
before F.W. Taylor is also known as Pre-Taylor period. Taylor’s theory focused on
ways to increase the efficiency of employees by moulding their thought and
scientific management.

Max Webber (1864-1920) (Bureaucratic Model):
Max Webber, a German Sociologist, was a teacher at Berlin University. He
was chief exponent if the Bureaucratic model. According to him, the recognition and
exercise of authority is the fundamental question. He identified three types of
authority structures i.e., chrismatic, traditional and bureaucratic. A chrismatic leader’s
authority is accepted by virtue of some exceptional innate qualities. The chrisma
remains with the leader and it is necessary that the successor too has chrisma. More
often, the authority structure will become one, based on heredity or procedure and
rules. Such an organisation will become a ‘traditional or rational legal’ organisation.
Bureaucratic organisation, in Webber’s views, is the most efficient form of
organisation. It is rational because specific objectives of the organisation are laid
down and organisation is designed to achieve them and it is legal because authority
stemmed from a clearly define set of rules, procedures and roles.

Taylor and scientific management (1856-1915):
Frederick Taylor is often called the “father of scientific management.”
Taylor believed that organizations should study tasks and develop precise
procedures. As an example, in 1898, Taylor calculated how much iron from rail
cars Bethlehem Steel plant workers could be unloading if they were using the
correct movements, tools, and steps. Lastly, he developed an incentive system that
paid workers more money for meeting the new standard. Productivity at Bethlehem
Steel shot up overnight. As a result, many theorists followed Taylor's philosophy
when developing their own principles of management.

Henry Fayol and Process of administrative management (1841-1925):
Henri Fayol, a French mining engineer, developed 14 principles of management
based on his management experiences. These principles provide modern‐day managers
with general guidelines on how a supervisor should organize her department and manage
her staff. Although later research has created controversy over many of the following
principles, they are still widely used in management theories.
They are:
Division of work, Authority and responsibility, Discipline, Unity of command,
Unity of direction, Subordination of individual interest to general interest, Remuneration
of personnel, Centralization, Scalar chain, Order, Equity, Stability of tenure of personnel,
Initiative, Esprit de corps.

14 pRINCIPLES
1.Division of labour: It led to increased productivity when both managerial and technical works
are carried out.
2. Authority: Fayol explained this as right to give orders and power to correct obedience.
3. Discipline: It makes the employees to respect for rules which govern an organisation.
4. Unity of command: It says the employees get orders from superior.
5. Unity of direction: It explains about grouping of activities in an organisation under single
head and single plan.
6. Subordination of each interest: Individual interest should not be put in front of interests of
an organisation in total.

7. Remuneration: There should be carry compensation which is to be distributed against good
performance.
8. Centralisation: Degree of adopting centralisation or decentralisation as per specific organisation
with managers to retain ultimate responsibility of doing work correctly.
9. Scalar chain: It is an authoritative chain in an organisation which appears from top to bottom and
carried out unity-of-command principle by allowing correct flow of information.
10. Order: To keep human and material resources at right place in right time.
11. Equity: It makes the employees to treat with equally possible rights.
12. Stability of personnel: Established firms carry stable group of employees.
13. Initiative: The employees are free to take initiative anytime.
14. Esprit de corps: The managers uplift sense of unity as an effort by way of harmony of interests.

II. The neo-classical theory of management:
Neo classical theory deals with the human factor. Elton Mayo pioneered the
human relations to improve levels of productivity and satisfaction. Elton Mayo and
Mary Parker Follett are the main contributors of human relations approach. Neo-
classical approach also causes ‘Behavioural Science Management’ which is a
further refinement of human relations approach.

a. Elton Mayo (1880-1949):
He joined the staff of Harvard university. Later on he became professor of Industrial
Research at the Harvard Graduate School of Business studies. Elton Mayo and his associates
greatly contributed to the human relations approach and Mayo is rightly called as father of “Human
Relations Movement”.
Mayo was of the view that cause of increase in productivity of the workers is not a single
factor changing hours of work and working conditions but a combination of several other factors
such as
1. Less restrictive methods of supervision 2. Giving autonomy to workers 3. Allowing the
formation of small cohesive sub groups of the workers 4. Creating conditions which encourage and
support the growth of these groups and 5. Co-operation between management and workers

b. Mary Parker Follett (1868-1933):
Another thinker associated with human relations movement is Follett. She studied
political science and economics at Harvard and Cambridge.
She found that managers were also facing some problems as faced by public
administrators. She favoured participation of the workers in the decision making process by
establishment clear cut channels of communication. She argued that authority and order in an
organization should be de-personalised.
She favoured professionalization of management. She advocated that integrated not
domination should be followed for removing conflicts among policies.
She used the tool of psychology to answer various questions. Even though her
approach was different them those of other thinkers on human relations but she has a
reputation as a pioneer of human relations approach.

c. Chester I. Bernard (1886-1961):
He was the president of New Jerray Bell Telephone Company. In his writings include
The functions of Executive (1938), Organisation and Management (1948). His writings had
important impact on human organization.
In his organization theory he adopted a sociological approach and in dealing with the
functions of executives, he emphasised the importance of leadership and communication.
He divided the functions of executives into three categories:
i. Providing a system of communication
ii. Securing effects and
iii. Formulating and defining purpose

III. The modern management theories:
Under modern management thought, streams of thinking have been noticed since
1960. The modern organizational theory is regarded as recent development in management
theory.
They represent integrative approach to management. There is no one best way of
doing things under all conditions. Methods and techniques which are highly effective in one
situation may not work in other situations.
Situation plays an important role in application of management function. Functions
are universal but their application is situational. Management takes a situational approach.

a. Quantitative approach:
Mathematics has made in roads into all disciplines. It has been universally
recognised as an important tool of analysis and a language for precise expression of concept
and relationship.
Among the mathematical theorists, operations researchers call themselves
“management scientists”. They thought that planning, organising or managing or decision
making is a logical process.
It is exhibiting/ expressing in mathematical symbols and relationships. With the help
of models, “problems can be expressed in terms of basic relationships, and where a given
goal is sought, the model can often be expressed in terms of suggesting a decision as to how
the best thing can be done”.

This school they are addicting the scientific management which was implemented
by F.W. Taylor and the people are contributed to this is Gilbreth, Grannt, Joel Dean,
Newmann and Hicks Features: The approach has following features:
1. Management is concerned with problem solving and must use mathematical
tools to solve them.
2. Mathematical models can be developed by quantifying various variables of the
problems.
3. Mathematical symbols can be used to describe managerial problems.
4. Mathematical tools, operations research, simulation and model building are
used to find out solutions to managerial problem.

b. System approach:
The systems approach looks upon the management as a system as an ‘organised
whole’ made up of sub-systems integrated into a unit or orderly totality. The attention must
be given to the overall effectiveness of the system rather than the effectiveness of any one
subsystem in isolation. According to traditional approach every function of management
was viewed separately but in systems approach the whole organization is viewed as a
system.
Features:
1. An organization consists of many sub-systems.
2. All the sub-systems are mutually related to each other.
3. The sub-parts should be studied in their inter-relationship rather than in isolation from
each other.
4. The organization maintaining the boundaries internally and externally.
5. The organization is responsive to environmental.

c. Contingent approach:
This approach was developed by J.W. Lorsch and P.R. Lawrence in 1970 who
were critical of other approaches pre supporting ‘one best way to manage’.
Management problems are different under different situations and need to be
tackled as per the demand of the situation.
This approach emphasizes the fact that what managers do in practice depends
upon a give set of circumstances (a contingency and situation).
This approach not only takes into account only given situation but also the
influence of given solution on behaviour pattern of an enterprise changes in organization
have to be made to face the contingencies that crop up from time to time.

Features:
1. Management is entirely situational.
2. Management policies and procedures should respond to environmental
conditions.
3. Manager should understand that there is no one best way of managing.
They should not treat management principles and techniques as universal.

1. The Classical School
It is found that classical school normally cover two domains:
1. lower-level management analysis.
2. Comprehensive analysis of management.
• Scientific Management
It has been identified that management science school will possess managers
possessing scientific aspects of getting problems solved which relates to making
decisions. Such mechanism comes out to improve productivity by way of
efficient use of physical and human resources which results from contribution of
five people such as:
• 1. Frederick W. Taylor
• 2. Frank and Lillian Gilbreth
• 3. Henry Gantt
• 4. Harrington Emerson MAnagement analysis.

Administrative Theory
• It is found that scientific management focused on the productivity of individual
workers at the same time, the administrative theory focused on total organisation.
The major contributors of such theory are:
1. Henry Fayol
2. Lyndall Urwick
3. Chester Barnard
4. Alvin Brown
5. Henry Dennison
6. Oliver Sheldon
7. Max Weber

II. Behavioural School
• Human Relations Movement
Elton Mayo details on worker productivity known as Hawthorne studies during year
1924 at Western Electric Company.
the treatment of individual and social processes for changing the worker nature and
behaviour. The impact is that the management is able to locate importance of worker's
needs by finding and social satisfaction.
Further the contributors Abraham Maslow and Douglas McGregor helped in with the
advance human relations movement.

Behavioural Science Approach
Organisational behaviour accepts that the behaviour is more complicated as compared
to human relations who led to start of systematic research which draws attention on
psychology, sociology, anthropology, economics and medicine.

III. The Management Science
School
It is compared that management science is similar to scientific management having certain
characteristics features like:
Managerial decisions: Basically scientific management relates to production work and
efficacy of both man and machine, whereas management science shows success from
planning and correct direction.
Mathematical models: Mathematical model lowers managerial decision to mathematical
form while decision making process simulates and appears earlier than real decision.
Computer applications: With the presence of computers, there exists an emergency of
management science as computer serves the backbone of science.
Evaluation criteria: Evaluation of model is done on basis of correct criteria.

Integrating the Two Approaches Early during 25 years, the attempts have been
made to get integration of various approaches to management.
These are:
1. Systems approach
2. Contingency approach

Ouchi’s Theory Z Management
• The success of Japanese companies made the management writers to examine
about certain Japanese organisations. It was catered by Ouchi's Theory Z. Ouchi
differentiated between the American and Japanese on seven aspects:
• Length of employment
• Mode of decision making
• Locations of responsibility
• Speed of evaluation and promotion
• Mechanism of control
• Specialization of career path
• Nature of concern of the employee

Developing an Excellent Manager
• Communicate clearly
• Listen
• Make decisions
• Show trust in your employees
• Set a good example
• Protect the team

essential skills of Managers
• Technical skills – Pertaining to knowledge and proficiency in activities involving
methods and procedures;
• Human skills – Ability to work effectively with other persons and to build up
cooperative group relations to accomplish organizational objectives;
• Conceptual skills – Ability to recognize significant elements in a situation; and to
understand the relationship among those elements; and
• Design skills – Ability to solve problems in ways that will benefit the enterprise.

CROSS CULTURAL ISSUES IN MANAGEMENT
1. Different Communication Styles
2. Different Attitudes Toward Conflict
3. Different Approaches to Completing Tasks
4. Different Decision-Making Styles
5. Different Attitudes Toward Disclosure
6. Different Approaches to Knowing

What are the cultural issues in business?
• Personal Space Expectations. Cultural differences in business include varying
expectations about personal space and physical contact.
• High and Low Context. Different cultures communicate through various levels of
context.
• Differing Meanings of Cues.
• The Importance of Relationships.
• Cultivate Cultural Understanding.

Environment
Environment can be defined as a sum total of all the living and non-living
elements and their effects that influence human life.
The circumstances, objects, or conditions by which one is surrounded.
Definition of Business Environment is sum or collection of all internal and
external factors such as employees, customers needs and expectations, supply and
demand, management, clients, suppliers, owners, activities by government,
innovation in technology, social trends, market trends, economic changes, etc.

TYPES OF ENVIRONMENT
1. Internal Environment
Internal environment is a component of the business environment, which is
composed of various elements present inside the organization, that can affect or
can be affected with, the choices, activities and decisions of the organization.
2. External Environment
External Environment refers to the part of the business environment which
comprises all the outside elements or forces that affect the business operations. As
a business cannot survive in isolation, it has to act or react effectively to every
happening, just to keep the business going.

Factors Influencing Internal Environment

• An external environment is composed of all the outside factors or
influences that impact the operation of business. The business must
act or react to keep up its flow of operations. The external
environment can be broken down into two types: the micro
environment and the macro environment.
• https://www.indeed.com/career-advice/career-development/external-
environment-factors

Types of External Environment
• Micro Environment
Micro environment, as its name suggests, covers a very limited area and
consists of all those components which can have a direct impact on the
company’s operations. It indicates the immediate ambit of the organization, which
can continuously influence or be influenced by the choices and decisions.
• Macro Environment
The macro-environment covers general factors, over which the
organization has no control. It refers to the portion of the external environment
which is purely external to the business entity.

• Customer: Customers are the persons or organizations who pay money, for buying
the company’s product or services.
• Suppliers: A supplier can be a person or a firm that supplies raw materials,
equipment, tools and services to the organization. The suppliers can affect the
company’s cost structure with their bargaining power.
• Market: The place where the business operates, is called the market. Price
sensitivity, market maturity, demand and supply forces, etc. can influence the
business.
• Competitors: Competitors are rival organizations, which can be market leaders or
followers. These are the firms that compete with the business entity for market
share, resources, etc.

• Intermediaries: Intermediaries can be any party who serves as a bridge
between the manufacturer and customer, such as departmental stores, online
stores, retailers, etc.
• Organization: It covers the members of the organization such as shareholders,
Board of Directors and employees, that has the capability of influencing the
business.
• Media: Media is also one of the important elements these days which can
make or break an organization. A positive public image is very important for
increasing the customer base, while one negative comment can ruin the
reputation of the company. Media also helps the company in promoting the
company’s products and services.

• Demographic Environment: Demography indicates the characteristics of
the population such as race, age, income, education, employment status,
gender, etc. in a specific geographical area. The factors that can influence
the business are sex ratio, educational attainment, geographic shifts in
population, growth rate, ethnic mix, income distribution, etc.
• Technological Environment: Nowadays, technology is playing a key role in
changing the lifestyle of human beings, by changing how they travel,
communicate or do business. It can be an opportunity for a business firm if it
can take advantage of the latest technological changes, or else it can be a
threat. The factors can be emerging technologies, Research and
Development, technological advancement, reduced communication costs,
etc.

• Socio-Cultural Environment: In the socio-cultural environment, societal
values, lifestyle, culture, social concerns, beliefs, traditions, the standard of
literacy, role of women in society, ethical standards, social attitudes, etc.
are some of the major factors that can have an impact over the business
enterprise. These factors are common to all similar organizations.
• Political and Legal Environment: This environment is somewhat common
to all similar firms and somewhat specific to the individual firm. It consists
of three main components, i.e. government, legal and political. Political
stability, law and order situation, level of political morality, the political
ideology of the ruling party, corruption, bureaucracy, extent of government
intervention in the industry, etc.

• Economic Environment: Economic environment encompasses the
overall nature of the economy, in which the business operates and
competes. Several factors in the economic environment can greatly
affect how the business operates; these are economic conditions,
economic system, globalization, economic change, inflation and interest
rates, economic policies such as monetary and fiscal policy, Exim policy,
industrial policy, etc.

Responding to the External Environment:
SWOT Analysis
• Play to Strengths
• Moderate Weaknesses
• Make the Most of Opportunities
• Manage or Eliminate Threats

What is Planning?
• Planning is the most basic of all managerial functions
which involves establishing goals, setting out objectives
and defining the methods by which these goals and
objectives are to be attained. It is, therefore, a rational
approach to achieving pre-selected objectives.
• Planning involves selecting missions and objectives and
the actions to achieve them. An important aspect of
planning is decision making - that is, choosing the right
alternatives for the future course of action.
• Planning bridges the gap between where the organization
stands currently and wishes to be in future. In the
absence of planning, events are left to chance.

Process of Planning
• The process of planning consists of the following steps:
1. Establishing objectives:
The first step in the planning process is to identify the goals of the
organisation. The internal as well as external conditions affecting the
organisation must be thoroughly examined before setting objectives. The
objectives so derived must clearly indicate what is to be achieved, where
action should take place, who is to perform it, how it is to be undertaken and
when is it to be accomplished. In other words, managers must provide clear
guidelines for organisational efforts, so that activities can be kept on the
right track.

2. Developing premises: After setting objectives, it is necessary to outline
planning premises. Premises are assumptions about the environment in which
plans are made and implemented. Thus, assumptions about the likely impact of
important environmental factors such as market demand for goods, cost of raw
materials, technology to be used, population growth, government policy, etc. on
the future plans are made. Plans should be formulated by the management,
keeping the constraints imposed by internal as well as external conditions in
mind.
3. Evaluating alternatives and selection: After establishing the objectives and
planning premises, the alternative courses of action have to be considered. The
pros and cons as well as the consequences of each alternative course of action
must be examined thoroughly before a choice is made.

4. Formulating derivative plans: After selecting the best course of action, the
management has to formulate the secondary plans to support the basic plan.
The plans derived for various departments, units, activities, etc., in a detailed
manner are known as ‘derivative plans’. For example, the basic production plan
requires a number of things such as availability of plant and machinery,
training of employees, provision of adequate finance, etc. To ensure the success
of a basic plan, the derivative plans must indicate the time schedule and
sequence of performing various tasks.
5. Securing cooperation and participation: The successful implementation of
a plan depends, to a large extent, on the whole-hearted cooperation of the
employees. In view of this, management should involve operations people in
the planning activities.

6. Providing for follow-up: Plans have to be reviewed continually to
ensure their relevance and effectiveness. In the course of implementing
plans, certain facts may come to light that were not even thought of
earlier. In the light of these changed conditions, plans have to be revised.
Without such a regular follow-up, plans may become out-of-date and
useless. Moreover, such a step ensures the implementation plans along
right lines.

Limitations
• Rigidity
• Costly and time consuming
• Employee resistance
• False sense of security
• Managerial deficiencies
• Planning prevents innovation
External Limitations: 1. Difficult to predict
2. Projected too far into the future
3. Environmental turbulence
4. Emergency situations

How To Make a Plan Effective
• Climate
• Top management support
• Participation
• Communication
• Integration
• Monitoring

Ten Commandments of a good plan
1. Should have a clear objective.
2. Should be simple and easy to understand.
3. Should provide for proper analysis and clarification of actions.
4. Should be flexible enough to move in sync with changing trends.
5. Should have a balanced focus.
6. Should be practicable and capable of delivering results.

7. Should allow people—especially those who look after its implementation
– to participate actively and enthusiastically.
8. Should provide for optimum use of resources.
9. Should be sold to everyone and communicated well before it’s being da
implemented.
10. Should allow integration of effort at every level smoothly.

Business Strategy
• Definition: Business strategy can be understood as the course of action
or set of decisions which assist the entrepreneurs in achieving specific
business objectives.
• It is nothing but a master plan that the management of a company
implements to secure a competitive position in the market, carry on its
operations, please customers and achieve the desired ends of the
business.
• A business strategy is a set of competitive moves and actions that a
business uses to attract customers, compete successfully, strengthening
performance, and achieve organisational goals. It outlines how business
should be carried out to reach the desired ends

• In business, it is the long-range sketch of the desired image, direction
and destination of the organisation. It is a scheme of corporate intent and
action, which is carefully planned and flexibly designed with the purpose of:
 Achieving effectiveness,
 Perceiving and utilising opportunities,
 Mobilising resources,
 Securing an advantageous position,
 Meeting challenges and threats,
 Directing efforts and behaviour and
 Gaining command over the situation.

Business strategy equips the top management with an integrated
framework, to discover, analyse and exploit beneficial opportunities, to
sense and meet potential threats, to make optimum use of resources and
strengths, to counterbalance weakness.

Levels Of Business Strategy
• Corporate level strategy: Corporate level strategy is a long-range, action-
oriented, integrated and comprehensive plan formulated by the top
management. It is used to ascertain business lines, expansion and growth,
takeovers and mergers, diversification, integration, new areas for
investment and divestment and so forth.
• Business level strategy: The strategies that relate to a particular business
are known as business-level strategies. It is developed by the general
managers, who convert mission and vision into concrete strategies. It is
like a blueprint of the entire business.
• Functional level strategy: Developed by the first-line managers or
supervisors, functional level strategy involves decision making at the
operational level concerning particular functional areas like marketing,
production, human resource, research and development, finance and so on.

Major Components Of A Business Strategy
1. Business objective
2. Core values
3. SWOT analysis
4. Operational tactics
5. Measurement

Importance Of Business Strategy
A business objective without a strategy is just a dream. It is no less
than a gamble if you enter into the market without a well-planned strategy.
Here are five reasons why a strategy is necessary for your business.
• Planning
• Strengths and Weaknesses
• Efficiency and Effectiveness
• Competitive Advantage
• Control

How to Develop a Business Strategy?
• Identify your objective and your core values.
• Conduct a self-assessment.
• Assign a team.
• Research your market and past success stories.
• Lay out a roadmap to success.
• Stay focused.

Decision making
• Decision making is the process of making choices by identifying a
decision, gathering information, and assessing alternative resolutions.
• “Decision-making involves the selection of a course of action from among
two or more possible alternatives in order to arrive at a solution for a given
problem”.

Programmed decisions are repetitive and routine in nature. This type of
decision or response to a situation is common within the organization and largely
automated. Programmed decisions are generally documented as Procedures,
Policies, or Rules.
Programmed Decisions features are;
 Programmed decisions made using standard operating procedures.
 Deals with frequently occurring situations. (Such as requests for leaves of
absence by employees)
 Much more appropriate for managers to use programmed decisions for similar
and frequent situations.
 In programmed decisions, managers make a real decision only once and the
program itself specifies procedures to follow when similar circumstances arise.
 This leads to the formulation of rules, procedures, and policies.
Programmed decisions

Non-Programmed Decision
• Non-programmed decisions are unique. They are often ill-structured, one-shot
decisions. Traditionally they have been handled by techniques such as judgment,
intuition, and creativity.
• Non-programmed decision features are;
 Situations for Non-programmed decisions are unique, ill-structured.
 Non-programmed decisions are one-shot decisions.
 Handled by techniques such as judgment, intuition, and creativity.
 A logical approach to deal with extraordinary, unexpected, and unique problems.
 Managers take heuristic problem-solving approaches in which logic; common sense
and trial and error are used.

Programmed Decision Non-Programmed Decision
Used for frequent situations of the organization; both internal and external.
Used for unique and ill-structured situations of the organization; both internal and
external.
Mostly Lower level managers are making these decisions. Mostly Upper-level managers are making these decisions.
Follows structured and non-creative patterns. Takes an outside of the box unstructured, logical and creative approach.
Differences between Programmed Decision & Non-
Programmed Decision

Bounded rationality
Bounded rationality is a human decision-making process in which we
attempt to satisfice, rather than optimize. In other words, we seek a decision
that will be good enough, rather than the best possible decision.

• Bounded Rationality in Decision Making
Decisions are choosing between alternatives ( subjected to various
factors). Generally speaking, the decisions made by individuals align with their
goals, objectives, and values. Though rationality is something that people strive
for, their level of knowledge often constraints it. Nevertheless, the rational
decision is possible because the bounded set of criteria on which it is based
corresponds to a closed system of variables. This suggests that one can make
judgments without considering potential outcomes resulting from knowledge
biases.
According to the theory of decision-making, an economic man (Homo
economicus) has all the knowledge. This is because they are aware of all
possible courses of action and the outcomes of each one. They consider all
available options. The economic man’s rationality indicates that their
preferences are exhaustive and transitive and that the options are perfect
substitutes. On the other hand, they make judgments to maximize their utility.

The concept of the bounded rationality model approaches the
decision-making process from a different point of view. It opines that even in
relatively simple problems, one cannot make decisions with a maximum utility
because it is difficult to test all viable options or alternatives. People tend to
differ in their goals, values, and desires as they are all influenced by
environmental factors. They have an impact on a person’s decision-making
process. Individual beliefs that they have chosen the best option may be false
because the person may be unaware of some alternatives that are genuinely
beneficial to them. Or they may believe that some opportunities are
advantageous to them when they are not. As a result, the final decisions may
not always have to be the best decisions.

Problem solving
• Problem solving is the act of defining a problem; determining the cause of
the problem; identifying, prioritizing, and selecting alternatives for a
solution; and implementing a solution.
5 Steps are,
• 1. Precisely Identify Problems
• 2. Collect Information and Plan
• 3. Brainstorm Solutions
• 4. Decide and Implement
• 5. Evaluate

Few key skills to work on
• Emotional intelligence
• Research
• Brainstorming
• Decisiveness
• Resilience

Group problem solving
• Group problem solving is the process of bringing together stakeholders who through
their analytical decision making abilities can influence the outcome of the problem.
The use of groups in problem solving is encouraged as groups tend to evaluate diverse
solutions and action plans.
• The problem-solving process involves thoughts, discussions, actions, and decisions that
occur from the first consideration of a problematic situation to the goal. The problems
that groups face are varied, but some common problems include budgeting funds,
raising funds, planning events, addressing customer or citizen complaints, creating or
adapting products or services to fit needs, supporting members, and raising awareness
about issues or causes.

Elements
• An undesirable situation.
• A desired situation.
• Obstacles between undesirable and desirable situation.

Important Characteristics
• Task difficulty
• Number of possible solutions
• Group member interest in problem
• Group familiarity with problem
• Need for solution acceptance

Group Problem-Solving Process
• Step 1: Define the Problem
• Step 2: Analyze the Problem
• Step 3: Generate Possible Solutions
• Step 4: Evaluate Solutions
• Step 5: Implement and Assess the Solution

Group Decision Making
• Group decisions may involve assimilating a huge amount of information,
exploring many different ideas, and drawing on many strands of
experience.
• Group decision-making is a situation faced when individuals collectively
choose from the alternatives before them.
• According to the idea of synergy, decisions made collectively tend to be
more effective than decisions made by a single individual. Factors that
impact other social group behaviours also affect group decisions.

Advantages
• Synergy is the idea that the whole is greater than the sum of its parts. When a group
makes a decision collectively, its judgment can be keener than that of any of its
members.
• Group members can identify more complete and robust solutions and
recommendations through discussion, questioning, and collaboration. The sharing
of information among group members is another advantage of the group decision-
making process.
• Group decisions take into account a broader scope of information since each group
member may contribute unique information and expertise.
• Sharing information can increase understanding, clarify issues, and facilitate
movement toward a collective decision.

Disadvantages
• Diffusion of Responsibility - results in a lack of accountability for
outcomes ,its easier for members to deny personal responsibility and
blame others for bad decisions
• Lower Efficiency - less efficient than those made by an individual
• Groupthink - is a psychological phenomenon that occurs within a
group of people in which the desire for harmony or conformity results
in an irrational or dysfunctional decision-making outcome

Strengths of Group Decision Making
 Groups generate more complete information and knowledge.
 By aggregating the resources of several individuals, groups bring more input
into the decision process.
 In addition to more input, groups can bring heterogeneity to the decision
process. They offer increased diversity of views.
 A group will almost always outperform even the best individual. So, groups
generate higher quality decisions.
 Finally, groups lead to increase acceptance of solutions. Many decisions fail
after the final choice is made because people don’t accept the solution. Group
members who participated in making a decision are likely to support the
decision and encourage others to accept it enthusiastically.

Weaknesses of Group Decision Making
• Group decisions are time-consuming, and they typically take more
time to reach a solution than making the decision alone.
• Group decisions have conformity pressures in groups. The desire by
group members to be accepted and considered an asset to the group
can result in squashing any overt disagreement.
• Group decision can be dominated by one or a few members. If this
dominated coalition is composed of low and medium ability
members, the group’s overall effectiveness will suffer.
• Finally, group decisions suffer from ambiguous responsibility. In an
individual decision, it’s clear who is accountable for the final outcome.
In a group decision, the responsibility of any single member is
watered down.

Group decision-making techniques
• Types of group decision-making techniques are;
 Brainstorming.
 Nominal Group Technique.
 Electronic Meeting.
 Multi-Voting.
 Delphi Method.
 Dialectic Decision Methods.

Coordination, Leading and Controlling

Coordinating
• Coordination is the function of management.
• Therefore, there is unity of action among the employees, groups, and departments.
• It also brings harmony in carrying out the different tasks and activities to achieve the organization’s
objectives efficiently.
• Coordination is an important aspect of any group effort. When an individual is working, there is no
need for coordination.
• Therefore, we can say that the coordination function is an orderly arrangement of efforts providing
unity of action in pursuance of a common goal.
• In an organization, all the departments must operate a part of a cohesive unit to optimize
performance.
• Coordination implies synchronization of various efforts of different departments to reduce conflict.
• Multiple departments usually perform the work for which an organization exists .

Definition
Coordination is an orderly arrangement of group efforts to provide
unity of action in the pursuit of common goals. Charles Worth defines
Coordination is the integration of several parts into an orderly hole to achieve the
purpose of understanding. Brech defines Coordination is balancing and keeping
together the team by ensuring suitable allocation of tasks to the various members
and seeing that the tasks are performed with the harmony among the members
themselves.
-
Mooney and Reiley

Features of coordination
• Coordination is the integration, unification, synchronization of the efforts of the
departments to provide unity of action for pursuing common goals. A force that binds
all the other functions of management.
• It is relevant for group efforts and not for individual efforts. Coordination involves an
orderly pattern of group efforts. In the case of individual efforts, since the performance
of the individual does not affect the functioning of others, the need for coordination
does not arise.
• It is a continuous and dynamic process. Continuous because it is achieved through the
performance of different functions. Also, it is dynamic since functions can change
according to the stage of work.
• Most organizations have some sort of coordination in place. However, the
management can always make special efforts to improve it.

• Coordination emphasizes the unity of efforts. This involves fixing the time and
manner in which the various functions are performed in the organization. This
allows individuals to integrate with the overall process.
• A higher degree of coordination happens when the degree of integration in the
performance of various functions increases.
• It is the responsibility of every manager in the organization. In fact, this is
integral to the role of a manager because he synchronizes the efforts of his
subordinates with others

Techniques of coordination
1. Chain of Command - an employee should receive orders form one superior only
because dual command is a continuous source of conflict. Management has to exercise
authority to regulate the performance of different departments because clear cut
authority relationship help in reducing conflicts among different departments.
2. Leadership:
Co-ordination becomes possible through leadership as it provides individual
motivation and persuades the group to have an identity of interests and outlook in group
efforts.
3. Committees:
Which helps to promote unity of purpose and uniformity of action among
different departments. while forming the committee utmost care must be taken by the
management, otherwise, the decisions taken by the group may not be effective to
achieve co-ordination in an enterprise.

4. Communication:
Effective communication conveys ideas, opinions or decisions of
managers to subordinate at different levels of the organization and carries back
information, suggestions’ and responses from subordinates. It regulates the flow
of work, co-ordinates the efforts of the subordinates of an enterprise. To be
effective, communication must be as direct as possible so as to minimize the
chances of misinterpretation. To ensure proper co-ordination, various kinds of
communication channels may be used, such as verbal relay of information,
written reports memos or other forms of documents, mechanical devices such as
teletypes, intercommunication system, etc.

5. Voluntarily Coordination:
Self-co-ordination or voluntary co-ordination is possible in a climate of
mutual co-operation, when two or more persons working within the same or
different departments, mutually discuss their problems and arrive at a
coordinated action. This can be easily achieved in any organization, when the
supervisor gives his consent without any hesitation for such a mutual
consultation among subordinates.
6. Sound Planning and Clear-Cut Objectives:
The objectives of the organization and policies must be clearly defined by
the management. A well-conceived plan must clearly define the goals of the
organization so that interdepartmental objectives can be accomplished. Thus to
ensure co-ordination, clear formulation of policies in the field of production,
sales, finance, personnel, etc., must be correlated.

7. Incentives:
Incentives have a tendency to ignite action and bring about co-ordination.
In order to infuse enthusiasm in a worker for greater and better work, incentives
have a distinct and significant role. Financial incentives which include wage,
bonus, salary, etc., and no-financial incentives which include job security of
interest, to achieve co-ordination and to reduce conflicts.

• In 1960, Douglas McGregor formulated Theory X and Theory Y
suggesting two aspects of human behaviour at work, or in other
words, two different views of individuals (employees):
1.one of which is negative, called as Theory X and
2.the other is positive, so called as Theory Y
• According to McGregor, the perception of managers on the nature
of individuals is based on various assumptions.

• Assumptions of Theory X
§ An average employee intrinsically does not like work and tries to escape it
whenever possible.
§ Since the employee does not want to work, he must be persuaded, compelled,
or warned with punishment so as to achieve organizational goals. A close
supervision is required on part of managers. The managers adopt a more
dictatorial style.
§ Many employees rank job security on top, and they have little or no aspiration/
ambition.
§ Employees generally dislike responsibilities.
§ Employees resist change.
§ An average employee needs formal direction.
•

• Assumptions of Theory Y
§ Employees can perceive their job as relaxing and normal. They exercise their physical
and mental efforts in an inherent manner in their jobs.
§ Employees may not require only threat, external control and coercion to work, but
they can use self-direction and self-control if they are dedicated and sincere to achieve
the organizational objectives.
§ If the job is rewarding and satisfying, then it will result in employees’ loyalty and
commitment to organization.
§ An average employee can learn to admit and recognize the responsibility. In fact, he
can even learn to obtain responsibility.
§ The employees have skills and capabilities. Their logical capabilities should be fully
utilized.
§ In other words, the creativity, resourcefulness and innovative potentiality of the
employees can be utilized to solve organizational problems.

• To bring Maslow’s need hierarchy theory of motivation in synchronization with empirical research,
Clayton Alderfer redefined it in his own terms. His rework is called as ERG theory of motivation. He
recategorized Maslow’s hierarchy of needs into three simpler and broader classes of needs:
§ Existence needs- These include need for basic material necessities. In short, it includes an
short, it includes an individual’s physiological and physical safety needs.
§ Relatedness needs- These include the aspiration individual’s have for maintaining significant
maintaining significant interpersonal relationships (be it with family, peers or superiors), getting
public fame and recognition. Maslow’s social needs and external component of esteem needs fall
under this class of need.
§ Growth needs- These include need for self-development and personal growth and advancement.
growth and advancement. Maslow’s self-actualization needs and intrinsic component of esteem
needs fall under this category of need.

• Difference between Maslow Need Hierarchy Theory and Alderfer’s ERG
Theory
§ERG Theory states that at a given point of time, more than one need may be
operational.
§ERG Theory also shows that if the fulfillment of a higher-level need is subdued,
there is an increase in desire for satisfying a lower-level need.
§According to Maslow, an individual remains at a particular need level until that
need is satisfied.
§While according to ERG theory, if a higher-level need aggravates, an individual
may revert to increase the satisfaction of a lower-level need. This is called
frustration-regression aspect of ERG theory.

§While Maslow’s need hierarchy theory is rigid as it assumes that the
needs follow a specific and orderly hierarchy and unless a lower-level
need is satisfied, an individual cannot proceed to the higher-level need;
ERG Theory of motivation is very flexible as he perceived the needs as a
range/variety rather than perceiving them as a hierarchy.
§According to Alderfer, an individual can work on growth needs even if
his existence or relatedness needs remain unsatisfied. Thus, he gives
explanation to the issue of “starving artist” who can struggle for growth
even if he is hungry.

• The expectancy theory was proposed by Victor Vroom of Yale School of
Management in 1964. Vroom stresses and focuses on outcomes, and not on
needs unlike Maslow and Herzberg.
• The theory states that the intensity of a tendency to perform in a particular
manner is dependent on the intensity of an expectation that the performance
will be followed by a definite outcome and on the appeal of the outcome to the
individual.
• The Expectancy theory states that employee’s motivation is an outcome
of:
1.how much an individual wants a reward (Valence),
2.the assessment that the likelihood that the effort will lead to expected
performance (Expectancy) and
3.the belief that the performance will lead to reward (Instrumentality).

• Thus, the expectancy theory concentrates on the following three
relationships:
§Effort-performance relationship: What is the likelihood that the
individual’s effort be recognized in his performance appraisal?
§Performance-reward relationship: It talks about the extent to which
the employee believes that getting a good performance appraisal leads to
organizational rewards.
§Rewards-personal goals relationship: It is all about the attractiveness
or appeal of the potential reward to the individual.

• Advantages of the Expectancy Theory
§It is based on self-interest individual who want to achieve maximum
satisfaction and who wants to minimize dissatisfaction.
§This theory stresses upon the expectations and perception; what is real
and actual is immaterial.
§It emphasizes on rewards or pay-offs.
§It focuses on psychological extravagance where final objective of
individual is to attain maximum pleasure and least pain.

• Limitations of the Expectancy Theory
§The expectancy theory seems to be idealistic because quite a few
individuals perceive high degree correlation between performance and
rewards.
§The application of this theory is limited as reward is not directly
correlated with performance in many organizations. It is related to other
parameters also such as position, effort, responsibility, education, etc.

• Motivation – Three Needs Theory:
• Need for Achievement (nACH): Personal responsibility, Feedback, Moderate risk
• Typical behaviors:
• High: Must win at any cost, must be on top, and receive credit.
• Low: Fears failure, avoids responsibility.
• Need for Power (nPOW): Influence, Competitive
• High: Demands blind loyalty and harmony, does not tolerate disagreement.
• Low: Remains aloof, maintains social distance.
• Need for Affiliation (nAFF): Acceptance and friendship, Cooperative
• High: Desires control of everyone and everything, exaggerates own position and
resources.
• Low: Dependent/subordinate, minimizes own position and resources.

Job enrichment definition
Job enrichment is a strategy used to motivate employees by giving them
increased responsibility and variety in their jobs.
Job enrichment is the process of adding motivators to existing roles in order
to increase satisfaction and productivity for the employee.
What is job enlargement?
• Job enrichment and job enlargement are both methods for increasing employee
satisfaction, motivation, and engagement. However, there is a distinct
difference between the two concepts.

Job enlargement is all about adding additional responsibilities to a
role within the same level. For example, an employee might take on more
planning activities within their role, rather than assigning these tasks to their
manager. Think of it as a form of vertical job expansion. The idea is that, with
added responsibilities and challenges, there’s less time for employees to be bored.
Generally speaking, the difference between job enrichment and job
enlargement is that job enlargement exclusively aims to broaden the range of
responsibilities assigned to an employee’s role. In contrast, job enrichment is
more about adding a variety of motivators to existing jobs.

Benefits of job enrichment
• Job enrichment and job satisfaction
• Decreased employee turnover
• Reduced absenteeism
• Job enrichment and communication
• Succession planning
• Job enrichment and productivity
• Employee empowerment
• Improved organizational structure

Job enrichment strategies
Rotate jobs
Give your employees the opportunity to perform different tasks and use a
variety of skills.
Combine tasks
Another great strategy is combining work activities. This can add extra
layers to an employee’s role and help them feel challenged.
Share employee feedback
A great way to show your employees that you value them is to share
regular feedback with them. Hold regular appraisals and tell your
employees whether or not you think they are performing well.

Conduct employee surveys
Don’t stop at giving feedback; feedback should go two ways. Make sure you
you collect regular opinions from your employees to find out what they like and
like and dislike about their job.
Automate tasks
Conduct an audit of all your internal processes and try to identify any tasks that
tasks that employees are working on that don’t provide much value to the
organization.
Create an incentive program
Finally, if you don’t already have one, consider designing and implementing
implementing an employee recognition program to motivate your employees to
employees to be as productive as possible. This can be a great tool for giving
for giving your employees a sense of accomplishment and motivating them to
them to achieve more.

The definition of job enlargement is adding additional
activities within the same level to an existing role.
What is job enlargement?
Job enlargement is the combining of job tasks across the same
level within a company. Implementing job enlargement widens the
scope of individual team members to include more tasks and
responsibilities.

Advantages of job enlargement
• Increased team member engagement
• Work flexibility
• Positive challenges
• Training opportunities
• Individual growth
• Development of soft skills

Disadvantages of job enlargement
• Possibility of lower morale
• Temporarily slower production
• Job creep
• Increased stress

Different Types of Leadership
Autocratic leadership
A leader who has complete control over his team is called
an autocratic leader. They never bend their beliefs and rules
for anyone. Additionally, their team has no say in the
business decisions. Moreover, the team is expected to follow
the path directed by the leader.
Laissez-Faire leadership
Laissez-Faire is derived from a French word that means
‘allow to do’. “The practice of non-interference in the
affairs of others, especially with reference to individual
conduct or freedom of action,’ defines dictionary.com. In this
type of leadership, team members have the freedom to perform
their job according to their will. They are given the freedom
to bring in their perspective and intelligence in performing
business functions.

Democratic leadership
In this type of leadership, team members and
leaders equally contribute to actualising business
goals. Furthermore, they work together and motivate
each other to achieve their personal goals too. This
type of leadership leads to a positive working
environment.
Bureaucratic leadership
In this type of leadership, leaders strictly
adhere to organisational rules and policies. They make
sure that their team members do the same. Bureaucratic
leaders are often organised and self-motivated.

https://corporatefinanceinstitute.com/resources/management/leadership-styles/
Strategic Leadership
Strategic leadership is when leaders use their skills and
capabilities to help team members and organisation achieve their long-
term goals. Strategic leaders strive to get the best out of people or
situations.
Here are some unique traits of strategic leaders
• They are interested in the well-being of others
• They are open-minded
• They are self-aware
• They are good at interpersonal communication
Transformational Leadership
Transformational leaders inspire others to achieve the
unexpected. They aim to transform and improve team members’ and
organisations’ functions and capabilities by motivating and
encouraging them.

Transactional Leadership
This type of leadership is task-oriented, which means
team members who meet the leader’s expectations will be
rewarded, and others will be punished. It is a prevalent
leadership style based on the action-and-reward concept.
Coach-Style Leadership
This leadership style focuses on identifying and
nurturing a team member’s strengths and weaknesses. A
coaching leader develops strategies that emphasize team
members’ success.
Though this is similar to strategic and democratic
leadership styles, the focus here is more on the
individual.

Qualities of a Good Leader
1. Honesty and Integrity: Leaders value virtuousness and honesty. They have
people who believe in them and their vision.
2. Inspiration: Leaders are self-motivating, and this makes them great
influencers. They are a good inspiration to their followers. They help
others to understand their roles in a bigger context.
3. Communication skills: Leaders possess great communication skills. They
are transparent with their team and share failures and successes with them.
4. Vision: Leaders are visionaries. They have a clear idea of what they
want and how to achieve it. Being good communicators, leaders can share
their vision with the team successfully.
5. Never give-up spirit: Leaders challenge the status quo. Hence, they
never up easily. They also have unique ways to solve a problem.
6. Intuitive: Leadership coach Hortense le Gentil believes that leaders
should rely on intuition for making hard decisions. Especially because
intuition heavily relies on a person’s existing knowledge and life
learnings, which proves to be more useful in complex situations.

7. Empathy: A leader should be an emotional and empathetic fellow because it
will help them in developing a strong bond with their team. Furthermore,
these qualities will help a leader in addressing the problems, complaints,
and aspirations of his team members.
8. Objective: Although empathy is an important quality a leader must imbibe,
getting clouded by emotions while making an important business decision is
not advisable. Hence, a good leader should be objective.
9. Intelligence: A good leader must be intelligent enough to arrive at
business solutions to difficult problems. Furthermore, a leader should be
analytical and should weigh the pros and cons before making a decision. This
quality can be polished with an all-inclusive leadership training program.
10. Open-mindedness and creativity: A good leader is someone who is open to
new ideas, possibilities, and perspectives. Being a good leader means
understanding that there is no right way to do things. Therefore, a good
leader is always ready to listen, observe, and be willing to change. They are
also out-of-the-box thinkers and encourage their teams to do so. If you enrol
for a leadership course, all these things will be a part of the curriculum.

11. Patient: A good leader understands that a business
strategy takes time to develop and bear results.
Additionally, they also believe that ‘continuous
improvement and patient’ leads to success.
12. Flexible: Since leaders understand the concept of
‘continuous improvement, they also know that being
adaptable will lead them to success. Nothing goes as
per plan. Hence, being flexible and intuitive helps a
manager to hold his ground during complex situations.

Committee
• A committee or commission is a body of one or more persons subordinate to a
deliberative assembly. A committee is not itself considered to be a form of
assembly.
• A committee is defined as a group of people performing some aspect of
managerial function. It is referred as a group of people whom a matter is
committed. For Example, Wage committee, tax committee, executive
committee etc.. A committee is sometimes referred as a board, commission,
task force or a team.

Need for the committee
The committees are set up for the following reasons:
1. The committees provide a forum for exchanging ideas among
organisational members.
2. The exchange of ideas among members may generate some suggestions
and recommendations which may be useful for the organisation.
3. There can be proper discussion on present problems and efforts are
made to find solutions.
4. The committees may also be needed in establishing and developing
organisational policies.

Types of committee
1. Formal and Informal Committees:
If a committee is formed as a part of organisation structure and is
delegated some duties and authority, it is a formal committee. An informal
committee may be formed to tackle some problem. A manager may call
some experts to help him in analyzing a problem and suggesting a suitable
solution. The chief executive may call a meeting of departmental heads and
some experts to find out a solution to some problem. In both the cases it is a
case of an informal committee.

2. Advisory Committees:
These are the committees to advice line heads on certain issues.
Line officers may refer some problems or issues to a committee for
advice. The committee will collect information about the problem and
recommend solution for the same. The line officers have the powers to
accept, modify or reject the suggestions of advisory committees. These
committees have no managerial powers and cannot exert their views on
the line executives.

3. Line Committees:
There may be committees with managerial powers. Instead of
giving a work to one person it may be assigned to a number of executives.
The committees having administrative powers are called line or plural
committees. Line committees help in planning company policies and
programmes and organizing efforts at fulfillment of these plans, etc.
These committees also direct and control the activities of employees for
achieving organisational goals.

Advantages
1. Pooling of Opinions:
The members of committees come from different background and areas of
expertise and have different viewpoints and values. When persons with varied abilities sit
together and discuss a problem, various aspects of the case are highlighted and pros and
cons are assessed. The pooled opinion will help in taking a realistic view of the problem.
2. Better Co-Ordination:
Committee form of organisation brings more co-ordination among different
segments of the organisation when representatives of different departments sit together;
they understand and appreciate the difficulties faced by others. This type of frank
discussions help on fixing the targets of different departments and better co-ordination is
achieved through this type of decision making.
3. Balancing of Views:
This type of organisation helps in balancing the views expressed by different
persons. There is a tendency to over emphasize the aspects of one’s own department by
ignoring the inter dependent character of problems of different departments. A
committee helps to bring out an agreed view of the problem by taking into account
divergent views expressed in such meetings.

4. Motivation:
The committees consist of managers as well as subordinates. The views of
subordinates are given recognition and importance. It gives them encouragement and
makes them feel as an integral part of decision making process. Such committees boost
the morale of subordinates and motivate them to improve their performance.
5. Dispersion of Power:
The concentration of power in few persons may lead to misuse of authority and
wrong decisions. By spreading powers among committee members this problem can be
solved.
6. Better Acceptance of Decisions:
The decisions taken by committees are better accepted by subordinates. The
decisions of an individual may be autocratic whereas committees decide in wider
perspective of organisation. Since various shades of people are represented in
committees, these decisions are better accepted.

7. Better Communication:
It is a better form for discussing matters of mutual interest and
reaching certain conclusions. These decisions can be properly
communicated to subordinates through committee members. The
members will transmit correct and authentic information and also convey
the background of taking those decisions.
8. Executive Training:
Committees provide a good forum for training executives. They
learn the value of interaction, group dynamics and human relations. They
are exposed to various view points and learn the art of reaching decisions
and solving organisational problems.

1. Delay:
The main drawback of committee form of organisation is delay in taking decisions. A
number of persons express their view points in meetings and a lot of time is taken on reaching
a decision. The fixing of committee meetings is also time consuming. An agenda is issued and
a convenient date is fixed for the meeting. The decision making process is very slow and many
business opportunities may be lost due to delayed decisions.
2. Compromise:
Generally, efforts are made to reach consensus decisions. The view Point majority is
taken as a unanimous decision of the committee. The thinking of the minority may be valid but
it may not be pursued for being singled out. They may accept less than an optimal solution
because of a fear that if their solution proves wrong then they will be blamed for it.
3. No Accountability:
No individual accountability can be fixed if these decisions are bad. Every member of
the committee tries to defend himself by saying that he suggested a different solution. If
accountability is not fixed then it is the weakness of the organisation.
Weaknesses

4. Domination by Some Members:
Some members try to dominate in the committee meetings. They try to thrust their
view point on others. The aggressiveness of some members helps them to take majority with
them and minority view is ignored. This type of decision making is not in the interest of the
organisation.
5. Strained Relations:
Sometimes relations among committee members or with others become strained. If
some members take divergent stands on certain issues, some may feel offended. In case
some issue concerning other persons is discussed in a committee and members taking stand
not liked by those persons may offend them. The discussions in the meetings are generally
leaked to other employees. Some unpleasant decisions may not be liked by those who are
adversely affected. It affects relations of employees not only on the job but at personal level
also.
6. Lack of Effectiveness:
The role of committees is not effective in all areas. The committees may be useful
where grievance redressal or inter personal departmental matters are concerned.
Committees may not be effective where policies are to be framed and quick decisions are
required. Individual initiative will be more effective in these cases. So committees have a
limited role to play.

Definition:
Group Decision-making is a form of participative decision-making,
where a group of individuals work together to solve a problem complex in
nature.

• A pool of Knowledge
Decision-making in a group involves many people during the process. This brings
more knowledge and expertise at the time of decision-making.
• Acceptance
As the decision is taken collectively, the members easily accept the decisions.
• Variety of Alternatives
A group can generate more alternatives than individuals.
• Overall Development
Group decision-making is an interactive process in which all members share their
skills and knowledge. Thus, it results in the overall development of the group members.
• Diversity of Views
Different individuals possess different views towards a situation. Thus, there is
a collection of different ideas for specific problems during decision-making.
• Balanced Decisions
Group members ascertain multiple consequences and risks associated with the
idea. Hence, results in balanced decision-making.

• Dominance
The group members have to agree with one or more dominating members
to make a decision.
• Conflict
Disagreement among the group members may lead to conflict in the
group.
• Time-Taking Process
It may take plenty of time if the group members cannot reach any suitable
decision.
• Pressure
The group members may feel pressure to accept the decisions taken by
others.

Techniques of Group Decision-making
Group decision-making techniques are the processes that help group leaders in
idea generation regarding a business problem. The creativity and expertise of the group
members facilitate hedging risks associated with the decision.
The techniques are,
1. Brainstorming
• It is a group decision-making technique developed by Alex Osborn.
• This technique aims to generate a pool of ideas in a judgement-free environment.
• In this technique, the group manager clearly states the problem.
• The group members are asked to generate as many ideas as possible
spontaneously.
• No criticism, comments, or judgements are allowed during the process.
• All the ideas are recorded and evaluated by the manager later on.

• Pros:
• A list of a large number of creative ideas is created.
• The process is carried out in a bias-free environment.
• It results in a low cost per idea.
• The size of the group is small, which leads to increased participation of group
members.
• As there is no restriction or judgement, quality ideas are received.
• The idea is acceptable to all.
• Cons:
• In the end, no plan or solution is generated. Only a list of ideas is left with the
manager.
• Due to lack of closure, group members are left dissatisfied.

2. Delphi Technique
• It is a group decision-making and planning process. Norman
C.Dalkey and his associates at the Rand Corporation developed this
technique.
• In this, we obtain judgements and solutions through group
members without physical interaction. Communication takes place
through e-mails or other methods via questionnaires.
• The steps taken to perform Delphi Technique are as follows:
• Delphi Question and the first enquiry
The group coordinator sends the Delphi Question and Questionnaires
to the group members. Post this, they ask group members to share
their ideas or solutions for the given problem.

• The first response
The members write their views, ideas and possible solutions. Thereafter, they
send their answers to the group coordinator.
• Analysis of first response, feedback and second enquiry
The group coordinator collects and summarises their responses. He prepares
another questionnaire asking for more refined solutions, clarification,
agreements & disagreements of previous ones.
• The second response
The group members again record their responses and send them to the
coordinator.
• Continuation of the process
This process continues until they reach a suitable solution.

3. Nominal Group Technique
• This decision-making technique doesn’t involve interaction among the group
members. The group members are present but don’t interact with each other
that is why it is called nominal.
• The group members need to write their ideas without any discussion. Their
opinions are noted on a chart one by one and clarified without any criticism.
The steps involved in NGT are as follows:
• The group members list their ideas silently.
• Group members write their ideas on a chart until all the ideas are listed.
• After that, the members collectively discuss the ideas without criticism.
• In the end, collect a written vote from all the members.

Electronic meeting
• It is a blend of the NGT technique and technology. In this method, the group hosts the
meetings through an electronic medium. The problem is shared with the group online, and the
members submit their responses through votes. However, the vote signifies agreement or
disagreement with the idea or suggestions.
Pros:
• The group members can be honest without any pressure.
• It is a less time taking process.
Cons:
• The members with good typing speed can excel compared to those with low or average typing
speed.
• Excellent ideas are not recognized.

Devils advocacy
• This technique identifies the flaws during the group decision-making process.
The benefit of this technique is that it highlights every possible loophole in the
solution.
• It is a technique where two group members are appointed as ‘devils‘. These
devils have to identify flaws in the ideas suggested by the group members. The
other members have to satisfy these devils with solutions.

Didactic interaction
• This technique is useful when the answer is to be drawn in Yes or No. Here we divide the
entire group into two parts. One part suggests points favouring the decision and the other
part presents points against the decision.
The steps involved in Didactic Interaction are as follows:
• The process begins with defining the problem/issue for which we need to take a Yes or
No decision.
• Then divide the group into two parts, one favouring Yes and the other favouring No.
• The groups support their side of the decision while discussing.
• Then they inter-change their sides and continue the discussion. That is to say, the
members in favour of No will support the Yes ones and vice versa.
• Mutual acceptance of both parties obtains the result of the discussion.

Group decision-making process (step by step)
1. Planning 📝
2. Determining alternatives 🤔
3. Selecting the best alternative 💎
4. Deployment 📤

Controlling
• Controlling determines what is being tackled by evaluating the performance and
if there is a deviation, by applying corrective measures so that the activities take
place according to plans. Can be considered as the activity for knowing and
correcting important changes in the activities that are planned.

Factors
1. Size of Business
2. Uncertainty
3. Decentralization Trends
4. Control is Vital for Morale

Information technology in controlling

Three elements of quality statements are :
a. Vision statement,
b. Mission statement, and
c. Quality policy statement
a. Vision statement
1. The vision statement is a short declaration of what on organization aspires to be tomorrow.
2. It is the ideal state that might never be reached; but on which one will work hard continuously
to achieve. Successful visions provide a brief guideline for decision making.
3. The vision statement should be coined in such a way that the leaders and the employees
working in the organization should work towards the achievements of the vision statement.
4. An example of a simple vision statement is :
“To continuously enrich knowledge base of practitioners in mobility industry and institutions in
the service of humanity”. – Society of Automotive Engineers (SAE)

What is Mission Statement?
1. The mission statement, describes the function of the organization. It provides a clear
statement of purpose for employees, customers, and suppliers.
2. The mission statement answers the following questions : who we are?; who are
our customers? ; what we do?; and how we do it?
3. An example of a simple mission statement is :
“Concern for the ultimate customers – millions of customers Concern for the intermediate
customers – the trade
Concern for the suppliers – the sources of raw materials and ancillaries Concern for the
employees – the most valued asset
Concern for the competitors – wishing them well as healthy competition ultimately
benefits the customers.
Concern for the shareholders – the investing public Concern for the national aspiration –
India’s future!”
- ITC Limited

What is Quality Policy Statement?
 The quality policy is a guide for everyone in the organization as to how they
provide products and service to the customers.
 It should be written by the CEO with feedback from the workforce and be
approved by the quality council.
 A quality policy is a important requirement of ISO 9000 quality systems.
 An example of a simple quality policy statement is:
“Xerox is a quality company. Quality is the basic business principle for Xerox.
Quality means providing our external and internal customers with innovative
products and services that fully satisfy their requirements. Quality is the job of
every employee”.

1. Non members
2. Members
3. Leader
4. Facilitator
5. Steering committee
6. Top management
7. Coordinating agency

Social Responsibility and Sustainable
Development Goals

What Is Social Responsibility?
Social responsibility means that businesses, in addition to
maximizing shareholder value, must act in a manner benefiting society, not just the
bottom line. Social responsibility has become increasingly important to investors and
consumers who seek investments that not only are profitable but also contribute to the
welfare of society and the environment. While critics have traditionally argued that the
basic nature of business does not consider society as a stakeholder, younger generations
are embracing social responsibility and driving change.
What are the main benefits of social responsibility?
Benefiting society and lessening the negative impacts on the environment are among the
main benefits of social responsibility. Consumers are increasingly looking to buy goods
and services from socially responsible companies, which can have a positive impact on
their bottom line.

IMPORTANCE OF ETHICS
• Guides us like a map
• Its about feeling for others
• Creates integrity

Management Principles and Practices.ppt.pptx

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