1. Master of Business Administration
Semester I
Management Process and Organizational Behaviour
Assignment
Set- 1
Q1. EXPLAIN THE PROCESS OF SOCIAL LEARNING THEORY?
Ans.
PROCESS OF SOCIAL LEARNING THEORY
The social learning theory was proposed by Bandura. It recognizes the importance of observing
and modeling the behaviors, attitudes, and emotional reactions of others. According to Bandura
(1977), most human behavior is learned observationally through modeling: from observing
others one forms an idea of how new behaviors are performed, and on later occasions this coded
information serves as a guide for action. Social learning theory explains human behavior in terms
of continuous reciprocal interaction between cognitive, behavioral, and environmental
influences.
Social learning has four processes:
1. Attention processes People learn from a model only when they recognize and pay attention to
its critical features. In order to learn, it is required to pay attention. Anything that detracts the
attention is going to have a negative effect on observational learning. If the is model interesting
or there is a novel aspect to the situation, it is more likely to dedicate the full attention to
learning.
2. Retention processes A model’s influence will depend on how well the individual remembers
the model’s action after the it is no longer readily available. The ability to store information is
also an important part of the learning process. Retention can be affected by a number of factors,
but the ability to pull up information later and act on it is vital to observational learning.
2. 3. Motor reproduction processes after a person has seen a new behavior by observing the model,
the watching must be converted to doing. The ability to store information is also an important
part of the learning process. Retention can be affected by a number of factors, but the ability to
pull up information later and act on it is vital to observational learning.
4. Reinforcement processes Individuals will be motivated to exhibit the modeled behavior if
positive incentives or rewards are provided. Finally, in order for observational learning to be
successful, you have to be motivated to imitate the behavior that has been modeled.
Reinforcement and punishment play an important role in motivation. While experiencing these
motivators can be highly effective, so can observing other experience some type of
reinforcement or punishment? For example, if you see another student rewarded with extra credit
for being to class on time, you might start to show up a few minutes early each day.
Principles of social learning are as follows:
1. The highest level of observational learning is achieved by first organizing and rehearsing the
modeled behavior symbolically and then enacting it overtly. Coding modeled behavior into
words, labels or images results in better retention than simply observing.
2. Individuals are more likely to adopt a modeled behavior, if it results in outcomes they value.
3. Individuals are more likely to adopt a modeled behavior, if the model is similar to the
observer and has admired status and the behavior has functional value.
3. Q2. What are the hindrances that we face in perception?
Answer:
Hindrances that we face in perception
Listening is not easy and there are a number of obstacles that stand in the way of effective
listening, both within and outside the workplace. These barriers may be categorized as follows –
1. Physiological Barriers – This was discussed earlier under the barriers to communication. Some
people may have genuine hearing problems or deficiencies that prevent them from listening
properly. Once detected, they can generally be treated. Other people may have difficulty in
processing information, or memory related problems which make them poor listeners. Another
physiological barrier is rapid thought. Listeners have the ability to process information at the rate
of approximately 500 words per minute, whereas speakers talk at around 125 words per minute.
Since listeners are left with a lot of spare time, their attention may not be focused on what the
speaker is saying, but may wander elsewhere.
2. Physical Barriers – These refer to distractions in the environment such as the sound of anair
conditioner, cigarette smoke, or an overheated room, which interfere with the listening process.
They could also be in the form of information overload. For example, if you are in a meeting
with your manager and the phone rings and your mobile beeps at the same time to let you know
that you have a message; it is very hard to listen carefully to what is being said.
3. Attitudinal Barriers – Pre-occupation with personal or work related problems can make it
difficult to focus one’s attention completely on what a speaker is saying, even if what is being
said is of prime importance. Another common attitudinal barrier is egocentrism, or the belief that
you are more knowledgeable than the speaker and that you have nothing new to learn from his
ideas. People with this kind of closed minded attitude make very poor listeners.
4. Wrong Assumptions – The success of communication depends on both the sender and the
receiver, as we have seen in an earlier unit. It is wrong to assume that communication is the sole
responsibility of the sender or the speaker and that listeners have no role to play. Such an
assumption can be a big barrier to listening. For example, a brilliant speech or presentation,
however well delivered, is wasted if the receiver is not listening at the other end. Listeners have
as much responsibility as speakers to make the communication successful, by paying attention,
seeking clarifications and giving feedback.
Another wrong assumption is to think that listening is a passive activity, in which a listener
merely absorbs the thoughts of the speaker. On the contrary, real listening or active listening is
hard work – it requires speaking sometimes to ask questions, agree or disagree with the speaker,
give feedback, etc.
4. Yet another barrier of this type is to assume that speakers are more powerful than listeners.
Speakers are seen as being in command of things, whereas listeners are seen to be weak and
lacking authority. According to communication experts however, the reverse is true. Listeners
are as important and as powerful as speakers. In fact David J. Schwartz, writer and management
professor, emphasizes the importance of listening by saying “Big people monopolize the
listening. Small people monopolize the talking.”
5. Cultural Barriers
Accents can be barriers to listening, since they interfere with the ability to understand the
meaning of words that are pronounced differently. The problem of different accents arises not
only between cultures, but also within a culture. For example, in a country like India where there
is enormous cultural diversity, accents may differ even between different regions and states.
Another type of cultural barrier is differing cultural values. The importance attached to listening
and speaking differs in western and oriental cultures. Generally, Orientals regard listening and
silence as almost a virtue, whereas Westerners attach greater importance to speaking. Therefore
this would interfere with the listening process, when two people from these two different cultures
communicate.
6. Gender Barriers
Communication research has shown that gender can be a barrier to listening. Studies have
revealed that men and women listen very differently and for different purposes. Women are more
likely to listen for the emotions behind a speaker’s words, while men listen more for the facts
and the content.
Example – A salesperson giving a demonstration of a new type of office equipment may be
asked by two colleagues if the equipment will work without any problems and respond by saying
“Sure.” A male user may take his answer at face value, whereas a female user may detect some
hesitation in his voice. This is because the male user listens for the content of the message,
whereas the female user listens for the tone of the message.
7. Lack of Training
Listening is not an inborn skill. People are not born good listeners. They have to develop the art
of listening through practice and training. Lack of training in listening skills is an important
barrier to listening, especially in the Indian context.
Lee Iacocca, former Chairman of the Chrysler Corporation in the US, was one of the first to
recognize the need for organized training programs in listening skills. Today, many organizations
both in India and abroad incorporate listening skills in their training programs.
8. Bad Listening Habits
Most people are very average listeners who have developed poor listening habits that are hard to
shed and that act as barriers to listening. For example, some people have the habit of “faking”
attention or trying to look like a listener, in order to impress the speaker and to assure him that
they are paying attention. Others may tend to listen to each and every fact and, as a result, miss
out on the main point. Yet another habit is to avoid difficult listening and to tune off deliberately,
if the subject is too technical or difficult to understand. Sometimes, the subject itself may be
dismissed as uninteresting, because the listener does not want to listen.
5. Strategies for Effective Listening:
Although a number of barriers stand in the way of effective listening, these can be overcome
through conscious efforts, training and practice. Some of the suggested methods are discussed in
detail below –
1. Create a Conducive Environment – To an extent, you can try to control the environment in
which communication takes place, so that listening can take place without any distractions.
Ensuring a proper sound system and acoustics so that the speaker is audible, avoiding places with
high levels of activity, loud noises from the outside environment and poor air conditioning
systems, shutting off mobile phones and telephones, are some of the ways in which you can
overcome some of the physical barriers to listening.
2. Select Face-to-face Channels – Listening is less accurate in the absence of face-to-face
communication. For example, listening to and understanding ideas correctly over the telephone
are much harder than through a face-to-face meeting. Take the case of calling a restaurant and
placing orders over the telephone for home delivery of a meal. The chances are that your orders
may not be understood correctly. Therefore, as far as possible, arrange face-to-face contact to
ensure more accurate listening.
3. Be Open-minded and Avoid Distractions – Listening is an exhausting activity which requires
the right attitude and mindset. You have to focus your attention completely on what the speaker
is saying, without letting your mind wander. This kind of concentration can be developed
through various techniques and through constant practice. In addition, it is also important to rid
yourself of the notion that you have nothing new to learn from the other person. Even if it is a
subject about which you may be knowledgeable, the speaker may offer a different perspective or
point of view. Therefore it is important to listen actively.
4. Use Non-verbal Cues to Indicate Active Listening – It is important to communicate to the
speaker that you are listening actively to what he is saying. This can be done even without verbal
communication. All the different aspects of non-verbal communication discussed earlier should
be used for maximum effect. For example, maintaining steady eye contact with the speaker,
sitting up with an erect posture, nodding now and then to show appreciation and understanding
and appropriate facial expressions are some of the ways in which your non-verbal
communication can indicate that you are involved in what the speaker is saying.
5. Use Verbal Communication to Indicate Active Listening – While nonverbal behavior by itself
can communicate that you are an active listener, it is also important to engage in verbal
communication with the speaker.
Silence is often interpreted as lack of understanding or attention. You need to seek clarifications,
give feedback and suggestions, or just paraphrase in your own words what the speaker has said,
in order to convey that you have understood his message.
6. Listen First Before Responding – Always let yourself finish listening before you begin to
speak. Avoid the tendency to formulate your own response, even before you have listened
completely to the speaker’s words.
6. If you are too busy thinking about what to say next, you may miss the main point that the speaker
is trying to make. This also gives the speaker the impression that you are pre-occupied or rude.
7. Use the Speaker-listener Gap constructively – It was pointed out earlier that listeners have the
ability to absorb information faster than speakers’ rate of speech. This spare time available to
listeners is often misused by letting the mind wander and is one of the physiological barriers to
listening.
One way of overcoming this barrier is to try to use this spare time to note down what the speaker
has said, review what has been said so far and anticipate what he may say next. Thinking ahead
of the speaker and trying to guess where his talk is leading is a good strategy for effective
listening. This is not easy, but can be learnt through proper training.
8. Focus on the Verbal and Non-verbal Message – Listening involves not only hearing and
understanding the meaning behind the words, but also being alert to the non-verbal behavior of
the speaker. The importance of non-verbal cues has been emphasized throughout this book. It is
important to watch for any positive or negative messages that may be conveyed through the
speaker’s tone of voice, facial expressions, gestures and outward appearance.
9. Focus on the Content, rather than the Delivery – In order to grasp the true meaning of what the
speaker is saying, it is important to concentrate on the content of the message, rather than on how
the message is delivered.
For example, looking at the power point slides during a speaker’s presentation may distract your
attention from the main point that he is trying to convey. Similarly, being over critical of the
speaker’s accent or mannerisms may make you miss the essence of the message.
10. Ask Questions of Yourself and Make Notes – In order to engage in active listening, you also
need to ask certain questions to yourself while listening. For example, “What is the key idea that
the speaker is trying to convey?”, “How does this fit in with I already know on the subject?” or
“How is this presentation organized?” are some possible questions that you could jot down along
with the answers.
7. Q3. Describe the bases of power.
ANS.
Bases of power
In the context of inter-personal relationship power may be defined as the ability of a person to
influence and control behavior of others. Experts have identified different bases or source of
power that a person may have. These are:
Coercive power. Coercive power results from a person's ability to punish or withhold rewards. A
person who robs you on the street threatening you with a gun is using this type of power.
Resource power. A person has resource power when he or she has the discretion to decide the
resources available to you. Thus a person in finance department, who can influence the sanction
of other employees' expenditure budget can exercise resource power over them.
Position power. A person has some authority and discretion assigned to him by virtue of his/her
position in the organization structure. This is position power.
Expert power. A person has expert power by virtue of being recognized as an expert. We accept
the advice of doctor, and even allow him/her to operate upon us because we have faith in his
expertise.
Information power. Information is like resource power. A person with information can disclose
the information selectively to people he wants to favour, and in this way exercise influence over
them.
Association power. People can also exercise power by their relationship and association with
others. People tend accept opinions and wishes of people having good relationship them.
Personal power. This type of power flows from the persons personal characteristics including
looks, personality, and interpersonal skills. This power has a multiplier effect. It helps a person
to enhance the effectiveness of all other type of power.
Power is the ability to make things happen in the way an individual wants, either by self or by
the subordinates. The essence of power is control over the behavior of others (French & Raven,
1962). Managers derive power from both organizational and individual sources. These sources
are called position power and personal power, respectively.
Personal power resides in the individual and is independent of that individual's position. .
Three bases of personal power are:
1. Expertise,
2. Rational persuasion,
3. Reference.
8. Expert power is the ability to control another person's behavior by virtue of possessing
knowledge, experience, or judgment that the other person lacks, but needs. A subordinate obeys
a supervisor possessing expert power because the boss ordinarily knows more about what is to be
done or how it is to be done than does the subordinate. Expert power is relative, not absolute.
However the table may turn in case the subordinate has superior knowledge or skills than his/ her
boss. In this age of technology driven environments, the second proposition holds true in many
occasions where the boss is dependent heavily on the juniors for technologically oriented
support.
Rational persuasion is the ability to control another's behavior, since, through the individual's
efforts; the person accepts the desirability of an offered goal and a viable way of achieving it.
Rational persuasion involves both explaining the desirability of expected outcomes and showing
how specific actions will achieve these outcomes.
Referent power is the ability to control another's behavior because the person wants to identify
with the power source. In this case, a subordinate obeys the boss because he or she wants to
behave, perceive, or believe as the boss does. This obedience may occur, for example, because
the subordinate likes the boss personally and therefore tries to do things the way the boss wants
them done. In a sense, the subordinate attempts to avoid doing anything that would interfere with
the pleasing boss-subordinate relationship. Followership is not based on what the subordinate
will get for specific actions or specific levels of performance, but on what the individual
represents-a path toward lucrative future prospects.
Charismatic Power is an extension of referent power stemming from an individual's personality
and interpersonal style. Others follow because they can articulate attractive visions, take personal
risks, demonstrate follower sensitivity, etc.
9. Q4. Ms. Chanchal Das Gupta is a recruitment specialist. For the post of QC Manager, she
interviews three candidates. Given below are the physical characteristics of the candidates.
CANDIDATE Physical Characteristics
MR. RAVI Muscular, thick skin, rectangular shaped
MR. GINEESH Thin, delicate build, large brain, tall
MR. RAMGOPAL Soft, round shaped, underdeveloped
muscles
From the above descriptions, what personality traits can Ms. Chanchal derive out of the
candidates as per Sheldon’s theory of personality?
ANS.
Per Sheldon`s theory of personality, below are the traits that Ms. Chanchalcan derive:
CANDIDATE Physical Characteristics
MR. RAVI Muscular, thick skin, rectangular shaped
MR. GINEESH Thin, delicate build, large brain, tall
MR. RAMGOPAL Soft, round shaped, underdeveloped muscles
Mr. Ravi represents Mesomorph body type. He is “well-proportioned”. Psychologically he is
Adventurous, Courageous, Indifferent to what others think or want, Assertive/bold, Zest for
physical activity, Competitive, With a desire for power/dominance, And a love of risk/chance
Mr. Gineesh represents Ectomorph body type. Psychologically he is Self-conscious, Private,
Introverted, Inhibited, Socially anxious, Artistic, Intense, Emotionally restrained, Thoughtful
Mr. Ramgopal represents Endomorph body type. Psychologically he is Sociable, Fun-loving,
Love of food, Tolerant, Even-tempered, Good humored, Relaxed, with a love of comfort, and has
a need for affection.
10. Q5. What are the consequences of conflict in organizations?
Ans:
Consequences of conflict in organizations
Organizational Conflict can have both positive and negative consequences.
Negative consequences: Increased costs (time, money) devoted to dealing with
the conflict, wasted resources and energy spent dealing with the conflict, Decreased productivity,
Lowered motivation, Decreased morale, Poor decision-making, Withdrawal and
miscommunication or non-communication, Complaints and blaming, Backstabbing and gossip,
Attitudes of distrust and hostility (that may influence all future interactions, (Permanent) erosion
to personal, work, and community relationships, Harm to others not directly involved in the
conflict,Damaged emotional and psychological well-being of those involved in the conflict,
Dissatisfaction and stress.
Positive consequences:
Leads to new ideas, Stimulates creativity, Motivateschange, Promotes organizational vitality, He
lps individuals and groups toestablish identities, Serves as a safety valve to indicate problems, B
uildscooperation, Helps individuals to develop skills on how to manage conflicts, Improving
quality decisions.
11. Q6. Explain sensitivity training.
Ans:
Sensitivity training
Sensitivity training is a psychological technique in which intensive group discussion and
interaction are used to increase individual awareness of self and others;
It is practiced in a variety of forms under such names as
T group,
Encounter group,
Human relations and
Group - dynamics training.
The group is usually small and unstructured and chooses its own goals. A trained leader is
generally present to help maintain a psychologically safe atmosphere in which participants feel
free to express themselves and experiment with new ways of dealing with others. The leader
remains as much as possible outside the discussion.
Issues are raised by the group members, and their interactions evoke
a wide variety of feelings. The leader encourages participants to examineverbally their own and
others’ reactions. It is believed that as mutual trust is developed, interpersonal communication
increases, and eventually attitudes will change and be carried over into relations outside the
group.
Often, however, these changes do not endure. Sensitivity training seems to be most effective
if sessions are concentrated and uninterrupted, as in several days of continuous meetings.
Sensitivity-training methods derived in large part from those of group psychotherapy.
They have been applied to a wide range of social problems (as in business and industry) in an
effort to enhance trust and communication among individuals and groups throughout
an organization.
12. Set- 2
Q1. State the characteristics of management.
Ans:
The main characteristics of management are as follows:
I. Management is an activity:
Management is an activity which is concerned with the efficient utilization of human and non-
human resources of production
II. Invisible Force:
Management is an invisible force. Its existence can be felt through the enterprise or institution it
is managing.
III. Goal Oriented:
Management is goal oriented as it aims to achieve some definite goals and objectives. According
to the Hayman, "Effective management is always management by objectives". Managers and
other personnel officers apply their knowledge, experience and skills to achieve the desired
objectives
IV. Accomplishment through the efforts of others:
Managers cannot do everything themselves. They must have the necessary ability and skills to
get work accomplished through the efforts of others
V. Universal activity:
Management is universal. Management is required in all types or organizations. Wherever there
are some activities, there is management. The basic principles of management are universal
and can be applied anywhere and in every field, such as business, social, religious, cultural,
sports, administration, educational, politics or military.
13. VI. Art as well as Science:
Management is both an art and a science. It is a science as it has an organized body of
knowledge which contains certain universal truths and an art as managing requires certain skills
which apply more or less in every situation.
VII. Multidisciplinary Knowledge:
Though management is a distinct discipline, it contains principles drawn from many
social sciences like psychology, sociology etc.
VIII. Management is distinct from ownership:
In modern times, there is a divorce of management from ownership. Today, big corporations are
owned by a vast number of shareholders while their management is in the hands of
paid qualified, competent and experienced managerial personnel
IX. Need at all levels:
According to the nature of task and scope of authority, management is needed at all levels of the
organization, i.e., top level, middle and lower level
X. Integrated process:
Management is an integrated process. It integrates the men, machine and material to carry out
the operations of the enterprise efficiently and successfully. This integrating process is result
oriented.
14. Q2. Mr. Suresh Kumar is the VP- HR of a leading financial services company. He is having
a meeting with Ms. Rejani chandran leading HR consultant. Mr. Suresh is concerned about
creating an environment that helps in increasing the job satisfaction amongst employees.
Assume that you are Ms. Rejani, the HR consultant.
What suggestion you will give to Mr. Suresh, for creating an environment that increases
job satisfaction?
Ans:
Suggestions that I will give to Mr. Suresh, for creating an environment that increases
job satisfaction are:
Below are the suggestions for creating an environment with increased job
satisfaction from an HR perspective:
Provide workers with responsibility-and then let them use it
Show respect
Provide a positive working environment
Reward and recognition
Involve and increase employee engagement
Develop the skills and potential of your workforce
Evaluate and measure job satisfaction
15. Q3. Define emotional intelligence. Explain Goldman’s model of emotional intelligence.
Ans:
Emotional intelligence
Emotional intelligence (EI) refers to the ability to perceive, control and evaluate emotions. Some
researchers suggest that emotional intelligence can be learned and strengthened, while others
claim it is an inborn characteristic. Since1990, Peter Salvoes and John D. Mayer have been the
leading researchers on emotional intelligence. In their influential article "Emotional
Intelligence," they defined emotional intelligence as, "the subset of social intelligence that
involves the ability to monitor one's own and others' feelings and emotions, to discriminate
among them and to use this information to guide one's thinking and actions" (1990).
Goleman identified the five 'domains' of EQ as:
1. Knowing your emotions.
2. Managing your own emotions.
3. Motivating yourself.
4. Recognizing and understanding other people's emotions.
5. Managing relationships, i.e., managing the emotions of others.
Emotional Intelligence embraces and draws from numerous other branches of behavioral,
emotional and communications theories, such as NLP (Neuro-Linguistic Programming),
Transactional Analysis, and empathy. By developing our Emotional Intelligence in these areas
and the five EQ domains we can become more productive and successful at what we do, and help
others to be more productive and successful too. The process and outcomes of Emotional
Intelligence development also contain many elements known to reduce stress for individuals and
organizations, by decreasing conflict, improving relationships and understanding, and increasing
stability, continuity and harmony.
16. Q4. Explain the different leadership styles as per Managerial – Leadership Grid Theory.
Ans:
Leadership styles as per Managerial – Leadership Grid Theory
The Managerial Grid is based on two behavioral dimensions:
Concern for People – This is the degree to which a leader considers the needs of team
members, their interests, and areas of personal development when deciding how best to
accomplish a task.
Concern for Production – This is the degree to which a leader emphasizes concrete
objectives, organizational efficiency and high productivity when deciding how best to
accomplish a task.
Country Club Leadership – High People/Low Production This style of leader is most
concerned about the needs and feelings of members of his/her team. These people operate
under the assumption that as long as team members are happy and secure then they will
work hard. What tends to result is a work environment that is very relaxed and fun but
where production suffers due to lack of direction and control.
Produce or Perish Leadership – High Production/Low People Also known as
Authoritarian or Compliance Leaders, people in this category believe that employees are
simply a means to an end. Employee needs are always secondary to the need for efficient
and productive workplaces. This type of leader is very autocratic, has strict work rules,
policies, and procedures, and views punishment as the most effective means to motivate
employees.
Impoverished Leadership – Low Production/Low People This leader is mostly
ineffective. He/she has neither a high regard for creating systems for getting the job done,
nor for creating a work environment that is satisfying and motivating. The result is a
place of disorganization, dissatisfaction and disharmony.
Middle-of-the-Road Leadership – Medium Production/Medium People This style seems
to be a balance of the two competing concerns. It may at first appear to be an ideal
compromise. Therein lies the problem, though: When you compromise, you necessarily
give away a bit of each concern so that neither production nor people needs are fully met.
17. Leaders who use this style settle for average performance and often believe that this is the
most anyone can expect.
Team Leadership – High Production/High People According to the Blake Mouton model,
this is the pinnacle of managerial style. These leaders stress production needs and
the needs of the people equally highly. The premise here is that employees are involved
in understanding organizational purpose and determining production needs. When
employees are committed to, and have a stake in the organization’s success, their needs
and production needs coincide. This creates a team environment based on trust
and respect, which leads to high satisfaction and motivation and, as a result, high
production.
18. Q5. Distinguish between internal and external forces of change.
Ans:
Internal and external forces of change
Internal Forces:
Poor financial performance
Employee dissatisfaction
Inefficiency of existing business processes and systems
Need to increase profitability
Existence of cultural misfits to organization goals and objectives
External Forces:
Changes in technology
Political factors
General macro-economic environment
Changes in consumer tastes, preferences, purchasing patterns & frequencies
Declining market shares due to competition.
19. Q6. What are the 14 principles of management of Henri Fayol?
Ans:
Following are the 14 principles of management of Henri Fayol:
1. DIVISION OF WORK:
Work should be divided among individuals and groups to ensure that effort and attention are
focused on special portions of the task. Fayol presented work specialization as the best way to
use the human resources of the organization.
2. AUTHORITY:
The concepts of Authority and responsibility are closely related. Authority was defined by Fayol
as the right to give orders and the power to exact obedience. Responsibility involves being
accountable, and is therefore naturally associated with authority. Whoever assumes authority
also assumes responsibility.
3. DISCIPLINE:
A successful organization requires the common effort of workers. Penalties should be applied
judiciously to encourage this common effort.
4. UNITY OF COMMAND:
Workers should receive orders from only one manager.
5. UNITY OF DIRECTION:
The entire organization should be moving towards a common objective in a common direction.
6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERALINTERESTS:
The interests of one person should not take priority over the interests of the organization as
a whole.
7. REMUNERATION:
Many variables, such as cost of living, supply of qualified personnel, general business
conditions, and success of the business, should be considered in determining a worker’s rate of
pay.
20. 8. CENTRALIZATION:
Fayol defined centralization as lowering the importance of the subordinate role. Decentralization
is increasing the importance. The degree to which centralization or decentralization should be
adopted depends on the specific organization in which the manager is working.
9. SCALAR CHAIN:
Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line
supervisor to the president, possesses certain amounts of authority. The President possesses the
most authority; the first line supervisor the least. Lower level managers should always keep
upper level managers informed of their work activities. The existence of a scalar chain and
adherence to it are necessary if the organization is to be successful.
10. ORDER:
For the sake of efficiency and coordination, all materials and people related to a specific kind of
work should be treated as equally as possible.
11. EQUITY:
All employees should be treated as equally as possible.
12. STABILITY OF TENURE OF PERSONNEL:
Retaining productive employees should always be a high priority of management. Recruitment
and Selection Costs, as well as increased product-reject rates are usually associated with hiring
new workers.
13. INITIATIVE:
Management should take steps to encourage worker initiative, which is defined as new or
additional work activity undertaken through self direction.
14. ESPIRIT DE CORPS:
Management should encourage harmony and general good feelings among employees.
