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Principles of Management & Professional Ethics

Unit 1

Introduction to Management

Groups of people working in an organization to develop or appraise or attain the common goal of the organization by utilizing the available resources are called Management. In simple terms it means managing the work done by the people. Just as the mind coordinates and regulates the various activities of the person, the management coordinates and regulates the activities of various members of an organization.

Definition of Management

The definitions by some of leading management thinkers and practitioners are as follows:

(i) “Management is the art of getting things done through the people.” - Mary Park Flott

(ii) “To manage is to forecast and to plan, to organize to command to coordinate and to control.” - Henry Fayol

(iii) “Management is the art of knowing what you want to do and then seeing that it is done in the best and the cheapest way.” – F.W.Taylor.

(iv) Management is the creation and maintenance of an internal environment in an enterprise where individuals working in groups goals, efficiently and effectively towards the attainment of group goals . It is a art of getting the work done through and with people in formally organized groups – Koontz and O Donnel

(v) Management is a social and technical process which utilized resources influences human action and facilitates changes in order to accomplish organizational goals -- Theo Haiman and William G Scott.

Nature of Management :

1. It is an Universal Activity: Management is relevant in every sphere of activity. it is relevant in army , government , private household work etc. the work can be done in a more systematic manner with the application of the techniques of management . the material and human resources can be effectively handled and the foal can be attained with maximum efficiently. Ex a student study at random ands systematic manner. Later is best one.

DEPARTMENT OF MANAGEMENT STUDIES.[Type text] Page 1

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2. It is goal oriented : Management focuses attention on the attainment of specific objectives. For Ex a business may aim for a particular level of sales. This can be achieved by proper forecast of sales by planning production by fixing the targets.

3. It is an Intellectual activity: The practice of management requires application of mind and intelligence . every work needs to be properly planned and execute work has to be assigned to different Individuals and responsible have to be fixed on them. Ex in an manufacturing unit production finance and marketing are the important activities performed . it has to work in proper co-ordination with the other departments. Then only objectives of the firm can be achieved.

4. It is a process: It is process consisting of various stages/ functions . Planning is the starting point of management and control is its last stage.

5. Management is both Art and Science: The practice of science needs knowledge of theory and formulae. But the practice of art requires skill management is social science. It focuses attention on the behavior of individuals and groups . the theoretical knowledge may not help always that time they require skill ex if the workers in a factory demand more pay and threaten to go on strike if their demand is not considered . here the skill of the manager will help to avert the strike then its theoretical.

6. It is a Social Process: Management deals with the behavior of individuals and groups . In a work place individuals work as a team. The behavior of an individual is bound to be different while he is part of a group ex: an individual worker may be forced to join a strike program because of the union.

7. It is an on going Activity : It is a continuous process planning , organizing etc have unlimited use. Management will exist as long as there are human activities.

8. It is Intangible : It is invisible cannot be seen , but it can be felt.

Management is a Profession: Like medical, law and engineering, management has also come to be recognized as a profession

Need for Management

As the organization grows it faces a lot of problems like shortage of raw material, labour problem, and misunderstanding among various groups etc. So there is a need to have a central body or point to a) coordinate the work and b) remove such hurdles both internally and externally. This center point is called Management.

Usage of Management

Management is very vital

1) To achieve the common goal.


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2) To develop overall activity.

3) To motivate the people.

4) To work efficiency.

5) To control the overall operation.

6) To take up overall planning.

7) To maintain mutual relationship among various levels of management.

8) To increase the profit or gain.

9) To reduce the complexity, difficulties and obstacles.

Functions of Management (“POSD CORB”)

1) Planning: Planning means forecasting or predicting the future activity in a specific manner or structure. It is the basic function and essential for all the organization.

2) Organizing: It is collection or joining of all the resources available within the organizational and outside, in order to achieve the organizational goal with efficiency.

3) Staffing: It involves appointing the right man for the right job at the right time. The management is to analyze the human resource, see if he is suitable for the job and accordingly allocate the work in the organization.

4) Directing: It is showing the correct path or correct way to achieve the organizational goal within the stipulated time.

5) Controlling: Controlling as a function involves regulating the person or examining the person whether he is working in the right way or not. In order to achieve the common goal as efficient as possible.

6) Coordinating: It is a type of support function. It involves accumulating the work to achieve the task.

7) Budgeting: It means allocation of the resources. It involves financial planning for the future activities.

8) Reporting: It is a statement showing the various activities to the top management. It shows the status of the work done.


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Levels of Management

The various levels of management are,

Levels of Management

As authority goes up the level of management, responsibility comes down. It means that the higher officials are more authority, while major responsibility are given to middle and lower level.

A) Top Level Management: The top level management derives its powers and authority directly from the owners of the enterprise. They are Board of Directors, Chairman, Managing Directors, COO, CEO etc.

The functions:

1. They are setting out the fundamental objectives of the enterprises.

2. They frame major policies for the business.

3. They design the strategies for the attainment of organizational objectives.

4. They appoint key managerial personnel for the middle management.

5. Development master plans in areas of finance, human resource, technology, marketing and other functions of organizational.

6. To represent the business outside, particularly in discussing business problems with the Government trade association and so on.


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B) Middle Level Management: They are departmental managers (Head of Department) like Production managers, Marketing managers, Personnel managers, Finance manager, Regional manager and other managers.

The functions:

1. They plan the role of a linking in between top level management and the lower level management.

2. It explains the objectives, strategies, policies laid down by the top level management to the low level management.

3. Communicates the problems, suggestions and view points of the lower management to the top management.

4. It prepares the departmental plans.

5. It submits reports on the performance at various departments to the top management.

6. It offers suggestions and recommendations to the top management for the betterment of overall management of the enterprise.

C) Lower Level of Management: It is called as operating level management or supervisory level. This is the level where actual operational work for the enterprise in the areas of production, finance, marketing, personnel, etc is performed by workers. This level of management consists of manager like supervisors, the foreman, the sales officers the accountants the sectional officers etc.

The Functions:

1. It does day to day operational planning in view of the instructions given by the middle level management.

2. It provides necessary instructions to operators for the best performance of their assigned jobs.

3. It supervisors the work of operators to ensure that their performance is in accordance with the standards laid down in plans.

4. It submits reports on the performance of operating staffs to the middle management.

5. It operates as a channel of communication between the middle management and the operators.

6. The problems, suggestions and recommendations of operators are performed by it to the middle management.


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Administration vs Management

Meaning

Administration as a function is concerned with determination of corporate policies, coordination of the various departments (production, finance, distribution etc.) of the organization under the control of the executives.

Management is concerned with execution of the policy within the limits setup by administration and employment of the organization for the particular objective before it. In other words Management is the doing process and administration is the thinking process.

Administration Management

1) All the policies are made by the Administration.

1) Management has a main function of implementing the decisions made by the Administration.

2) They are the owners / proprietors of the company.

2) They are the managers of the company.

3) Conceptual, human skills are necessary. 3) Technical and human skills are more important here.

4) The main functions are planning and controlling.

4) The main functions are directing and organizing.

5) Level of authority:

Administration mainly comprise of Top level management.

Management mainly carried on by Middle and lower level management.

6) Administration is thus more permanent in nature.

6) While management may change during the course of running the organization.

7) Objective:

They are mainly interested in

Profitability

Sales volume

They actually work for remuneration, thus they direct their efforts towards the attainment of goal.

8) They don’t take part in the day to day activity of the organization.

8) Managers take part in the day to day activity.

9) Administration is the thinking process. 9) While the management are the doing process.


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Who is a Good Managers?

Introduction

Managers is a person who has the ability or strength to coordinate, motivate and guide all the personnel working under him so as to make sure they attain the organizational goal in the most efficient manner possible.

Qualities of a Good manager

1) Good Education

2) Technical Knowledge

3) Personality

4) Communication skills

5) Honesty

6) Positive thinking

7) Control Management

8) Motivation

9) Guide

10) Leadership qualities

11) Coordinate

12) Decision making (planning, forecasting)

13) Innovative

14) Good analysis

15) Risk taking

Roles of a Manager :

Mintzberg has identified ten roles of a manager which are grouped into three categories.

1. Interpersonal Roles:

a) Figure head – Manager performs symbolic duties required by the status of his office making speeches, bestowing honors, welcoming official visitors, distributing gifts to retiring employees are examples of such ceremonial and social duties

b) Leader – The manager relationship with his own subordinates . the manager sets an example legitimizes the power of subordinates and brings their needs in accord with those of his organization.


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c) Liaison : It describes a manager’s relationship with the outsiders ex. Govt, industry groups.

2. Information Roles:

a) Monitor role :Seeks and collects information to obtain thorough understanding

of organization and environment E.g. Reading periodicals.

b) Disseminator role: Transmits information received from outsiders or insiders to other organization members Eg. forwarding mail.

c) Spokes person role :Transmits information to outsiders on organization plans,

Policies, actions Eg. board meetings , handling mail.

3. Decisional roles:

a) Entrepreneurial role : An initiate change adapting to the environment and supervises Design of organization. Improvement projects as opportunities arise. Prepare strategies

b) Disturbance handler role: Responsible for corrective action when organization

faces unexpected crisis.

c) Resources allocate role :Responsible for allocation of human monetary and materials resources .Eg. scheduling , requests

d) Negioation

EVOLUTION OF MANAGEMENT THOUGHT

Management practice is as old as human civilization when people started living together in groups. For, every human group requires management and the history of human beings is full of organisational activities.

TAYLOR AND SCIENTIFIC MANAGEMENT

Taylor has defined scientific management as follows:

“Scientific management is concerned with knowing exactly what you want your men to do and then see in that they do it in the best and cheapest way.”

On the basis of his experiments, he published many papers and books and all his contributions were compiled in his book ‘Scientific Management’. Taylor’s contributions can be described in two parts: Elements and tools of scientific management and principles of scientific management.


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ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

Taylor conducted various experiments at his work places to find out how human beings could be made efficient by standardizing the work and better method of doing the work. These experiments have provided the following features of scientific management.

1. SEPERATION OF PLANNING AND DOING: Worker was put under the supervision of a supervisor commonly known as gang boss. Thus, supervisor’s job was merely to see how the workers were performing. This was creating a lot of problems, and Taylor emphasized that planning should be left to the supervisor and the worker should emphasize only operational work.

2. FUNCTIONAL FOREMANSHIP: Separation of planning from doing resulted into development of supervision system which could take planning work adequately besides keeping supervision on workers.

For this purpose, Taylor evolved the concept of functional foremanship based on specialization of functions.


Workshop manager

Planning in charge Production incharge

Route clerk

Instruction card clerk

Time

and cost clerk

disciplinarian

Speed boss

inspector

Maintenance foreman

Gang boss

worker

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3. JOB ANALYSIS: Job analysis is undertaken to find out the one best way of doing the thing. The best way of doing a job is one which enquires the least movements, consequently less time and cost.

(i) Time study involves the determination of time a movement takes to complete. The movement which takes the minimum time is the best one. This helps in fixing the fair work for a period.

(ii) Motion study involves the study of movements in parts which are involved in doing a job and thereby eliminating the wasteful movements and performing only necessary movements. This reduces the time taken in performing a work and also the fatigue of workers.

(iii) Fatigue study shows the amount and frequency of rest required in completing the work. After a certain period of time, workers feel fatigue and cannot work with full capacity. Therefore, they require rest in between.

4. STANDARDISATION: As far as possible, standardization should be maintained in respect of instruments and tools, period of work, amount of work, working conditions, cost of production, etc. These things should be fixed in advance on the basis of job analysis and various elements of costs that go in performing a work.

5. SCIENTIFIC SELECTION AND TRAINING OF WORKERS: A worker should be given work for which he is physically and technically most suitable LIKE : education, work experience, aptitude, physical strength, etc

6. FINANCIAL IINCENTIVES: Financial incentives can motivate workers to put in their maximum efforts. If provisions exist to earn higher wages by putting in extra effort, workers will be motivated to earn more.

7. ECONOMY:. The economy and profit can be achieved by making the resources more productive as well as by eliminating the wastages.

8. MENTAL REVOLUTION: Scientific management depends on the mutual co-operation between management and workers. For this co-operation, there should be mental change in both parties from conflict to co-operation

PRINCIPLES OF SCIENTIFIC MANAGEMENT

Taylor has given certain basic principles of scientific management. The fundamental principles are :


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1. REPLACING RULE OF THUMB WITH SCIENCE: Taylor has emphasized that in scientific management, organized knowledge should be applied which will replace rule of thumb. While the use of scientific method denotes precision in determining any aspect of work, rule of thumb emphasizes estimation.

2. HARMONY IN GROUP ACTION: . Group harmony suggests that there should be mutual give and take situation and proper understanding so that group as a whole contributes to the maximum.

3. CO-OPERATION: Scientific management involves achieving co-operation rather than chaotic individualism.

4. MAXIMUM OUTPUT: Scientific management involves continuous increase in production and productivity instead of restricted production either by management or by worker.

5. DEVELOPMENT OF WORKERS: In scientific management, all workers should be developed to the fullest extent possible for their own and for the company’s highest prosperity.

FAYOL’S ADMINISTRATIVE MANAGEMENT

Perhaps the real father of modern operational management theory is the French industrialist Henry Fayol. His contributions are generally termed as operational management or administrative management.

“To manage is to forecast and to plan, to organize, to coordinate and to control.”

He found that activities of an industrial organization could be divided into six groups:

1. Technical (relating to production);

2. Commercial (buying, selling and exchange);

3. Financial (search for capital and its optimum use);

4. Security (protection of property and person);

5. Accounting (including statistics) and

6. Managerial (planning, organization, command, coordination, and control).

He has divided his approach of studying management into three parts: (i) managerial qualities and training, (ii) general principles of management, and (iii) elements of management.


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MANAGERIAL QUALITIES AND TRAINING

Fayol was the first person to identify the qualities required in a manager. According to him, there are six types of qualities that a manager requires. These are as follows:

1. Physical (health, vigour, and address);

2. Mental (ability to understand and learn, judgement, mental vigour, and capability);

3. Moral (energy, firmness, initiative, loyality, tact, and dignity);

4. Educational (general acquaintance with matters not belonging exclusively to the function performed);

5. Technical (peculiar to the function being performed); and

6. Experience (arising from the work).

GENERAL PRINCIPLES OF MANAGEMENT

Fayol has given fourteen principles of management. He has made distinction between management principles and management elements.

1. DIVISION OF WORK : According to him,” specialization belongs to natural order. The workers always work on the same part, the managers concerned always with the same matters, acquire an ability, sureness, and accuracy which increase their output.

2. AUTHORITY AND RESPONSIBILITY: The authority and responsibility are related, with the latter the corollary of the former and arising from it. Fayol finds authority as a continuation of official and personal factors.

3. DISCIPLINE: Discipline is obedience, application, energy, behavior, and outward mark of respect shown by employees.

4. UNITY OF COMMAND: Unity of command means that a person should get orders and instructions from only one superior..

5. UNITY OF DIRECTION: Unity of direction is different from unity of command in the sense that the former is concerned with functioning of the organization in respect of its grouping of activities or planning Unity of direction provides better coordination among various activities to be undertaken by an organization.


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6. SUBORDINATION OF INDIVIDUAL TO GENERAL INTEREST: Common interest is above the individual interest. Individual interest must be subordinate to general interest when there is conflict between the two.

7. REMUNERATION OF PERSONNEL: Remuneration of employees should be fair and provide maximum possible satisfaction to employees and employers.

8. CENTRALISATION: In small firms, centralization is the natural order, but in large firms, a series of intermediaries is required. Since both absolute and relative values of the managers and employees are constantly changing, it is desirable that the degree of centralization or decentralization may itself vary constantly.

9. SCALAR CHAIN: There should be a scalar chain of authority and of communication ranging from the highest to the lowest. It suggests that each communication going up or coming down must flow through each position in the line of authority . Fayol has suggested ‘gang plank’ which is used to prevent the scalar chain from bogging down action.

10. ORDER: This is a principle relating to the arrangement of things and people. In material order, there should be a place for everything and every thing should be in its place.

11. EQUITY: Equity is the combination of justice and kindness. Equity in treatment and behavior is liked by everyone and it brings loyalty in the organization

12. STABILITY OF TENURE: No employee should be removed within short time. There should be reasonable security of jobs.

13. INITIATIVE: Within the limits of authority and discipline, managers should encourage their employees for taking initiative. Initiative is concerned with thinking out and execution of a plan.

14. ESPIRIT DE CORPS: This is the principle of ‘union is strength’ and extension of unity of command for establishing team work..


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CONTRIBUTIONS OF TAYLOR AND FAYOL : A COMPARISON

Similarity:

1. Both have attempted to overcome managerial problems in systematic way.2. Both have developed some principles which can be applied in solving managerial

problems.3. Both have emphasized that management actions can be effective if these are based on

sound principles.4. Both of them have emphasized that managerial qualities are acquirable and can be

acquired through training. Therefore, organizations should make attempts to develop these.

5. Both have emphasized harmonious relationships between management and workers for te achievement of organizational objectives.

Dissimilarity:

There is more dissimilarity between the approaches of Taylor and Fayol as compared to similarity. This is because of the fact that Taylor has concentrated on the shop floor efficiency while Fayol has concentrated on higher managerial levels.

Basis of difference Taylor Fayol

1.Perspective

2.Focus

3.Orientation

4.Results

5.Overall contributions

Shop floor level

Efficiency through work simplification and standarisation.

Production and engineering

Scientific observation and

measurement

Basis for accomplishment on the production line

Higher management level

Overall efficiency by observing certain principles.

Managerial functions

Personal experiences

translated into universal truths.

Systematic theory of management.


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DEPARTMENTATION:

Departmentation is the process of dividing and grouping the activites and employees f an enterprise into the departments. The total work of an enterprise is divided into functions and sub-functions. Later, these are grouped together to form different departments.

In manufacture concern, the total work may be divided into the following functions:

i. Purchase

ii. Production

iii. Marketing

iv. Personnel and

v. Finance

Each of these functions will be entrusted to different departments. For example, the production department will look after production and related maters; the marketing department will look after marketing and other related matters and soon.

The activities normally performed by the different departments in a businedd enterprise may be stated as follows:

1. Purchase Department–

i. Purchase of raw materials.

ii. Maintenance of necessary records pertaining to materials.

iii. Stores control, etc.

2. Production Department –

i. Manufacture.

ii. Quality control.

iii. Plant maintenance, etc.

3. Marketing Department –

i. Departmention of sales targets.

ii. Appointment of dealers and distributors.

iii. Advertisement and sales promotion.


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iv. Monitoring the performance of salesman, etc.

4. Personnel Department–

i. Recruitment and selection of employees.

ii. Training

iii. Wage administration, etc.

5. Finance Department–

i. Provision of working capital and also

ii. Fixed capital for all other departments.

The concept of departmentation may be explained by means of a chart:

Concept of departmentation


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BASIS OF DEPARTMENTATION

Dividing and grouping of activities and employees may be done by following any of the patterns given below:

1. Departmentation by functions

2. Departmentation by products

3. Departmentation by Territory

4. Departmentation by Customers

5. Departmentation by Numbers and Time

Departmentation by function:

The most popular basis of departmentation is the one, done according to the major functions of an enterprise. As mentioned earlier, in a manufacturing concern, production, marketing, finance and personnel are the major functions. In a trading concern, buying, assembling and selling are the important functions. Separate departments will be established to perform these functions. Each major function may be divided into sub-functions. Marketing, for example, may be further divided into advertising, sales promotion, packing, market research, monitoring sales personnel and so on.

Functional departmentation by a concern selling cars may be shown by means of a chart:


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Advantages of departmentations by functions:

The following are some of the merits of functional departmentation:

1. It is the most natural approach to divide the activities and employees of an enterprise.

2. It recognizes the importance of the basic activities of a concern.

3. It provides sample scope for specialization.

4. As there are separate departments to look after all key activities of an enterprise, duplication of work is avoided.

5. It makes assessment of the performance of subordinate easier.


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Drawbacks

The following are some of the limitation of functional departmentation:

1. It increases the responsibilities of the departmentation heads.

2. It gives too much importance to specialization. Even within a department, each employee may specialize only in a particular job.

3. Functional departmentation increases the need for inner-dependence among different departments. This may, sometimes, result in conflicts between departments.

4. The autonomy enjoyed by each department may give the departmental head undue authority. This may be used against the interests of the subordinates.

5. It may also be difficult to secure proper co-ordination between the different departments..

Departmentation by products

This approach is suitable for those concerns that market different lines of products. There may be separate divisions to look after the production, finance, personnel and marketing needs of each product line of the enterprise. For example, Godrej Ltd., is manufacturing different lines of products-soaps, locks, refrigerators, furniture, etc. There separate divisions to look after each product line of the company.

The idea of product departmentation by Godrej Ltd., may be presented by means of a simple chart:


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Advantages of product departmentations:

The following are the merits of product departmentation:

1. Each division focuses attention on the production and marketing of a specific product line.

2. It fixes responsibility on individual departments or divisions for the promotion of specific product lines.

3. It helps to reduce the problem of co-ordination as each division looks after all activities concerning a product.

4. It is also possible to evaluate the performance of each division am dthe contribution it makes to the growth of the entire business enterprise.

5. Departmentation by product is the most suitable approach in the cash of an enterprise undertaking diversification of activities.


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Drawbacks

The following are the disadvantages of product departmentation:

1. Each division must have all the necessary facilities in order to be self-sufficient. This increases the cost of operations.

2. The top management may find it difficult to exercise control over the various divisions and their activities.

3. There may also be duplication of certain activities.

Departmentation by Territory

This approach is suitable for such organization as bank, insurance companies, transport companies etc., whose activities are spread over the different parts of the state or country. Under territorial departmentation, division of activities is done region-wise or branch-wise.The idea of territorial departmentation may be explained by means of chart:

Merits of territorial departmentation:

The merits of territorial departmentation may be stated as follows:


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1. It enables the organization to cater to the needs of the customers in different places.

2. Obviously, this approach provides scope for geographical expansion of business.

3. It is possible for the business to gain intimate knowledge of the customers in each place.

Limitations

Territorial departmentation, however, suffers from the following limitations:

1. It makes it difficult for the head office to exercise effective control over the zonal or branch offices.

2. It becomes necessary to employ more managerial and subordinate staff to manage the regional offices.

3. It is also important that the staff who are posted to the various regional offices are familiar with the regional language, customs and habits of the people living there.

Departmentation by Customers

In the case of departmentation by customers, the division of activities is done based on the needs of the customers. The depositors of a commercial bank are segregated on the basis of the nature of their deposit account, i.e., fixed deposit account, recurring deposit account, savings bank deposit account etc. this has been explained by means of a chart below:


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Merits

The advantages of departmentation by customers are given below:

1. The business is able to fulfill the specific needs of the customers.

2. It offers scope for specialization as well.

3. It also makes it possible for the business to maintain good rapport with different classes of customers.

Disadvantages

Some of the drawbacks of departmentation by customer are as follows:

1. Certain departments may not be active at all due to lack of clients.

2. There is also a possibility of under-utilisation of men, machines and other resources in certain departments due to a fall in demand.

3. There is also scope for duplication of activities.


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Departmentation by number and time

In the case of departmentation by numbers, grouping of activities is done based on the number of persons engaged for the purpose. In the army, for example, the fighting troops are classified into battalions, brigades, etc., based on the number of person prescribed for each unit.

Departmentation by time is relevant in the case of those concern that work 24 hours a day and as a result may require additional sifts to cope with the volume of work. There may be separate departmentation to look after each shift.

CENTRALISATION:

MEANING:

Centralization refers to systematic and consistent retention or concentration of authority for decision making at higher levels of management.

CONCEPT:

Centralization of authority is that philosophy of top management of an enterprise; under which maximum authority for management of the enterprise is kept by top management with itself; and minimum authority for management is pushed down the management hierarchy i.e. is managers at middle and lower levels.

MERITS OF CENTRALISATION:

1. CONSISTENCY IN DECISION MAKING:

Centralization leads to consistency in decision-making; because decisions are taken by a small group of managers at upper levels of management. Accordingly, there are lesser problems of co-ordination.


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2. STRONG TOP MANGEMENT:

Centralization of authority strengthens top management; and it is a position to provide out-standing leadership to the whole enterprise by virtue of its vast authority.

3. LOWER COST OF ADMINISTRATION:

In a centralized set up of the organisation, cost of administration is lesser; because the enterprises can operate with a limited number of managers. This is a good advantage pf centralization, in the present-day-times characterized by highly inflationary conditions.

4. BROAD APPROACH TO MANAGING:

In centralization, the top management has a broad outlook to managing; as it takes decisions from the system’s perspective – viewing the functioning of the organization as a whole.

5. DISCOURAGING INTER-DEPARTMENTAL CONFLICTS:

Centralization discourages inter-departmental conflicts; because major decisions of departments are taken at upper levels of management with an orientation towards departmental co-operation.

6. NATURE DECISION-MAKING:

In centralization, upper management, because of its experience, wisdom and broad outlook, is more mature in decision-making. Such decisions carry the chance of being least risky.

7. RETENTION BY TOP MANAGEMENT.

In centralization, top management retains tight control over the whole organization, because of its vast powers.

8. OPTIMUN UTILISATION OF RESOURCES:

Under centralization, there is an optimum utilization of organisational resources, because of rational allocation of scarce resources among different uses.

9. EFFICIENT HANDLING OF EMERGENCIES:

In centralization, there is an efficient handling of emergency by top management; and it can overcome organisational crises in an intelligent and planned manner.

10. SUITABLE IN THE PRESENT-DAY ENVIRONMENTAL SCENARIO:

Centralization is highly suitable for tackling present-day environmental scenario; which is highly volatile and turbulent. Under these circumstances, top management can take sound decisions in consultation with specialists, from various fields.


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DEMERITS:

1. HEAVY BURDEN ON TOP MANAGEMENT:

There is heavy burden of management work on top management; as it has to do strategic planning, policy formulation and controlling over the whole organization.

2. ORGANISATIONAL GROWTH RETARDED:

Centralization retards the growth of organization. Strategies of diversification, expansion programmes cannot be practical for organization; as top management, already over-burdened with normal management work, can hardly find time to think in these directions.

3. LOWER STATUS OF LOWER LEVEL MANAGERS:

Centralization decreases the status of over level managers. As such, they have less motivation to work, because of the non-fulfillment of their ego needs.

4. AUTOCRATIC MANAGEMENT:

Centralization may lead to autocratic management, in the organization. Top management with unrestricted powers may not hesitate to impose its autocratic policies and leadership styles on the whole organization i.e. it may misuse its powers.

5. INITIATIVE DISCOURAGED:

Centralization discourages the exercise of initiative on the part of lower level managers. Their creativity and innovative skills have no scope, in the organization.

6. DELAYED DECISION MAKING:

In centralization, there is delayed decision making; because of top management is burdened with many organisational issues and cannot pay timely attention to decision-making.

7. INFERIOR DECION MAKING:

There is inferior decision making by top management. This may seem paradoxical; but it is true in the sense that top rank managers are much remote to the situational factors, in the context of which decisions have to be made.

8. MANAGERIAL DEVELOPMENT RETARDED:

Centralization retards managerial training and developmental process. Under this philosophy, lower rank managers have little chance of development; because their roles in organizational life are routinised and they have nor or little freedom to exercise initiative and take bold decisions, in an unrestricted manner.


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9. MANAGEMENT BY EXCEPTION RETARDED:

Centralization retards the policy of management by exception; under which top management must concentrate its attention only on strategic issues. However, under centralization, this policy is not possible; as top management has to attend to all aspects of managing, because of reservation of substantial decision making with itself.

10. EGOISTIC PLANNING:

As a matter of great men psychology, top management, sometimes, may indulge in egoistic planning for ambitious purposes: without caring for the attainment of enterprise objectives.

DECENTRALISATION

MEANING:

Decentralization means systematic dispersal of authority in all departments and at all levels of management.

CONCEPT OF DECENTRALIZATION:

Decentralization of authority is that philosophy of management of an enterprise; under which maximum authority of the management of the enterprise is dispersed (or distributed) among managers of middle and specially, lower levels, and minimum authority is kept by the top management, in reserve, to be exercised by it itself.

DEMERITS:

1. LACK OF CONSISTENCY IN DECISION MAKING:

There is a lack of consistency in decision-making; because a large number of managers at lower levels may decide the same issue in diverse manners – despite operating within the organizational policy framework. Accordingly, problems of co-ordination are accentuated.

2. WEAK TOP MANAGEMENT:

Top management is rather weak; as most of its powers to given away among lower levels of management. It is not in a position to provide outstanding leadership to the organization; because of its reduced.


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3. HIGHER COST OF ADMINISTRATION:

The cost of administration is higher; because to operate the decentralized units, a large number of managers are necessitated.

4. NARROW APPROACH TO MANAGING:

The managers of decentralized units have, usually, a narrow outlook to managing. For them, their own departmental interests are supreme-as against the overall interests of the whole organization.

5. ENCOURAGING INTER-DEPARTMENTAL CONFLICTS:

Decentralization encourages inter departmental conflicts; because different departmental managers take decisions in their own unique manners and style, by virtue of, their vast powers and hell care for departmental co-ordination and co-operation.

6. RISKY DECISION-MAKING:

Lower level managers, because of its experience, wisdom and narrow are less mature in decision making. Sometimes, under decentralization such risky decisions might be taken as might endanger the very survival of the business enterprise.

7. LOSS OF CONTROL BY TOP MANAGEMENT:

Top management’s control over the organization is loosened; as its substantial powers are passed on to the lower levels of management.

8. OPTIMUM UTILISATION OF RESOURCES:

There may be, at times, less than optimum utilization of resources; because the same set of activities may be duplicated in various decentralized units-leading to wastage of precious organizational resources.

9. INEFFICIENT HANDLING OF EMERGENCIES:

Lower level management may be frightened by emergencies and run the seek the shelter and guidance of top management for handling emergency situations. Failure to effectively deal with emergencies by lower level management, may tell upon the survival and prosperity of the whole enterprise.

10. UNSUITABLE IN THE PRESENT-DAY ENVIRONMENT SCENARIO:

Present-day environment scenario makes decentralization impractical. For taking sound decisions under these circumstances, top management cannot provide specialists to every Tom, Dick and Harry managers at lower levels in the organizations; because of financial implications.


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MERITS:

1. LIGHT BURDEN ON TOP MANAGEMET:

There is light burden on top management; as much of the management work is passed on to lower levels of management.

2. ORGANISATIONAL GROWTH FACILITATED:

Decentralization facilitates organizational growth. Dynamic and talented managers at lower levels coupled with power, can easily conceive of and implement growth strategies, of course, in consultation with top management..

3. HIGHER STATUS OF LOWER LEVEL MANAGERS:

Decentralization adds to the status of lower level managers

4. DEMOCRATIC MANAGEMENT:

Decentralization leads to democratic features in organizational functioning. In fact, under decentralization, management decision making power gets divided among a large number of lower rank managers. This phenomenon puts restraints over the dictatorial use of powers by the top management.

5. INITIATIVE ENCOURAGED:

Decentralization encourages the exercise of initiative on the part of lower level managers. They can think out and execute their innovative plans, for the overall betterment of organizational life. Their creativity and innovative skills have full scope in the organization. That is why, many decentralized enterprises have progressed a lot, in some cases.

6. QUICK DECISION MAKING:

There is quick decision making. For one thing, lower level managers have comparatively limited managerial work, as they have to attend to only their own departmental problems. And for another, they need not seek approval of upper management for decision making on issues, for which authority has been decentralized to them.

7. SUPERIOR DECISION MAKING:

Decision making is superior, in the sense that lower level managers are close to other situational factors, in the context of which decisions have to be made. In fact, they practically deal with situational factors and develop a better sense of their appreciation and tackling.


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8. MANAGERIAL DEVELOPMENT FACILITATED:

Decentralization is a systematic way of training and developing managers for higher management positions. This philosophy more or less does away with the problem of managerial succession.

9. MANAGEMENT BY EXCEPTION FACILITATED:

Decentralization facilitates the policy of management by exception. By retaining authority for strategic decision making with itself, top management can decentralize substantial authority for operational management purposes to lower levels managers.

10. RATIONAL PLANNING:

Rational planning is done by lower level managers. They have comparatively little ambition and ego and care more for attainment of their departmental objectives through designing and implementing rational plants.

Span of Management :

It refers to the number of subordinates a manager can effectively manage. It is also known as span of control

What if too many subordinates are placed under a manager?

Loss of control

Communication can be affected

Frustration can take place

Conflicts may arise very often between managers and subordinates.

What if the number of subordinates is too low?

The mangers potential cannot be fully utilized

The goal of the organization cannot be effectively accomplished

Factors influencing Span of Supervision

Ability of the manager

Capabilities of the subordinates


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Nature of work

Facilities available

Extend of Delegation

Quality of plans

MBO (MANAGEMENT BY OBJECTIVE)

MEANING:

MBO is a management system in which each member of organization effectively participates and involves himself. This system gives full scope and to the individual strength and responsibility.

DEFINITION:

George S. Ordiorne

“The system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms of results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members”.

Koontz and weihrich

“MBO is a comprehensive managerial system that integrates many key managerial activities in a systematic manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives”.

FEATURES OF MBO:

1. IT IS NOT ONLY A TECHNIQUE BUT ALSO A PHILOSOPHY:

The philosophy of MBO and its concepts guides and influences every aspect of management. MBO is an approach which includes of management.


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2. SETTING OBJECTIVES:

The assumption of MBO is that employee participation and involvement in goal setting which leads too better commitment and motivation towards the achievement of organizational objectives. It lay emphasis on participate decision making.

3. PROVIDES EVALUATION AND MECHANISM:

MBO is a systematic approach to managing an organization where in all key personnel are expected to contribute to achieve the overall goals. It attempts to blend and balance the goals of all key personnel. It provides evaluation mechanism through which the contribution of each individual is measured.

4. CREATES LINKAGE BETWEEN ORGANIZATIONAL GOALS AND INDIVIDUALS GOALS:

MBO creates linkage between organizational goals and individuals goals. The performance targets are derived from the overall objectives of the organization.

5. REWARDS ARE GOVERNED BY THE RESULTS ACHIEVED:

The performances of employees are periodically evaluated in the light of predetermined targets. MBO emphasis on improving future performance. Rewards are governed by the results achieved.

6. CONTINUOUS PROCESS:

MBO is a continuous process or a never ending process. The continuous nature of MBO process not only ensures sustained concentration of efforts towards organizational goals, it also helps in modifying the goals to suit the changing conditions.

SIGNIFICANCE AND ADVANTAGES OF MBO:

1. TARGETED PLANNING:

MBO results in verifiable goals which can easily be translated into action plans. The objective setting process of MBO leads to an integrated hierarchy of objectives throughout the organization.


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2. PARTICIPATION AND COLLABORATION:

Under MBO objectives of each department are consistent with the overall objectives of the organization. Managers at all levels understand fully their role in total organization. There is active participation and collaboration among the various levels of the organization.

3. MOTIVATION:

Managers at all levels are involved in goal setting. As a result they are more committed to the goals of the organization. Rewards are linked with performance. Employees are allowed considerable discretion in setting individual targets which provides them psychological satisfaction.

4. EFFICIENT COMMUNICATION:

There is frequent interaction between superiors and subordinate which leads to mutual faith and understanding among them. It improves the work climate in the organization and leads to better communication.

5. TRAINING AND DEVELOPMENT:

MBO provides opportunity to subordinate executives to participate in decision making process. This helps in developing their conceptual and human skills. MBO enables an organization to fully utilize the ability of its members. MBO helps in identifying the areas in which employees need further training.

6. PERFORMANCE APPRAISAL:

MBO provides objective yardsticks for systematic evaluation of performance. The performance of subordinates in monitored more effectively due to periodic review of progress. The greatest advantage of MBO is perhaps that it makes it possible for a manager to control his own performance.

LIMITATIONS OF MBO

1. DIFFICULTY IN TEACHING MBO PHILOSOPHY:

When managers are clear about this concept only then they can explain to subordinates how it works, why it is being done, what will be the expected results, how it will benefit participants, etc. this philosophy is based on self direction and self control and aims to make managers professionals.

2. FAILURE TO PROVIDE GUIDELINES TO GOAL SETTERS:


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The managers who will guide in goal setting should themselves understand the major policies of the company and the role to be played by their activity. Failure to understand these vital aspects will prove fatal for this system.

3. DIFFCULTY IN SETTING GOALS:

The main emphasis in MBO technique is on setting objectives. The setting of objectives is not a simple thing. It requires lot of information for arriving at the conclusions.

4. EMPHASIS ON SHORT TERM OBJECTIVES:

. There may be possibility that short term and long term objectives may be incompatible because of specific problems. So proper emphasis should be given to both short term and long term objectives.

5. DANGER OF INFLEXIBILTY:

It will also be foolish to strive for goals which have become due to revised corporate objectives.

MBE (MANAGEMENT BY EXCEPTION)

MEANING:

Management by exception is a system of identification and communication that signals to the manager when his attention is needed and implies the use of management by exception particularly in controlling aspect. Thus it can be stated that MBE is a controlling technique.

ADVANTAGES:

Executives are left with more time to tackle bigger and tougher issues, as the details of small problems are left to the subordinates.

There is better utilization of management talent across the organization as even the subordinates get to implement their own decisions and solve problems in their own way, however small they may be.

It increases the span of management and delegation of authority is improved.

It provides greater opportunities and thus increases confidence and motivation.

It uses the latest knowledge on trends, history and business data.

It forces every manager to be thorough and precise and also up-to-date with all relevant information.

It helps to identify problems before they become big.

It also prevents last minute run and panic.

Qualitative and quantitative yardsticks can be established judging the situation and people.


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It increases chances of better performance appraisal and hence improves motivation. Communication is improved between different segments of an organization. This focus on results causes it identify any problem in any part of the organization. Better organizational cohesiveness and achievement of objectives.

LIMITATIONS:

Newly established organizations and organizational with a dynamic environment cannot adopt the techniques easily.

Establishing standards i.e., both qualitative and quantitative takes a lot of time and involves lot of effort and precision (accuracy).

Proper and knowledgeable subordinates need to be found, which is a difficult process. Subordinates act out of over-confidence and think they can handle bigger problems too. Thus

often tougher problems go unreported and by the time it comes to the superior. It is too late and hence very difficult to set things.

PROCESS OF MBE

Measurement Projection Selection Observation Comparison Decision making

Measurement:

By assigning values to past and present performances, exceptional areas can be identified.

Projection:

All the values that are meaningful too the organizational objectives are to be extended to see future requirements.

Selection:

This involves the criteria and method which management will use to follow the progress path towards organizational objectives.

Observation:

Current performances are observed and measured so that managers are aware of the current state of affairs in the organization.


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Comparison:

It involves the evaluation of the actual performance against planned performance, identifying the exceptions that require attention and reporting the variations to the management.

Decision making:

This involves prescribing the action that must be taken in order to bring performance back into control or to adjust expectations to reflect changing conditions within and outside the organization or to exploit opportunity.

ORGANISATION

MEANING

The word organization has come from the word organism which means a structure of

interrelated and interdependent parts.

The part or components of organization consist of men, machines, materials, methods,

money, functions, authority and responsibility.

The task of organization is to unite or integrate these components effectivelt for the

purpose of attaining the common goal.

DEFINITIONS

According to Allen, “Organization is the process of identifying and grouping the work to

be performed, defining and delegating responsibility and authority, and establishing relationships

for the purpose of enabling people to work most effectively together in accomplishing

objectives.”

According to Wheeler, “Organization is the structural framework of duties and

responsibilities required of personnel in performing various futions within the company”.

According to Haney, “Organization is a harmonious adjustment of specialized parts for

the accomplishment of some common purpose or purposes”.


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PRINCIPLES OF ORGANISATION:

A sound organization structure should adhere to the following principles:

Objective- The various activities performed in an organization should help to attain the goal of

the enterprise. The goal of each individual and department must synchronise with that of the

concern.

Division of work-The total work of the enterprise should be divided into identifiable functions

like productions, purchases, marketing, finance, etc., for better performance and control. This

leads to specialization.

Authority and responsibility:-authority is the official right of a manager. Responsibility is the

duty of a subordinate, to whom some work has been assigned, to report to the superior on the

work done.

Delegation-It means transfer of authority by a superior to his subordinate. A subordinate to

whom some work has been given must also be given the necessary authority to carry out the task.

Delegation results in a vertical flow of authority from the top level to the organization structure.

Balance- Authority and responsibility must always be equal. If responsibility exceeds authority,

the subordinate will not be able to perform the task. On the other hand, if authority exceeds

responsibility, there will be misuse of authority.

Responsibility is absolute- responsibility is never delegated. For the performance of his

subordinates, a superior is accountable to his own superior.

Unity of command-It means that subordinate should get orders from one superior only and is

accountable o him alone. Dual subordination results in confusion and leads to indiscipline.

Distinction between line and staff functions-Line functions are concerned with the

performance of the basic activities of the business. Production and sales are the line functions of

a manufacturer. Staff functions are of a supportive nature. Purchases, Personnel, etc., are staff

functions. The staff managers can only advise on certain matters. They cannot take the final

decision.


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Simplicity-The organization structure must not be a complicated one. It should have only few

levels of authority so that there is free flow of communication between persons.

Flexibility-The organization structure should not be rigid. It should be capable of being adjusted

according to the required change in future.

ORGANISATION STRUCTURE

An organization structure explains the position and official relationships between the

various individuals working in an organization. It helps to understand an organization better. It

provides answer to the following questions:

Who is the top-most official in an organization?

Who are the department heads? What are their functions?

Who are the subordinate staff in each department? Etc.

ORGANIZATION CHART:

Diagrammatic presentation of the organization structure is what is known as an

'organization chart'. It may show the names, designations and functions of the personnel in an


General Manager

Production manager Marketing manager

Foreman 1 Foreman 2 Asst.marketing manager1

Asst.marketing manager2

Worker1 Worker2 Worker1 Worker2

Salesman1 Salesman2 Salesman2Salesman1

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organization. A specimen of an organization chart is given below:

Merits of an organization chart:

The merits of an organization chart may be stated as follows:

1. It shows the official positions of each individual in an organization.

2. From the organization chart, it is possible to make out who the superiors and subordinates

are.

3. It gives identity to the personnel in an establishment.

4. It helps an outsider to understand the different designations in an organization.

Drawbacks of an organization chart:

The limitations or drawbacks of an organization chart are given below:


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1. An organization chart can only show the formal or official relationships in an organization. It cannot depict the informal or personal relationships between the individuals.

2. It may, sometimes, promote ill-feelings among the personnel in an organization. An individual, who has been indicated in the chart as a subordinate, may not be able to take it in the true spirit.

3. Often, the organization chart is not updated in accordance with the changes in position taking place in the organization from time to time.

UNIT – 2

Business: Business means the state of being busy, in other words those activities which involve production of wealth.

A business is an enterprise which means distributes or provides an article or services which other members of the community need and are able and willing to pay for it.

Types of Business Organization

1. Sole Proprietorship

2. Partnership

3. Company

4. Co-operatives

5. Multinational Companies

1. Sole Proprietorship : Business wholly owned by a single individual is known as sole trading. The profit and loss is made is fully responsible by that person.

Characteristics: One man ownership and control ,Enjoyment of entire profit, simplicity, self employment .

2. Partnership : A partnership is an association of two or more persons working with a common goal and zeal and agreed to share the profits and losses mutually.

Characteristics: mutual agreement, sharing of profits, unlimited liability, utmost good faith.

Kinds of partners

(i) Active Partner : a partner who takes full interest in business

(ii) Sleeping Partner: a partner who does not take interest in business but contributes in capital.

(iii) Partner in Profits only: partners interested in profits only.


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(iv) Sub Partner : he is stranger to contract as he is not a part to the partnership, he is not related to business.

(v) Partner by Estoppels : a person may not be really a partner in business but by his behavior he makes outsider believe that he is a partner.

(vi) Minor Partner: a person who has not completed the age of 18 but due to compulsion from the court he may be appointed as a partner.

3. Company : company is an association of persons who contribute money or money’s worth to a common stock and employ it in some trade or business and also share the profit and loss as the case may be arising there from.

(i) Private Limited Company : it is a company which has a minimum paid up capital as may be prescribed.

(ii) Public Limited Company : minimum number of persons should be seven and maximum unlimited.

(iii) Government Company : fully taken over or run by the Government (State or Central )

4. Co-Operatives : it is voluntary association of persons for mutual benefit and its aims are accomplished through self help and collective effort.

5. MNCs : Multi National Companies are companies that manufacture and market products or services in several countries.

Recruitment :

It is a process of finding suitable candidates for the various posts in an organization.

Stages involved in selection of candidates:

1. Receiving Application forms

2. Scrutiny

3. Preliminary Interview

4. Tests

5. Final Interview

6. Checking References

7. Medical Examination

8. Appointment

9. Probation

10. Confirmation of Service


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Training : training is the process of imparting skill or job knowledge to a person . It takes an individual from where he is to where he should be

Importance of Training:

1. Improvement in skill and knowledge

2. Higher production and productivity

3. Job satisfaction

4. Better use of resources

5. Reduction of accidents

6. Reduction in complaints

Performance Appraisal :

It means evaluation of performance of an individual, it is a continuous process, done periodically to find the employee’s strength and weakness.

Objectives:

1. To improve management development

2. To improve employees performance

3. Work force planning

4. To improve effective communication

Methods of Performance Appraisal :

(i) Trait Based techniques : it means performance evaluated by qualities it can be as such as

Job knowledge – having sufficient knowledge in job

Leadership – having or acquired leadership qualities

Loyalty

(ii) Graphical scale method : under this method traits are broadly classified and put in a graphical form

(iii) Ranking method : this method is very easy here rank is provided on the basis of certain traits , ranking can be outstanding, good and below average.

(iv) Grading : here categories such as good, very good and excellent are used.


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(v) Group appraisal : here a small number of persons are taken and appraisal is done.

(vi) MBO (Management By Objectives) under this method the superiors and subordinate managers of an organization come and discuss upon the employee whether to promote or not etc.

Problems in Performance Appraisal :

1. There is no standard yardstick to measure the performance

2. Some superiors may be strict in evaluating the other may be not.

3. personal disliking may also affect the appraisal

4. Discrimination may take place based on religion, caste, sex and mother tongue.

5. Many methods may bring in problem.

Steps to make Performance Appraisal effective

1. Continious follow up

2. Standard measure to be followed

3. Manager capacity to be taken care off.

4. No discrimination should be done

5. There should be trust and confidence in the Performance Appraisal

6. Double appraisal should be done to prevent any mistakes

7. Better communication should be there

Accidents

Accidents and Safety (as per Factories act)

As per the Industrial Dispute act “Any occurrence which causes bodily injury to a person making him unfits to resume duty within 48 hours”. Any untoward incident which causes impairment (reduction of capacity) to the person, materials , the machinery or to the process.

Causes of Accidents:

1. Monotony and repetitive

2. Work Fatigue and physical exhaustion

3. Faulty layout

4. Faulty design of machines


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5. Defective systems and process

6. Lack of training

7. Lack of precautions in handling dangerous substances

8. Accidents prone situations (high tension wire)

9. Accident prone workmen

10. Absence of safety systems

11. Failure of safety systems

Cost of Accidents

1. Loss of man days, machines and materials.

2. Injury to employee and compensation for the same.

3. Financial losses like repairing the machine – compensation under the act etc.

4. Continuing to keep the workmen who have become less capable due to accidents.

5. Breakdown in mutual trust between employer and employee.

6. Bad publicity and image loss.

7. Unwillingness to take up risky jobs in future.

8. Disturbance in production sequence.

9. Cost of production lost on that date.

10. Consequential losses like market loss and loss of face with competitors.

How to reduce accidents:

1. Investigate each accident and find out the cause.

2. Fix responsibility and prevent repetition.

3. After each accident, explore the systems and correct them.

4. Promote safety awareness, safety consciousness and safe habits.

5. Build up a safety department.

6. Constant training.

7. Preventive maintenance – particularly on holidays. Observe safety day or week (3rd Nov - Bhopal Gas Tragedy)

8. Identify hazardous materials and pay special attention

9. Reduce monotony of work

10.Display do’s and don’ts near all the machines


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Plant Layout

It means planning for location of all machines , equipments , utilities , work stations material storages areas, service areas , rest rooms , lunch rooms , coffee/tea rooms , rest areas, movement of materials , people around into and within the buildings.

Objectives of Layout:-

1. facilitates manufacturing process,

2. Proper and efficient utilization of available of floor space.

3. To ensure that work proceeds from one point to another point,

4. provision of control of operations,

5. provide adequate safety to the workers,

6. provision of medical facilities and cafeteria,

7. Careful planning to avoid frequent changes in layout.

Advantages of Good Layout:-

1. To the worker - better safety and security to the worker, less number of operations, time gap between two motions is reduced considerably, more output productivity.

2. Manufacturing Costs – wastage is reduced, quality product is achieved, more production in quantity.

3. Management – maximum usage of floor space, effective supervision, more storage facilities, production increased, negligible accidents, there by plant shut down comes to nil.

Types of Layout : - Classified under

1. Process Layout; - or functional layout – here more emphasis is given to specialization.

Advantages - similar products with small difference, characteristics is produced in great quantity. Wide flexibility, easy to adjust any modification can be done. Effective supervision. More control on machines. Lower capital investment.

Disadvantages: more materials needed, more floor space needed, buffer stock needed.

2. Product Layout: - or Line product – The machine or equipment is determined at some definite place where machine is required to perform some operation from a sequence of operations designed to manufacture the product.


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Advantages – widely used, provides smooth and regular flow of materials to finished goods, lesser inspection, reduces material handling.

Disadvantages: A break/ halt at one point can affect the other process too. Heavy capital investment, vulnerability to production line shut down.

3. Stationary Layout: This type of layout is used in those situations where heavy goods or of huge size and weight that their movement from one place to another is not possible. Here men, materials and raw materials are moved to a place where activities are carried out.

4. Cellular Type Layout: Here machines are grouped into cells;

each cell is formed to produce a single part family.

5. Hybrid Type: - In this type of layout two layouts are taken together and products are made out.

6. Service Type Layout: - Here this type of layout is used in hospitals, hotels , business enterprises shopping malls etc.

Steps in planning the layout for new enterprises.

1. Planning of objectives ,nature of machines, equipments and operation involved in the manufacture

2. Decide on the machines and involved in the manufacture

3. Develop process charts.

4. Decide on the best process layout needed to manufacture

5. Space layout should be drawn

6. Decide on the number of labors, line man inspectors and supervisors for effective control.

7. Location of toilets, windows break rooms to be decided.

8. Drainage wastages electric fittings tube lights ventilation facilities to be provided.

9. Pathway to be constructed

10. All provision should be drawn accordingly to the GoI Factory Act.


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Techniques of Plant Layout :-

1. Type and quality of labor required,

2. Volume of work to be done fro present space to future,

3. Description of operations their sequence ,

4. Nature of machines and operations,

5. Amount of material buffer stock,

6. Size of finished and semi finished goods.

Plant Layout tools and techniques: -

1. Process charts –

2. Process flow diagrams –

3. Machine data cards.

UNIT – 3

The word “Organization ” originates from the word organism which means a structure with its parts so integrated that their relation to each other is governed by their relation to be whole. It also means work together.

Koontz and O Donnell – Organizing involves the establishment of an intentional structure of roles through determination and enumeration of the activities required to achieve the goals of an enterprise and each part of it, it involves assigning the activities , delegation of work, coordination etc.

Characteristics of an Organization :

1. Division of Labor – Work should be allotted on the basis of specialization, efficiency and the capacity.

2. Co-ordination : Every organization should adopt their own suitable methods to ensure proper co-ordination of the different activities performed at various work points

3. Objectives: Any organization should be bound by a set of objectives which should be common and known to everybody.

4. Social system : Its activities are governed by social and psychological laws. There are two aspects - the formal and the informal one.


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5. Authority and Responsibility : An organization itself means an arrangement of position into a graded series, the position are arranged in such a order that subordinates is under a superior. It shows the hierarchy of the subordinates and superiors

6. Communication: It also shows the ways of communication, the path of communication.

Organization Charts : For better and effectiveness of the organizing function, a manager can make use of several aids or organization design. The chart shows the functions or positions of the organization and their relationships.

Theories in Organization

1. Classical Theory

2. Neo Classical Theory

3. Modern Theory

1. Classical Theory: This theory is derived from F.W.Taylor , it gives the organization structure . Universal principles, the rules. Job description and training. It has four principles Division of Labor, Scalar Chain and functional process, Structure, Span of Control

2. Neo Classical Theory : This theory is developed by Elton Mayo he took the principles from classical theory and added some more principles such as span of control, communication gaps, decision makers.

3. Modern Theory : This theory is based on the above two theories and also includes, Strategic Parts , the nature of their mutual dependency, the processes in the system which link the parts together , the goals sought to be accomplished by the system.

Importance of OB to managers:

1. Ensures cohesiveness and order in the organization.

2. Facilities the effective communication.

3. Foster co – ordination.

4. Improves efficiency and quality of work.

5. Adapts to new technology.


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Motivation

Motivation means a process of stimulating people to action to accomplish desired goals – W.G.Scott.

Something that moves the person to action and continues him in the course of action already initiated

Characteristics of Motivation

1. It is a Psychological concept – appreciation from the manager

2. Motivation is always total and not piece meal – it means that a person cannot be motivated in installments.

3. Motivation may be financial or non financial

4. Motivation is a continuous process

Importance :

1. Inducement of employee

2. higher efficiency

3. Optimum use of resources

4. better human relations

5. reduction in labor turnover

6. avoidance of strikes and lockouts

Theories in Motivation

1. Maslow Need Hierarchy theory

2. McGregor’s X and Y Theories

1.Maslow Theories on Motivation

He classified human needs into five categories and arranged the same in a particular order

1. Physiological Needs – these are primary needs or basic needs such as food, clothing. Shelter

2. Safety needs – the safety or security needs emerge once the basic or physiological needs of a person are fulfilled.


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3. Social needs – friendship , companionship, association and love affection comes under this

4. Esteem needs – the needs arise in view of a persons desire to have has ego satisfied, ego social status and reputation

5. Self Actualization needs – after reaching all the above needs the person goes for more of capability.\

McGregor’s X and Y Theories

‘X’ Theory – This theory is negative or pessimistic in approach. The following assumptions are

People generally do not like to work

People are un ambitious, lazy

People lack creativity

Employees need to constantly watched or supervised

‘Y’ Theory – This theory is Positive in approach. The following assumptions are

This theory is positive in approach

People love their work

People are responsible and positive outlook

Self directive

MORALE

A Morale is nothing but the attitude of employees of an organization towards their job, the management, the fellow employees, the superiors and the subordinates.

Characteristics of Morale:

3. It denotes group attitudes,

4. it is a psychological concept,

5. it may be high or low,

6. it is tangible

Job Satisfaction :

It is a pleasurable or positive emotion state resulting from the appraisal of one’s job or job experiences.


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Factors affecting job satisfaction :

Personal Factors Organizational Factors

Age nature of work

Sex pay and other benefits

UNIT 4

Leadership

The word leadership refers to the process of leadiong , those entities that perform one or more acts of leading , the ability to affect human bahavoiur so as to accionmlish a mission a mission designated byu the leader.

Good leaders are made not born : one who has the desiere and will power to lead can become an effective leader. Good leaders develop through a continiours process of self study , education , training , experience and reflection.

Difference between Manager and Leader

Sr No Manager Leader

1. Administrator Innovate

2. Has Subordinates Has Followers

3. Focus on systems Focus on people

4. Rely on control Inspire trust

5. Accept the status quo Challenge the status quo

6. Managers imitate Leaders originate

7. Managers copy Leaders show originality

The process of Great Leadership

1. Challenge the process2. Inspire a shared vision3. Enable others to act4. Model the way5. Encourage the hearts


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Characteristics of Leadership :

It is a quality within inner self

It is a process of influencing others

It requires motivation

It is a continuous process

It requires confidence of followers

Qualities of a Leader:

Ability to analyze

Emotional stability

Self confidence

Foresight

Better Understanding

Mental courage

Communication skills

Ability to guide

Positive thinking

Functions of Leader

1. Planning 2. Policy making3. Execution of plans and policies4. Controlling 5. Providing reward and punishment6. Settlement of disputes7. Role model

Different Kinds of Leadership styles

1. Autocratic Leader – here the leader wants his subordinates to work in the manner he wants. The autocratic leader thinks that his followers are incapable of making decisions.

2. Democratic leader – a democratic leader does not make unilateral or one sided decisions. He allows his subordinates to discuss the problem and put forth their views clearly. He thinks all the employees are capable.


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3. Laissez Faire Leader - He does not lay down guidelines within which his followers have to work he does not interfere with anybody

4. Functional Leader – This type of leader is one who has specialization in particular field of activity. He always thinks and spends most of the time on the task given to him.

5. Institutional Leader - An institutional leader is one who has become a leader by virtue of his official position in the organizational hierarchy

Theory on Leadership

The Traits Theory – this theory is based on the assumptions that a leader is a person who possesses certain exceptional traits or qualities. Qualities such as Intelligence, communication skills, judgment, courage, knowledge, sincerity, determination and physical appearance.

The Behavioral Theory : here leaders are made not born. The behavior of a person attracts many followers towards him. These followers are ready to accept him as their leader as they are influenced and impressed by his behavior.

The Situational Theory: According to this theory leadership is situation based. According to the situation leader does his duties.

Communication

Communication: Communication means common derived from the Latin word Communize. It is a process of sharing facts, ideas and opinions in common.

The information sent is called message, the person who sends the information is called sender or communicator, the person who receives the information is called receiver or communicatee . The act of conveying message is called transmission.

Objectives of Communication

- To give and receive information

- To provide advices and opinions

- To provide counseling

- To issue orders and instructions

- To impart education and training

- To receive suggestions

- To persuade people

- To improve morale

- To motivate people


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The Communication Process

Communication is the process of passing information from one person to another.

Nature of Communication:

1. Two way process 2. knowledge of language3. the message should have substance 4. Communication may be made in gestures too5. communication is a continuous process6. communication may be formal or informal

Types of Communication :

1. Formal Communication : This type of communication follows the hierarchy ,(Scalar chain). It is always authentic and in a written form such as policy manuals, orders, circulars and notices. Any information that officially reaches an employee is called formal communication.

2. Informal Communication : This type of communication is the result of casual talk or personal contact between two or more persons. Informal communication is also called as “Grapevine”.

Types of Grape Vine:

Single Stand Gossip Probability


Sender Encoding Channel Decoding Receiver

Feedback

A

B

C

D

E

F

G

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Cluster type

3. Oral Communication : Verbal transmission of information is called oral communication.

4. Written Communication : this type of communication is in a written form.

5. Gesture Communication : gestures are actions , such as nodding head, shaking hands, rolling of eyes etc

6. Downward Communication : from the top authority to the lower level such as orders, messages, circulars etc

7. Up Ward Communication : From the lower level management to the top level management such as feedback and reports .

8. Sideward communication : persons with same designation .

Barriers to Communication:

1. Personal Barriers :- Lack of command over language, lack of self confidence, lack of fluency, faulty pronunciation , lack of confidence

2. Mechanical Barriers :- Distortion such as cross talk, bad signal and electrical disturbance.

Overloading of machines, faulty equipments

3. Organizational Barriers:- Inadequate facilities, too much rely on formal organization.

Measures to overcome communication Barriers:

1. Improving vocabulary power and fluency,

2. Gaining self confidence

3. Shorter communication channels,

4. Establish direct contact wherever possible,

5. Repair of faulty devices,

6. Use of grapevine,

7. To make use of more electronic communication devices,


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8. Feedback etc

Motivation

Motivation means a process of stimulating people to action to accomplish desired goals – W.G.Scott.

Something that moves the person to action and continues him in the course of action already initiated

Motivation as the process of attemting to inflenc to do your will thoruth thye possiblity of reward”.

According to websters definition, “ Motivation is an impulsive, emotion desire, or psychological need acting as incitement to action”.

Characteristics of Motivation

5. It is a Psychological concept – appreciation from the manager

6. Motivation is always total and not piece meal – it means that a person cannot be motivated in installments.

7. Motivation may be financial or non financial

8. Motivation is a continuous process

Importance :

7. Inducement of employee

8. higher efficiency

9. Optimum use of resources

10. better human relations

11. reduction in labor turnover

12. avoidance of strikes and lockouts


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Motivation Process :

Motivation is treated as a need satisfying behaviour.

Theories in Motivation

3. Maslow Need Hierarchy theory

4. McGregor’s X and Y Theories

1.Maslow Theories on Motivation

He classified human needs into five categories and arranged the same in a particular order


Unfulfilled Wants, desires

Tension Drive

Learning

Behaviour Goal

Tension Reduction

Cognitive Process

Basic Needs

Social Needs

Safety Needs

Self Actualisation Needs

Esteem Needs

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6. Physiological Needs – these are primary needs or basic needs such as food, clothing. Shelter

7. Safety needs – the safety or security needs emerge once the basic or physiological needs of a person are fulfilled.

8. Social needs – friendship , companionship, association and love affection comes under this

9. Esteem needs – the needs arise in view of a persons desire to have has ego satisfied, ego social status and reputation

10. Self Actualization needs – after reaching all the above needs the person goes for more of capability.\

McGregor’s X and Y Theories

‘X’ Theory – This theory is negative or pessimistic in approach. The following assumptions are

People generally do not like to work

People are un ambitious, lazy

People lack creativity

Employees need to constantly watched or supervised

‘Y’ Theory – This theory is Positive in approach. The following assumptions are

This theory is positive in approach

People love their work

People are responsible and positive outlook

Self directive

Types of Motivation :

1. Positive Motivation Negative Motivation

- Praise - Demotions

- Participation in decision making - Dismissals

- Pride - Lay offs


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- Delegatio of Authority and resp - Pay cuts

2. Extrinsic Motivation Intrinsic Motivation

- Increase in wages - Praise

- Retirement benefits - Recognition

- Rest Periods - Competition

- Holidays and Health Insurances - Participation in

decision making

3. Financial Motivation Non Financial Motivation

- Wages and Salaries - Praise

- Bonus , insurances - Job rotation

- Profit sharing, vacation pay - Recognition and power

- Co – Partnership - job security, team spirit

- Stock options - promotion

UNIT – V

PROFESSIONAL ETHICS

BUSINESS ETHICS:

DEFINITION:

The study and examination of moral and social responsibility in relation to

business practice and decision making in business is known as “Business Ethics”.

The term “business” is commonly referred to the commercial activities achieved

at making profit. But gradually there is a substantial change in the way in which people viewed

the business. In the past primary objective of a business was profit maximization but the present


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perspectives on business objectives is not maximization.It is profit maximization in long run

besides fulfilling the ethics in the business. A business is regarded as social institution forming

integral part of social systems .The business is viewed as subsystem to the social system. This is

because any type of social system is influenced by :

1. The way the business functions

2. The organization of the business

3. Innovations

4. Transmission and diffusion of information.

5. New ideas etc.

They have either direct or indirect effect on the society.

Business Ethics is the behavior that a business adheres to in its daily dealings with the

world. The ethics of a particular business can be diverse. They apply not only to how the

business interacts with the world at large, but also to their one-on-one dealings with a single

customer.

When business people speak about “business ethics” they usually mean one of three things: (1)

avoid breaking the criminal law in one’s work-related activity; (2) avoid action that may result in

civil law suits against the company; and (3) avoid actions that are bad for the company image.

Businesses are especially concerned with these three things since they involve loss of money and

company reputation.

ETHICS IN WORK PLACE:

Workplace ethics are codes of conduct that influence the development of an ethical

culture within the workplace. Going beyond what is considered legal in the area where the

business operates, workplace ethics inspire communication between employees, allow for respect

to be extended to each person within the organization, and promote customer relationships that

are based on honesty and integrity. While there are core elements that tend to define a work-


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based code of ethics, the specific expressions of these central values vary from one corporate

setting to the next.

It is important to remember that workplace ethics are shaped by two important factors. First,

workplace policy must be in harmony with all laws and regulations that are currently in force in

the jurisdiction where the business operates. This helps to ensure that basic workplace ethics

preclude any pressure or coercion to engage in actions that are considered to be illegal, promote

discrimination in the workplace, support unfair hiring and firing practices, or allow wages to be

set that are below the minimum legal standards for the area.

Along with being shaped by laws and regulations, workplace ethics are also influenced

by business ethics For example, ethical business practices would include actions such as not

using marketing materials or campaigns that mislead consumers. Workplace ethics would also

involve establishing and operating support networks such as wellness programs that help

employees be healthy and happy. Ethics of this type would also involve the conscious effort to

cultivate a working environment where people want to come to work and be productive because

of pride in what they do for a living.

While businesses tend to comply with laws and regulations set by local jurisdictions, not

every company sees the need to develop workplace ethics that affirm the worth of employees and

motivate them to be productive on the job. When a company chooses to do no more than what is

required by local law, the chances of heavy employee turnover are much higher. In addition, it is

easier for cliques to develop among certain groups of employees, a state that can often

undermine productivity and cost the company a great deal in terms of time and revenue

generation.

FORMULATION OF ETHICS:

Family Ethics are formulated through the operation of five forces in the individual’s

environment:

1. Influences: the formulation of ethics begins when the individual is a small child parents

demonstrate high ethical standards.


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2. Peer Influence: As the child develops contacts outside the home through school, play and

work, peer exert considerable influence on the individuals ethical beliefs

3. Experience: As a person matures and develops as a human being, he or she will be exposed to

many critical experiences that will affect his or her ethical standards.

4. Values and Morals: People who have high value on money and material possessions may have

strong ethical standards. People who value the quality of life enjoyed by all living creatures will

have strong ethics.

5. Situational Fact us: People often change their ethics in response to unforeseen situational fact

us.

MANAGERIAL ETHICS:

Managerial ethics illustrate a rather sensitive issue. The recent business history has

proven ethics as a rather challenging objective of larger organizations. The following topics /

views may illustrate fundamental issues in the current debate. The current competing views

include "Maximize Profit" and "society's welfare" .

Maximizing profits illustrate the greatest commitment to shareholder and

stakeholders. In this particular theory, the managerial staff is only committed to maximize the

bottom-line in terms of profit: a mean to an end in order to achieve the highest possible profits.

Society's welfare illustrates a common goods approach.

In this particular approach managerial staff attempts to achieve a balance between

the bottom-line and social welfare of the society and employees. It is of great interest to explore

the theoretical aspects of managerial issues and compare them to real practices.

The two above name theories assume that managerial issues are constrained and

objective; stakeholders vs. society. On the other hand, the reality proves a rather multi

dimensional reality; stakeholders vs. society vs. culture vs. religion vs. politics vs. diversity vs.

personality vs. globalization vs. many other unpredictable factors. Further, both of theories

appear to be better suited for larger organizations: small businesses encounter more immediate

issues such as revenue and cash flow rather than managerial ethics.

Most small businesses ran by savvy business people are less concerned about


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ethics. Out of extensive experience in consulting small businesses, I can confidentially stat that I

have never met a small business owner that was not willing to take unethical actions in order to

maximize profits. Given the fact that this is not a scientific statement, it is important to view this

statement in terms of personal experiences, which conflicts with the academic management

practices.

Moreover, there is more to the issue of ethics. Given the fact that both competing

theories consider some sort of managerial responsibility to some one or some group, illustrates a

major weakness of both theories. Both theories fail to point to the necessity of "perception". It is

hypocritical to expect only one segment of a society i.e. businesses to create value or consider

societal consequences.

Thus, most business simply attempt to create a perception of societal

responsibilities rather than genuine concerns In terms of creating profits, it is important to

understand that in practical terms, it is difficult to create social awareness or consider social

issues without being able to prove their value to the business shareholder or stakeholder. Thus,

any managers' first priority should be profits, Once the objective of achieving the highest

possible profits have been achieved, an organization can effort to pursue alternate goals of

societal concerns and improvement.Some people may argue that societal benefits / concerns may

have a direct influence on the bottom line of any given business.

However, it is important to point to the fact that it is extremely difficult to quantify

the direct impact of societal charity work on corporate profits. It is merely possible to use

anecdotal and qualitative data in order to assign arbitrary real value to such social actions.

Ultimately, it is important to consider the main goal of any given company i.e. profits.

It is further important to allow for businesses to pursue and achieve their goals before they can

be expected to become beneficial corporate citizens.

MANAGINIG ETHICAL BEHAVIOUR:

Managing ethical behavior is a one of the most pervasive and complex problems

facing business organizations today. Employees' decisions to behave ethically or unethically are

influenced by a myriad of individual and situational factors. Background, personality, decision

history, managerial philosophy, and reinforcement are but a few of the factors which have been

identified by researchers as determinants of employees' behavior when faced with ethical

dilemmas. The literature related to ethical behavior is reviewed in this article, and a model for


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understanding ethical behavior in business organizations is proposed. It is concluded that

managing ethics in business organizations requires that managers engage in a concentrated effort

which involves espousing ethics, behaving ethically, developing screening mechanisms,

providing ethical training, creating ethics units and reinforcing ethical behavior.

CODES OF ETHICS:

Definition: Written guidelines issued by an organization to its workers and management, to help

them conduct their actions in accordance with its primary values and ethical standards.

A code of ethics is a set of guidelines which are designed to set out acceptable

behaviors for members of a particular group, association, or profession. Many organizations

govern themselves with a code of ethics, especially when they handle sensitive issues like

investments, health care, or interactions with other cultures. In addition to setting a professional

standard, a code of ethics can also increase confidence in an organization by showing outsiders

that members of the organization are committed to following basic ethical guidelines in the

course of doing their work.

The format of a code of ethics can vary widely. Unlike more straightforward

employee guidelines and codes, a code of ethics usually starts with a section that sets out the

purpose, aspirations, and goals of the parent organization. For example, the 2002 code of ethics

for the American Psychological Association (APA) begins: “Psychologists are committed to

increasing scientific and professional knowledge of behavior and people's understanding of

themselves and others and to the use of such knowledge to improve the condition of individuals,

organizations, and society.”

Following a general introduction to the function and goals of an organization is a section

dedicated to setting out specific behavior standards for members. This section usually covers

potential ethical issues such as confidentiality, partisanship, or misuse of information. In addition

to addressing theoretical ethical minefields, a code of ethics often contains a section which

outlines the procedures for handling grievances, both outside and inside the organization.


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A well written code of ethics will be easy to follow and very clear, with sections that

people can point to in order to illustrate specific issues. In the sense of organizations like the

APA, members agree to support the code of ethics both because it is good practice and because it

promotes their organization. A code of ethics also stands behind most scientific experimentation,

ensuring that the results are valid and that the testing was carried out in an ethical way.

A code of ethics: A code of ethics often focuses on social issues. It may set out general

principles about an organization's beliefs on matters such as mission, quality, privacy or the

environment. It may delineate proper procedures to determine whether a violation of the code of

ethics has occurred and, if so, what remedies should be imposed. The effectiveness of such codes

of ethics depends on the extent to which management supports them with sanctions and rewards.

Violations of a private organization's code of ethics usually can subject the violator to the

organization's remedies (such as restraint of trade based on moral principles). The code of ethics

links to and gives rise to a code of conduct for employees.

ENCOURAGING ETHICAL BEHAVIOUR:

Most authorities agree that there is room for improvement in business ethics. One of

the most problematic questions raised in relation to business ethics is whether or not businesses

can become more ethical in the real world. The majority opinion on this issue suggests that

government, trade associations, and individual firms can indeed establish acceptable levels of

ethical behavior.

The government can do so by legislating more stringent regulations. But, rules require

enforcement and when in many cases there is evidence of lack of enforcement even the ethical

businessperson will tend to "slip something by" without getting caught. Increased regulation may

help, but it surely cannot solve the entire business ethics problems.

Trade associations can and often do provide ethical guidelines for their

members. These organizations within particular industries are in an excellent position to exert

pressures on members that stoop to questionable business practices. However, enforcement and

authority vary from association to association. Moreover, exactly because trade associations exist

for the benefit of their members, harsh measures may be self-defeating.


http://en.wikipedia.org/wiki/Code_of_conduct

http://en.wikipedia.org/wiki/Business_ethics

http://en.wikipedia.org/wiki/Business_ethics

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Employees can more easily determine and adopt acceptable behavior when

companies provide them with a "code of ethics." Such codes are perhaps the most effective way

to encourage ethical behavior. A code of ethics is a written guide to acceptable and ethical

behavior that outlines uniform policies, standards and punishments for violations. Because

employees know what is expected of them and what will happen if they violate the rules, a code

of ethics goes a long way towards encouraging ethical behavior. However, codes cannot possibly

cover every situation. Companies must also create an environment in which employees recognize

the importance of complying with the written code. Managers must provide direction by

fostering communication, actively modeling and encouraging ethical decision making, apart

from investing in training employees to make ethical decisions.

Sometimes, even employees who want to act ethically may find it difficult to do so.

Unethical practices can become ingrained in an organization. Employees with high personal

ethics may then take a controversial step called "whistle blowing." Whistle blowing is informing

the press or government officials about unethical practices in an organization. Whistle blowing

could have averted disaster and prevented needless deaths in the Challenger space shuttle

disaster, for example. How could employees have known about life-threatening problems and let

them pass? Whistle blowing on the other hand, can have serious repercussions for employees;

those who make waves sometimes lose their jobs.

Recent literature has suggested several strategies for promoting ethical behavior in

organizations (Adler and Bird, 1988; Burns, 1987; Harrington, 1991; Raelin, 1987; Stead etal.,

1990). First, chief executives should encourage ethical consciousness in their organizations from

the top down showing the support and care about ethical practices. Second, formal processes

should be used to support and reinforce ethical behavior. For example, internal regulation may

involve the use of codes of corporate ethics, and the availability of appeals processes. Finally, it

is recommended that the philosophies of top managers as well as immediate supervisors focus on

the institutionalization of ethical norms and practices that are incorporated into all organizational

levels.

Organizations and their managers must understand that the above recommendations

are key components in the development and maintenance of an ethically-oriented organizational


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culture. Organizations can also enhance an ethically-oriented culture by paying particular

attention to principled organizational dissent. Principled organizational dissent is an important

concept linking organizational culture to ethical behavior. Principled organizational dissent is the

effort by individuals in the organization to protest the status quo because of their objection on

ethical grounds, to some practice or policy (Graham, 1986). Organizations committed to

promoting an ethical climate should encourage principled organizational dissent instead of

punishing such behavior.

Organizations should also provide more ethics training to strengthen their employees' personal

ethical framework. That is, organizations must devote more resources to ethics training programs

to help its members clarify their ethical frameworks and practice self-discipline when making

ethical decisions in difficult circumstances.

An effective organizational culture should encourage ethical behavior and discourage unethical

behavior. Although much remains to be learned about why ethical behavior occurs in

organizations and creating and maintaining organizational cultures that encourage ethical

behavior, organizations can benefit from the following suggestions:

** Be realistic in setting values and goals regarding employment relationships. Do not promise

what the organization cannot deliver.

** Encourage input throughout the organization regarding appropriate values and practices for

implementing the cultures. Choose values that represent the views of employees at all levels of

the organization.

** Do not automatically opt for a "strong" culture. Explore methods to provide for diversity and

dissent, such as grievance or complaint mechanisms or other internal review procedures.

** Insure that a whistle-blowing and/or ethical concerns procedure is established for internal

problem-solving (Harrington, 1991).

** Provide ethics training programs for all employees. These programs should explain the

underlying ethical and legal (Drake and Drake, 1988) principles and present practical aspects of


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carrying our procedural guidelines. Understand that not all ethical situations are clear-cut. Like

many basic business situations, the organization should recognize that there are ambiguous, grey

areas where ethical tradeoffs may be necessary. More importantly, some situations have no

simple solution (Cooke, 1991).

** Integrate ethical decision-making into the performance appraisal process.

SOCIAL RESPONSIBILITY:

Definitions of Social responsibility:

Social responsibility is an ethical or ideological theory that an entity whether it is a

government, corporation, organization or individual has a responsibility to society at

large. ...

A voluntarily assumed obligation toward the good of a larger social unit as opposed to

the self alone

Occurs when a retailer acts in the best interests of society -- as well as itself. The

challenge is to balance corporate citizenship with a fair level of profits.

is about improving the quality of relations with key stakeholders. Novo Nordisk defines it

as putting values into action in the perspective of human resources, human rights, health

and safety, and our relations with society at large.

Responsibilities citizens have to their society and nation.

Involves considering the impact and being accountable for the effects that actions might

have on society.

can be defined as accepting responsibility for others and taking action against social

injustice. it includes meeting the needs of others through charitable giving.

SOCIAL RESPONSIBILITIES OF BUSINESS

A firm expresses its responsibility to the society by reacting in either or

both of the following two ways.

1. The manner in which it carries out its own business activities


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2. The welfare activities it takes upon itself as an additional function

RESPONSIBILITY TO SHARE HOLDERS

1. To make the shareholders feel secured by protecting their investments2. To be transparent3. To allow them to participate in decision making4. To ensure them good dividends

RESPONSIBILITY TO EMPLOYEES

1. To offer employees fair wages2. To establish better working conditions3. To provide them fair work standards and norms.4. To provide labor welfare activities5. To educate the employees by adopting proper training methods.6. To recognize and appreciate the work of the employees and rewardthem or to promote them.7. To install grievance handling cell.8. To enable them to involve in decision making.

RESPONSIBILITY TO CONSUMERS

To improve the efficiency of the business by

a) Increasing productivity.b) Improving quality.c) Suroothening distribution system.1. To offer the products at reasonable prices.2. To provide pre-purchase and post purchase service to the consumers.3. To facilitate research and development to meet the customer requirements.4. To maximize imperfections in distribution systems5. To provide sufficient and unnecessary information about the product.

RESPONSIBILITY TO COMMUNITY

1. To be pollution free and maintain ecological balance.2. To invest more in research and development so as to improve the standardof living of the society.3. To develop alternative recourses thereby preventing current resourcesbeing used from exhaustion.4. To improve the efficiency of business operations.5. To include in social welfare activities6. To contribute to national effort to build up a better society


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If a firm fulfills all the above mentioned responsibilities then it is said to befollowing the business ethics. But in practice such an ideal business doesn’texist.

FEW ENVIRONMENTAL CONCERNS

One important factor a business man must not neglect is his responsibility to

environment. The abundant natural resources are getting exhausted after 19th

century due to rapid industrialization.

LAND:

The worst effected are as their cattle starve and they travel even increasing

distance for grazing due to industrialization and urbanization.

WATER:

Through people are keen in this issue by constructing dams and reservoirs the bi

products and industry waste couldn’t find a better discharge channel than this.

Hence sure measure must be take in this context to keep the water free from

pollution.

DEFORESTATION:

The results of deforestation for industrialization and urbanization are vulnerable. It

is resulting in destruction of wild life, increase in price of wood, air production etc.

HABITAT:

The people who are living in forests and remote areas love their shelter

and livelihood in the vent of industrialization.

HEALTH:

The business users must be conscious about the health of the society

and behave responsibility for their health.


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SPIRITUALITY

Spirituality & Ethics

Today people are finding that there’s more to life—and business—than profits alone. Money as

the single bottom line is increasingly a thing of the past. In a post-Enron world, values and

ethics are an urgent concern. The hottest buzz today is about a “triple bottom line,” a

commitment to “people, planet, profit.” Employees and the environment are seen as important

as economics. Some people would say it’s all about bringing your spiritual values into your

workplace. A recent poll by KRC Research for Spirituality published November 17, 2003 in

USA Today found that 6 out of 10 people say workplaces would benefit from having a great

sense of spirit in their work environment.

What is spirituality in business? There’s a wide range of important perspectives. Some

would say that it’s simply embodying their personal values of honesty, integrity, and good

quality work. Others would say it’s treating their co-workers and employees in a responsible,

caring way. For others, it’s participating in spiritual study groups or using prayer, meditation, or

intuitive guidance at work. And for some, it’s making their business socially responsible in how

it impacts the environment, serves the community or helps create a better world.

Some business people are comfortable using the word “spirituality” in the work environment,

as it’s more generic and inclusive than “religion.” Instead of emphasizing belief as religion

does, the word spirituality emphasizes how values are applied and embodied. Other people

aren’t comfortable with the word spiritual and prefer to talk more about values and ethics when

describing the same things that others would call spiritual. However, there are some people who

will talk about God as their business partner or their CEO.

There’s some fear about spiritual beliefs or practices being imposed by employers, but to date

this has been extremely rare. On the other hand, some observers warn about the potential for

superficiality and the distortion of spiritual practices to serve greed.


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Key spiritual values embraced in a business context include integrity, honesty, accountability,

quality, cooperation, service, intuition, trustworthiness, respect, justice, and service. The

Container Store chain nationwide tells workers they are “morally obligated to help customers

solve problems” – they’re not just to sell people products. The CEO of Vermont Country Store, a

popular national catalogue company, honored (instead of fired) an employee who told the truth

in a widely circulated memo, and so increased morale and built a sense of trust in his company.

Spirituality plays a key role in the development of ethical leaders. Moreover, spirituality

demands that leaders cultivate and nourish a sense of self that recognizes the

interrelatedness of life or a sense of community. A sense of community refers to the larger

extended ecological sphere made tangible by nature, defined as the universe and the

cosmos, but in its final essence, it is spirit.

Spirituality is the core of the inner and social lives of ethical leaders. It informs the

relationship between the private and public spheres of leadership at the intersections

where worlds collide. How then do leaders utilize spirituality as a resource in making fitting

ethical decisions in the various contexts and situations that lead to transformation of

powerful, intransigent systems?

The relationship among spirituality, ethics, and leadership is important because leaders in

many public venues are increasingly turning to approaches that emphasize some form of

spirituality as an authoritative source in making decisions that impact the lifestyles,

attitudes, and behaviors of many people, especially in the areas of education, government,

health, science, and business. Often these appeals to spirituality fail to address the larger

ethical questions of justice, equity and truth-telling that are raised in public life.


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PERSONALITYPersonality is a concept that we use continuously in our day to day routine, when dealing with people. We talk about people as having a good personality or a bad personality or arrogant and aggressive personality. Personality is defines as : an individual`s personality is a relatively stable set of characteristics, tendencies, and temperaments that have been significantly formed by inheritance and by social, cultural, and environmental factors . this set of variables determinants the communities and differences in the behavior of the individual. Factors determining Personality

A) Biological Factors(i) Heredity : here the individual gets the personality from his

parents that is from genes . some characteristics are more influenced by the family heredity.

(ii) Brain : another biological factor that influences personality is the role of the brain of an individual . research gives indication that better understanding of human personality and behavior might come from the study of the brain.

(iii) Physical Features: an individuals external appearance is proved to be having a tremendous effect on his personality. For instance , fat, skinny or handsome etc

B) Family and Social Groups : Family and social groups have most significant impact on personality development. These groups have their impact through socialization and identification processes.

(i) Socialization process : The contribution of family and social groups in combination with the culture is known as socialization. Socialization is a process by which an individual infant acquires, from the enormously wide range of behavioral potentialities that are open to him at birth, those behavior patterns that are customary and acceptable according to the standards of his family and social groups

(ii) Identification Process : This process occurs when a person tries to identify himself with some person whom he feels ideal in the family. A child may behave like his father or mother etc.

C) CULTURAL FACTORS : Culture is traditionally considered as the major determinant of an individuals personality . the culture largely


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determines what a person is and what a person will learn. Culture is the complex of these beliefs , values, and techniques for dealing with the environment which are shared among contemporaries and transmitted by one generation to the next.

D) SITUATIONAL FACTORS: An individual s personality , although generally stable and consistent does change indifferent situations . the different demands of different situations call forth different aspects of one personality. Human personality is also influenced by situational factors. The effects of environment is quite strong. Knowledge , skill and language are obviously acquire and represent important modifications of behavior.

THEORIES IN PERSONALITY 1) PSYCHOANALYTICAL THEORY : This theory is based on the notion that

man is motivated more by unseen forces than he is controlled by conscious and rational thought. (i) The Id – it is the original and most basic system of human personality. It consists of everything psychologically that is inherited and present at the time of birth. (ii) The Ego : the ego is the reality oriented part of thinking , it is largely practical and works in an executive capacity. Ego is rational and logical and in essence it is the conscious mediator between the realties of world and the id`s demands.(iii) The super Ego :Super ego represents noblest thoughts , ideas, feelings that are acquired by a person form his parents, teachers, friends, religion, organizational and colleagues etc.

2) TRAIT THEORY : Trait theory visualizes personality as a reflection of certain traits of the individual . even though there are many traits that are common to most people, there are many other traits that are unique to person and are not shared by other individuals. On the basis of trait theory, people can be described as aggressive, loyal , pleasant ,flexible,. Humorous , sentimental, cool and so on

3) SOCIO – PSYCHOLOGICAL THEORY : This recognizes the

interdependence of the individual strives to meet the needs of the society, while

society helps the individual to attain his goal.

4) SELF THEORY : Also called as field theory, emphasis the totality and

interrelatedness of all behavior . there are four factors in self concept.

a) Self Image : Every person has certain beliefs about who or what he/she is.

b) Ideal Self: The ideal self denoted the way one would like to be.


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c) Looking Glass Self: The looking glass self is the perception of a person

about how others are perceiving his qualities and characteristics.

d) Real Self: The real self is what one really is . in the face of feedback from

the environment, the person reevaluates himself and re adjusts his self image

to be more consistent with the cues he was receiving.

Trade Unions :

A Trade Union is essentially an association of employees of a particular trade or

industry formed to safeguard the interests of its members against certain vindictive

management actions

Characteristics :

1. Association of employees,

2. Voluntary association,

3. Permanent body,

4. Common interest, good rapport with the management, good relations

5. Need for trade union

6. To ensure job security and right pay for the members

7. To ventilate the grievances of employees to the management

8. To have better bargaining power

9. To secure better condition of service

10. To have a say in management decisions

Functions of Trade Unions :

Safeguarding the interests if employees

Ensure better working conditions and living conditions

Secure promotion and training opportunities

Collective bargaining


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Participation in management decisions

Education

Recreation

Social service

Political affiliation

Giving strike calls

Measures to Strengthen Trade Unions :

1. Improve financial position

2. Incresase memebership

3. Ged grid of political affliation

4. Do away with multiple unions

1. Group Cohesiveness

The group develops maturity and becomes cohesive or interconnected with the passage of time. Cohesiveness in a group is achieved when the group appears to be very attractive to its group members. In such type of cohesiveness, individuals value their group membership and have a very strong enthusiasm and motivation to remain members of the group. Group cohesiveness can be described as the attractiveness of a group to its members. A highly cohesive group appeals a lot to its members. The cohesiveness of a group plays important role in the performance and effectiveness of the group. There are a large number of factors that influence cohesiveness level of a group. Those important factors can be broadly categorised into five types. They are : size of the group, homogeneous character of group members, success of the group, competition with other groups, and the exclusiveness of the group.

Size of the Group: As we know the fact that small family is more cohesive or interconnected and so is the group. The smaller the group, the more will be cohesiveness and more will be their satisfaction. The larger group will deliver dissatisfaction to its members and will be having cohesiveness.

Homogeneous Character of Group Members: The greater amount of similarity felt by group members with each others helps in building bonds of faith, trust and satisfaction among them. It enhances communication in group members. The group can be considered to be most cohesive when its members are more homogenous in terms of age, sex, education, martial status etc. The members also share certain attitudes, values, experiences and other characteristics that are common to each other.


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Success of Group: The success of the group makes it cohesive. The sense of realization is developed among group members to avoid differences for accomplishing group goals. The groups become s attractive to its members when the groups become successful in achieving its goals. This further enhances cohesiveness in the group.

Competition with Other Groups: Group cohesiveness is increased in the organisation when competition between groups increases. The growing competition among groups in an organisation motivates members of each group to come together for achieving group goals. This is the one basic reason where organisations promote group cohesiveness by having work groups competition in the organisation between /among groups over sales target, zero defect production, minimization of wastages; etc. The recognition of group names and publicizing gives them encouragement and also encourages healthy competition. It maintains good quality and maintains extra ordinary working levels among the groups.

Accidents

Accidents and Safety (as per Factories act)As per the ID (Industrial Disputes ) act “Any occurrence which causes bodily injury to a person making him unfits to resume duty within 48 hours”. Any untoward incident which causes impairment (reduction of capacity) to the person, materials , the machinery or to the process.

Causes of Accidents: 1. Monotony and repetitive2. Work Fatigue and physical exhaustion3. Faulty layout4. Faulty design of machines5. Defective systems and process6. Lack of training7. Lack of precautions in handling dangerous substances8. Accidents prone situations (high tension wire)9. Accident prone workmen10. Absence of safety systems11. Failure of safety systems

Cost of Accidents

1. Loss of man days, machines and materials.2. Injury to employee and compensation for the same.3. Financial losses like repairing the machine – compensation under the act etc.4. Continuing to keep the workmen who have become less capable due to accidents.5. Breakdown in mutual trust between employer and employee. 6. Bad publicity and image loss.


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7. Unwillingness to take up risky jobs in future.8. Disturbance in production sequence.9. Cost of production lost on that date.10. Consequential losses like market loss and loss of face with competitors.

How to reduce accidents:7. Investigate each accident and find out the cause. 8. Fix responsibility and prevent repetition.3. After each accident, explore the systems and correct them.4. Promote safety awareness, safety consciousness and safe habits.5. Build up a safety department.6. Constant training.7. Preventive maintenance – particularly on holidays. Observe safety day or week (3rd Nov - Bhopal Gas Tragedy)8. Identify hazardous materials and pay special attention9. Reduce monotony of work10.Display do’s and don’ts near all the machines

Plant LayoutIt means planning for location of all machines , equipments , utilities , work stations material storages areas, service areas , rest rooms , lunch rooms , coffee/tea rooms , rest areas, movement of materials , people around into and within the buildings.

In manufacturing, facility layout consists of configuring the plant site with lines, buildings, major

facilities, work areas, aisles, and other pertinent features such as department boundaries. While

facility layout for services may be similar to that for manufacturing, it also may be somewhat

different—as is the case with offices, retailers, and warehouses. Because of its relative

permanence, facility layout probably is one of the most crucial elements affecting efficiency. An

efficient layout can reduce unnecessary material handling, help to keep costs low, and maintain

product flow through the facility.

Objectives of Layout:- 8. facilitates manufacturing process,9. Proper and efficient utilization of available of floor space. 10. To ensure that work proceeds from one point to another point,11. provision of control of operations, 12. provide adequate safety to the workers, 13. provision of medical facilities and cafeteria, 14. Careful planning to avoid frequent changes in layout.


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Advantages of Good Layout:-1. To the worker - better safety and security to the worker, less number of operations, time gap between two motions is reduced considerably, more output productivity. 2. Manufacturing Costs – wastage is reduced, quality product is achieved, more production in quantity.3. Management – maximum usage of floor space, effective supervision, more storage facilities, production increased, negligible accidents, there by plant shut down comes to nil.

TYPES OF LAYOUT1. PROCESS LAYOUT

Process layouts are found primarily in job shops, or firms that produce customized, low-volume products that may require different processing requirements and sequences of operations. Process layouts are facility configurations in which operations of a similar nature or function are grouped together. As such, they occasionally are referred to as functional layouts. Their purpose is to process goods or provide services that involve a variety of processing requirements. A manufacturing example would be a machine shop. A machine shop generally has separate departments where general-purpose machines are grouped together by function (e.g., milling, grinding, drilling, hydraulic presses, and lathes). Therefore, facilities that are configured according to individual functions or processes have a process layout. This type of layout gives the firm the flexibility needed to handle a variety of routes and process requirements. Services that utilize process layouts include hospitals, banks, auto repair, libraries, and universities.

PROCESS LAYOUT

Advantages of process layouts include:

Flexibility. The firm has the ability to handle a variety of processing requirements. Cost. Sometimes, the general-purpose equipment utilized may be less costly to purchase

and less costly and easier to maintain than specialized equipment. Motivation. Employees in this type of layout will probably be able to perform a variety of

tasks on multiple machines, as opposed to the boredom of performing a repetitive task on an assembly line. A process layout also allows the employer to use some type of individual incentive system.

System protection. Since there are multiple machines available, process layouts are not particularly vulnerable to equipment failures.

Disadvantages of process layouts include:


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Utilization. Equipment utilization rates in process layout are frequently very low, because machine usage is dependent upon a variety of output requirements.

Cost. If batch processing is used, in-process inventory costs could be high. Lower volume means higher per-unit costs. More specialized attention is necessary for both products and customers. Setups are more frequent, hence higher setup costs. Material handling is slower and more inefficient. The span of supervision is small due to job complexities (routing, setups, etc.), so supervisory costs are higher. Additionally, in this type of layout accounting, inventory control, and purchasing usually are highly involved.

Confusion. Constantly changing schedules and routings make juggling process requirements more difficult.

2. PRODUCT LAYOUT

Product layouts are found in flow shops (repetitive assembly and process or continuous flow industries). Flow shops produce high-volume, highly standardized products that require highly standardized, repetitive processes. In a product layout, resources are arranged sequentially, based on the routing of the products. In theory, this sequential layout allows the entire process to be laid out in a straight line, which at times may be totally dedicated to the production of only one product or product version. The flow of the line can then be subdivided so that labor and equipment are utilized smoothly throughout the operation.

Advantages of product layouts include:

Output. Product layouts can generate a large volume of products in a short time.

Cost. Unit cost is low as a result of the high volume. Labor specialization results in

reduced training time and cost. A wider span of supervision also reduces labor costs.

Accounting, purchasing, and inventory control are routine. Because routing is fixed, less

attention is required.

Utilization. There is a high degree of labor and equipment utilization.

Disadvantages of product layouts include:

Motivation. The system's inherent division of labor can result in dull, repetitive jobs that

can prove to be quite stressful. Also, assembly-line layouts make it very hard to

administer individual incentive plans.

Flexibility. Product layouts are inflexible and cannot easily respond to required system

changes—especially changes in product or process design.

System protection. The system is at risk from equipment breakdown, absenteeism, and

downtime due to preventive maintenance.


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3. FIXED-POSITION LAYOUT

A fixed-position layout is appropriate for a product that is too large or too heavy to move. For

example, battleships are not produced on an assembly line. For services, other reasons may

dictate the fixed position (e.g., a hospital operating room where doctors, nurses, and medical

equipment are brought to the patient). Other fixed-position layout examples include construction

(e.g., buildings, dams, and electric or nuclear power plants), shipbuilding, aircraft, aerospace,

farming, drilling for oil, home repair, and automated car washes. In order to make this work,

required resources must be portable so that they can be taken to the job for "on the spot"

performance.

4. COMBINATION LAYOUTS

Many situations call for a mixture of the two or three main layout types. These mixtures are

commonly called combination or hybrid layouts. For example, one firm may utilize a process

layout for the majority of its process along with an assembly in one area. Alternatively, a firm

may utilize a fixed-position layout for the assembly of its final product, but use assembly lines to

produce the components and subassemblies that make up the final product (e.g., aircraft).

5.CELLULAR LAYOUT

Cellular manufacturing is a type of layout where machines are grouped according to the process

requirements for a set of similar items (part families) that require similar processing. These

groups are called cells. Therefore, a cellular layout is an equipment layout configured to support

cellular manufacturing.

Processes are grouped into cells using a technique known as group technology (GT). Group

technology involves identifying parts with similar design characteristics (size, shape, and

function) and similar process characteristics (type of processing required, available machinery

that performs this type of process, and processing sequence).

Advantages of cellular manufacturing include:


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Cost. Cellular manufacturing provides for faster processing time, less material handling,

less work-in-process inventory, and reduced setup time, all of which reduce costs.

Flexibility. Cellular manufacturing allows for the production of small batches, which

provides some degree of increased flexibility. This aspect is greatly enhanced with FMSs.

Motivation. Since workers are cross-trained to run every machine in the cell, boredom is

less of a factor. Also, since workers are responsible for their cells' output, more autonomy

and job ownership is present.

7. SERVICE TYPE LAYOUT:

This type of layout is used in service sectors such as banks, educational institutes, hospitals,

shopping malls etc

Steps in planning the layout for new enterprises.11. Planning of objectives ,nature of machines, equipments and operation involved in the

manufacture12. Decide on the machines and involved in the manufacture13. Develop process charts.14. Decide on the best process layout needed to manufacture15. Space layout should be drawn16. Decide on the number of labors, line man inspectors and supervisors for effective control.17. Location of toilets, windows break rooms to be decided.18. Drainage wastages electric fittings tube lights ventilation facilities to be provided.19. Pathway to be constructed20. All provision should be drawn accordingly to the GoI Factory Act.

Techniques of Plant Layout :-

7. Type and quality of labor required,8. Volume of work to be done fro present space to future,9. Description of operations their sequence , 10. Nature of machines and operations, 11. Amount of material buffer stock, 12. Size of finished and semi finished goods.

Plant Layout tools and techniques: -

1. Process charts – 2. Process flow diagrams – 3. Machine data cards.


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1. Vital for implementing plans: organization follows planning, organization assigns work to superiors and subordinates. Achieves organization goals.

2. Specialization: the entire work is divided based on the nature of work, this results in specialization.

3. Optimum use of resources: right men are recruited for the right job and materials are kept at the right place and made available at the right time.

4. Team work: A series of operations will have to be carried out to complete any task. A number of people will be performing these operations. It is necessary for them to work as a team and with proper understanding.

5. Communication relationship: a subordinate as pr the instructions given to him by his superior. Once the work has been completed he has to report to his superior.

6. Creativity: organization provides scope for the individuals to Eg. habit their creative skills .

7. Coordination: the activities performed by different department are interrelated and interdependent.

8. Continuity: the men may come and go, machine may be replaced , materials may be purchased whenever necessary all these activities go on in an organization on a continuous basis. Organizations ensure that there is no disruption of work due to non availability of men, machinery, material as and money.

Formal Organization: it is deliberately and consciously created for the accomplished of the enterprise objectives. It provides for official relationships between the individuals . the communication channel in formal. It has well established rules of procedures.Informal organization: it is the outcome of personal and social relationships between the individuals in an organization. It develops spontaneously as a result of interactions between friendship, identical taste etc.

Difference between Formal and Informal.Formal Organization InFormal OrganizationIt is consciously and deliberately created.Authority and responsibility are vital for its functions.Rules and regulations are importantIt can be shown an organization chart.Authority flows downwards and responsibilities flow upwards.It is created only to attain the organization objectives.Designations and official positions are very important.It is permanent and stable

1. it arises spontaneously 2. it is only personal factors such as

friendship , trust , confidence that are important.

3. Personal relationship between individuals is more important.

4. It cannot be shown5. There is no flow of authority6. It is created to fulfill the social

needs of an individual 7. Designation and official positions

are unimportant8. It is unstable.


General Manager

Production Manager

Asst Production Manager

Foreman

Workers

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Forms of organization 1. Line organization: It is known as military organization. Here the superior at the top

makes decisions and communicates his decisions and assigns certain work to his immediate subordinate. There is a vertical downwards flow of authority and an upward flow of responsibility in such an organization.

Merits: 1. There is no complicated relationship in this organization . it can easily be understood by

anyone.2. It clearly defines the authority and responsibility of each individual.3. Each person knows clearly whom he should report to and who should report to him.4. There is unity of command i.e. a subordinate gets orders from one superior only.5. It provides scope for better supervision. This ensures greater discipline.Demerits:1. It lacks specialization. The line manger is responsible for both planning and execution of

the work assigned to him. Eg. production manager is responsible for attaining the production targets and also for quality control.

2. the line managers are overburdened with lot of work. Eg. the marketing manager has to monitor sales and assess the performance of the sales man, take care of advertisement and sales promotion he will become physically and mentally tired.

3. It is always downward communication as result the subordinates may loose initiative.4. The line managers enjoy monopoly in the matter of decision making.5. Line organization has been found to be very good for small organization that employs

few workers.


GM

Purc mgr Pur

Prod mgr Qty mgr

Plant Supervisor

Service Mgr Office spare

Foreman 1 Foreman 2 Foreman 3

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Line and staff organization: in this kind of organization staff experts are specialists in specific areas, assist the line personnel. The experts do not have the powers to command and subordinates other than those who are under their direct control . they can advice the line personnel on certain matters. They do not have authority to take decision on vital issues. It is for the line manager to decide whether to accept the suggestion of the staff specialist or not.The staff experts provide relief to the line personnel when the latter are over burdened with work.

Merits 1. Staff experts provide support to the line personnel. This provides line executives to perform well. 2. The line executive gets relief from work burden. 3. The suggestion given by the staff experts helps to take better decisions.4. As every executive performs only a specific task he is able to do it with full concentration.Demerits:Conflicts often arise between the line and staff executives.1. The staff experts do not have the authority to make decisions they can only advice .2. The line and the staff pattern of the organization would enhance the cost of cooperation.

Functional Organization


Board of Directors

Mktg Mgr

MD

Prod Mgr

Foreman 2Foreman 1

Pernsl Mgr

Sales officer 1 Sales officer 2

workers Sales Representatives

Officer 1

Officer 2

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It is suitable for large scale organization. There will be separate departments to look after different lines of activities. Ex. the purchase department will take care of all matter pertaining to purchase. The production department will take of all production related activities. Each department will be headed by a manager and will work according hierarchy.

Advantages1. it promotes specialization, each department specialize in a particular line of work 2. each functional head looks after specific activities so no burden.3. Better control.4. each individual concentrates on a particular task so maximum efficiency

Disadvantages:1. more number of departments and divisions2. difficult to control and co ordinate3. delay in arriving in decisions4. Expensive to adopt.

Committee organization: Committee Organization is a group of persons entrusted with a certain tasks. The committee organization members are expected to discuss certain problem and come with a solution.. Eg. board of directors in a company. The committee may meet at regular intervals and discuss the progress of work at a various levels.Types of committees:

A) Standing Committee: is never dissolved, there may be changes in membership. The committee remains always. Eg.. The board of directors in a company.

B) Temporary Committee: this one is created for a specific purpose. As soon as the purpose has been accomplished the committee stands dissolved. Eg. if there is a strike in the organization it forms a committee.

C) Executive Committee: a Executive committee is one that has powers to make important decisions for the enterprise. Eg. board of directors.


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D) Advisory Committee: this committee can only make suggestions. It does not have the powers to make decisions.

E) Formal committee: this is one that is constituted as per the values and policies of the organization. It has hierarchy. It functions according to the lines of authority.

F) Informal committee: this is the one that is not constituted as per the rules and policies of the organization. Such a committee is the outcome of informal meetings of the workers to discuss their work related problems.

Advantages:1. Scope for group judgment2. Secure proper co ordination3. Committee members feel motivated when they participate in the discussion4. Committee functions as a democratic organization.5. Problems that cannot be solved by individual will have to be referred to a committee.

Disadvantages:1. Expensive2. More time for discussions3. Sometimes compromise decision made.

Project Organization: It may be successfully adapted if it is necessary to manage a small number of large projects each project team has specialists in different fields. The project manager co ordinates the activities of the team members.Advantages:

1. it can be designed to suit individual projects2. it makes use of specialized knowledge and skill wherever required.3. it fixes responsibility on individuals on the work done by them.

Disadvantages:1. The project manager may have tough time dealing with specialists from different fields.2. Decision making is difficult.3. The time within which the project has to be completed will put pressure on every

individual.Matrix Organization:Suitable where a large number of small projects will have to be managed. A matrix organization is also known as a multiple command system as it has two chains of command, ie the flow of authority is both vertical and horizontal . separate departments are established for each specified task. These departments have to share the resources with the rest of the organization.Advantages:

1. It offers the benefits of unity command.2. It gives motivation for the personnel.3. It promotes communication.

Disadvantages:It goes against the principles of unity of commandDual command may result in confusion.Quick decisions may not be possible.It gives scope for the conflicts.

Job satisfactionDEPARTMENT OF MANAGEMENT STUDIES.[Type text] Page 87

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Job satisfaction describes how content an individual is with his /her job. The happier people are within their job, the more satisfied they are said to be. Job satisfaction is not the same as motivation or aptitude, although it is clearly linked. Job design aims to enhance job satisfaction and performance, methods include job rotation, job enlargement, job enrichment and job re-engineering. Other influences on satisfaction include the management style and culture, employee involvement, empowerment and autonomous work position. Job satisfaction is a very important attribute which is frequently measured by organizations. The most common way of measurement is the use of rating scales where employees report their reactions to their jobs. Questions relate to rate of pay, work responsibilities, variety of tasks, promotional opportunities, the work itself and co-workers.

What is Job Satisfaction?

Job satisfaction is in regard to one's feelings or state-of-mind regarding the nature of their work. Job satisfaction can be influenced by a variety of factors, eg, the quality of one's relationship with their supervisor, the quality of the physical environment in which they work, degree of fulfillment in their work, etc.

(To my knowledge, there is no strong acceptance among researchers, consultants, etc., that increased job satisfaction produces improve job performance -- in fact, improved job satisfaction can sometimes decrease job performance. For example, you could let sometime sit around all day and do nothing. That may make them more satisfied with their "work" in the short run, but their performance certainly didn't improve.)

Models of job satisfaction

Affect Theory

Edwin A. Locke’s Range of Affect Theory (1976) is arguably the most famous job satisfaction model. The main premise of this theory is that satisfaction is determined by a discrepancy between what one wants in a job and what one has in a job. Further, the theory states that how much one values a given facet of work (e.g. the degree of autonomy in a position) moderates how satisfied/dissatisfied one becomes when expectations are/aren’t met. When a person values a particular facet of a job, his satisfaction is more greatly impacted both positively (when expectations are met) and negatively (when expectations are not met), compared to one who doesn’t value that facet. To illustrate, if Employee A values autonomy in the workplace and Employee B is indifferent about autonomy, then Employee A would be more satisfied in a position that offers a high degree of autonomy and less satisfied in a position with little or no autonomy compared to Employee B. This theory also states that too much of a particular facet will produce stronger feelings of dissatisfaction the more a worker values that facet.


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http://en.wikipedia.org/wiki/Job_enlargement

http://en.wikipedia.org/wiki/Job_rotation

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http://en.wikipedia.org/wiki/Aptitude

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Dispositional Theory

Another well-known job satisfaction theory is the Dispositional Theory Template:JacksonApril 2007. It is a very general theory that suggests that people have innate dispositions that cause them to have tendencies toward a certain level of satisfaction, regardless of one’s job. This approach became a notable explanation of job satisfaction in light of evidence that job satisfaction tends to be stable over time and across careers and jobs. Research also indicates that identical twins have similar levels of job satisfaction.

A significant model that narrowed the scope of the Dispositional Theory was the Core Self-evaluations Model, proposed by Timothy A. Judge, Edwin A. Locke, and Cathy C. Durham in 1997.[5] Judge et al. argued that there are four Core Self-evaluations that determine one’s disposition towards job satisfaction: self-esteem, general self-efficacy, locus of control, and neuroticism. This model states that higher levels of self-esteem (the value one places on his/her self) and general self-efficacy (the belief in one’s own competence) lead to higher work satisfaction. Having an internal locus of control (believing one has control over her\his own life, as opposed to outside forces having control) leads to higher job satisfaction. Finally, lower levels of neuroticism lead to higher job satisfaction.[5]

Two-Factor Theory (Motivator-Hygiene Theory)

Frederick Herzberg’s Two factor theory (also known as Motivator Hygiene Theory) attempts to explain satisfaction and motivation in the workplace[6] This theory states that satisfaction and dissatisfaction are driven by different factors – motivation and hygiene factors, respectively. An employee’s motivation to work is continually related to job satisfaction of a subordinate. Motivation can be seen as an inner force that drives individuals to attain personal and organizational goals (Hoskinson, Porter, & Wrench, p. 133). Motivating factors are those aspects of the job that make people want to perform, and provide people with satisfaction, for example achievement in work, recognition, promotion opportunities. These motivating factors are considered to be intrinsic to the job, or the work carried out.[6] Hygiene factors include aspects of the working environment such as pay, company policies, supervisory practices, and other working conditions.[6]

While Hertzberg's model has stimulated much research, researchers have been unable to reliably empirically prove the model, with Hackman & Oldham suggesting that Hertzberg's original formulation of the model may have been a methodological artifact.[6] Furthermore, the theory does not consider individual differences, conversely predicting all employees will react in an identical manner to changes in motivating/hygiene factors.[6] Finally, the model has been criticised in that it does not specify how motivating/hygiene factors are to be measured.[6]

Job Characteristics Model

Hackman & Oldham proposed the Job Characteristics Model, which is widely used as a framework to study how particular job characteristics impact on job outcomes, including job satisfaction. The model states that there are five core job characteristics (skill variety, task identity, task significance, autonomy, and feedback) which impact three critical psychological


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http://en.wikipedia.org/wiki/Frederick_Herzberg

http://en.wikipedia.org/wiki/Neuroticism

http://en.wikipedia.org/wiki/Locus_of_control

http://en.wikipedia.org/wiki/Self-efficacy

http://en.wikipedia.org/wiki/Self-esteem

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states (experienced meaningfulness, experienced responsibility for outcomes, and knowledge of the actual results), in turn influencing work outcomes (job satisfaction, absenteeism, work motivation, etc.).[7] The five core job characteristics can be combined to form a motivating potential score (MPS) for a job, which can be used as an index of how likely a job is to affect an employee's attitudes and behaviors----. A meta-analysis of studies that assess the framework of the model provides some support for the validity of the JCM.

Organizational behaviorOrganizational behavior is the study of individuals and their actions within the context of the organization in a workplace setting. It is an interdisciplinary field that includes sociology, psychology, communication, and management; and it complements the academic studies of organizational theory (which is more macro-level) and human resource studies (which is more applied and business-related). It may also be referred to as organizational studies or organizational science. The field has its roots in industrial and organizational psychology.

Importance of Organizational Behavior

Organizations are all around us. We are born in an organization, we live, work and most probably will die in an organization. Yet most of us do not understand how people function, behave and interact between each other within these organizations. We also do not understand if people shape an organization or an organization shapes people.

In the beginning, people create an organization and shape its mission and culture and later more people join the organization. This new group of people adjust themselves within the existing organizational culture. Sometimes they also influence organizational culture by bringing new and unique skills to the organization. Sometimes they learn from each and at other times, external forces like competition, political and cultural changes compel them to learn new technical, communication or interpersonal skills. All these internal and external factors help an organization and its people to evolve to cope with the ever-changing world.

Until recently, managers paid little attention to Organizational Behavior or soft skill training. The industrial revolution created the need for hard (technical) skills. People worked in the production line and were not required to think or interact to each other. However, things have changed; instead of standing behind the production lines, they now sit in front of a computer and control a robot who works in the production line. Now, people need more technical skills, but they also need skills to communicate and work within a group.

The great English poet Samuel Butler put it together more eloquently, "Any fool can paint a picture, but it takes a wise man to be able to sell it." If the "fool" is the metaphor for hard skill then the "wise man" would be the soft skill; but the soft skill of the wise man is useless without the hard skill of the fool; the harmonizing of both skills sells the picture. Therefore, the study of


http://en.wikipedia.org/wiki/Industrial_and_organizational_psychology

http://en.wikipedia.org/wiki/Human_resource_management

http://en.wikipedia.org/wiki/Organizational_theory

http://en.wikipedia.org/wiki/Organization

http://en.wikipedia.org/wiki/Meta-analysis

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Organizational Behavior is not considered pop psychobabble anymore. A comparison between old and new organizations makes the picture clear.

Importance of OB to managers

Managers perform four major functions such as planning, organizing, directing and controlling. In addition to these functions there are ten managerial roles, which can be defined as organized set of behaviors identified with the position. These roles are developed by Henry Mintzberg in 1960s after a careful study of executives at work. All these roles, in one form or other deal with people and their behavior. These ten managerial roles are divided into three categories. The first category called the interpersonal roles arises directly from the manager’s position and the formal authority given to him. The second category, the informational role arises as a direct result of the interpersonal roles and these two categories give rise to the third category called decisional roles. The Figure (given below) shows the categories of managerial roles.

The roles, in the context of organizational behavior, are as follows:

1. INTERPERSONAL ROLES: In every organization managers spend a considerable amount of time in interacting with other people both within their own organizations as well as outside. These people include peers, subordinates, superiors, suppliers, customers, government officials and community leaders. All these interactions require an understanding of interpersonal behavior. Studies show that interacting with people takes up nearly 80% of a manager’s time. These interactions involve the following three major interpersonal roles:

a. Figure/lead Role: Managers act as symbolic figureheads performing social or legal obligations. These duties include greeting visitors, signing legal documents, taking important customers to lunch, attending a subordinate’s wedding and speaking at functions in schools and churches. All these, primarily, are duties of a ceremonial nature but are important for the smooth functioning of an organization.

b. Leadership Role: The influence of the manager is most clearly seen in the leadership role as a leader of a unit or an organization. Since he is responsible for the activities of his subordinates therefore he must lead and coordinate their activities in meeting task-related goals and motivate them to perform better. He must be an ideal leader so that his subordinates follow his directions and guidelines with respect and dedication.

c. Liaison Role: The managers must maintain a network of outside contacts. In addition, they need to have a constant contact with their own subordinates, peers and superiors in order to assess the external environment of competition, social changes or changes in governmental rules and regulations. In this role, the managers build up their own external information system. This can be achieved by attending meetings and professional conferences, personal phone calls, trade journals and informal personal contacts with outside agencies.

2. INFORMATION ROLES: A manager, by virtue of his interpersonal contacts, emerges as a source of information about a variety of issues concerning an organization. In this capacity of information processing, a manager executes the following three roles.


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a. Monitor Role: The managers are constantly monitoring and scanning their internal and external environment, collecting and studying information regarding their organization. This can be done by reading reports and periodicals, interrogating their liaison contacts and through gossip, hearsay and speculation.

b. Information Disseminator Role: The managers must transmit the information regarding changes in policies or other matters to their subordinates, their peers and to other members of an organization. This can be done through memos, phone calls, individual meetings and group meetings.

c. Spokesman Role: A manager has to be a spokesman for his unit and represent his unit in either sending relevant information to people outside his unit or making some demands on behalf of his unit.

3. DECISION ROLES: A manager must make decisions and solve organizational problems on the basis of the environmental information received. In that respect, a manager plays four important roles.

a. Entrepreneur Role: Managers, as entrepreneurs are constantly involved in improving their units and facing the dynamic technological challenges. They are constantly on the lookout for new ideas for product improvement or product addition. They initiate feasibility studies, arrange capital for new products and ask for suggestions from the employees to improve organization. This can be achieved through suggestion boxes, holding strategy meetings with project managers and R&D personnel.

b. Conflict Handling Role: The managers are constantly involved as judge in solving conflicts among the employees and between employees and management. Mangers must anticipate such problems and take preventive action and take corrective action once the problem arises. These problems may involve labor disputes, customer complaints, employee grievances, machine breakdowns, cash flow shortages and interpersonal conflicts.

c. Resource Allocation Role: The managers establish priorities among various projects or programs and make budgetary allocations to different activities of an organization based on these priorities.

d. Negotiator Role: The managers in their negotiator role represent their organization in negotiating deals and agreements within and outside of an organization. They negotiate contracts with the unions. Sales managers may negotiate prices with prime customers. Purchasing managers may negotiate prices with vendors.

All these ten roles are important in a manager’s job and are interrelated, even though some roles may be more influential than others depending upon the managerial position.

For example, Sales Manager gives more importance to interpersonal roles, while the production manager may give more importance to decisions roles.


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Theories of decision making can be subdivided into three categories

Normative (concentrates on how decision should be made) Descriptive (concerned with how the thinker came up with their judgement) Prescripted (aim to improve decision making)

Organization structures and dynamics

Incentive theory is a concept of human resources or management theory. In the corporate sense, it states that firm owners should structure employee compensation in such a way that the employees' goals are aligned with owners' goals. As it applies to the operations of firms, it is more accurately called the principal–agent problem.

Bureaucracy Complexity theory and organizations Contingency theory Evolutionary Theory and organizations Hybrid organisation Informal Organization Institutional theory Merger integration Organizational ecology Model of Organizational Citizenship behaviour Model of organizational justice Model of Organizational Misbehaviour Resource dependence theory Transaction cost Hofstede 's Framework for Assessing Cultures Mintzberg 's Organigraph

Personality traits theories

Big Five personality traits Holland's Typology of Personality and Congruent Occupations Myers-Briggs Type Indicator

Control and stress modelling

Herzberg's Two factor theory Theory X and Theory Y

Motivation in organizations

Motivation the forces either internal or external to a person that arouse enthusiasm and resistance to pursue a certain course of action. According to Baron et al. (2008):[8] "Although motivation is a broad and complex concept, organizational scientists have agreed on its basic characteristics.


http://en.wikipedia.org/wiki/Theory_X_and_theory_Y

http://en.wikipedia.org/wiki/Two_factor_theory

http://en.wikipedia.org/wiki/Myers-Briggs_Type_Indicator

http://en.wikipedia.org/w/index.php?title=Typology_of_Personality_and_Congruent_Occupations&action=edit&redlink=1

http://en.wikipedia.org/wiki/Big_Five_personality_traits

http://en.wikipedia.org/wiki/Organigraph

http://en.wikipedia.org/wiki/Mintzberg

http://en.wikipedia.org/wiki/Hofstede

http://en.wikipedia.org/wiki/Transaction_cost

http://en.wikipedia.org/wiki/Resource_dependence_theory

http://en.wikipedia.org/w/index.php?title=Organizational_Misbehaviour&action=edit&redlink=1

http://en.wikipedia.org/wiki/Organizational_justice

http://en.wikipedia.org/wiki/Organizational_Citizenship_behaviour

http://en.wikipedia.org/wiki/Organizational_ecology

http://en.wikipedia.org/wiki/Merger_integration

http://en.wikipedia.org/wiki/Institutional_theory

http://en.wikipedia.org/wiki/Informal_Organization

http://en.wikipedia.org/wiki/Hybrid_organisation

http://en.wikipedia.org/wiki/Evolutionary_Theory_and_organizations

http://en.wikipedia.org/wiki/Contingency_theory

http://en.wikipedia.org/wiki/Complexity_theory_and_organizations

http://en.wikipedia.org/wiki/Bureaucracy

http://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem

http://en.wikipedia.org/wiki/Management

http://en.wikipedia.org/wiki/Human_resources

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Drawing from various social sciences, we define motivation as the set of processes that arouse, direct, and maintain human behavior toward attaining some goal"

There are many different motivation theories such as:

Attribution theory Equity theory Maslow's hierarchy of needs Incentive theory (psychology) Model of emotional labor in organizations Frederick Herzberg two-factor theory Expectancy theory

Elements of Organizational Behavior

The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcome are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from.

Models of Organizational Behavior

There are four major models or frameworks that organizations operate out of, Autocratic, Custodial, Supportive, and Collegial (Cunningham, Eberle, 1990; Davis ,1967):

Autocratic — The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

Custodial — The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation.Supportive — The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives.

Organization Development

Organization Development (OD) is the systematic application of behavioral science knowledge at various levels, such as group, inter-group, organization, etc., to bring about planned change (Newstrom, Davis, 1993). Its objectives is a higher quality of work-life, productivity, adaptability, and effectiveness. It accomplishes this by changing attitudes, behaviors, values, strategies, procedures, and structures so that the organization can adapt to competitive actions, technological advances, and the fast pace of change within the environment.


http://en.wikipedia.org/wiki/Expectancy_theory

http://en.wikipedia.org/wiki/Two-factor_theory

http://en.wikipedia.org/wiki/Frederick_Herzberg

http://en.wikipedia.org/wiki/Emotional_labor

http://en.wikipedia.org/w/index.php?title=Incentive_theory_(psychology)&action=edit&redlink=1

http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

http://en.wikipedia.org/wiki/Equity_theory

http://en.wikipedia.org/wiki/Attribution_theory

http://en.wikipedia.org/wiki/Motivation

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Characteristics of OB: 1. Humanistic Values: Positive beliefs about the potential of employees (McGregor's Theory Y). 2. Systems Orientation: All parts of the organization, to include structure, technology, and people, must

work together. 3. Experiential Learning: The learners' experiences in the training environment should be the kind of

human problems they encounter at work. The training should NOT be all theory and lecture. 4. Problem Solving: Problems are identified, data is gathered, corrective action is taken, progress is

assessed, and adjustments in the problem solving process are made as needed. This process is known as Action Research.

5. Contingency Orientation: Actions are selected and adapted to fit the need. 6. Change Agent: Stimulate, facilitate, and coordinate change. 7. Levels of Interventions: Problems can occur at one or more level in the organization so the strategy

will require one or more interventions.

Transactional analysisTransactional analysis, commonly known as TA to its adherents, is an integrative approach to the theory of psychology and psychotherapy. It is described as integrative because it has elements of psychoanalytic, humanist and cognitive approaches. TA was developed by Canadian-born US psychiatrist, Eric Berne, during the late 1950s.

What is Transactional Analysis

Transactional Analysis (TA) is a personality and psychotherapy for personal growth. It has wide applications in Clinical Psychology, organizations and education also.

Dr.Eric Berne, the originator of TA, considers a transaction as the unit of social intercourse. A transaction consists of a transactional stimulus (TS) and a transactional response (TR). TS is the behavior (verbal or nonverbal) produced by one person in acknowledgement of the presence of others when two or more people encounter each other. TR is the response to TS by another person.

Structure of transactional analysisAccording to the International Transactional Analysis Association,[1] TA 'is a theory of personality and a systematic psychotherapy for personal growth and personal change'.


http://www.psychology4all.com/EricBerne.htm

http://en.wikipedia.org/wiki/Eric_Berne

http://en.wikipedia.org/wiki/Psychiatrist

http://en.wikipedia.org/wiki/Cognitive

http://en.wikipedia.org/wiki/Secular_humanism

http://en.wikipedia.org/wiki/Psychoanalysis

http://en.wikipedia.org/wiki/Psychotherapy

http://en.wikipedia.org/wiki/Psychology

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1. As a theory of personality, TA describes how people are structured psychologically. It uses what is perhaps its best known model, the ego-state (Parent-Adult-Child) model, to do this. The same model helps explain how people function and express their personality in their behavior[1]

2. It is a theory of communication that can be extended to the analysis of systems and organisations.[1]

3. It offers a theory for child development by explaining how our adult patterns of life originated in childhood.[1] This explanation is based on the idea of a "Life (or Childhood) Script": the assumption that we continue to re-play childhood strategies, even when this results in pain or defeat. Thus it claims to offer a theory of psychopathology.[1]

4. In practical application, it can be used in the diagnosis and treatment of many types of psychological disorders and provides a method of therapy for individuals, couples, families and groups.

5. Outside the therapeutic field, it has been used in education to help teachers remain in clear communication at an appropriate level, in counselling and consultancy, in management and communications training and by other bodies

Ego StatesIn his encounters with his clients, Dr. Berne understood that there exist three distinct states in all people. People change from one state to another in the course of their transactions. This change can be easily noticed by the manners, appearances, words, gestures, and tones.The three distinct states called the ego states are the Parent ego state, the Adult ego state, and the Child ego state. The Parent ego state is produced by the play-back of recordings in the brain of unquestioned or imposed external events perceived by the person before his social birth i.e., before the age of 5 years. This ego state consists of NO's, DON’T's, HOW -TO's and the facial expressions, tone of voice, manners etc. of the person's parents. In other words, this ego state consists of the "taught - concepts" of life. The Child ego state is the response the little person produced to what he saw, heard, felt and understood. Most of these are feelings because the child has not developed verbal responses at that time. In other words, this ego state may be considered the collection of "felt-concepts" of life. The Parent ego state begins with the biological birth of the individual and extends up to and age of five years. The Child ego state also starts with the physical birth and continues to develop until the social birth (around the age of five).The Adult ego state develops after both the Parent and the Child ego states have began to develop. This state begins to develop from about ten months of age. The function of this state is to update both Parent data and Child data by continuous examination of these data with respect to actual reality. Thus only those taught concepts and felt-concepts applicable and appropriate to the present are accepted. Thus the Adult state is said to be the "thought-concepts" of life.Types of Transactions Complementary Transactions Complementary transactionsExamples of Complementary TransactionsParent-Parent, Adult-Adult, Child-Child, Child-Parent, Parent-Child, Child-Adult, Adult-Child, Adult-Parent, Parent-AdultFirst Rule of Communication


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We have the first rule of communication in TA :"When TS and TR on the P-A-C diagram make parallel lines, the transaction can go on indefinitely."Crossed Transactions Examples of Crossed TransactionsAdult-Adult and Parent-Child; Adult-Adult and Child-Parent; Parent-Child and Parent-Child; Child-Parent and Child-ParentSecond Rule of CommunicationHere we have the second rule of communication in TA: "When TS and TR in the P-A-C diagram cross each other, communication stops."Duplex TransactionThere can be implied communications along with the primary communications. Eg., "Where did you hide the can-opener?" Here the main stimulus is Adult-Adult. But the word hide has an implied stimulus elicited from the Parent of the communicator to the Child of the receiver. This type of communication is called duplex transaction. The duplex transaction (the implied TS or TR) in the transactional diagram is represented by broken arrows.


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