1 Definition of Management It is very difficult to give a precise definition of the term management. Different management authors have viewed management from their own angles moreover, during the evolutionary process of management different thinkers laid emphasis on different expects. For example, F.W. Taylor emphasized engineering aspects, Elton Mayo laid emphasis on human relations aspects, E.F.L, Brech, George R. Terry emphasis on, decision making aspect, Ralph Davis stresses leadership aspect and some other like Barry Richman etc. emphasized integration or coordination aspect. Some Important Definition of Management 1. Harold Koontz Management is the art of getting things done through and with people in formally organized groups. 2. George R. Terry Management is a disconnect process consisting of planning organizing activating and controlling performed to determine and accomplish the objectives by the use of people and resources. 3. Donald J. Cough Management is the art and science of decision making and leadership. 4. Mary Cushing Nile Good Management, or scientific management, achieves a social objective with the best use of human and material energy and time, and with satisfaction for the participants and the public. 5. Henry Fayol To manage is to forecast, to plan, to organize, to command, to coordinate, and to control. 6. Theo Haimann and William Scott Management is a social and technical process which utilizes, resources, influences, human action and facilitates changes in order to accomplish organizational goals. Thus, the above definitions bring out that Management us a social and technical process It consists of planning, organizing staffing, leading decision making coordinating and controlling. It is concerned with getting done i.e. accomplished pre-determined objective by the use of people and resources. It helps in the creation, direction, maintenance and operation of organization. It secures maximum benefits for the employer, the employees, and the community. Management
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Definition of ManagementIt is very difficult to give a precise definition of the term management. Different management authors have viewed management from their own angles moreover, during the evolutionary process of management different thinkers laid emphasis on different expects. For example, F.W. Taylor emphasized engineering aspects, Elton Mayo laid emphasis on human relations aspects, E.F.L, Brech, George R. Terry emphasis on, decision making aspect, Ralph Davis stresses leadership aspect and some other like Barry Richman etc. emphasized integration or coordination aspect.Some Important Definition of Management1. Harold KoontzManagement is the art of getting things done through and with people in formally organized groups.2. George R. TerryManagement is a disconnect process consisting of planning organizing activating and controlling performed to determine and accomplish the objectives by the use of people and resources.3. Donald J. CoughManagement is the art and science of decision making and leadership.4. Mary Cushing NileGood Management, or scientific management, achieves a social objective with the best use of human and material energy and time, and with satisfaction for the participants and the public.5. Henry FayolTo manage is to forecast, to plan, to organize, to command, to coordinate, and to control.6. Theo Haimann and William ScottManagement is a social and technical process which utilizes, resources, influences, human action and facilitates changes in order to accomplish organizational goals.Thus, the above definitions bring out that
Management us a social and technical process It consists of planning, organizing staffing, leading decision making coordinating and controlling. It is concerned with getting done i.e. accomplished pre-determined objective by the use of people and
resources. It helps in the creation, direction, maintenance and operation of organization. It secures maximum benefits for the employer, the employees, and the community.
ManagementManagement simply means a specific process of planning, organizing, staffing directing and controlling the efforts of the people who are engaged in activities in business organization in order to attain predetermined objective of such organizations.IntroductionModern age is an era of management resolution. There was a time when economic development depended mainly on scientific and mechanical inventions. However, in the modern world good management is necessary for efficient and effective working of organization, along with technological advancements.
Meaning of ManagementManagement is a wide term carrying several meanings, depending in the context in which it is used. Usually, the term management assumes three meanings, when it is used in three different senses as follows:1. Management as a NounWhen used as a noun, management refers to managerial personnel, i.e. all those persons are concerned with getting things alone, through other people. Such persons are charged with some responsibility and are given some authority – responsibility of executing the policies and programs of an organization, and authority in order to
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discharge their responsibilities. In this sense, management include the Board of Directions, Chairman and Managing Director, Functional Directors like Marketing Director and Finance Director, General Managers, and First Line Supervisors. The task of such business management is executory and supervisory in nature.2. Management as a ProcessWhen used as a process, management refers to what the management body or management committee or management council or managers do, or what a manager does. In other words, in this sense, management means the set of functions performed by the managers. These managerial functions broadly include – Planning organizing staffing, directing and controlling. Such functions are performed in order to get things done, through and with other people in an effective and efficient manner. This is why that management has been said to be the ordering and coordinating of functions and of the men fulfilling these functions in order to achieve a given purpose. Henry L. Sisk has also said.Management is the coordination of all resources through the process of planning, organizing, directing and controlling in order to attain stated objectives.3. Management as a Discipline (i.e. Subject)When used in the sense of a discipline or subject, it refers to a branch or body of knowledge and practice is other words, here management means the set of principles, concepts theories and practices as a subject of study for those who intend to be good managers in various areas. Here, the management also denotes a code of conduct for managers and does prescribe the techniques and methods of managing things.It may be noted that management has also been analyses as an economic resource, a factor of production, a system of authority, a technique of leadership and a means of coordination or decision making.Simply stated management means getting things done through and with the individuals and groups by effective and efficient use of available resources.
Levels of ManagementA level of management means the positions of managers in the organizational hierarchy. The number of level is question, which is related to several important elements, such as costs, status, working styles, etc. It depends on such factors as organization’s size, technology and degree of diversity in its work activities.Three levels have been generally recognized in organizational hierarchy as follows:1. Top ManagementIt includes the top managers or management committees, such as board of directors, management council, chairman, general managers etc.2. Middle ManagementIt includes departmental heads and sectional heads, which are below top managers, out above lower managers.3. Supervisory ManagementIt is also known as lower management and includes managers, such as foreman, salesman, assistants, head clerk and supervisors.Functions of Managers at Different LevelsAt different levels in the management hierarchy, the managers perform different functions as follows.1. Top ManagementTop managers functions relate mainly to designing of plans, policies and organization structure. They deal with environmental process and provide leadership to the organization.2. Middle ManagementIn many cases the job of the middle manager is that of intermediary between top management and supervisory or operating management. They coordinate inputs production and outputs. They are responsible for executing the plans and policies framed by the top managers.
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3. Supervisory ManagementAt this level, managers get down to the most specific and detailed aspects of the organizational task. They are responsible for getting the technical guidance, help and solve the obstacles, doubts and inconveniences of the workers and remove their dissatisfaction. They make recommendations for providing proper working conditions etc.Managerial Skills and Levels of ManagementThese are four types of managerial skills, which are required in different degrees of importance at various managerial levels as follows:1. Technical SkillIt is the ability to use tools, procedures or techniques of a specialized field. It is relatively more important and required at supervisory level then its importance goes on reducing at middle and top levels. For example, a supervisor must have full knowledge as to how the plastic molding machine works. However, the President of a company does not need to know much of the technical details of drilling for oil or how to refine the oil.2. Human SkillIt is the ability to work with understand and motivate other people. This skill is essential at every level of management because all managers whether at high or at low level have to deal with their subordinates.3. Conceptual UnitIt is the mental ability to coordinate the organization’s interests and activities and to see the organization in its enlarged form as one whole system. This type of skill is primarily required at the top level and then at the middle and lower levels, its importance keeps on diminishing.4. Design of Problem Solving SkillIt is the ability to see a problem and then also to workout a solution to it. This skill is required at all levels because every manager without reference to this level makes decision strategic, or routine ones. However, its significance lies more at higher levels.Management has a dynamic nature. It means that management is an organizing and unceasing element or concept. Management does not occur by rigid formula or fixed pattern. It is ever-present reality of organizational life. Management does not carry out the work himself, but the managers get the work done through other people by pioneering, leading, motivating and controlling their activities, efforts and Behavior. The following important characteristics of features of management clearly indicate toward its nature.1. Management is a Complex and Continuous Social ProcessManagement deals with human phenomenon about which too little is known. The structure and Behavior of groups of people are very complex. It is a process because its comprises a series of actions that lead to achievement of objectives. It is a social process because these actions are primarily concerned with relations between people. It is a continuous process because new problems crop up as the old ones are solved.2. Management is an Independent SkillManagement has emerged as an essential, a distinct and a leading independent institution, which is a central event in the social history. It is a new basic and dominant institution or social group.3. Management is a ScienceScience is a systemized knowledge about a phenomenon ascertained by observation and experiment. It means that under science, general truths are discovered and critically tested, and then underlying principles are established. As science, management has developed and provides a body of principles, theories, laws, techniques and practices, which are capable of universal application. It has developed certain generalizations, which are applicable to any group activity.Management is growing as science due to the following reasons:(a) Quantitative Tools under the name and style of Operations Research have been introduced in the field of managerial decision-making.
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(b) Researches have been conducted which have provided better insight into the nature and Behavior of man.(c) Certain Principles theories and practices have been identified to the name and style of International Management or Contemporary Management or Global Management.(d) Different Case Studies undertaken in various countries unfold the correct and the same results. Thus, the degree of predictability is being properly identified and ascertained.4. Management is an ArtArt is the answer to the query how it tells about the way to accomplish the desired results. It is behavioral knowledge. Art is the applied science i.e. application of knowledge for the solution of organizational problems. The meaning of art is the bringing about of a desired result through the application of skill. Management, in this sense is an art. It provides to the enterprise the ability to compromise with the least of undesired consequences – which is the essence of art. Management leads, motivates and influences the people to be on the right, desired track by effecting various kinds of adjustments and how compromises through artful handling of conflicts and dissentions. It tells as to how to solve various problems in the field of production marketing, finances, personal technology, research and development, human resource development, competition etc.5. Management is a System of AuthorityManagement is the system of authority which is represented by vertical and horizontal dispersal of authority positions resulting in what is properly known as management hierarchy or chain of command. Under the authority system well defined lines of command and delegation of suitable positional powers along with specified responsibilities at all levels, are established. System of authority creates discipline and order and avoids chaos.6. Management is UniversalManagers perform the same functions regardless of their place in the organization, structure of the type of enterprise in which they are engaged. Acting in their managerial capacity, presidents / chairmen, directors, department heads, supervisors/foremen, college principles, bishops and heads of governmental agencies all do the same thing i.e. perform the same functions. They are all engaged in setting things done through and with people. As managers each must at one time or another perform all the duties. Characteristics of managers irrespective of their level in the organization or their place or ratio of working, this is the principle of universality of managerial functions or management.7. Managerial knowledge and experience are transferableBy implication of the principle of universality of management, managerial knowledge and experience are transferable from department to department, from enterprise to enterprise, and from nation to nation. Executives can employ their skill as well in one occupation as in another, to the extent that their tasks are managerial and not technical, and with the proper motivation and orientation to environment of managing.8. Management is a ProfessionProfession is defined in many ways. Any occupation by which a person earns livelihood is called profession. It is also in restricted sense, and then it includes certain specified occupation only. All occupations are not included in professions. Thus, clear definition of profession is not possible.9. Management is an Integrating ForceManagement is a force that is well recognized the integrating human and physical resources through its proper direction, designing of organization structure, job positions, delegation and decentralization of authority and responsibility, consultative and participative processes and influencing. It establishes congruence (i.e., balance) between organizational interests and goals on one hand and the individual interest and goals on the other hand.10. Management is IntangibleManagements intangible in that
The process of management cannot be seen, and
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The principles, theories, techniques, concepts and practices of management are also invisible. Management is said to be good or bad on the basis of results. However, when management is referred to manageerial personnel, it can be seen.
11. Management Utilities Multi-Disciplinary ApproachManagement relies for its vast body of knowledge on various other fields, such as economics, anthropology, sociology, psychology, mathematics, engineering etc.
Definition of Scientific ManagementFrederick TaylorScientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way.Kimball and KimballAn attitude that aims to replace (I think with I know). It points out the method of intelligently directing the construction and arrangement of factory buildings, the character of methods and processes, the organizations of departments, the elimination of wastes and increase of efficiency in all phases of industrial administration where experience and date are applicable.Peter F. DruckerThe operational study of work, the analysis of work into its simplest elements and the systematic improvement of worker’s performance of each element.In a nutshell, scientific management represents a body of knowledge that is concerned primarily with the discovery of casual relationships (i.e. cause and effect relationships) i.e. cause and effect relationship between the efforts expended for a given objective, and the results of these efforts, with special emphasis on the discovery of the best method in the light of the available man-power, materials, and technology.Frederick W. TaylorTaylor started his career as an apprentice (labourer) in a small machine shop in Philadelphia in 1876. Owing to his sincerity of purpose and devotion to duty, he joined the Midvale Steel Works in 1878 as a machinist and then became a foreman and later rose to the position of the chief engineer. He wrote five books and four papers Shop Management is his important book. In the later part of his career, he worked as management consultant of a steel company.Principles of Scientific ManagementTaylor’s concept of scientific management consisted especially of a scientific approach to management. Its primary objective was to replace methods based on trail and error and rule of thumb (i.e., practical sense and experience rather than exact rules or calculations). The principles of scientific management may be listed as follows.1. Development of a true science for each element of a man’s job to replace the old rule of thumb method.2. The scientific selection, education, training and development of workers for every job.3. An almost equal distribution or work and responsibility between management and workmen, management entrusted with the planning of work and workmen to look after the execution of plans.4. Intimate, friendly cooperation between management and workers to ensure that work is done in accordance with the principles of the science which have been developed in accordance with the planned jobs and tasks.The aims of concepts of scientific management may be summed up as follows:
Science, not rule of thumb (i.e., not methods based no practical sense and experience rather than exact rulers or calculations).
Harmony, not discord. Cooperation, not individualism. Maximum output in place of restricted output. Development of each individual to his greatest efficiency and prosperity.
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In addition to the above principles and concepts, Taylor developed several techniques or elements, which provide the mechanism for implementing his principles. Some important of these techniques or elements may be listed as follows:1. Time StudyTime study or work measurement is designed to establish the standard time required to carry out a job under specified conditions. It involves analysis of a job into its constituent elements and recording the time in performing each element. Taylor suggested the use of time study to lay down a fair day’s work so as to avoid guesswork and uncertainty in the effort and productivity expected of each worker.2. Motion StudyIt is systematic and critical study of the movements of both the worker and the machine so as to identify and eliminate unnecessary and wasteful movements, and decide on the best way of doing the job.3. Standardization and SimplificationUnder scientific management the third element of technique is to lay down the predetermined standards regarding the task, materials, equipments, method, time, quality and cost and working conditions standardization helps to simply work, ensure interchangeability to parts to ensure uniformity of operations and facilitate comparisons of efficiency.4. Scientific Task PlanningIt is the technique of forecasting and designing ahead or in advance every step in a long series of separate operations. Each step is to be taken in the right place of the right degree and at the right time. Each operation is to be performed at the optimum efficiency. Scientific task planning provides answer to the questions like what work is to be done, how is to be done, where it is to be done and when it is to be done. More efficient routing systems and works scheduling were developed for effective planning of work.5. Functional ForemanshipAccording to Taylor one supervisor cannot be an expert in all aspects of work supervision. He suggested the system of functional foremanship in which eight supervisors supervise a worker’s job. Four of them i.e., route clerk, instruction card clerk, time and cost clerk and shop disciplinarian, are concerned with the planning of work in the factory office. And the other four, i.e., gang boss, speed boss, repair boss and inspector are involved in the execution of work at the shop flour.6. Incentive, Wage Plan with Differential Piece Rate SystemTaylor emphasized the need for scientific determination of remuneration for workers. For this purpose, he suggested that a direct link should be created between remuneration and productivity for motivating workers. In this connection, he developed the differential piece rate system of wage payment. Under this system, two piece rates are laid down – one, low rate for those who fail to achieve the standard output and the second higher rate for those who achieve or exceed the standard output.7. Adoption of Exception PrincipleTaylor recommended adoption of exception principles which means that the management reports should be condensed into comparative summaries giving in detail only the exception to the past standards or average – both the especially good and the especially had exceptions.Taylor testifies that in order for the principles of scientific management to succeed, a complete mental revolution on the part of the management and workers was required.The basic philosophy of Taylor’s scientific management lies in the need for a fundamental change of attitudes on the part of both managers themselves as partners in the joint endeavor rather than adversaries. Rather than quarrel over profits, they should try to increase production. He believed that the management and labour had a common interest in increasing productivity – which he called mutuality of interest.
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Taylor pleaded for double mental revolution. He writes that in its essence, scientific management involves a complete mental revolution on the part of the workingmen engaged in any particular establishment or industry. Such a revolution should be brought about concerning their duties towards their work, toward their fellowmen and toward their employers.He pleaded for equal mental revolution on the part of management – the owner of the business and the board of directors. Such a revolution should be brought about concerning their duties toward their fellow workers in the management toward their workmen and toward all of their daily problems.Taylor believes that without this complete mental revolution on both sides scientific management does not exist. Scientific management exist when the management cares for the interest and goals of the workers and on the other hand, the workers trust the managers and cares for the interests and goals of the organization.Taylor says that the great revolution that takes place in the mental attitude of the two parties under scientific management is that both sides take their eyes off i.e., away from the division of the surplus as the all-important matter and they together turn their attention towards increasing the size of the surplus.Critical EvaluationTaylor’s scientific management may be critically examined as follows:(a) Contribution to Management ThoughtTaylor was the first person to develop a systematic and scientific study of management. Hence he is known as the father of scientific management. He presented his ideas as a systematic body of thought. His main contribution to management practices included the following aspects.
To emphasize the importance of applying scientific methods of enquiry, observation, experimentation and inferences to the problems of the management. He exhorted against the use of trial and error approach to industrial problems.
Stressing the separation of planning of work from its execution so as to enable workers to perform at his best and earn accordingly.
Emphasizing the aim of management to the maximum prosperity of the employer along with the maximum welfare of each employee.
Laying emphasis on the necessity of a complete mental revolution on the part of the both workmen and management in order to derive the benefits of scientific management through harmony and cooperation rather then individualism and discord.
The primary benefit of scientific management was criticized and proper use of energy ounce of energy. Moreover, specialization and division of labour or work have bought about the second industrial revolution. It has also facilitated professionalization of management.(b) Criticism Or LimitationIn spite of its great contributions, the scientific management approach has been criticized for its various limitations as follows:1. It is mechanistic approach ignoring human element in the organization – it is concerned with the efficiency of workers in the technical sense emphasizing production only and attaching no importance to the social and psychological need of the workers. In this context it has called unfair and undemocratic.2. Trade unions have opposed scientific management on the ground that it leads to autocratic management and also raises the workload of workers with a corresponding adverse impact on employment of men.3. It assumes that workers are inherently lazy and they require strict supervision and exercise of authority by management. It is also its wrong assumption that workers are motivated by material gains, i.e. money only.4. It has been called by some critics as narrow, impracticable and titled toward exploitation of workers.5. It is said that this approach is primarily concerned with problems at operating level only and it hardly emphasizes the managerial organization and processes.
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6 Some say that there is no one best way of doing a job as pleaded by Taylor, because what is the best way, it shall depend on different circumstances of each case.ConclusionDespite all criticism of Taylor’s scientific management, his techniques continue in the name of work study in India and elsewhere.Systems Approach to ManagementClassical and neo-classical theories of management considered only partial aspects of an organization for paying special attention on the individual aspect or part. Classical theorists emphasized work and technical aspects, whereas neo-classical theorists laid stress on worker aspect or human element in the organization. In this sense, these theories were incomplete or insufficient for managers to guide them in the management of organization. Hence there was felt a need for some more exact and comprehensive theory of management.Defining SystemsIn simple words, a system may be defined as a set a interrelated and interdependent parts forming an organized unit or entity. These parts are known as sub-systems which interact with each other and are subject to change. They are interrelated as well as interdependent. Hence, changes in any sub-system lead to changes in others.Any working organization may be said to have three sub-systems as follows:1. Technical Sub-SystemIt represents the formal relationships among the members of an organization.2. Social Sub-SystemIt provides social satisfaction to members through informal group relations.3. Power Sub-SystemIt reflects the exercise of power or influence by individuals and groups.The whole or total system emerges as a result of interaction between and among the various sub-systems. It is important to note that the system and its sub-systems also interact with the environment, which may influence or be influenced by the system or sub-systems. (Environment is the sun total of the factors and forces outside an organization, such as customers, competitors, suppliers, investors, regulatory government agencies etc)Features or Concepts of Systems ApproachLudwig Van Bertalanffy and Kenneth E. Boulding has been the pioneer of systems approach. Katz and Kahn, Stafford Beer, Foresster, Hertz, Norbert Wiener, McCloskey and Morse, etc have also contributed to this story.Drawing on the work from many fields including biology, the systems approach analysis the functions of the total enterprises in terms of systems – inputs, processing, and outputs – with a view to improving their operations.The significant features or concepts of systems approach may be outlined as follows:1. Sub-SystemsThese are the parts that make up the whole. Each system may also be a sub-system of still larger whole. For example an electronic goods company is a system, but it becomes a sub-system of the electronic goods industry, which is a larger whole.2. Interrelatedness of Sub SystemsIt is probably the distinguishing characteristics of a system, which means that a manager cannot change on sub-system without affecting the rest because the sub-systems interact with each other and therefore are dependent on each other. For example, the solution to a problem of the Production Department (a subsystem) will have an impact on other departments (subsystems) such as Marketing and Finance – say, if it is decided to increase the production by 50% of the present output, then marketing efforts will have to be further geared to sell the enhanced production and more finances will have to be arranged for additional production.3. SynergyIt means that the whole is greater than the sum of its part. In other words, systems approach results in synergic effect which means that 2 + 2 – More than 4.
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4. Open SystemOpen system means that which interacts which its environment and closed system is that which does not interact with its environment being self-sustained. The emphasis of systems approach is an open system. It believes that most of the organizations are open systems because they depend for their inputs (i.e., money, materials, men, information etc.) on the society. In addition, the organization sells their outputs (i.e. goods and services) to the customers in the society. Thus, if an organization wishes to survive, it must respond to its environment – customers and suppliers.5. System BoundaryEach system has its boundary that separates it from the environment.6. EnvironmentAll systems operate, within an environment, which, for an organization, might include customers or clients, competitors, suppliers, investors, government and regulatory government agencies, unions etc. Environment includes things that are significant to the organization, but are largely beyond its control.7. FlowsA system has flows of information, methods and energy including human energy. These enter the system as inputs, undergo transformation process and exit as outputs.8. FeedbackIt is the assessment of work done, identification of deviations and taking of corrective action.9. Central Functions or PurposeThere is always a central function or purpose of a system against which the efforts of the organization and its subsystem can be evaluated or measured.In a nutshell, systems approach attempts to view organization as a unified, purposeful system composed of interrelated parts. It gives manager a way of looking at the organization as a whole and as a part of the larger, external environment. The organizations are viewed as procuring and transforming inputs into outputs. The organizations are also viewed as extremely complex entities subject to changes from within and outside. In order to meet the various needs of such as organizations, a balanced and integrated approach to management is required.At the heart of the system approach lays the following:
Management information system (MIS) Communicating network for collection, analysis and flow of information and quantitative data so as to
facilitate planning and control. Decision making system as the primary means of balancing the different parts of the organization. Integration of activities and departments with a view to making the best use of scare resources. Sub-System of management – the managers should try to adapt and cope with environmental changes.
Critical EvaluationThe systems approach may be critically evaluation as follows:(A) Contributions (Advantages)Systems theory has made the following contributions.1. It provides a manager a way of thinking about the job of managing and unfolds an opportunity to him for looking it the organization as a whole and for achieving overall effectiveness.2. It provides a unified focus to organizational efforts – a direction towards which people should strive.3. It draws attention of managers to an important factor and that is the environment in which an organization works. The interaction with the environment is dynamic.4. It includes within it focus both micro and macro aspects of the organizations. Hence it serves a multi-level and multi-dimensional approach.
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5. It implies that the modern manager should have analytical orientation should be expert in motivating to achieve goals and open mandate to receive and respect new ideas, i.e. creativity and innovation.6. It also implies that management education must seek to develop the ability to work with and motivate others.7. The feed back mechanism provides and opportunity to rearrange organizations part according to the change in the environment.(B) LimitationsThe system theories have been criticized on the following grounds.1. Systems theory is not a complete explanation of the whole organizational system. It does not explain how the sub-system of the specific organization is uniquely related in a given environment.2. The conceptional framework for understanding organization provided by system theory is too abstract.3. It does not really offer any new thing. Managers do understand interrelationship between different parts and the influence of environment on organization and it sub-systems. What is necessary for a manager to know as to how the sub-system of a specific organization are uniquely related in a given environment and thus how best to deal with a particular problem? This is not answered by the system approach.ConclusionThough facing several criticisms, the system theory provides a framework for integrating much, if not all, of knowledge of management thought. It provides a unified focus to the organizational efforts. Its major contribution results from its strong emphasis on the interrelatedness are mutuality of the part of an organization. It has really opened new vistas for managers of today’s world.Henri Fayol – Father of ManagementFayol was a French mining engineer in his early thirties, but after that he switched over to general management and was Managing Director from 1888 to 1918. He wrote his book General and Industrial Management in 1916 in French, which was translated in English in 1949, only when American Management writers came to know about his ideas.Fayol is known as the father of management or the founder of the classical management. Not because he was first to investigate managerial behavior, but because he was the first to systematize it. He was contemporary to Taylor. Taylor was basically concerned with organizational functions, whereas Fayol was interested in the total organization. It may be noted that Taylor is known as the father of scientific management, i.e. supervisory or lower management, while Fayol is recognized as the father of management, i.e. the higher management or the general management.Division of Business ActivitiesAccording to Fayol, business activities in any organization consist of six interdependent operations as follows:1. Technical – activities concerning production.2. Commercial – activities concerning buying, selling and exchange.3. Financial - activities concerning optimum use of capital.4. Security – activities concerning protection of property.5. Accounting – activities concerning final accounts, costs and statistics. And6. Managerial – activities concerning planning, organizing, commanding, coordinating and controlling.According to him, the first five activities were well known and as such to devoted his attention to the description and explanation of the managerial activities. Also he analyzed the nature of such activities and skill requirements, which were so far given little scattered attention by thinkers.Universality of Management: (Elements of Management)Fayol considered the process of management to be of universal application and distinguished between five elements of the process. He regarded these elements of management as the function of management, which were being performed by all managers universally and at all the levels of organization. He divided management functions into five parts as follows:
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Forecasting and planning Organizing Command Coordination Control
Thus, according to Fayol, management means to forecast and plan, to organize, to command, to co-ordinate and to control. The management was defined as the process of performing these functions. It may be noted that the present pattern of management functions follows broadly the lines set by Fayol.Fayol emphasized that management involved the application of certain skills, which could be acquired by persons on the basis of systematic instructions and training. Once acquired the skills could be applied to all kinds of institutions including church, schools, and political as well as industrial organization.Principles of ManagementFayol made a distinction between “elements of management” and “general principles of management”. Besides a systematic analysis of the management process and management functions, Fayol formulated a set of fourteen principles as guidelines for implementing the process of management.These principles may be listed as follows:1. Division of WorkIn any organized situation, work should be divided into compact jobs to be assigned to individuals. This applies to managerial work and non-managerial work. Division of labour facilities specialization and improves efficiency, if it is done within reasonable limits.2. Authorities and ResponsibilityThe authority is the official right to a manager to manage people and things. Authority of a manager goes hand in hand with the responsibility for effective results. In other words, there should be parity or balance between authority and responsibility vested in a managerial position.3. DisciplineDiscipline is defined as observance of diligence and respect for seniors and rules and regulations. Managers as leaders of their work groups should enforce discipline throughout the organization. Fayol declares that discipline requires good superiors at all levels. He emphasized the need of discipline among the personnel for the smooth running of organization. He advocated penalties to prevent in violation.4. Unity of CommandIt means that a subordinate in an organization should be under direct supervision of a single from whom he should get instructions and to whom be should be accountable. In other words, every employee should have only one boss. If a subordinate has more than one boss, to that case conflict and condition in authority and instructions of general bosses would result.5. Unity of DirectionFayol advocates one head, one plan for a group of activities having same objective. In other words, a set of activities having the same objective should be under the direction of a single manager. Similarly, there should be one plan of action for such a set of activities because the objective is the same. This principle promotes smooth coordination of activities, efforts and resources.6. Subordination of Individual Interest to Group InterestThe collective good and common interest of the organization should prevail over the narrow, sectional and self-interest of its members of an organization for the welfare of both the organization and the members.7. Remuneration of PersonnelRemuneration as well the methods of payment in an organization should be fair so as to afford maximum satisfaction both to the organization and its employees.
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8. CentralizationAccording to Fayol, every thing which reduces the importance of subordinates role is centralization and that which increases it, is decentralization. In his opinion, the question of centralization and optimum degree in particular case. There should be a proper combination and decentralization in an organization based on a consideration of several internal and external factors.9. Scalar ChainFayol defines the scalar chain as the chain of superiors ranging from the ultimate authority (i.e. top authority) to the lowest ranks. It is also known as hierarchy of management. Every communication should follow the prescribed route, i.e. the proper channel. Authority relationships are said to be scalar when subordinates report to their immediate superiors and when their superiors, in turn, directly report as subordinates, to their superiors.10. OrderOrder relates to both persons and things. It means a systematic arrangement of materials and systematic placement of people in the organization. In material order, everything should be in its proper place and there should be a place for everthing. For social order there should be a place assigned to each employee, and each employee should be in the place assigned. The right man in the right place is the ideal here.11. EquityEquity means combination of fairness, kindliness and justice. Equity motivates the workers to perform their duties. Besides, it promotes a friendly atmosphere between superiors and subordinates.12. Stability of Tenure of PersonnelManagement should strive to minimize employee turnover (i.e. changes in staff). In other words efforts should be made to achieve relative stability and continuity of tenure of the personnel. This could be achieved by attractive remuneration and honourable treatment of personnel. Stability and continuity of personnel promote teamwork, loyalty and economy.13. InitiativeIt refers to the freedom to propose a plan and execute it. Management should encourage subordinates to take desirable initiative in thinking out plans and executing them. Entending opportunities and freedom to contribute their best could do this.14. Esprit de corpsEsprit de corps means the spirit of loyalty and devotion, which unites the members of a group or society. It is a sense of respect and belongingness to one’s organization. This principle stresses the need for team spirit, cordial relations, and co-operations among the personnel.It is to be noted that Fayol made is clear that he had no intention to close the list of principles or make them inflexible.Critical EvaluationFayol’s administrative or process or functional theory of management may be evaluated as follows:(A) Contribution of Fayol’s WorkFayol’s major contribution was to identify management as a separate set of skill or functions performed by managers in the organizations. The skills and abilities required for effective management were stated to be dependent on the manager’s positions at different levels of organization. Fayol pointed out that administrative or managerial skills were more essential for higher-level manager, whereas technical skills and abilities were required more of the lower levels.Fayol was the first thinker who emphasized, for the first time the necessity of formal education and training in management. He was the person who provided a set of means (i.e. planning, organizing, commanding, coordinating and controlling) for understanding the management process.) He also provided principles for implementing this process.
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He provided conceptual framework for analyzing the management process and emphasized that management was a separate, distinct activity.Management as a body of knowledge gained immediately from Fayol’s analysis of management skills of universal relevance and the analysis of the principles of general management.(B) Limitations or WeaknessesFayol’s administrative theory of management is criticized on the following grounds.1. It is too formal as Fayol divides “business activities” into six categories, and their management into five functions and the implementation of these functions with the help of fourteen principles.2. Some critics call this theory as inconsistent, vague and inadequate.3. It does not pay adequate attention to workers. It has pro-management bias.4. Jernert Simon calls Fayol’s principles as proverbs, comparable to folklore and folk wisdom.ConclusionIn spite of several criticisms of Fayol’s work, his theory of managerial functions still exerts considerable influence on the practice of management as well as the teaching of this subject world over.It may be also noted that when combined together the scientific management approach and the functional approach are called classical school or classical theory of management or classical approach to management.Meaning of Management PrinciplesManagement principles may be defined as fundamental truths of general validity. They are helpful in predicting and understanding the results of managerial actions. The principles have been derived from the experience of managers in different fields of activity. Primarily members of the classical management school have developed them.Management principles are intended to improve the practice of management by providing guidelines for managerial actions in the management process. They become the basis of scientific process of management.Flexibility of Management Principles (Nature)As indicated above, management principles are not rigid, absolute truths like rules and laws. In fact, they are flexible guides to managerial actions. Hence, while applying these principles, due attention must be given to varied and changing, circumstances because human beings who are subject of such principles are different and changeable and moreover other concerned factors are also not stable. At times it has been found in practice that the same principles are seldom applied twice in exactly the same way.Like other social sciences, management science is also not very exact and rigid. Certain kind of flexibility is always necessary to accommodate new thinking, new demands and newly emerging circumstance. Hence the management principles are flexible and should be adopted to meet the specialty of every situation. However as a precaution management principles should be guarded against unnecessary frequent modifications and alterations based on pure whims and frenzies of individual user so that they are not distorted unwarrantedly.In sum, it may be said that the nature of the principles of management suggests that they should be applied with fair judgment and interpretation of the available facts in a given situation.Characteristics of Management PrinciplesThe characteristics of management principles may be examined as follows:1. Management principles are derived from analysis of management functions and processes.2. There are two types of principles:Descriptive which attempt to explain and predict the behavior of organizational members and managerial decisions and their relationships.Normative which attempts to prescribe and evaluate the behavior of organizational members including the managers. They prescribed what ought to be, what is good, right and desirable.3. The principles known today have their origin in the works of classical writers and thinkers like Taylor, Fayol and Mooney and Reiley.
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4. They are universal in the sense that they are valid for most organizational under most circumstances.5. They are flexible in nature and change with the changes in the environment in which an organization exists. It is to be noted that nothing is permanent is the landslide of management, because of the complex and unpredictable nature of human behavior.Need and Importance of Management PrinciplesProper use of management principles will probably improve organizational performance. According to George R. Terry, Principles of management are to a manager as a table of strengths of materials is to a civil engineer. The value of the principles lies in the foundation they provide for efficient conduct of management practice. By means of principles, a manager can avoid fundamental mistakes in his job and foretell the results of his actions with confidence.Principles help in several ways – increasing the managerial efficiency, increasing the productivity of workers, enhancing managerial knowledge and thinking, improving research in management, serving as aid to training enhancing social welfare by helping in improving the quality of life of people and community resources to best advantage of organizational members, etc.The main purpose of management principles is to make available useful elements of a systematic theory of management, so as to improve the management practice. They provide a means of organizing knowledge and experience in management.The above discussion clearly brings out that it is due to all the above facts that management principles have become a permanent need in today’s management world.Various Management PrinciplesA number of management thinkers have formulated various management principles. Taylor and Fayol has enunciated the most important principles.Human Relations Approach Historical PerspectiveScientific management remained concerned tithe the efficiency and productivity of workmen at the shop floor. Fayol’s functional approach to management aimed as improving the managerial activities and performance at top level in the organization. Between 1925, opinion of many experts was directed towards the human element or aspect of the organization. They drew their attention from “work” emphasis to “worker” emphasis. It was clearly felt that earlier approaches to management were incomplete and insufficient in that there was little recognition of the importance of workers as human beings, their attitudes, feelings, needs and requirements. In fact, the technical approach to work methods in scientific management did not produce durable and desirable results in all cases. Individual and group relationships in the work place often prevented maximum benefits to be derived from planning and standardization of work or monetary rewards offered for efficiency. Elton Mayo is the founder of this theory.Hawthorne ExperimentsThe human relations approach to management developed as a result of a series of experiences (in all four) conducted by Elton Mayo and his associates F.J. Reothlisherger and W.J. Dickson at the Hawthrone plant of the Western Electric Company at Chicago in United States. The Hawthrone studies were aimed at finding out what factors really influenced the productivity and work performance of workers. These experiments were made with respect to – different levels of illumination in the work place changing in working conditions like hours of work, lunches, test periods and how group norms affect group effort and output.Human Relations Concepts: Findings of Hawthorne StudiesThe main findings of Hawthrone studies were as follows:1. Physical environment at work place (i.e., working conditions) do not have any material effect on the efficiency of work.2. Social or human relationship influenced productivity more directly than changes in working conditions.
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3. Favourable attitudes of workers and work-teams towards their work were more important factors determining efficiency.4. Fulfillment of workers social and psychological needs have a beneficial effect on the morale and efficiency of workers.5. Employee groups formed on the basis of social interactions and common interest exercised a strong influence on workers, performance. In other words, informal organization controlled the norms established by the groups in respect of each member’s output.6. Workers cannot be motivated solely by economic reward. More important motivators are job security, recognition by superiors and freedom to take initiative and to express their individual opinions as matters of their own concern.Behavioral Or Social Science ApproachHistorical PerspectiveThe Behavioral or social science approach developed as a corollary to the human relations approach.Social scientists and organization theorists are of the opinion that best results can be obtained by building theories of management and organization based on findings of the Behavioral sciences, such as psychology, sociology, psychiatry, economics, cultural anthropology and philosophy.Behavioral approach reflects the findings of intensive carried out by Behavioral scientists like Chester I Bernard, Douglas McGregor, Chris Argyris, A.H. Maslow, Herzberg, Rensis Likert etc. many of the conclusions of the Hawthorne studies have been reaffirmed by subsequent research studies. Moreover, certain ideas have been refined, extended and these behavior scientists have highlighted other important ideas. These scientists have tried to eliminate the exaggeration of the importance of informal relations. The focal point of management action is the behavior of human being in the organization – management as a technical process only, was given up.Behavioral scientists conduct research to answer the question.“Why a person or a group of persons behaves or acts in a particular manner? They try in answer in any problems faced by the managers by explaining the behavior of the people”.Elements Or Concepts or Features Of Behavioral ApproachThe Behavioral approach concerns itself with the social and psychological aspects of human behavior in organization. The behavior of members of an organization clearly affects both, its structure and its functioning as well as the principles on which it can be managed. Behavioral researches have provided sufficient evidence that human element is the key factor in the success are failure of an organization. In several experiments, it has been observed that people prefer to be consulted rather than receive order or information. Less reliance on the use of authority is preferred.Some of the more important elements or concepts of Behavioral approach may be outlined as follows:1. Individual BehaviorIndividual Behavior is closely linked with the Behavior of the group to which he belongs. The group dictates changes in his Behavior. Individuals observe those work standards which are prescribed by the group.2. Informal LeadershipInformal leadership, rather than formal authority of managers is more important for setting and enforcing group standards of performance. A a leader, a manager may be more effective and acceptable to subordinates, if he adopts the democratic style of leadership.3. ParticipationIf the subordinates are encouraged and allowed to participate in establishing goals, there will be positive effect on their attitude towards work. If employees are involved in planning, designing the jobs and decision-making, there will be least resistance to changes effected in technology and work methods.4. Motivation by Self-Control and Self-DevelopmentBehavioral scientists maintain that by nature most people enjoy work and are motivated by self-control and self-
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development. Managers should try to identity and provide necessary conditions conducive to the proper and sufficient use of human potential. The manager’s attitude towards human behavior should positive. They should know that average man is not lazy by nature. But he is ambition. Every man likes to work and prefers to assume responsibilities. MacGregor maintains that employees favour self-direction and self-control. Behavioralists believe that in place of the concept of social man the concept of self-actualizing man would be more appropriate to explain human motivations.Chester I Bernard pointed out that material reward is of crucial signification only upto a definite point. The incentives of status, power, good physical conditions opportunities of participation and good social (i.e., cultural interrelationships) are very important.5. Informal OrganizationBehavioralists particularly Bernard, consider informer organization as an essential part of the formal organization. Informer organization must always be taken into account while determining managerial behavior.6. General Supervision Not Close OneAs regards supervision of subordinates, Behavioralists particularly Likert, are not in favour of close supervision. They advocate general supervision, which tends to be associated with high productivity.Basic Assumptions (Are Propositions) Of Behavioral ScientistsThe Behavioral science approach is based on certain assumptions about man and organization, which my be looked upon as their prepositions (statements of opinion or judgment) also. Those may be outlined as follows1. Organization is socio-technical system involving people and technology as their primary components.2. The behavior of the members of an organization clearly affect both its structure and its functioning, as well as the principles on which it can be managed.3. Individual’s behavior is closely linked with a greatly influenced by the behavior of the group to which he belongs.4. A wide range of factors influences work and interpersonal behavior of people in the organization.5. Congruence (agreement) between organizational goals and individual goals organizations members would be established.6. Several individual differences in perceptions, aspirations, needs, feelings, abilities and values of people excite in the organization, such difference along with their changing nature over periods of time have to be recognized.7. Informal leadership rather than the formal authority of supervisors is more important for increase in employee performance.8. Democratic leadership style and participative managerial style encourage positive attitude of employee towards work and faster’s high moral and initiative among them.9. By nature most people enjoy work and are motivated by self-direction, self-control and self-development.10. Conflict in organization may to some extent inevitable and at times even desirable for development, innovation and creativity in certain cases. Conflicts and cooperation coexist in organizations. Conflicts are not to be suppressed, but are to be resolved and not always coordinated in vital for achievement of organizational goals.The above prepositions are important elements of Behavioral science thinking. Thus the Behavioral approach represents a significant advance over the human relations approach.The major areas of research and analysis by the Behavioral scientists are interaction between organizational structure, work performance and employees behavior, consequences of traditional, coercive controls on humans, influence of technological advances and changes on group behavior, human needs and aspirations, theories of motivation and leadership, developmental aspects of human resources, organizational behavior aspects, group dynamics, patterns of communication and their importance in the organization, managerial styles and their impact on employee behavior, organizational climate, culture and politics, organizational development, change and conflict, organizational rules and status, and so on.
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Distinction Between Human Relations and Behavioral ApproachesAs indicated earlier, Behavioral science approach is an improvement over the human relations thinking. This may be explained in the following ways.1. Areas of StudyThe human relations movement kept it limited to the study of psychological needs of people, supervision styles, working conditions, interpersonal relations, communication etc. On the other hand Behavioral scientists have gone very far and wide in the study of organizational and managerial aspects covering the areas as mentioned in the previous paragraph.2. Human Nature AssumptionsHuman relation theorists have made some general, unverifiable assumption about human nature holding “social man” view. In contrast, Behavioral scientists have understood the factual nature of individuals and of their Behavior-holding “self-actualizing man” model.3. Human NeedsHuman relations thinkers presume that people have only social needs, whereas the Behavioral scientists regard individuals as different from one another and dynamic with respect to their needs and attitudes and emphasize both social and psychological needs.4. Organization NatureHuman relations approach believes organizations to be purely social systems, while Behavioral science approach views organizations as socio-technical systems which are required to accomplish a set of individual, social and corporate (economic) goals.5. Employee SatisfactionHuman relations theorists advocate that employees satisfaction is achieve through economic and other incentives and then it automatically leads to higher employee productivity. On the other hand, Behavioral scientists assert that employee satisfaction is a matter of a set of factors including fulfillment of social and self-actualization needs and high morale is also necessary for achieving higher employee productivity, which is a composite thing made by different factors including participative management.6. Conflict TreatmentHuman relation thinkers proposed that conflict, competition and disagreement is to be avoided or should always be resolved, whereas Behavioral scientists concede that conflict is not always bad, it may be constructive too, it is inevitable and may not always be resolved.7. Manager’s RoleUnder human relations model, manager’s traditional role of controller is modified to include responsibility for maintenance of the human system. On the other hand, under the Behavioral science model, the manager’s basic role is rather dramatically redefined and he is no longer viewed as a controller but rather as a developer and facilitator of the performance of the socio-technical system to which he is assigned.8. Nature of ApproachesHuman relations approach is criticized for being unscientific (i.e. vague and simplistic and for patting forth broad conclusions having personal bias. On the other hand, Behavioral scientists have made their propositions based on extensive researches and its sub discipline organizational Behavior also has a strong research orientation.ContributionThe contribution of Behavioral science to management thought and practice consists primarily of creating new insights rather than new techniques. It has developed a useful way of thinking about the role of a manager, the nature of organizations and the Behavior of individuals with organizations.
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Management Science or Operations Research Or ApproachQuantitative ApproachA quantitative approach to management thought is known as management science or operations approach.“C.West Churchman. Russell Adoff and E.Leonard Arnoff” define the management science or operations research OR approach as an application of the scientific method to problems arising in the operation of a system and a solving of these problems by the solving of mathematical equations representing the system. (Introduction to Operations Research. New York Willey. 1957).The management science approach suggests that managers can best improve their organization by using the scientific method and mathematical techniques to solve operational problems.The Beginning of the Management Science ApproachDuring the World War II, in Great Britain and in America, some mathematicians, physicists and other scientists were called to help solve complex, operational problems that existing in the military. They were able to achieve significant technological and tactical breakthroughs. The scientists were organized into teams that eventually became known as operations research or groups. When the war was over the applicability of or to problems industry gradually became apparent, particularly in the wake of new industrial technologies being put into use or specialists were called to help managers come up with answers to the new problems. With the invention of electronic computer system or procedures were formalized into what is now called “management science school” or “quantitative school”.The early or groups typically included physicists and other “hard” scientists, who used the problem solving method known as scientific method which involves.(i) Observing the problem system.(ii) Constructing a model, i.e. a generalized framework from which consequences of changing the system can be predicted.(iii) Deducting (inferring) from the model how the system will behave it changes were made in existing conditions.(iv) Testing the model by performing an experiment on the actual system to see whether the effects of changes predicted using the model, actually occur when the changes are made.The Operations Research groups were very successful in using the scientific method to solve their operational problems.Now, the management science approach is being used in many companies in India and other countries and applied to many diverse management problems, such as production scheduling, plant location product packaging etc.Characteristics of Management Science ApplicationsFour primary characteristics are usually present in situations in which management science techniques are applied. These are as follows:1. Large Number of VariablesThe management problems studied is so complicated that managers need help in analyzing a large number of variables.2. Use of Mathematical ModelThe use of mathematical models the investigate the decision situation in typical in management science applications. Models are constructed to represent reality and then used to determine how the real world situation might be improved.3. Use of a ComputerA management science application makes use of computers. There are two factors that make computers extremely valuable to the management science analyst.Today, managers are using such management science tools as inventory control methods, network models and probability models as aid in decision making process. Since management science thought is still evolving, more and more sophisticated analytical techniques can be expected.
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Critical Evaluation of Management Science ApproachManagement science team presents management with an objective basis for making a decision. Management science techniques increase the effectiveness of the manager’s decision making. They are best suited analyzing quantifiable factors, such as expenses, sales and units of production. They are used in such activities as capital budgeting management, cash flow management, production scheduling, development of product strategies, planning for human resource development programs, maintenance of optional inventory levels and aircraft scheduling.However, is special widespread use for many problems, management science of today has not developed to a point where it can effectively deal with an important aspect of the organization, that is the human side of an enterprise. But no doubt that it has marvelously contributed to the solving of planning and control problems and to the progress in the areas of organizing, staffing and the leading the organization. Anyhow some managers complain about the complicated nature of the concepts, language and techniques of management science, which are not readily understandable and not easily implemental. Some other managers indicate about the drawback of management science in that if fails to address to the psychological and Behavioral components of workplace activities because the managers are not sufficiently involved with management scientists at the initial level of developing decision making techniques and as a result the later implementation of these techniques remain often unsuccessful. There exits a lack of awareness among the management scientist regarding the problems and constraints actually faced by the managers in organization, particularly because of their remoteness from the actual some of the workplace activities.Growth and Development of Management ThoughtThe management thought has grown and developed gradually in the following stages:1. Early EraThe is known as pre-scientific management era. During this era the management finally came into being as a separate field of study and research.2. Scientific Management EraDuring this era some principles of scientific management were developed. This era saw great advances in management practice by application of empirical studies to determine faster and better methods of production.3. Processes or Functional or Administrative EraDuring this era, a clear distinction was made between technical activities and managerial activities. Planning, organizing, command, coordination and control were recognized as managerial activities. The organization was recognized as a rational-legal structure.4. Human Relations EraDuring this era, special emphasis was laid on “worker” aspect of the organization. It was pleaded that workers should be cared as human assets of the enterprise.5. Behavioral Or Social Sciences EraDuring this era, the individual, the work groups and the participative management aspects were emphasized.6. Management Science Or Quantitative EraThis era saw the scholars to lay emphasis on rational decision-making and use of mathematical techniques for managing the organizations.7. Modern EraDuring this era, emphasis is being laid on treating the organization as a system composed of interrelated and interdependent parts, working in its specific environment. Moreover, it has been experienced and advocated that there is no one best way of dealing with a situation. The manager has to find a best way in each specific situation depending on the different circumstances of the individual case.
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Definition of Production ManagementIn modern competitive world, if an enterprise and master its production and marketing, it will be able to acquire and maintain a considerable market share.Production may be defined as the conversation of the raw material into finished goods and services through transforming process for purposes of supplying them into the market. Thus, it is process of creation of goods and services. The terms “production and manufacturing” are generally used as synonyms. Production activities are vital for the survival, growth and development of every enterprise.Production to be successful has to be managed. Hence production management assumed great importance in every organization.Some important definition of production management may be given as follows:Elwood BuffaProduction management deals with decision-making related to production process so that the resulting goods and services are produced according to the specifications in the amounts and by the schedule demanded and at minimum cost.A.W.FieldProduction management is the process of planning and regulating the operations of that part of enterprise which is responsible for actual transformation of materials into finished products.Major Activities of Production ManagementProduction management deals with manpower and physical resources and facilities for transforming inputs into outputs. Production Management involves three major activities or functions:1. Planning of Production InputsIt includes determining of necessary inputs including raw materials, labour, electrical power, machines and equipments, facilities etc., required for production work.2. Installation of the Necessary InputsIt includes taking decisions with regard to designing of the plant, choice of the best machines and arrangement of other necessary facilities so that the production work can be started.3. Co-Ordination and Control of the Production ProcessAn effective production system involves co-ordination among the various activities and affairs within the production department itself and also integration of its activities and decisions with other departments of the enterprise, such as finance, marketing, purchases, personnel, according and research and development. It also includes determining the necessary sequence of operations, preparing work schedules and assigning work to specific employees, so as to ensure smooth production operations. Control includes ensuring that the actual production performance meets the predetermined production plans and goals and also providing for proper feedback for taking corrective action.Nature and Importance of Production ManagementProduction management has become an important now a day that it is treated to be a separate, independent functional area of management.Production management has assumed its importance because of the following reason:1. It is the foundation for earning profits – by producing goods or services and selling them into the market.2. It ensures that produced goods or services are of desired quality, in required quantity and according to time-schedules.3. It facilitates optimum inventory level.4. It ensures proper co-ordination and necessary control, which are required for adequate, time and cost-conscious production.5. It ensures coping with the changes in demands in the market and maintains stability in the production department.
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Production Planning and ControlProduction Planning, Planning is deciding in advance what to do, how to do it, when to do it, who is to do it. Then, production planning involves decision making in various production aspects, such as designing of production plans, programs and goals, selection of production process, plant layout, provision of physical facilities (like material, tools, machines, equipments etc.) and preparation of time-schedules.“Lawrence Bethel Observes” Production planning takes a given product or line of products and organizes in advance the manpower materials, machines and money required for a predetermined output in a given period of time. It starts with a product concept capable of being manufactured, a general idea of the process by which it can be made and a sales forecast for the discernible future.Production ControlControl means ensuring that actual performance meets the predetermined standards. Then, “production control” refers to a set of steps for verifying whether production operations occur in conformity with the production plan adopted. It guides and directs the flow of production so that the goods of desired quality are manufactured at the right time and it maximum possible economic manner. It may be noted that “production control” is frequently used synonymously with “production planning and control” with planning being implied.Spriegel and Lansburgh define production control asthe process of planning production in advance of operations, establishing the exact route of each individual item, part or assembly, setting, starting and finishing dates for each important item, assembly, and the finished products and releasing the necessary orders as well as initiating the required follow-up to effective the smooth functioning of the enterprise.James Lundy saysBasically, the production control function involves the co-ordination and integration of the factors of production for optimum efficiency. The principal objective of production control is to facilitate the task of manufacturing and see that everything is being done strictly in accordance with the plan. It co-ordinates and integrates the factors of production for optimism and directs and checks the course and progress of work.Advantages of Production Planning and ControlProduction planning and control yields the following main advantages,1. Avoidance of Rush OrdersProduction is well planned and its time aspects are well controlled. Therefore, production control reduces the number of risk-orders and overtime works on plant.2. Avoidance of BottlenecksThe incomplete work does not get accumulated because production control maintains an even flow of work.3. Cost ReductionProduction control programs minimizes the idleness of men and machines, keeps in process inventories at a satisfactory level, leads to a better control of raw materials inventory, reduces costs of storage and materials handling, helps in maintaining quality and containing rejection and thus reduces unit cost of production.4. Effective Utilization of ResourcesIt reduces the loss of time by the workers waiting for materials and makes most effective use of equipments.5. Co-OrdinationIt serves to co-ordinate the activities of plant and results in a concerted effort by workmen.6. Benefits to WorkersAdequate wages, stable employment, job Security, improved working conditions, increased personal satisfaction, high morale.7. Efficient Service to CustomersIt ensures better service to the customers by enabling production to be conducted in accordance with the time schedules and therefore deliveries are made on promised dates.
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Basic Functions of MarketingThe marketing process performs certain activities as the goods or services move from producer to consumer. Every firm does not perform all these activities or jobs. However, any company that wants to operate its marketing system successfully must carry them out. The following marketing tasks have been recognized for a long time.1. SellingIt is core of marketing. It is concerned with the persuasion of prospective buyers to actually complete the purchase of an article. Setting pays an important part in realizing the ultimate aim of earning profit. Selling is enhanced by means of personal selling, advertising, publicity and sales promotion.2. BuyingIt involves what to buy, what quality, how much, from whom, when and at, what price. People in business buy to increase sales or to decrease costs. Purchasing agents are much influenced by quality, service and price. The products that the retailers buy for resale are determined by the need and preferences of their customers.3. TransportationTransport is the physical means whereby goods are moved from the places where they are produced to those they are needed for consumption. Transportation is essential from the procurement of raw materials to the delivery of finished products to the customers places. Marketing relies mainly on railroads, tracks, waterways, pipelines and air transport. The type of transportation is chosen on several consideration such as suitability, speed and cost.4. StorageIt involves the holding of goods in proper condition from the time they are produced until they are needed by consumers (in case of finished products) or by the production department (in case of raw materials and stores). Storing protects the goods from deterioration and helps in carrying over surplus for feature consumption or use in production. Goods may be stored in various warehouses situated at different places. Storing assumes greater importance when production is seasonal or consumption may be seasonal. Retail firms are called “stores”.5. Standardization and GradingThe other activities that facilitate marketing are standardization and grading. Standardization means establishment of certain standards or specifications for products based on intrinsic physical qualities of any commodity. This may involved quantity (weight or size) or it may involve quality (colour, shape, appearance, material, taste, sweetness etc). Government may also set some standards e.g., in case of agricultural products. A standard conveys a uniformity of the products.“Grading means classification of standardized products into certain well-defined classes or groups.” It involves the division of products into clauses made up of unit processing similar characteristics of size and quality. Grading is very important for “raw material” (such as fruits and cerials), mining products” (such as coal, iron-ore and mangenese) and “forest products” (such as timber). Branded consumer products may bear grade levels, – A B C.6. FinancingIt involves the use of capital to meet financial requirements of the agencies dealing with various activities of marketing. The services of providing the credit and money needed to meet the cost of getting merchandise into the hands of the final user is commonly referred to as finance, function in marketing. In marketing, finances are needed for working capital and fixed capital, which may be secured from three sources – onward capital, bank loans and advances, and trade credit (provided by the manufactures to wholesaler and by the wholesaler to the retailers).7. Risk TakingRisk means lose due to some unforeseen circumstances in future. Risk-bearing in marketing refers to the financial risk inherent in the ownership of goods held for an anticipated demand, including the possible losses due to a fall in price and the losses from spoilage, depreciation, obsolescence, fire and floods or any other loss that may occur with the passage of time. From production of goods to its selling stage, many risks are involved due to changes in
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marker conditions, natural causes and human factors. Changes in fashions or interventions also cause risks. Legislative measures of the government may also cause risks.8. Market InformationThe only sound foundation, on which marketing decisions may be based, is correct and timely market information. Right facts and information reduce the aforesaid risks and thereby result in cost reduction. Business firms collect, analyze and interpret facts and information from internal sources, such as records, sales people and findings of the market research department. They also seek facts and information from external sources, such as business publications, government reports and commercial research firms. Retailers need to know about sources of supply and also about customers buying motives and buying habits. Manufacturers need to know about retailers and about advertising media. Firms in both these groups need information about competitor’s activities and about their markets. Even ultimate consumers need market information about availability of products, their quality standards, their prices, and also about the after-sale service facility Common sources for consumers are sales people, media advertisements, colleagues etc.It may be noted that in addition to the mentioned jobs, the marketing manager is also involved in product planning, pricing of products, selection of distribution channels, framing of marketing objectives, environmental scanning, target market selection, market programming and developing marketing strategy.Stages or Steps in Marketing Research ProcessMarketing research exercise may take many forms but systematic enquiry is a feature common to all such forms. Being a systematic process, though, it is not necessary that all research processes would invariably follow a given sequence, yet marketing research often follows a generalized pattern, which can be broken down and studied as sequential stages. The various stages or steps in the marketing research process may be discussed as follows:1. Identification and Defining of the ProblemThe market research process begins with the identification of a problem faced by the company. The clear cut statement of problem may not be possible at the very outset of research process because often only the symptoms of the problems are apparent at that stage. Then, after some explanatory research, clear definition of the problem is of crucial importance in marketing research because such research is a costly process involving time, energy and money. Clear definition of the problem helps the researcher in all subsequent research efforts including setting of proper research objectives, the determination of the techniques to be used and the extent of information to be collected. It may be noted that the methods of explanatory research popularly in use are : survey of secondary data, experience survey or pilot studies i.e. studies of a small initial sample. All this is also known as preliminary investigation.2. Statement of Research ObjectivesAfter identifying and defining the problem with or without explanatory research, the researcher must make a formal statement of researcher objectives. Such objectives may be stated in qualitative or quantitative terms and expressed as research questions, statement or hypothesis. For example, the research objective. “To find out the extent to which sales promotion schemes affected the sales volume” is a research objective expressed as a statement. On the other hand, a hypothesis is a statement that can be refuted or supported by empirical findings. The same research objective could be stated, “To test the proposition that sales are positively affected by the sales promotion schemes undertaken this winter.” Example of another hypothesis may be. “The new packaging pattern has resulted in increase in sales and profit.” Once the objective or the hypothesis are developed, the researcher is ready to choose the research design.3. Planning the Research Design or Designing the Research StudyAfter defining the research problem and deciding the objectives, the research design must be developed. A research design is a master plan specifying the procedure for collecting and analyzing the needed information. It represents a framework for the research plan of action. The objectives of the study are included in the research design to ensure that data collected are relevant to the objectives. At this stage, the researcher should also
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determine the type of sources of information needed, the data collection method (e.g. survey or interview), the sampling methodology and the timing and possible costs of research.4. Planning the SampleSampling involves procedures that use a small number of items or parts of the population (total items) to take conclusion regarding the population. Important questions in this regard are; who is to be sampled as a rightly representative lot? Which is the target – population? What should be the sample size – how large or how small? How to select the various units to make up the sample?5. Data CollectionThe collection of data relates to the gathering of facts to be used in solving the problem. Hence, methods of marketing research are essentially methods of data collection. Data can be secondary, i.e. collected from concerned reports, magazines and other periodicals, especially written articles, government publications, company publications, books etc. Data can be primary i.e. collected from the original base through empirical research by means of various tools. There can be broadly two types of sources – (i) Internal sources – existing within the firm itself, such as accounting data, salesmen’s reports etc. (ii) External sources – outside the firm.6. Data Processing and AnalysisOnce data have been collected these have to be converted into a format that will suggest answer to the initially identified and defined problem. Data processing begins with the editing of data and its coding. Editing involves inspecting the data collection – forms for omission, legibility and consistency in classification. Before tabulation, responses need to be classified into meaningful categories. The rules for categorizing, recording and transferring the data to “date storage media” are called codes. This coding process facilities the manual or computer tabulation. If computer analysis is being used the data can be key-product and verified.7. Formulating Conclusions, Preparing and Processing the ReportThe final stage in the marketing research process is that of interpreting the information and drawing conclusion for use in managerial decision. The research report should clearly and effectively communicate the research findings and need not include complicated statement about the technical aspect of the study and research methods. Often the management is not interested in details of research design and statistical analysis but instead in the concrete findings of the research. If need to the researcher may bring out his appropriate recommendation or suggestions in the matter. Researchers must make the presentation technically accurate, understandable and useful.
Meaning and Definition of Management by Objectives (MBO)Management by Objectives (MBO) has become a widely used slogan. It is a basic mentality that a high-performance manager brings to the job of managing. Peter Drucker coined the term “Management by Objectives” in 1954. He profounded Management by Objectives concept and emphasized it and than it developed as a management philosophy. Some authors has used the term “management by results” interchangeable with Management by Objectives.Management by Objectives is an overall philosophy of management that concentrates on goals and end results. Management by Objectives is based on the presumption that people perform better when they know what is expected of them and can relate their personal goals to organization goals. It also assumes that people are interested in the goal setting process and in evaluating their performances against the target.Some important definitions of Management by Objectives may be given as follows:George S. OdiorneThe 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 ares of responsibility in terms of the results expected of him and use these measures as guides for operating the unit and assessing the contribution of each of its members.
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Peter DruckerHe says that management by objectives and self-control is a philosophy of management, resting on a concept of human action, human Behavior and human motivation. Management by objectives applies to every manager at any level and to all business enterprises whether large or small. He says the Management by Objectives “ensures performance by converting objective needs into personal goals”Heinz Weihrich and Harold Koontz“Management by objectives 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.”Essential Characteristics of Features of Management by ObjectivesA careful study of the above definitions brings out the following features of Management by Objectives:1. Management by Objectives is a philosophy or a system and not merely a technique.2. It emphasizes participative goal setting.3. It clearly defines each individual’s responsibilities in terms of results.4. It focuses attention on what must be accomplished (goals), rather than on how it is to be accomplished (methods).5. It converts objectives needs into personal goals at every level in the organization.6. It establishes standards or yardsticks (goals) as operating guides and also as basis of performance evaluation.7. It is a system intentionally directed toward effective and efficient attainment of organizational and personal goals.Management by Objectives ProcessThere are four important and essential steps or elements in the Management by Objectives process as follows:1. Setting ObjectivesGoal setting or objective-setting is a multistage process. It starts with the examining of the current state of affairs, level of efficiency, threats and opportunities. Then the key result areas are identified, such as product markets, improved services, lowered costs, work simplification, employee motivation, profitability, innovation and social responsibility. The performance of these areas is critical for organization in the sense that failure in these areas my result in failure of the organization and this is why they are known as “key” results areas. Peter Drucker says, “Objectives are important in every area where performance and results directly affect the survival and prosperity of business.”Therefore interacting or joint goal setting takes place. Subordinates are actively involved in formulating goals at every level is the organization. Such goals are finished with reference to the overall objectives of the organization. Care is to taken establish goals that are measurable and contribute to the accomplishment of corporate objectives. Proper attention is given to “time” element also. Such goals may be long-range, medium-range or short-range. Further, resources availability also becomes an important consideration in goal setting. There is always need to decided priorities among the different objectives keeping in view the environment which business operates as well s possible future changes in it.2. Developing Action PlansSet objectives must be translated into action plans. It requires assignment of specific responsibilities to different departments, divisions and individuals. It also requires allocation of necessary resources needed to perform the assigned responsibilities. Time dimensions are also to be decided in order that targets are reached without any unwarranted delays.3. Periodic Review or Monitoring the ProgressAfter setting objectives and developing action plans, it is necessary to establish a proper monitoring system with a view to regularly keeping the activities and efforts on a prescribed path leading to the ultimate objectives. The progress is monitored without day-to-day interference in subordinates functioning. At agreed intervals, results are
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measured in terms of quantity, quality, time and cost against the set objectives. It is ensured that the deviations found, if any are thoroughly discussed and immediate corrective actions are taken to set them right on the course. Such a regular monitoring and periodic review not only provide feedback, which is essential for completion of work in time, but also motivates the managers accountable for performance. Periodic review and monitoring are done at departmental levels generally.4. Performance AppraisalThis is the last phase of Management by Objectives program that evaluates performance annually. The annual review or appraisal is comprehensive and is done at the organizational level. The actual annual results are evaluated against the set objectives. Such assessment is also used for determining targets for next year for modification in standards (goals) if needed and for taking corrective actions in order to avoid deviations from predetermined objectives.Management by Objectives Cycle and Recycling ObjectivesWhen all the four steps or phases in the Management by Objectives as mentioned above are completed then one Management by Objectives cycle is said to be over. The last phase or the fourth step in the Management by Objectives cycle is used as an input for recycling objectives and other actions. Objectives are changed or modified in the light of the environmental changes and the experiences gained over the year. Then, revised action plans are developed as per needs, periodic review is done. And performance is gain evaluated. Thus goes on the recycling.Benefits of Management by Objectives1. Balanced Stress on ObjectivesManagement by Objectives forces managers to set objectives with balanced stress on key result areas. Thus, crisis conditions are avoided to take place in the organization.2. Better ManagingManagement by Objectives forces managers to think about planning for results, rather than merely planning activities or work. Managers are required to ensure that the targets are realistic and needed resources are made available to subordinates to achieve the targets. Clearly set objectives for the subordinates serve as evaluation standards as well as motivators for them. Thus, Management by Objectives results in improvement in managing.3. Better OrganizingThe positions in the enterprise can be built around the key result areas. Managers are required clarifying organizational roles and structures. Hence better organizing.4. Greater Employee Involvement and CommitmentIf Management by Objectives program is installed in an organization, people are not just doing work, following instructions and waiting for guidance and decisions from “above” and the superiors do not dictate things. They are now individuals with clearly defined goals, which have been formalized through their own participation in the process. Moreover, they fully well understand the areas of their discretion – their authority. They are also confident of getting needed help from their superiors. There is clarity of roles. These elements together make for a feeling of greater personal commitment on the part of the subordinates. They become more enthusiastic in attaining the targets. There is high motivation; there is high morale too.5. Orderly Growth of OrganizationManagement by Objectives provides for the maintenance and orderly growth organization by means of predetermined set of objectives for everyone involved. It is also provides in measurement of what is actually achieved. The progress and even the tenure of all responsible managers are dependent upon their producing the results. Management by Objectives emphasizes the ability, skill and achievement of managers rather than their personality. Thus, the orderly growth and development of the organization is ensured.6. Development of Effective ControlsManagement by Objectives not only sharpens the planning, but also develops effective controls. It specifically provides for periodic reviews and annual performance appraisals serving as the needed feedback for further
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streamlining the objectives or targets. It makes possible for a manager to control his own performance, high degree of self-control resulting in stronger motivation. Control from “above” is substituted by control from “self” Management by Objectives facilitates coordinated effort and teamwork.7. Generating of an Ideal AtmosphereDouglas McGregor says. “The motivations, the potential for development, the capacity for assuming responsibility, the readiness to direct Behavior toward organization goals are all present in people. Management does not put them there. The essential task of management is to arrange organizational conditions and methods of operations so that people can achieve their own goals best by directing their own efforts towards organizational objectives.” This is an ideal atmosphere suitable for better industrial relations and ensured success of the enterprise.8. Objective AppraisalManagement by Objectives provides a scientific basis for evaluating a subordinate’s performance, because goals (standards) are jointly set by the superior and the subordinates.Limitations of Management by ObjectivesIn spite of its many advantages, the Management by Objectives has some weaknesses as follows:1. Unfavourable Attitude of ManagersSome managers have an attitude that the regular attention required of them by Management by Objectives system, draws heavily on their busy time-schedule and is not consistent with their roles. They feel that it is not so effective a way as some other approaches. Some managers view their roles as principally involving policy-making, budget formulation etc.2. Excessive Paper WorkManagement by Objectives program involves a huge amount of newsletters, instruction booklets, training manuals, questionnaires, performance date, review and appraisal reports to be prepared by the superiors and subordinates. Thus, Management by Objectives is said to have created one more “paper mill” in the organization added to the already existing large amount of paper work.3. Problems about Goal SettingManagement by Objectives require issuance of proper, exhaustive guidelines to goal-setters. However, managers responsible for practicing Management by Objectives do not themselves understand and appreciate a good deal about it, especially about the concept of self-control and self-direction which is basic to Management by Objectives. Similarly, there are several other difficulties in goal setting:
Positive and active participation from subordinates is not easily forthcoming. Truly verifiable goals are not easy to formalize. Emphasis is put on short-range goals; where as long-range goals are avoided, though long-range goals are
vital for growth and development of the organization. Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily
accepted in the middle of the year. Over-use of quantitative goals jeopardizes the qualitative aspect which may even more important the
quantification is some case. Goals tend to take precedence or priority over the person who uses them. Any action is acceptable if it
serves in the attainment of goals, without caring of its impact on people. Thus, all these difficulties come in the way of making management by objectives operational in an organization. Further, managing involves more than goal setting.
4. Time-Consuming Nature of Management by ObjectivesManagement by Objectives system is time-consuming especially in the early phases of its introduction when employees are unfamiliar with its process. Since managers also have to learn the necessary skills it is commonly estimated that it takes 2 years to take an management by objectives program working smoothly. A few
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management by objectives program work smoothly. A few management by objectives programs have failed because managers could not spare adequate time needed for its various phases.5. Difficulties in Making Organizational ChangesManagement by Objectives system requires to be integrated with other systems in the organization, such as budgeting, forecasting, communication, control etc. Sometimes current practices may have to be changed. Thus, greater decentralization may become a necessity. Moreover, some systems may required to be changed, for example, control system, data processing system etc. Managers feel such changes as time-consuming, distributing there “status quo” (or as it is) facilities and difficult in different other ways.6. Failure to Teach Management by Objectives PhilosophyManagement by Objectives as a concept is simple but it is deceptively so. It is much easier to explain this principle than to introduce it to an organization, especially in a very dynamic and changing environment. Moreover, management by objectives is still building toward achieving a fully institutionalized system of management to be used by the entire key manager. Sometimes managers fail to use objectives as a constructive force, even with the full participation and assistance of their superiors. In order to understand the philosophy of management by objectives, managers have to make themselves professionals.Steps for Improving the Prospects Or Effectiveness of Management by Objectives Application1. Top Management Support and CommitmentManagement by Objectives should be used by a strong power and authority structure, i.e. by the top management, so that “planning for work” may be rightly shifted to “planning for goals or results”. David Hampton says, “If you want to make Management by Objectives work, you must integrate it into the real systems of work and influence.” Management by Objectives must be considered a way of managing and not to an addition to the managerial job. Harold Koontz points out. “An effective program of managing by objectives must be woven into an entire pattern and style of managing. It cannot work as a separate technique standing alone.” In this whole content, top management support and commitment to management by objectives program is essential and vital.2. Other Important Steps
Managers should be given adequate training in management by objectives philosophy and procedures before installing the system. For this purpose, adequate time and resources are required and therefore be arranged.
Necessary mechanism for making management by objectives program a success should devised and for this purpose the administrators of management by objectives program must be endowed with sufficient authority to punish and reward at their own levels.
Feedback should be made effective the more specific timely the feedback the more positive the effect. Employee Participation should be made real and committed by properly motivating them. Management by Objectives must be carried all the way down to the first line or supervisory level. It should be seen that conflicting objectives are not set at any level and important non-quantifiable
objectives are not brushed aside. During the course of implementation of management by objectives the required redistribution of powers
and status should be seriously considered so as to avoid all kinds of unnecessary infighting and negative conflicts.
Most of the limitations or weaknesses of management by objectives are not of formidable (uncontrollable) nature. Some minor adjustments in attitudes, initiative and determination on the part of the managers may overcome all the difficulties and pitfalls, which come in the way of management by objectives program. It appears from the widespread discussions and adoption of management of objectives concept in private and public enterprises that it has come to stay in the field of management.
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Meaning and Definition of Decision MakingDecision making may be reviewed as the process of selecting a course of action from among several alternatives in order to accomplish a desired result. The purpose of decision making is to direct human Behavior and commitment towards a future goal. If there are no alternatives, if no choice is to be made, if there is no other way-out, then there would be not need for decision making. It involves committing the organization and its resources to a particular choice of course of action thought to be sufficient and capable of achieving some predetermined objective.Managers at all level in the organization make decision and solve problems. In fact, decision-making is the process of reducing the gap between the existing situation and the desired situation through solving problems and making use of opportunities. A decision is a course of action consciously selected from available alternatives, with a view to achieving a desired goal. It is an outcome of the judgment and represents a choice and commitment to the same. It is a final resolution of a conflict of needs, means or goals made are the face of uncertainty, complexity and multiplicity. A decision is conclusion reached after consideration it occurs when one option is selected to the exclusion of others – it is rendering of judgment.Different management scholars have defined Decision making as follows:George TerryDecision making is the selection based on some criteria from two or more alternatives.Heinz Weihrick and Harold KoontzDecision making is defined as the selection of a course of action among alternatives, it is the care of planning.Louis AllenDecision making is the work a manager performs to arrive at conclusion and judgment.Nature Or Characteristics of Decision MakingDecision making is globally thought to be selection from alternatives. It is deeply related with all the traditional functions of a manager, such as planning, organizing, staffing, directing and controlling. When he performs these functions, he makes decisions. However, the traditional management theorists did not pay much attention to decision making. In fact, the meaningful analysis of decision making process was initiated by Chester Bernard (1938) who commented, The process of decision are largely techniques for narrowing choice.The nature of decision-making may be clearly understood by its following characteristics features:1. Decision making is an intellectual process, which involves imagination, reasoning, evaluation and judgment.2. It is a selection process in which best or most suitable course of action is finalized from among several available alternatives. Such selected alternative provides utmost help in the achievement of organizational goals. The problems for which there is only one selection are most decision problems.3. Decision making is a goal oriented process. Decisions are made to attain certain goals. A decision is rated good to be extent it helps in the accomplishment of objectives.4. It is a focal point at which plans, policies, objectives, procedures, etc., are translated into concrete actions.5. Decision making is a continuous process persuading all organizational activity, at all levels and in the whole universe. It is a systematic process and an interactive activity.6. Decision making involves commitment of resources, direction or reputation of the enterprise.7. Decision making is always related to place, situation and time. It may be decision not act in the given circumstances.8. After decision making it is necessary and significant to communicate its results (decisions) for their successful execution.9. The effectiveness of decision-making process is enhanced by participation.Elements of Decision MakingThere are following elements in decision making.
The decision maker.
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The decision problem or goal. Attitudes, values and personal goals of the decision maker. Assumption with regard to future events and things. The environment in which decision is to be made. Available known alternatives and their estimated or imagined outcomes. Analytical results in the whole perspective. The constraints. The act of selection or choice. Timing of decision. Proper communication of decision for its effective execution.
Theories of Decision MakingThe most common bases upon which decisions are made are, fact experience, intuition and authority. The decision itself is concerned with the achievement of an objective. Bridging the gap between the basis for the decision and the decision itself is the theory (or technique) used to arrive at the decision. Theories of decision making stem from the manner in which decisions are made.Ernest Dale has suggested a comprehensive list of theories of decision making as follows1. Traditional Economic Theory2. Psychological Theory3. Mathematical Theory.1. Traditional Economic Theory Or Marginal TheoryThe simplest theory of business decision making is that the decision makers try to maximize profits and that key consider all courses of action open to them in attempting to do. This is the theory held by traditional economists. Although it may be partially true that the decision makers generally have the effect of profits on mind, they may not always attempt to maximize profits. Marginal theory is based on the law of diminishing return. According to this law, with the additional units of inputs (labour and capital), the marginal contribution of each unit is at a decreasing rate. There comes a stage when the marginal return is zero. This is marginal point. A number of decisions in the area of production, sales, marketing, advertising, recruitment, etc are taken by the management on the basis of marginal theory.2. Psychological TheoryThis theory is designed to identify what actually goes on in the decision maker’s mind when he makes a decision. Several factors leave an impact on the mind of the decision maker, such as nature, size and purpose of the organization, manager’s aspiration, attitude, habits, personally temperament, political learning’s, social and organizational status, technological skill, domestic life, education, experience, level of satisfaction and so on Psychology of a manager has an important bearing on the quality of decisions he makes. As decision making is an intellectual process, these psychological factors cannot be avoided altogether.One of the best-known psychological theories is Herbert Simon’s theory, which explain that the decision maker attempts to satisfies rather maximize. In other words, a manager finds an answer that is good enough. What consequences the manager considers good enough, will depend on what has been achieved in the past.3. Mathematical Decision TheoryIt is not designed to show how decisions are actually made. Rather, it is designed to help the decision maker who is interested in maximizing profits in a given situation, to lay out the alternatives in such a way that he sees the risks and the consequences more clearly. With the development of operations research and computers for handling complex mathematical models, this approach is commonly used by large organizations where decision making problem is very complex. The linear programming, venture analysis, game theory, queuing theory, probability theory, etc are some of the examples of widely used Operations Research technique. Although these techniques
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provide a good deal of analysis, yet the rational and psychological aspects of decision making cannot be ignored totally. The attitude, intelligence and wisdom of the decision maker shall always have an important impact on the quality of decisions made by him.
Meaning and Definition of PolicyA policy is a general statement that guides thinking, action and decision making of managers for the successful achievement or organizational objectives Policies define the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of discretion by managers.The top managers generally frame the policies. However, a manager at any other level may low down policies within the limits of his authority and also within boundaries set by policies of his seniors.A policy is not static and may be modified or reviewed in the light of changes in the environment. A policy may be verbal, written or implied.A well defined policy helps the manager to delegate authority without undue fear, because the policy lays down the limits for decisions by the subordinates. Moreover, policies operate objectives, speed up decision making, ensure coordination, help in training and orienting employees and ensure proper administrative control.Different scholars have defined the term policy as follows:Heinz Weihrich and Harold KountzPolicies are plans in that they are general statement or understanding that guide or channel thinking in decision making. Not all policies are statements they are often merely implied from the actions of managers.F.T. HankerA policy is a statement, verbal, written or implied of those principles and rules but are set by managerial leadership as guidelines and constraints for the organization’s thought and action.E.F.I BrechPolicy is a patter of direction for the guidance of those who carry responsibility for the management of the activities of the enterprise.Dalton McFarlandPolicies are planned expressions of the company’s official attitudes towards the range of Behavior within which it will permit or desire its employees to act.George TerryPolicy is a verbal, written or implied overall guide setting up boundaries that supply the general limits and direction in which managerial action will take place.Characteristics Or Features of PolicyPolicy has the following important features:1. A policy is a standing, repeat-use plan for answering the recurring problem of the similar nature.2. It is a guide thinking in decision making. It is not an exact order in which things are done. It provides the framework within which decisions should be taken. It unfolds the broad guidelines for achieving organizational objectives.3. It allows some amount of judgment or discretion on the part of the executives.4. It prescribes the course of action selected to guide and determine present and future decisions.5. It lays down the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of discretion on the part of the executives.6. Policies are generally framed by top-level management, however, managers at other levels also can frame necessary policies to deal with recurring problems of similar nature, such as departmental policies, divisional policies – formulated at the level of department or division.7. Departmental or divisional policies are formulated within the limits of the authority of the respective in charge and also within the limits set by the organizational policies.
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8. A policy is not static. Policies are reviewed and modified from time to time as per requirements or demands of the changing environment.Classification of PoliciesA number of policies are used in an enterprise in order to attain the organizational objectives. Policies may be classified as follows:(A) On the Basis of SourceAccording to their source, origin or emergence, policies may be of the following kinds:1. Originated PolicyIt is also known as formulated policy. It is a policy deliberately formulated by top management to guide decision-making at lower levels, board of directors, the chief executive, the executive committee of the board or heads of the major departments or divisions. Such policies are broad in scope and affect usually the whole organization or its major segments. These policies are often written ones, typically in the form of a policy manual of the organization and flow down.2. Appealed PolicyIt is a policy formulated on the appeal or request of subordinates for filling the gaps left by originated policies. In other words, when a subordinates refers an exceptional problem of recurring nature not covered by existing policies, to his superior and appeals for a policy decision. When the superior makes decision in such a case, it becomes a precedent (policy) for future action. Such policies may be formulated at any level and are in the nature of flowing upward policies.3. Imposed PolicyIt is a policy, which an organization is compelled to adopt due to some outside forces, such as the government and its regulatory agencies, trade association, trade unions.(B) On the Basis of FunctionsPolicies are needed in all areas of business of an enterprise. These may be classified on the basis of different managerial functions as follows:1. Production PolicyRaw material, purchase policy, repairs and maintenance policy, technology adoption and development policy, quality control policy, inventory policy and research and development policy are some examples in the category. Indent for the purchase of raw materials should be made at least a week in advance is an example of Raw Materials Purchase Policy.2. Human Resource PolicyExamples in this category are recruitment policy, training policy, employee career development policy, wages and salary policy, placement policy, promotion policy and transfer policy, employee participation policy. Any vacancy shall be filled first by promotion from within the organization and then, if need be, from outside sources Is an example of Recruitment Policy.3. Marketing PolicyCapital structure policy, packaging policy, distribution policy, advertising policy, customer service policy, credit policy, market research policy and important examples in this category. Customer’s complaint must be responded within the next day is an example of Customer Service Policy.4. Finance PolicyCapital structure policy, fixed capital policy, working capital policy, investment policy, research policy, dividend policy are some examples in this category. Excess capital, if any should be invested for short term only, preferably in limited company shares registered in stock exchange is an example of Investment Policy.5. Accounting PolicyInventory valuation policy, depreciation policy, provisions policy (for bad debts etc) deferred revenue expenditure policy etc. are examples in this category. Deferred revenue expenditure (e.g., a huge amount spent on
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advertisement) should be spread over the years of its benefit generation and written off every year accordingly, is an example of Deferred Revenue Expenditure Policy.Process of Policy FormulationPolicy formation is a creative and analytical phase of planning. It is based on the underlying objectives of the organization. Policy formulation process involves various steps or activities and their analysis in order arrive at a decision. The important steps involved in policy formulation may be briefly described as follows:1. Understanding of Corporate ObjectivesOrganizational objectives are the starting point for policy formulation. They are ultimate results, which an organization tries to achieve. They provide the foundation for policy formulation.2. Analysis of the EnvironmentThe basic purpose of policies is to integrate the organization with its environment; hence the policy makers must know the nature and other feature of the organization environment. This requires a comprehensive analysis of the environment – its opportunities and threats.3. Internal AnalysisThe policy makers should be fully conversant with the strengths and weaknesses of the organization. They should clearly identify the factors which are critical for the success of the organization.4. Definition of Policy AreaPolicy makers should then specify clearly the areas, which require policies to be made.5. Choice Or Selection of PolicyAfter evaluation of different policy alternatives, the most appropriate or suitable policy alternative is selected. This is the stage where the manager arrives at the right policy in the concerned area.6. Communication and Implementation of PolicyThe selected policy is communicated in clear words to those who are supposed to implement it. Implementation of policy is the operative aspect of policy whereby it is put into action. The concerned people apply the policy when problematic situations arise or when they normally do their jobs.7. Review and Modification of PolicyThe correctness of a policy is perceived when it is put into practice. On the basis of feedback from the executors of the policy, a periodical review is carried out and wherever necessary, desired modifications are made in the policy from time to time. Sometimes outdated or obsolete policies are reconstituted or reframed.
Meaning and Definition of LeadershipSimply stated, leadership is the process of influencing the Behavior of others towards the attainment of desired goal or purpose in given circumstances. Leadership is a tool to get the desired work done through employees or subordinates. Leadership is majorly explained on the basis of influence relationships and motivational considerations. One method of solving the problem of motivation is the effort to provide inspiring and effective leadership to the employees. The success of a manager is largely decided by the fact as to how much effective he is as a leader. Leadership is the ability to make people act the way the manager or leader wants. It is the process of influencing others to become what they are capable of becoming in the view of the leader. Leadership, in essence is carrying the people with the leader by their consent.Different scholars have defined leadership in the following ways:Rober TannenbaumLeadership is interpersonal influence, exercised in situations and directed, through the communication process, towards the attainment of goals.George TerryLeadership is the leadership in which one person or the leader influences others to work together willingly on related tasks to attain that which the leader desires.
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Theo HaimannLeadership can be defined as the process by which an executive imaginatively directs, guides and influences the work of others on choosing and attaining specified goals by medicating between the individual and the organization in such a manner that both will obtain maximum satisfaction.E.B. ReuterLeadership is an ability to persuade or direct men without use of the prestige or power of formal office or external circumstances.Weihrich and KoontzLeadership is defined as influence that is the art or process of influencing people so that they will strive willingly and enthusiastically inward the achievement of group goals.Peter DruckerLeadership is lifting of a man’s vision to higher sights, the raising of a man’s performance to a higher standard and the building of a man’s personality beyond its normal limitation.Characteristics or Features of Leadership (Nature)The important characteristics of leadership, which indicate its nature, may be described as follows:1. Leadership is an influence process stimulating group members.2. It is a relational concept in which two sides are included, influencing agent and the persons influenced. The first side is called leader the second side is called followers.3. Leadership is a complex relationship which exists between the leader, the followers, the organization, the social values and the economic and political condition. Each of these ingredients or factors has its own peculiarities which are the cause of the complexity of this relationship.4. Leadership required aptitude and basic attitudes with regard to Behavior pattern, tolerance, human psychology and achievement.5. Leadership depends on the properties of the situation and the persons to be led. In other words, these two factors especially affect the effectiveness of leadership. Generally, it is the function of the leader, the followers and other situational variables.6. The leader’s role and the degree of its acceptance by the group members, condition the leadership. In other words right person’s right role proves him to be a good leader.7. Th core of leadership is to motivate the employees by integrating their individual goals with those of the organization.8. A leader leads he does not push. It means that a leader takes his followers and their achievements to such a height where they do not believe to reach. When a leader leads, he serve also, i.e., he fully cars for the satisfaction of his followers.9. Leadership appears to be more of an emotional than an intellectual or rational process, because its direct concern is with man whose both emotional and rational powers are to be stimulated or incited. Such powers can be had by means of dedication not only by use of knowledge. Leadership is a rational to the extent that is is goal directed.10. Persons capable of exercising effective leadership in organizations are in critically short supply in relation to their tremendous demand.11. Leadership is part of management, but not all for it.12. Leadership is a nebulous, not fully clear accept even after so research done in this field. In other words, still there is no simple answer to the riddle.Theories of LeadershipLeadership styles focus on the Behavior pattern exhibited by a leader during supervision of the subordinates. On the other hand, who will emerge an effective leader? Or how effective a leadership style will be? such questions are answered by leadership theories. Simply stated, theories focus on various approaches to successful leadership.
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The theories of leadership may be classified into three categories, Trait theories, Behavioral theories and situational theories.1. Tratist Leadership TheoryIn its early stage, this theory was called great man theory of leadership, which says that leaders are born and not made. Ancient people thought that certain natural qualities of leadership exist in a person. Ultimately, the great man theory gave way to a more real theory the Trait approach.Trait theory views leadership as a conglomerate (or a large set) of different traits or qualities. The great man theory believed that traits were inherited. Whereas, trait theory holds that traits are not always inborn but can be acquired through education, training and experience. Trait theory holds that leadership is largely a matter of personality, a function of specific traits. It suggests that there are certain unique qualities or traits clearly identifiable in leaders. The greater the degree of such traits possessed by a person the better and more successful will be proved as a leader. It further suggests that leaders differ from followers with respect to certain key traits and these traits remain unchanged across time. The trait theory attempts to isolate the attributes of successful and unsuccessful leader and using such a list of traits, it predicts the success of failure of persons as leaders. It is to be noted that these traits are not measurable.Various thinkers have differed on the package of traits. Many studies of traits have been made. Ralph Stogdill found (1974) that various researchers have identified specific traits related to leadership ability as follows:a. Physical TraitsFive in all, such as energy, appearance and height.b. Intelligence and Ability TraitsFour in all, such as high level of intelligence and judgment.c. Personality TraitsSixteen in all, such adaptability, aggressiveness, enthusiasm and self-confidence.d. Task-Related CharacteristicsSix in all, such as achievement drive, persistence and initiativee. Social CharacteristicsNine in all, such as cooperativeness, interpersonal skills and administrative ability.It may be noted that the discussion of the importance of traits still goes on. More recently (1991). Shelly Kirkpatrick and Edwin Locke have identified the following key leadership traits.i. DriveIncluding achievement, motivation, energy, ambition, initiative and tenacity (i.e. firmness).ii. Leadership MotivationThe aspiration to lead but not to seek power as such.iii. Self-ConfidenceIncluding motional stability.iv. Cognitive AbilityThe ability of knowing, including consciousness of things and judgment about them.v. An Understanding of the BusinessAccording to them, less clear is the impact of creativity, flexibility and charisma (i.e. strong personal charm to attract and influence) on the leadership effectiveness.In general the study of leaders traits has not been a very fruitful approach to explaining effectiveness of leadership. Not all leaders possess all the traits and many followers (non-leaders) may possess most or all of them. Further, the trait theory does not indicate as to how much of any trait a person should have to be an effective leader. Also, most of these so-called traits are really patterns of Behavior. Furthermore, the list of traits is not uniform. Effective leadership is not a function of some traits only. Situation also plays an important role in making someone a successful leader.
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2. Behavioral Theories of LeadershipDissatisfaction with the results of the trait approach has caused a significant change in the emphasis of leadership research and the focus shifted in the actual Behavior and actions of leaders from the traits or characteristics of leaders. Thus, Behavioral theories attempt to describe leadership in terms of what leaders do rather than what they are. According to Behavioral approach, leadership is the result of effective role Behavior. This approach holds that an effective leader is one who performs these acts which help the group to attain its goals.The most popular models of leadership based on the Behavioral approach may briefly be discussed as follows:Likert’s for systems of management. Rensis Likert has studied the patterns and styles of leaders and manager for three decades (1961). He has developed a continuum of our systems of management or leadership styles as follows:a. System 1 ManagementIt is described as exploitative authoritative. Its managers are higher autocratic have little trust in subordinates and motivate people through fear and punishment and only occasionally reward. They engage in downward communication and limit decision making to them.b. System 2 ManagementIt is called benevolent – authoritative. Its managers have a patronizing confidence and trust in subordinates. They motivate with rewards and some fear and punishment. They permit some upward communication and solicit some ideas and opinions from subordinates. They allow some delegation of decision making but with close policy control.c. System 3 ManagementIt is referred to as Consultative. Its managers have substantial but not complete confidence and trust in subordinates. They usually try to make use of subordinates ideas and opinions. They use reward for motivation with occasional punishment and some participation.Leadership StylesSimply stated, the term Leadership style refers to the pattern of Behavior, which a leader adopts in directing Behavior of the followers towards the attainment of organizational goals. From another viewpoint, leadership style is the position that a leader usually takes with regard to how much decision making freedom he allows to his followers to have. Similarly, the Behavior exhibited by a leader during supervision of his followers is known as leadership style. The nature and form of leadership style is affected by the following factors, existing circumstances, time period, personality of the leader, his experience, attitude and orientation, nature of followers, external environmental and so on. Most of the managers use several styles at one or the other point of time, but in which category a manager falls, is decided by the style that is mostly used by him. Basically and broadly, there are three important leadership styles as follows:1. Autocratic Or Authoritarian StyleIt is also known as directive style. It is basically treated as a traditional method of leadership. An autocratic leader centralize power and decision making in him and exercise complete control over the subordinates. He dominates and drives his group through coercion and command. He uses both positive and negative motivations, for example, reward, praise, fear of criticism or punishment. When he uses positive motivations that is called benevolent autocratic style and when he uses negative motivations that is known as dictatorial or oppressive autocratic style. The autocratic leader likes, Theory X-undemocratic thinking, he emphasizes work only.The autocratic leder himself decides all policies. He gives orders to the subordinates and expects them to follow such orders completely without any grudge or question. Under this style, subordinate are thought to be inexperienced and wisdom less and therefore they are given no freedom – the autocratic leader decides the technicalities and modalities of the work and the course of action. Hence any one except the leader does not know the future action.
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Autocratic style permits quick decision making provides strong motivation and satisfaction to the leader centralize power and dictates terms, yields positive results when great speed is required and needs less competent subordinates at lower levels. Its major disadvantages are, It leads to frustration, low morale and conflict among subordinates are induced to avoid responsibility, initiative and innovative Behavior. Full potential of subordinates and their creative ideas are not utilized. In the absence of the leader, organizational continuity is threatened because subordinate gets no opportunity for development.This style may be appropriately used where subordinates are uneducated, unskilled, unwise, inexperienced, where the company endorses fear and punishment as accepted disciplinary techniques and where the leader prefers to be active and dominate to decision making.2. Democratic Or Participative StylesThe democratic leader decentralizes power. He involves subordinates in the decision making. Decision is made in consultation and participation with the subordinates. The style emphasizes group-discussion and group decision making. The democratic leader like Theory Y-fairness, equity and human relation. He emphasizes both work and worker. The subordinates are encouraged to utilize their full talent potential and capacities and assume greater responsibilities. The democratic leader shares power with subordinates, delegate adequate authority to them, keeps them well informed about matters of their interest and concern and allow adequate freedom for thinking, discussing, expressing and making suggestions. He has faith in the subordinates and their wisdom, skills and capacities. He holds objective approach. Communication pattern is multi-dimensional.The major advantages of this style are, It improves job satisfaction and moral, develops positive attitude, reduces resistance to change, generates self-motivation due to participative decision making and freedom of thought and impression, increases productivity and develops better subordinates.The major disadvantages of this style are, It is time consuming and causes delays in decision making; may fail when the communication pattern and skill are not strong enough is not workable where subordinates do not want to take extra responsibility of sharing in decision making and becoming part of every decision decreases productivity in some cases especially when decisions are diluted to appease or please everybody.Democratic style is more appropriate where subordinates are educated, skilled, wise, creative and enthusiastic, where the company endorses self-direction and self-control and rewards and involvement as prime means of motivation and control and where leader desires to hear subordinates before making decisions and to develop a strong and capable force of followers.3. Free Rein Or Laissez-Faire Or Permissive StyleThere are several forms of this style. For example, in some cases the subordinates are given a goal to achieve in their own way, whereas in some other cases they themselves decide their group goals. In fact, there is almost complete delegation of authority and the path leading to the goals is decided by the subordinates themselves. The leader behaves primarily as a member of the group and plays the role of a member only. He give his opinion or suggestion only when it is demanded from him. Under this style, the group members are educated and motivated by themselves, the leader is not required to educate but he acts, as a link primarily for arranging adequate resources needed for attaining the goals, for establishing contact between employees and the outside world, for collecting necessary information from external sources and for establishing coordination. The concept of management by exception promotes this type of style. Subordinates themselves plan, control, evaluate and decide.The major advantages of this style are, It increases subordinates, freedom, develops their expression, compels them to work as group members, increases job satisfaction and moral, utilities subordinates potential to the maximum possible extent and promotes creativity or innovation.The free-reign style is appropriate where subordinates themselves are well trained and highly knowledge about their tasks and unhesitatingly ready to assume extra responsibility, where the company has a wide and effective communication network acceptable to the subordinates and it endorses complete freedom and full involvement as
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means of motivation and control and where the leader is ready to compromise with the status in the group and is interested in delegating the whole authority to the subordinates. It is mostly used in circumstances where the leader feels him in a position to leave the alternative or selection fully on the group’s choice.Choosing a Leadership StyleWhich leadership style is best or which to choose? Different scholar makes different suggestions in this regard. However, widely known for their effective management practices the Japanese favour participative leadership style. In actual practice it is difficult to hold my one style, is the best leadership style. As discussed above, each style has got its merits and demerits. Hence the choice of a style will depend upon several factors, such as suggested by Tannenbaum and Schmidt.1. Forces in the ManagerManager’s value system, confidence in subordinates, own leadership inclination and feeling of security in an uncertain situation.2. Forces in the SubordinatesTheir need for independence, readiness to assume responsibility for decision making, tolerance, for ambiguity (or strangeness), interest in problem at hand, understanding and identification with the goals of the organization, knowledge and experience to deal with the problem and learned expectation of sharing in decision making process.3. Forces in SituationThe type of organization, group effectiveness, the complexity of the problem itself, pressure of time on the situation etc.Effective manager should be expert enough to adapt or modify their leadership style as per the need of the moment. Sticking to one best considered style at all times in all situations with all people may not work well to be a good leader. Most suitable leadership style is that which fits with the situation the followers and the leader.Meaning and Definition of PlanningPlanning is thinking in advance or before doing something. All kinds of organization do planning. Planning helps us in looking into the future. Planning establishes goals or objectives and identifies the ways to achieve them. A plan is a predetermined course of action to be taken in future.George SteinerPlanning is a process that begins with objectives, defines strategies, policies and detailed plans to achieve them.Peter DruckerPlanning is the continuous process of making present entrepreneurial (risk taking) decisions systematically and with best possible knowledge of their futurity.Nature of Characteristics of PlanningThere are a number of features or characteristics of planning that indicate towards its nature. These may be outlined as follows:1. Goal-OrientedPlanning is goal-oriented in the sense that plans are prepared and implemented to achieve certain objectives.2. Basic to all Managerial FunctionsPlanning is a function that is the foundation of management process. Planning logically precedes all other function of management, such as organizing, staffing etc because without plan there is nothing to organize nothing to control. Every managerial action has to be properly planned.3. PervasivePlanning is a function of all managers, although the nature and extent of planning will vary with their authority and level in the organization hierarchy. Managers at higher levels spend more time and effort on planning than do lower level managers.
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4. Interdependent ProcessPlanning affects and is affected by the programs of different departments in so far as these programs constitute an integrated effort.5. Future OrientedPlanning is forward looking and it prepares an enterprise for future.6. Forecasting Integral to PlanningThese essence of planning is forecasting. Plans are synthesis of various forecasts. Thus, planning is inextricably (inseparably bound up with planning).7. Continuous ProcessPlanning is an ongoing process. Old plans have to be revised and new plans have to be prepared in case the environment undergoes a change. It shows the dynamic nature of planning.8. Intellectual ProcessPlanning is a mental or conceptual exercise. It therefore involves rational decision making, requires imagination, foresight and sound judgment and involves thinking before doing thinking on the basis of facts and information.9. Integrating ProcessPlanning is essential for the enterprise as a whole. Newman and others have drawn our attention towards this feature of planning, without planning, an enterprise will soon disintegrate the pattern of its actions would be as random as that made by leaves scampering (running quickly in short steps) before an autumn wind and its employees would be as confused as ants in an upturned anthill. If there are no plans action will be a random activity in the organization instead there will be chaos.10. Planning and Control are InseparableUnplanned action cannot be controlled, without controlled, planned actions cannot be executed. Plans furnish standards of control, In fact Planning is meaningful without control and control is aimless without planning. Planning is measuring rod of efficiency.11. Choice among Alternative Courses of ActionThe need for planning arises due to several ways available for an action. If there is only one way-out left, there is no need for planning.12. Flexible ProcessThe principle of navigational change (i.e. change according to changes in environment) applies to planning. In other words, effective planning requires continual checking on events and forecasts and the redrawing of plans to maintain a course towards desired goals. Thus, plans have to be adaptable to changing circumstances.Planning ProcessThe process of planning involves the following steps:1. Analyzing EnvironmentAt the outset, the internal and external environment is analyzed in order to identify company’s strengths and weaknesses (in internal environment) and opportunities and threats (existing int the external environment). This is also known as SWOT (strengths, weaknesses, opportunities and threats) analysis.2. Establishing Objectives Or GoalsIn the light of the environmental scanning (study), clear or probable opportunities that can be availed are identified. In order to avail them, objectives or goals are clearly defined in specific term along with priorities in all the key areas of operations. Major problems associated with such objectives are also identified and defines, so that there may be special emphasis on their planned solutions.3. Seeking Necessary InformationAll relevant facts and data are collected from internal and external sources. For example, availability of supplies, physical and human resources of the company, finances at disposal, relevant government policy, general economic conditions and relevant specific market situation. Then such investigated and collected information and factors are
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analyzed. Such information analysis is used in two ways – first, to make necessary modifications in objectives or goals and secondly to take help from them in premising (considering) assumptions.4. Premising Or Establishing the Planning PremisesIn order to develop consistent and coordinated plans, it is necessary that planning is based upon carefully considered assumptions and predictions. Such assumptions and predictions are known as planning premises. The assumptions under which plans are supposed to operate should be clearly brought out. Such presumptions and forecasts are prepared for various areas, such as sales, prices, wages, taxes, changes in fashions and habits, purchasing power, standards of living, population competitors and so on.5. Identifying and Developing Alternative Courses of ActionAfter establishing objectives or goals and taking other related steps, feasible alternative programs or courses of action are seached out. Impossible or highly difficult propositions are left out.6. Evaluating the AlternativesProbable consequences of each alternative course of action in terms of its pros and cons (e.g. costs, benefits, risks, etc) are assessed and than relative importance of each of them is found out by looking at their overall individual strengths and limitations especially in the light of the present objectives and the environment of the company.7. Choosing the Most Appropriate Alternative Or Course of ActionAfter weighing the pros and cons of each of the alternative courses of action and realizing their individual relative importance, the most appropriate alternative in the light of the overall consideration is selected to be followed. In other words, the alternative which appears to be most feasible and conducive to the accomplishment of company’s predetermined objectives, is chosen as a final plan of action – as strategy.8. Preparing the Derivative PlansDerivative plans involve short range, operating plans that are useful in day-to-day operation and provide a working basis for such operations. Such plants are developed in the form of schedules, budgets, programs, procedures, methods, rules, policies etc. The derivative plans are prepared in different departments and their timing and sequence are also specified. Such plans are prepared in concrete terms showing specific results to be attained within specified time limit and by utilizing the allocated resources. An integrative mechanism has also to be provided for effecting coordination between and among different derivative plans being executed by different departments.
EnvironmentOrganizations are not island in themselves they function neither in isolation nor in vacuum. They are part of a society and exist in association with their environment, i.e., certain facts surrounding various situations. Organization’s profitability is not determined by what the products look like, nor whether it embodies high or low technology; it is rather determined by the environment within which it operates. Thus, organizations are affected by environment. If an organization is to remain successful and prosperous, it must regularly adapt to its environment, which is uncertain and changing. Failure adequately adapt to the environment may be a major cause of organization’s failure. However, organizations also affect the environment.Although William Starbuck has identified some 20 different uses of the work environment in order to perform an efficient and effective environmental analysis the environment of an organization is generally divided into two distinct levels; external or general and internal or specific environment.External or general environment is a set of those factors that affect and organization from outside is boundaries. The external environment contains elements that have broad and long-term implications for managing the organization. Such environment has both direct action and indirect action elements. Direct action element of external environment include various stakeholders lie shareholders, customer, suppliers, competitors, employees, community (or society), special interest groups, government and international issues. They are also designated as
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economic environment or task environment. Indirect action elements of external environment include political-legal socio-cultural and technological components.Internal or specific or organizational environment is a set of those factors that affect an organization from inside its boundaries. It contains elements that exist within the organization and normally have immediate and specific implications for managing organization. Broadly speaking, internal environment includes organizational objectives, organizational resources, organizational structures, processes and techniques. Organizational resources include, financial and physical or material resources and human technological capabilities. Organization structures, processes and techniques include; marketing, production, finance and accounting. From a more specifically management viewpoint, internal environment includes planning, organizing, staffing, directing and controlling.Environment AnalysisOrganizations are open system of management that constantly interacts with their environment. Environmental analysis is the study of organizational environment to identify and indicate those environmental factors that can significantly influence organizational operations and manager’s strategic decision making. It is thinking about the unthinkable, and it is seeing new insights rather than extrapolation. Environmental analysis is the discerning (seeing and understanding well) of those aspects of the environment, which shall have the greatest influence on the organization’s ability to achieve its objectives. Such a discerning is made within and with the help of a framework provided by the knowledge of the organization’s goals and the existing strategy of the organization.Environment DiagnosisEnvironment diagnosis is an exercise attempted to identify the factors of causes in the environment that affect the function of an organization and use such identification as a base for developing plans or strategic to improve or maximize the dynamism and effectiveness of the organization. Environment analysis is a tool of environmental diagnosis.Environmental Diagnosis Analysis and DiagnosisThe purpose of environment analysis and diagnosis is to identify the ways in which changes in various organizational factors may directly and indirectly influence the organization and management. Managers commonly perform environment analysis in order to understand different activities and happenings inside and outside their organization and thereby increase the chances of framing sound and effective organizations and managerial strategies by coping with the probable demands of the environment.Environmental analysis is required due to its needs and importance for the following reasons:1. Environmental factors are primary impact makers on corporate strategy of organizations.2. Such analysis helps in anticipating opportunities and to plan alternative responses to those opportunities.3. It helps in determining threats and developing an early warning system to prevent threats to the organization or to determine the risks that may be faced by organization in its future operations.4. It helps to identify those adjustments or adaptations, which are required for greater accomplishment of organizational objectives.5. It is sort of SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis which helps in deciding about the rights course of action for managerial to successfully negotiate with the prevalent circumstances around the organization in order to ensure its survival, growth and development.6. Environmental information strengthens the planning process and strategy formulation.Environmental analysis is well accepted and recognized as an essential ingredients of strategic management. It may, however be noted that the Behavior of the environment may be predictable, partially predictable or unpredictable. Further, the predictable or partially predictable Behavior may be controllable, partially controllable or uncontrollable. Moreover the environment may be homogeneous or diversified and stable or changing.Environmental Influences on Organization and ManagementEnvironmental factors affect an organization in two ways (i) they set the limits or constraints over its functioning, (ii) they provide opportunity and challenges. The factors themselves act as limits, which are sometimes visisble and
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at other moments, invisible. The environment provides opportunities by way of markets for new products, etc and challenges in the form of competitors etc. We daily find in newspaper headlines about government’s new regulations, competitors, new schemes, consumer revolts, anti pollution activities of the community, trade union, strikes and so on. To deal with these groups is an integral part of all manager’s job. Such a job becomes more important the higher a manager rises in managerial hierarchy.The Internal EnvironmentThe part or level of an organization’s total environment that exists inside the organization and usually has immediate and specific implications for managing the organization is called the internal environment. It consists of those factors inside an organization that affect the management of the organization. In broad terms, the aspects included in the internal environment are, objectives, resources and facilities (human and physical), informal organization (or group), other divisions or units of the organization, unions, marketing and accounting. It may be notes that employees and unions of an organization have such a nature as they are to be included both in external and in internal environment. From a more specifically management viewpoint, internal environment includes the state of planning, organizing, staffing, directing and controlling with the organization.Matching the Internal Environment with the External EnvironmentIt is clear from the above discussion that on organization (internal environment) must be suited to its external environment. The management develops its organizational strategies through an environment analysis. On the basis of the results of such environmental analysis, proper organizational strategy may be systematically developed by means of the following special tools and techniques.1. Critical Questions Analysis (CQA)Several contemporary management writers suggest that an appropriate organizational strategy is a process of answering some critical or basic question as follows:(a) What are the purposes and objectives or goals of the organization?’The answer to this question unfolds the desination where the organization wants to go. Appropriate strategy must reflect organizational purpose and objectives in order to minimize inconsistencies in strategy.(b) Where is the organization currently heading?The answer to this question tell about the state of achievement of organizational goals and also whether the level of present progress is satisfactory or not. Managers come to now the gaps in their performance. In fact, this question focuses on where the organization is actually going – whether on desired path or in wrong direction.(c) What is the present environment in which the organization exists and what changes are expected in it in relevant future?The answer to this question brings out the special features of the current environment and its future trends. However, it may be noted that this question focuses on factors both inside and outside the organization. For example, lack of technically qualified personnel in the organization and a sudden arrival of latest computerized technology in the market are the factors that exist respectively in the internal and the external environment.(d) What steps are essential to better accomplish the objective in future?In fact, the answer to this question focuses on the requirements of the actual strategy of the organization in order to remove all inconsistencies and gaps in the currently adopted strategy. However, it may be noted that correct answer to this question depends on the opportunity provided to the managers to reflect on he previous three questions.Thus, managers can have appropriate strategy to match internal environment with external environment only if they have a clear understanding of three things, (i) Where the organization intends to go, (ii) Where the organization is currently going, (iii) What is the environment in which it exists and is expected to exist.2. SWOT analysisStrategic thinking tends to focus on analysis of the strengths and weaknesses of the firm and opportunities and threats of the external environment. Only after completing a comprehensive appraisal of the internal and external
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situations (strengths, weaknesses, opportunities and threats) of the firm, managers could consider the viable strategic options. Such options could only be broadly classified as, for instance, growth (to increase the amount of business), diversification (to reallocate resources to new attractive products in order to exploit new market segments), harvest (to maximize the short term cash flow from the business), retrenchment (to strengthen or protect the amount of business being currently generated) and divestiture (to eliminate an organization segment, commonly known as Strategic Business Unit (SBU), that is not generating a satisfactory amount of business and that has little hope of doing so in the near future). Good strategic option (selected out of the aforesaid strategic options) should build on strengths and exploit opportunities.The logic of this analysis indicates that as each firm will be facing a different set of opportunities and threats (Os and Ts), and each will have differing strength and weaknesses (Ss and Ws), the strategies that result will be unique to the firm. However, a precaution has to be taken in selecting the managers who conduct the SWOT analysis, because if it is given to inexperienced hands, then it may tend to generate long lists of points and the longer the list, the cloudier will be the emerging strategic picture.It may be noted that they may be two ways to superior performance of the organization (i) either the organization should become the lowest-cost producer in its industry, (ii) it should differentiate its products or services in such respects as are valued by the customers so high that they will pay a premium price to get and enjoy such edging benefits. Thus, organizations can choose to apply either of these two general strategies.3. Business Portfolio AnalysisUnder this type of analysis, sound and unsound business activities are separately identified in relation to market share of business and the growth of markets in which business exists. Sound activities are then continued, supported and emphasized, while unsound activities are discarded, discontinued and de-emphasized.4. Competitor AnalysisManagers should know quite a lot about their competitors because it is essential to stay in competition in order to capture a lion’s share of the market. Organizations should devote the time and effort required to gain a deep understanding of their competitors. If they know their enemy, it will help them to anticipate the strategic moves that the rivals might make. For purposes of making a systematic examination of the competitors and their strategies the following steps are required to be taken:(i). To examine the existing and potential (future) competitors by close scrutiny of the needs that organization’s products or services are satisfying.(ii). To examine the competitor’s current activities, capabilities, drives, expected moves and vulnerabilities (weaknesses).(iii). To concentrate on four main areas with a view to establishing a comprehensive profile of the competitors their future goals, assumptions, current strategy and capabilities.Meaning of Span of ManagementThe term Span of Management is also known as Span of Control or Span of Authority or Span of Supervision. Simply stated Span of Management means the number of subordinates that a manager can effectively manage. This concept implies that the number of subordinates directly reporting to a superior should be limited so as to make supervision and control effective, because executives have limited time and ability. It is an accepted proposition that the larger the number of subordinates reporting directly to a manager, the more difficult it will be for him to supervise and coordinate their activities effectively.What is an Ideal Span?It is sometimes suggested that the span of management should neither be too wide nor too narrow. Then, the question arises as to how many persons a supervisor can manager effectively. Some experts tell that the ideal span is 4 at higher levels and 8 to 12 at lower levels. But the number of subordinates cannot be easily determined because the nature of jobs and capacity of individuals vary from organization to organization.
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Classical View of Span of ManagementThe first person to draw attention to the principle of span of management was a British General, Sir Iaan Hamilton (1920) who said that the average human brain can be effective in handling from 3 to 6 other brains. After a lengthy study of military organizations, he concluded that the span should be smaller at the top of the organization, where thought processes were more complicated and that it should set progressively larger toward the lower levels, where thought processes were less complicated and more routine.V.A. Graicunas (1933) suggested that as the number of subordinates increases arithmetically, the number of potential relationships, between the superior and subordinates increases geometrically. For example, Graicunas indicates that if a superior manages 2 subordinates, there are actively 6 different relationships. Thus, he pointed out that an increase in the number of subordinates causes almost an explosive growth in the number of possible relationships. Hence, only number of bodies in a span should not be counted, but the multifarious relationships generated by the numbers must also be recognized while deciding for the span of individual manager.Classical writers advocated a span of control ranging from 3 to 7 or 8 persons at the higher levels and a span of 20 to 30 persons at the lowest level.Modern View of Span of ManagementContingency or Situational Approach (Factors Determining Span of ManagementThe evidences indicate that spans of control cannot be stated in absolute terms as done by the classical scholars. There is no correct span for all situations. The predominant current view is to look for the causes of limited span in individual situations, rather than to assume that there is a given numerical limit generally applicable to all. Pragmatically speaking, a really proper span of control is one that is not improper.Modern Approach has shifted away from trying to find out a universal formula of span of management. Instead of emphasizing absolute spans (specific numbers), the current view is that span is more flexible thing, and there is no one correct span for all situations. The appropriate number of span of control for a particular manager is contingent on several factors that may be discussed as follows:1. The Capacity and Ability of the SuperiorThe personal abilities and influence of the superior (manager) play an important role in determining the number of subordinates that can be effectively supervised by him. If the superior possesses qualities of leadership, decision-making ability, communication skill, motivating strength and time management expertise, in greater degree, that the span of control may be wider. In other words, if the superior (executive) can comprehend problems quickly, can get along well with people and can command loyalty and respect from the subordinates, then he can supervise a large number of subordinates effectively.2. The Capacity and Skill of SubordinateIn case the subordinates are competent, well trained, experienced and have good judgment, initiative and a sense of obligation, then they seek less guidance from their superior and therefore the superior manager will be in a position to supervise a large number of subordinates. On the other hand, if the manager has no confidence in the capacity and caliber of his subordinates, then the span will be restricted to be narrow.’3. Nature and Importance of Work SupervisedIf the work is simple and repetitive, the span of management may be wider, because it does not require much attention and time on the part of the superior. On the other hand where the subordinate’s job is complex requiring close supervision by the superior, then the number of persons under him should be narrow or small. Such characteristics generally indicate whether jobs are easy or complicated, dissimilarity of jobs assigned the number of new problems that may be encountered, the need for frequent consultations and communication, the physical dispersal of jobs, geographically location of members, nature of decision making by the subordinates and so on. The more a subordinate’s job involves unpredictability, variety, discretion and responsibility, the smaller span is likely to be.
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4. Clarity of Plans and ResponsibilityIf the plans and policies are clear and easily understandable and if the functions and responsibilities are laid down in as definite terms as possible, the task of supervision is easier and the span of management can be wider because the subordinates need not go to superior frequently for orders, instructions and guidance.5. Degree of DecentralizationIf there is proper delegation and decentralization of authority, then the superior can successfully supervise a large number of subordinates, because in that case he has not to take any decisions himself and merely provides encouragement and occasional direction. In case of centralization of authority, the span will be narrow.6. Staff AssistantsWhen staff assistants (experts) are employed to advise and serve the superiors and the subordinates, then contract between the superior and the subordinates may be reduced and the span be broadened.The Impact of the Span of OrganizationThe actual span of supervision affects the organization in different ways. The structure of organization produced by the narrower span is called tall organization, and the wider span produce what is known as flat organization. The narrow span requires multiple levels of supervision and hence longer time for communication. Tall organization is more expensive and complicates the process of communication and integration. A narrow span results in harassed subordinates and frustrated superiors. However, a narrow span enables managers to exercise close supervision and control and wherever these are needed, the narrow span is better suited.Conversely, a wider span results in fewer levels of supervision. The flat organization facilitates better communication and coordination, but it permits only general supervision due to the limited availability of time. The wide span results in harassed superiors and frustrated subordinates.Robert House and John Miner (1969) have summarized the entire question of span of management as follows:1. Under most circumstances the optional span is likely to be in the range of 5 to 10.2. The larger spans (say 8 to 10) are most often appropriate at the highest policy making levels of an organizations.3. The number of effective spans of first-line supervisors is contingent upon the technology of organization.4. Appropriate span for specific situations depends on a set of local factors (for example, task, interdependencies and leadership skills).
Meaning and Definitions of ControlControl is necessary function to make all other managerial functions effective. Its ensures that the corporate goals are achieved effectively and efficiently. Controlling is the process that the corporate goals are achieved effectively and efficiently. Controlling is the process by which management regulates that work activities according to designed plans, policies, procedures and programs so as to ensure the accomplishment of the organizational resources and people in a direction leading to organizational goals.some important definitions of control may be given as follows:Henri FayolControl consists in verifying whether everything occurs in confirmatory with the plan adopted, the instruction issued and principles established. It has for object to point our weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything, things, people, action.Theo Haimann and William ScottControlling is the process which check the performance against standards. It makes sure that organization goals and objectives are being met.Robert AnthonyManagement control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of an organization’s objective.
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Weihrich and KoontzControlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.Characteristic Or Features of ControlControlling has the following important features, which clearly bring out its nature:1. Control is a Continuous ProcessControl is not a single step activity. Rather, it is a dynamic process that involves constant analysis of actual and planned performance and the resultant deviations as well as the revision of objectives, plans, policies, procedures, positions, incentives etc in the light of such deviations.2. Purpose of Control is PositiveGeorge Terry says, the function of controlling is positive – it is to make things happen, i.e. to achieve the goal within stated constraints, or by means of the planned activities. Controlling should never be viewed as being negative in character – as a hurdle in getting objectives won. Controlling is a managerial necessity and a help, not an impediment or a hindrance.3. Controlling is a exercise at all levels in the Management HierarchyControl is a function of every manager, from Chairman and Managing Director to a supervisor, though it may vary in scope among managers. For example the top managers are concerned with administrative control, which is exercised through broad policies, plans and other directives. The middle level managers are concerned with the executor control for the purpose of getting the plans, policies, and programs executed. At the lower level, supervisors exercise operational control to ensure successful performing of actual operations or production activities by their close monitoring.4. Control Guides Behavior of People and use of Resources and FacilitiesControl guides the action and the Behavior of the people who are responsible for carrying out different activities or operation, and also guide the use by them of different organizational resources and facilities in order to effectively and efficient, contribute toward accomplishment objectives.5. Control is mainly Forwarding LookingControl mainly aims at the future because future is a head and past in gone. However, the experience about the criterion for future standards, but it may be noted that control may also be past control and current control. Thus it is not full correct to say that control is looking back.6. Control Measures and Evaluate PerformancesControlling involves measurements of the actual results in order to facilitate other evaluation or comparison against the planned results. It also suggests guidelines for future course of action.7. Control Facilities Coping with EnvironmentEffective controlling system foresees the likely changes in consumer preferences and demands and therefore guides the members of the organization to modify the products or services to meet the anticipated needs and requirements of the consumers in the future market.8. Control Closely Related to PlanningPlanning is the basis of controlling. Control implies the existence of certain standards or yardsticks against which actual results are to be evaluated. Planning provides such standards, if there is no plan; it means that there is no basis for control. Planning sets the course of action and controlling monitors the operation or activities to follow such course of action. In fact, planning initiate the process of management and control completes this process. Without a plan control is blind because it does not know where to go and weather it is going on a right path or not. Control looks active in the company of a plan because then it seeks to compel events to confirm to the plan. Without a plan is handicapped. H.G. Licks comments, Planning is clearly a pre-requisite for controlling, it is utterly foolish to think that controlling could be accomplished without planning. Without planning there is no
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predetermined understanding of the desired performance. In fact planning without corresponding control is likely to be a hollow hope.On the other hand, planning without control is not a reality. In the absence of a control system, best designed plans may go astray and thus will fail to reach their destination. Control ensures to the organizational activities and the functions on the right track and aligned with plans and goals. Standards for evaluation of performance are the beginning point of the control process. Controlling indicates the need for revision of plans in case the standards are not achievable or if the environment has changed. The information collected by the control system is also useful for planning in future. Without control planning will be a futile exercise remaining on the papers only. Control makes plans meaningful and effective, similarly controlling is effective only when it is specially tailored to plans.Thus, it is correct to comment that planning is manning less without control and control is aimless without planning. Weihrich and Kortz comments, planning and controlling may be viewed as the blades of a pair of scissors, the scissors cannot work unless there are two blades. Without plans and objectives, control is not possible because performance has to be measured against some established criteria. Similarly, without control, realization of plans is not possible be guided on the right path leading to the accomplishment of plans. This is why that Weihrich and Koontz has commented as follows. Planning and controlling are inseparable the Siamese twins of management. Any attempt to control without plans is meaningless, since there is no way for people to tell whether they are going where they want to go (the result of the tusk of control) unless they first know where they want to go (part of the task of planning). Plans thus furnish the standards of control. Thus, there is complete interdependence between planning and controlling.Importance of ControlThe major benefits of a good control system may enlist as follow:1. Stimulates ActionA good control system stimulates action by spotting the significant deviations from the original plan and by highlighting them for the people who set thing right i.e., who can take corrective action. Thus, it guides and keeps the organization’s operations on the right back.2. Facilities Decentralization and CoordinationControl encourages top management to delegate authority to subordinates throughout the organization without completely losing their grip over it. In the context of predetermined goals, control keeps all activities and efforts within their specified limits and makes the operations to move towards organizational goals through coordinated efforts.3. Facilities other Managerial FunctionsControl and planning are closely related to each other. Control points out the deficiencies in plans and policies by verifying their quality and correctness. It helps to review, revise and update the plans and policies in order to cope with changes in the environment. By doing so, control also indicates the limitations and drawbacks of organizing staffing, motivation, leadership and decision-making.4. Enhances Employee MoraleControl is vital to the strength and moral of company employees because it prevents the individuals form going astray from plans and thus prevents anarchy to develop. Employees do not like a situation that goes out control because in that case they may become victims to any within and cannot predict what will happen to them. Thus without control their morale may be lowered. The tremendous complexity of modern organization and certain psychological dependencies of the employees on order and stability, make the control system a necessity.5. Creates Psychological Pressure to WorkIf there exists a sound control system in an organization, employees have psychological pressure to work hard and perform well. Efficient control system provides order and discipline in activities and helps to minimize dishonest Behavior on the part of employees. Employees remain alert in their efforts.
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6. Other BenefitsSeveral other benefits from good control system may be as follow:
Control is necessary for the optimum use of organization’s scarce resources. It helps in organization’s growth and change It helps in forecasting and thus provides basis for future action. Control techniques like rules, procedures, budgets etc stand as effective guides to managers. In the absence of control, the plans will remain but mere pipedreams. Control helps in judging the accuracy of standards. In the area of their responsibility, if managers do not control events, they will be at the mercy of the
events.
Requirements of Effective Control SystemA control system is a deliberate creation, not an automatic phenomenon. Through different organizations may design their control systems according to their unique and special characteristics or conditions, yet in designing a good and effective control system the following basic requirements must be kept in mind:1. Focus on Objectives and NeedsThe effective control system should emphasis attainment of organizational objectives and therefore it should be designed in accordance with practical needs of the enterprise. For example, the marketing department may use pre-controls for introduction of new products into the market, and current control for specific advertisements. Similarly, more sophisticated and broad ranging controls may be developed for production managers than for a shop floor supervisor. Thus, controls should be tailored to plans and positions.2. Prompt IndicatorAn ideal control system could detect and report significant deviation as promptly as possible so that necessary corrective action may be taken adequately in time. This needs an efficient system of appraisal and flow of information. Rapid reporting of variations of the core of control.3. Forward LookingControl should be future-oriented, marketing valuable forecasts to the managers so that they become aware of the problems likely to confront them in the future.4. Understandable and EconomicalControl tools and techniques adopted should be such as are clearly understandable by the managers. They must know all the details and critical points in the control device as well as its usefulness. If developed and complex statistical and mathematical techniques are adopted, then proper training should be imparted to the persons who are supposed to execute such control system. Besides the control system should be worth its costs. Expensive and elaborate control system will not suit, for example to small enterprise.5. Control by Functions and FactorControl should emphasis function, such as production, marketing, finance, human resources, etc it should also focus on four factors, quality, quantity, time use and costs. Not one but multiple controls should be adopted.6. Strategic Points ControlEvery detail or thing is not be controlled in order to save time, cost and effort. Certain strategic or vital points in the functioning of an enterprise must be identified and appropriate control devices should be designed and imposed at those stages. Thus, only critical, major deviations should be attended to and control should concentrate on exceptional problems only. Control should be selective and concentrate on key result areas of the company.7. FlexibleIt means that the control system should be able to accommodate such modifications or revisions as are made necessary in the wake of rapidly changing and complex organizational environment. Control must not become
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ends in themselves. They must be suited to the environment in which an organization finds itself. Flexibility in control system is generally achieved by the use of alternative plans or flexible budgets.8. ObjectiveTo the maximum possible extent, controls, i.e., standards of performance should be objective (unbiased) and specific. For this purpose control measures should be verifiable or quantified. Standards should be determined based on facts and participation.9. Indicative as well as SuggestiveControls should not only be able to point to the deviations, but they should also suggest corrective action that is supposed to check the recurrence of variations or problems in future.10. Correct Action at Correct TimeA significant test of the effectiveness of a control system is whether correct action is taken at correct time.11. Attention to Human Factor or Emphasis on Self-Control AspectIt is said that excess control causes corruption. Control system should be designed is such a way, as it does not arouse negative reactions among organizational people. Good controls are designed to develop positive feelings in the members by focusing on work and not on worker. It facilities creative action within properly laid down limits. The aim of control should be to create self-control among members. For this purpose, the tendency over the years has been toward such techniques as participative budgeting and human resources accounting.
Meaning and Definition of MotivationSuccess at work is not a matter of only technical expertise but also dependent on the interest of the worker. Creating interest in people to give their best to the work and the workplace is the key to motivation. For this purpose, the managers should know why people act as they do and what will make them to give their best on their jobs.Some important definitions of motivation may be given as follows:Carroll StrartleMotivation is a reported urge or tension to move in a given direction or to achieve a certain goal.Micheal JuciusMotivation is the art of stimulating someone or oneself to set a desired course of action or push the right button to get the desired action.E.F.I. BrechMotivation is a general inspirational process which gets the members of the team to pull their weight effectively, to give their loyalty to the group, to carry out properly the tasks that they have accepted and generally to play an effective to play an effective part in the job that the group has undertaken.Weihrich and KoontzMotivation is a general term applying to the entire class of drives, desires, needs, wishes and similar forces. To say that managers motivate their subordinates is to say that they do those things which key hope will satisfy these drives and desires and induce the subordinates to act in a desired manner.In sum, motivation is a psychological process which is related to human side and through which the desires, needs or tensions of the employees are understood and they are inspired in such a way that they proceed in a desired direction, provide maximum help in the achievement of specified goals, keep on the drive to work, continue to cooperate with each other, develop and maintain the sense of belongingness towards the enterprise, feel satisfied and their morale remains high. Thus, motivations are the process of steering a person’s inner drives and actions towards certain goals and committing his energies to achieve these goals.Characteristics Or Features of MotivationSome important features of motivation may be brought out as follows:
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1. Personal and Internal FeelingMotivation is a psychological phenomenon, which is generated within an individual in the form of an energetic force that drives him to behave or not to behave in certain ways. These are some environmental and other forces that trigger these drives.2. Art of Stimulating Someone Or OneselfA manager can use motivation to inspire not only his subordinates, but to motivate himself also. For self-motivation, he has to take following steps
He should set a goal for himself and should not close sight of it. He should supplement his long term objectives with short-term goals. He should learn a challenging task every year. He should make his job a different one with a view to improving objectives for his position and increasing
his productivity. He should develop an area of expertise by building on his strengths and developing his weaknesses into
strengths. He should give himself the feedback and reward himself by celebrating his accomplishment.
3. Produces Goal – Directed BehaviorMotivation is closely intertwined with Behavior. As a Behavioral concept, it directs human Behavior toward certain goals.4. Motivation can be either Positive or NegativePositive motivation is also known as Carrot Approach and includes use of additional pays, incentives, praise possibility of becoming a permanent employee etc. Negative motivation is also called Stick Approach and implies punishment, such as reprimands, threat of demotion, threat of termination, etc.5. The Central Problem of Motivation is HOWMotivation is necessary for successful achievement of goals. However, it is a complex process because different employees have different needs, their motives are varied and needs and motivates change from time to time. Moreover, motivation is partly logical and partly emotional. Further, people satisfy their needs in many different ways. Hence, the central problem of motivation is how to inspire such a typical group of individuals towards attainment of goals in a concerned manner.6. Motivation is System OrientedMotivation is the result of interplay among three sets of different factors:
Influences operating within an individual, for example, his needs, tensions, motives, values, goals etc. Influences operating within the organization for example, its structure, technology, physical facilities,
various processes, the nature of job, advancement avenues etc. Forces operating in the external environment, for example, society is culture, norms, values, customs,
government policy regarding the business of the enterprise etc.7. Motivation is a Sort of BargainingInducements from the side of the enterprise and contributions from the side of the employees.8. Motivation is different from SatisfactionMotivation refers to the drive and effort to satisfy a want or goal. Satisfaction refers to the contentment experienced when a want is fulfilled. In other words, motivation implies a drive toward an outcome and satisfaction is the outcome already experienced.Theories of MotivationDifferent management scholars to explain how Behavior is energized, gets started, sustained, directed or stopped have propounded several theories.
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Maslow’s Needs Hierarchy TheoryMaslow’s need priority model is one of the most widely referred to theories of motivation. Abraham Maslow, a clinical psychologist, thought (1943) that a person’s motivational needs could be arranged in a hierarchical manner, starting in an ascending order from the lowest to the highest needs and concluded that once a given level of needs (set of needs) was satisfied, if ceased to be a motivator. The next higher level of need is to be motivated in order to motivate the individual. Although the hierarchical aspects of Maslow’s theory are subject to question and often not accepted, his identification of basic needs has been fairly popular.The five categories of needs may be described as follows:1. Physiological NeedsThese are the basic needs for sustaining human life itself: needs for food, drink, shelter, clothing, sleep, sex etc. Man can live on bread alone, if there is no bread. But once these basic needs are satisfied, they no longer motivate.2. Safety NeedsSafety or securing needs are concerned with freedom from physical or psychological (mental) harm, danger, deprivation or threat, such as loss of jobs, property, food, clothing or shelter.3. Social Or Affiliation Or Acceptance NeedsThese are belongingness needs emanating from human instinct of affiliation or association with others. These include owners, love and affection, needs of mutual relations, identification with some group etc. These are the needs more of mind and spirit than of physique.4. Esteem NeedsThis set of needs represents higher level needs. These needs represent needs for self-respect, respect of others a general feeling of being worthwhile, competence, achievement, knowledge, independence, reputation, status and recognition.5. Self-Actualization NeedsThis set of higher order needs concerns with reaching one’s potential as a total human being. It is the desire to become what one is capable of becoming, i.e. to maximum one’s capacity and abilities in order to accomplish something appreciable and self-fulfilling. It is a need for being creative or innovative, for transforming self into reality.Salient features of Maslow’s Needs Model1. The urge to fulfill needs is a prime factor in motivation of people at work. Human beings strive to fulfill a wide range of needs. Human needs are multiple, complex and interrelated.2. Human needs form a particular hierarchy or priority structure in order of importance.3. Lower-live needs must be at least partially satisfied before higher-level need emergy. In other words, a higher-level need does not become an active motivating force until the preceding lower-order needs are satisfied. All needs are not felt at the same time.4. As soon as one need is satisfied, the individual discovers another need which is still unfulfilled.5. A satisfied need ceases to be a motivator, i.e., does not influence human Behavior. Unsatisfied needs are motivators, i.e., they influence human Behavior.6. Various need levels are independent and overlapping. Each higher-level need emerges before the lower-level need is completely satisfied.7. All people to a greater or lesser extent; have the identified needs.Critical Evaluation of Maslow’s Model1. Human needs cannot be classified into clear and only specified categories, i.e. their hierarchy cannot be definitely specified. The determination of higher and lower levels is dependent on people’s cultural values, personalities and desires. For example, the higher-level need of an Indian worker may be the lower-level need of an American worker.
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2. It is not necessary that a time only one need be satisfied. In other words, needs of more than one levels may be fulfilled jointly, for example: physical and esteem needs, Maslow’s model does not explain this multi-motivation fact.3. Some of the assumptions of Maslow’s theory are not always found in practice.4. It has been found by some scholars like Lawler and Suttle that physical and safety needs may be probably satisfied, but high-level needs do not appear to be rather satisfied.Though Maslow may not be the final answer in motivation, yet his model does make a significant contribution in terms of making management aware of the diverse needs of human beings at work, their diverse motives. Needs may not be the only determinants of human Behavior but they are definitely important for understanding such Behavior.
Meaning and Definition of OrganizationWe live in the age of organizations. Modern civilization requires large aggressions of people working together to produce the goods and services efficiently. Organizations are grand strategies created to bring order out of chaos when works together. The structure resulting from three things is known organization. (i) Identifying and grouping of work, (ii) defining and delegating authority and responsibility, and (iii) establishing relationships among those who are engaged in performing group activities. Without defined relationships, there will be no organization. Peter Drucker rightly says, An institution (organization) is like a tune it is not constituted by individual sounds but by the relating between them. Organization is a dynamic tool for interweaving six M’s, Men, Money, Machines, Materials, Methods and Markets. People work for organization’s objectives and manage its affairs for achieving them effectively and efficiently.Some important definitions of organization may be given as follows:Hodge and JohnsonAn organization can be thought of as a complex relationships among human and physical resources and work, cemented together into a network of system.James MooneyOrganization is the form of every human association for attainment of a common purpose.J.L. MassieOrganization is the structure and process by which a cooperative group of human beings allocates its tasks among its members, identifies relationship and integrates its activities towards common objectives.George TerryOrganizing is the establishing of effective Behavioral relationships among persons so that they may work together efficiency and gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or objectives.Organization ConceptsEvery scholar has defined organization from his own perception. But in all, there are three concepts of organization as follows:1. Structure2. Process3. System1. Organization as a StructureWeihrich and Koontz point out, Organization implies a formalized intentional structure of roles or positions. Organization structure may be defined as the established pattern of relationships among the component parts of an enterprise. In this sense, organization structure refers to the network of relationships among individuals and positions in an enterprise. It is the network of horizontal and vertical relationships among the members of group designed to accomplish some common objectives. This network governs the activities of people in the form of a
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social group. The horizontal dimension shows differentiation of job into departments, divisions or sections. The vertical dimension reflects what is known as hierarchy or chain of command, of authority. The organization structure is the skeleton framework of business enterprise. Thus, the organization structure implies the following things.(a). Division of labour into group activities under departments, divisions or sections and also into various positions.(b). Assignment of tasks and activities to different persons and departments.(c). The formal relationships with well-defined responsibilities.(d). The hierarchical relationships with allocation of authority between superior and subordinates – delegation and decentralization of authority.(e). Span of control with defined number of subordinates under a superior.(f). Coordination among different departments and people.(g). A set of policies, procedures, standards (goals) and methods of evaluation of performance, all formulated to guide the people and their activities.However, the actual operations and Behavior of people are not always governed by the formal structure of relations. Hence, the formal structural arrangements are affected and modified by social and psychological forces combined known as informal organization.2. Organization as a SystemOrganization as a system implies the component parts, each of which has its unique properties, capabilities and natural relationships and thus all are interrelated and interdependent. Hence, system implies an arrangement and set of relationships among multiple parts operating as a whole, each part being called a sub-system. Every sub-system is itself a system composed of smaller interrelated parts of sub-system. The system produce synergic effect which means that the sum of all the parts is greater then the whole i.e., 2 + 2 = more than 4. Organization as a system also implies that it is an open system, which means that it interacts with its environment for its survival, growth and development. An organization as a socio-technological system consists of the following components or elements:(a). InputsThe system takes certain inputs from its environment. These inputs are human resources, physical resources and facilities, energy, supplies, technology and information.(b). Processing or TransformationProcessing or transformation involves the utilization of the inputs through some specified technique to convert them into outputs. A number of sub-systems are created for processing or transformations purpose, such as production, finance, personnel and research and development. Interrelatedness and interdependence of all these sub-systems is kept in mind.(c). OutputThe processing or transformation technique results in output that may be intended and unintended. Intended outputs are usually called objectives or goals. For example, high productivity and efficiency we intended objectives. The output may consist of goods and services. An unintended output may be informal relation among the group members.(d). DistributionFor distributing the output to the target market or consumers, several sub-systems may be created, such as sales, marketing, advertising, etc. Distribution may be done directly or through intermediaries known as wholesalers, semi-wholesalers and retailers.(e). ManagementThe management component of the organization system is concerned with the determination and implementation of processing and distribution activities in order to achieve system’s goals. It involves planning, organizing, staffing, directing and controlling.
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(f). FeedbackFor effective managing, feedback of information with regard to the quality, quantity, cost and time of system outputs is necessary. It also helps in establishing and enforcing standards for desired results. It facilities corrective action wherever needed in the system.(g). EnvironmentThe management components helps in coping with the environment, which is complex and fast changing in the modern world. Management takes adequate steps needed for availing the opportunities and averting the threats in the environment. If the organization system intends to survive, grow and develops, it has to interact properly and successfully with its environment.3. Organization as a ProcessOrganization as a process is known as organizing. Weihrich and Koontz point out, Organizing is (1) the identification and classification of required activities, (2) the grouping of activities of activities necessary to attain objectives, (3) the assignment of each grouping to a manager with the authority (dilatation) necessary for coordination horizontally (on the same or a similar organizational level) and vertically (for example, corporate, headquarters, division, and department) in the organization structure.’Organization is needed in order to avert the havoc of disorganization. It may be briefly illustrated as follows: A short sentence is disorganized like this, riirggnagesnoiztlsuse. In this form it is nonsense. If we reorganize it substantially, it will look like this: Organizing gets results now it is workable, but difficult. By a slight change, it reads: Organizing gets results. Hence organization becomes important for management by results – for accomplishing our goals.A sound organization contributes greatly to continuity, growth and development of an enterprise in the following ways:1. Facilities AdministrationA properly designed organization facilitates both management and operation of the enterprise by helping in its smooth functioning through various factors, such as well-defined areas of work for employees; effective delegation and decentralization of authority; clear mutual relationships; good communication network; coordination of the activities of individuals, groups and units, adequate and control.2. Facilitates growth, expansion and diversificationA sound organization structure is flexible enough to accommodate future changes with regard to growth expansion and diversification of enterprise’s activities. Besides, certain organization practices are developed which lead the business enterprise to expand and diversify.3. Permits Optimum Utilization of ResourcesSound organization permits optimum use of technological improvements and human resources and efforts (right persons being placed in right positions on the basis of their skills, knowledge and experience). It develops competent people through the facility of appropriate effective training and promotion opportunities.4. Stimulates CreativitySpecialization provides individuals with well-defined duties, clear lines of authority and clearly defined responsibilities. Delegation and decentralization makes it possible for superiors to assign routine and repetitive jobs to their subordinates and to concentrate themselves on important issues in order to better exploit their own potential and encourage the creative thinking and innovative skills of the people.Organization ChartsOrganization structure is represented primarily by means of a graphic illustration called an organization chart. An organization chart is a diagram depicting organization’s formal positions and formal lines of authority. In fact, it is structural skeleton of an enterprise’s hierarchy of management. Organization charts are a means of avoiding conflict by clarification. With their familiar pattern of boxes and connecting lines, these charts are used as a management tool for deploying human resources.
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An organization chart shows two dimensions of the structure: (a) the vertical authority structure, such as official positions, span of management, hierarchy of command, etc and (b) the horizontal differentiation of work activities such as work units or departments. It reflects the pattern of authority flow from top management to the lower levels. It also shows managers, ranks and jurisdictions, types of authority relationships, line, staff or functional – communication lines throughout the organization, the number of levels in the managerial hierarchy, the span of management and the relative status of different managerial positions and departments. Organization charts also help in reflecting as to who reports to whom – who is superior and who is subordinate, how many subordinates are accountable to a superior and what are the avenue, open for advancement of a manager holding a particular position in the chart.The organization structure can be diagrammed into an organization chart in three different ways:(a). The traditional or conventional vertical chart shows the position of the chief executive at the top of a pyramid form, from where the authority flows downward. The managers towards the top of the pyramid have more authority than those who are towards the bottom.(b). The horizontal chart originates from its left and proceeds to the right, depicting the chief executive’s position at the extreme left and placing the successively lower managerial positions towards the right end.(c). The circular or concentric chart places and shows the chief executives position at its center and other middle and lower level managerial position radiate from the center in concentric circles, the lowest managerial positions being placed on the outermost circle.The horizontal and circular charts represents a healthy departure to the extent that they de-emphasize the hierarchical, i.e., bureaucratic nature of organization structure. However, vertical charts are still common in practice. Normally, the greater the height of a vertical chart, the smaller the span of management and the lower the height, the greater the span of management. Organization charts with little height are usually referred to as flat and those with much height as tall.Advantages of Organization ChartsThey are useful in several ways as follows:
Organization chart is a means to indicate graphically how the managerial positions fit into the total organization and how they relate to each other.
It shows at a glance the lines of authority and reporting pattern. It provides a conceptional background to identify inconsistencies and deficiencies and thereby helps in
deciding for further improving modifications to cope with future demands of the changing environment. It serves as a reliable blueprint for newly recruited personnel who may understood the structure of the
organization and the interrelationships among its various work units. It provides a framework of personnel classification and evaluation systems.
Limitations of Organization Charts Organization chart depicts only a static view of the organization, while the organization is a dynamic
concept. It shows only the formal relationships and fails to describe informal relationships in the organization,
though informal relationships are equally important and significantly affect the functioning of the organization.
It does not show the quality and content of the managerial relationships that actually exist in the organization, but shows only the ’supposed relationships’. Thus, it fails to tell about the effectiveness of various elements, processes, and other structural dimensions within the organization.
Organization charts become quickly outdated because they fail to incorporate into them the frequent changes or alternations taking place in the organization structure and in the patters of authority and activity relationships.
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Decentralization of AuthorityDecentralization of authority means dispersal of decision – making power to the lower levels of the organization. According to Allen, decentralization refers to the systematic effort to delegate to the lowest level all authority except that which can only be exercised at central points. Thus decentralization means reservation of same authority (power to plan, organize, direct and control) at the top level and delegation of authority to make decision at points as near as possible to where action takes place.Decentralization is not same thing as delegation. Delegation means entrustment of responsibility and authority from one individual to another. But decentralization means scattering of authority through the organization. It is the diffusion of authority with in the enterprise. Delegation can take place from one person to another and be a complete process. But decentralization is complete only when the fullest possible delegation is made to all or most of the people.Decentralization is distinct from dispersionDispersion occurs when plants and offices are located at different place with physical distance between them. Performance of work in dispersed plants and offices does not necessarily lead to decentralization. A company may be highly centralized although its physical facilities and employees are widely dispersed and company may be highly decentralized even through all physical facilities and employees are located in a single building.Distinction between Delegation and DecentralizationThe points of distinction between and decentralization are given below:1. Delegation is a process of devolution of authority where as decentralization.2. Delegation takes place between a superior and a subordinate and is a complete process. It may consist of certain tasks alone. But decentralization involves spreading out the total decision – making power.3. In delegation control rests entirely with the superior or delegator but in decentralization, the top management may exercise control only in a general manager and delegate the authority for control to the departmental manager.4. Delegation is a must for management. Subordinates must be given sufficient authority to perform their assignments otherwise they will come to the superior time and again even for minor decisions. However, decentralization is optional in the sense that the top management may or may not decide to disperse authority.Meaning and Scope of StaffingEarly definition of staffing focused narrowly on hiring people for vacant positions in an enterprise. Today, staffing is termed as human resource management and defined more broadly. Staffing may be defined as a managerial function of attracting, acquiring, developing and retaining human resources in order to provide the talent necessary for work activities leading to accomplishment of organizational objectives. This definition emphasizes that people are vital and valuable resources requiring proper care and attention. Thus, staffing involves: filling up various managerial and non-managerial positions created in the organization structure with qualified persons, upgrading the quality and usefulness of the members of organization for its success and its retaining the members by providing adequately for their welfare and career advancement.The staffing process involves job analysis, human resource planning, recruitment, selection, placement, orientation, training and development, compensation performance appraisal, career development, promotion, transfer and separation. In many organizations most of the aforesaid activities are handled by the Personnel Department, now popularly known as Human Resource Management Department. It may be noted that staffing decisions and initiatives are the basic responsibility of line managers. However, the personnel management department provides necessary specialist services as well as supportive and administrative services to line managers for effective management of human resourcesStaffing is a continuous function of management because human resources continue to be a significant factor in organizational success and therefore the organization always needs to acquire and retain in proper form its personnel. Moreover, employee welfare and development, expansion and diversification, promotion and transfers,
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demotions and separations, retirement and death, modernization and change etc are common events continually taking place in an organization, rendering staffing a never ending process. Managers have to keep a regular watch on the number and composition of people required by the organization. The continuous nature of staffing is self-evident, as employees need regular care, balance and development to be effective for contribution towards achievement of expected results. Establishing and maintaining congruence between organizational goals and employees, personal goals is also an important regular aspect of organization’s working. To keep a proper working climate is an ongoing responsibility of personnel department.Need and Importance of StaffingProgressive and successful organizations treat all employees as valuable human resources. Productivity and the resultant financial reward are dependent solely on the quality and skill of people. Some organizations make up for their lack of natural resources by their dedication to the maximum possible development of their human resources. If employees are put first, they help the enterprise to prosper. Staffing function provides proper mechanisms for efficient handling of personnel matters, including workers, grievances. Filed research indicates that employees tend to return the favour when they are treated with dignity and respect. Specially, it is reported that professional employees kept higher organizational commitment when their employer’s human resource practice were perceived to be fair and just. Staffing is responsible for creating such practices.ActivitiesStaffing activities, though all derived from organization strategy and structure, in turn activate the strategic management and the structure. Strategic orientation in staffing function increases the chances of organizational success.ProcessStaffing process and policies play a considerable role in acquiring right people at right time on right positions. Effective staffing function strives to establish cost-benefit relationship while manning the positions in the organization structure – people are acquired at lower outflows for providing greater efforts, optimal contribution and higher commitment.RelationshipStaffing is important in its relationship with other managerial functions, because without their human resources, organizations would remain empty skeletons that cannot move to achieve their goals. The functions of planning, organizing, directing and controlling become nonstarters without people n the organization. It is clear that the effectiveness of other managerial functions depends on the degree of efficiency with which the staffing function is done. An organization is healthy, strong and successful to the extent that its people are capable, skillful and committed. Further, the attitudes, orientations and performance of people partly depend on how efficiently the staffing function is handled by the enterprise and how much attention top management gives to it.NeedStaffing function takes care of the need for building a sound organization. In a sense, organization widely differs in their quality and competence due to large variations in their human resources.PrinciplesStaffing not only helps in acquiring right talent, but also strives for nurturing. There are no universally accepted staffing principles. However, Heinz Weihrich and Harold Koontz have identified certain useful major principles or guidelines for understanding and performing more effective staffing function.1. Principle of the Objective of StaffingThe objective of managerial staffing is to ensure that those qualified personnel who are able and wiling to occupy them fill organization roles. There is considerable evidence of failure to achieve results when these qualities are lacking.2. Principle of StaffingThe clearer the definition of organization roles and their human requirements and the better the techniques of
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manager appraisal and training employed, the higher the managerial quality. Those organizations that have no established job definitions, no effective appraisals and no system for training and development, will have to rely on coincidence or outside sources to fill positions with able managers. On the other hand organizations applying the systems approach to staffing and human resource management, will utilize the potentials of individuals in the enterprise more effectively and efficiently.3. Principle of Job DefinitionThe more precisely the results expected of managers are identified, the more the dimensions of their positions can be defined. Since organizational roles occupied by people with different needs, these roles must have many dimensions – such as pay, status, power, direction and possibility of accomplishment – that induce managers to perform.4. Principles of Managerial AppraisalThe more clearly variable objectives and required managerial activities are identified, the more precise can be the appraisal of managers against these criteria. This principle suggests that performance should be measured both against verifiable objectives (as in an appraisal approach based on management by objectives) and against standards of performance as managers. The appraisal of managers as manager considers how well the key managerial activities within the functions of planning; organizing, staffing, directing and controlling are carried out.5. Principle of Open CompetitionThe more an enterprise is committed to the assurance of quality management, the more it will encourage open competition among all candidates for management positions. Violation of this principles has led many firms to appoint managers with inadequate abilities. Although social pressures strongly favour promotion from within the enterprise, these forces should be resisted whenever better candidates can be brought in from the outside. At the same time, the application of this principle obligates the enterprise to appraise its people accurately and to provide them with opportunities for development.6. Principle of Management Training and DevelopmentThe more management training and development are integrated with the management process and enterprise objectives, the more effective the development programs and activities will be. This principle suggests that in the systems approach, training and development efforts are related to the managerial functions, the goals of the enterprise and the professional needs of managers.7. Principle of Training ObjectivesThe more precisely the training objectives are stated; the more likely are the chances of achieving them. The analysis of training needs is the basis for training objectives that give direction to development and facilitate the measurement of the effectiveness of training efforts. This principle brings into focus the contribution that training makes to the purpose of the enterprise and the development of individuals.8. Principles of Continuing DevelopmentThe more an enterprise is committed to managerial excellence, the more it requires that manager practice continuing self-development. This principle suggests in a fast-changing and competitive environment, that managers cannot stop learning. Instead, they have to update their managerial knowledge continuously, revaluate their approaches to managing and improve their managerial skills and performance to achieve enterprise results.Selection Process Or Elements of Selection ProcessThe major steps involved in the selection process may be discussed as follows:1. Filling in Application FormThis may be regarded as the first step of selection process. Candidates are supposed to provide complete information about them in a prescribed printed form. It may require information regarding a candidate’s name, father’s name, address, nationality, sex, marital status, religion, education qualifications, work experience, fields of extra-curriculum activities, and references of two eminent persons and so on. The application of the candidates provides the basis for further analysis of the candidature and examination of his suitability for employment. The
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specific type of information required in an application blank may vary from firm to firm any by positions within the organization. However, there is high degree of similarity with regard to general information sought in the application blanks of various organizations. If properly used application blanks can be an effective aid in selection. However, their usefulness is largely dependent on the accuracy of data and information furnished by the candidates. In their eagerness to obtain work, some applicants may be tempted to stretch the truth concerning matters such as past experience, responsibilities, salary and reasons for bearing the previous job. For this reason, many human resource managers make it a point to query applicants further regarding these matters during the employment interview.2. Preliminary ScreeningThis refers to initial assessment of basic suitability of candidates for the job positions. The human resource manage sees whether the applicants meet the basic academic and other minimum requirements as to age, work experience, etc. Such screening may be done by going through the data and information supplied in the application blanks or by holding preliminary screening interviews. The basic objectives of preliminary screening are (i) to eliminate the unsuitable candidates at an early stage, (ii) to reduce the overall cost of selection.3. Employment TestsCandidates, who are filtered through the initial screening, submit themselves to certain tests, formal or informal. Test is a means of evaluating candidates knowledge, skills, experience, attitudes, aptitudes, personality, interest, capacity, physical characteristics, level of mental ability, likes and dislikes and soon. In some cases, such as typing and shorthand, computer knowledge and efficiency, etc., tests are the only way to determine the suitability of candidates for the job.There are several types of tests, which are widely used for selection purposes. They include; intelligence tests, aptitude tests, personality tests, performance tests and so on. Written tests are found to be most popular in many cases.Tests provide a more objective, authentic and consistent basis for selection of right candidates. They help the organization in arriving at a judgment on the likely work Behavior and performance of candidates. However, certain conditions should be met if tests are to be used for employee selection. First, the tests should be reliable. In other words, they should provide consistent results. Secondly, tests should be valid. In other words, they should measure what they are designed to measure. If a test is designed to predict job performance, prospective employees who score well on the test, should prove to be objective when different scorers interpreting the results of the same test, arrive at similar interpretations. Finally, tests should be standardized. This requires them to be administered under standard conditions to a large group of persons. The purpose of standardization is to obtain norms; therefore specific test scores will be meaningful when compared to other scores in the group. If a test cannot indicate the ability to perform the job, it must not be used.Testing helps in achieving the most efficient matching of applicants with jobs. From a social standpoint, testing that is job-related, serves the objective of equal employment opportunity, to which modern societies are increasingly committed. Thus, it is vital that organizations have a thoughtful process for validating any selection tests they use. No doubt, testing is a complex, time consuming and expensive process.4. Employment InterviewAlthough employment tests provide a lot of valuation information and insight about the candidate, they do not provide a complete set of information and knowledge required about a candidate. The interview helps in evaluating information obtained from the application blank and tests. It provides an opportunity to the interviewer to integrate different pieces of information through his personal impressions and observations of the interviewee so as to such a decision regarding the suitability of the applicant for employment. Thus, the combination of tests and in view provides better results in selection. It allows applicants to obtain additional information about the prospective employer.
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An employment interview is part of almost every selection process. It is the most important step in selection. This is because an interview enables the selectors to get a first hand idea of the personality of the candidate, their gestures, communication skills, general skills, mannerisms, reactions, presence of mind and confidence. Further more an interview presents an opportunity for both the organization and the job applicant to “sell” themselves to one another and to establish their mutual expectations. However, for such expectations to be accurately established, it is essential that employment interview he as realistic as possible. In order to prevent unrealistic expectations, disillusionment and feelings of being misled in new employees, which may result in lack of job commitment and early turnover (leaving the organization), interviewees, should be told negative as well as positive aspects of a position, so that the applicants who view such negative aspects as unacceptable, can remove themselves from further consideration. Those who remain will represent a recruitment pool with accurate job expectations. Research by John P. Wanous (1980) suggests that such “realistic recruitment” contributes significantly to reducing employee turnover.Types of InterviewsIn general, there are several types of interview’s, which may be briefly discussed as follows:1. Unstructured Or Non-Directive Or Informal Or Traditional InterviewIn an unstructured interview, there are no predetermined questions or prearranged sequence of topics for discussion. Consequently, by design unstructured interviews are highly flexible and informal – no fixed questions format or systematic scoring procedure. Interviewers are free to probe into those areas seeming to deserve further investigation and to adapt (alter) their approach to the prevailing situation, as well as to changing stream of job applicants. Spontaneity characterizes this type of interview. Its direction is large determined by a job applicant’s answers. To be effective, an unstructured interview requires highly skilled and trained interviewers. Experience shows that, if properly conducted, an unstructured interview can lend to significant job-related insights. However, such interview is highly susceptible to distortion, bias, inconsistency and difficult verification of its results.2. Structured Or Patterned InterviewStructured interviews are recommended as alternative to traditional unstructured or informal interview. A structured interview may be defined as a series of job-related questions with standardized answers that are consistently applied across all interviews for a particular job. In this interview standardized questions are asked from all applicants for certain jobs and a standard form is used for recording responses. Standardization permits easy comparison of candidates. It also helps in achieving and proving validity. Of Course, no interview can be completely unstructured or nondirective and it is hard to conceive of an interview that is totally structured or patterned.Generally, structured interviews are constructed, conducted and scored by a committee of three to six members so as to try to eliminate bias. The structured interviews are more likely to provide consistent and reliable information from the various interviewers. Furthermore, if the specific interview questions in a format are drawn from an accurate job analysis, then structured interviews are also more likely to be valid. However, such interviewers have limited flexibility. The unstructured interview format (form) restricts adaptation (alteration) to unusual circumstances or unusual interviews. Such interviews do not afford the opportunity to the applicants to demonstrate their job knowledge, communication skills, etc.3. Stress InterviewMost interviews try to place interviewees at ease. However, the opposite is true in the stress interview. It is specifically intended to determine a job applicant’s interviewer purposefully attempts to create a climate of intimidation (threat), criticism and ridicule (mockery or making some one appear foolish or worthless). The purpose is to deserve the interviewee’s reaction to stress and tension. This approach is based on the theory that certain personal traits, for example, emotional stability, can be deserved only when an individual is placed in stressful surroundings. Thus, an interviewer may deliberately interrupt an applicant in his midsentence, cast
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aspersions on an applicant’s character, remain silent for protracted (longer) periods of time and adopt a hostile posture in an attempt to create a pressurized situation.The extent which stress interviews are useful is debatable. Some justify its use when the concerned job position is particularly stressful, for example, law enforcement officer, airline pilot, sales representative, or fire fighter. However, some critics contend that the kind of stress created in an interview is rarely similar to that found on a job. Moreover, there are not very many positions in which the ability to cope with stress in a primary characteristics.4. Group InterviewInterview also differs according to how many interviewers and applicants are involved. Normally, job applicants meet with interviewers one-on-one, i.e., individually. However, in the group interview, several applicants questioned together by one or more interviewers. A small group of fine or six candidates is observed and evaluated in group discussions and interactions, by the selectors.5. Series InterviewFor certain types of jobs, especially managerial jobs candidates may be required to go through a series of interviews of a progressively rigorous nature.6. Board InterviewFor important jobs, especially those of a political nature the board interview may be used. Here several interviewers, often members of a government board or committee, quiz one or more candidates.
