Unit 1Management:

Definition of Management:

Management is an art of getting things done through and with the people in formally organized groups. It is an art of creating an environment in which people can perform and individuals and can co-operate towards attainment of group goals.

Harold Koontz.

Management is an art of knowing what to do, when to do and see that it is done in the best and cheapest way.

F.W. TaylorScope and Signification of Management:

Importance of Management

According to Peter Drucker,

"Management is what the modern world is all about."

This statement means that all the development that has taken place in the world is due to efficient management.

The points below bring out the significance or importance of management.

1. Encourages Initiative

Management encourages initiative. Initiative means to do the right thing at the right time without being told or influenced by the superior. The employees should be encouraged to make their own plans and also to implement these plans. Initiative gives satisfaction to employees and success to organizations.

2. Encourages Innovation

Management also encourages innovation in the organisation. Innovation brings new ideas, new technology, new methods, new products, new services, etc. This makes the organisation more competitive and efficient.

3. Facilitates growth and expansion

Management makes optimum utilisation of available resources. It reduces wastage and increase efficiency. It encourages team work and motivates employees. It also reduces absenteeism and labour turnover. All this results in growth, expansion and diversification of the organisation.

4. Improves life of workers

Management shares some of its profits with the workers. It provides the workers with good working environment and conditions. It also gives the workers many financial and non-financial incentives. All this improves the quality of life of the workers.

5. Improves corporate image

If the management is good, then the organisation will produce good quality goods and services. This will improve the goodwill and corporate image of the organisation. A good corporate image brings many added benefits to the organisation.

6. Motivates employees

Management motivates employees by providing financial and non-financial incentives. These incentives increase the willingness and efficiency of the employees. This results in boosting productivity and profitability of the organisation.

7. Optimum use of resources

Management brings together the available resources. It makes optimum (best) use of these resources. This brings best results to the organisation.

8. Reduces wastage

Management reduces the wastage of human, material and financial resources. Wastage is reduced by proper production planning and control. If wastage is reduced then productivity will increase.

9. Increases efficiency

Efficiency is the relationship between returns and cost. Management uses many techniques to increase returns and to reduce costs. Higher efficiency brings many benefits to the organisation.

10. Improves relations

Management improves relations between individuals, groups, departments and between levels of management. Better relations lead to better team work. Better team work brings success to the organisation.

11. Reduces absenteeism and labour turnover

Absenteeism means the employee is absent without permission.

Labour Turnover means the employee leaves the organisation.

Labour absenteeism and turnover increases the cost and causes many problems in the smooth functioning of the organisation. Management uses different techniques to reduce absenteeism and labour turnover in the organisation.

12. Encourages Team Work

Management encourages employees to work as a team. It develops a team spirit in the organisation. This unity bring success to the organizationFUNCTIONS OF MANAGEMENT:

Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, There are four fundamental functions of management i.e. planning, organizing, actuating and controlling. According to Henry Fayol, To manage is to forecast and plan, to organize, to command, & to control. Whereas Luther Gullick has given a keyword POSDCORB where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and ODONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

Organizing

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnels. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:

Identification of activities.

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.

Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & ODonell, Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).

Recruitment, selection & placement.

Training & development.

Remuneration.

Performance appraisal.

Promotions & transfer.

Directing

It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:

Supervision

Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.

Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.

Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haiman, Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation. According to Koontz & ODonell Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished. Therefore controlling has following steps: Establishment of standard performance.

Measurement of actual performance.

Comparison of actual performance with the standards and finding out deviation if any.

Corrective action.PRINCIPLES OF MANAGEMENT:

Management Principles developed by Henri Fayol:

1. DIVISION OF WORK: Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task. Fayol presented work specialization as the best way to use the human resources of the organization.

2. AUTHORITY: The concepts of Authority and responsibility are closely related. Authority was defined by Fayol as the right to give orders and the power to exact obedience. Responsibility involves being accountable, and is therefore naturally associated with authority. Whoever assumes authority also assumes responsibility.

3. DISCIPLINE: A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.

4. UNITY OF COMMAND: Workers should receive orders from only one manager.

5. UNITY OF DIRECTION: The entire organization should be moving towards a common objective in a common direction.

6. SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: The interests of one person should not take priority over the interests of the organization as a whole.

7. REMUNERATION: Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a workers rate of pay.

8. CENTRALIZATION: Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working.

9. SCALAR CHAIN: Managers in hierarchies are part of a chain like authority scale. Each manager, from the first line supervisor to the president, possess certain amounts of authority. The President possesses the most authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a scalar chain and adherence to it are necessary if the organization is to be successful.

10. ORDER: For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be treated as equally as possible.

11. EQUITY: All employees should be treated as equally as possible.

12. STABILITY OF TENURE OF PERSONNEL: Retaining productive employees should always be a high priority of management. Recruitment and Selection Costs, as well as increased product-reject rates are usually associated with hiring new workers.

13. INITIATIVE: Management should take steps to encourage worker initiative, which is defined as new or additional work activity undertaken through self direction.

14. ESPIRIT DE CORPS: Management should encourage harmony and general good feelings among employees.ROLES OF MANAGER:

A managers role is very crucial in an organization. The success of organization depends upon managers ability in utilizing the resources for achieving the pre determined goals. Henry Mintzberg suggested three areas where a manger has to work.

Interpersonal Role

Informational Role

Decisional Role

Interpersonal role:

A manger is concerned with his interacting with people both inside the organization and outsiders. There are three types of interpersonal roles.

Figure Head: In figure head role manager performs activities which are ceremonial and symbolic nature. These include greeting the visitors attending the social functions involving employees, handing out merit certificates and other awards to outstanding employees.

Leader: Managers leader role involves leading his subordinates and motivating them for willing contributions. Manager is responsible for activities of his subordinates. He has to set example of hard work and dedication so that subordinate follow his directions with respect.

Liaison Role: In liaison role manager serves as a connecting link between his and outsiders or between his unit and other organizational units.

Informational Role

Informational role involves receiving collecting of information and distributing them as required. It is of three types

Monitor: In monitoring role manager collects the information which can affect the organizational activities by reading magazines and periodicals, reports from the departments, talking with others to learn changes in the publics taste.

Disseminator: In disseminator role manger distribute the information to his subordinates and superiors by sending circulars, holding meetings and making phone calls.

Spokesperson: In spokesperson role the manager represents his organization or unit with interacting with outsiders. These may customer, financer, govt. suppliers or other agencies in society. It can be done by attending press conferences, meetings and by issuing notices.

Decisional Role:

It is very important role. Manager has to take decisions daily. In decisional role he performs four roles.

Entrepreneur: As an entrepreneur the manger assumes certain risks which can affect the organization. He has to take decisions like expansion or diversification, initiation of new projects, development of older procedures etc.

As a Conflict Handler: As a conflict handler he has to take care of certain disturbance in organization such as resolving employee disputes and strikes etc.

Resource Allocator: As a resource allocator managers fulfill the demand of various units in terms of human physical and financial. He tries to utilize these resources in such way that no department suffers for their inadequacy.

Negotiator: As negotiator manager has to take decisions regarding prices with suppliers and customers. He also deals with trade unions and negotiates with them regarding working conditions and wage fixation.SOCIAL RESPONSIBILITY AND ETICHS IN MANAGEMENT:

Social Responsibilities of Management

The term social responsibilities can be defined as the obligation of management towards the society and others concerned.

Reason for Social Responsibilities: Business enterprises are creatures of society and should respond to the demands of society. If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive. Therefore the long term interests of business are best served when management assume social responsibilities. The image of business organization liked with the quality of its products and customer service and the extent to which it fulfills the expectations of owners, employees, consumers, government and the community at large. For long term success it matters a great deal if the firm has a favorable image in the public mind. Every business enterprise is a organ of society and its activities have impact on the social scene. Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advances the basic values of society, and constitute to its stability, strength and harmony.

Increasing concern for the social responsibility of management, it is now recognized that besides taking care of the financial interest of owners, managers of business firms must also take into account the interest of various other groups such as employees, consumers, the government and the community as a whole. These interested groups are directly or indirectly affected by the pursuit of business activities and they are the stake-holders of the business enterprise.

Responsibility towards owners: The primary responsibilities of management is to assure a fair and reasonable rate of return on capital and fair return on investment can be determined on the basis of difference in the risks of business in different fields of activity. With the growth of business the shareholders can also expect appreciation in the value of their capital.

Responsibility towards employees: Management responsibility towards employees relate to the fair wages and salaries, satisfactory work environment, labour management relations and employee welfare. Fair wages should be fixed in the light of labor productivity, the prevailing wage rates in the same or neighboring areas and relative importance of jobs. Managers salaries and allowances are expected to be linked with their responsibility, initiative and skill. But the spread between minimum wages and highest salaries should be reasonable. Employees are expected to build up and maintain harmonious relationships between superior and subordinates. Another aspect of responsibility towards employees is the provision of welfare amenities like safety and security of working conditions, medical facilities, and housing, canteen, leave and retirement benefits.

Responsibility towards consumers: In a competitive market, serving consumers is supposed to be a prime concern of management. But in reality perfect competition does not prevail in all product markets. In the event of shortage of supply there is no automatic correction. Besides consumers are often victims of unfair trade practices and unethical conduct of business. Consumer interests are thus protected to some extent with laws and pressure of organized consumer groups. Management should anticipate these developments, satisfy consumer needs and protect consumer interests. Goods must be of appropriate standard and quality and be available in adequate quantities at reasonable prices. Management should avoid resorting to hoarding or creating artificial scarcity as well as false and misleading advertisements.

Responsibility towards the Governments: As a part of their social responsibility, management must conduct business affair in lawful manner, honestly pay all the taxes and dues, and should not corrupt public officials for selfish ends. Business activities must also confirm to the economic and social policies of the government.

Responsibility towards the community and society: The socially responsible role of management in relation to the community are expected to be revealed by its policies with respect to the employment of handicapped persons, and weaker sections of the community, environmental protection, pollution control, setting up industries in backward areas, and providing relief to the victims of natural calamities etc.

CLASSICAL THEORY:Classical theory of management

BUREAUCRACY MANAGEMENT (Max Weber-1900)

Bureaucracy management is a stream of classical theory of management. Max Weber was the first of management theorists who were concerned the management structure with the sets of rule and regulations. Bureaucracy management depends upon administration devices. Max Weber presents the ideal organization structure. There are four major characteristics of organizational structure.-

Hierarchical positions

Rules of system

Division of labour for specialization

Impersonal relationship

Advantage of bureaucracy management:

Hierarchy of authority.

Employment is based on the technical efficiency.

Eliminate managerial inconsistencies.

A well understood system.

Maintain the consistency of working.

Rules and regulation of the duties are followed by the employees.

Records are kept for future references.

People are given authority according to their position in organization.

Disadvantage of bureaucracy management:

Human resources are not tackled.

Inter personal relations are discarded.

It does not allow for personal growth and development.

It does not possess adequate.

Organization becomes static and change is not anticipated.

Difficult to keep co-ordination and communication between employees.

It is a closed system.

NEO CLASSICAL THEORY:

Neo- classical theory is also referred to as behavioral science approach to modifying and improving the classical theory. While classical theories focused more on structure and physical aspects of the worker and Neo-classical theory gives importance to human and social aspects of the worker and his relations in the organization.

The neo-classical theory is based on the Hawthrone experiments. Elton Mayo conducted the Hawthrone experiments at Hawthron plant of General Electronic Company (GEC) between 1927 and 1993 at Chicago with 30,000 workers. The Hawthron plant was manufacturing telephone system bell. The objective of the experiment was to find out the behavior and attitude of workers at workplace under better working conditions. In the company, when management provide the benefits of medical allowance and pension with recreational facilities. Even thought workers get all facilities but the productivity was not up to expectation. So, in 1924, the professor Elton Mayo and his research team investigate the reasons for dissatisfaction of employees and decrease in productivity.

Four Phase of Hawthrone experiments:

Prof. Elton Mayo and his team conducted researches in four phases.

Illumination experiments (1924 1927)

Relay assembly room experiments (1927 1928)

Mass interviewing programme (1928 -1930)

Bank wiring room study (1931 1932)

Result of Hawthrone Experiments:

Motivation: Employees are not motivated by only money (bonus scheme and incentive).

Communication: communication helps the management and employees to have better mutual understanding. Through proper communication, management can easily identified the problem faced by its employees and can easily solve out.

Social factors: Social factors are responsible for deciding the level of output.

Behavior of workers: workers are not as individual identity but as members of a group in an organization and they have their own norms and beliefs. Workers behavior depends upon his mental level and emotions. Workers began to influence their group behavior towards management.

Relationship: Employees do not like order and command. They preferred to maintain amicable relationship with their co-workers. They want co-operative attitude from their superiors.

Production level: Teamwork and Group psychology increases productivity.

Criticism of Hawthrone Experiments:

Hawthrone experiment was not conducted scientifically.

In the experiment, various format and structure are not feasible.

Eltone Mayo gives more importance to human aspect and ignoring other important aspects.

Group conflict is prevalent in an organization.

Hawthrone experiment did not give any recognition to the forces which are responsible for productivity in the organization.

During experiment, Eltone Mayo has assumed that a satisfied employee would be productive. But the finding was different. There is no link between working condition and productivity.

Major contributors of Neo-classical theory are:

Chris Argyris- He recommended that worker should be given freedom to make their own judgments.

Mary Praker Follett: He referred group influence.

Dougals Me Gorgor: he referred two views.

X-theory- it is based on classical theory and

Y-theory- it is based on neo-classical theory.

Abraham Maslow: He referred individual needs.

Unit 2: Planning and Decision Making

Planning means looking ahead and chalking out future courses of action to be followed. It is a preparatory step. It is a systematic activity which determines when, how and who is going to perform a specific job. Planning is a detailed programme regarding future courses of action. It is rightly said Well plan is half done. Therefore planning takes into consideration available & prospective human and physical resources of the organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands with the available resources.

According to Urwick, Planning is a mental predisposition to do things in orderly way, to think before acting and to act in the light of facts rather than guesses. Planning is deciding best alternative among others to perform different managerial functions in order to achieve predetermined goals.

According to Koontz & ODonell, Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap between where we are to, where we want to go. It makes possible things to occur which would not otherwise occur.

Steps in Planning Function

Planning function of management involves following steps:-

Establishment of objectives

a) Planning requires a systematic approach.

b) Planning starts with the setting of goals and objectives to be achieved.

c) Objectives provide a rationale for undertaking various activities as well as indicate direction of efforts.

d) Moreover objectives focus the attention of managers on the end results to be achieved.

e) As a matter of fact, objectives provide nucleus to the planning process. Therefore, objectives should be stated in a clear, precise and unambiguous language. Otherwise the activities undertaken are bound to be ineffective.

f) As far as possible, objectives should be stated in quantitative terms. For example, Number of men working, wages given, units produced, etc. But such an objective cannot be stated in quantitative terms like performance of quality control manager, effectiveness of personnel manager.

g) Such goals should be specified in qualitative terms.

h) Hence objectives should be practical, acceptable, workable and achievable.Establishment of Planning Premises

1. Planning premises are the assumptions about the lively shape of events in future.

2. They serve as a basis of planning.

3. Establishment of planning premises is concerned with determining where one tends to deviate from the actual plans and causes of such deviations.

4. It is to find out what obstacles are there in the way of business during the course of operations.

5. Establishment of planning premises is concerned to take such steps that avoids these obstacles to a great extent.

6. Planning premises may be internal or external. Internal includes capital investment policy, management labour relations, philosophy of management, etc. Whereas external includes socio- economic, political and economical changes.

7. Internal premises are controllable whereas external are non- controllable.

Choice of alternative course of action

1. When forecast are available and premises are established, a number of alternative course of actions have to be considered.

2. For this purpose, each and every alternative will be evaluated by weighing its pros and cons in the light of resources available and requirements of the organization.

3. The merits, demerits as well as the consequences of each alternative must be examined before the choice is being made.

4. After objective and scientific evaluation, the best alternative is chosen.

5. The planners should take help of various quantitative techniques to judge the stability of an alternative.

Formulation of derivative plans

1. Derivative plans are the sub plans or secondary plans which help in the achievement of main plan.

2. Secondary plans will flow from the basic plan. These are meant to support and expediate the achievement of basic plans.

3. These detail plans include policies, procedures, rules, programmes, budgets, schedules, etc. For example, if profit maximization is the main aim of the enterprise, derivative plans will include sales maximization, production maximization, and cost minimization.

4. Derivative plans indicate time schedule and sequence of accomplishing various tasks.

Securing Co-operation

1. After the plans have been determined, it is necessary rather advisable to take subordinates or those who have to implement these plans into confidence.

2. The purposes behind taking them into confidence are :-

a. Subordinates may feel motivated since they are involved in decision making process.

b. The organization may be able to get valuable suggestions and improvement in formulation as well as implementation of plans.

c. Also the employees will be more interested in the execution of these plans.

Follow up/Appraisal of plans

1. After choosing a particular course of action, it is put into action.

2. After the selected plan is implemented, it is important to appraise its effectiveness.

3. This is done on the basis of feedback or information received from departments or persons concerned.

4. This enables the management to correct deviations or modify the plan.

5. This step establishes a link between planning and controlling function.

6. The follow up must go side by side the implementation of plans so that in the light of observations made, future plans can be made more realistic.STEPS IN PLANNING PROCESS:As planning is one of great importance to an organisation, the entire process of planning should be carried out in a systematic manner. Planning is an intellectual process which an executive carries out before he does any job with the help of other people. It involves the following steps:

1. Determination of the objectives:

The first step in planning is to identify certain objectives. The objectives set must clearly indicate what is to be achieved, where action should take place, who should perform it and when it is to be accomplished. The objectives should be established for the entire organisation and for each and every department. Planning has no utility if it is not related to certain objectives.

2. Collection and forecasting of Information:

Sufficient information must be collected in order to make plans and sub plans. Necessary information includes the critical assessment of current status of the organisation together with a forward look at the environment that is anticipated. The collection and forecasting of the information must be done in terms of external and internal environment. The considerations of the external environments must the competitions now and in the future. The assessment of internal environment may consist of the strong and weak point of the organisation. This is an important step of planning process.

3. Development of planning premises:

The next step is the establishment of planning premises. Planning premises are the assumptions and predictions about the future. The assumptions are the basis of planning. Forecasting is important in premising. It helps in making realistic assumptions about sales, costs, prices, products etc in future. This requires a collection of data on present trends and future possibilities.

4. Discovering alternative courses of action:

Usually, there are several alternatives for any plan. The manager should try to find out all the possible alternatives.At the time of developing alternatives he should screen out most viable alternatives. So he has to analyse in detail a limited number of alternatives.

5. Selection of best alternative:

The various alternatives identified are evaluated and compared in terms of their expected costs and benefits. Many quantitative techniques are available to evaluate alternatives. after evaluating the various alternatives the best alternative should be selected for implementation.

6. Formulation of derivative plans:

The next step is to develop detailed sub plans for its implementation. Derivative plans are required to support the overall plans. The derivative plans are developed in the frame work of overall plans.These are drawn up with respect to different areas of activity.

7. Communicating the plan :

It is very important to get the co operation of the subordinates at every stage of its implementation. For this purpose the plans should be communicated and explained to them so that they can get the clear picture of what to be done. An organisation is not benefited from planning process until they are put into action.

8. Follow up measures:

To ensure the plans are proceeding along the right lines, the actual performance is compared with the planned performance. In this way, any short coming can be noted and suitable remedial action can be taken.

OBJECTIVES:

The main objectives of management are:

Getting Maximum Results with Minimum Efforts - The main objective of management is to secure maximum outputs with minimum efforts & resources. Management is basically concerned with thinking & utilizing human, material & financial resources in such a manner that would result in best combination. This combination results in reduction of various costs.

Increasing the Efficiency of factors of Production - Through proper utilization of various factors of production, their efficiency can be increased to a great extent which can be obtained by reducing spoilage, wastages and breakage of all kinds, this in turn leads to saving of time, effort and money which is essential for the growth & prosperity of the enterprise.

Maximum Prosperity for Employer & Employees - Management ensures smooth and coordinated functioning of the enterprise. This in turn helps in providing maximum benefits to the employee in the shape of good working condition, suitable wage system, incentive plans on the one hand and higher profits to the employer on the other hand.

Human betterment & Social Justice - Management serves as a tool for the upliftment as well as betterment of the society. Through increased productivity & employment, management ensures better standards of living for the society. It provides justice through its uniform policies.

STRATEGIES:

Strategy is an action that managers take to attain one or more of the organizations goals. Strategy can also be defined as A general direction set for the company and its various components to achieve a desired state in the future. Strategy results from the detailed strategic planning process.

A strategy is all about integrating organizational activities and utilizing and allocating the scarce resources within the organizational environment so as to meet the present objectives. While planning a strategy it is essential to consider that decisions are not taken in a vaccum and that any act taken by a firm is likely to be met by a reaction from those affected, competitors, customers, employees or suppliers.

Strategy can also be defined as knowledge of the goals, the uncertainty of events

and the need to take into consideration the likely or actual behavior of others. Strategy is the blueprint of decisions in an organization that shows its objectives and goals, reduces the key policies, and plans for achieving these goals, and defines the business the company is to carry on, the type of economic and human organization it wants to be, and the contribution it plans to make to its shareholders, customers and society at large.

Features of Strategy

Strategy is Significant because it is not possible to foresee the future. Without a perfect foresight, the firms must be ready to deal with the uncertain events which constitute the business environment.

Strategy deals with long term developments rather than routine operations, i.e. it deals with probability of innovations or new products, new methods of productions, or new markets to be developed in future.

Strategy is created to take into account the probable behavior of customers and competitors. Strategies dealing with employees will predict the employee behavior.

Strategy is a well defined roadmap of an organization. It defines the overall mission, vision and direction of an organization. The objective of a strategy is to maximize an organizations strengths and to minimize the strengths of the competitors.

Strategy, in short, bridges the gap between where we are and where we want to be

POLICIES;

Policies - Definition and Types

Policies are guides to thinking in decision making. They reflect and interpret objectives and guide decisions to to achieve the objectives. They establish the framework for planning programs. They establish limits or boundaries to plans whereas planning premises provide the operational background.

Policies themselves are plans. They are also the result of planning and decision making. Policies also have levels. A policy can be a major as that of financing growth through retained profits.

Policies can be categorized as originated policy, appealed policy, implied policy, and externally imposed policy.

The most logical way of policy setting is that originated by managers at a certain level for the express purpose of guiding their decisions and the decisions of their subordinates in the operation of business.

The decisions made by superiors in the on problems referred to them can develop into policies and such policies are termed as appealed policy.

Many times policies develop from the actions that people see about them. If a company talks of high quality in speeches and slogans, but is frequently producing and selling shoddy goods, people working in the company assume that poor quality is the policy of the company. Implied policy emerges from instances where stated policy is not enforced.

Government, trade associations and trade unions impose certain policies on the organizations.

Guidelines for Effective Policies

Policies should reflect objectives and plans.

Policies should be consistent.

Policies should be flexible

Policies should be distinguished from rules and procedures.

Policies should be in writing.

Policies should be taught.

Policies should be controlled

Policies in Various Functional Areas of Business

In the following functional areas, policies are announced generally to guide decision making.

Product selection and development

Pricing

Sales promotion

Distribution channels

Production and inventory

Finance

Personnel selection and training

Compensation

Employee benefits

PLANNING PREMISES:

Meaning of Planning Premises

Planning premises are the basic assumptions about the environment.

These assumptions are essential to make plans more realistic and operational. Planning premises provide a framework. All plans are made within this framework. There are many environmental factors, which influence the plan. Assumptions are made about these factors. These assumptions are called premises.

Types of Planning Premises

Different types of planning premises are depicted in the picture (figure) below.

1. Internal and External Premises

Internal Premises come from the business itself. It includes skills of the workers, capital investment policies, philosophy of management, sales forecasts, etc.

External Premises come from the external environment. That is, economic, social, political, cultural and technological environment. External premises cannot be controlled by the business.

2. Controllable, Semi-controllable and Uncontrollable Premises

Controllable Premises are those which are fully controlled by the management. They include factors like materials, machines and money.

Semi-controllable Premises are partly controllable. They include marketing strategy.

Uncontrollable Premises are those over which the management has absolutely no control. They include weather conditions, consumers' behavior, government policy, natural calamities, wars, etc.

3. Tangible and Intangible Premises

Tangible Premises can be measured in quantitative terms. They include units of production and sale, money, time, hours of work, etc.

Intangible Premises cannot be measured in quantitative terms. They include goodwill of the business, employee's morale, employee's attitude and public relations.

4. Constant and Variable Premises

Constant Premises do not change. They remain the same, even if there is a change in the course of action. They include men, money and machines.

Variable Premises are subject to change. They change according to the course of action. They include union-management relations.

MANAGEMENT BY OBJECTIVES:

An effective management goes a long way in extracting the best out of employees and make them work as a single unit towards a common goal.

The term Management by Objectives was coined by Peter Drucker in 1954.

What is Management by Objective ?

The process of setting objectives in the organization to give a sense of direction to the employees is called as Management by Objectives.

It refers to the process of setting goals for the employees so that they know what they are supposed to do at the workplace.

Management by Objectives defines roles and responsibilities for the employees and help them chalk out their future course of action in the organization.

Management by objectives guides the employees to deliver their level best and achieve the targets within the stipulated time frame.

Need for Management by Objectives (MBO)

The Management by Objectives process helps the employees to understand their duties at the workplace.

KRAs are designed for each employee as per their interest, specialization and educational qualification.

The employees are clear as to what is expected out of them.

Management by Objectives process leads to satisfied employees. It avoids job mismatch and unnecessary confusions later on.

Employees in their own way contribute to the achievement of the goals and objectives of the organization. Every employee has his own role at the workplace. Each one feels indispensable for the organization and eventually develops a feeling of loyalty towards the organization. They tend to stick to the organization for a longer span of time and contribute effectively. They enjoy at the workplace and do not treat work as a burden.

Management by Objectives ensures effective communication amongst the employees. It leads to a positive ambience at the workplace.

Management by Objectives leads to well defined hierarchies at the workplace. It ensures transparency at all levels. A supervisor of any organization would never directly interact with the Managing Director in case of queries. He would first meet his reporting boss who would then pass on the message to his senior and so on. Every one is clear about his position in the organization.

The MBO Process leads to highly motivated and committed employees.

The MBO Process sets a benchmark for every employee. The superiors set targets for each of the team members. Each employee is given a list of specific tasks.

Limitations of Management by objectives Process

It sometimes ignores the prevailing culture and working conditions of the organization.

More emphasis is being laid on targets and objectives. It just expects the employees to achieve their targets and meet the objectives of the organization without bothering much about the existing circumstances at the workplace. Employees are just expected to perform and meet the deadlines. The MBO Process sometimes do treat individuals as mere machines.

The MBO process increases comparisons between individuals at the workplace. Employees tend to depend on nasty politics and other unproductive tasks to outshine their fellow workers. Employees do only what their superiors ask them to do. Their work lacks innovation, creativity and sometimes also becomes monotonous.

DECISION MAKING PROCESS:

Six steps in the decision making process with diagram are discussed below.

1. Defining and Analysing the real problem

The manager should first find out what is the real problem. The problem may be due to bad relations between management and employees, decrease in sales, increase in cost, etc. After finding out the true problem manager must analyse it carefully. He should find out the cause and effect of the problem.

2. Developing Alternative Solutions

After defining and analysing the real problem, the manager should develop (make) alternative (different) solutions for solving the problem. Only realistic solutions should be considered. Group participation and computers should be used for developing alternative solutions.

3. Evaluating the Alternative Solutions

The manager should carefully evaluate the merits and demerits of each alternative solution. He should compare the cost of each solution. He should compare the risks involved. He should also compare the feasibility of each solution. He should find out which solution will be accepted by the employees.

4. Selecting the best Solution

After evaluating all the solutions, the manager should select the best solution. He should select a solution which is less costly and less risky. He should select a solution which is most feasible and which is accepted by the employees. In short, the manager should select a solution which has the most merits and least demerits. The best solution is called the "Decision".

5. Implementing the Decision

After making the decision, the manager should implement it. That is, he should put the decision into action. He should communicate the decision to the employees. He should persuade the employees to accept the decision. This can be done by involving them in the decision making process. Then the manager should provide the employees with all the resources, which are required for implementing the decision. He should also motivate them to implement the decision.

6. Follow Up

After implementing the decision, the manager must do follow up. That is, he must get the feedback about the decision. He should find out whether the decision was effective or not. This is done by comparing the decision with the action, finding out the deviations (differences) and taking essential steps to remove these deviations. So, follow-up is just like the control function. It helps to improve the quality of future decisions.

UNIT 3

Concepts of Organizing

The working relationships vertical and horizontal associations between individuals and groups that exist within an organization affect how its activities are accomplished and coordinated. Effective organizing depends on the mastery of several important concepts: work specialization, chain of command, authority, delegation, span of control, and centralization versus decentralization. Many of these concepts are based on the principles developed by Henri Fayol.

Work specialization

One popular organizational concept is based on the fundamental principle that employees can work more efficiently if they're allowed to specialize. Work specialization, sometimes called division of labor, is the degree to which organizational tasks are divided into separate jobs. Employees within each department perform only the tasks related to their specialized function.

When specialization is extensive, employees specialize in a single task, such as running a particular machine in a factory assembly line. Jobs tend to be small, but workers can perform them efficiently. By contrast, if a single factory employee built an entire automobile or performed a large number of unrelated jobs in a bottling plant, the results would be inefficient.

Despite the apparent advantages of specialization, many organizations are moving away from this principle. With too much specialization, employees are isolated and perform only small, narrow, boring tasks. In addition, if that person leaves the company, his specialized knowledge may disappear as well. Many companies are enlarging jobs to provide greater challenges and creating teams so that employees can rotate among several jobs.

Chain of command

The chain of command is an unbroken line of authority that links all persons in an organization and defines who reports to whom. This chain has two underlying principles: unity of command and scalar principle.

Unity of command: This principle states that an employee should have one and only one supervisor to whom he or she is directly responsible. No employee should report to two or more people. Otherwise, the employee may receive conflicting demands or priorities from several supervisors at once, placing this employee in a no-win situation.

Sometimes, however, an organization deliberately breaks the chain of command, such as when a project team is created to work on a special project. In such cases, team members report to their immediate supervisor and also to a team project leader. Another example is when a sales representative reports to both an immediate district supervisor and a marketing specialist, who is coordinating the introduction of a new product, in the home office.

Nevertheless, these examples are exceptions to the rule. They happen under special circumstances and usually only within a special type of employee group. For the most part, however, when allocating tasks to individuals or grouping assignments, management should ensure that each has one boss, and only one boss, to whom he or she directly reports.

Scalar principle: The scalar principle refers to a clearly defined line of authority that includes all employees in the organization. The classical school of management suggests that there should be a clear and unbroken chain of command linking every person in the organization with successively higher levels of authority up to and including the top manager. When organizations grow in size, they tend to get taller, as more and more levels of management are added. This increases overhead costs, adds more communication layers, and impacts understanding and access between top and bottom levels. It can greatly slow decision making and can lead to a loss of contact with the client or customer.

Authority

Authority is the formal and legitimate right of a manager to make decisions, issue orders, and allocate resources to achieve organizationally desired outcomes. A manager's authority is defined in his or her job description.

Organizational authority has three important underlying principles:

Authority is based on the organizational position, and anyone in the same position has the same authority.

Authority is accepted by subordinates. Subordinates comply because they believe that managers have a legitimate right to issue orders.

Authority flows down the vertical hierarchy. Positions at the top of the hierarchy are vested with more formal authority than are positions at the bottom.

In addition, authority comes in three types:

Line authority gives a manager the right to direct the work of his or her employees and make many decisions without consulting others. Line managers are always in charge of essential activities such as sales, and they are authorized to issue orders to subordinates down the chain of command.

Staff authority supports line authority by advising, servicing, and assisting, but this type of authority is typically limited. For example, the assistant to the department head has staff authority because he or she acts as an extension of that authority. These assistants can give advice and suggestions, but they don't have to be obeyed. The department head may also give the assistant the authority to act, such as the right to sign off on expense reports or memos. In such cases, the directives are given under the line authority of the boss.

Functional authority is authority delegated to an individual or department over specific activities undertaken by personnel in other departments. Staff managers may have functional authority, meaning that they can issue orders down the chain of command within the very narrow limits of their authority. For example, supervisors in a manufacturing plant may find that their immediate bosses have line authority over them, but that someone in corporate headquarters may also have line authority over some of their activities or decisions.

Why would an organization create positions of functional authority? After all, this authority breaks the unity of command principle by having individuals report to two bosses. The answer is that functional authority allows specialization of skills and improved coordination. This concept was originally suggested by Frederick Taylor. He separated planning from doing by establishing a special department to relieve the laborer and the foreman from the work of planning. The role of the foreman became one of making sure that planned operations were carried out. The major problem of functional authority is overlapping relationships, which can be resolved by clearly designating to individuals which activities their immediate bosses have authority over and which activities are under the direction of someone else.Delegation

A concept related to authority is delegation. Delegation is the downward transfer of authority from a manager to a subordinate. Most organizations today encourage managers to delegate authority in order to provide maximum flexibility in meeting customer needs. In addition, delegation leads to empowerment, in that people have the freedom to contribute ideas and do their jobs in the best possible ways. This involvement can increase job satisfaction for the individual and frequently results in better job performance. Without delegation, managers do all the work themselves and underutilize their workers. The ability to delegate is crucial to managerial success. Managers need to take four steps if they want to successfully delegate responsibilities to their teams.

Specifically assign tasks to individual team members.

The manager needs to make sure that employees know that they are ultimately responsible for carrying out specific assignments.

Give team members the correct amount of authority to accomplish assignments.

Typically, an employee is assigned authority commensurate with the task. A classical principle of organization warns managers not to delegate without giving the subordinate the authority to perform to delegated task. When an employee has responsibility for the task outcome but little authority, accomplishing the job is possible but difficult. The subordinate without authority must rely on persuasion and luck to meet performance expectations. When an employee has authority exceeding responsibility, he or she may become a tyrant, using authority toward frivolous outcomes.

Make sure that team members accept responsibility.

Responsibility is the flip side of the authority coin. Responsibility is the duty to perform the task or activity an employee has been assigned. An important distinction between authority and responsibility is that the supervisor delegates authority, but the responsibility is shared. Delegation of authority gives a subordinate the right to make commitments, use resources, and take actions in relation to duties assigned. However, in making this delegation, the obligation created is not shifted from the supervisor to the subordinate it is shared. A supervisor always retains some responsibility for work performed by lower-level units or individuals.

Create accountability.

Team members need to know that they are accountable for their projects. Accountability means answering for one's actions and accepting the consequences. Team members may need to report and justify task outcomes to their superiors. Managers can build accountability into their organizational structures by monitoring performances and rewarding successful outcomes. Although managers are encouraged to delegate authority, they often find accomplishing this step difficult for the following reasons:

Delegation requires planning, and planning takes time. A manager may say, By the time I explain this task to someone, I could do it myself. This manager is overlooking the fact that the initial time spent up front training someone to do a task may save much more time in the long run. Once an employee has learned how to do a task, the manager will not have to take the time to show that employee how to do it again. This improves the flow of the process from that point forward.

Managers may simply lack confidence in the abilities of their subordinates. Such a situation fosters the attitude, If you want it done well, do it yourself. If managers feel that their subordinates lack abilities, they need to provide appropriate training so that all are comfortable performing their duties.

Managers experience dual accountability. Managers are accountable for their own actions and the actions of their subordinates. If a subordinate fails to perform a certain task or does so poorly, the manager is ultimately responsible for the subordinate's failure. But by the same token, if a subordinate succeeds, the manager shares in that success as well, and the department can be even more productive.

Finally, managers may refrain from delegating because they are insecure about their value to the organization. However, managers need to realize that they become more valuable as their teams become more productive and talented.

Despite the perceived disadvantages of delegation, the reality is that a manager can improve the performance of his or her work groups by empowering subordinates through effective delegation. Few managers are successful in the long term without learning to delegate effectively.

So, how do managers learn to delegate effectively? The following additional principles may be helpful for managers who've tried to delegate in the past and failed:

Principle 1: Match the employee to the task. Managers should carefully consider the employees to whom they delegate tasks. The individual selected should possess the skills and capabilities needed to complete the task. Perhaps even more important is to delegate to an individual who is not only able to complete the task but also willing to complete the task. Therefore, managers should delegate to employees who will view their accomplishments as personal benefits.

Principle 2: Be organized and communicate clearly. The manager must have a clear understanding of what needs to be done, what deadlines exist, and what special skills are required. Furthermore, managers must be capable of communicating their instructions effectively if their subordinates are to perform up to their expectations.

Principle 3: Transfer authority and accountability with the task. The delegation process is doomed to failure if the individual to whom the task is delegated is not given the authority to succeed at accomplishing the task and is not held accountable for the results as well. Managers must expect employees to carry the ball and then let them do so. This means providing the employees with the necessary resources and power to succeed, giving them timely feedback on their progress, and holding them fully accountable for the results of their efforts. Managers also should be available to answer questions as needed.

Principle 4: Choose the level of delegation carefully. Delegation does not mean that the manager can walk away from the task or the person to whom the task is delegated. The manager must maintain some control of both the process and the results of the delegated activities. Depending upon the confidence the manager has in the subordinate and the importance of the task, the manager can choose to delegate at several levels.

Span of control

Span of control (sometimes called span of management) refers to the number of workers who report to one manager. For hundreds of years, theorists have searched for an ideal span of control. When no perfect number of subordinates for a manager to supervise became apparent, they turned their attention to the more general issue of whether the span should be wide or narrow.

A wide span of management exists when a manager has a large number of subordinates. Generally, the span of control may be wide when

The manager and the subordinates are very competent.

The organization has a well-established set of standard operating procedures.

Few new problems are anticipated.

A narrow span of management exists when the manager has only a few subordinates. The span should be narrow when

Workers are located far from one another physically.

The manager has a lot of work to do in addition to supervising workers.

A great deal of interaction is required between supervisor and workers.

New problems arise frequently.

Keep in mind that the span of management may change from one department to another within the same organization.

Centralization versus decentralization

The general pattern of authority throughout an organization determines the extent to which that organization is centralized or decentralized.

A centralized organization systematically works to concentrate authority at the upper levels. In a decentralized organization, management consciously attempts to spread authority to the lower organization levels.

A variety of factors can influence the extent to which a firm is centralized or decentralized. The following is a list of possible determinants:

The external environment in which the firm operates. The more complex and unpredictable this environment, the more likely it is that top management will let low-level managers make important decisions. After all, low-level managers are closer to the problems because they are more likely to have direct contact with customers and workers. Therefore, they are in a better position to determine problems and concerns.

The nature of the decision itself. The riskier or the more important the decision, the greater the tendency to centralize decision making.

The abilities of low-level managers. If these managers do not have strong decision-making skills, top managers will be reluctant to decentralize. Strong low-level decision-making skills encourage decentralization.

The organization's tradition of management. An organization that has traditionally practiced centralization or decentralization is likely to maintain that posture in the future.In principle, neither philosophy is right or wrong. What works for one organization may or may not work for another. Kmart Corporation and McDonald's have both been very successful both practice centralization. By the same token, decentralization has worked very well for General Electric and Sears. Every organization must assess its own situation and then choose the level of centralization or decentralization that works best.

SPAN OF MANAGEMENT:

Span of management refers to the number of subordinates that a manger can efficiently manage. Number of subordinate directly reporting to a manager is known as span. Span of management is important for

1. Determining the complexity of an individual managers job and

2. Determining shape and structure of the organisation

Fewer the number of subordinates reporting to a manger larger the number of managers required. Therefore span for control should be fixed.

Factors determining the span of management:

Capacity of manager: Each manager has different capacity and ability in terms of decision making, leadership, communication, judgment, guidance and control etc. mangers having more abilities in respect to these factors may have more number of subordinates.

Capacity of subordinates: capacity of subordinates also affects the span of a manager. Efficient and trained subordinates may work without much help of their manager. They may just need broad guidelines and they will perform accordingly. They would require lesser time from their superior due to which manager can have large number of subordinates under him.

Nature of work: If subordinates are performing similar and repetitive routine work they can do their work without having much time of the manager. Frequent changes in work would require more detailed instructions from manager whenever there is change in work. Type of technology used also affects the span of control.

Degree of Decentralization: degree of centralization or decentralization affects the span by affecting the involvement in decision making process. If manager clearly delegates his authority and defines it fully this would require less time to devote to manage his subordinates as subordinates will take most of the actions by their own. Hence manager can have wider span.

Degree of Planning: If the planning is effectively done particularly if standing plans procedures rules methods are clear then subordinates can make their decisions on their own. If they have to make their own plans they would require more guidelines by superiors and manager can handle narrow span in the case of improper planning.

Communication System: If communication system is modern i.e. tools like electronic devices will save time of face to face interaction, which require more time, span of manager can be increased

Level of Management: level of management also affects the span. Higher the level of management lesser the number of subordinates as higher level management does not have much time to supervise. They spend their most of time in planning and other functions. Lower level managers can have wider span than the higher level managers.

Physical location: If all the persons to be supervised are located at same place within the direct supervision of manager, he can supervise more number of people. If subordinates are at different locations then manager can supervise less number of spans.

DEPARTMENTATION:

Departmentation is a means of dividing the large functional organisation into smaller, flexible administrative units. It makes grouping of activities into units and sub-units created through departmentation which are known as department, division, section, branch etc. The process of departmentation takes place at all levels in the organisation. At the top level, the break up of functions into activities is called Primary Departmentation. Grouping activities into separate units at the middle level is called Intermediate Departmentation and at the lower level it is called Ultimate Departmentation or Secondary Departmentation. Let us discuss some definitions of Departments.

According to Louis Allen, Departmentation is a means of dividing the large and monolithic functional organisation into smaller flexible administrative units.

According to koonts and ODonnell : A department is a distinct area, division or branch of an enterprise over which a manager has authority for the performance of specified activities.

In short, we need departmentation in an enterprise to divide the activities along with authority, responsibility and accountability with sole objective to get the work done smoothly and in the best possible way.

Importance of Departmentation

The importance of departmentation is to facilitate successful operation and to create an environment for effective performance. Grouping of activities and employees into departments makes it possible to expand an organisation to a large extent. It enables the organisation to recapture some of the advantages of the small functional organisation while minimising the disadvantages of that which comes with increasing size, diversity and dispersion.

The importance of Departmentation may be stated in the following way:

Specification: Departmentation helps to grow specification in various activities which leads to improving the efficiency of operation.

Feeling of autonomy: Departmentation gives independent charges to managers. The feeling of independence provides satisfaction and in turn increases their responsibilities and efficiency.

Fixation of responsibility: Through Departmentation, responsibilities of the work can be precisely and accurately fixed. The authority and responsibility of each department is defined precisely.

Development of Management: The managers of each department perform specialised functions. They take independent decision and develop themselves for higher positions. Departmentation facilitates the development of managerial personnel by providing them opportunities for exercising initiatives.

Facility in Appraisal: Since the managers perform specified jobs, their performance appraisals become easier. Departmentation facilitates administrative control as standards of performance are laid down separately for each department.

Budget Preparation: It makes the preparation of budget for departments easier as well as for the organisation as a whole easier.

Proper Supervision: As the authority for making decisions is diffused to the managers of the departments and works are assigned to each individual department wise, supervision and control become easier.

After discussing the meaning and importance of Departmentation, we will discuss the bases on which various groups or departments are created in an organisation. Following are the most widely used bases for Departmentation.

Departmentation by Function

Departmentation by Product

Departmentation by Territory or Geographic Area

Departmentation by Customer or Market

Departmentation by Process or Equipment

Composite or Combined Departmentation.DELIGATION:

A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should delegate authority. Delegation of Authority means division of authority and powers downwards to the subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.

Elements of Delegation

Authority - in context of a business organization, authority can be defined as the power and right of a person to use and allocate the resources efficiently, to take decisions and to give orders so as to achieve the organizational objectives. Authority must be well- defined. All people who have the authority should know what is the scope of their authority is and they shouldnt misutilize it. Authority is the right to give commands, orders and get the things done. The top level management has greatest authority. Authority always flows from top to bottom. It explains how a superior gets work done from his subordinate by clearly explaining what is expected of him and how he should go about it. Authority should be accompanied with an equal amount of responsibility. Delegating the authority to someone else doesnt imply escaping from accountability. Accountability still rest with the person having the utmost authority.

Responsibility - is the duty of the person to complete the task assigned to him. A person who is given the responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks for which he was held responsible are not completed, then he should not give explanations or excuses. Responsibility without adequate authority leads to discontent and dissatisfaction among the person. Responsibility flows from bottom to top. The middle level and lower level management holds more responsibility. The person held responsible for a job is answerable for it. If he performs the tasks assigned as expected, he is bound for praises. While if he doesnt accomplish tasks assigned as expected, then also he is answerable for that.

Accountability - means giving explanations for any variance in the actual performance from the expectations set. Accountability can not be delegated. For example, if A is given a task with sufficient authority, and A delegates this task to B and asks him to ensure that task is done well, responsibility rest with B, but accountability still rest with A. The top level management is most accountable. Being accountable means being innovative as the person will think beyond his scope of job. Accountability, in short, means being answerable for the end result. Accountability cant be escaped. It arises from responsibility.

For achieving delegation, a manager has to work in a system and has to perform following steps : -

Assignment of tasks and duties

Granting of authority

Creating responsibility and accountability

Delegation of authority is the base of superior-subordinate relationship, it involves following steps:-

Assignment of Duties - The delegator first tries to define the task and duties to the subordinate. He also has to define the result expected from the subordinates. Clarity of duty as well as result expected has to be the first step in delegation.

Granting of authority - Subdivision of authority takes place when a superior divides and shares his authority with the subordinate. It is for this reason, every subordinate should be given enough independence to carry the task given to him by his superiors. The managers at all levels delegate authority and power which is attached to their job positions. The subdivision of powers is very important to get effective results.

Creating Responsibility and Accountability - The delegation process does not end once powers are granted to the subordinates. They at the same time have to be obligatory towards the duties assigned to them. Responsibility is said to be the factor or obligation of an individual to carry out his duties in best of his ability as per the directions of superior. Responsibility is very important. Therefore, it is that which gives effectiveness to authority. At the same time, responsibility is absolute and cannot be shifted. Accountability, on the others hand, is the obligation of the individual to carry out his duties as per the standards of performance. Therefore, it is said that authority is delegated, responsibility is created and accountability is imposed. Accountability arises out of responsibility and responsibility arises out of authority. Therefore, it becomes important that with every authority position an equal and opposite responsibility should be attached.

Therefore every manager,i.e.,the delegator has to follow a system to finish up the delegation process. Equally important is the delegatees role which means his responsibility and accountability is attached with the authority over to here.

Relationship between Authority and Responsibility

Authority is the legal right of person or superior to command his subordinates while accountability is the obligation of individual to carry out his duties as per standards of performance Authority flows from the superiors to subordinates,in which orders and instructions are given to subordinates to complete the task. It is only through authority, a manager exercises control. In a way through exercising the control the superior is demanding accountability from subordinates. If the marketing manager directs the sales supervisor for 50 units of sale to be undertaken in a month. If the above standards are not accomplished, it is the marketing manager who will be accountable to the chief executive officer. Therefore, we can say that authority flows from top to bottom and responsibility flows from bottom to top. Accountability is a result of responsibility and responsibility is result of authority. Therefore, for every authority an equal accountability is attached.

Centralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management. According to Allen, Centralization is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be :-

Reservation of decision making power at top level.

Reservation of operating authority with the middle level managers.

Reservation of operation at lower level at the directions of the top level.

Under centralization, the important and key decisions are taken by the top management and the other levels are into implementations as per the directions of top level. For example, in a business concern, the father & son being the owners decide about the important matters and all the rest of functions like product, finance, marketing, personnel, are carried out by the department heads and they have to act as per instruction and orders of the two people. Therefore in this case, decision making power remain in the hands of father & son.

On the other hand, Decentralization is a systematic delegation of authority at all levels of management and in all of the organization. In a decentralization concern, authority in retained by the top management for taking major decisions and framing policies concerning the whole concern. Rest of the authority may be delegated to the middle level and lower level of management.

The degree of centralization and decentralization will depend upon the amount of authority delegated to the lowest level. According to Allen, Decentralization refers to the systematic effort to delegate to the lowest level of authority except that which can be controlled and exercised at central points.

Decentralization is not the same as delegation. In fact, decentralization is all extension of delegation. Decentralization pattern is wider is scope and the authorities are diffused to the lowest most level of management. Delegation of authority is a complete process and takes place from one person to another. While decentralization is complete only when fullest possible delegation has taken place. For example, the general manager of a company is responsible for receiving the leave application for the whole of the concern. The general manager delegates this work to the personnel manager who is now responsible for receiving the leave applicants. In this situation delegation of authority has taken place. On the other hand, on the request of the personnel manager, if the general manager delegates this power to all the departmental heads at all level, in this situation decentralization has taken place. There is a saying that Everything that increasing the role of subordinates is decentralization and that decreases the role is centralization. Decentralization is wider in scope and the subordinates responsibility increase in this case. On the other hand, in delegation the managers remain answerable even for the acts of subordinates to their superiors.

Implications of Decentralization

There is less burden on the Chief Executive as in the case of centralization.

In decentralization, the subordinates get a chance to decide and act independently which develops skills and capabilities. This way the organization is able to process reserve of talents in it.

In decentralization, diversification and horizontal can be easily implanted.

In decentralization, concern diversification of activities can place effectively since there is more scope for creating new departments. Therefore, diversification growth is of a degree.

In decentralization structure, operations can be coordinated at divisional level which is not possible in the centralization set up.

In the case of decentralization structure, there is greater motivation and morale of the employees since they get more independence to act and decide.

In a decentralization structure, co-ordination to some extent is difficult to maintain as there are lot many department divisions and authority is delegated to maximum possible extent, i.e., to the bottom most level delegation reaches. Centralization and decentralization are the categories by which the pattern of authority relationships became clear. The degree of centralization and de-centralization can be affected by many factors like nature of operation, volume of profits, number of departments, size of a concern, etc. The larger the size of a concern, a decentralization set up is suitable in it.

LINE & STAFF ORGANIZATION STRUCTURE:

Line and staff organization is a modification of line organization and it is more complex than line organization. According to this administrative organization, specialized and supportive activities are attached to the line of command by appointing staff supervisors and staff specialists who are attached to the line authority. The power of command always remains with the line executives and staff supervisors guide, advice and counsel the line executives. Personal Secretary to the Managing Director is a staff official.

Features of Line and Staff Organization

1. There are two types of staff :

a. Staff Assistants- P.A. to Managing Director, Secretary to Marketing Manager.

b. Staff Supervisor- Operation Control Manager, Quality Controller, PRO

2. Line and Staff Organization is a compromise of line organization. It is more complex than line concern.

3. Division of work and specialization takes place in line and staff organization.

4. The whole organization is divided into different functional areas to which staff specialists are attached.

5. Efficiency can be achieved through the features of specialization.

6. There are two lines of authority which flow at one time in a concern :

a. Line Authority

b. Staff Authority

7. Power of command remains with the line executive and staff serves only as counselors.

Merits of Line and Staff Organization

Relief to line of executives- In a line and staff organization, the advice and counseling which is provided to the line executives divides the work between the two. The line executive can concentrate on the execution of plans and they get relieved of dividing their attention to many areas.

Expert advice- The line and staff organization facilitates expert advice to the line executive at the time of need. The planning and investigation which is related to different matters can be done by the staff specialist and line officers can concentrate on execution of plans.

Benefit of Specialization- Line and staff through division of whole concern into two types of authority divides the enterprise into parts and functional areas. This way every officer or official can concentrate in its own area.

Better co-ordination- Line and staff organization through specialization is able to provide better decision making and concentration remains in few hands. This feature helps in bringing co- ordination in work as every official is concentrating in their own area.

Benefits of Research and Development- Through the advice of specialized staff, the line executives, the line executives get time to execute plans by taking productive decisions which are helpful for a concern. This gives a wide scope to the line executive to bring innovations and go for research work in those areas. This is possible due to the presence of staff specialists.

Training- Due to the presence of staff specialists and their expert advice serves as ground for training to line officials. Line executives can give due concentration to their decision making. This in itself is a training ground for them.

Balanced decisions- The factor of specialization which is achieved by line staff helps in bringing co- ordination. This relationship automatically ends up the line official to take better and balanced decision.

Unity of action- Unity of action is a result of unified control. Control and its effectivity take place when co- ordination is present in the concern. In the line and staff authority all the officials have got independence to make decisions. This serves as effective control in the whole enterprise.

Demerits of Line and Staff Organization

Lack of understanding- In a line and staff organization, there are two authority flowing at one time. This results in the confusion between the two. As a result, the workers are not able to understand as to who is their commanding authority. Hence the problem of understanding can be a hurdle in effective running.

Lack of sound advice- The line official get used to the expertise advice of the staff. At times the staff specialist also provide wrong decisions which the line executive have to consider. This can affect the efficient running of the enterprise.

Line and staff conflicts- Line and staff are two authorities which are flowing at the same time. The factors of designations, status influence sentiments which are related to their relation, can pose a distress on the minds of the employees. This leads to minimizing of co- ordination which hampers a concerns working.

Costly- In line and staff concern, the concerns have to maintain the high remuneration of staff specialist. This proves to be costly for a concern with limited finance.

Assumption of authority- The power of concern is with the line official but the staff dislikes it as they are the one more in mental work.

Staff steals the show- In a line and staff concern, the higher returns are considered to be a product of staff advice and counseling. The line officials feel dissatisfied and a feeling of distress enters a concern. The satisfaction of line officials is very important for effective results.SYSTEM APPROACH TO HRM:

A system is a set of interrelated but separate elements or parts working towards a common goal.

The enterprise procures and transforms inputs such as physical, financial and human resource