Principle and Practice of Management

7/24/2019 Principle and Practice of Management

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National Institute of Business ManagementChennai - 020

FIRST SEMESTER EMBA/ MBA

Subjet ! "#ini$les an% "#aties of Management

En#ollment No! ! MBA&/MA'&(N/))*2&+,2,.2&&F Roll No! ! N&(N/))*2

1. What are the fundamentals of staffing and manpower? Explain the

different methods of selection recruitment, training and development.

FUNDAMENTALS OF STAFFING

Organizations require the services of a large number of personnel. These

personnel occup the various positions created through the process of organizing.

Each position of the organization has certain specific contributions to achieve

organizational ob!ectives. "ence the person occuping the position should involves

matching have sufficient abilit to meet its requirements. #taffing basicall

involves matching !obs and individuals. This ma require a number of functions

li$e manpower planning, recruitment, selection, training and development,performance appraisal promotion, transfer, etc. %arious authors loo$ at staffing as

one of the elements of organizing &rocess.

The responsibilit for #taffing rests on all managers at all levels of the

organization. 't increases as one goes up in the organizational hierarch. (or

example chief executive ta$es active interest in the selection of personnel

particularl at higher levels. #imilarl managers at other levels are involved in

some form of staffing function for example, )esides selection of subordinates for

their departments, the are involved in their *aining performance appraisal ,etc.+ormall, managers tr to ensure two things. (irst, the want that the get

subordinates who are capable of performing the wor$ of their departments .#econd,

the want that their subordinates re trained and developed appropriatel so that


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their performance increases and there is suitable replacement of personnel whose

positions fall vacant because of an reason.

'n order to facilitate the effective performance of staffing function, personneldepartment is created in large organizations. This department is basicall staff

department. 'ts primar responsibilit is to ta$e those aspects of staffing which

cannot he performed well b line managers either because discharge of such a f

action requires the use of specific s$ills not adequatel possessed b line managers

or because line managers ma not get enough time to go through these aspects.

MANPOWER PLANNING

&lanning for manpower resources ma!or managerial responsibilit to ensure

adequate suppl of personnel are the right time both in terms of their qualit and

aptitude and effective utilization of these personnel.

Objectives of Manpowe P!annin"

. -an power planning enables an organization forecast its manpower

requirement

. -anpower planning helps the organization to match its power with s$ills

necessar for achieving its ob!ectives

/. -anpower planning helps organization to $now how its personnel are

emploed and how their s$ills are being used

0. #stematic manpower planning facilities similar approach in other aspects of

staffing

MANPOWER PLANNING PRO#ESS

-anpower planning considers matching all !obs and individuals in future. #incethere is enough time, the organization can achieve this b ta$ing sstematic

manpower planning. The process of manpower planning entails consideration of

several steps with relevant inputs before the manpower demand can be arrived


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at, on the one hand, and identification of the sources of suppl to meet the

demand ta$ing into account the several constraints on the other hand.

$%Pojectin" Manpowe Re&'ie(ents

The first essential step in manpower planning is to forecast

organization structure that will meet the future needs of the

organization. The basic exercise that has to be underta$en in this

context is to arrive at the scale of business activit over a time period.

2. )ob Ana!*sis1

2ob analsis can be directed along the following lines3

4i5 What is the basic ob!ective of the !ob? What is the purpose of the

segment of the organization to which the !ob is related?

4ii5 What tpes of plans and pro!ects are underta$en in this !ob?

4iii5 What tpes of decisions are to be made b the incumbent on the

!ob?

4iv5 What is the authorit of the !ob? "ow man subordinates will

wor$ under him? 6an this !ob alter the present organization

structure? 'f es, in what wa?

4v5 What tpe of personnel does the incumbent contact?

4vi5 What are the requirements of personal attributes of incumbent in

terms of education, training, experience, apprenticeship, phsical

strength, mental capabilities, social s$ills, etc.

3. Manpowe Invento*1

-anpower inventor is related to the identification of $e personnel in

the organization and cataloguing their characteristics without reference to


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the present positions held b them. 't provides information about present

and future personnel being available in the organization.

4i5 The first step in manpower inventor is the determination ofpersonnel whose inventor is to be prepared.

4ii5 7fter determination of personnel to be included in manpower

inventor, detailed information about them is collected. The

information ma be factual regarding age, education, experience,

emploment records, merit rating histor, health status, retirement

data, results of pschological and other tests etc.

4iii5 The third step of manpower inventor involves appraisal of

personnel included in inventor. This will give the information

about present and potential talents of each individual.

4iv5 7fter appraising all personnel included in manpower inventor,

detailed stud will be made of those individuals who have high

potential for promotion and holding of $e positions in the

organization.

0. I+entification of Gap between Avai!ab!e an+ Re&'ie+ Manpowe

When all these exercises arc underta$en, the organization is in a position

to determine the actual needs of personnel and their availabilit. These

factors will, however, be affected b the rate of loss of personnel.

Therefore, the additional requirement of personnel will be equal to

manpower required and manpower available without considering loss of

personnel.

RE#RUITMENT AND SELE#TION

*ecruitment and selection process starts after the identification ofvacancies to be filled up. While recruitment is concerned with the

identification of sources from where the personnel can be emploed and

motivating them to offer for the emploment, selection ta$es care of

choosing the most suitable personnel for emploment. (lippo has defined


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recruitment as follows3 8*ecruitment is the process of searching for

prospective emploees and stimulating them to appl for !obs in the

organization8.

So'ces of Manpowe S'pp!*

+ormall, an organization can fill up its vacancies either through

promotion of people available in the organization or through the selection

of people from outside. Thus there can be two sources of suppl of

manpower 9 external and internal. The first problem is to identif outside

sources. +ormall, following outside sources are utilized for different

positions.

. A+vetise(ent97dvertisement is the most effective means to search

potential emploees from outside the organization.

. E(p!o*(ent A"encies 9 -an organizations get the information

about the prospective candidates through emploment agencies. 'n our

countr, two tpes of emploment agencies are operating3 public

emploment agencies and private emploment agencies. There are

emploment exchanges run b the government almost in all districts. The

emploment see$ers get themselves registered with these exchanges.

/. On #a(p's Rec'it(ent: -an organizations conduct preliminar

search of prospective emploees b conducting interviews at the

campuses of various institutes, universities, and colleges. This source is

quite useful or selecting people to the posts of management trainees,

technical supervisor, scientist, and technicians.

0. Dep'tation: -an organizations ta$e people on deputation from

other organizations. #uch people are given choice either to return to their

original organization after a certain time or to opt for the present

organization.

;. E(p!o*ee Reco((en+ations: Emploee recommendations can be

considered to emplo personnel particularl at the lower levels.


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-% Se!ection Tests : -an organizations hold different $inds of

selection tests to $now more about the candidates or to re!ect the

candidates who cannot be called for interview etc.

.% Inteview : #election tests are normall followed b personal

interview of the candidates.

/% #0ec1in" of Refeences9 -an organizations as$ the candidates to

provide the names of referees from whom more information about the

candidates can be solicited.

2% P0*sica! E3a(ination 9 &hsical examination is carried out to

ascertain he phsical standards and fitness of prospective emploees. The

practice of phsical examination varies a great deal both in terms of

coverage and timing.

4% Appova! b* Appopiate A't0oit* 9 On the basis of the above

steps, suitable candidates are recommended for selection b the selection

committee or personnel department.

5% P!ace(ent97fter all the formalities are completed, the candidates are

placed on their !obs initiall on probation basis. The probation period

ma range from three months to two ears.

TRAINING AND DE6ELOPMENT

The term training is concerned with imparting specific s$ills for

particular purposes. (or example, (lippo has defined training as 8the act

of increasing the $nowledge and s$ills of an emploee for doing a

particular !ob8. >evelopment has been defined as follows3 8-anagement

development is all those activities and programmes when recognized and

controlled, have substantial influence in changing the capacit of theindividual to perform his assignment better and in so doing are li$el to

increase his potential for future management assignments8.

Ro!e of Tainin" an+ Deve!op(ent


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+o organization has a choice of whether to train its emploees or not, the

onl choice is that of methods. The primar concern of an organization is

its viabilit, and hence its efficienc. There is continuous environment

pressure for efficienc, and if the organization does not respond to thispressure, it ma find itself rapidl losing whatever share of mar$et it has.

Training can pla the following roles in an organization.

. Incease Efficienc*9 Training plas active role in increasing efficienc

of emploees in an organization. Training increases s$ills for doing a !ob

in better wa.

% Incease in Moa!e of E(p!o*ees 9Training increases morale of

emploees. -orale is a mental condition of an individual or group whichdetermines the willingness to cooperate.

/. 7ette ,'nan Re!ations9 Training attempts to increase the qualit of

human relations in an organization.

0. Re+'ce+ S'pevision9 Trained emploees require less supervision.

The require more autonom and freedom.

;. Incease+ O"ani8ationa! 6iabi!it* an+ F!e3ibi!it*9 Trained people

are necessar to maintain organizational viabilit and flexibilit. %iabilit

relates to the survival of the organization during bad das, and flexibilit

relates to sustain its effectiveness despite the loss of its $e personnel and

ma$ing short9term ad!ustment with the existing personnel.

I+entif*in" Tainin" Nee+s

The basic aim of training is to induce a suitable change in the individual

concerned.

. O"ani8ation Ana!*sis9 Organization 7nalsis is the first factor for

identifing training needs. 't is a sstematic effort to understand where

training effort needs to be emphasized in the organization.


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. Tas1 Ana!*sis9 Tas$ analsis entails a detailed examination of a !ob,

its various operations, and the conditions under which it has to be

performed.

/. Man Ana!*sis 9 The focus of man analsis is on the individual

emploee, his abilities, his s$ills, aria the inputs required for !ob

performance, or individual growth and development in terms of career

planning. -an analsis helps to identif whether the individual emploee

requires training and, if so, what $ind of training.

TRAINING MET,OD

The range of training methods is such that the can provide opportunit

to uns$illed to become s$illed the offer people to be promoted at

various levels of the organization. Training methods are means of

attaining the desired ob!ectives in a learning situation. These methods can

be grouped in some categories on various bases.

On9the !ob training methods

. On specific !ob3

7. Experience

). 6oaching

6. @nderstud

. &osition rotation

/. #pecial pro!ects, tas$ forces, etc.

0. 7pprenticeship

;. %estible school

Off9the !ob training methods

. #pecial courses and lectures


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. 6onference

/. 6ases

0. *ole plaing

;. -anagement games


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'n off9the9!ob training, a trainee has to leave his place of wor$ing and

devote his entire time for training purpose. >uring this period, the trainee

does not contribute anthing to the organization.

% Specia! #o'ses an+ Lect'es 9 #pecial courses and lectures are

$nowledge based training methods. 'n these programmes, an effort is

made to expose participants to concepts and theories, basic principles,

and pure and applied $nowledge in an sub!ect area.

. #onfeence9 'n order to overcome the limitations of lecture method

which emphasizes onl one wa of communication, that is, from trainer

to trainee, man organizations have adopted guided9discussion tpe of

conferences in their training programmes.

/. #ases 9 6ase method of training has been developed b "arvard

)usiness #chool of @.#.7. 't is one of the most commonl used training

methods not onl for business executives but also for management

institutes.

0% Ro!e P!a*in"9 *ole plaing is a 4mining technique which can be used

ver easil as a supplement to various training techniques. The concept

of role plaing has been drawn from drama and pla in which actors plathe various roles.

;. Mana"e(ent Ga(es9 -anagement games are used to stimulate the

thin$ing of people to run an organization or its department. The game can

be used for developing s$ills for a variet of purposes li$e investment

strateg, mar$eting strateg, production strateg, collective bargaining,

etc.


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=. In9bas1et E3ecise 9 'n9bas$et exercise is a simulation technique

designed around the Cincoming mailC of a manager. 7 variet of situations

is presented in this exercise which would usuall be dealt b a manager

in his tpical wor$ing da.

A. Sensitivit* Tainin" 9 &robabl no other training technique has

attracted so much attention or controvers in recent ears as sensitivit

training. -an of its advocates have an almost religious zeal in their

enchantment with the training experience. #ome of its critics match this

fervor in their attac$s on the technique. 'n part as a result of criticisms

and experience, a somewhat revised approach, often described as team

development training, has appeared.

B. Tansactiona! Ana!*sis : Transactional analsis 4T75 is used to

develop better interpersonal interactions among individuals. 't involves

understanding of personalit factors of individuals and their ego with

which the interact.


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4. Explain the nature and functions of >irecting.

NATURE AND FUN#TION OF DIRE#TING

Etmologicall directing is to point or aim to point out the proper course to

guide to order, to plan and superintend to command to counsel. >irecting

ma thus be conceived as a vector with two dimensions namel 4a5

magnitude and 4b5 aim or direction. Therefore directing must have an aim

which in fact is the goal of the enterprise. Without an aim there is no

direction and therefore, no directing. The areas that are directed are the

enterprise as a whole, the total sstem, loc$ stoc$ and barrel9the enterprise

structure and the human elements that man it.

T0e ,'(an E!e(ent

"uman element is emphasized in the tas$ of directing. The enterprise must

produce tangible goods and services of a qualit and at a price that must sell

in the competitive -ar$et. 7nd this managing has to be achieved through

the human element of the enterprise. Without harnessing the manpower to

its full productive capacit, good wor$ done in the other managerial

functions, such as planning, organizing and staffing, would remain sterile

and unproductive. The human clement itself is a productive factor, whether

emploees at lower levels or managers from bottom upward. Each wor$er is

thin$ing and feeling unit. Each has a compulsion 4wages and discipline5 to

wor$ each also has a will 4the natural human passion for fulfillment5 to

wor$. 't is the tas$ of the directing function that the will and the compulsion

are not at loggerheads. -ore than this, each man is either a co9operator or a

contender. 7 man is seldom a piece, alone he is alwas the member of a


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group, and then the manager. "e is the more complex man : b education

and environment. "e occupies a higher centre of power and influence in the

organization hierarch. "e is closer to the enterprise goal9has more access toit9wields more influence on it, for good or evil.

In+ivi+'a! 9 an+ t0e Go'p

The @niverse of the directing functions is the world of men within the

enterprise. 'ts sub!ect is the man as the unit. We will attempt here a surve of

the human behavior individuall and in groups which has a distinct

relevance to their status as participants in the process of enterprise

management and therefore, a direct bearing on the directive function. -an is

a bundle of conflicts. This conflict shapes his conduct within the enterprise,

in his interpersonal relationships, how he wor$s for the enterprise, how he

discharges his obligations to other groups and to the enterprise. #econd man

is self9inconsistent. 't is both a strength and wea$ness in hispartnership in

the enterprise effort. 't is also a challenge and opportunit of the directing

authorit. "e can be changed, directed, managed or developed. Third man is

primaril emotional, egoistic. "e is logical to a point. )ut if ou can rouse

him 4and muse is an emotional word5 he can wor$ wonders beond normal

boundaries. +egativel, if he is hurt, affronted, his wrath is roused, he can be

a nuisance. The range between his use and uselessness is enormous.

-anaging the ego 4and the ego status5 of the human element of the

enterprise need to be consciousl pursued b the directing function. Ever

man has a secret life and this is not onl in his emotional and pschological

self but in his wa of life. &art of it need not concern us, as the enterprise


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manager, but quite a part reveals itself in his in9enterprise behaviour which

cannot be overloo$ed. This element decides between his openness, candour,

cooperative team spirit and his secretiveness, slness, subterfuge, habit ofpulling strings and spreading stench and foul air all around. 't should be

understood that the organizational man cannot be all open, direct,

straightforward. #ecretiveness should not be encouraged it is the one surest

wa how dsfunctional conflicts raise their heads. #ixth, there are formal

groups within the enterprise, functions divisions, departments, cadres,

grades and others. These groups function openl with assigned tas$s, within

the recognized organizations structure. There are other groups, man of

which are unobserved9onl felt and perceived. The inner logic of such

informal grouping ma be divided into six motives3

4i5 #urvival. 7s in nature, so in an enterprise, the group is a more

effective unit than the lone individual in the struggle for survival.

4ii5 7 genuine fondness, commonness of li$es and disli$es ma provo$e

an informal group, although the cementing of such a group is often

looser apt to snap under stress and strain.

4iii5 The motive of gain is a good bond holding together a group. 't is one

step more active than the survival group.

4iv5 7 group often functions for revenge.

4v5 7 man also forms or !oins a group for sport and pleasure, to combat

boredom and drudger of the wor$place. #uch a group is


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comparativel harmless and neutral to enterprise interest but ma still

cause waste and dissipation of enterprise time and direction.

4vi5 (inall, a man see$s a group where he can feel important, here he can

show off, where he has others who praise him for qualities of which

he see$s to boast and which he desires to possess.

Two important points need to be remembered b the directing functionar.

4i5 #uch informal groups often spell potential harm to the enterprise. The

have to be watched, spotted and discouraged.

4ii5 The groups do not wor$ within the rigid boundaries under which the

have been described. #eventh, no man is free from worries and

frustrations. "e does not leave these behind, at home, when he

centers the wor$ place he carries the stress and strain into it. Eight,

the emploee is not interested in the organization unless it is for what

the organization can give him. The lesson of this observation is thatthe enterprise and the !ob must be made worthwhile for the man.

+inth, the man is usuall s$eptical about the senior. This is not an

intrinsic situation but a derived one. Tenth, both the managerial staff

and others can be

changed and for the benefit of the enterprise. Eleventh, the unit of the

enterprise man is his famil. -ore precisel, the manCs world iscomposed of three concentric spheres. The inner sphere is he and his

famil. The interest of this inner group is paramount. 't will easil

oven ide the interest9all that concern the enterprise. The second


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sphere of his interest comprehends his friends and closest associates.

"e will use his position in the enterprise to wor$ for this group. The

third sphere includes the manCs wide social contract9hisacquaintances with whom he ma have a bond of shifting quid pro

quo give and ta$e. (inall, directing and leadership consist in

directing and leading people. 'n all wal$s of life, leaders are few,

followers are man. "ero worship is a trait not uncommon in human

nature.

The 7verage -an The concept of the average man9the averageeconomic man or the average social man9can be traced to the

classical economic theorists. The economic behavior of the common

man was postulated and theorized on assumptions on how the

average economic man would behave, given certain economic

environmental conditions. Dater studies and empirical testing

established that there are man ifs and butCs and exceptions in the

application of the classical economic theories in real life situations.

>irecting men is no substitute for directing the man as he is. The

enterprise man contributes to the wor$ and ob!ective of the group to

which he belongs 4and through the group, to the enterprise ob!ective5

his own wor$ and attitudes, roup dnamics, in which the members

of the group combine and participate disclose a pattern of group

behaviour, but no two groups behave ali$e nor does the same getup

behave or react to environment identicall at different times or under

different sets of impulses.


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The >irecting (unction and the (ollowers 't needs to be emphasized

that the directing function directs, guides, harmonizes and manages

the human element9not as power or wisdom from outside the zone ofoperation. The truth is far from it. The followers and subordinates are

ver much part of him and of his function. "e appraises through their

experience and their own assessment of situations. "e gleans their

wisdom and their s$ills4 much as a s$illed gardener gleaning flowers5

puts the string of harmon round them and snthesizes their efforts9

labor, initiative, resourcefulness and gives them a direction, a goal to

achieve, and avenue to reach the goal. "is followers and subordinates

are his raw materials his bric$s and mortar, cla and timber, the

colour and the brush out of which all, he must raise the architecture, a

wor$ or art and achievement. The elements are all there, bonded,

recreated as it were, into a new weapon of power and success.

#ome Theories and 6oncepts of -an and his +ature &schologist,

Edgar ". #chein, in his boo$, COrganizational &schologC,

formulated four concepts of the developing man. These in summar

are, 4i5 -an is basicall an economic animal and will pursue the aim

of maximizing his economic gain.


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;.Explain the methods of >epartmentation.

4iv5 The demand on the ma!or departments li$e production, mar$eting, finance

etc, for ad!ustments to cater to the needs of the customer9wise departmental

setup, often cause overall managerial problems. 4A5 ) &rocess or &lant This

method is similar to product9based departmentation. 'nstead of the product

forming a ma!or division of the enterprise, a ma!or process or composite plant or

equipment constitutes a significant segment 4centre5 of enterprise operation. 4B5

) 6ommittees 6ommittees sometimes are placed in charge of functions and

ta$e the place of department. This method of depirlmentation is seen in

operation in academic and research institutions and universities, although in an

organization where the ma!or functions are mainl deliberative and directive and

where the output of the function demands independent specialist views to be

brought to bear on it, this method ma be adopted. 4F5 -atrix or rid -ethodof >epartmentation The -atrix 4or rid5 structure is a mosaic of tas$ and

functions. Often the situation is, as in a sizeable program or pro!ect the tas$ is

large and rewarding, et temporar, as all programmed must be completed.


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The advantages of the method are3 4i5 @nit of command so far as the pro!ect is

concerned the pro!ect leader or manager is accountable for the success of the

pro!ect. 4ii5 The pro!ect manager can draw on the specialist 4functional5 servicesof the other departments to complete the networ$. 4iii5 7s individual pro!ects are

completed and wound up, the functional services are released, with ease and

flexibilit. These ma !oin other pro!ects which ma replace the completed ones

or attend to other basic ob!ectives of the 'nstitution. 4iv5 The method provo$es

functional 4as opposed to dsfunctional5 conflicts which is health :especiall

in academic institution. 4v5 't produces econom of efforts and expenses. 4vi5 't

helps speed and flexibilit in organizing pro!ects and consultation services.

7mong its limitations ma be mentioned3 4i5 'nter functional 4interdisciplinar5

dsfunctional conflicts cannot be ruled out. 4ii5 >iscordance between the pro!ect

manager and the functional hands is li$el. 4iii5 When the organization has other

demands on the functional services for its other ob!ectives besides the pro!ects,

competing claims 4and quarrels5 on the functional resources ma result.

>E&7*T-E+T7T'O+

The logic of departmentation is two9fold3 4a5 the size of an enterprise, 4b5 the

growth of specialization 4division of labour5 in the activities of the enterprise.

+ormall, a manager can 4directl5 control up to a limit of the size of activities.

Dogicall, it helps a manager to control the subordinate activities in the form of

logicall bound 4homogeneous5 tas$s and functions. >epartmentation, then is

the process of dividing the enterprise activities into manageable units 4b size5,

grouped on the logic of their internal similarit 4homogeneit5.

-ethods of >epartmentation9 &attern and 6riteria


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4'5 ) #imple +umbers The number of persons pursuing a set of activities can

be the basis of departmentation. This method is limited and is suitable in

situations where the wor$ is repetitive where manpower is the most importantcondition, where group efforts are as important as individual efforts and where

the group tas$ 4output5 can be related to number in the group.

45 ) Time This method of forming groups has limited applicabilit. 't often

goes with the first methods so that number in the group wor$ing for a defined

period ma$es the !oint criterion of grouping.

4/5 ) (unction 7 function stands for a composite concept which includes3

4a5 4b5 4c5 4d5

the tas$ 4homogenous5 the s$ill 4specialization5 required for the tas$ the service9

discrete and well defined, and clear cut ob!ective.

(unctional departmentation offers one of the most logical method of divisioning

4grouping5 enterprise activities. 't is one of the most commonl used methods,

either independentl or in combination with others. The ma!or functional

divisions are production, mar$eting, finance and personnel. +ote that these are

lin$ed with the ma!or4divisions5 ob!ectives of an enterprise demand specific

s$ill and training for their operation possess a well9laid9out tas$ set apart from

each and cover discrete, well demarcated areas of activities within the

enterprise.

The merits of the functional method of departmentation are 4a5 't is most logical

and consistent with the natural division of the enterprise tas$ and ob!ective. 4b5 't

gives necessar status to these functions b placing their heads high in the

organizational echelon.


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4c5 't gives full weightage to the s$ill and specialization required in the discharge

of the several functions. 4d5 The ma!or functions need cooperation and team

wor$, starting from the highest level, for effective implementation of enterprisegoal. The limitations of this method are not so much inherent as situational and

empirical. These are3 4i5 7n excessive emphasis on the functions rather than on

the operational goals. The functions are sometimes misconceived as an end in

themselves rather than as the means to an end. 4ii5 (unctional goals and group

interests tend to develop, cutting across organizational goal. 4ii5 7s

specialization grows, each function seems to carve out a niche, ruling out

communication with other department. 4iv5 't confuses 4often5 the line of

operational authorit. 6onflicts arise when a functional director vetoes the line

general managerCs suggestions on functional grounds.

4v5 7 serious doubt exists whether the functional heads li$e finance, personnel,

etc. should not be located one step below in the organizational echelon, sa

under the second level of the main line authorit, for example, general

manager4 production5, in a manufacturing organization. 405 ) &roducts or

#ervice This method ma wor$ well when a few ma!or products or services

absorb most of the activities 4manufacture, sales profits5 of the enterprise. Each

of these products is then constituted into a ma!or >ivision, which functions

largel on independent basis.

The merits of this arrangement are3 4i5 The operational integrit and

accountabilit of the line management is not blurred or underrated. 4ii5 Each

ma!or product constitutes a cost and profit9centre. 't is proper that functional

services should be placed subordinate to the divisional4line5 chief as sub9

functions, in the organization structure. 4iii5 This method helps product


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development, diversification, innovation and products research. 4iv5 The pattern

is suited to rapid growth and product and mar$et expansion. 't helps the 6hief

46hairman or &resident5 of the enterprise to divest himself of responsibilit,transfer a high degree of autonom to the >ivisions and enforce aggressive

profit and growth targets. The limitations of this methods coincide with the

problems of 4a5 duplication of functional services, 4b5 high overheads, 4c5

divisional goals overriding enterprise goals 4when the two diverge5, 4d5 it

requires more manpower and s$illed managers9 which often is a constraint, and

4e5 in certain functional areas, especiall, finance, personnel and industrial

relations, product9wise division of these functions leads to basic difficulties of

harmon and uniform standards.

4;5 ) eographical *egion >epartmentation b geographical region is

sometimes seen as a compul#ion when the enterprise produces and sells in the

wide national mar$et, often in intemational mar$ets.

>E&7*T-E+T7T'O+

The logic of departmcntation is two9fold3 4a5 the size of an enterprise, 4b5 the

growth of specialization 4division of labour5 in the activities of the enterprise.

+ormall, a manager can 4directl5 control up to a limit of the size of activities.

Dogicall, it helps a manager to control the subordinate activities in the form of

logicall bound 4homogeneous5 tas$s and functions. >epartmentation, then is

the process of dividing the enterprise activities into manageable units 4b size5,

grouped on the logic of their internal similarit 4homogeneit5.

-ethods of >epartmentation9 &attern and 6riteria


24/30

45 ) #imple +umbers The number of persons pursuing a set of activities can

be the basis of departmentation. This method is limited and is suitable in

situations where the wor$ is repetitive where manpower is the most importantcondition, where group efforts are as important as individual efforts and where

the group tas$ 4output5 can be related to number in the group.

45 ) Time This method of forming groups has limited applicabilit. 't often

goes with the first methods so that number in the group wor$ing for a defined

period ma$es the !oint criterion of grouping. 4/5 ) (unction 7 function stands

for a composite concept which includes3 4a5 the tas$ 4homogenous5 4b5 the s$ill

4specialization5 required for the tas$ 4c5 the service9discrete and well defined,

and 4d5 clear cut ob!ective. (unctional departmentation offers one of the most

logical method of divisioning 4grouping5 enterprise activities. 't is one of the

most commonl used methods, either independentl or in combination with

others. The ma!or functional divisions are production, mar$eting, finance and

personnel. +ote that these are lin$ed with the ma!or4divisions5 ob!ectives of an

enterprise demand specific s$ill and training for their operation possess a well9

laid9out tas$ set apart from each and cover discrete, well demarcated areas of

activities within the enterprise. The merits of the functional method of

departmentation arc 't is most logical and consistent with the natural division of

the enterprise tas$ and ob!ective. 't gives necessar status to these functions b

placing their heads high in the organizational echelon.


25/30


26/30

hat distinguishes a leader from the common run of

manager is the measure of willingness on the part of the

followers #the led$ that the leader can ring into the system.

Tanneaum&s #and his colleagues$ de7nition 8uietlyintroduces the term in a situation in its formulation. This has

the 8uality of ringing in the situational "ariale which

dierentiates contingency models of leadership from the

asolute models. It emphasi1es leadership eecti"eness as

distinct from leadership 8ualities #or traits$ percei"ed

asolutely irrespecti"e of the situational "ariales.

The Trait -pproach

Traits are innate, inherent personal 8ualities. It follows that #y

this approach$ if a leader is seen to possess certain traits,

his leadership inde! can e read #almost$ o a leadership

meter. Three necessary and su9cient conditions which

must e satis7ed if traits should e uni8ue determinants of

the leadership inde!. These may e summari1ed thus5

#i$ The trait 8uality should follow a descending order as one

tra"erses from the highest #top e!ecuti"es in leadershipposition$ to the lowest #employees$ le"els of the enterprise

system. #ii$ There must e a high correlation etween the

le"el of a manager&s traits and the le"el of his success. #iii$

The correlation etween success #achie"ement$ and traits

should e higher as one goes up the management hierarchy

from ottom #employees$ le"el upward to top e!ecuti"e

le"els. There is a large measure of consensus that certain

essential traits are common elements of leadership as

oser"ed from dierent sur"eys and in"estigations. These

are5

#a$ Intelligence #$ Con7dence #c$ Initiati"e #d$ Urge for

achie"ement #e$ :trong power need


27/30

-ttitude Criterion -pproach to 'eadership

The leader)attitude approach to leadership studies registers

and appraises the "ariales in terms of attitudes

#orientation to or concern fro$ conditioning leadership

eha"iour and eecti"eness. :tudies de7ned two "ariales

#attitudes$ which were termed employees orientation and

production orientation. - parallel set of concepts was

e"ol"ed y Don"in Cartwright and -l"ing ;andar as a result

of a numer of research studies. They identi7ed the aim of a

group as a composite of two elements #group dynamics$.

#i$ -chie"ing a group goal

#ii$ :er"ice of the group itself

The goal)oriented manager will set tas%s, impro"e

techni8ues and producti"ity and structure his acti"ities

toward the group goal. The manager, on the other hand,

who concentrates on group ser"ice and group maintenance,

will e relations oriented, with concern for people,

culti"ating popular participation, fostering and trusting

informal group eha"iour, trustful and communicati"e. :till

another parallel concept may e oser"ed under what maye styled -uthoritarian Democratic eha"iour tapering o

into the laisse1 faire leadership style. In terms of the group

dynamics phraseology #discussed ao"e$, authoritarian

leader style is set parallel to achie"ing the group goal as

against group maintenance or ser"ice which appro!imates

to the democratic leader style. The authoritarian leader will

decide and tell his followers what to do< the democratic

leaders will opt for a participati"e style of decision ma%ing.

0anagement and 'eadership -ll management includes #and

needs$ leadership, ut leadership e!ists and is called into

play e"en where management, strictly is not in"ol"ed.

0anagement is a weapon of achie"ing group or enterprise

in+uencing followers to mo"e toward the goal leadership is


28/30

in"ol"ed. =ut leadership is a much more uni"ersal attriute.

The followers to a leader are not necessarily his unior or

suordinates. 'eadership is an instrument of management

ut its content is neutral to management.

6osition of 6ower

6ositional power of a leader falls into two groups)classi7ed

according to their source and nature. These are5 #i$ coerci"e

power and #ii$ persuasi"e power. =roadly spea%ing, coerci"e

leader #manager$ power +ows from the owner&s position of

authority, his power to do good positi"e power and to do

harm negati"e power. Coerci"e power wor%s y imposition

e!ternal to the followers. The e!ercise of coerci"e power aspercei"ed y the followers may e actual or threatened.

-ctuali1ed coerci"e power is a spent force. Coerci"e power

li%ewise, must carry a continued element of e!pectancy.

Coerci"e power that has e!hausted and reali1e its full

potential for good is dislodged from its power position. Oilier

attriutes of coerci"e power and its e!ercise that help

sustain its potency are

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Principle and Practice of Management

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