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Unit 1 Define management. Management is the art of getting things done by group of people with the effective utilization of available resources. According to FW Taylor, management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way. Significance, Importance, Features of management. 1. Achieving goals. Management helps the organization in achieving its goals. The role of manager is to provide common guidance and direction to the individual efforts for the fulfilment of organizational Goal. 2. Increasing the efficiency. Management helps in increasing the efficiency of the business by increasing productivity through efficient planning, organizing, controlling and directing. 3. Help in creating a dynamic organization. Management helps in providing the required impetus for an organization to transition from one phase of development to another and also in adjusting to the changing dynamics of the business environment. 4. Helps in achieving individual objective Management helps in guiding the individual towards attaining personal objectives, which has a direct impact on attaining the organizational objectives. 5. Development of society. By developing the organization, management helps in its growth. A developed organization has some moral responsibility towards society and it does so by creating employment opportunities, providing good quality products and services. Difference between Administration and management? AdministrationManagementAdministration determines policy to be followed and decide the objectives to be achievedManagement implements the policy an achieve the objectives.Administration not directly involved in the execution.Management involves in the execution of plan and achieving objectives.Planning, organizing and staffing are the main functions of administration.Direction, motivation and control are main function of management.Administration comprises of top level executives, Example owners and Board of Directors.Management comprises lower level executives, managers, supervisors, extra.Administration acts as a Principle.Management acts as an agency.Administration requires administrative ability more than technical ability.Management requires technical ability. Discuss the evolution of Management Thoughts. The development of management thoughts has been evolutionary in Nature. Many of the developments in this field have taken place in the last 100 years, i.e, 20 century. The time period in which different concepts have developed, may be divided into five parts. Pre Scientific Management Era (Before 1880s) The systematic study of management has a separate field started only in the second-half of the 19th century. The main contribution to the field of management in this era are - Robert Owen Robert Owen who made valuable contribution to the development of management . He was at textile manager in Scotland between 1800 to 1828. He was the first person to pay attention towards labour welfare. He suggested the change in the attitude of industrialist toward workers. Although he did not propose a formal theory of management, his work provide foundation of thought which all managers shares today. Charles Babbage He was a British mathematician at Cambridge University. He said that good management, which directs and controls machines and worker, is the most crucial element in successful business. Henry Robinson Towne He was among the prominent person who provide the necessary background for development of scientific management. Scientific management Era. 1880 - 1930. This era started at F.W. Taylor, who rcognized for the first time the need of a scientific approach to the task of managing an enterprise. He is called the father of scientific management movement. The other management thinkers who contributed to the development are Henry Fayol of France, H.L. Gant of USA and Oliver Sheldon of London. The main features of scientific management era are. a. It was closely associated with industrial revolution. b. The scientific management movement is based upon contribution from a number of sources, including Scientific management of FW Taylor. Administrative management of Henry Fayol. Bureaucratic model of Max Webber. Public administration. Microeconomics. c. This era focused attention on division of labour, tasks Management, Standardisation, simplification and specialisation. Human Relation Era. 1930 - 1950 The third major field in the development of management thought emphasised human relationship in organisation. This era modified improve, extended the classical concept. It gave greater emphasis to men behind machines. It stressed the importance of individual as well as group relationships in the workplace. Human Relation Era pointed out the role of psychology and sociology in understanding individual as well as group Behaviour in organisations. The major contributor to the development of this era are professional Elton Mayo, Mary Parker Pollet, R. Berter. Social Science Era. 1930 - 1950. Social scientists and the organisation theorists are of the opinion that best results can be obtaine by building theories of management based on findings of behavioural sciences. Behavioural scientists conducted research to answer the question why a person or a group or person behaves or acts in a particular manner. This era is marked by the development of (a) human behaviour school (b) social systems School The spiritual father of social science era was Chester I. Banard. 5. Management science era. Modern management era. 1950 onwards. This period is marked by the growing influence of economies and mathematicians of management. Two schools of thought was developed in this era. (a) Decision Theorist School (b) Mathematical School. Men Like Herbert Simon, EFL Breach, Peter F. Drucker, Tom Peters, Michael Porter belong to this era. The Decision Theory School is also referred to Operation Research. It looks at management as a logical process. Mathematical models and statistical formula are used to develop management concepts and organisational behaviour. The three approaches that developed in modern management era are. A. Quantitative Approach B. System approach. C. Contengen approach. From the above discussion it is obvious that in each era management in good shape come forward with new concepts and theories, discarding the old. Fayols 14 principle of Management Division of labour To divide work among various departments and employees According to required abilities and skills as to get benefit of specialisation. 2. Authority and responsibility. Authority should commensurate with responsibility. More authority may result in miss utilisation or under utilisation of it. 3. Discipline. It implies compliance with organisational directives and rules, orders and instructions of superior in cooperation with fellow workers. Unity of command. According to this principle, one subordinated should get orders and instructions regarding his work only from one superior. It helps in maintaining discipline among employees, controlling their activities, fixing responsibility and not allowing them to sidetrack responsibility. Unity of direction. All activities relative towards common goals should be included in single plan to be implemented by particular manager. Subordination of individuals interest to interest of organisation. According to this, in every work setting, each employee should sacrifice and subordinate his personal interest and goals for accomplishing common goals of the organisation. Remuneration. Employees should be paid fairly and reasonably in accordance with their contribution. 8 Centralization. The relationship between centralization and decentralisation of authority is a matter of proportion and optimum balance which should be maintained according to needs of organisation. Scalar chain. As a result of delegation of authority in organisation, line of authority from top to the lowest level is established. It is known as scalar chain because all employees are attached to it in the relationship of superior and subordinate. Order. In order to facilitate smooth flow of work, an efficient use of resource material, machine, tools, equipment, etc. as well as employees should be in their proper place and order. Equity. The principle of equity suggest that similar treatment based on the principles of equity, fairness and impartiality should be issued to all employees working in the organisation. Stability of tenure of personnel. Since people need time to learn their jobs, therefore they should not be allowed to move frequently from one position to another. Initiationship According to this principle, employees should be provided an opportunity as to develop an initiative for solving work related problems. Do care should be taken specially for developing policies so as to regulate decisions making behaviour of managers on the one hand and on the other to provide them enough liberty for using their personal skills and judgments. Espirit De corps. It implies to build team spirit among the employees showed that they work in harmonious manner with proper mutual understanding. Scientific management principle. By FW Taylor. (a) Science-not Rule of Thumb : For solving problems and making decisions, the manager should adopt scientific attitude and use scientific thinking and methods. The 'rule of thumb' or 'hit or miss' approach should be replaced and problems studied in all respects, required data should be collected and analysed for finding a solution. Intuitive decisions should be substituted by decisions based on facts. b) Harmony-not Discord : All the departments and workers are a part of an organisation. There should be complete harmony or coordination in their functioning and any kind of disagreement, clash or conflict should not be allowed to crop in and, if it arises, should be reduced to a minimum. (c) Cooperation-not Individualism : Instead of fostering individualism, importance of cooperative group efforts should be recognised Because if objectives of the organisation are to be accomplished, it would be possible not only on account of dynamic and effective leadership of the individual manager but the wholehearted cooperation and commitment of all employees. Credit should be given to all employees. (d) Maximum, not Restricted Output : Production should be carried out up to the maximum capacity available in a unit. As production increases, economies of scale set in and the cost per unit of output will decrease. The policy of restricted output should be treated as an outdated one. (e) Development of Each Employee to his Greatest Efficiency and Prosperity : For the prosperity of individual workers as well as the organisation, the efficiency level of workers should be increased by providing scientific training and developing their potential abilities to the maximum. Theories of Management Management and organisation theory may be defined as the study of structure, functioning and performance of organisation and the behaviour of groups and individuals working in the organisation. Such theory provides the grounds for management activities. Various theories of management have been evolved and they may be grouped into three categories. Classical theory - Up to 1930. This term classical, means something traditionally accepted or long established. The classical management thinkers like Taylor, Fayol, Oliver Sheldon etc are of the opinion that an organisation is like a machine and human beings are different components of that machine. Therefore, the theory has been termed as Machine Theory. The classical theory of management rest on four key players. Division of labour - It is the corner stone among the four pillars. Scalar and functional process - They deal with the vertical and horizontal route of the organisation. Structure - It is the logical relationship or functions in an organisation. Span of control - This concept related to the number of subordinate that a manager can effectively supervise. The classical concept represent an important part of management theory. Many of the classical concepts hold variety even today. Classicalist have given a number of principles of management. Example: Fayol has given 14 principles of management. Similar other principles have been given by Taylor and others. However, the classical theory has ignored the socio-psychological aspect an motivational aspect of human behaviour. This theory has failed, organisation having no interaction with environment. This assumption is totally unrealistic. Neo Classical theory. 1930 - 1950. Neo classical theory of management started its development from the findings of Hawthorny experiment. Afterwards, many contributions have been added to this field. Thus essence of neo classical theory is contained in two points. A. An organisation should be viewed as social as well as in economic and practical terms. B. The social process of good behaviour can be understand in terms of clinical method. The main propositions of neoclassical theory are - A. The organisation is a social system. B. The social environment of the job effects people and is also affected by them. C. Informal organisation also exist within the formal organisation. D. Human being has diverse motivational pattern and right to fulfil different types of needs. E. Communication is necessary as it conveys the feelings and sentiments of people who work in the organisation. F. Teamwork is essential for cooperation among the people. Neoclassical theory has given a new dimensions to the design and management of the organisation. It has recognised such important factors which were almost ignored by classical theory like informal organisation, informal leader, non economic motivation etc. Modern theory. 1950 onwards. Modern management theory is comparative, systematic, and highly constructive. This theory can be understood in three approaches - A. Quantitative approach. ( Operation Research ) The Quantitative School of Management is also called Operation Research or Management Science. New mathematical and statistical tools are being applied in the field of management, particularly decision-making on complex problem. Operation Research, Computer and Management Information System ( MIS ) are the modern tools of management decision-making program. B. System approach. A system approach acknowledgeds environmental influences which were denied by the classical theory. It stretched the inter relationship, an interdependence of all activities within an organisation. Rigid rules cannot deal with certain and uncover controllable events. An organises influence the environment or is influenced by it. System approach includes opeation research technique, behavioural sciences, MIS and social system. C. Contingency approach. It points out that all type of management and all type of leadership can work under certain circumstances. Situational factors play an important role in the designing of suitable management style. The following factors affect organisational structure and managerial style. Environment. Technology. People. Size of the organisation Thus, contingency approach suggests that the management style which indicates the above forces will be more effective. Unit 2 Define Planning Planning is the primary function of management. It is the process of determining future course of action in order to achieve results. Planning involves deciding in advance what is to be done, where, how and by whom it is to be done. Planning is looking forward. Planning bridges the gap between where we are and where we wanted to go. The term has been defined by various management thinkers in different ways. According to M.E. Hurle "Planning is deciding in advanced what is to be done in future". According to Massie "Planning is the process by which a manager looked to the future and discovers alternative courses of action open to it". Characteristics / Nature of Planning Planning is an integral part of management 1.It is based on objectives and policies Planning involves selecting objectives and developing policies, programmes and procedures for attainment of objectives. 2. It concerns future activities The essence of planning is looking ahead. It is concerned with deciding in the present what has to be done in future. 3. It is a mental activity According to Koontz and Odonnell, "planning is an intellectual process". Planning involves thinking. 4. It is based on facts Planning is not a guess work. It is based on objectives, facts, data and information. 5. It is to be flexible and adaptable Planning cannot be rigid. It is to be flexible and adoptable. It must be changed with the pace of time. 6. It involves six basic questions a. What is to be done? b. Why should it be done? c. Who will do it? d. How will it be done? e. Where will it be done? f. With what resources will it be done? g. When it to be done? 7. It is the primary function Planning is the first function of management. Other functions like organising, staffing, directing, controlling etc. are followed by planning. Without planning no other functions can be performed. 8. It is planned by all manager There are three level of management, namely top, middle and lower. Managers at all levels are involved in planning though differ in degrees. Importance / Advantages of Planning Planning is the most important and fundamental function of management. Planning is essential for effective performance of all the other function of management. No organisation can effectively utilise its resources without effective planning. 1. Helps in defining objectives Establishing objectives is the first step in planning. Therefore planning helps to establish clear cut and tangible objectives of the organisation. 2. Reduces Uncertainity It involves systematic forecasting of future events, trends and risks. Through planning managers can forsee the amount of risk and uncertainity involved in any business activity. 3. Prepare for change No one can prevent change. But planning can prepare managers to face and cope with the change. 4. Provide competitive strength Through planning a company may systematically add new line of products, expand the plant capacity, change the method of work, change the product quality and style. Such activities improve competitive strength. 5. Provide criteria for decision making The different element of planning i.e. objectives, policies, procedures, rules, methods, budgets etc. provide sound criteria for making decisions. 6. Motivate Employees Plans spell out goals as well as rewards. Therefore, employees are inspired to work more and better to get the rewards. Thus, planning motivates employees. 7. Facilitates co-ordination and co-operation Planning facilitates co-operation and co-ordination in an organisation. Managers can easily co-ordinate the activities of people and seek co-operation of each member. 8. Provide a basis of control Planning ensures timely performance as per standard. Various types of plans serve as standards of performance. Control is exercised in the context of planning. Types of planning. 1.Corporate planning. This term is used for planning undertaken by top managers for the whole organisation. It is a process of determining overall objectives and discovering courses of action for achieving them. It lays down basic objectives, strategy and policies to be pursued by managers for the whole organisation. Corporate planning covers and integrates all those major and vital matters and issues which are directly concerned with survival, profitability, growth and development of the organisation such as launching of new product, switching over to new technology, location, decision, etc. 2. Operational or tactical planning Operational planning involves conversion of corporate plans into detailed and specific ones dealing with various activities. Operational plan is prepared for a short period for less than a year and is also known as tactical or action plans because it divides corporate, strategic and long term Planning into various sub plans and programmes. 3. Strategic planning. Strategic planning has become relevant in a dynamic business environment. Strategic planning is the process of determining how to pursue organisational long term goals with the resource available. According to Anthony , " it is the process of deciding an objectives of an organisation, on changes in these objectives, on the resources used to attain these objectives and on the policies that are to govern acquisation, use and deposition of these resources.". 4. Short range and long range plans. Plans can also be classified with respect to time. On this basis, we can classify planning into three categories, namely short term, medium term and long term. Short term planning relates to a period of less than one year. Medium term planning covers a period of over one year but less than five years. Long range planning sets long term goals of the enterprise and formula specific plans for attaining these goals. 5. Functional planning. Functional planning covers a particular functional area of the business. For instance, if planning pertains to finances of the enterprise, it is known as financial planning. Similarly, there may be plans in other functional areas like production, marketing, purchasing, etc. 6. Standing and single use plants. Standing plans are also known as repeated use plans since they are designed to be used over and over again. They are formulated to guide managerial decision and action on recurring problems. Thus, standing plans cover a variety of repetative situations. Standing plans ensure quick decision and action whenever need arises. There is no need to repeat the reasoning and analyses required initially to design a standing plan whenever a similar situation arises. Standing plans include the following. Objectives. Policies Procedures Methods Rules Single use plans are made for handling non repetitive New or unique problems. They are tailored to fit specific situations and they become obsolete after their use. Single use plans include the following - Budget. Programmes Projects Strategies Levels of Planning The three levels of planning in management are strategic, intermediate, and operational. Strategic planning This is a high-level planning that defines the company's goals and initiatives. Top management usually performs strategic planning. Tactical planning This is an intermediate-range planning that develops specific ways to implement the strategic plan. Middle-level managers often perform tactical planning. Operational planning This is a routine decision-making process that takes place at the bottom level of management. Operational plans are prepared to establish actions that are necessary to achieve operational goals. What is Management by Objecives - MBO ? A number of new techniques of management have been developed in the recent past and MBO is one of them. The Credit for the development of MBO goes to Peter F. Drucker. This model of objectives setting was first offered by Drucker in 1954 In his book "The Practice of Management" Since then, MBO theory and practice has spreaded around the world by different name, as Management by Results (MBR), planning by objectives (PBO) , Joint target setting (JTS), The term Mbo refers to a formal procedure in which each manager and individual jointly set the goals of the organisation. Mbo is both a philosophy and goal oriented approach of management. It is a process whereby superiors and subordinates jointly identify the common objectives, set the results to be achieved, review the contribution of each individual and integrate the individual with the organisation. According to Peter Drucker, " MBO is regarded as a system for improving performance by setting of objectives at the corporate, departmental and individual managers level ". Thus, Mbo is a process through which an organisation set goals, define responsibility, review performance with the active participation of superior and subordinates. Characteristics of Mbo From the various definitions and discussion we find the following characteristics of Mbo - 1.It is a philosophy of management. 2. It is a goal oriented approach. 3. It set common objectives and also individual goals. 4. It involves participation of all people in goal setting 5. It is an interactive approach 6. It aims at optimum results. 7. It applies to total management systems. 8. It is a simple but universal approach. Various steps in Mbo / Mbo process / Techniques The process of Mbo consists of the following major steps - 1. Setting overall objectives. Mbo process starts with the setting of overall corporate objectives. The top management set the overall objectives for survival, growth and profit of the organisation. The overall objectives should keep the managers and subordinates a clear idea of what top management wants. 2. Setting departmental objectives. The next step in the MBO process is to set objectives for each department or unit of the organisation. The departmental Heads set the departmental objectives. 3. Setting individual goals or targets Next step relates to the setting of individual subordinates goals. These goals are actually the performance activities objectives for individual employees. The individual goals must be specific, quantitative, time-linked and reward-link. 4. Matching objectives with resources To achieve objectives Sufficient resources are required. There must be a perfect match between the objectives and the resources available. The management should ensure proper supply of resources necessary for Achievement of Objectives. 5. Recycling the objectives Objective setting is an interactive process. Therefore, the objectives set at different levels are to be presented before the top management for necessary adjustment and for their approval. 6. Developing action plans. The next step Is to develop action plans to achieve the goals already set. Action plans are the courses of action to be taken. It includes beginning and completion dates of each activity, time required for performance, priority of different activities, nature and amount of resources required etc. 7. Implementation of Action Plans. Next step relates to the implementation of action plans. Individuals are assigned their goals who implement them. Managers train, guide, motivate and give support to Individuals for proper implementation of the plan. 8. Periodic reviews. Superior and subordinates make or prepare periodic review, report on the progress of the works. If necessary, the action plans may be revised or modified. 9. Performance Appraisal. After a specific period of time, the performance is evaluated on the basis of certain tangible and intangible factors. These factors are allocated time, use of resources, co-operative behaviour, productivity etc. 10. Feedback Finally, the feedback is provided to the top managers. On the basis of final evaluation, a superior sends his comments and suggestions to the top managers regarding performance of every employee. Top management can make necessary changes in the Mbo programme or the objectives to be set in future. Advantages of Mbo The main benefit of Mbo program may be outlined below - 1. Encourages result oriented philosophy. Mbo encourages management and employees to be result oriented. Managers direct the activities for achievement of goal. 2. Effective planning. Mbo program can provide opportunity to discuss and remove the possible problems in the performance of plans. It makes planning more effective. 3. Coordination. It helps in coordinating the activities of the organization. Harmony can be established among organizational goals, departmental goals, and individual goals. 4. Encourage Commitment It encourages people to commit themselves to their goals. This is because they get an opportunity to put their ideas in the process of goal setting. 5. Self direction and control. It encourages self direction and self-control among the members of the organization. 6. Motivation. It can be important source of motivation because it provides proper participation and satisfaction of personal goals. 7. Facilitates control. It facilitates control. It sets the target and actual performance can be compared against the targets or goals. Deviations, if any, may be remove by taking corrective actions. 8. Development of managerial skills. It serves as a means for developing managerial skills. It provides opportunities to improve skills by setting and attaining challenging goals. What is Management by Exception - MBE ? It implies that every subordinate should be authorized to manage or perform his group involved without any intervention from the superior manager. Superior manager should be called to interval only in exceptional circumstances. So long as the matter or problem is within the scope of subordinates authority or the performance is within the livings of the standards, managers did not interfere in their working. Similarly, the subordinate should refer the matters only of exceptional nature to be superior. This practice of management is known as the Management by exception. It is clear from the above discussion that management have been defined and understood in various senses, emphasizing on different concepts of management. However, it is not fair to define management in terms of only one aspect, but it is a synthesis of all these views and thoughts. Unit 3 Define Organising According to Mc Farland Organisation is an identified group of people contributing their efforts towards the attainment of goals. According LA Allen, "Organising is a process of identifying and grouping the word to be performed, Defining and delegating responsibility and authority and establishing a pattern of relationship for the purpose of enabling people to work most effectively together in accomplishing objectives." Various types of organisation. 1.line organisation or line control Line organisation is the oldest and simplest form of organisation structure. It is also known as the military traditional and one man control. Line organisation is one in which authority flows from the top to the bottom vertically. In other words, the line of authority runs from the top to the lowest level of management. Merits It is simple to establish and easy to understand due to the direct chain of command. It clearly shows the division of authority and responsibility among various managerial positions. It helps in quick decision making because a manager can decide without consulting other managers. It facilitates sends more rapidly since there are only a few people to consult. Demerits. Line organisation overloads the managers because they are to make all the decisions. The subordinate lose initiative, because all final decisions are made by the top management. There is much scope for favouritism and nepotism because of one man's control in each department. There is little or no communication from the subordinate to the top level because the subordinates keep Distance from the managers. 2. Functional Organisation The credit for the developing functional organisation structure goes to FW Taylor. This structure is based on the concept of functional foremanship developed by Taylor. Functional organisation structure is one in which line authority is centralised Through staff specialist. In other words, authority runs through many functional experts. The functional heads are responsible for their respective areas. Merits It reliefs top executives from the burden of operating details. Hence they can devote more time on long term strategic planning. It allows organisations to make full use of services of functional experts. It fosters economy an efficiency in operation through specialisation. It facilitates mass production through the use of specialisation and standardisation. Demerits. The subordinates may get confused by the multiple superiors who direct their work. Coordination becomes difficult to do over specialisation. There is always a problem of discipline among the subordinates. It is too complicated to be understand by The subordinates. 3. Line and staff organization In order to overcome the disadvantages and limitation of line and functional organisation, a third form of organisational structure is developed which is called Line and Staff organisation. Line and stuff organisation structure is one which combines line managers with staff specialist. In other words, there is particle flow of authority and responsibility and staff specialists are associated with the managers to provide technical and managerial advises. Thus, staff being the thinkers and line being the doers. The staff is responsible for planning an advice and the line is for actual execution of the Work. The line and idea was originated in the Army and later fixed in business administration. Merits The lines of authority and responsibility are clearly defined. The staff officers serve as trainers. Too many line officers. It facilitates separation of planning and doing functions. It helps managers in managing complex and big organisations more effectively with the help of specialised staff services. In such an organisation, decisions tend to be sound and balance. Demerits The staff specialists feel ignored when their advice is not given due importance. This structure proves to be expensive because of employment of staff specialists. Generally there exist a conflict between the line managers and staff specialist for many reasons Too much dependence on the Staff by the line officers weaken their performance. Applicability In spite of some limitations, Line and stuff is the best system for medium and large enterprise. But this doesn't mean that every business concern should adopt these principle. It is not equally suitable for all types of business. Business undertaking requiring special services like purchasing, engineering, accounting, legal, etc Can suitably adopt this system. However, for a smooth functioning of any organisation The conflict between the line authoritie and the staff authoritie should go. They should remember that their functions are not contradictory, but complementary in nature. Difference between line and functional organisation? Line OrganisationFunctional Organisation1. Authority In line control authority flows Top to bottom verticallyIn functional control authority Does not always flow vertically. It also flows diagonally.2. CommandThere is unity of command in line control.There is multiplicity of command in functional control.3. DecisionDecision making is simple and quick in line control.Decision-making is difficult and delayed in functional control.4. CoordinationIt is easy to coordinate efforts in it in line control.It is difficult to coordinate efforts in it in functional control.5. SpecialisationThere is limited scope for specialisation in line control.There is fast scope for specialisation in functional control.6. SuitabilityIt is suitable for small enterprise.Functional control is suitable for large scale production enterprise. Decentralisation Decentralization is opposite of centralization. It refers to a situation the authority is going to take decision at various points. In management, decentralization is disperson of authority. According to Henry fayol," Everything that goes to increase the importance of the subordinates goal is the decentralisation. Thus decentralization of authority refers to dispersion of authority to lower level of management. Factors determining degree of decentralization. How much authority should be centralized or decentralized is a difficult question to answer. The decision of centralization or decentralization is influenced by a number of factors. Some of them are as follows. 1. Size of the organization. Decentralization depends on the size of the organization. The larger the size of an organization, the more urgent is the need for decentralization. Multi product organizations are likely to be highly decentralized. 2. History of the organization. Decentralization of authority also depends on the history of development of the organization. Organizations that are formed through acquisition and may reserves are likely to be more decentralized. 3. Management Philosophy. The philosophy of top management has considerable influence on the degree of decentralization. When the top management believes in participative management, there will be a higher degree of decentralization. 4.Pattern of planning. Planning is usually the most crucial management function in thinking about decentralization. In the organization having carefully drawn plans, the chance of decentralization is high because managers can make decision within the context of those plans. 5. Rate of change in organization. The rate of change in the organization also affects the degree of centralization and decentralization. If the business is fast developing and it is facing the problems of expansion, there is more chance that authority will be decentralized. 6. Environmental influences. There are environmental influences also which determine the degree of decentralization. The government regulations relating to business have great impact on the centralization of authority. 7. Communication system. Adequate and effective communication system is favourable for centralization of authority. Where it is inadequate and ineffective, decentralization of authority become essential. 8. Significance of the decisions. The more the by significant decision is to be made, it is likely to be made at the upper level of the organization. But the routine decision involving very low cost and risks are decentralized. Merits or advantages of Decentralization? Many organizations adopt decentralization because it offers the following benefits. 1. Reduces burden of top managers. Decentralization of authority reduces the workload of top managers. They can devote more time on important work of planning and policymaking. 2. Quick decisions. It facilitates quick decision as the decisions can be made on the spot without consulting higher level manager. 3. Better communication. Decentralization improves organizational communication system. It is due to the fewer level of authority. 4. Democratic atmosphere. Decentralization promotes democratic atmosphere in the organization because of dispersional of authority throughout the organization. Limitation of the merits of decentralization. Decentralisation is useful basically to large organizations. Here, there are many problems on decentralisation, some of which are as follows. 1. Loss of control. Decentralization creates semi autonomy departments in the organization. Therefore, the top management may lose its control over the functioning of different departments. 2. High cost. Decentralization of authority is likely to increase the cost of administration and operation. 3. Difficult in co-ordination. Decentralization may create problem in bringing coordination among the different departments of the organization. 4. Lack of uniformity. Uniformity of decision and actions may be lacking in the centralized organization. Span of Control It is also known as span of management or a span of supervision or a span of responsibility. The concept of span of control refers to the number of subordinates directing, reporting to a superior. It also refers to the number of subordinates who can be effectively and efficiently supervised directly by a manager or superior. A manager cannot directly supervise unlimited number of subordinates. Therefore, the principle of span of control is needed. Factors determining optimum span of control. The basic idea behind limiting the span of control is to enable a manager to manage his subordinates effectively. Therefore, certain factors are quite important in determining the suitable or optimum span of control. Some of them are as follows. 1. Ability of manager. Ability of manager is the most important factor in determining the span of control. A manager who is able, competent and well trained can effectively supervise more subordinates. 2. Ability of subordinates. Able and well trained subordinates require less supervision and less contact with their superiors. Hence the organization can go for Wider span of control. 3. Nature of Job. If the nature of Job is interdependent, complex and varied, narrow span of control is essential. But simple and routine type jobs may allow wider span of control. 4. Delegation of authority. When a supervisor clearly delegates authority to his subordinates, the subordinates require minimum time and interaction with the supervisor. In such a situation, a wider span of control may be opted for. 5. Degree of decentralization. Degree of Centralization or decentralization also affects the span of management. Higher degree of decentralization, higher the degree of span and vice versa. 6. Communication system. The pattern of communication also affect the managers. If communication is mostly face to face, the organization should go for narrow span. On the other hand, use of modern communication tools helps to increase the span of control. 7. Nature of environment. Some managers operate in unstable environment than the others. That managers operating in more unstable environment need to have narrow span of control. 8. Staff assistance. When staff assistance is available, the manager can operate with wider span of control. It means that he can supervise larger number of subordinates. Thus, it is clear that optimum or appropriate span of control for any organization depends on a number of factors. Management should consider all of them simultaneously while deciding the optimum span of control. Unit 4 Define staffing Staffing can be defined as one of the most important functions of management. It involves the process of filling the vacant position of the right personnel at the right job, at right time. Hence, everything will occur in the right manner. Importance of Staffing Staffing function Fill up the gap between organisational design and human assets and make structure of organisation functional and operating. All the physical resources are to be utilised through human resource, therefore an efficient utilisation of these resource to the large extent depends on skill, capabilities, an attitude of human Inputs. A force of highly talented and spirited employees is must for Accomplishing objectives of the organisation. Staffing process and policies play considerable role with regard to development of executives and non executive employees. It can be done by providing Scientific and regular training to the employees and conducting development programmes from time to time for executives. Through the process of training and development both managerial as well as non managerial employees are made capable of contributing their maximum for achieving organisational Objectives. In addition, attitude, orientation, morale, motivation and performance of the employees in an organisation depends on how effectively staffing functions have been handled and how much attention has been given by top executives. Effective performance of staffing functions helps in matching the expenditure incurred in maintaining human resource and the benefit derived out of it. It is done by enhancing contribution and commitment of the employees towards Goal Achievement. All round developments made in their personality enables them to contribute significantly for the success, growth and development of an organisation. Components of Staffing Unit 5 Define Directing In management, directing is the process of guiding, supervising, leading, and motivating employees to achieve organizational goals. It is a core function of management, along with planning, organizing, and controlling. Directing involves: Instructing Counseling Inspiring Looking over the performance of employees Directing can help with: Bringing about changes in an organized manner Stabilizing the organization Smooth adaptation of changes Effective utilization of resources Abraham Maslows need Hierarchy Theory Abraham Maslow says, developed a widely acclaimed conceptual framework for understanding human motivation. According to Maslow, human needs tend to follow a basic hierarchical pattern from the most basic needs to the higher level needs. Until the more basic needs are fulfilled, a person will not try to made his higher level needs. Human needs tend to follow the classification of 5 needs. Physiological needs. Physiological needs are biological needs required to preserve human life. These needs include needs for food, clothing and shelter. These needs must be made at least partly before higher level needs emerge. They exert a tremendous influence on behaviour. 2. Safety and security. Once physiological needs become relatively well ratified, the safety needs begins to manifest themselves and dominate human behaviour. These include Protection from Physiological danger.Fire and accident Economic security. Friends Benefits Health Insurance programme. Desire for an orderly, predictable environment. The desire to know the limits of acceptable behaviour. 3. Social Needs As a social animal, man has an acceptable need in a social group or community. Social needs relate to the desire to help, social interaction, friendship, affiliation, belongingness with groups, acceptance, affection, support from others, and so on. Ecoestic or Esteem Needs. These are higher level needs like power, status, self-respect etc, which are felt by man in certain stages in his life. Self actualization. According to Maslow, to discover and fulfil his own potential through creativity and self actualization. Maslows motivation model is based on three assumption. Man is a wanting animal. He always wants more. A satisfied need can never be a motivator. Only unsatisfied need can influence his behaviour. Mens need are Arranged in a hierarchy of importance.Once a lower level need is satisfied another higher level needs emerge and demands satisfaction. Dauglas MC Gregor XY Theory Discussion on motivation remains incomplete without the reference to Mc Gregor's theory of X&Y. Professor Douglas Mc Gregor has introduced 2 theories in his famous book (The human side of enterprise). He has developed two theories to explain human behavior, which he calls Theory X and Theory Y. Douglas motivation model is based on the assumptions regarding human nature. Accordingly, he has divided people into two categories as shown below. Theory XTheory Y 1. People lack ambitious. 1. The people are ambitious. 2. They dislike responsibility. 2. They seek responsibility. 3. They are self-centered. 3. They are dynamic. 4. They are by nature resistant to change. 4. They recognize and accept change. 5. They are not very bright and lack of creativity. 5. They are intelligent and possess creative potential. 6. When the employees are unskilled and semi skilled, illiterate, ignorant, we can conclude in favour of theory X. 6. When the employees are liberated or well informed and get good wages and salaries and their jobs are challenging and meaningful, we can conclude in favor of theory Y.7. Theory X believes in negative motivation.7. Theory Y believes in positive motivation. 8. Sick will prefer Theory X. 8. Mentally healthier people will opt for Theory Y Herzbergs Theory of Needs - Two Factor Theory of Motivation In the late 1950s Frederick Herzberg had conducted a study on motivation. The study has developed a theory of work motivation. This theory has brought implications for management in the effective utilization of human resources. So this theory is known as Herzbergs motivation theory of needs. It is otherwise called maintenance theory of motivation, hygiene theory, or two factor theory of motivation. Herzberg's try to understand from his studies the motivation problem and to identify the human behavior, nature and needs which are inbariable to organizations. In this study, he intergrouped 200 engineers and accountants from 11 industries in Pittsburg area. He asked these persons to think of the time when they feel good and bad about their jobs and describe the conditions which cause such feelings. Frederick Herzberg developed a two factor theory of motivation. He says that man has two sets of needs. One is the lower level set. It denotes maintenance or environmental factors which do not motivate job satisfaction. But they are absence causes dissatisfaction. The other side is the set of higher level need, which are counted as motivators because they are the real causes of job satisfaction. Two kinds of needs of people at work. Maintenance factors. Motivational factors. 1. Money, wages and salaries.1. Challenging work. 2. Security and status. 2. Increased responsibility. 3. Working conditions. 3. Recognition for achievement. 4. Company policy and administration.4. Opportunity for growth and development. 5. Interpersonal relationship. 5. Achievement of an important task. In Herzberg term, satisfaction is equal to motivation. Unhygienic environment creates dissatisfaction. Hygienic environment and fairways means no dissatisfaction. Unit 6 Define control. Control is the last phase in the management process. Controlling is seeing that actual performing is guided towards expected performance. It is an important function of management. The other management functions cannot be completed properly without performance of control function. According to. Phillip Kotler, "Control is the process of taking steps to bring actual results and desired results closer together". According to J.K. Rosen," Control is the function of the system which provides direction in performance to the plans. Thus, control is the process by which managers ensure that performance is in conformity with plans and goals. The function of control is concerned with checking and correcting activities of human beings and not the human beings. Requirements of effective control system. 1. Feedback. Feedback is the process of adjusting future actions based upon the information regarding past performance. If feedback practice is followed by the management, the control process will be very easy. 2. Emphasis on objective. Before planning a control system, it is essential to know clearly the objectives of the organization. The control system should aim at accomplishing the organizational objective. 3. Suitability. Control should be tailored to fit the need of the organization. The flow of information concerning correct performance should correspond with the organizational structure employed. 4. Forward-looking. The control system should direct towards future. It should report that aviation from the plans quickly in order to saveguard the future. 5. Flexibility. A control system must keep pace with the continuously change in patterns of the dynamic business world. It should be adaptable to new developments, including the failure of the controls itself. 6. Economy. The benefits derived from the control system should be more than the cost of exercising such a control system. 7. Suggest remedial action. An effective control should disclose the places of failure, person for failure and how they had been dealt with. Discuss the various techniques of controlling. Various methods are used by the management for controlling the various deviations in the organization. The nature and use of managerial control techniques are discussed below. 1. Statistical Control Reports. This type of reports are prepared and used in large organizations. Reports are prepared in quantitative terms. Then the variations from standards are easily measured. In this way, control is exercised by the management. 2. Personal observation. Using this technique the manager personally observes the operations in own place. The manager corrects the operation whenever the need arises. This is the oldest method of control. 3. Cost accounting and cost control. Profit of a business depends upon the cost incurred to run a business. Profit is maximized by reducing the cost of operation or production. So the business concern gives much importance to the cost accounting and cost control. 4. Break even analysis. It is otherwise called as "cost volume profit analysis". It analyzes relationship among cost of production, volume of production, volume of sales and profits. The break even point analysis helps managerial control in several ways. 5. Special Control report. This report may or may not contain statistical data. Using this technique, a particular operation is investigated at a specified time for a particular purpose. This is done according to the requirements of management but not in regular basis. 6. Management Audit. It is an independent process. It aims at pointing out the inefficiency in the performance of management functions such as planning, organizing, staffing, directing, controlling and suggesting possible improvement. 7. Return on investment. ROI It is also known as return on the capital employed. Using this technique, the rate of profitability is identified by the management. 8. Performance evaluation and review technique. PERT This technique is very useful for construction projects, publication of books, etc. 9. Critical Path Method - CPM. This technique also follows the principle of PERT. It concentrates on cost rather than duration. Critical path method assumes that duration of every activity is constant. In this technique time estimate is made in each activity. 10. Budgetary control. The preparation of budget is also one of the control technique followed by the management. Budgetary control is a tool used by the management to obtain the objectives expressed as in the form of budget. The actual results are compared with the budgeted figures. Define Coordination. J.Lundy, " Coordination involves the development of unity of purpose and the harmonious implementation of plans for the equipment of desired aims". Newman, " Coordination is a part of all phases of administration, and that it is not a separate and distinct activity". Need and Importance of Co-ordination The effective performance of managerial functions require co-ordination. 1.Unity in diversity: Effective co-ordination is the essence of good management. There are large number of employees and each has different ideas, views or opinions, activities and background in a large organisation. Thus, there is a diversified activity in large organisation where these diversified activities will be inefficient in the absence of co ordination. So, co-ordination is the main element of unity in diversity. 2. Team work or unity of direction: The efforts, energies and skills of various persons should be integrated as group efforts to achieve the objectives of organisation but the absence of co-ordination, the group efforts may be diversified and fail to achieve the objectives. Besides, co-ordination eliminates the duplication of work which leads to economic and efficient management. 3. Functional differentiation: The organisation functions are divided department wise or section-wise or division-wise. Each department performs different jobs. They are necessary to achieve the general objectives. Co-ordination ensures definite achievement objectives. Each department tries to perform its function in isolation from others. It may create a problem. Therefore, co-ordination is necessary to integrate the functions of the related departments. 4. Specialisation: There is a high degree of specialisation in the modern industrial world. Specialist know throughly about their respective fields. They are able to judge the scope, nature and kind of work they perform. But they fail to know the job of other and the importance of others performance. This tend to cause disputes among the specialist. Disputes may be solved with the help of co-ordination. 5. Reconciliation of goals: Each department or division has its own goals to achieve within the stipulated time. There are general goals in relation to an employees who are working in the organisation also have their own goals. Individuals or Employees give more importance to their own goals than to the department and organisational goals. Therefore, co-ordination reconciles the goals with both departmental and organisation goals. 6. Large number of employees: Large number of employees are working in large organisations. They have different habits, behaviour and approaches in a particular situation. Sometimes, they do not act rationally. Their behaviour is neither always well understood nor completely predictable. So, there is very possibility of problems arising in a complex organisation. All this makes co-ordination more essential. 7. Congruity of flows or congruent flows: Congruity of flows refers to the continuous flow of similar information from one direction to other directions. Information regarding the utilisation of resources, activities, using of authority and output is made to flow in an organisation. Co-ordination ensures the smooth and continuous flow of information. 8. Empire building: Empire building refers to top portion of line organisation. The line officers always expect co-operation from staff officers. But the line officers are not ready to extend their co-operation to staff officers. It creates conflicts between line officers and staff officers. Therefore, co-ordination is necessary to avoid conflicts between line officers and staff officers. 9. Differentiation and integration: The whole activity of every organisation is classified into two units. They are specialised and homogeneous units. Authority is delegated to the various levels of organisation. This is necessary to achieve group efforts. Co-ordination facilitates this process . Types of Co-ordination Normally, the co-ordination is divided into two types. They are explained below: 1. Internal co-ordination: It is the establishment of relationship with a view to co- ordinate the activities of all the managers, executives, divisions, sub-divisions, branches and other workers. Internal co-ordination is also sub-divided into the following two types: (i) Vertical co-ordination: Vertical co-ordination refers to that co-ordination in which a superior authority co-ordinates his work with that of his sub-ordinates and vice versa. Sales manager co-ordinates his work with the activities of the sales supervisor. Similarly, the sales supervisor is required to have co-ordination and cordial relationship with his superiors. (ii) Horizontal co-ordination: Horizontal co-ordination refers to the establishment of a relationship between the persons of the same status. For example, co-ordination between the departmental heads, supervisors, co-workers, etc. 2. External co-ordination: External co-ordination is the establishment of a relationship between the employees of the organisation and outsiders of the organisation. This relationship is established for the benefit of the organisation as a whole. The following are the outsiders with whom an organisation has to establish better relationship: (i) Market agencies. (ii) General public. (iii) Competitors. (iv) Customers. (v) Union government, state government, local self-governments and other government ------x------ View All subject Notes ! Financial Accounting BBA 1st Semester Managerial Economics BBA 1st Semester Principle of Management BBA 1st Semester Computer Fundamentals BBA 1st Semester

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