MANAGEMENTIN

ORGANIZATION-By Sushant Sharma

1. Forms of Business Enterprise – Risk /Income /Management.

2. Management TheoriesManagement Theories

3. Management Techniques3. Management Techniques

4. Nature &Purpose of Management

5 Management Processes in 3D

6. Managerial Skills /Functions

PURPOSE OF STUDY

Work organization

-for Community – goods &services-for Shareholders- Dividends-for Owners- Profits-for Employees- service------------

jobs careers ,income ,perks ,welfare

BUSINESS ENTERPRISE

ENTERPRISE GOAL

OPTIMUM EFFIECIENCYAND EFFECTIVENESS

(DIVERSIFICATION,EXPANSION /CAPITAL

INVESTMENT )

ENTERPRISE GOAL

PROFITABILITY–NECESSARY FOR

SURVIVING

MEASURE OF SUCCESS BUT NOTA GOAL

Three elements of form of ownership; Risk, Income, and Management.

In the individual proprietorship the three are centered in one man who risks hisown capital , undertakes the management, and receives all the income.

Under the partnership form, the partners as a body, like the individual owner,undertake the risk and management and receive the income; but amongthemselves there may be an infinite number of combinations. One partner, forinstance, may supply all of the capital; another may supply the management;and they may divide the income in any manner agreed upon.

Under the corporate firm the risk is taken by the various creditors andshareholders who supply capital under the conditions that have been agreedupon.

These creditors and shareholders divide the income in rough proportion to theirrisk. The management, however, is not necessarily retained in the hands of thepeople who contribute the capital, but may be turned over to directors andofficers who are not personally large shareholders.

The tendency has plainly been to separate the supplying of capital for thebusiness and the management of the capital so that they need not necessarilybe joined in one man or even in a small group of men.

Types of Business Organisations

Private SectorPublic Sector-

Controlled by StateGovt.

Joint Sector

State Enterprises-M/s BHEL ,

IRCON,SAIL

Public PrivateOrganization

Capitalist Form Non Capitalist Form

1 Proprietary Firms/Proprietorship

2 Partnership

3 Joint Stock Company

Private Ltd. Co.

Public Ltd. Co.

Co-operativeOrganizations

Forms of Business Enterprise1. Proprietary &Partnership Firm

- Formed by individual /group of people- Owner’s own capital- No sharing of Profits/loss- Unlimited Liability -if he fails to clear his business debts- all his private property attached to

creditors- Easy to form – Not subjected to any legislation

2. Joint stock Companies- Capital base is created by sale of shares- Voluntary incorporated association of shareholders /stockholders who contribute to the common

stock- Limited Liability – Liability of the shareholders is limited ,hence risk faced by them are reduced.- For Pvt Ltd company , shareholders cannot be more than 50.- Shares not quoted on stock exchange- Public Ltd Co. – May be tightly /lightly held by a family- Public sector Co. –All shares held by Govt./Govt. controlled Co’s.-

3. Multinational CorporationsAdv: 1. Business opportunities in many diff countries

2. can raise money for its operations worldwide3. Can establish production overseas wherein access to natural resources4. can recruit people worldwide labour pool

4. Entrepreneurship --The individual owning outright his own business and usually managing it himself withoutmuch cooperation or assistance.

-Entrepreneur undertakes economic ventures, owns ,organizes, promotes &manages ittaking risk of business

-

Attributes of anEntrepreneur

1. Opportunity finding – Maximization ofOpportunities

2. Problem Facing3. Will to Manage4. Need for Power5. Capacity for Empathy

MANAGEMENT THEORIES1. Scientific Management Theory (Fredrick Taylor)

2. Human relation Theory ( Elton Mayo)

3. Theory X &Y (Mc-gregor)

4. Motivation Theory (Herzberg)

5. Management System Theory ( Fayol)

6. Need Hierarchy Theory (Maslow)

7. Mckinsy’s 7s Approach

1. Scientific Management Theory (Fredrick Taylor)

- No inherent conflict between labour and employers.

- Labour wanted more income,- Employers wanted more profits- Consumer wanted a better price.

- All benefited -Plant itself produced more.

- Real problem -determining a fair day’s pay for a fair day’swork.

- Derive Quantitative method –- worker could know the basis of his wages, which his income

moved up- increase of efforts put in then he would be more rational and

more production-oriented.- To be conducted by the employer

Scientific Management Theory (Fredrick Taylor)

It is for employers to establish a scientific approach tomanagement which he said was based on five basic rules:

i. Replacing thumb rule with organised knowledge.

ii. Obtaining harmony in group action rather than discord.

iii. Achieving co-operation of all rather than chaoticindividualism.

iv. Working for maximum output rather than restrictedoutput.

v. Developing of workers’ ability to their fullest extentpossible for their own and their company’s prosperity.

Further Taylor advise the employers to establish the followingfour management practices:

i. Scientific management of work (Time and MotionStudies).

ii. Clear procedures of work (Authority, Instructions,Training, Manuals of Operations).

iii. A rational wage structure (making wage system reflectindividual merit, moving up income with increasedinputs, incentive systems, pay scales etc.)

iv. Right man for the right job (systematic employment,recruitment, selection policies).

Scientific Management Theory (Fredrick Taylor)

-1st experimented by Elton Mayo (1924-44).

-The General Electric Plant at Hawthorne in 1923 was undergoing highlabour turnover, absenteeism and production fall for no explicablereasons.

-Case- I Reason- Fatigue as well as lack of proper lighting and otherphysical amenities at the work place. The needful was done.

- The production went up but the problem was that while these conditionswere not present in the control group, it’s production also went up. Thisindicated that the increased production could not be attributed to theimprovement in working conditions only. Mayo who was involved in theseexperiments discovered that it was not the fact of giving better conditionsbut the feeling that this action created amongst the employees that did thetrick. The employees felt the company cared for them.

2. Human Relations Theory (Elton Mayo)

-Case 2 Later when Mayo asked workers to elect representatives whowould sit with the management to decide on the introduction of changes indaily working hours and other conditions of work, the output curve soaredup without regard to changes whether they were made or not. Thisincreased output was attributed to participative management.

-Case- 3 Another department of the same company had a differentproblem. Whatever management did to improve production never worked.Attempts to get tough, only made supervisors more disliked.

-- Everyone seemed to be busy and working but the production curvenever went up. No one reported on any one and no one got caught. Onsome days production went up for no particular reasons and on other daysit went down also for no particular reasons.

Human Relations Theory (Elton Mayo)

Case-3 contd..

- The management were baffled as they did not feel in control of the situation.

- Mayo studied the situation and identified the role of informal groups in shopfloor management.

- He found that people organise themselves into small groups on the basis ofinterests (caste, village, origin, language etc.) and someone emerged as aleader of the group. Group pressure and loyalty to the group developed andthe informal group leader had more say in all matters. Whenever he felt goodabout the company the production went up and on the other days it wentdown.

- Mayo said that a management should accept the role of informal groups andinformal leaders in management. Informal group leaders should be identified,accepted and involved in the management process. The formal managementi.e. managers, engineers, supervisors should be trained in human relations inorder to achieve better production.

Human Relations Theory (Elton Mayo)

3. Theory X and Y (McGregor)

Theory X of McGregor was a label for the traditionalmanagement approach of pushing people and extractingwork out of them. It was based on the premise that:

i. People did not like to work basically.

ii. Some kind of club, authority, threat of punishment,needed to be held on their heads to make sure thatthey worked.

iii. People did not like to think for themselves. Thereforethey should be told what to do.

Theory X and Y (McGregor)

In contrast to that theory, McGregor, based on his researches,established what he called theory Y which was based on thefollowing premise:

i. People do not like or dislike work as such. Rather theydevelop an attitude towards work based on theirexperience in the past.

ii. While authoritarian methods can get things done in theshout it will not work in the long run.

iii. People select goals for themselves (what they want tobe to do, to achieve) if they see the possibility of somekind of reward in it, material or psychological.

Theory X and Y (McGregor)iv. Once a person sets a goal for himself he will pursue it

vigorously at least more than what a supervisor canotherwise pressurise him to do.

v. Most people, under right circumstances, seek responsibilityfor self-fulfilment. They do not shun responsibility.

Commenting on Theory X and Theory Y, McGregor said that theyneed to be seen as a continuum and not as two ends of a situation.

-He said that Theory y was not an invitation to disorder or softness orabdication of management responsibilities.-Theory Y recognised authority as a method of managerial control to beused along with other methods such as self control, self-discipline andself- regulation.- The most powerful motivating force to an individual was the possibility offinancial gains coupled with the possibility of personal growth.

Fredric Hertzberg Two Factor Theory

Frederick Irving Hertzberg (1923 – 2000) -noted psychologist who becameone of the most influential names in business management.

Motivation-Hygiene Theory / Two factor theory (1959) of jobsatisfaction.

According to his theory, people are influenced by two factors:

• Satisfaction, which is primarily the result of the motivator factors.These factors help increase satisfaction but have little effect ondissatisfaction.

• Dissatisfaction is primarily the result of hygiene factors. Thesefactors, if absent or inadequate, cause dissatisfaction, but theirpresence has little effect on long-term satisfaction.

Motivator Factors

Achievement

Recognition

Work Itself

Responsibility

Promotion

Growth

Hygiene Factors

Pay and Benefits

Company Policy and

Administration

Relationships with co-workers

Physical Environment

Supervision

Status

Job Security

Salary

Management System Theory (Fayol)

Perhaps the real founder of modern management is the Frenchindustrialist, Henri Fayol. Fayol wrote as a practical man ofbusiness reflecting on his long managerial career and he set downthe principles based on his observations and experience. He saidthat all activities of an enterprise could be divided into 6 group viz.

i. Technical - productionii. Commercial - buying, selling and exchangeiii. Financial - creating resources and making

optimal use to capitaliv. Security - protection of property, persons and

healthv. Accounting - book keeping statistics and feed backvi. Managerial - planning, organisation, direction,

coordination and control

Management System Theory (Fayol)Fayol pointed out that the first 5 activities are well-known and theyexisted in businesses of any kind and size. Therefore he devotedhis attention to the analysis of the 6th i.e. Managerial.

To being with Fayol said that persons responsible for managementmust have the required managerial qualities which he listed asbelow:

i. Physical i.e. good health and vigorii. Mental i.e. ability to understand, learn, judge, adopt and predictiii. Moral i.e. energy, firmness, willingness to accept responsibility,

initiative, loyalty, tact, dignityiv. Educational i.e. expert knowledge of one’s own field and ability

to work with the techniques of other disciplines.v. Technical i.e. expertise in one’s own professionvi. Experience i.e. performance in the past which a person is able

to analyse, codify and use for work in future.

Management System Theory (Fayol)Thereafter, Fayol went on to identify and establish the followingfourteen general principles of management:

- Division of work- Authority and responsibility- Discipline- Unity of command- Unity of direction- Subordination of self-interest to the corporate interest- Human relations- Centralisation- Chain of authority- Orderliness i.e. place for everything and everything in place- Quality- Stability of tenure i.e. offering a career- Initiative- Team sprit

MAN IS NEVER CONTENDED

Whenfulfilled

WhenfulfilledNeed for:

1. Hunger2. Protection against nature &3. Well being of self & family

Need for:1. Social relationship

2. Belonging to a group3. Recognition & Promotions

Need for:1. Power

2. Social & Societalesteeming

3. Psychological feeling ofbeing wanted desired &

recognized.

NeedsHierarchy

Theory(Maslow)

Needs Hierarchy Theory (Maslow)• Before this need is fulfilled another need emerges. Thus one need

replaces another and the process continues. It is in pursuit of needs thatpeople keep striving to get more and more.

Example :• If Ford or Rock feller or Birla work so hard for so long every day, certainly

they do not work for money.

• Money is worth what it can buy and these people perhaps have all that isworth having. Therefore, the needs that motivate them to keep striving towork hard, to expand, must be of a different order altogether.

• Maslow suggested that a management must recognize this reality ofneeds. You cannot take people for granted.

• You may have given the best today but the best of today has got changesof becoming the minimum for tomorrow and ground for further demands.

• Today’s motivators are likely to become tomorrow’s hygiene factors.

Meaning of Management

• Management is generally defined as the art and science ofgetting things done through others. This definitionemphasizes that a manager plans and guides the work ofother people.

• It is a process of utilizing physical &human resources toaccomplish design objectives

• Relying on group effort for better results more than what isproduced by sum of total of individual effort

• Management is the process of designing and maintainingan environment in which individuals, working together ingroups, efficiently accomplish selected aims.

Management Process• Process refers to a set of activities sequentially arranged

and designed to provide a specific output.

• Difference between a function and a process is former isfocused on tasks, jobs, people, structures & latter onactivities.

• For example, task of construction is important but wontamount to much unless passes through planning,organizing, staffing and controlling process.

• Management is the process of planning, organizing,leading, and controlling the efforts of organizationmembers and of using all other organizational resources toachieve stated organizational goals”. Management focuseson the entire organization from both a short and a long-term perspective.

• Management is an organizational function, like sales,marketing or finance. It doesn't necessarily meanmanaging people. We can manage ourselves or thematerial assigned to us at work. If you managed a projectvery well on your own, it would mean that you did the job ina well-organized, efficient.

Meaning of Management

Management Process Management as amatrix of functions and process

FunctionProcess

Technical Financial Marketing PersonnelorHR

Procurement

Planning

Organising

Staffing

Coordinating

Controlling

Need & Purpose of Management

The need of management is:• Goal setting• Helping in achieving objectives• Operational strategy• Optimum utilization of physical resources• Optimum utilization of human resources• Reducing costs, time and efforts• Maintaining the quality of end product• Increasing the satisfaction• Securing the future plans• Policy making• Financial control• Responsibility of success• Innovation and specific

The Purpose of Management

The basic purpose of management is to learn about WHY

W – WHAT TO MANAGE?H – HOW TO MANAGE?Y – YOUR GOAL AND PATH

• The purpose of management is to align, encourage,inspire, develop, and sustain individual contributors sothat organizational goals can be met. This is what shouldbe aspired to in any healthy organizational culture.

• Management must actively enable their resources to dothe tasks required of them.

• Management is making the best use of resourcesavailable (including human resource) under any givencircumstances for achieving the organizational goals.

• The purpose of management is to identify opportunitiesand threats in the economic environment and devisestrategies and vision to inform and drive an entity's choiceof organizational goals. Management is furtherresponsible for providing the resources, people,organization structure, processes, and motivation, andleadership needed to achieve the goals identified.

• The purpose of management is to offer a purpose to anorganization, and within that context, to develop anorganization best suited to achieving that purpose.

MANAGEMENTTECHNIQUES

1. WHY TO BENCHMARK2. WHAT SHALL WE BENCHMARK3. WHAT MEASUREMENTS SHALL WEAPPLYWHO SHALL WE BENCHMARK AGAINSTAND HOW4. WHAT IS THE SCOPE AND NATURE OFPERFORMANCE GAP5. HOW CAN WE TRANSLATE THE DATAINTO REAL IMPROVEMENTS

(I) BENCHMARKING

-A benchmark is a standard of performance

-Benchmarking is a process of continuouslycomparing and measuring an organizationwith leader anywhere in the world, to gaininformation that will help it to take action toimprove its performance

Types of BenchmarkingInternal Benchmarking- Comparisons with other parts of the same organizations-

departments, other sites, other companies within the same group,either in the same country or abroad.

- Straightforward to arrange and fairly common.- Easy to obtain all the information necessary for a good comparison

to be made.- It the operations are similar across the different sites the data will

be instantly relevant and usable, but it is unlikely to yieldimprovements, which meet world best practices

Competitors Benchmarking is much more difficult.- An information obtained is likely to be very relevant but, for

reasons of confidentiality it will be almost impossible to get a fullpicture of how a direct competitor operates.

- Looking at output and available figures can give some information,but they can also mislead if the processes that deliver the outputscannot be determined.

- Some of the larger organizations, however, do exchangeinformation in selected areas in the interest of jointly coming toterms with best practice.

Types of BenchmarkingFunctional Benchmarking-Involves making comparisons with typically non-competitive organizations, which carry out the same,functional activity that you are interested in. Examples arewarehousing, procurement, catering etc.-Advantages; functional leaders are easy to identify inmany areas: confidentiality is not usually an issue:approaches which may be novel for your industry can bediscovered: two-way partnership can be developed.-Weighting against these is likely to be problems inadopting and adapting their practices for your operation.

Generic Benchmarking-goes a step further and may compare business processes,which cut across various functions and in quite differentindustries.-Opportunities discovered by this process are likely to be mostinnovative and to create breakthroughs for unprecedentedimprovement.-integration of novel concepts into a different industry is alsolikely to be most challenging.

Best Practices

1. The approach towards benchmarking shall be to understand theidea/ purpose behind the best practices and then adopt those ideasto fit into our own processes and culture.

2. Competitor’s benchmarking shall be preferred only wheninformation obtained is likely to be relevant as it is almost impossibleto get full picture of how a competitor operates

3. Related processes to benchmarking impact on other processesshall be evaluated

4. Benchmarking shall be used as motivational tool for employeesfor innovation and breakthrough thinking.

Process - Consists of Policies .Procedures ,steps ,Technology&personnel's needed to carry out significant segment of operationwithin an organization

-Structured ,measured set of activities designed toproduce a specified output for a particularcustomer/market

Business Process- Sequence of tasks &functions which togetherleads to the objectives that contribute to the success of organization

Re-engineering – Transformation of Company from the one based onfunction (such as accounting /marketing /manufacturing ) to theprocess based such as procurement of a machine , fulfillment ofcustomer expectations

- analyzing and altering the basic work processes of a business

(II) Business Process Re-engineering

(II) Business Process Re-engineering

Fundamental rethinking –why do we do andwhat we do ,

Radical redesign –Getting to the root problem

achieve dramatic improvements in critical,contemporary measure to cost, quality,service and speed

Management Process

Process refers to a set of activities in logicalsequentially arranged and designed to provide aspecific output.

This process is focused on tasks, jobs, people,structures & latter on activities. Thesemanagement processes have to pass throughPlanning, Organising, Staffing, Directing andControlling processes.

Planning Predetermining a course of action foraccomplishing organizational objectives.

Organizing Arranging the relationship among work units foraccomplishment of objectives and the granting ofresponsibility & authority to obtain those objectives

Staffing Selecting and training people for positions in theorganization

Directing Creating an atmosphere that will assist andmotivate people to achieve desired end results

Controlling Establishing , measuring and evaluatingperformance of activities towards plannedobjectives

MANAGEMENT PROCESSES

1. Setting objectives

2. Making assumptions

3. Creating options/ alternatives

4. Selecting a course

5. Formularize derivative plans

6. Estimate resource requirement and their allocation.

1. Planning Steps

Levels of Planning

In construction, three levels of planning are there.

1. Corporate Planning - This planning is done incorporate level or by Top Level Management.

2. Project Planning – This planning is done byMiddle Level Management.

3. Site Planning - This planning is done by LowLevel Management.

Types of Planning

Strategic Planning:-Analyzing competitive opportunities and threats, as well as the strengths andweaknesses of the organization, and then determining how to position the organizationto compete effectively in their environment.-Strategic planning has a long time frame, 3years or more-Strategic planning generally includes the entire organization and includes formulationof objectives. Strategic planning is often based on the organization's mission, which isits fundamental reason for existence.-conducted by organization's top management.

Tactical Planning:-Intermediate-range planning that is designed to develop relatively concrete and specificmeans to implement the strategic plan.-Middle-level managers often engage in tactical planning.-Tactical planning often has a one- to three-year time horizon.

Operational Planning:-Assumes the existence of objectives and specifies ways to achieve them.-Short term planning that is designed to develop specific action steps that support thestrategic and tactical plans.-Time horizon, from one week to one year

Rolling Planning : Refers between short & long-term planning.

Contingency Planning : Emergency or stand by plans.

Steps in Planning FunctionPlanning function of management involves following steps:-1. Establishment of objectives1. Planning requires a systematic approach.2. Planning starts with the setting of goals and objectives to be achieved.3. Objectives provide a rationale for undertaking various activities as well

as indicate direction of efforts.4. Moreover objectives focus the attention of managers on the end results

to be achieved.5. As a matter of fact, objectives provide nucleus to the planning process.

Therefore, objectives should be stated in a clear, precise andunambiguous language. Otherwise the activities undertaken are boundto be ineffective.

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

7. Such goals should be specified in qualitative terms.8. Hence objectives should be practical, acceptable, workable and

achievable.

2. Establishment of Planning Premises

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

2. They serve as a basis of planning.3. Establishment of planning premises is concerned with

determining where one tends to deviate from the actual plansand causes of such deviations.

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

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

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

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

3. Choice of alternative course of action

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

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

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

4. After objective and scientific evaluation, the best alternative ischosen.

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

4. Formulation of derivative plans

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

2. Secondary plans will flow from the basic plan. These are meant tosupport and expedite the achievement of basic plans

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

4. Derivative plans indicate time schedule and sequence ofaccomplishing various tasks.

Formulation of derivative plans

Securing Co-operation

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

2. The purposes behind taking them into confidence are :-a. Subordinates may feel motivated since they are involved in

decision making process.b. The organization may be able to get valuable suggestions and

improvement in formulation as well as implementation of plans.c. Also the employees will be more interested in the execution of

these plans.

Follow up/Appraisal of plans

a. After choosing a particular course of action, it is put into action.b. After the selected plan is implemented, it is important to appraise

its effectiveness.c. This is done on the basis of feedback or information received

from departments or persons concerned.d. This enables the management to correct deviations or modify the

plan.e. This step establishes a link between planning and controlling

function.f. The follow up must go side by side the implementation of plans

so that in the light of observations made, future plans can bemade more realistic.

2. Organizing

Organizing is the function of management which follows planning.

-Brings together the basic resources of an enterprise in an orderlymanner,-Arranges people and resources in an acceptable pattern so that theycould perform the required activities efficiently and effectively or,-It is a function in which the synchronization and combination of human,physical and financial resources takes place. All the three resources areimportant to get results. Therefore, organizational function helps inachievement of results which in fact is important for the functioning of aconcern.

A manager performs organizing function with the help of following steps:-1. Identification of activities - All the activities which have to be

performed in a concern have to be identified first. For example,preparation of accounts, making sales, record keeping, qualitycontrol, inventory control, etc. All these activities have to begrouped and classified into units.

2. Departmentally organizing the activities - In this step, themanager tries to combine and group similar and related activitiesinto units or departments. This organization of dividing the wholeconcern into independent units and departments is calleddepartmentation.

3. Classifying the authority - Once the departments are made, themanager likes to classify the powers and its extent to themanagers. This activity of giving a rank in order to the managerialpositions is called hierarchy. The top management is intoformulation of policies, the middle level management intodepartmental supervision and lower level management intosupervision of foremen. The clarification of authority help inbringing efficiency in the running of a concern. This helps inachieving efficiency in the running of a concern. This helps inavoiding wastage of time, money, effort, in avoidance of duplicationor overlapping of efforts and this helps in bringing smoothness in aconcern’s working.

4. Co-ordination between authority and responsibility -Relationships are established among various groups to enablesmooth interaction toward the achievement of the organizationalgoal. Each individual is made aware of his authority and he/sheknows whom they have to take orders from and to whom they areaccountable and to whom they have to report. A clearorganizational structure is drawn and all the employees are madeaware of it.

Formal & Informal OrganizationFormal organization means Intentional structure of roles in a formallyorganized enterprise. The formal structure in each organization that hasbeen put in place by management has an accompanying informalstructure. Management does not and cannot control the informalstructure.

The informal structure has no written rules, is fluid in form and scope, isnot easy to identify, and has vague or unknown membership guidelines.

For management, the informal structure may be positive or negative.Positive qualities include the ability to quickly spread information andprovide feedback to the information. The informal structure gives people asense of being in the know. Management can feed information into theinformal structure at very low cost. The informal structure can also helpsatisfy employees' social needs.The negative qualities of the informal structure mirror the positivequalities in several ways. The more juicy a rumor, the more likely is theinformal structure to repeat it, expand it and make it into the "truth."Management may not know what information is flowing through theinformal structure. Employees can waste a great deal of time nurturingand participating in the informal structure. Finally, the informal structurecan fence out new employees, "rate breakers," and change agents nomatter the extent to which the formal structure makes .

Organizational StructureEach organization has an organizational structure. By action and/orinaction, managers structure businesses. Ideally, in developing anorganizational structure and distributing authority, managers' decisionsreflect the mission, objectives, goals and tactics that grew out of theplanning function. Specifically, they decide:

1. Division of labour - Division of labour is captured in anorganization chart, a pictorial representation of an organization'sformal structure. An organization chart is concerned withrelationships among tasks and the authority to do the tasks.

2. Delegation of authority - Authority is legitimized power. Power isthe ability to influence others. Delegation is distribution ofauthority. Delegation frees the manager from the tyranny ofurgency. Delegation frees the manager to use his or her time onhigh priority activities. Note that delegation of authority does notfree the manager from accountability for the actions and decisionsof subordinates

3. Departmentation- Departmentation is the grouping of jobs underthe authority of a single manager, according to some rationalbasis, for the purposes of planning, coordination and control. Thenumber of departments in an organization depends on thenumber of different jobs, i.e., the size and complexity of thebusiness.

4. Span of control- The span of control is the number of people amanager supervises. The organizational structure decision to bemade is the number of subordinates a manager can effectivelylead. The typical guideline is a span of control of no more than 5-6people. However, a larger span of control is possible dependingon the complexity, variety and proximity of jobs.

3. STAFFING:

Process through which competent employees are recruited; selected,properly trained, effectively developed, suitably rewarded and theircombined efforts are harmoniously integrated and directed towardsachieving the desired results / objectives of the business enterprise.Labour force is undoubtedly an active sensitive and essential factor ofproduction.The process of staffing involves the following:• Assessment of manpower requirement.• Recruitment and selection of competent personnel.• Proper training and development of personnel.• Placement of selected personnel and orientation.

On the basis of the above, it can be safely defined that 'Staffing is amanagerial function that brings people with required skills into theorganisation and develop them into valuable organizational resource:

Future / Nature of Staffing:Staffing function of management involves the followingcharacteristics.

• It is the function of management.• It is an integral part of management process.• It is continuous activity function of management.• It is concerned with human resources of an organisation.• It is a persuasive function of management.• It is separate from physical factors, because it is difficult and

tactful function.• It is concerned with the maximum utilization of human

resources such as direction, coordinate and control.

Need and Importance of Staffing:

The success of business depends upon the greater extent on the rightselection, training and development of the staff. Thus, competent, co-operative and dedicated staff is the most precious asset of anorganisation.

The following grounds justify the need and importance in managementand effects the cost of production are given under.

• Facilitating discovery of competent staff.• Ensuring maximum productivity.• Developing personnel for shouldering greater responsibilities.• Meeting future requirements of talented person.• Job satisfaction due to proper placement.• Maximum utilization work force.• Supplying information regarding transfer, promotion, recruitment,

death, demotions etc.

Steps of Staffing Function

a) Manpower Planning1. Manpower planning is an essential pre-requisite of staffing.2. It avoids shortage and at the same time also avoids surplus people.3. Forecasting is the first step in manpower planning.

b) Recruitment1. Recruitment follows planning.2. Through recruitment organization attracts potential people and

induces them to apply for the positions/jobs.3. Two sources of recruitment - Internal source and external source.

c) SelectionSelection has three parts;1. Comparing the qualification and experience of the prospective

candidate with job requirement.2. Eliminating those whose qualifications and experience does not

match the requirement.3. Selecting those who satisfy the near.

The selection procedure is assisted by Job Analysis and Job Specification.

Placement• Defined as determination of the precise job to which a selected

candidate is assigned or assigning an appropriate job to theselected candidate.

• Proper placement ensures job satisfaction for the individual andgives his best to the organization.

Training

It is an inseparable of staffing.• Training increase knowledge, develop skill and change the

attitude.• Training is an investment not a cost.• It’s a continuous process in the any organization.• Types of training

(a) Induction training(b) On job training(c) Refresher training

4. Leading

Leading is the fourth function of management.

Leading involves influencing others toward the attainment oforganizational objectives. Effective leading requires the manager tomotivate subordinates, communicate effectively, and effectively usepower. If managers are effective leaders, their subordinates will beenthusiastic about exerting effort toward the attainment oforganizational objectives.

To become effective at leading, managers must first understand theirsubordinates' personalities, values, attitudes, and emotions. Therefore,the behavioral sciences have made many contributions to theunderstanding of this function of management. Personality researchand studies of job attitudes provide important information as to howmanagers can most effectively lead subordinates.

Motivation, leadership, communication, decision making are the part ofleading process.

Leading Means Inspiring

A manager should strive to become an inspiration to the rest of theemployees. Employees will follow a manager because the manager isthe boss. However, a manager that is an inspiration means thatemployees follow that person because they believe in what the manageris doing and they are trying to help the company achieve its goals.Finding ways to inspire employees means coaching them and motivatingthem to succeed as integral parts of the company.

Leading Affects Morale

The way a manager leads greatly affects employee morale within thedepartment and company as a whole. Managers should create a climatethat encourages new ideas and employee input. The more theemployees feel that they have a say in the company, the more they willbe willing to share ideas and attempt to find better ways to improveprocesses. For example, a good manager may reward employees withmonetary or benefit incentives if they can increase output of a product.Another idea is a treasure box of goodies. Managers can set a goal earlyin the week and employees who meet the goal by the end of the weekare allowed to take a prize from the treasure box.

Leading is Key to Effective Communication

For a manager to be an effective leader, he or she must also be aneffective communicator. A manager that shares information and letsemployees know the latest news in the company is someone that isdeemed trustworthy by his or her employees. Employees feel little loyaltyor trust towards a manager who does not readily give out information.

Leading Effectively Contributes More to the Bottom Line

An effective leader inspires employees, which allows those employeesto feel like they are making a meaningful contribution to the company.Satisfied employees generally work harder and take more ownership intheir job positions. This can mean happy customers and a higher level ofcustomer service.

• MOTIVATIONSelection, training, evaluation and discipline cannot guarantee a highlevel of employee performance. Motivation, the inner force thatdirects employee behavior, also plays an important role. Highlymotivated people perform better than unmotivated people. Motivationcovers up ability and skill deficiencies in employees.

Basic principles of delegation1. Principle of delegation by results expectedIt should be clear to the boss and to the subordinate what is being delegated, for what purpose or to what endresults.

2. Principle of functional definition -Boss should be sure that the subordinate has it in him to accomplish thetask even when authority is delegated to him. “ you are backing the competent horse.”

3. Scalar principle- There is a limit to the number of persons that a boss can supervise effectively. Once thatlimit is passed, authority must be delegated to subordinates who will make decisions within the area of theirassigned duties.

4. Authority level principle-Authority is delegated when decision making power is vested in a subordinate bya superior. A superior cannot also delegate all this authority without passing over his own position. Thefollowing considerations are important:

5. Principle of unity of command-It is argued that too specific delegation at senior levels robs theexecutives of flexibility and they will not be able to develop in the best way. (it has been said that theperson who is most clear about his duties is the peon or the worker. The most confused man in theorganization is the top boss as all work is his and he has also no work the same being performed byExecutives). However, it is found prudent to delegate specifically and at the same time develop traditionof flexibility.

6. Principle of absolute responsibility -A boss cannot delegate responsibility even when he is willing todelegate authority. Once responsibility is delegated, his own position is finished. Therefore, when a bossdelegates authority, he retains responsibility, but exacts from the subordinate the responsibility tocomplete the assignment. He holds the subordinate answerable to him but is willing to own theresponsibility for job not done by subordinate.

7. Principle of parity of authority and responsibility. Expecting a person to accomplish goals without theauthority to achieve them is meaningless. Work delegation is to be accompanied by authority delegation.

CONTROLLING– is a management functionthat involves comparing actual performancewith planned performance and takingcorrective action if needed, to ensure theobjectives are achieved.

1. ESTABLISHING STANDARD.

2. MEASURING ACTUALPERFORMANCE AGAINST THESTANDARDS AT STATEDINTERVAL

3. TAKING CORRECTIVE ACTIONSWHENEVER UNWANTEDDEVIATIONS ARE FOUND

STEPS OF MONITORING AND CONTROL

Examples of ControlsDelegation (Accountability)Evaluation (Performance)Financial Statement (Budget Management)Performance Management (Observation and Feedback)Policies and Procedures (Behaviors in Workplace)Quality Control and Operations ManagementRisk, Safety and Liabilities

Characteristics of Effective Control System

• Controls need to focus on appropriate activities – Effectivecontrols must focus on critical factors that affect both theindividual’s and the organization’s abilities to achieveobjectives.

• Controls should be timely – Information needed forcomparisons and control purposes needs to be in themanagement’s hands in order to make effective correctiveaction. Delays in generating, gathering or disseminatinginformation can prolong the occurrence and extent ofdeviation.

• Controls must be cost effective – The benefit of using appropriatecontrols should be worth their cost of installation and operation.Too much control can be worse than too little. The key is toprovide appropriate for the situation and provide savings greaterthat the costs involved.

• Should be accurate and concise – Controls must provideinformation about operations and people in sufficient quality andquantity to enable managers to make meaningful comparisons tooperations standards. As with control, too much information canbe as bad as too little.

• Controls should be accepted by the people they affect – Controlsand their applicability to specific situations should becommunicated clearly to those responsible for implementingthem and to those who will be governed by them.

Characteristics of Effective Control System

Types of Control Systems

• Feed forward controls – are preventive controls that try toanticipate problems and take corrective action before they occur.Example – a team leader checks the quality, completeness andreliability of their tools prior to going to the site.

• Concurrent controls – (sometimes called screening controls)occur while an activity is taking place. Example – the teamleader checks the quality or performance of his members whileperforming the cpm on equipments in the site.

• Feedback controls – measure activities that have already beencompleted. Thus corrections can take place after performance isover. Example – feedback from facilities engineers regarding thecompleted job.

Steps in the Control Process

• Establishing Performance Standards – A standard is a unit ofmeasurement that can serve as a reference point for evaluatingresults. Management should set its sights on something it wantsto accomplish.Managers should exercise control by comparing performance tosome standards or goals.

Types of Standards

A. Tangible – clear, concrete specific and generally measurable.1. Numerical Standards – expressed in numbers – items produced,

absences, percentage of sales, etc.2. Monetary Standards – measured in terms of money – profit

margins, costs, etc.3. Physical Standards – quality, durability, size, weight and other

factors related to physical composition.4. Time Standards – refer to the speed with which the job is to be

done – project completion dates..

B. Intangible Standards – relate to human characteristics whichare not expressed in terms of numbers, money, physicalqualities or time – desirable attitude, high morale, ethics andcooperation.

Measuring Performance – After setting the standards, managers mustmonitor performance to ensure that it complies with the establishedstandards.

How Often to Measure Performance – Determining how often tomeasure performance is an important decision. A strategic control pointis a performance measurement point located sufficiently early in anactivity to allow any necessary corrective actions to be taken toaccomplish the objective.

Types of Standards

How to Measure – This can be done through the following:

1. Personal observation.2. Written or oral reports by or about employees.3. Automatic methods.4. Inspections, test or samples.

• Comparing Performance with Standards and Analyzing Deviations. –Information receives regarding a serious departure from standardsshould be investigated in order to determine what caused thedeviation. Jumping into conclusion without analyzing the problemmight produce ineffective corrective action.

It is also important to check results that are substantially abovestandards in order to determine why they varied from standards.Operating procedures should be check to determine if these are beingfollowed correctly or if there is an improvement in operations thatshould be included in the new standards.

• Taking Corrective Action if Necessary – This is the final step in thecontrol process. Adjustments, fine-tuning, and perhaps drastic actionmay be necessary to pull off important tasks or to maintain standards.

MaterialMoneyDesign

Methods

Process ofConstruction Output

Comparator

Standards

Effects &DecisionMakers

InputSensor

Types of Control

Controls may be categorized in many different ways but 4 groups arecommonly recognized.

1. Production and operations control; regulate the actualuseful work of the organization e.g. employee performance,attendance records, productivity etc.

2. Inventory control governs the level of material and suppliesof goods and services and finished goods kept in storage.

3. Quality control assures the acceptable quality of the goodsor services produced.

4. Financial control focuses on the flow of money and valueinto, out of, and within organization.

MANAGINGPEOPLE -

TECHNIQUES

LEADERSHIP

Definitions• Influences others to accomplish a mission, task, and objective and

directs the organization in a way that makes it more cohesive andcoherent.

• Leadership is the ability to influence a group towards theachievement of goals.

• Leader can create the memory &shadows of leadership create acertain atmosphere or climate. Leaders not only face to face impacton people.

Types of leadershipAutocratic leadershipAutocratic leadership is an extreme type of transactional leadership, wherethe leader have absolute power over his or her subordinates and teammembers have almost no opportunity for making suggestions, even if thesewould create an improvement for the team or organization. Most peoplebecome de-motivated being treated like this. Because of this autocraticleadership usually leads to high levels of staff turnover or suiving. For someunskilled or routine jobs, the style can in few cases remain effective wherethe advantages of control outweigh and disadvantages.

Democratic Leadership

Although a democratic leader will make the final decision, he or she asksto attend the other team members to contribute to the decision – makingprocess. This increases job satisfaction by involving team members oremployees in what’s going on, and helps to develop people’s skills. Teammembers and employees increase their self confidence and feel in controlof their own destiny, such as promotion they want, and are motivated towork hard and effective by more than just a financial reward. Thisapproach can be most suitable where working in a team is indispensable,and quality is more important than the speed of productivity.

Laissez-faire leadership

Laissez-faire leadership is translated to English means – ‘leave it be’ anddescribes a leader who leaves his or her employees to set on with theirwork. It may be effective if the leader knows what is being achieved andcommunicates this to his or her team regulators. Most often, Laissez-faireleadership is suitable for teams in which the workers are very experiencedand highly trained self-starters. Unfortunately, it can also lead to situationswhere the managers are not practicing sufficient control.

1.Leader as Initiator

2. Leader as Model

3. Leader asNegotiator

4. Leader as Listener

5. Leader as Coach

6. Leader as Workingmember

TECHNIQUES OF GOOD LEADERSHIP-Drawing attention to the actions essential formeeting team's goal.

-Shall place themselves where they canobserve the connection between work &projects high level objectives-Shall use their own behavior to shape upother’s behavior &performance .--shall be able to influence through hisbehavior.

-Shall be negotiating savvy to obtain theresources &personnel .-Shall be frame the situation in a positive way–as mutually beneficial

-Shall be able to gather signals from theenvironment-Indication of impending troubles ,teammembers discontent &opportunities for gain

-Sharing knowledge /experience to maximizeteam members potential

-Shall pitch in to do share of work wherein heonly has potential only /area of specialcompetence

MANAGER & LEADERTEN COMPLEMENTARY CONNECTIONS

S.No. A Manager A Leader

1 Administers Innovates

2 Maintains Develops

3 Accepts Reality Investigates Reality

4 Focuses on Systems &Structures

Focuses on People

5 Has a short range view Has a long range view

6 Asks how and when Asks what and why

7 Has his eyes on the bottomline

Has his eyes on the horizon

8 Accepts status quo Challenges status quo

9 Imitates Originates

10 Relies on Control Relies on Trust

COMMUNICATION

1. OBJECTIVES

2. FORMS OFCOMMUNICATION

3.METHODS OFCOMMUNICATION

4.COMMUNICATIONMODEL

5.FEATURES OFEFFECTIVECOMMUNICATION

Objectives of Communications1. Responds to the information & communication needs of stockholders

2. Aids manager for decision process through obtaining information within &outside the organisation

3. It helps in appraising all about the goals of the organisation

4. Communication helps in co-ordination. In a large organisation work is carriedout on the basis of departmentation which might have been done on somesuitable basis like expertise of works, geographical location of works etc.

5. Communication is essential for proper understanding amongst all the membersof the organisation.

6. Communication is essential for recruitment, training, performance evaluation etc.of various people associated with the organisation.

Forms of CommunicationsCommunication could be of three basic categories,namely:

- Written communication- Verbal communication- Non-verbal communication

1. Interactive – Meetings/ Phone calls/ Video/conferencing

2. Push – Letters/ Memo /report/ Email /Fax/ Voicemail / Press releases

3. Pull – Intranet sites, e-learning, share pointportals

Methods of Communication

ENCODE

DECODE

SENDER

ENCODE

DECODEMESSAGE

FEEDBACKMESSAGE

ECODE – Translate the thoughts/ ideas in to language understood by others.

DECODE – To translate the message back into meaningful through/ ideas

COMMUNICATION MODEL

• Any organization structure involves interacting of people working at different levelswith a view to achieve the predetermined goals.

• Communication is a process where sender transmit his ideas, behavior, opinion,expression to the receiver.

Barriers in Communication

• Improper Encoding of messages/Lack of clarity.• Distance• Noise• Culture• Education• Like/dislikes• Say that it’s a bad idea• Un-clarified assumption• Poor transmission.• Inappropriate channel.• Inadequate feedback.• Language• In attention of receiver.

Omissions: In the downward communication superiors withhold a part ofinformation thinking that it is not needed for subordinates while the latterwithhold unfavorable information in upward communication.Untrustworthiness of the communicator: By his act or behavior the sender(superior or subordinate) is considered as untrustworthy andcommunications from him are not taken seriouslyPoor retention by the receiverFaulty organization. The chain of command is too long and as a result thecommunication is poor.

Features of Effective Communication

i. Clear Purpose

ii. Appropriate Form &Medium

iii. Language- both written and verbal -understandable by thereceiver.

iv. Information/ message/ instruction should be compete andunambiguous

v. Not to be based on any assumptions.

vi. Proper follow up.

SWOT Analysis

• S – Strengths• W – Weaknesses• O – Opportunities-• T – Threats

A SWOT Analysis is a powerful techniquefor identifying Strengths and Weaknesses,and for examining the Opportunities andThreats your employees face.

Used in a personal context, it helps youassist your employees to develop theircareers in a way that takes best advantageof their talents, abilities and opportunities.

As managers we can focus and developtheir attributes while minimizing theirweaknesses and reducing the threats toturnover on our teams

SWOT

What makes SWOT particularlypowerful is that with a littlethought, it can help you uncoveropportunities that youremployees are able to use to theiradvantage.

By understanding theirweaknesses, you can manage andeliminate threats that wouldotherwise catch them unaware.

S.W.O.T Matrix

Internal Analysis

Strengths Weaknesses

External Analysis

Opportunities Threats

What Does A SWOT Evaluate?

Internal & Personal

StrengthsStrengths WeaknessesWeaknesses

OpportunitiesOpportunities ThreatsThreats

External & Positive External & Negative

Internal & External Personal

Brainstorming Questions

Strengths

• What do you do particularly well?• What do you do that is unique in the

“marketplace?”• What do your customers/clients/patrons

ask for you to do over and over again?• What do you have the right

tools/resources to accomplish? (1)

Weaknesses

• Weaknesses– Factors that are within

an organization’scontrol that detract fromits ability to attain thecore goal.

– Which areas might theorganization improve?

SWOT: External Factors

Opportunities– External attractive factors that

represent the reason for anorganization to exist anddevelop.

– What opportunities exist in theenvironment, which will propelthe organization?

– Identify them by their “timeframes” (1)

Opportunities

• Are there new situations coming down the roadthat you can take advantage of (new programsbeing offered, new faculty joining the department,new tools available to you)?

• Are there gaps in the “market” that you can fill?

• Are there partnerships that might be fruitful? (1)

SWOT: External Factors

Threats– External factors, beyond an

organization’s control, whichcould place the organizationmission or operation at risk.

– The organization may benefitby having contingency plans toaddress them if they shouldoccur.

– Classify them by their“seriousness” and “probabilityof occurrence”. (1)

Threats

• Who is your competition and what do theyoffer that you can’t do as well or at all?

• Are there “environmental” changes orsituations that could cause problems foryou and your programs?

• What other roadblocks are being thrown inyour path?

Simple Rules SWOT Analysis

• Be realistic about the strengths andweaknesses of your organization or group

• Distinguish between where your organizationis today, and where it could be in the future

• Be specific: Avoid gray areas. (1)

Simple Rules SWOT Analysis• Always analyze in relation to

your core values, mission,mandate, goals, vision.

• Keep your SWOT short andsimple.

• Avoid complexity and overanalysis

• Empower SWOT with a logicalconceptual framework. (1)

SWOT (OTSW) MATRIX

Opportunities-external

1.2.3.4.5.

Threats-external

1.2.3.4.5.

Strengths-Internal1.2.3.4.5.

Weaknesses-Internal1.2.3.4.5.

Create a Plan of Action

• Set goals and objectives, like with anyother plan. Limit 3-5

• What steps can you take to:– Capitalize on your strengths– Overcome or minimize your weaknesses– Take advantage of some new opportunities– Respond to the threat (1)

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