recommended books management of change managing … · mgmt study material created/ compiled by -...

Mgmt study material created/ compiled by - Commander RK Singh [email protected]

of 42 - Principles of Management

Jamnalal Bajaj Institute of Mgmt Studies

Recommended Books

(a) Principles of Management by Koontz

(b) By LM Prasad

Management of Change

Change has become inevitable due to: -

(a) Technology

(b) Competition

(c) Growing customer needs

(d) Environment

(e) Politics

Managing Change

It involves: -

(a) Strategic planning and alignment

(b) Minimising resistance

(c) Maximising acceptance

(d) External environment assessment

(e) Change of Organisational structure and culture

(f) Developing work climate to enhance teamwork, trust and co-operation

(g) Whole hearted implementation

Barriers to Change

(a) Fear of uncertainty or unknown

(b) Fear of economic loss

(c) Social pressures/peer pressure

(d) Perceived inconveniences

(e) Fear of loss of power

(f) Need for new styles/skills/knowledge

(g) Resistance from groups

(h) Organisational culture

(i) Feeling of insecurity

(j) Lack of incentives

Process of Change

(a) Unfreezing - the old set of values system, structure and behaviour

(b) Changing - Introducing the new set of values and change planned

(c) Refreezing – Making permanent the changes. Institutionalising the new set

of rules, values, system, structure and behaviour




Managing Change

Techniques of overcoming resistance

(a) Education through communication

(b) Participation of affected people from beginning rather than at the end.

Making the potential hardliners a member of the committee designing the

change.

(c) Facilitation through support to people to overcome the blues of change

(d) Negotiation – Give and take attitude

(e) Manipulation – co-option

(f) Explicit or implicit coercion

Mixed strategies are used to overcome change

Changing Characteristics of Corporates

Old New

Goal Oriented Vision oriented

Price focused Value focused

Product quality Total quality

Product driven Customer driven

Shareholder focused Stake holder focused

Finance oriented Speed oriented

Efficient, Stable Innovative, entrepreneurial

Hierarchical Flat, empowered

Machine based Information based

Functional Cross functional

Rigid, Committed Flexible, learning

Local/regional/National Global

Emerging Waves

Factor Yesterday Today

Economy Protected Open

Characteristic Monopolistic Competitive

Market Sellers Buyers

Players Few Several

Kind of Players National Global

Price Level High Dropping

Growth Boom Depression

Consumer No choice Multiple Choice

Technology Low High




Quality Average High

Delivery Weeks/Months/Years Off the shelf

Pricing High Cut-throat

Needs Limited Enhanced

Response Sluggish Quick

Relation Curt Respect

Characteristic Buyer Partnership/advocate

Nature Passive Participate

Care Std Differential

Approach Mass Personalised

Association Distant Close

Style Arrogant Understanding




MOTIVATION

“Moveve” – To Move (Latin)

Definition:

It is an actuating force which inspires a man to put his best in accomplishment of a task.

Or

Motivation is set of process that arouse, direct and maintain human behaviour towards

attaining some goals.

Needs, drive, behaviour, goals, rewards (+) or (-)

Scope of Motivation. Very wide as it affects every walk of a person’s life.

- All employees from top management to the lower most cadre

- Student/teacher motivation in eduacaton institution.

- Consumer motivation to buy a product of a particular company.

- Motivation of the electorate to vote.

- Defence Forces.

- Join religious/god-man institutions.

- Voluntary Organisations.

Theories of Motivation.

Maslow Hierarchical Needs

Self Actualisation

Esteem/Ego/Status

Social Acceptance/Belongingness

Safety/security

Physiological/survival

Maslow’s Hierarchy of Human Needs

Hertzberg’s Theory

Maintenance/Hygiene Factors Motivation Factors




Maintenance/Hygiene Factors. Absence of maintenance/Hygiene factors

lead to de-motivation but their presence does not necessarily mean

motivation of a person.

- Company Policy

- Supervisory Policy

- Salary

- Interpersonal relations

- Job security

- Working conditions

Motivational Factors. Presence of these factors most often than not will

motivate a person to perform better.

- Achievement

- Recognition

- Responsibility

- Opportunity

- Work itself

Douglas McGregor XY Theory. This theory is two sets of assumptions by the

same person which were published around 6 years apart.

Theory X Theory Y

Old and traditional assumptions New and dynamic assumptions

Dislikes and avoids work Enjoys working

Avoids responsibility Accepts responsibility

Controls, threats and punishment are

needed

Self disciplined

Prefers to be directed and has few

ambitions

Highly imaginative and ambitious

Negative approach Positive approach

Communication from top to bottom 2 way communication

Autocratic Leadership Democratic

No involvement in decision making Higher involvement in planning

Pessimistic, rigid and static Optimistic, flexible and dynamic

Methods of Motivating People

1. Financial Incentives.

(a) Wage payment

(b) Incentive Pay

(c) Bonus

(d) Company paid insurance




(e) Perks

(f) Retirement payment incentives

2. Non Financial Incentives.

(a) High Position

(b) Consulted while Decision making

(c) Greater responsibility

(d) Token rewards

3. Positive Reinforcements.

(a) Improving work environment

(b) Appreciation and praise

(c) More facilities at work environment

4. Participation.

(a) Decision making

(b) Plans & Policies

5. Job enrichment.

(a) Job should be more interesting, meaningful and challenging

6. Humanise the work environment respect the need to treat each employee as

individual




PRINCIPLES OF MANAGEMENT (08 Jul 04) By Mr Kamath

Leadership

Definitions

1. Leadership is the ability of a person to influence a group of people to work

with zeal and confidence towards the achievement of goals.

2. Leadership is the quality of behaviour of individual where by they guide

people or their activities in an organised effort.

3. An act or process of influencing people to strive willingly and

enthusiastically towards achievement of common goals.

Qualities of a Good Leader

1. Good personality

2. Intelligent

3. Initiative

4. Innovative

5. Self confidence

6. Good Communication Skills

7. Coach and guide

8. Proper judgement

9. Knowledge of Human Skills

10. Administrative Skills

11. Discipline

12. Patience

13. Visionary

14. Willingness to lead from front

15. Strategist

16. Decision Making ability

17. Integrity

18. Conviction

Business Leaders. JRD Tata, Mr Narayan Murthy, Bill Gates Jack Welch




Books in Our Library

1. Business Legends by Gita Piramal

2. Business Maharajas by Gita Piramal

Styles of Leadership

Every manager develops a style in managing the activity. Such styles vary from

leader to leader, situation to situation and organisation to organisation. Following are the

popular styles of management: -

1. Authoritarian/Autocratic Style. This style demands absolute obedience

and subservience from the subordinates. Important characteristics of this style of

leadership are: -

(a) Superior makes all the decisions.

(b) Superior does not consult subordinates

(c) Superior is responsible for the decisions taken

Utility and Application. This style is useful only in short run and is

counterproductive in the long run. However, it is the most suitable style for crisis

and disaster management/emergency situations.

2. Bureaucratic Style. In this style of leadership decisions are taken as per

laid down set of rules without any deviation.

(a) Decisions are taken within the set of laid down rules in the letter

(followed as written)

(b) Subordinates are not consulted

(c) Avoids responsibility

(d) All situations are dealt in a mechanical manner with little or no

regard to emergency/priority/spirit or even the organisational goals.

(e) Delay in work and unnecessary increase in paper work.

Utility and Application. The decision making is very methodical and little

bias. Has high accountability and therefore good for larger organisations. However,

it delays decision making and looses sight of organisational goals in favour of

application of the written rules.




3. Laissez Fair. Subordinates have full freedom of action and decision-

making.

(a) Superior allows his subordinates full freedom to act and decide with

little or minimal interference.

(b) Superior acts more as a guide in arriving at decisions.

(c) Superior and subordinates share th responsibility/

Utility and Application. This particular style of leadership is ideal for

intellectual/creativity intensive organisations like Advertising/Media/research/

software development etc. However, it is often disastrous for production and

marketing organisations.

4. Paternalistic Style. In this style, as the name suggests, the leader acts as

the father figure for the subordinates.

(a) Creates family atmosphere.

(b) Leader is treated as father figure by subordinates.

Utility and Application. This style has very high success rate. However, owing

to its highly time and effort intensive demands on the leader due to his personal

involvement at the micro level in the personal affairs of the subordinates, this style

is suitable for only small organisations.

5. Democratic Style. This style has two sub branches: -

(a) Consultative Style.

(i) Superior consults every subordinates before taking any

decision.

(ii) Superiors are open-minded and encourage constructive

suggestions from subordinates.

(iii) Superior takes the decision after consultations none of which

are binding on him.

(b) Participative Style.

(i) Superior consults his subordinates and allows them to take

part in the decision making process. It is mostly by majority

decision.

(ii) Both leader and the group shares the responsibility.




(iii) Groups decision is generally final and overrides the personal

preferences/choices of the leader.

2. Missionary Style.

(a) Social Club

(b) Believe in good fellowship/friendship.

(c) Believe in warm and pleasant social atmosphere.

3. Neurocratic Style. (Hitler)

(a) Highly task oriented style

(b) Highly sensitive leadership

4. Situational Style. Style varies depending upon situation. This is the most

suitable style for the military leaders, who may have to don different styles for

peace time, war time, training and emergencies.

Blake and Moutan Managerial Grid

(concern

for

people)

1,9 9,9

5,5

1,1 9,1

Low (Concern for production) High

(1,1) - Impoverished management characterised by low concern for production and low

concern for people. Many of the Govt Agencies Management falls into this characteristic.




(9,1) - Task Master management characterised by the High concern for production and

low concern for the people. Many of the today’s MNC and private corporate management

are falling into this group.

(1,9) - Country Club management characterised by the High concern for the people but

low concern for the productivity.

(5,5) - Middle of the Road Management is characterised by the equal concern for both.

(9,9) - Team Management approach is the best suited for corporate. This is the kind of

management being followed by Infosys.




PRINCIPLES OF MANAGEMENT By Mr Kamath

COMMUNICATION

Definition: Transfer of information and understanding from one person to another person.

The word “communication” has been derived from Latin word “Communis” which means

common. Communication there fore means establishing a commonness with some one and

sharing Idea, Thoughts, Feeling, Attitudes etc.

Communication can be in three directions:

1. Upward – From subordinates/workers to senior officers/management

2. Downward – From Superiors/management to subordinates and workers

3. Lateral – Between colleagues, peers, interdepartmental meetings, etc.

Communication could be a one way or two way process. But for the communication to be

effective and reliable, it should be two way as far as possible.

COMMUNICATION PROCESS

SENDER RECEIVER

Barriers to Effective Communication.

Personal Barriers.

a. Human emotions

i. Love

ii. Fear

iii. Anger

iv. Distrust

v. ------

vi. -----

b. Values

FEED BACK

Thoughts Encode Transmission Receive Decode Under-

stand




c. Poor Listening – Hearing is with ears while listening is with mind

(attentiveness is the keyword in listening)

d. Perceptions – Opinionated, etc

Physical Barriers.

e. Interference

f. Noise

g. Distance

i. Physical

ii. Hierarchical

Semantic Barriers.

h. Multiple Meaning Words

i. Language

Five components which contribute to effective interpersonal communications

1. Self Concept – Who am I?

2. Listening

3. Clarity pf expressions

4. Coping with anger

5. Self Disclosure – Openness invites openness from others also.

Seven Essentials in Communication

1. Candid

2. Clear

3. Complete

4. Concise

5. Concrete – No vagueness, Definite

6. Correct

7. Courteous




22 Jul 04

Principles of Management

Prof Kamath

Staffing

Recruitment is process of attracting potential candidates to the organisation when

there is a requirement and creating pool of candidates from which selection s to be made.

Wrong selection is waste of recruitment cost and also loss of

opportunity (profits supposed to be accrued by the company through the

employee).

1. Sources of Recruitment.

(a) Internal.

(i) Promotions

(ii) Transfers

(iii) References

(iv) Deputations/Secondments

(v) Friends/Relatives

(vi) Internal Notifications

(b) External.

(i) Advertisements in various forms

(aa) News Papers

(ab) Journals/Magazines

(ac) TV

(ad) Hoardings

(ae) Pamphlets




(ii) Campus Selections

(iii) Placement Agencies

(iv) Head hunting – Identifying the suitable person through

various methods and approaching him for joining the

organisation

(v) Job Fairs

(vi) Poaching

(vii) Social Organisations

(viii) Road Shows

(ix) Religious Organisations

(x) Trade Unions

(xi) Employment Exchanges – Formed by statute

Advertisements. Advertisements are generally expensive and

therefore they have to be properly placed to ensure that they reach the

right people and attracts the right kind of candidates.

2. Selection. It is the process of short listing of candidates for offering job.

Following are various stages of selection process: -

(a) Written Test

(b) Physical Test

(c) Psychological Test

(d) Group Discussion

(e) Preliminary Interview

(f) In-depth interviews

(g) Offer

(h) Salary Negotiations

(i) Medical

(j) Appointment Letter




(k) Acceptance

3. Induction/Orientation/Training. Following are the stages of induction: -

(a) Welcome to the organisation

(b) Indoctrination of person with the goals/motives/profile etc of the

organisation

(c) Executive summary of the Company Profile

(d) Induction Kit

(e) Admin formalities

(f) Company Introductory Tour

(g) Introduction with senior management

(h) Introduction to specific department

(i) Settling down in the department

(j) Follow-up instructions before confirmation at the end of the probation.




29 Jul 04

Principles of Managements

Prof Kamath

Training. Training is a process by which employees are helped to gain knowledge,

learn skills, change attitudes towards attainment of organisational goals.

Knowledge K

Attitude A

Skills S

Habits H

Training Vs Development. Both terms are generally used together as complimentary of

each other. However, there does exist subtle difference between the two.

Training is generally a short term process towards attainment of organisational

goals

Development covers a wider canvass and is generally meant for personality

development of personnel which do not benefit the organisation in a direct manner.

However, the organisation may get the spin off benefits due to overall development

of its employees.

Purpose of Training –

1. Productivity Improvement (Most common cause for training)

2. Quality Improvement

3. Safety Improvement

4. Ensuring availability of trained manpower for eminent future needs

(Creating of reservoir of skilled manpower for future deployment)

5. Training for personnel development

6. Specialised needs of organisation

7. Leadership development

Methods of training-

1. On job training (OJT)

2. Mentor method

3. Apprenticeship (teaching of theory and practical)

4. Internship (Practical (hands-on training after theory lessons like doctors do)

5. Assistant to (Juniors attached to Senior people)




6. Vestibule Training (Actual replica of work situation is created at off-site

location – like a workshop for training but without any production or quality

targets)

7. Simulators (Though the system is not a physical replica of the actual work

situation, the functionality and feel is same. Here the input parameters can

be controlled and output parameters can be critically analysed. For example,

Flight Training Simulators, Damage Control Simulators. Simulators are very

expensive but are a very effective tool for imparting training in critical

fields.

8. Off the Job Training

(a) Class Room Training

(b) Role Play

(c) Case Study Method – First started in Harvard Law School and later

followed by Harvard Business School.

(d) In Basket Training – Trainee is given the Manager’s in Tray and

asked to take actions on them.

(e) Out Bound Training – Physical activities, adventure etc

(f) Computer Based Training – Software based training.

(g) Business Games – A-la War Game

Performance Appraisal

Performance Appraisal is technique for evaluating the performance of the employees.

They are two basic approaches to performance appraisal: -

(a) Judgemental Approach – Used for awarding increments, promotions,

awards, and postings.

(b) Developmental Approach - Used for identification of training

needs. Also used for Man Power planning of the organisation

Methods of Appraisal

Traditional Methods.

1. Simple Ranking Method. – Herein all employees are graded one after the

other in descending order of their performance. Very obsolete and rarely in

use now a days.




2. Paired Comparison. Each employee is compared viz a viz his peers in a

matrix table as below

A B C D E

A X + - + +

B - X + + -

C + - X - +

D - - + X -

E - + - + X

3. Free Essay Method. Also called pen picture method. In this method, an

elaborate write up about the employee is given detailing the positive and

negative qualities, capabilities, strengths, weakness, achievement, potential,

etc, are given. However, the system suffers from the ills of subjectiveness

and the command and power over the language of the assessor.

4. Graphical Method. In this method, each employee is numerically

scored on a scale of 5 or 10 for various attributes of professional and

personality. This gives a comprehensive data base of capabilities and

limitations of personnel to the higher management.

5. Critical Incidence Method. All positive as well negative major incidences

are recorded and reported

Modern Methods

1. Management by Objectives (MBO) Method. In this method, the superior and

subordinate mutually agree to a performance target which is reviewed regularly. The

limitation of this method is that the goals should be clearly definable as well as quantifiable

for clear assessment.

2. 3600 Appraisal Method . Under this method, an employee is assessed not

only by his superiors but also be his peers and even juniors. Some times the clients reports

are also taken into consideration.

Errors

1. Biases

2. Halo effect – Assessment affected by one good deed of the employee

3. Horn Effect – Assessment affected by one bad deed of the employee

4. Recency – Appraisal affected by few good or bad deeds of the employee and past

performances not adequately considered.

5. Errors of Strictness and leniency

6. Central Tendency – Everybody assessed in a narrow band of performance




7. Errors of not following cardinal principles.

8. “Same as me – Different from me” syndrome. Bhai – Bhatijavad concept.




05 Aug 04

Co-ordination Prof Kamath

Co-ordination is orderly synchronisation of efforts

Def: Co-ordination deals with the tasks of blending efforts to ensure successful

attainment of an objective. It is accomplished by means of planning, organising, actuating

and controlling.

Nature of Co-ordination

(a) It is an essential managerial function

(b) Needed at all levels of management

(c) Involves orderly arrangement of group efforts

(d) It is a continuous process carried out by the managers

(e) Its purpose is to secure unity of action towards common objective.

Co-ordination is essence of management.

There is a need for Co-ordination in every action of management.

Planning

Organising

Communication

Motivate

Leading

Decision

Making

Co-ordination Controlling Staffing




Co-ordination through Planning. Planning through mutual discussion, exchange of

ideas is the ideal time to bring about Co-ordination.

Co-ordination through Organising. It facilitates Co-ordination by placing all

related activities in the same Admin unit.

Co-ordination through Staffing. It involves manpower planning training, etc which are

performed in such a manner that they are right person for the job.

Co-ordination through Directing. The very essence of giving orders instructions

coaching and teaching subordinates means to Co-ordinate their activities will be actioned in

most effective way.

Co-ordination through Controlling. Involves monitoring of actual performance of

proper review done, in case of deviations corrective methods are taken.

Co-ordination through Communication. Good communication is of immeasurable help

in Co-ordination of various activities. Personal contact is the most effective means of

communication to achieve Co-ordination and accomplish organisational goals.

Need/Objective/Significance for Co-ordination.

Co-ordination is necessary to avoid conflict amongst employees. Perceiving organisational

goals differently in his or her own way, the members would bring about chaos and

confusion. Therefore, Co-ordination brings about unity and action. This is brought about by

Co-ordination and reconciliation of goals.

Total Accomplishment. The properly Co-ordinated efforts of the employees of a

department will be for greater that the mathematical sum of their individual

accomplishments

Economy and Efficiency. Economy in labour, time and equipment is possible since

there is no duplication of efforts.

Good Personal Relations and Retention of management and other personnel.

Types of Co-ordination.

(a) Internal Co-ordination within organisation.

(b) External Co-ordination. Organisation Vs outside agencies

(c) Vertical Co-ordination. Co-ordination within the same organisation

(d) Horizontal Co-ordination. Between different sub departments of an

organisation.




(e) Procedural Co-ordination. Line of authority and sphere of activity is

defined.

(f) Substantive Co-ordination. It is concerned with contents of the

organisation’s activities.

Difficulties in Co-ordination.

(a) Lack of Co-ordination and understanding between individual and departments.

(b) Lack of good interpersonal relations.

(c) Lack of direction and aimless individual efforts.

(d) Lack of loyalty towards organisation.

Professional Management/Traditional Management.

Traditional

1. Management by Family Members. The traditionally managed business

organisations are mainly managed by family members because the organisation is closely

owned by particular family. Management decisions are influenced by family members.

2. Style of Management. Managers in traditionally managed companies

function more as autocrats. The subordinates are not consulted before making any

decisions. They are not given a chance to voice their opinion. Decisions of superiors are

imposed on them.

3. Priority to particular community.

4. Key positions are held by family members which includes MD, Financial

Controller, etc

5. Emphasis is on Profit Motives. Look for quick profits. So go for projects

requiring less capital investment.

6. Centralised Authority. Authority is centralised in hands of few.

Routine matters are also decided by higher executive.

7. Lacks Professionalism. Managers discourage employee initiative and

participation.

8. Training and Development. Do not place much emphasis on training and

development because they believe managing is an inborn talent.




9. Outdated Techniques. Old techniques of accounting. No automation and

modernisation.

10. Loyalty to Owner necessary for promotion. Manager are generally elderly

people.

Professional

1. Formal Education. Professional manager are formally educated and trained to

run business. Emphasis on training and development.

2. Meritocracy. Family ties and biases are minimised.

3. Delegation of Authorities. Decentralisation is followed.

4. Social Responsibility. Professional managers generally show greater social

responsibility than the traditionally managed companies.

5. Employee Participation

6. Automation and modernisation.

7. Seminars and Workshops. Managers Participation in seminars etc by trade

organisations, productivity councils etc.

8. Accept new challenges.

9. Style of leadership is generally democratic. Also follow situational leadership.

10. Management audit by management consultants.




12 Aug 04

Principles of Management Mr Kamath

Delegation

Definition: Delegation of authority is the process a manager follows in dividing the role

assigned to him so that he performs that part which because of his unique organisational

placement only he can perform effectively and so that he can get others to hep with what

remains.

Delegation means process by which managers transfer formal authority from one person to

another within an organisation.

To delegate means to grant or to confer.

To delegate does not mean to surrender authority.

The assignment to another person of formal authority (legitimate power and accountability)

for carrying out specific activities.

Reasons for Delegation.

1. Enables superior to concentrate on tougher/important assignments/jobs.

2. Development of subordinates

3. Leads to higher motivation.

4. Improves morale and attitude.

5. Better results and quick decision

6. Improves superior-subordinate relations.

7. Enhances team spirit

8. Reduced wastage and absenteeism

9. Facilitates promotions of subordinates

10. Better coordination

11. Better work performance of the organisation

12. Succession planning

Four Stages of Delegation.

1. Assign Duties

2. Transfer authority




3. Acceptance of condition Reject

4. Creation of Responsibility

Stage I – Assignment of duties

Stage II – Determination of results expected

Stages III - Granting of authority

Stage IV – Creating accountability for performance

Conclusion: Duty, authority and responsibility are 3 fundamental components of

delegation. All three phases of delegation are interdependent. They are inevitable attributes

of delegation and no two can stand without presence of the third like a three-legged stool if

any of its legs is ever broken.

Barriers in Delegation (For senior)

1. Tendency of people to do things personally.

2. Desire to dominate – Want too be centre of attraction.

3. Fear of being exposed.

4. Fear of losing control

5. Lack of confidence in subordinates

6. Lack of ability to give directions

7. Fears of subordinates excellence

8. Creating indispensability

9. Nature of job – Time constraints, confidentiality of matter, competence of

subordinates, etc

Barriers in Delegation (for Subordinates)

1. Fear of being exposed

2. Fear of criticism

3. Absence of self confidence

4. Absence of positive incentives

5. Undue interference by superiors

6. Poor superior – subordinates relations

7. Dependence on decisions

8. Overload of existing work

9. Favouritism in delegation by superior- Better rewarding jobs for chosen few




10. Unwillingness to take responsibility

11. Comfort Zone

12. Feeling that the work is not deserving him (inferior work being delegated when

person rates him suited for much higher level of work)

13. Peer pressures

Guidelines for Effective Delegation

1. Determine Objectives. Objectives must be clearly determined, stated and

understood.

2. Provide Incentives. Recognition, appreciations of good work, promotions,

monetary benefits etc help to motivate the subordinates for accepting the delegation

of duties.

3. Maintain Favourable Atmosphere. Mutual confidence, co-operation, team spirit,

cordial relations between superiors and subordinates hep effective delegation.

4. Select Competent Subordinates. A properly trained qualified, and responsible

subordinate to be selected for successful delegation.

5. Establish Necessary Controls. Periodical reports of performance help to keep

control without unnecessary interference.

6. Provide Necessary Training. Training to be given to enable subordinates to

handle the delegated jobs effectively and efficiently.

7. Give subordinates enough freedom to do the job.

8. Principles of Unity of Command – Only one superior.

Centralisation

Def. The extent to which decision-making and control authority is concentrated

at the top of management.

Advantages.

1. It facilitates standardisations of procedures and systems.

2. Unity of actions

3. Economical and no duplication of work

4. Facilitates quick decision making

5. Facilitates better Co-ordination

6. Communication is fast and quick

7. Less paper work




8. Facilitates personal leadership

9. To provide for integration

10. Simple authority structures

11. Quality of management

12. Better for handling emergencies

13. Economy of expenditure

Disadvantages

1. Overburdens manager leading to delays

2. Does not allow full scope for specialisation

3. May affect customer service

4. Does not boost morale of juniors

5. Possibility of red tapism

6. Difficult for large companies

7. Top heavy lop sided organisational structure

8. Distorted decision making

9. Poor motivation and morale

10. Communication system may get affected

11. Impediment to organisational growth

Decentralisation

1. Decentralisation means partial dispersal and devolution of management levels in a

formal and purposeful manner.

2. Decentralisation is the tendency to disperse decision-making authority in an

organisation

3. Provides relief to top managers.

4. Encourages initiatives among junior cadre of management

5. Helps in development of Junior Managers

6. Boosts morale of Jr and Middle Management

7. Effective customer service

8. Beneficial for large organisations

9. Quick decision making




10. Growth and diversifications

11. Flexibility for organisations

12. Communication systems

13. Multiple managerial centres

14. Top management free to devote energy for strategic planning.

15. Quality of Decisions

16. De-bureaucratising of approach

Disadvantages

1. High operating costs

2. Duplication of jobs

3. Coordination problems

4. Important decisions involving all levels get delayed

5. Communication gap

6. Uniformity lacking

7. Loss of control

8. Imbalance

9. Craze for authority

10. Paucity of general management talent

Factors affecting decision of company to Centralise or decentralise

1. History of organisation

2. Size of the organisation

3. Philosophy of organisation

4. Matter of planning.

Centralised Organisation Structure

MD

Mkt Manager Prodn Manager Finance Manager

Pur Manager Engg Mgr

Factory 1 Factory 2 Factory 3




Decentralised Organisation Structure

MD

Mkt Manager Prodn Manager Finance Manager

Factory 1

Factory 2

Factory 3




19 Aug 04


Difference Between Delegation and Decentralisation

Delegation

Decentralisation

Delegation is a process Decentralisation is the end result

Delegation is done by the superior Decentralisation is done between top mgmt

and the subordinate and departments

Superior/Delegator exercises full There is minimum control over the control

over the delegatee decentralised units

It is must for success It is optional

PLANNING

Definitions

Planning is deciding in advance what to do, how to do, when to do, where to do, and who is

to do it.

Management planning involves development of forecasts, objectives, policies,

programmes, procedures, schedules and budgets.

Plan is a statement of objectives to be achieved by certain means in the future. It is a blue

print for action.

Plan is a predetermined course of action to achieve the specified goal.

Planning is at every level. It is a continuous, unending process.

Nature and Characteristics of Planning

1. Planning is goal oriented. Plans are developed and executed to achieve goals.

2. Future Oriented. Necessary forecasts are made about future and accordingly

plans are based on them.




3. Continuous Activity. Effective planning requires constant and continuous checking

of events.

4. Primacy of Planning. Planning is the primary and basic function of

Management.

5. Planning is an Intellectual Process. A great deal of imagination and

intelligence is needed to prepare a sound plan.

6. Pervasiveness of Planning. It exists at every level of management, however

high or low.

7. Planning Provides a Sense of Direction. Planning bridges gap between where

we are and where we want to go.

8. Integrated Process. Every plan needs to be integrated with other plans to

achieve organisational goals.

9. Flexibility. Plans should be flexible as plans are based on parameters which may

be highly dynamic.

10. Generates Efficiency. Planning generates efficiency due to optimum

utilisation of resources.

Advantages

1. Planning Minimises Risks. This is because future risks are forecasted and

necessary protective devices are planned.

2. Planning Facilitates Coordination. The concerned deptt work in close

coordination in implementation of plans.

3. Facilitates Organising. Planning facilitates better organisation of resources.

4. Planning helps in offsetting uncertainty and change. Planning helps in devising

suitable action against changes in technology, market forces, etc.

5. Planning helps in focussing attention on objectives.

6. Planning also helps in exercising control if there are any deviations from planned

targets.

7. Planning increases organisation’s effectiveness.

8. Planning helps in Decision Making.




9. Planning helps in increasing the organisation’s ability to adopt to future

eventualities.

10. Planning helps in ensuring relatedness amongst decisions.

11. Planning helps company to remain more competitive in its industry.

12. Planning reduces immediacy. It reduces incidences of emergency situations.

13. It reduces mistakes and oversights

14. Planning helps in identifying the bottlenecks/problem areas in time

15. Planning increases effectiveness.

Disadvantages.

1. Planning is a time consuming process.

2. It takes lot of paper work.

3. It is an expensive process with investments on data collection, hiring of experts, etc

4. It can generate frustration in the employees and planners if the targets are not

achieved. It can also cause loss of initiative amongst them.

5. Planning can cause false sense of security and even complacency due to faulty

planning.

6. It may delay actions due to over planning.

7. Danger of human error or error in data collection is always present.

Steps in Planning.

1. Being Aware of Opportunities. Awareness of opportunities in light of

competition, our strengths and weakness is the real starting point for planning.

2. Setting objectives or Goals. Objectives are set for the entire enterprise in all the

key areas of operations, productions, marketing and finance.

3. Considering planning premises. Assumptions or forecasts of future and known

conditions that will affect operation of plans.

4. Determining alternatives courses. Examine alternative courses of action.




5. Evaluating alternative courses. Weighing the various alternatives in the light

of presm9ises and goals.

6. Select the course of action from alternatives.

7. Formulate Derivative Plans. Derivative plans are required to support the

basic plan., programmes. Budgets, schedules, etc are some of the examples

8. Establishing Sequence of Activity. Sequence of activity is determined in such a

manner as to put plan to action. Budgets can be prepared to give more meaning to plans for

implementation.

Short Term Plans - Plans for period of 01 day - one year – Operational Plans.

Medium Term Plans – plans for 1 – 2 years – Tactical Plans

Long Term Plans – Plans from 2 – 5 years perspective – Strategic Plans

Hierarchy of Plans

Purpose

Or Mission

Objective

Strategy

Policies – Major/minor

Procedures

Rules

Programme- Major/Minor/supporting

Budget – Numerised Program

Management by Objectives

Definition

The superior and subordinates managers of an organisation jointly define its common

goals, define each individual’s major area of responsibility in terms of result expected of

them and use these measures as guides in operating the unit and assessing the contribution

of each of its members.




Characteristics.

1. Collectively formulation of goals.

2. Collectively formulation of actions.

3. Implementation of plan – autonomy to subordinates

4. Collectively monitoring of performance – Mid term/end of year review.

Objectives.

1. MBO has an objective by itself. It is result oriented. It is performance that counts.

2. It is a management system and philosophy where stress is on goals and not methods

3. It provides accountability and responsibility and recognises that employees have

needs for achievement and self-fulfilment.

4. It meets those needs by providing opportunities for participating in goal setting

process.

5. Subordinates become involved in planning their oen career.

Advantages

1. Better utilisation of resources

2. Aid in planning

3. Development of peraonnel

4. Better team work

5. Concentration on Key Result area (KRA)

6. objective evaluation

7. MBO is result oriented.




26 Aug 04


Line and Staff Organisation

Line Executives are those directly contributing to profits of company through

manufacture, sale or service. Line refers to those positions and elements who have

responsibility and are accountable for accomplishment of primary objective, eg production,

sale, etc.

Staff Executives support the work of line executives, source information and assist

in auditing performance on various aspects. Staff functions are those that help line persons

work most effectively in accomplishing the objectives. Or these are those functions, which

have the responsibility and authority for providing advice and service to Line executive in

the accomplishment of the order.

Advantages of Line And Staff Type of Organisation.

1. Planned Specialisation

2. Well defined authority and responsibility

3. Bifurcation of conceptual and executive functions

4. Training ground

5. Sound decisions

6. Less burden on Line executive

7. Suitable for large organisations

Characteristics

1. Line executives command, they are doers

2. The staff specialists advice, they are thinkers

3. The staff plays a major part in planning the activity

4. The Line manager have clear and absolute authority for execution of decisions

Complaint of Line against Staff

1. Unfamiliar with actual work

2. Excessive paper work

3. Less degree of freedom

4. Lack of practical knowledge

5. Line works strenuously and Staff works cushy

6. Staff people usurp the Line authority

7. Staff has ears of management.




Complaint of Staff against Line

1. Extravagant

2. Ignorant/Old fogies

3. Take myopic view

4. Incentive oriented

5. Shifting responsibilities

6. Under-utilisation of their services

7. Rigidity/Not wanting to change

8. Lack of authority

9. Lack of mutual respect

10. Difficulty in exercising skill

11. Lack of clarity

Resolving Line and Staff conflicts

1. Formal meetings

2. Cross training

3. Matters of dispute to higher authorities

4. Line should have clear direction

5. Mutual respect

6. Job rotation

7. Transparency

8. Better communication

Disadvantages of Such Organisation.

1. Conflicts between Line and Staff

2. Excess dependence on Staff

3. Misinterpretation of Staff communication

4. High Operating Costs

5. Irresponsible Staff

6. Staff lacks authority

7. Delay in decision making

8. Shifting of responsibility

CONTROL

Control is any process that guides the activity towards any pre-determined objectives.

Control can be applied in many fields like price, distribution, production, finance

manpower, etc.

Control as an element of management can be defined as a process of analysing whether

actions are being taken as planned and taking corrective actions to make these conform to

planning.




Control tries to find out the deviations between the planned performance and the actual

happenings/performance and suggests corrective actions where they are required.

Following are the features of control: -

1. Control is forward looking because we can control future happening and not

past. However, in control past/present performance is measured because no one can

measure outcome of future happenings. In light of these measurements, managers

have to take corrective actions.

2. Control is both an executive process and from point of view of organisation,

a reason. Every manager has to perform the control function.

3. Control is a continuous process. Through managerial control, the manager

exercises control at a point of action, it follows a definite pattern, time table,

schedule, month after month, year after year

4. A control system is a coordinated integrated system. The control system

consists of interlock of several systems and not just one system.

Controlling and Other Functions

Control is closely related to other functions of management. Often it is said that

planning is the basis, delegation is the key and information is the guide for control. This

indicates the linkage of control to other processes of management.

1. Planning is the basis. In the sense that it provides for the entire spectrum on which

the control function is based. These two terms are used interchangeably. There is a

direct linkages between plans and control. Controlling implies certain existence of

goals and plans and standards. Planning aids in formulation of goals.

2. Action as the Essence. Control basically emphasises what actions to be taken to

correct deviations that may be found between the standards and actual performance. For

this purpose organisation actions are necessary. In real sense control means action to

correct the conditions which may be found in error or to prevent such condition from

occurring in future. Hence action is essential.

3. Delegation is the key to control

4. Information is the Guide. Control is guided by adequate information from

beginning to the end. Management information system and management control system

go hand in hand. The information system is designed on the basis of control systems.

The manager must have adequate information about the performance standards and

how he is contributing towards the achievement of organisation objectives. There must




be a system of information tailored for specific need at every level of management.

Both in terms of adequacy and timeliness.

5. Control system ensures that every manager gerts adequate information. The control

of information which is supplied in the organisation. Howeverm the information is

used as a guide and on this bais a manager can take action.

Essentials of a Good Control Syestm.




Essentials of Good Control System. All control systems and techniques should

reflect the job they have to perform. There may be several techniques which may have

general application. However, it should not be assumed that these mechanism should be

applied in all situations. Manager have to choose appropriate tool for particular situation

which will help him in controlling the actions as per plan.

2. Forward Looking. Control should be forward looking though many of the

controls are instantaneous they should focus attention on how future actions can conform

with plans. In short control mechanism should be such that they aid in planning process.

3. Promptness in Reporting Deviations. An ideal control system should report

deviations promptly and inform manager concern to take timely action. This is done

through designing appropriate information system.

4. Pointing Out Exceptions at Critical Points. Control System should be able to point

out exceptions at critical points and should suggest whether action has to be taken for

deviation or not. Some deviations will have great impact in organisation, while others

others may have little impact. The control system should provide info for critical control

point and control on exception. The critical control point stresses that effective control

requires attention to those factors critical to apprising the performance against an individual

plan. The control of the exception requires that a manager takes action when there is an

exceptional deviation. The more the manager’s concentration on control by exception more

efficient will be result on the control.

5. Objective. Control should be objective, definite and determinable in clear and

positive way. The standard of measurement should be quantitative as far as possible. If they

are not quantifiable they should be determinable and verifiable. If the performance standard

is not measurable and determinable, many subjective elements enter the process and affect

the control mechanism on the wrong footing.

6. Flexible. Control mechanism should be flexible so that it remains working

even if there are changes in plan, unforeseen circumstances or outright failure. A good

control system should report such changes and failures and must have an element of

flexibility to maintain management of operations in spite of such failure/changes.

7. Economical. Control system should be economical and should be worth the cost.

Economy is relative since the benefit will vary as per the importance of activity, the size of

the operations, etc.

8. Simple. The control system should be simple and understandable so that all

managers can use it effectively. The control techniques involving mathematical formula are

detested by many managers who find it difficult to understand and implement in

organisation.

9. Monitoring. Control system should monitor the planning system effectively.




10. Motivating. Control system should motivate both the controller and the

controlled.

11. Reflecting Organisation Pattern. The control should reflect organisation pattern

by focussing attention on positions in the organisation structure where deviations are

corrected. Organisation structure can act as a vehicle not only for coordinating the

activities in the organisation but also as a tool to maintain effective control.

There are 4 major steps in control

1. Establishment of the control standard. Every function in the organisation

begins with plans which are goals, objectives and targets to be achieved. In light of this,

standards are established which are the criteria against which performance will be

measured. For setting standards it is important to precisely and concisely identify the

results, which are desired. Precision in the standards is important. In some areas standards

may be more precise while in some other areas decision on precise standards may be

difficult. Standards can be precisely defined or quantified in terms of volume of products,

costs, revenue investments etc. The can also be expressed in qualitative terms if there is

difficulty in quantifying the same. After setting the standards it is important to decide the

level of achievement or performance which is to be regarded as good or satisfactory. There

are important characteristics of a particular work which can be called as good performance.

Important characteristics should be considered while determining level of performance,

output, resources, expenditure, etc. The desirable level of performance should be

reasonable and flexible.

2. Measurement of Performance. The second major step is measurement of

performance. This step involves measuring performance in respect of work in terms of

control standards. The measurement of performance against standards should be on future

basis so that deviations can be detected in advance of the actual occurrence and avoided by

appropriate means. Appraisal of actual or expected performance becomes an easy task if

standards are properly determined and method of measuring performance can be expressed

in physical and monitory terms such as production units, sales volume, profits, etc as these

are easily and precisely measurable. The performance which is qualitative and intangible

cannot be measured precisely. For this purpose some other techniques have to be used. It is

not necessary that all measurements are rigidly quantitative. Accordingly to Peter Drucker,

it is very much desirable to have a clear and common measurement in all key areas of

business. In his opinion, ofr measuring tangible and intangibles performance, measurement

must be

a. Clear

b. Simple and rational

c. Relevant

d. Reliable, self announcing and understandable.




3. Comparing actual and standard performance. The third major step of control process

is comparing actual and standard performance. It involves two steps.

a. Finding out extent of deviation.

b. Identifying the causes of such deviation.

c. When adequate standards are developed and actual performance is measured

precisely and accurately, any variations will be clearly revealed.

Management may have information regarding what performance data charts

graphs and written reports besides observing to keep itself informed about

the performance in different segments of ergonomics. Such performance is

compared with the standards one to find out whether various segments and

individuals are progressing in the right direction. When the standards are

achieved no further managerial action is required and control process is

complete. However, standards may not achieved in all cases and the extent

of deviations may vary from case to case. Hence management has to

naturally determine whether strict compliance with standards is required or

whether variations are permissible and to what limit.

d. When the deviation between the standards and actual performance is beyond

the prescribed limit an analysis is made of the causes of such deviation. For

control and planning purposes ascertain the causes of such deviation is

important along with computations of variations because such analysis helps

to take proper control action. The analysis will pin point the person

responsible and he can take necessary corrective action.

e. Measurement of performance analysis of standard deviation and their causes

may be of no use unless they are communicated to person concerned so that

corrective action can be take. This can take form of reports.

4. Correction of Deviations. This is the last step in control process which r3equires that

action should be taken to maintain the desired degree of control in the system or operation.

An organisation is not a self regulating is not self regulating system like a thermometer

which operates in a state of equilibrium put there by virtue of engineering design. In

business organisation the type of automatic control can not be established because of so

many factors involved in the total environment. In fact correction of standard deviation in

management control process which may involve effect of various management functions.

Desired

performance

Action plan

Implementation

Action

Plan

Cause

analysis

Actual

performance

Performance

Measurement

Comparison

of two

Identifying

deviation

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