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Title: Management


1
MANAGEMENT
  • Dr. ANANDA KUMAR
  • Professor,
  • Department of Management Studies,
  • Christ College of Engg. Tech.
  • Puducherry, India.
  • Mobile 91 99443 42433
  • E-mail searchanandu_at_gmail.com

2
MANAGEMENT
  • Management is the process of designing and
    maintaining of an environment in which
    individuals working together in groups
    efficiently accomplish selected aims.
  • Koontz Weihrich
  • Management is the art of knowing what do you
    want to do and then seeing that it is done in the
    best and cheapest way.
  • - F. W. Taylor

3
MANAGEMENT
  • Management is the coordination of all resources
    through the process of planning, organizing,
    directing and controlling in order to attain
    stated goals.
  • - Henry L. Sisk

4
MANAGERIAL SKILLS
  • 1. Technical Skill
  • 2. Human Skill
  • 3. Conceptual Skill

5
  • Technical Skill
  • It refers to the ability to the tools, equipment,
    procedures and techniques.
  • Effective supervision and coordinating of the
    work of the subordinates. Therefore depends on
    the technical possessed by the lower level market.

6
  • Human Skill
  • Human skill refers to the ability of the
    manager to work effectively as a group member and
    to build cooperative effort in the team he leads.
  • Human skills are concerned with understanding
    of people.
  • Managers skill in working with others is
    natural and conditions.

7
  • Conceptual Skills
  • This skill also called design and problem.
    Solving skill involves the ability.
  • To see the organisation and the various
    components of it as a whole.
  • To understand how its various parts and functions
    mesh together.
  • A higher degree of conceptual skill helps in
    analyzing the environment and in identifying the
    opportunities.

8
MANAGEMENT LEVELS
Top Level Management Middle Level Management
Lower Level Management
9
  • Top Level Management
  • The main functions of top management are
  • To formulate goals and policies of the company.
  • To formulate budgets.
  • To appoint top executives.
  • To provide overall direction and leadership of
    the company.
  • To decide the distribution of profits etc.

10
  • Middle Level Management
  • The important functions of middle level
    management.
  • To monitor and control the operating performance.
  • To train, motivate and develop supervisory level.
  • To co-ordinate among themselves so as to
    integrate the various activities of a department.

11
  • Lower Level or Supervisory Management
  • The main functions of lower level management
  • To train and develop the efficiency of the
    workers.
  • To assign jobs to workers
  • To give orders and instructions.
  • To maintain discipline and good human relations
    among workers.
  • To report feedback information about workers.

12
FUNCTIONS OF MANAGEMENT
  • 1. Planning
  • 2. Organising
  • 3. Staffing
  • 4. Directing
  • 5. Controlling

13
  • 1. Planning
  • Planning is simple looking ahead. It is
    preparing for the future. Effective planning
    leads to efficient management. Effective planning
    provides answers to questions like what to do?
    When to do? How to do? Who is to do?

14
  • Organising
  • Organizing establishes harmonious relationship
    among all the workers of an organization by
    providing them with suitable authority and
    responsibility.
  • According to Louis A. Allen Organisation
    involves identification and grouping the
    activities to be performed and dividing them
    among the individuals and creating authority and
    responsibility relationships among them for the
    accomplishment of organizational objectives.

15
3. Staffing
  • Staffing process involves selecting candidates
    for positions, fixing salary, training and
    developing them for effective organizational
    functions. The manager performs the duties of
    job analysis, job description etc. which come
    under the staffing function.

16
4. Directing
  • One plans are made and the organisation is
    created next step is to achievement of objectives
    of the organisation.
  • Directing is involves activities like guiding,
    supervising and motivating the subordinates in
    their jobs. Motivation, leadership and
    communication are three important sub function of
    directing. Motivation helps to increase the
    performance of the workers. Communication
    provides with proper information to improve the
    effective management. Leadership the process by
    which a manager guide and influences the work of
    his subordinates.

17
5. Controlling
  • Controlling as a function of management deals
    with checking and verifying the activities
    against the predetermined standards. The process
    of ensuring that actual activities conform to
    planned activities. Controlling process involves
    the following steps.
  •   1. Establishing standards
  • 2. Measuring current performance.
  • 3. Comparing this performance to the
    established
  • standards.
  • 4. Taking corrective actions of deviation are
  • detected.

18
IMPORTANCE OF MANAGEMENT
  • 1. Attainment of group goals
  • 2. Effective functioning of business
  • 3. Resource development
  • 4. Management control the organisation
  • 5. Integrates individual efforts
  • 6. Motivation
  • 7. Communication
  • 8. Coordination
  • 9. Decision-making
  • 10. Leadership quality

19
DIFFERENCE BETWEEN ADMINSTRATION MANAGEMENT
20
Points of Distinction Administration Management
1. Nature It is a determinative thinking function. It is an executive or doing function.
2. Scope It is concerned with the determination of major objectives and policies. It is concerned with the implementation of policies.
3. Level It is mainly a top-level function It is a largely a middle and lower-level function.
4. Influence Administrative decisions are influenced mainly by public opinion and other outside forces. Managerial decisions are influenced mainly by objectives and policies of the organisation.
5. Direction of human efforts It is not directly concerned with direction of human efforts. It is actively concerned with direction of human efforts in the execution of plans.
6. Main functions Planning and control are the main functions involved in it. Directing and organizing are the main functions involved in it.
7. Skills required Conceptual and human skills. Technical and human skills.
21
NATURE CHARACTERISTICS OF MANAGEMENT
  • 1. Management is Universal
  • 2. Management is Purposeful
  • 3. Management is an Integrative Force
  • Management is a Social Process
  • Management is Multidisciplinary
  • Management is a Continuous Process
  • Management is Intangible
  • Management is an Art as well as a Science

22
MANAGEMENT AS A SCIENCE OR AN ART?
23
What is Science?
  • The science portion of management is apparent
    in the body of management knowledge, its
    fundamental principles and what experience and
    experimentation have shown.
  • In some management subjects, we can build
    models and use mathematics to prove our study
    toward the scientific end of the spectrum.
  • Management as a discipline fulfills the science
    criterion. The application of these principles
    helps any practicing manager to achieve the
    desired goals.

24
What is Science?
  • Science classified into two types. They are
    exact science and inexact science. Exact science
    where the results are accurate. In the case of
    management it is an inexact science.

25
What is Science?
  • Management is inexact science because
  • Every organizations human resources are
    different attitude, aspirations and perceptions.
    So standard results may not be obtained.
  • Readymade and standard solutions cannot be
    obtained
  • Management is complex and unpredictable.
  • Every organisation decisions are influenced by
    the environment. The environment is so complexes
    and unexpected changes.

26
What is an art?
  • Art means application of skill in finding a
    desired result. Art is the way of doing things
    skillfully. Management is an art because of the
    following facts.
  • Management process involves the use of
    practical knowledge and personal skill.
  • Management is creative.
  • Application of practical knowledge and certain
    skills helps to achieve concrete results.

27
Management is both science and an art
  • Management is a science because it contains
    general principles. It is also an art because it
    requires certain personal skills to achieve
    desired results.

28
HENRY FAYOLS CONTRIBUTION (1841 1925)
  • Fayol was a contemporary of Taylor.
  • He started his career as a junior engineer in a
    coal mining company in France in 1860 and became
    its general manager in 1880.
  • We published his famous book Administration
    Industrielle et Generale in 1916 which was
    published in English in 1949 under the title
    General and Industrial Management.
  • This book is now considered to be one of the
    best classics in management.

29
Principles of Management
  • 1. Division of Work
  • Authority Responsibility
  • Discipline
  • 4. Unity of Command
  • 5. Unity of Direction
  • Subordination of Individual interest to General
    interest
  • Remuneration of personnel
  • 8. Centralization

30
  • 9. Scalar Chain
  • Order
  • Equity
  • Stability of Staff
  • Initiative
  • Esprit-de-corps

31
Case Study
  • ABI Ltd., is a medium sized company Mr. Pramod
    has been working in the company for over 12 years
    as a secretary. He has got an excellent track
    record and recently he has been raised to the
    position of Administrative Manager. As a result
    of this change, the output of his work in the
    office dropped considerably and morale become
    low. There was alarming increased in Staff
    turnovers.

32
  • To study the situation, the managing director
    engaged a consultant. His report while praising
    the aspects of office administration pointing out
    his incapabilities especially in dealing with
    people. Surprisingly, Mr. Pramod enjoyed much
    popularity of the senior executives of the
    company. He won their appreciation for his
    valuable service as a manager. They were much
    worried over the incapabilities of Mr. Pramod in
    dealing with people. They were helpless.

33
  • Questions
  • What is the real possible cause of this problem?
  • What can be done to rectify the situation
    considering Mr. Pramods value to the company?

34
ROLE OF A MANAGER
  • 1. Director
  • Motivation
  • Human being
  • Guide
  • Friend
  • Planner
  • Supervisor
  • Reporter

35
TASKS / RESPONSIBILITIES OF A PROFESSIONAL MANAGER
  • 1. Planning of work
  • 2. Proper and Effective Communication
  • 3. Co-ordination of Efforts
  • 4. Getting co-operation of employees
  • 5. Encourages a team spirit
  • 6. Better utilization of Resources
  • 7. Selecting the Procedure
  • 8. Maintaining good human relations
  • 9. Solve the problem
  • 10. Arranging training and development facilities

36
QUALITIES OF MANAGER
  • Physical
  • Mental
  • Moral
  • General Education
  • Special knowledge
  • Experience

37
SYSTEM APPROACH TO MANAGEMENT
  • Introduction Like a human organism an
    organisation is a system. In an organisation
    also people, tasks and the management are
    interdependent.

38
  • System concepts
  • System theory was first applied in the fields of
    science and engineering.
  • A system is essentially a set or assemblage of
    things interconnected or independent, so as to
    form a complex unity.
  • Just as a doctor effective manager should
    collect information about all parts of the
    organisation in order to diagnosis a problem and
    take necessary corrective action.

39
  • Some key concepts
  • Subsystem While an organisation as a
    whole is a system, the various components or
    parts within it are called the subsystem. Thus a
    department is a subsystem of the organisation.
  • Closed system A system that does not
    interact with its environment. A closed system
    has fixed boundaries, its operation is relatively
    independent of the environment outside the
    system.
  • Open system A system that interacts
    with its environment. Thus an open system is one
    which constantly comes into contact with the
    environment.
  • Synergy Synergy means that
    departments that interact cooperatively are more
    productive than they would be if they operated in
    isolation.

40
Open system model of an Organisation
External Environment

Information
OUTPUTS Goods Services
INPUTS Human Machines Money Technology
Transformation
Feedback
41
SOCIAL RESPONSIBILITIES OF A BUSINESS
  • 1. Responsibility towards shareholder/owners
  • 2. Responsibility towards Employees
  • 3. Responsibility to customers
  • 4. Responsibility towards Government
  • 5. Responsibility towards community

42
  • 1. Responsibility towards shareholder/owners
  • a fair return on investment
  • safety of investment
  • steady appreciation of investment
  • regular, accurate and full information about
    the working and progress of the company.

43
  • 2. Responsibility towards Employees
  • Fair wages and salaries
  • Good and safe working conditions
  • Adequate service benefits such as housing,
    medical facilities insurance cover, retirement
    benefits
  • Recognition of workers rights to form trade
    unions, to collective bargaining and strike
  • Opportunities for education, training and
    promotion.
  • Workers participation in decision-making.

44
  • 3. Responsibility to customers
  • Regular supply of quality goods at right time
    and place
  • Change reasonable prices
  • Supply goods that meet the needs of different
    classes and taste with different purchasing
    power.
  • Prompt, adequate and continuous service
  • Prompt, redressal of customers grievances
  • True and fair information through
    advertisements
  • Avoid unfair and unethical practices like
    adulteration, hoarding and black marketing.

45
  • 4. Responsibility towards Government
  • To abide by the laws of the land
  • To pay taxes honestly and in time
  • To avoid corrupting public servants
  • To encourage fair trade practices
  • To avoid monopoly and concentration of economic
    power

46
  • 5. Responsibility towards community
  • To make the best possible or efficient use of
    the societys resources
  • To provide maximum possible employment
    opportunities
  • To keep the environment healthy and free from
    all types pollution
  • To refrain from indulging in anti-social and
    unethical practice
  • To improve public health, education and
    cultural life of the community.

47
PLANNING
  • Planning is the most basic of all management
    functions.
  • Lots of planning activities are done by the
    management people at all levels.
  • Planning is the process of selecting objectives
    and determining the course of action required to
    achieve these objectives.
  • Planning bridges the gap from where we are and
    where we want to go.

48
Definition
  • According to Koontz and ODonnell, Planning is
    deciding in advance what to do, how to do it,
    when to do it, and who is to do it. It is the
    selection among alternatives of future course of
    action for the enterprise as a whole and each
    department within it. Plans involve selecting
    enterprise objectives and determining ways of
    achieving them.

49
Definition
  • In the words of Mary Cushing Niles, Planning is
    the conscious of selecting and developing the
    best course of action to accomplish an objective.
    It is the basis from which future management
    action spring.

50
STEPS IN PLANNING PROCESS
51
Identification of opportunities
Establishment of objectives
Developing Planning Premises
Identification of Alternatives
  • STEPS IN PLANNING PROCESS

Evaluation of Alternatives
Selecting an Alternatives
Formulating Derivative Plans
Establishing Sequence of Activities
52
1. Identification of Opportunities
  • Identification of awareness of the opportunity is
    the starting point of planning. First of all, we
    should identify the possible future opportunities
    and analyze them clearly and completely. From
    that, we should know
  • Where we stand,
  • What is our strength and weakness,
  • What problem we wish to solve and why, and
  • What we expect to gain.

53
2. Establishment of Objectives
  • The next step in planning is to establish
    objectives for the entire organization and then
    for each subordinate units. Objectives specify
    and indicate the results expected.
  • What is to be done?
  • Where is the primary emphasis to be placed?
  • What is to be accomplished by the various types
    of plans?

54
3. Developing planning premises
  • Planning premises are the assumptions that should
    be made about the various elements of the
    environment. It provides the basic framework in
    which plans operate. These premises may be
    internal or external.
  • Internal premises include organizational,
    policies, resources of various types, sales
    forecasts and the ability of the organisation to
    withstand the environmental pressure. External
    premises include the total factors in task
    environment like political, social,
    technological, competitors, plans and actions,
    and government policies etc.

55
4. Identification of Alternatives
  • A particular objective can be achieved through a
    number of ways. The entire alternative cannot be
    analysed. Some alternative can be rejected at
    its preliminary stage itself by considering
    preliminary criteria such as minimum investment
    required, matching with the present business,
    market conditions government control, skilled
    workers, technique available etc.
  • Only the alternatives which meet the preliminary
    criteria may be chosen for further detailed
    analysis.

56
5. Evaluation of Alternatives
  • The alternatives considered for the analysis
    according to preliminary criteria may be taken
    for further evaluation. Each alternative course
    of action is evaluated on the basis of
    profitability, capital investment, risk involved,
    gestation period etc. It presents a problem
    because each of these alternatives may have
    certain advantages and disadvantages. For
    instance, an alternative may appear to be must
    profitable. But, it requires a large cash outlet
    with slow payback another may be less profitable
    but involves less risk factors.

57
6. Selecting Alternatives
  • After the evaluation of various alternatives, the
    most appropriate course of action is selected.
    If more than one alternative is suitable, then
    any are alternative may be chosen for execution.
    When the situation changes and the selected plan
    do not provide to be the best, the other
    alternative may be tried.

58
7. Formulation of derivative plans
  • The derivative plans are formulated on the basis
    of the major plans. There are several minor
    plans required to support and execute the major
    plans. These plans are known as derivative
    plans. The various derivative plans are planning
    for buying equipment, buying raw materials,
    recruiting and training personal, developing new
    product etc.

59
8. Establishing sequence of activities
  • After formulating basic and derivative plans, the
    sequence of activities is determined so that
    plans are put into action while formulating
    derivative plans, a built in mechanism should be
    created for periodic review and updating of
    various plans whenever necessary. The starting
    and finishing times are fixed for each piece of
    work so as to indicate when and within what time
    that work is to be commenced and completed.

60
PURPOSE or OBJECTIVES OF PLANNING
  1. Primary of Planning
  2. To achieve objectives
  3. To cope with uncertainty and change
  4. To Facilitate control
  5. To help in coordination
  6. To increase organizational effectiveness
  7. To guide decision making

61
PRINCIPLES OF PLANNING
  1. Principle of the Contribution to objectives
  2. Principle of the Primacy of planning
  3. Principle of the Pervasiveness of Planning
  4. Principle of the Flexibility of Planning
  5. Principle of Periodicity
  6. Principle of Planning Premises
  7. Principle of Efficiency of Operations

62
ADVANTAGES OF PLANNING
  1. Helps in achieving objectives
  2. Better utilization of resources
  3. Economy in operation
  4. Reduces uncertainty and risk
  5. Improves competitive strength
  6. Effective Control
  7. Coordination
  8. Encourages Motivation

63
LIMITATIONS OF PLANNING
  1. Lack of accurate information
  2. Time and Cost
  3. Inflexibility
  4. Delay during emergency period
  5. False sense of security

64
NATURE / CHARACTERISTICS OF A SOUND PLAN
  1. Primary
  2. Continuity
  3. Flexibility
  4. Unity
  5. Precision
  6. Pervasiveness

65
RANGE OF PLANNING
  • It involves deciding a future course of action,
    plans always have some time frame-the period in
    future that a plan covers.
  • Based on the length of time involved, plans are
    usually classified as strategic range and
    operational plans or short range plans

66
  • LONG RANGE PLANNING / STRATEGIC PLANNING /
    CORPORATE PLANNING
  • Strategies are the large scale action plans for
    interacting with environment in order to achieve
    long term goals.
  • Strategic plans focus on the board future of
    the organisation and incorporate both external
    environment demands and internal resources into
    the actions managers need to take to achieve the
    long term goals of the organization.
  • Typically, strategic plans cover the major
    aspects of the organization, including its
    products, services, finances, technology and
    human resources.

67
  • SHORT RANGE PLANNING / OPERATIONAL PLANNING
  • Operational plans translate tactical plans into
    specific goals and actions for small units of the
    organization and focus on the near term,
    typically 12 months or less.
  • Strategic planning provides guidance and
    boundaries for operational planning.
  • For example, if the strategic plan is to face
    competition with new and innovative products,
    major tasks to achieve this goal would be
    clarified by operational planning.

68
OBJECTIVES
  • Objectives are the aims, purposes or goals that
    an organization wants to achieve over varying
    periods of time.
  • Objectives simply let people know what they are
    trying to do, or what is expected of them at the
    close of the evaluation period.

69
SETTING OBJECTIVES
  • Objective features in all branches of
    management.
  • For setting the initial objectives, all
    organizations have a formal, explicitly
    recognized, legally specified organization.
  • In general, the overall objective of the
    organization is set by the top management.

70
Conti.
  • However, in some organizations, the objectives
    are set by the vote of the shareholders in
    others, by a vote of the members, by a small
    number of trustees or by a few individuals who
    will win and run the organization.
  • In large organizations, objectives are set by
    the board of directors, governing board,
    executive committee.

71
MANAGING BY OBJECTIVES (MBO)
  • MBO is a process whereby the superior and the
    subordinate managers of an enterprise jointly
    identify its common goals define each
    individuals major areas of responsibility in
    terms of results expected of him, and use these
    measures as guides for operating the unit and
    assessing the contribution of each of its
    members.
  • - George Odiorne

72
Conti.
  • MBO is a process whereby superiors and
    subordinates sit together to identify the common
    objectives and set the results which are to be
    achieved by the subordinates.

73
THE PROCESS OF MBO
  • 1. Setting Preliminary objectives
  • 2. Fixing Key result areas
  • 3. Setting subordinates objectives
  • 4. Recycling objectives
  • 5. Matching resources with objectives
  • 6. Periodic performance reviews
  • 7. Appraisal

74
BENEFITS OF MBO
  • 1. Improvement of managing
  • 2. Clarification of organization
  • 3. Personnel satisfaction
  • 4. Team work
  • 5. Development of Effective Control
  • 6. Fast Decision making

75
WEAKNESS OF MBO
  • Failure to teach the philosophy of MBO
  • Failure to give guidelines to goals setters
  • Difficulty of setting goals
  • Emphasis on short-term goals
  • Danger of Inflexibility
  • Time consuming
  • Increased paper work

76
REASONS WHY MBO FAIL
  • Lack of top management involvement and support.
  • Lack of understanding of the philosophy behind
    MBO.
  • Difficultly insetting realistic and meaningful
    objectives.
  • Increased time pressure.
  • Lack of relevant skills.
  • Lack of individual motivation.
  • Poor integration with other systems

77
POLICIES
  • A policy is a broad statement formulated to
    provide guidance in decision making.
  • A policy is the statement or general
    understanding which provides guidance in decision
    making to members of an organisation in respect
    to any course of action. - L.M. Prasad
  • Policies are general statements of
    understandings which guide or channel thinking in
    decision making or subordinates. - Weihrich and
    Koontz

78
NEED or IMPORTANCE or PURPOSE OF POLICY
  • To operationalise objectives
  • To save time and effort
  • To facilitate delegation of authority
  • To speedup decision making
  • To control administration

79
FORMULATION OF A POLICY
  • Identification of area
  • Objectives
  • Analysis of Environment
  • Corporate Analysis
  • Collection of Information
  • Analysing the information
  • 7. Identification of Alternatives
  • Appraisal of Policies
  • Selection of a Policy
  • Approval of policy
  • Communicating the policy

80
TYPES OF POLICIES
  • 1. Formulated Policies
  • 2. Appealed Policy
  • 3. Imposed Policy

81
STRATEGIES
  • Strategy is the determination of basis
    long-term objectives and the adoption of the
    course of action and allocation of resources to
    achieve these goals. - Alfred D. Chandler
  • A strategy may also be defined as a special type
    of plan prepared for meeting the challenge posted
    by the activities of competitors and other
    environmental forces.
  • Strategy is a course of action through which an
    organisation relates itself with environment so
    as to achieve its objectives.

82
PROCEDURES
  • Policies are subdivided and stated in terms of
    procedures.
  • For example A companys policy may be to sell
    the obsolete products at a discount. The
    procedure may explain how to decide which product
    is obsolete and what percentage of discount is to
    be offered.
  • Procedures for placing orders for material and
    equipment, for sanctioning different types of
    employees leave, for handling grievances at the
    shop floor level, etc., suggest how each of these
    has to be handled.

83
PROGRAMMES
  • A programme is a broad term which includes goals,
    policies, procedures, rules and steps to be taken
    in putting a plan into action.
  • Terry and Frankin define programme as a
    comprehensive plan that includes future use of
    different resources in an integrated pattern and
    establishes a sequence of required and time
    schedules for each in order to achieve stated
    objectives.

84
FORECASTING
  • In all organizations, managers plan their future
    course of action based on some predictions of the
    future. Forecasting provides them the knowledge
    of the future trends.
  • Forecasting is the process of estimating the
    future, based on the analysis of their past and
    present behaviour. Its aim is to provide
    information for planning and decision making.

85
BUDGETS
  • Budgets are used to quantify and allocate
    resource to specific activities. In most
    organizations, budgets are proposed and annually.
  • A variety of resources can be quantified in
    budgets, but money is most commonly used. There
    are several types of budgets. For example, a
    capital expenditure budget specifies the amount
    of money to be spent on specific items that have
    long term use and require significant amounts of
    money to acquire. These items might include such
    things as equipment, land or buildings.

86
DECISION-MAKING
  • Decision-making is defined as the process of
    choosing a course of action from among
    alternatives to achieve a desired goal.
  • It is one of the functions of management and also
    a core process of planning. The management
    executive takes a number of decisions every day.
  • There are number of alternatives available to the
    management. The best one is selected out of the
    available alternatives.

87
Definition
  • Knootz and Weihrich, Decision making is defined
    as the selection of a course of action from among
    alternatives.
  • Georage R. Terry, Decision making is the
    selection based on some criteria from two or more
    possible alternatives.

88
DECISION MAKING PROCESS / PHASES OF DECISION
MAKING
Identification of Problem
Diagnosis and analysis the problem
Search for Alternatives
Evaluation of Alternatives
Selecting an Alternatives
Implementation and follow-up
89
ORGANISING
  • Organising is the process of identifying and
    grouping of activities required to attain the
    objectives, delegating authority, creating
    responsibility and establishing relationships for
    the people to work effectively.

90
Definition
  • According to Haimann, Organising is the
    process of defining and grouping the activities
    of the enterprise and establishing the authority
    relationships among them.
  • Koontz and ODonnel define organizing as the
    grouping of activities necessary to attain
    objectives, the assignment of each grouping to a
    manager with authority necessary to supervise it,
    and the provision for co-ordination horizontally
    and vertically in the enterprise structure.

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NATURE OF ORGANIZATION
  1. Common Objectives
  2. Specialization or Division of Labour
  3. Authority of Structure
  4. Group of Persons
  5. Co-ordination
  6. Communication
  7. Environment
  8. Rule and Regulations

92
SPAN OF CONTROL or SPAN OF MANAGEMENT
  • Span of management means the number of people
    managed effectively by a single superior in an
    organization.
  • The term Span of management is also known as
    Span of supervision, Span of authority and
    Span of responsibility.
  • If the number of members is too large, it will
    be very difficult to manage the persons and
    perform the work effectively.

93
Definition
  • According to L. Urwick, the ideal number of
    subordinates is four in case of higher level
    management and eight to twelve in case of bottom
    level management.

94
DETERMINATION OF SPAN OF MANAGEMENT
  1. Direct single relationship
  2. Direct group relationships
  3. Cross relationship

95
  • 1. Direct single relationship It is
    one in which a supervisor has direct relationship
    with his subordinates individually. If X
    supervises Y and Z who are subordinates, there
    are two direct single relationships.

  • Supervisor
  • Subordinates

X
Z
Y
96
  • Direct group relationships In direct
    group relationship, a supervisor has direct
    relationship with his subordinates jointly.
  • Supervisor
  • Consultation Consultation
  • Subordinates

X
Y
Z
97
  • Cross relationship In cross
    relationship, a subordinate has relationship with
    another subordinate mutually.

  • Supervisor
  • Relationship
  • Subordinates

X
Y
Z
98
FORMAL ORGANISATION
  • A formal organisation typically consists of a
    classical hierarchical structure in which
    positions, responsibility, authority,
    accountability and the line of command are
    clearly defined and established.
  • Each and every person is assigned the duties and
    given the required amount of authority and
    responsibility to carryout the job.
  • The inter relationship of staff members can be
    shown in the organisation chart and manuals

99
Advantages of Formal Organisation
  • Since the definite boundary of each worker is
    clearly defined, the conflict among the workers
    is automatically reduced.
  • Overlapping of responsibility is easily
    avoided.
  • More stable organization can be ensured. It
    makes the organization less dependent on one man.
  • A sense of security arises from classification
    of the task.
  • It motivates the employees.

100
INFORMAL ORANISATION
  • Informal organisation is an organisation which
    establishes the relationship on the basis of
    members interaction, communication, personal
    likings and disliking, and social contacts within
    as well as outside the organisation.
  • It arises naturally on the basis of friendship or
    some common interest which may or may not be
    related with work.

101
Advantages of informal organisation
  • Since informal organisation gives satisfaction
    to the workers, it motivates workers and also
    maintains the stability of the work.
  • It fills up the gaps and deficiency of the
    formal organisation.
  • It fills up the gaps among the abilities of the
    managers.
  • The presence of informal organisation
    encourages the executives to plan the work
    correctly and act accordingly.

102
DIFFERENCE BETWEEN FORMAL AND INFORMAL
ORGANISATION
Point of view Formal Organisation Informal Organisation
Origin It is created deliberately and consciously by the frames of the organisation. It is created spontaneously and naturally.
Purpose It is created for achieving legitimate objectives of the organisation. It is created by the members of the organisation for social and psychological satisfaction.
Nature Planned and official Unplanned and unofficial.
Size It may quite large. It may be small in size.
Nature of groups It may be stable and continue for a very long. It is quite unstable in nature.
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Point of view Formal Organisation Informal Organisation
Number of groups More Less
Structure Definite structure, mechanical and rational Structure less, impersonal and emotional.
Authority Authority flows from top to bottom It may flow upward to downwards from or horizontally.
Communication Communication normally flows through the prescribed chain of command. Communications pass through the informal channels which do not have one single form.
104
ORGANISATIONAL CHARTS
  • Organisational charts are prepared for the
    purpose of describing the organisational
    structure clearly.
  • An organisation chart is a graphical portrayal of
    the various positions in the enterprise and the
    formal relationships among them.
  • It shows the organisational relationships and
    activities within an organisation.

105
KINDS OF ORGANISATION CHARTS
  • 1. Vertical Chart
  • 2. Horizontal Chart or Left to Right Chart
  • 3. Circular Chart or Concentric Chart

106
  • 1. Vertical Chart

Chairmen
Managing Director
Marketing Manager
Production Manager
Personnel Manager
Supervisor for Operation B
Supervisor for Operation A
Supervisor for Operation C
Workman III
Workman II
Workman I
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  • 2. Horizontal chart or Left to right chart

Managing Director
Salesman I
Branch Manager I
President
Salesman II
Branch Manager II
Managing Director
Managing Director
Managing Director
Salesman III
Branch Manager III
108
  • Circular Chart or Concentric Chart
  • Supervisor III
  • Supervisor II
  • Supervisor I

Production Marketing Manager
Manager Personnel Finance Manager
Manager
Chairman
109
STEPS IN ORGANISING PROCESS
  • 1. Determination of Activities
  • 2. Grouping of Activities
  • 3. Assignment of Duties
  • 4. Delegation of Authority
  • 5. Establishment of Structural Relationship
  • 6. Co-ordination of Activities

110
DEPARTMENTATION / FUNCTIONAL DEPARTMENTATION
  • Departmentation means the process of grouping of
    similar activities of the business into
    department, division or other homogeneous units.
    It is used for the purpose of facilitating smooth
    administration at all levels.
  • Departmentation involves grouping of people or
    activities with similar characteristics into a
    single department or unit.

111
DEPARTMENTATION BY DIFFERENT STRATEGIES
  • 1. Departmentation by Numbers
  • 2. Departmentation by Time
  • 3. Departmentation by Enterprise Function
  • 4. Departmentation by Territory or Geography
  • 5. Departmentation by Customers
  • 6. Departmentation by Process or Equipment

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  • Departmentation by Numbers
  • In this case, departments are created on the
    basis of number of persons forming the
    department. Similar types of activities are
    performed by small groups.
  • In such case, the each group is controlled by a
    supervisor or an executive.
  • For example, in the army soldiers are grouped
    into squads on the basis of the number prescribed
    for each unit.

113
  • Departmentation by Time
  • Under this base, the business activities are
    grouped together on the basis of the time of
    performance.
  • For example, a manufacturing unit working in
    three shifts of eight hours each per day may
    group the activities shift wise and thus having
    separate department for each shift.
  • The basic idea is to get the advantages of people
    specialized to work in a particular shift.

114
  • Departmentation by Enterprise Function

President
Vice-president
MD
Finance Dept
Personnel Dept
Production Dept
Marketing Dept
Production Planning
Financial Planning
Market Research
Recruitment Selection
Production Engineering
Budgets
Market Planning
Training
Purchasing
General Accounting
Sales Administration
Tooling
Labour
Advertising
Cost Accounting
Repairs
115
  • 4. Departmentation by Territory or Geography

President
Managing Director
Northern Region
Central Region
Western Region
Southern Region
Eastern Region
116
  • Departmentation by Customers

Branch Manager
Manager Housing Loans
Manager Business Loans
Manager Cooperative Loan
Manager Personal Loans
Manager Agricultural Loans
117
6. Departmentation by Process or Equipment
President
General Director
Ginning
Weaving
Spinning
Packing Sale
Dying Printing
118
  • 7. Departmentation by Product or Service

General Manager
Automobile
Heavy Engg Division
Finance
Sales
Finance
Sales
Personnel
Production
Personnel
Production
Power Products Division
Earth Moving Equipment Division
Finance
Sales
Finance
Sales
Personnel
Production
Personnel
Production
119
 AUTHORITY
  • According to Hendry Fayol, Authority is the
    right to give orders and the power to exact
    obedience.
  • Koontz and ODonnell have defined authority as,
    Authority is the power to command other to act
    or not to act in a manner deemed by the possessor
    of the authority to further enterprise or
    departmental purposes.

120
LINE AUTHORITY or LINE ORGANISATION
  • Line authority exists between superior and his
    subordinate.
  • Line authority is the direct authority which a
    superior exercises over a number of subordinates
    to carry out orders and instructions.
  • In organisation process, authority is delegated
    to the individuals to perform the activities.

121

Manager
Superintendent 1
Superintendent 2
Foreman 1
Foreman 1
Foreman 2
Foreman 2
W
W
W
W
W
W
W
W
W
W
W
W
122
STAFF AUTHORITY
  • Staff authority is exercised by a man over line
    personnel.
  • The relationship between a staff manager and the
    line manager with whom he works depends in part
    on the staff duties.
  • In a management, staff refers to those elements
    of the organisation which help the line to work
    most effectively in accomplishing the primary
    objectives of the enterprise, the nature of the
    staff relationship is advisory.

123
  • The function of staff is to investigate research
    and give advice to line managers.
  • Staff personnels having specialized knowledge
    and skills reduce the burden of line personnels.

124
DECENTRALISATION OF AUTHORITY
  • Centralization and decentralization refer to the
    location of decision-making authority in an
    organisation.
  • Centralisation means that the authority for
    most decisions is concentrated at the top of the
    managerial hierarchy whereas decentralisation
    requires such authority to be dispersed by
    extension and delegation through all levels of
    management.

125
  • Louis A.Allen has defined both the terms as,
    Centralisation is the systematic and consistent
    reservation of authority at central points within
    an organisation. Decentralisation applies to the
    systematic delegation of authority in an
    organisation-wide context.

126
MAKING DECENTRALISATION EFFECTIVE
  • 1. Centralized Top Policy
  • 2. Appreciation of Concept of Decentralization
  • 3. Development of managers
  • 4. Competition among units
  • 5. Open Communication
  • 6. Effective Co-operation

127
DELEGATION OF AUTHORITY
  • Delegation of authority is a process which
    enables a person to assign works to others and
    delegate them with adequate authority to do it.
  • Delegation consists of granting authority or the
    right to decision-making in certain defined areas
    and charging the subordinate with responsibility
    for carrying through an assigned task

128
COMPARISON BETWEEN DELEGATION AND DECENTRALISATION

Sl. No Delegation Decentralization
1. It is the process of devolution of authority. It is the end result achieved by the delegation.
2. It implies the relationship between a superior and a subordinate. It implies the relationship between top management and various departments and sections.
3. The delegation control rests entirely with the superior. Here, the top management exercises only control and delegates the authority for control to the departmental heads.
4. It is must for management. It is optional
5. It is a technique of management to get things done. It is both technique and philosophy of management.
6. It can take place without decentralization. There cannot be decentralization without delegation.
129
STRATEGY AND ORGANIZATION DESIGN
  • A well-developed design enhances the
    accomplishment of strategic objectives, and these
    strategic objectives should have carefully
    selected to ensure successful organizational
    performance.
  • Organization design is overall plans for
    organizing the work, goals, relationships, and
    decisions of an organization in such a way that
    people can perform to the best of their abilities.

130
DESIGN ORGANIZATIONS TO MATCH THEIR ENVIRONMENTS
  • Some of the pioneering work on the relationship
    between organization design and environment was
    done by Tom Burns and G.M. Stalker. They found
    that successful organizations were designed
    differently in different environments. They
    distinguished between two types of organization
    designs a mechanistic design and an organic
    design.

131
  • Mechanistic Designs A mechanistic
    design follows Webers bureaucratic model very
    closely in that it is characterized by
    specialized activities, specific rules and
    procedures, an emphasis on formal communicational
    and a well-defined chain of command.
  • Because mechanistic designs tend to be
    inflexible and resistant to change, this type of
    design is more successful in a stable
    environment.

132
  • Organic Designs In an organic design,
    task activities are loosely defined, there are
    very few rules and procedures, and great emphasis
    falls on self-control, participative problem
    solving, and horizontal communication.
  • Organic designs are more successful in dynamic,
    rapidly changing environments that require
    adaptability to change.

133
STAFFING
  • Staffing is defined as filling and keeping
    filled, positions in the organization structure.
  • It includes identifying work force requirements,
    inventorying the people available and recruiting,
    selecting, placing promoting, appraising and
    training developing both candidates and current
    jobholders to accomplish their tasks effectively
    and efficiently.

134
ROLE OF STAFFING
  • Massive increase in the number of employees.
  • Technological innovations that require more
    skilled and experienced staff.
  • Changing employee roles and values.
  • Increasing the percentage of woman employees.
  • Effective utilization of skills and potential
    of the work force.
  • Provision of job satisfaction to employees.

135
JOB ANALYSIS
  • It is an attempt to match the jobs and
    job-holders.
  • Job analysis is a detailed study of a job to
    identify the skills, experience and aptitude
    required for the job.

136

JOB ANALYSIS
Job Specification
Job Description
Personal Characteristics Age, Sex,
Education. Physical Characteristics Length,
Weight, Vision. Mental Characteristics General
intelligence, Memory, Judgment. Social
Psychological Characteristics Emotional
Stability, Initiative, Creativity.
Job Title A Title of the Job Job Activities
Tasks performed, materials used. Working
Conditions Light, Heat, Noise. Social
Environment Size of work group members etc.
137
  • Job Description Job description is a
    written statement showing job title, tasks duties
    and responsibilities involved in a job.
  • Job Specification Job specification
    also known as man or employee specification is a
    statement of minimum acceptable qualities
    required in a job incurrent for the effective
    performance of the job.

138
JOB DESIGN
  • The job design is usually broad enough to
    accommodate peoples needs and desires. It may
    be especially appropriate to design jobs for
    exceptional persons in order to utilize their
    potential.
  • People spend a great deal of time on the job
    and it is therefore important to design jobs so
    that individuals feel good about their work.

139
  • Two important goals of job design are
  • To meet the organisational requirement such as
    higher productivity, operational, efficiency,
    quality of product/service etc.
  • To satisfy the needs of the individual employees
    like interests, challenge, achievement etc.

140
TECHNIQUES FOR DESIGNING JOBS
  • The following factors are the designing of jobs.
  • 1. Job Enlargement
  • 2. Job Rotation
  • 3. Job Enrichment

141
Job Enlargement
  • Job Enlargement is several short tasks which are
    given to one worker. Thus the scope of the job
    is increased because there are many tasks of be
    performed by the same worker.
  • Job enlargement does not increase the depth of a
    job. Enlarged jobs require longer training
    period because there are more tasks to be
    learned. If workers are more satisfied with
    jobs, job enlargement should be successful.

142
Job Rotation
  • Job rotation refers in the movement of an
    employee from the job to another.
  • An employee who works on a routine job is
    affected from boredom and monotony.
  • Job rotation improves employees skills. Thus
    the role of job rotation is motivating people is
    limited.

143
Job Enrichment
  • Job enrichment is based on herzbergs two-factor
    theory of motivation. It is based on the
    assumption that in order to motivate workers.
    The job itself must provide opportunities for
    achievement, recognition and responsibility.
  • The job enrichment approach to boring jobs is to
    give the individual employee more autonomy in the
    job. Employee receives a greater sense of
    accomplishment as well as more authority and
    responsibility.

144
RECRUITMENT
  • Recruitment is defined as a process to discover
    the sources of manpower to meet the requirements
    of the staffing schedule and to employ effective
    measures for attracting that manpower in adequate
    members to facilitate effective selection of an
    efficient work force.
  • B.Flippo defined recruitment as The process of
    search for prospective employees and stimulating
    them to apply for jobs in the organization.

145
SOURCES OF RECRUITMENT

SOURCES OF RECRUITMENT
INTERNAL SOURCE
EXTERNAL SOURCE
146
  • Internal Sources
  • Present permanent employees
  • Present temporary/Casual employees
  • Retired employees

147
  • External Sources
  • Advertisements
  • Employment exchanges
  • Campus Recruitment
  • Recruitment at the factory gates or gate hiring
  • Jobbers / Contractors / Personnel consultants
  • Recommendations of existing employees

148
SELECTION
  • Selection is the process that enables the
    enterprise to pick up the candidates with the
    required qualifications, training and skill for
    the job after careful screening and rejecting the
    undesirables at each successive step.
  • The selection procedure is the system of
    functions and devices adopted in a given company
    to ascertain whether the candidates
    specifications are matched with the job
    specifications and requirements.

149
STEPS OF SELECTION PROCESS

Screening of Applications
Selection Tests
Preliminary Interview
Medical Examinations
Final Interview
Approval
Placement
150
PERFORMANCE APPRAISAL
  • Appraising the performance of individuals,
    groups and organization is a common practice of
    all societies.
  • Thus teachers evaluate the performance of
    students, bankers evaluate the performance of
    creditors, parents evaluate the behaviour of
    their children and all of us consciously or
    unconsciously evaluate our own actions from time
    to time.

151
  • Meaning
  • Performance appraisal evaluate not only the
    performance of worker but also his potential for
    development.
  • Performance appraisal is a continuous process
  • Appraisals are arranged periodically according
    to a definite plan.
  • The performance appraisal is the process of
    determining and communicating to an employee how
    well he is performing the job.
  • Performance appraisal is the employees job
    relevant strength and weaknesses.

152
PROMOTION
  • Promotion means shifting of personnel to a higher
    position carrying increased wages and
    responsibilities. It is a movement from lower to
    higher rank involving higher salary,
    responsibility and increase in status.

153
TRAINING AND DEVELOPMENT
  • Training plays a very important role in human
    resource development. Training involves the
    department of skills that are usually necessary
    to perform a specific job.
  • According to Edwin B.Flippo Training is the act
    of increasing the knowledge and skills of an
    employee for doing a particular job.

154
  • Development means all round improvement in the
    job performance, personality growth in
    proficiency, advancement and progress in all
    other personality traits that make an employee a
    better man and a better citizen.

155
NEED FOR TRAINING
  • Every organization should provide training to all
    employees irrespective of their qualification,
    skill, suitability of the job etc.
  • 1. Training is necessary to prepare existing
    employees for higher level jobs.
  • 2. Training is necessary when a person is
    shifted from one job to another.
  • 3. Training is necessary to make employee mobile
    and versatile.
  • 4. Training provides a sense of security and self
    confidence to employees.

156
Cont
  • 5. Training is needed to bridge the gap between
    what the employee has and what the job demands.
  • 6. Training develops new skill to the employees.
  • 7. There are three other factors which could
    necessitate training

157
TRAINING METHODS

Training Methods
On-the Job Training Methods
Off-the Job Training Methods
  • Job Rotation
  • Apprenticeship Coaching
  • Committee Assignments
  • Experience
  • Temporary Promotions
  1. Lecture
  2. Conference Seminars
  3. Role Playing
  4. Case Studies
  5. Programmed Instructions
  6. Business Game
  7. In basket method
  8. Sensitivity Training

158
ORGANISATIONAL CHANGE
  • The term change refers to an alteration in a
    system whether physical biological or social.
    Thus organisational change is the alteration of
    work environment in organization.
  • 1. Organisational change is a continuous change.
  • 2. Any changes may affect part of organization
    positively or negatively.
  • 3. When change occurs in any part of the
    organization, it disturbs the old equilibrium
    necessitating the development new equilibrium.

159
FACTORS INFLUENCING ORGANISATIONAL CHANGE

Organisational Change
External Factors
Internal Factors
  • Technologies
  • Social
  • Political
  1. Change in Managerial Personnel
  2. Deficiency in Existing organisation

160
ORGANISATION DEVELOPMENT
  • Organisation development is a systematic and
    continuous process of learning and growth. It
    improves the managerial effectiveness. It is
    basically long range programme.
  • Organisational development is attempting to
    change the behavioural attitudes and performance
    of the total organisation.
  • Organisation development is an education strategy
    which focuses on the whole culture of the
    organisation in order to bring about planned
    change.

161
DIRECTING
  • Directing may be defined as the process of
    instructing, guiding and inspiring human factors
    in the organisation to achieve organisation
    objectives.
  • It is not only issuing orders and instruction by
    a superior to his subordinates but also including
    the process of guiding and inspiring them to work
    effectively.

162
Cont..
  • Directing includes the following elements
  • 1. Leadership
  • 2. Motivation
  • 3. Communication

163
LEADERSHIP
  • Leadership is the process of influencing the
    behaviour of other towards the accomplishment of
    goals in a given situation.
  • Koontz and ODonnel have defined, Leadership is
    the art of process of influencing people so that
    they will strive willingly towards the
    achievement of group goals.

164
IMPORTANCE OF LEADERSHIP
  1. Motivating employees
  2. Leader develops team work
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