MCS Notes 11 Marks

8/3/2019 MCS Notes 11 Marks

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-Charles Babbage, a scientist mainly interested in mathematics, contribution to the management

theory by developing the principles of cost accounting and the nature of relationship between various

disciplines. -He concentrated on production problems and stressed the importance of a) division and

assignment of work on the basis of skill and b) the means of determining the feasibility of replacing a

replacing manual operations with automatic machinery.

II. SCIENTIFIC MANAGEMENT (1880-1920)

1.HENRY FAYOL (1841-1925)

-He was a French mining engineer who turned a leading industrialist and successful manager and rose to

the position the chief management director.

-In his famous work, General and industrial administration, Fayol has listed 14 principles ofadministration.

-He evolved and general theory of administration to be applied in any field of organized activity,

particularly at the top level of management.

-He is father of management

2.F.W TAYLOR (1856-1915)

-He has earned for himself an important place in the management thought.-He is called the father of scientific management movement which seeks to apply scientific method to the

problem of management.

-Taylor published the following articles:

-i.A Piece Rate System, ii. Shop Management iii. On the Art of Cutting Metals and The Principles ofScientific Managementwhich was published in 1911.

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3. FRANK GILBERTH (1868-1924)

-Frank bunker Gilberth and Lillian Moller Gilberth were a husband and wife team. They made significant

contributions to motion study, fatigue study and work simplification.

-He analysis of the ob convinced him that many of the body movements could be eliminated or combined

to simplify the job and to increase productivity.

-He found the most efficient and economical motions for each task. This increased the workers moraland productivity and reduced his fatigue.

4. HENRY L. GANTT (1861-1919)

-He was an associate of Taylor at Midvale and Bethlehem steel works.

-He developed the techniques of work scheduling and control.

-His significant contribution was the famous Gantt chartwhich is still used for scheduling and control of

work.

-He also developed the Task and Bonus Plan under which a minimum wage is guaranteed to all workers

irrespective of output.

-He believed that is all problems of management, the human element is the most important.

III. HUMAN RELATIONS PERIOD (1920-1950)

1. GEORGE ELTON MAYO (1880-1949)

-He was a professor of industrial psychology at the Harvard Business School. He published several booksand papers, e.g i. Human Problem of an Industrial Civilization, Management and Morale, The Social

Problem of an Industrial Organization, Training for Human Relation etc.

-He served as the leader of the team which carried out the famous Hawthorne Experiments, these

experiments were conducted in the Hawthorne plant of West Electric Company in Chicago (USA) from

1927 to 1932.

-Hawthorne Experiments may be classified into four stages:

i. Illumination experimentsdesigned to Asses the effects of illumination on employeeefficiency.

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ii. Team room experimentdesigned to judge the influence of working conditions (duration ofrest periods, length of the work week, wage incentives, etc) on worker performance. These

were experimental in nature.

iii. Interviewing studies- undertaken to improve employee attitudes. These were psychological innature.

iv. Observational studies carried out to understand the factors influencing informalorganization of work groups. These were sociological in nature.

IV. MODERN MANAGEMENT PERIOD 1950 at present

1. DOUGLAS MCGREGOR (1906-1964)

-He was a professor of management at the MIT(USA).-He is known for the development of motivation theory. He developed Theory X and Theory Y.

-He advocated motivation by participation and job enrichment.

2. PETER F. DRUCKER (1909-TILL DATE)

-Drucker is now a professor of social sciences at Claremont graduate school, California.

-His most popular book is The Practice of Management publishedin 1954-He introduced the concept ofMBO (Management By Objectives) and self-control in early fifties.-He has emphasized creative and innovative management and he is against bureaucratic management

-He has identified three important phases in organizing activity analysis, decision analysis and relation

analysis.

3. Explain about the Schools of Management thought or different approaches

to management.

SCHOOLS OF MANAGEMENT THOUGHT

(OR)

DIFFERENT APPROACHES TO MANAGEMENT.

Management thoughts have been termed as pattern approaches, or schools of management. Each

of these employs certain beliefs, views, and formats.

1.Empirical Approach: it bases its methods on a close study of past managerial experiences and

management cases. Studies experience through cases. Identifies successes and failures. Main contributors

to this approach are Earnest Dale, Moony and Rellay, Urwick and many other management

practioners.

2. Human Behaviour Approach: a) this approach draws heavily its concepts from psychology and

sociology. b) Emphasis is placed on getting greater productivity through motivation and good human

relations. c) Motivation, leadership, communication, participative management and group dynamics arethe core of this approach. Beginning from the famous Hawthorne Experiments, contributions have come

from many psychologists and sociologist notably from Maslow, Hers berg. McGregor etc3. Social System Approach: The organization is essentially a cultural system composed of people who

work in co-operation. a) Relationships exist among the external and internal environment of the

organization. b) Co-operation among the group members is necessary for the achievement of

organizational objectives. The real pioneer of social systems approach is Chester Barnard.

4. Decision Theory Approach: It concentrates on rational decisions and it is real job of every manager in

the organization. Decision of what to achieve and how to achieve it are the vital characteristics and

challenges of every manager. Major contributors are Simon, Forrester Cyert etc.

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5.Mathematical approach: This school visualizes management as a logically entity. The action can be

expressed in terms of mathematical symbols, relationships and measurable data. The major contributors

included in this school are Newman, Russel Ackoff etc.

6.Social Technical system approach: This approach views an organization as two systems a) a social

system and b) technical system, which necessarily interact. By Trist and Bamforth.

7.Systems approach: the system approach of management is of recent origin, having developed in late

1950. The system approach has made a significant contribution on management discipline and practices.Systems have boundaries, but they also interact with the external environment; i.e., organizations are

open system.

8.Group Behaviour approach: emphasis on behavior of the people in groups. Based on sociology and

social psychology. The study of large groups is often called organization Behaviour.

9.Mckinseys framework: the seven S are 1. Strategy, 2.structure, 3.systems, 4.style, 5.staff, 6.shared

values, 7. skills

4. Differentiate between Management & Administration.

Management VS administration

There has been a controversy on the use of the two terms-management and administration.

Administration is different from management: Administration is a higher-level activity while

management is a lower level management. Administration is a determinative function concerned with

the determination of objectives and policies while management is an executive function involving the

implementation of polices.

Administration Management

1. Legislative and determinative function.

2. Determination of objectives and policies

3. Provides a sketch of the enterprise.

4. Influenced mainly by public opinion and

other outside forces.

5. Mainly a top level function

6. Involves thinking and planning

1.executive function

2.Implementation of policies

3.provides the entire body

4.influenced mainly by administrative

decisions

5.mainly a lower level function

6.involves doing and acting

BOD

MD

Production manager

Plant superintendent

Supervisor

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5. Explain the Levels of Management.LEVELS OF MANAGEMENT:

The different levels of management may be classified into three categories

Levels of management:

Board of directors

Managing director

Production Finance marketing HR manager

Manager Manager managermanag

Plant chief account branch manager training officer

Superintend

financial officer

Foremen sales officer

clerks

Workers salesmen

Management /industrial management has got the following activity levels.

1.Top-level management:-Top level management includes a) Board of Directors b) Managing Director, c) Chief executive, d)

General manger, e) Owners, f) Shareholders.

Setting basic goals and objectives.

Expanding or contracting activities

Establishing policies

Monitoring performance

Designing/Redesigning organization system

Shouldering financial responsibilities etc.

2. Upper Middle Management

-Upper Middle Management includes a) sales executive (manager), production executive,

financial executive, R&D executives, Accounts executive- Establishment of the organization.

Selection of staff for lower levels of management

Installing different departments

Designing operating policies and routines

Assigning duties to their subordinates etc.

3.Middle Management

It includes a) Superintends, Branch manager, General foreman, etc.

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- To cooperate to run organization smoothly

- To understand interlocking of departments in major policies

- To achieve coordination between different parts of the organization

- To conduct training for employee development

- To build an efficient company team spirit

4. Lower Management

It includes a) Foremen, Supervisors, or charge-hands, office superintendent, inspectors, etc.- Direct supervision of workers and their work

- Developing and improving work methods and operations

- Inspection function

- Imparting instruction to workers

- To give finishing touch to the plans and policies of top management

- To act as a link between top management and the operating force (i.e workers)

- To communicate the feeling of workers to the top management.

5. Operating Force

It includes a) Workers, rank and file workman, skilled, semi-killed and unskilled.

- To do work on machines or manually, using tools, etc

- To work independently (in case of skilled worker) or under the guidance of supervisor.

6. Explain the details regarding Management Skills.

MANAGEMENT SKILLS:

By managerial skills, we mean the skills or qualities desired in managers, the possession of which would

enable them to act better as practicing managers.

1. Technical skill:

- Technical skill might be termed as technical expertise.

- It is an imperative sill for managers at the lower level management. Because it is

actually these people who guide and supervise work of operators under their

subordination.- Accordingly, it may range from knowledge regarding operation and repair of a

machinery, storage of materials, to training of subordinates.

-

2.Human skill:

- By human skill we mean the ability to tactfully deal with human beings and mould their

behavior at work in the desired manner to help attain the common objectives of the

enterprise-most effectively and efficiently.

- A manager has to provide effective supervision, motivation and leadership that part of

his subordinates.

- A human skill is equally needed by all manages- from highest to the lowest authority in

the management hierarchy.

- Application of human knowledge and skill may involve motivating the sales force toachieve revised targets, or persuading the subordinates to effect economies, and so on.

3. Conceptual skill

- It is concerned with concepts or ideas.- It is imperative for top management level, necessary for the middle management level

and desirable for the lower level management

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- Application of conceptual knowledge and skills may involve formulation of a plan tointroduce a new product, to explore new markets, or trying out new methods of

production.

skills and Management Level

Top ----------------------------------------

---------------------------

Middle

---------------------------

Lower -------------

7. Explain the Managerial Roles of the Manager in an Organisation.

MANAGERIAL ROLES:

Many managers, especially at the top and middle management levels, perform some such functions,

as could not, properly, be called management functions.

I. Interpersonal roles:

a) Figurehead: i. Attending the wedding ceremony of an employee of the organization.

ii. Entertaining VIP visitors and taking them to lunch or dinner.

iii. In this role the manager performs duties of a legal or ceremonial nature, such aswelcoming visitors, giving testimonials to employees.

b) Leader: In this role the manager provides the dynamic force and direction to his subordinates by

means of guidance and motivation.

c) Liaison:

i. Dealing with public grievances and complaints for betterment of public relations.

ii. The manager maintains or helps to maintain a link of the enterprise with outside

parties; which is necessary for collecting useful information for the enterprise and

developing good relations of the enterprise with important sectors of society.

iii. Liaison helps the manager to establish mutually helpful horizontal relationship

II. Informational roles:

a) Monitor:

i. In this role the manager receives and analyses information form the outside world and

from within the organization, for transmission to appropriate people.

b) Disseminator:

i. The information received from outside and from within the organization is analyzed fromthe point of view of its relevance. The relevant information is then passed on to the

appropriate persons both within and outside the organization.ii. Manager performs the role of a disseminator in the sense that he shares the information

and experience with others.

c) Spokesman:

i. The manager acts as a representative of the organization to transmit information to the

outside world.

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ii. When he negotiates with the trade unions or talks to the press person, he acts as a

spokesman of the organization.

III. Decisional roles:

a) Entrepreneur:i. A manager assumes the role of an entrepreneur when he initiates any change in

technology or work methods.ii. Example: manager makes a decision to acquire new machine or modify work methods.

b) Disturbance handler:

i. In this role the manager is a troubleshooter, rushing in to provide speedy solution to a

crisis. Breakdown of a machine, dispute between subordinates, strike call by labour

union, withdrawal of credit facility by suppliers of material, loss of a valued customer.

c) Resource allocator:i. The manager has to determine the distribution of organizational resources such as 5Ms.

ii. Accordingly, setting of a time schedule for the completion of a job, or approval of

expenditure on a particular project is the functions which the manager performs in the

role of a resource allocator.

d) Negotiator:

i. The managers role as a negotiator consists in settlement of terms and conditionswith various parties-particularly outside the enterprise.

ii. A role could be-

-Settlement about wage, working conditions, bonus, workers participation in

management etc. with labour union.-Settlement about price, delivery of goods, after-sales service and other issue

with major customers.

-Bargaining with suppliers of raw materials or goods.

8. Explain about 14 principles of management.HENTRY FAYOLS CONTRIBUTION TO MANAGEMENT:

a) Introduction to fayol and his work

Henry Fayol (1841-1925) was a French mining who turned a leading industrialist and successful

manager. He was a mining engineer in a French mining and rose to the position of the chiefManaging Director.

Fayols classification of business functions:

Technical activities (relating to production)

Commercial activities (relating to buying, selling or exchange)

Financial activities (relating to search for and optimum use of capital i.e., finances)

Security activities (relating to protection of the properties and personnel of the

enterprise)

Accounting activities(( relating to a systematic recording of business transactions,

including statistics also)

General principles of management:

Fayol advocated fourteen principles of management.1. Division of Work: division of work leading to specialization result in increased human efficiency;

as through the application of this principle, much more production is possible with the same amount

of human efforts.

It results in efficient use of resources and increases productivity. This is applicable to both managerial and

technical functions.

2. Authority and responsibility: it is the power inherent in a managerial position which enables a

manager to command subordinates to work towards the attainment of enterprise objectives.

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Responsibility, is the reverse of authority; whose essence is an obligation owed by a subordinate to the

superior for the proper performance of the job for which authority is granted to the former.

3. Discipline: discipline is absolutely necessary for the smooth running of an organization. Discipline

means following rules, regulations, policies and procedures by all employees of organization.

4. Unity of command: an employee should receive orders from one supervisor only to avoid possibleconfusion and conflict. This principle is useful in the clarification of authority responsibility

relationships.5. Unity of direction: all the activities must be aimed at one common objective. It implies that for each

group of activities having the same objective. There must be one head and one plan.

6. Subordination of individual interest to general interest: the interest of one employee or group

should not be given importance over the interest and goals of organization.

7. Remuneration of personnel: remuneration of personnel is the price paid or payable to people

managers and workers- for their service rendered towards the attainment of the enterprise objectives.

8. Centralization authority: it refers to a reservation of decision-making authority at top levels of

management. Decentralization, on the other hand, means a dispersal of authority from the central (top-

level) points to middle, and specially lower level of management.

9. Scalar chain

Management may be regarded as a chain of superiors. There should be an unbroken line of

authority and command through all levels from the highest ( i.e., general manager)to the lowest ranks(employee).

10. Order: this promotes the idea that everything (e.g. materials) and everyone (human being) has his

place in the organization.

Materials and human beings should be arranged such that right material (think)/ person isin the right place.

11. Equity of treatment:

- Managers should have fairness in treatment for all his subordinates

-Manger should deal with his subordinates with kindness and justice.

-This will make employees more loyal and devoted towards the management.

12. Stability

-Stable and secure work force is an asset to the enterprise, because unnecessary labour turnovers arecostly.

-An average employee who stays with the concern is much better than outstanding employees who merely

come and go.

-Instability is the result of bad management.

13. Initiative:

-Mangers should sacrifice their personal vanity in order to permit their subordinates to exercise their own

initiative.

-A manager should encourage his subordinates to take initiative.

14. Esprit de corps

-This principle of management emphasizes the need for teamwork (harmony, and proper understanding)among the employees and shows the importance of communications in obtaining such teamwork.

- It is unity of strength9. Explain about the contributions of F.W. Taylor in Scientific Management.

Contribution of F.W.Taylor

He is called that father of scientific management.

Taylors scientific management is popularly called as Taylorism.

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Scientific management involves the application of a scientific approach to management

decision-making; and discarding at the same time, all unscientific approach as like-rule of the

thumb, a hit or miss approach and a trial and error approach.

Definition of scientific management:

Scientific management consists in knowing what you (i.e management) want men to do

exactly; and seeing to it that they do it in the best and the cheapest manner.

Principle of scientific management:

1. Science, not the rule of thumb.

The basic principle of scientific management is the adoption of a scientific approach to managerial

decision making; and a complete discard of all unscientific approaches, hitherto practiced by

management.

2. Harmony, not discord

Harmony refers to the unity of action; while discords refer to differences in approach.

3. Co-operation, not individualism

Co-operation refers to working, on the part of people, towards the attainment of group objectives; while

regarding their individual objectives as subordinate to the general interest.

4. Maximum production, in place of restricted production.

His view the most dangerous evil of the industrial system was a deliberate restriction of output.5. Development of each person to the greatest of his capabilities.

Management must endeavor to develop people to the greatest of their capabilities to ensure maximum

prosperity for both employees and employers.

6. A more equal division of responsibility between management and workers.

This principle of scientific management recommends a separation of planning from execution.

7. Mental revolution on the part of management and workers.

It involves a complete mental revolution on the part of both sides to industry viz workers and

management.

10. Explain about the Taylors scientific management.AN OUTLINE STRUCTURE OF TAYLORS SCIENTIFIC MANAGEMENT

1. Separation of planning and doing.

Before Taylor scientific management, worker himself used to decide how he had to work

and what instruments were necessary. Taylor has emphasized that planning function should be

separated from actual performance and should be given to specialists.

2. Job analysis:

There is one best way of doing a job which requires least movement, consequently less

time and cost. In very industry, this way should be determined which involves time, motion and

fatigue study.

i. Time study: Time study involves the determination of time a movement takes to complete. The

movement, which takes minimum time, is the best.

ii. Motion study: it involves the study of movements in parts which are involved in doing a job and

thereby eliminating the wasteful movements and performing only necessary movements.

iii. Fatigue study: this indicates that the workers feel fatigued after putting in work for a certain

period and they are not able to do the work at their full capacity. Thus, they should be provided

appropriate rest at appropriated intervals. The fatigue study shows the time and frequency of rest.

3. Standardization of raw materials, tools and working conditions:

i) Raw materials, tools, machines and other facilities of work must be of a reasonable goodquality so that the quality of production is reasonable.

ii) Another variety of standardization which Taylor refers to is uniformity in providing

work facilities and work conditions to all workers, doing a similar type of job.

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4. Scientific selection and training of workers.

Selection of workers should be on scientific basis. A worker should be given worker

which he physically and technically most suitable. Training should be provided to workers to make

them more efficient

5. Diiferent piece-rate system:

In order to motivate worker-positively as also negatively to product the standard output.

The inherent features of this scheme are: -i. A standard output for each worker is determined in advance through scientific work-

studies.

ii. Two rate of wage-payment are established.

a) A higher rate per unit of output

b) A lower rate per unit of output.

6. Financial incentives:

Worker can be motivated by financial incentives. Taylor himself applied differential piece rate system

which is of a highly motivating nature. The wage should be based on individual performance and o the

position which he occupies.

7. Economy:

While applying scientific management, not only scientific and technical aspect should be considered but

adequate consideration should be given to profit and economy.8. Function foremanship:

The scheme of functional foremanship recommended by taylor, is, in fact, an introduction managerial

specialization at the shop level. In this system eight persons are involved to direct the activities of the

workers.

Planning function executive function

Route clerk instruction time & shop gang speed repair inspector

Card clerk cost clerk disciplinarian bossboss boss

WORKERS

11. Explain about the Social Responsibility of Business?

SOCIAL RESPONSIBILITY OF BUSINESS:

Concept:

It refers to such decisions and activities of a business firm which provide for the welfare of the

society as a whole along with the earning of profit for the firm.

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It implies formulation of business objectives, plans, policies and programmes etc. with emphasis onnot only the economic concept of profit-maximization; but also with an orientation towards meetingsocial obligations- so that business functioning does not impinge on the legitimate interest of varioussegments of society.

CONPONENTS OR AREAS OF SOCIAL RESPONSBILITY:

I. Responsibility to itself::

- A business entity is supposed to earn a reasonable amount of profits to ensure its own

survival and gradual growth.

- This can be achieved only by planning effectively, honestly and with a foresight.

- Stability, expansion and growth are three watchwords which a business has to keep in

mind in order to fulfill its obligations toward its own self.

II. Responsibilities towards owners.

Paying a reasonable rate of dividend as reward for risking capital in business.

Ensuring safety of investment of funds provided by owners.

Showing due regard towards the interests of minority of members.

Ensuring growth of the company

Giving owners a true and fair account of the functioning, profitability and financialposition of the company.

Accessibility of chairman and directors to the owners for getting information relating to

the company.

III. Responsibilities towards workers:

Payment of adequate and timely wages

Providing adequate industrial safety devices

Granting job security

Providing congenial work environment

Providing opportunities for promotion and advancement

Ensuring reasonable workers participation in management

Protecting worker from occupational hazards Encouraging participative management in the company

Giving humane treatment to workers

Encouraging the development of good trade union leadership

IV Responsibilities towards consumers

Ensuring availability of products in the right quantity, at the right place and at the

right time

Supplying products of high quality.

Avoidance of indulging in unfair trade practices like-

-Supplying lesser weight

-Defective packing of goods

-Black-marketing, hoarding and profiteering

-Adulteration etc.o Providing good after-sales services.

o Using correct measures

o Immediate redress of consumer grievances

o Encouraging the formation of associations of consumers and consumers

advisory councils and maintaining close links with them.

V. Responsibilities towards suppliers and fellow-businessmen:

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- Fair settlement of accounts in time

- Abiding by the terms of contracts made with suppliers (and fellow businessmen)

- Development of sound business relations with suppliers (and fellow businessmen)

- Refraining from exploitation of the small businessmen, by their bigger counterparts.

VI. Responsibilities towards the state:

- Timely payment of legitimate taxes

- Strictly observing the provisions of the various laws and enactments.- Co-operating with the government in the implementation of its economic and social

policies

- Not to indulge in winning political favors for selfish interests.

- Supplying the required information to governmental departments, from time to time.

VI Responsibilities towards the society at large:

- Optimizing the use of resources

- Generation of maximum employment opportunities.

- Controlling environmental pollution

- Preventing urban congestion

- Undertaking programmes for rural development

- Innovating and implementing schemes for the uplift of the downtrodden

12. Define Ethics. Discuss about the important functions of Ethics.ETHICS:

Ethics is defined as discipline dealing with what is good and bad and with moral duty and obligation.

Personal ethics: the rules by which an individual lives his or her personal life

Accounting ethics pertain the code that guides the professional conduct of accountants.

Business ethics is concerned with truth and justice and has a variety of aspects such as the expectations

of society, fair competition, advertising, public relations, social responsibilities, consumer autonomy, and

corporate behavior in the home country as well as abroad.

Code of ethics:

A code is a statement of policies, principles or rules that guide behavior, certainly, codes of

ethics do not apply only to business enterprise; they should guide the behaviour of persons in all

organization and in everyday life.

The functions of code of ethic committee of a business enterprise may include1. Holding regular meeting to discuss ethical issues

2. Dealing with gray areas

3. Communicating the code to all members of the organization

4. Checking for possible violations of the code

5. Enforcing the code

6. Rewarding compliance and punishing violations

7. Reviewing and updating the code

8. Reporting activities of the committee to the board of directors.

Concept of business ethics:

Definition: business ethics are moral principles which must govern the conduct of business enterprise;

and guide businessmen as to whether their decisions and actions are right or wrong in terms of welfare

of society.

Social ethical business unethical neglect of

Welfare behaviour social

welfare

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The notion business ethical affecting social welfare

Analysis of the above definitions:

- Business ethics are moral principles which guide business behaviour

- Business ethics imply an idea of honesty in that these guide businessmen as to rightnessor wrongness of their decisions and actions

- The basic philosophy of business ethics is maximum social welfare, through functioningof business enterprises.

Examples of unethical business behaviour

1Workers:

o Overlooking industrial norms in order to get work done

o Denying legitimate promotions

o Discrimination among workers on the bases of caste, sex or relation.

2. Consumers:

- Indulging in vulgar and false advertising to attract consumers

- Neglecting after sales service

- Supplying lesser weight at higher prices, etc3. Investors/shareholders:

- Indulging in unhealthy speculation to the detriment of the interests of genuine investors

- Withholding payment of dividends; even when it is possible, etc.

4. Government:

- Keeping two sets books to evade taxes

- Supplying wrong or misleading information to government departments vis--vis

labour strike, labour problems, production, etc.

5. Society at large

- Bribing public officials to obtain undue favours

- Black marketing and hoarding of goods

- Production of things injurious to health of people etc.

Ethics vs. Law

Law is also based on ethical considerations; in that all law is based on the notions of equity, fairness and

justice. However, in some cases it may be observed that a thing is unethical but perfectly legal. In fact,

law may be against ethics. For example, production of liquor, cigarettes, and vulgar movies may be legal;

but absolutely unethical.

13. Explain about the Functions of Management.

FUNCTIONS OF MANAGEMENT:

1. Planning:

- Planning involves the formulation of what is to be done, how, when and where it is to

be done, who is to do it and what results are to be evaluated.- Planning means looking ahead, it is mental work, it is selecting from among many

choices following the procedure given below:

i. Lay down the company objective/targets.ii. Collect and classify the information relating to company objectives.iii. Develop alternative course of action to do the things.

iv. Compare the alternatives in terms of objectives, feasibility and consequences

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v. Select the optimum course of action yielding maximum benefit/gainvi. Establish policies, procedure, methods, schedules, programmes, systems, standards and

budgets for the optimum course of action selected.

2. Organizing:

o After determining the course and make-up of action, the next step, in

order to accomplish the task, is to distribute the necessary work among the workinggroups.

-It is the process of by which the structure and allocation of jobs is determined.

-It means, organizing people, materials, job, time etc., and establishing framework

. in which responsibilities are defined and authorities and laid down

o The process of organizing involves:

-Divide the workinto component activities-Assignpeople to task (component activities)-Define responsibilities

-Delegate authority-Establish structural relationship ( i.e organization structure) to secure coordination

3. Staffing: -Staffing is the process by which managers select, train, promote and retire theirsubordinates.

-Staffing involves the developing and placing of qualified people in the various jobs in the

organizations

-Staffing is a continuous process. The aim is to have appropriate persons to move into

vacated positions newly created in the enterprise.

-Function of staffing is from Recruitment to Retirement (RR)

4. Directing

-Directing is the process by which actual performance of subordinates is guided towards

common goals of the enterprises

-It includes

i) Giving instructions to subordinates

ii) Guiding the subordinates to do the work

iii) Supervising the subordinates to make certain that the work done by them is as per

the plans established.

- Directing involves functions such as

a) Leadership: leadership is the quality of the behaviour of the persons (mangers)

whereby they inspire confidence and trust in their subordinates, get maximum cooperation from them and

guide their activities in organized effort.b) Communication: it is the process by which ideas are transmitted, received and

understood by others for the purpose of effecting desired results.

c) Motivation: Motivating means inspiring the subordinates to do a work or to achieve

company objectives effectively and efficiently.

d) Supervision: supervision is necessary in order to ensure, I. that the work is going on

as per plan established, and ii) that the workers are doing as they were directed to do.

5. Controlling.

- Controlling is the process that measures current performance and guides it

towards some predetermined goal.

- Controlling means checking up to ensure that the planned work is progressing

as per schedule and if not, then to apply corrective action to achieve the pre-

determined objectives.

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Planning is the function of each and every manager irrespective of the level and area of

his/her operation.

Planning is an essential ingredient in management at all executive levels.

Managers at the top level prepare long-term plan for the company as whole, middle

level managers formulate departmental and functional plans for medium term. At the

lowest level, managers prepare operating and short-term plans.

7. Planning is both- long-range and short-range

Long-range planning usually covers a period ranging from 3 to 5 or 7 years,

while plans for a period of upto 1 year (or even 2 years) are regarded as short-

range plans.

8. Planning is continuous:

Planning is an on-going and dynamic exercise.

As the assumptions and events on which plans are based change, old plans have

to be revised or new ones have to be prepared.

III. Desirable features:

9. Planning is actionable: An ideal requirement of planning is that is must be actionable.

A plan is not just a paper-plan which either is not capable of implementation or is never put into

practice, for any reasons whatsoever.

10. Planning is flexible:

A plan is capable of modification, revision or readjustment, future; when some of those futureenvironmental factors change on which the plan is based.

11. Planning is an integrated system:

Ie. Various departmental plans, the plans of superiors and subordinates and the long-range and

short-range plans- all must be harmonized and fitted into an integrated structure of planning.

12. Planning is efficient:

The usual commercial cost-benefit formula is employed in the context of planning also-for

judging how far and to what extent, is a plan efficient or otherwise.

15. Write the importance of Planning.

IMPORTANCE OF PLANNING:

1. Planning offsets future uncertainty and change:

A business concern has to work in an environment which is uncertain and ever-changing.

Planning helps the manager in carving out the future course of action and this brings a higher

degree of certainty.

2. It tackles increasing complexity in modern business:

To run a modern business undertaking, there is need for large number of people with different

specialization and complex machines.

3. It helps in co-ordination:

Planning is the best stage for the integration of diverse forces at work.

Sound planning interrelate all the activities and resources of an organization.

The activities and efforts of various departments and division can be harmonized with the help

of an overall plan.

4. Encourage innovation and creativity

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10. Follow-up action:

Though the planning process comes to a close with the implementation of the plan; yet a

desirable step, which yet remains to be taken, relates to the follow-up action on the

implementation of the plan.

Follow-up action implies watching the consequences (both good and bad)- economic,

social psychological etc.

17. Draw a chart for levels of planning.PLANNING LEVELS

TOP STRATEGIC PLANS

MANAGEMENT -------------------------- long-range

Objective plans

Long range plans

Policies

MIDDLE ADMINISTRATIVE PLANS medium-

MANAGEMENT ------------------------------------ range

Organization plans

MotivationManagerial control

LOW OPERATIONAL PLANS short-

MANAGEMENT ----------------------------------- range

Rules plan

Method

Procedure

TOP LEVEL MANAGEMENT:

It is concerned with the strategic of courses of action, programme, policies, procedures and

standards that will determine the procurement, use and disposition of these resources.

MIDDLE LEVEL MANAGEMENT:

Examples: Research and Development, Marketing, Manufacturing, finance etc.

LOWER LEVEL MANAGEMENT

Example: plans for finished goods inventories to meet current market demands, plans to accelerate

research projects which are behind schedule.

18. Explain about the Types of Planning. TYPES OF PLANNING:

In the process of planning several specific plans are prepared which may broadly be classified into two

categories: Standing and Single -Use plans

.

PLANS PLANSTANDING PLAN SINGLE USE PLANS

Mission Programmes

Objectives Project

Policies Schedules

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Top management usually gives a start to launching of scheme of MBO; by identifying

the fundamental objectives of the enterprise as a guide to superiors and subordinates

throughout the organization for setting their own objectives.

They constitute the basic and long-term ends towards which the activities of all

departments and individuals are directed.

The objectives that are set also indicate the measures for achieving the objectives.

2. Unit sub-goals

Once the corporate objectives are formulated, the short-terms goals for each organizational

unit e.g., division, department or branch are established.

Such unit goals reflect what is expected of each unit.

3. Individual targets.

After the corporate and unit goals are set up the next step is to fix performance targets for

each individual manager at various level of the organization.

Superiors and subordinates throughout the enterprise determine their individual objectives-

through a process of mutual consultation. Such setting of individual objectives is the core

aspects of MBO.

4. Matching goals with resources.

To make MBO scheme realistic, goals of individuals are compared to the resources availablefor their implementation.

This helps the organization in allocating the resources in an economical way.

5. Recycling objectives.

Recycling objectives under MBO is done to take care of the interconnection among related

objectives.

Every manager calls periodical meetings of his subordinates to discuss their performance and

to jointly identify the steps to betaken for improvements in future.

6. Performance of appraisal

At the end of the year, a detailed discussion between a manager and this subordinate takes

place in which results of the unit are evaluated and the targets reviewed.

20. Write the Merits & demerits of MBO.Merits and demerits of MBO:

Merits:

1. Better managing.

MBO helps in better managing the organization. If forces management to think of

planning for results.

Objectives also force managers to think how these can be achieved and what resources

would require.

2. Clarity in organization.

MBO tends to force clarification in organization roles and structures.

3. CommitmentMBO elicits commitment performance. If the objectives are set by people who are responsible forachieving them, they have a sense of feeling that they are achieving their own objectives.

4. Helps in Appraisal

MBO provides the measurement criteria to judge where one stands. So that corrective actions. Ifrequired, can be taken well in time.

Demerits:

1. Failure to teach the philosophy.

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MBO seems to be easy on its face, but there is much to be understood and appreciated by

managers.

2. Problem of goal setting

Truly verifiable goals are difficult to set MBO requires verifiable goals. For example, quantified

goal setting for staff people is quite difficult.

3. Emphasis on short-run goals:

In most of the organizations practicing MBO, there is a tendency to emphasis short-run goals.

4. Inflexibility:

Sometimes MBO presents the danger of inflexibility in the organization.

5. Wastage of time:

MBO involves a wastage of a lot of valuable time of managers in joint consultations; and they left

with little time for efficiently discharging their

21. Define Strategies. Explain the process.STRATEGIES

The concept of strategy in business has been borrowed from military organization.

Strategy is the complex plan for bringing the organization from a given posture to a desired

position in a future period of time.

For example, if the management anticipates price-cut by competitors, it may decide upon astrategy of launching an advertising campaign to educate the customers and to convince them of

the superiority of its products.

Strategy making process:

1. Environment analysis:First of all the external environment of the enterprise is analyzed to determine the opportunities andthreats for the enterprise.

2. Self-appraisal

The internal environment of the enterprise (resources, capabilities, etc) is examined to know the

strengths and weaknesses of the firm.3. Strategic alternatives

Alternative strategies are developed to deal with the environmental forces.

4. Strategic implementationDetailed operational plans are developed and communicated to employees so as to execute the chosen

strategy.

I. SWOT Analysis:SWOT analysis is a key concept in the world of corporate planning, strategy formulation and other

practical spheres of management.

SWOT is also called TOWS by same management people. In fact, TOWS is SWOT; just written

backwards.

Concept and purpose a SWOT analysis:

S Strengths

Internal environment

W Weaknesses

O Opportunities

External environment

T Threats

1. The purpose of SWOT analysis is:

To capitalize (i.e. to take best advantage) on the strengths of the company.

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To overcome the weaknesses of the company

To exploit fully the opportunities available in the external environment

To manage successfully the threats posed by the external environment

2. A brief account of environmental analysis:

i. Internal environmental analysis

ii. External environmental analysis

I. Internal environmental analysis

All that environment which is found within the business enterprise itself, may be termed as

the internal environment of business.

a) Philosophical environment, consisting of the mission, values, beliefs and long-term goals of the

enterprise and organizational culture.

b) Managerial environment, consisting of the management hierarchy, quality of management talents

and the process of managerial development.

c) Structural environments, consisting of -

- rules, policies and procedures of the organization

- communication network

- controlling techniques etc.

d) Production environment, consisting of-

- raw material availability and utilizations system

- quality control system

- technology available to the organization

e) Marketing environment, consisting of -

- marketing research system and procedures

- advertising and other sales promotion techniques

- training and compensation of salesmen.

f) Personnel environment, consisting of-

- quantity and quality of manpower

- type and nature of manpower planning

g) Financial environment, consisting of

- working capital management

- capital budgeting-techniques and proceduresh) Human relations environment, consisting of-

- line-staff harmony and conflicts

- public relations etc

- management labour relations

II. External Environmental analysis:

It would be the fitness of things, to first identify the salient features of external environment -

It is quite difficult to identity specific factors comprised in this environment.

a) Legal factors:Legal factors constitute the existing legal framework; as applicable to business enterprise

- commercial laws,

- industrial laws,

- import-export laws- taxation laws

b) Political factors:

- political stability

- taxation attitude towards business

- policies of liberalization

- ideology of the government towards business reflected in its economic and business

policies

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c) social-religious-cultural factors:

- population growth and trends

- level of education in society

- craze for a higher standard of living

- consumer awareness- changing social and cultural value etc.

d) Competitive factors:- Their patronage of business products (services) buying capacity, likes, dislikes, preference

etc. vitally ensure profitability for the business enterprise.

e) Technological factors:

-if they plan to adhere to the new technology, they may be

-problem of resource chrunch

-re-organizational problems

-resistance to organizational changes by workers

f) Financial factors

- policies of banks and financial institutions

- stock market environment

- structure of interest rates

- foreign capital etc- control of central bank

g) Natural environment factors

- natural resources

- climate- geographical features whether the area is hilly or plain etc.

22. Explain TOWS Matrix in SWOT analysis.TOWS MATRIX:

1. The WT strategy aims to minimize both weakness and threats and may be calledthe mini-mini strategy. For example, form a joint venture, retrench or even

liquidate

2. the WO strategy attempts to minimize the weaknesses and maximize theopportunities.(mini-maxi)

3. the ST strategy is based on the organizations strengths to deal with threats in theenvironment. The aim is to maximize the former while minimizing the latter.(

maxi- mini)

4. The most desirable situation is on in which a company can use its strengths totake advantage of opportunities (the SO strategy). maxi-maxi

Internal factors

External factors

Internal strength (S)

e.g strength in

management, operations,R&D

Internal weaknesses (W)

e.g weaknesses in areas

shown in the boxstrengths.

S

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23. Define Decision making. Explain the important features of D-M.DEFINITION:

1.Decision-making is the selecting of an alternative, from two or more alternatives, to determine an

opinion or a course of action. Beorge R.Terry.

2.Whatever a manager does, he does through making decisions. -Peter F. Drucker.

FEATURES OF DECISION-MAKING:

1. Decision-making is goal-oriented

2. Decision is the choice of the best course among alternatives.

3. Decision-making is a mental process (thoughtful considerations).

4. Decision is aimed at achieving the objectives of the organization

5. It involves the evaluation of the available alternatives.6. It may also be negative and may just be a decision not to decide.

7. Decision relates the means to the end.

8. Decision-making involves a certain commitment.

24. Write the major classifications of the types of decisions.

A major classification of the types of decisions:

1.Personal and Organization decisions:

Personal decisions are those which are taken by managers concerning their personal life matters.

Organizational decisions are those which are taken by managers, in the context of organizationand for furthering the objectives of the organization.

2. Casual and routine decisions:

Casual decisions only on some special issues concerning organizational life. E.g. a decision to

install a new piece of machinery.

Routine decisions day-to-day operation of the organization. E.g. sending samples of a product to

the Govt. investigation center

3. Strategic and tactical decisions:

Decision relating to designing of strategies are strategic decisions. Eg. Major capital expendituredecision.

For implementation purposes, strategies are translated into operational plans ortactical decisions.

Such tactical decisions are taken at middle and lower levels of management.4. Policy and operative decision:

Apolicy decision is a decision - guidance and instruction

Policies are decided by superiors towards subordinates.

Decisions of subordinates taken within the prescribed limits are called operative decisions.

5.Programmed and non-programmed decisions:

Programmed decisions are normally of repetitive nature

taken by lower level managers

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Non-programmed decisions are of non-repetitive.

new branch, introducing a new product in the market etc.

6. Major and Minor decisions:

Major decision: if it relates to the purchase of a big machine worth, say a lakh of rupees, it is a,

major decision.

Minor decision: purchase of fountain pen ink a few reams are minor matters and may be decidedby the Office Superintendent.

7. Individual and collective decisions:

An individual(not personal) decision is taken by a manager is his individual capacity, withoutbeing consultation with any other person. (Autocratic)

Collective decisions are those which are jointly taken by a group of managers forum.(Democratic)

25. Explain about the Decision Making Process.

PROCESS OF DECISION MAKING:

I. Background steps:

1. Definition of the decision making problem:

define the problem, before he takes any decision.

take care of many factors in defining the problem.

Sufficient time should be spent on defining the problem.

2. Collection of data:

A decision as good as the adequacy and quality of data are on which it is based.

Accordingly management should proceed to collect necessary data for decision-making

purposes.

Service of MIS in this regard may prove to be highly useful and valuable.

II. Technical Steps:

3. Development of alternatives:

This step usually guided by SWOT analysis. Accordingly, management must develop thosealternative; which-

-Capitalize on the strengths of the company

-Overcome its weaknesses/limitation

-Lead to best exploitation of environment opportunities.

-Manage threats successfully.

4. Evaluation of alternatives:

After development of alternative is critically evaluated in terms of its merits and limitations- to

get at the net worth of each alternative.

The following criteria for evaluation-

-Risk and resource implication associated with each alternative.

-Cost-benefit analysis for each alternative.

i. Quantitative and qualitative factors:Quantitative factors: these are factors that can be measured in numerical terms, such as time or

various fixed and operating costs. (Tangible)

Qualitative factors: factors are those that are difficult to measure numerically, such as the

quality of labour relations, the risk of technological change, or the international political climate.

ii. Marginal Analysis:

Evaluating alternatives may involve utilizing the techniques of marginal analysis to compare

additional revenues arising from additional costs.

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If the additional revenues of a larger quantity are greater than its additional costs, more profits

can be made by producing more.

Marginal analysis can be used in comparing factors other than costs and revenues.

iii. Cost effectiveness analysis:

An improvement on, or variation of, traditional marginal analysis is cost effectives, or cost benefit,

analysis.

It seeks the best ratio of benefits and costs, this means, for example, finding the least costly way

of reaching an objective or getting the greatest value for given expenditure.

5. Selection of the best alternative:

In making a selection of the best alternative, management may base its decision on any of thefollowing two bases:

- Experience (experience managers take better decision)

- Experimentation. (A sample of decision may be put to implementation on a trial basis)

-

III. Practical Steps:6. Implementation of the decision:

A decision remains only a paper-decision; unless and until it is put into practice.

The following managerial aspects, to be taken care of:

- Communication of decision to those who are to implement it

- Making all resources and facilities available to the operators of the decisions

- Motivating people to implement the decision with enthusiasm.

- Exercising general supervision over the implementation of the decision.

7. Follow-up or feedback action:

The implementation of decision leaves certain information for the decision-making process.

The result of decision-execution can imply two sets of information.

i. That the decision-making process was right and should be continued.

ii. that the decision-making was wrong and or should be enriched with newways and techniques.

Objective

XProblem Fact finding Alternative Y Evaluation of

Z alternatives

Test Selection of best

Alternatives

Implementation

Feed back action

Decision-making process

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UNIT-II

ORGANIZATION

26. Define Organisation. Explain steps in Organising process.

Important Definition:

Mcfarland has characterized organisaiton as an identifiable group of people contributing their

efforts toward the attainment of goals.

Koontz and ODonnell. Organization involves the grouping of activities necessary to

accomplish goals and plans, the assignment of these activities to appropriate departments and the

provision for authority delegation and co-ordination.

Mooney and Railey Organisation is the form of every human association for the attainment of

a common purpose.

As a function of management, organizing is a process; broadly consisting of the following steps:

1.Determination of the total workload and division of work:

The very first step in the process of organizing is to make a determination of all the activities of all the

activities which are necessary to be undertaken for the attainment of the enterprise objectives.

Fayol divided business activities into technical, commercial, financial, , security, accounting and

managerial.

2.Grouping and sub-grouping of activities i.e creation of Departmentation.

The various activities identified under the first step are then classified into appropriate

Departmentation and divisions according to similarities and common purpose. Such grouping of

activities is known as Departmentation.

Each department may be further divided into section to create a logical structure.

3. Assignment of duties.

The individual departments are then allotted to different positions and individuals. The duties of

every individual are defined on the basis of his ability and aptitude. Every individual is made responsible for the specific job assigned to him. In this way, duties are

assigned to specific individuals.

4.Delegation of authority:

Once the duties and responsibilities of every individual have been fixed, he must be given theauthority necessary to carry out the duties assigned to him.

A chain of command is created from top to bottom through successive delegations of authority.

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27. Explain about the Principles or Features of Organisation process.PRINCIPLE OF ORGANISATION OR FEATURES OR ORGANISATION:

1.Unity of objective: an organisation and every part of it should be directed towards the accomplishment

of common objectives. It implies the existence of formulated and understood objectives.

2. Efficiency: an organisation is efficient if is able to accomplish predetermined objective at minimum

possible cost.

3. Division of work: the activities of the enterprise should be so divided and grouped that there is the

most efficient breakdown of tasks.

4. Span of control: no executive should be required to supervise more subordinates than he can

effectively manage. The number of employees a manager can directly supervise.

5. Scalar principle: Authority and responsibility should be in a clear unbroken line from the highest

executive to the lowest executive.

6. Delegation: authority should be delegated to the lowest possible level, consistent with necessary

control so that coordination and decision-making can take place as close as possible to the point of action.

7. Functional definition: the duties and authority-relationships of different individual must be clearly

defined so that there is, no confusion or overlapping.

8. Correspondence: authority and must be coterminous and co-extensive.

9. Unity of command: each person should receive orders from only on superior and be accountable him.

10.Unity of direction: there must be one head and one plan for a group of activities towards the same

objectives.

11. Balance: the various parts of an organisation should be kept in balance and none of the functions

should be given undue emphasis at the cost of others.

12. Exception principles: every manager should take all decisions within the scope of his authority and

only matters beyond the scope of his authority should be referred to higher levels of management.

13. Coordination: the purpose of organizing is to secure unity of effort.

14. Flexibility: the organisation must be free from complicated procedures and red tape.

15. Continuity: the organisation should be so structured as to have continuity of operations.

Arrangements must be made to enable people to gain experience in positions of increasing diversity and

responsibility.

28. Explain about the Formal & Informal Organisation.

Formal Organisation: The formal organisation is a system of well-defined jobs, each bearing a definite measures of authority,

responsibility and accountability. - louis A.Allen

It is a deliberately designed structure of roles; which is built by management through

assigning a matching role to each one of the groups for facilitating individuals- to best attain theobjectives of the enterprise.

Informal Organisation:

Informal organisation is a social group of individuals which comes into existence

automatically as a result of the operation, and interaction of certain socio-psychological factors, among

persons who are working in various capacities within the four wall of the formal organisation.

Informal organisation is the network of personal and social relationships not established or required by

formal organisation. - Keith Davis

ADVANTAGES AND LIMITATIONS OF INFORMAL ORGANISATION:

Advantages:

I. Advantages from the viewpoint of management

1. More productivity and production:

By winning the co-operation of informal groups and their leaders, management is assured of more

productivity on the part of workers leading to higher production.

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2. Communication feedback

Through the forum of informal organizations, management could get the reaction of the

employees of the organisation i.e. the communication feedback, on the communications

transmitted by it.

3. Innovative and creativity encouraged.

Informal groups and their leaders might often come out with suggestions or recommendations for

the betterment of organizational functioning.

If, even some of such suggestions are accepted and implemented by the management; the same

acts as a spur to innovation and creativity on the part of the members of informal groups.

4. A more humanistic formal organisation

The emergence, activities and growth of informal organizations lead to the development of

human-touch which makes the formal organizations more humanistic or prevents

dehumanization of the personnel.

II. Advantages from the viewpoint of the members

1. Solution to work-problem:

Informal groups provide a forum for discussion wherein members can discuss their work-related

problems with senior and expert members of the group.

2. Management made alert and responsible

The fact of the existence of informal organizations and the fear of their likely actions makes

management more alert and responsible- while designing its plans, policies and actions.

3.Bulwark against management

Informal groups, especially labour unions, act as a bulwark of employees-against the undesirable

practices and actions of management.

4. Doing away emotional tensions

Informal groups, by providing a forum of entertainment, gossips etc. help members do away with

their emotional tensions- caused by personal affairs and family circumstances.

Limitations:

I. Limitations from the viewpoint of management

1. Spread of rumours The grapevine communication carries with itself, a natural possibility of spreading rumours

which might injure the interests and intentions of management.

2. Less than optimum production.

Actions and activities of informal organizations lead to a wastage of the productive time of

members. There is also some amount of time wasted in gossips indulged in by the members.

3. Problem of indiscipline

Informal organizations my-a-times invite and encourage rash and reckless behaviour on the part

of members. This creates long-run problems of indiscipline for the organisation and management.

II. Limitation from the viewpoint of members

1. Political domination of informal groups

They mould the functioning of informal organizations to serve their own petty selfish political

interests injuring the interests of members badly.2. Loss of self-entity

A vast majority of the members of informal groups-specially less educated, unskilled and semi-

skilled-seek pleasure in being blind followers of the leaders of these groups.

Formal organization Informal organisation

1. Origin

It is a deliberate or intentional creation by It is a self-generating process. It comes

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management done for purpose of

achieving the objectives of the enterprise.

2. Objectives

Its different departments have specific

objectives which are developed through

definite planning and decision-making

process.3. Functioning

To pre-planned rules, polices, procedures

and programmes.

4.Authority-responsibility relationships

There are clear-cut and properly defined,

authority and responsibility relationship

which are usually shown through

organizational chart.

5. Leadership

Every group manager, is a leader; byvirtue of, his official status and authority.

6. Communication system

There is well planned system of

communication routed through the scalar-

chain.

7. Stability

It is most stable

8. Political domination

At least on the face of it, is away formpolitical domination.

into existence; due to the operation of

certain socio-psychological factors.

It does not have any specific objectives

evolved through planning etc.

There is no such rules and procedure of

functioning.

There are no such specific authority and

responsibility relationships. It represents a

natural-social structure-never depicted on a

chart.

Leaders are those who are popularly

accepted by all or a majority of the group-toact as leaders of the group.

-Personal power.

-

It is of a grapevine nature i.e it might spread

from any person to any person, in any

manner and in any direction.

It is least stable.

In a large number of cases are politicallydominated.

29. Explain about the Types of Organisation.TYPES OF ORGANISATION:

The nature of authority-responsibility relationships found in an organisation makes for a

particular pattern of the organizational structure.

Types:

I. Line Organisation.

This is the oldest type of organisation. Under it, the persons having the greater decision-making

authority are placed at the top and those having the least decision-making authority at the

bottom.

It consists of direct vertical relationships.

It does not make provision for staff specialists.

Operation of this system is simple

Existence of superior-subordinated relationship

The boss gives instructions directly to his subordinates.

Superior at each level makes decisions within the scope of him authority.

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ShareholdersAuthority

Flow Directors

M.D

Production Finance Marketing Personnel

Manager Manager Manager Manager

Works accounting advertising Training

Manager officer section section

Workers clerk salesman HR executive

Line Authority

Types of Line Organisation:

1. Pure line organization:

The activities at any one level are the same and all the individuals perform the same typeof work and the divisions or departments are made for the sake of control and direction.

Example, at the lowest levels of an organisation all the workers may be engage in a

similar activity, but for better control and supervision.

Works manager

Foreman Foreman Foreman Foreman

Dept.No.1 Dept.No.2 Dept.No.3 Dept.No.4

workers workers workers workers

2. Departmental Line Organisation:

The whole unit is divided into different departments that are convenient for control purposes.

All the departmental managers enjoy equal status and work independently.

For example, in the production, there may be a number of foremen each in charge of a sub-department and controlling a certain number of workers.

Factory superintended

Foreman Foreman Foreman Foreman

Shearing Dept. Press Dept. Welding Dept Finishing Dept

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Workers workers workers workers

Advantages of line organisation

1. Simplicity:

It is the simplest and the oldest type of organisation.

It is easy to establish and operate.

It is also easy to explain the workers.

2. Flexibility

As each executive has full authority and responsibility for his job, required changes can be made

quickly and easily.

The adjustments in the organization can be easily made to suit the changing conditions.

3. Quick decision:

Managers can take decisions quickly and act promptly as no staff officers are to be consulted and

there is adequate authority at every level.

4. Unified control:

There is unity of command and control according to which an employee can be given orders by

one superior only. All activities affecting a department are under the control of one executive.

5. Fixed responsibility:

Every person knows from whom he gets orders and to whom he is accountable.

Every executive can be held fully responsible for the actions of his subordinates.

6. Effective discipline:

Singleness of responsibility and control ensures strong discipline among the employees.

7. Economy:

It less expensive in terms of overhead costs, as there are no staff specialists.

8. Speed action:

Because of a clear division of authority and responsibility, as also unity of command and control,

decisions can be made and executed promptly.

Limitation of line organization:

1. Overburdening:

Key executives are overloaded with administrative work.

Top executives have to be superman to effectively control diverse activities.

As the business grows in size, executives find it impossible to cope with their duties in the

absence of staff assistance.

2. Instability:

The success and survival of the enterprise depends upon a few individuals. There is little scope

for expansion of business beyond their capabilities.

Loss of key executives may put the future of the concern in jeopardy.

3. Lack of specialization:

There is no scope for specialization as one individual cannot be expert in all function.

Lack of specialization and over dependence on subordinates lower efficiency of operation.

4. Autocratic control:

As each department is under the complete control of one executive, there is danger of

authoritarian. There is possibility of favouritism.

5. Delayed communication:

Subordinates hesitate to offer suggestions and to criticize a wrong decision taken by the superior.

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II. LINE AND STAFF ORGANISATION:

Line authority:

Responsibility for proper performance of work is not delegated. But authority can be delegated

and the term line is used to indicate the line of authority.

Staff authority:

Staff is a stick carried in the hand for support.

Staff authority means authority to support the line authority.

Staff authority denotes a non-executive relationship where personnel with expertise provide

assistance to the line management, but only in an advisory capacity.

STAFF STAFF

L

I

N

E

Body of Members

Board of Director

Personnel manager PrivateSecretary

Taxation expert Chief Executives PRO

Labour expert Account

Officer

Production manager finance manager marketing

Manager

Subordinates subordinates subordinates

LINE

STAFF

Advantages of Line and Staff Organisation:

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1. Discipline:

Unity of command is maintained, as staff is not given executive authority.

2. Expert advice:

Line executives, and through them the enterprise as a whole, benefit a great deal from the expert

advice and guidance provided by the staff officers.

3. Balance decisions:

With information and advice provided by staff specialists, line executes can take better and more

sound decisions.

4. Relief to line executives:

The staff officers look after the detailed analysis of each important managerial activity which is a

big relief to the line officers.

Disadvantages of line and staff organisaiton:

1.Conflicts:

Staff may undermine line authority while line may ignore staff. This may lead to friction between

them.

2. Advice ignored:

As the staff officers lack authority to put their recommendation into practice, the line executivesmay ignore their advice.

3. Expensive:

It is expensive in terms of overheads as two separate sets of personnel are required.

4. Conflict between line and staff:

The allocation of responsibility between line and staff may not be very clear.

Staff advice may be confused with line authority creating confusion and disorder.

Line and Staff authority:

Line authority Staff authority

1.It refers to those positions and

elements of the organisation, which

have the responsibility and authority,

and are accountable for accomplishment of primary objectives

2.line elements provide decision

authority and a central means for the

flow of communication through scalar

chain of authority.3.line managers make the salient

decisions by exercising command

authority.

1. It refers to those elements which

have responsibility and authority for

providing for providing advice and

service to line in attainment ofobjectives.

2. Staff elements facilities the

decision process by bringing expert

and specialized knowledge..

3.staff officials advise and counsel.

30. Explain about the Conflicts between Line & Staff Organisation.CONFLICT BETWEEN LINE AND STAFF.

The major source of line and staff conflict is the difference in their viewpoints and perception.Conflicts arise when any of them fails to appreciate the view of the other. When a conflict between line

and staff arises both the parties try to explain the causes of conflict in terms behaviour of the other.

The viewpoints of both line and staff on this conflict are given below.

a) The line viewpoint: the line managers have the following to say about the staff people.

1. Staff authority undermines line authority and interferes in the work of line managers.

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2. Staff authorities are not acquainted with the practical problems of the enterprise, as they are only

academics.

3. As staff officers are specialists only in a specific area, they cannot see the whole picture

objectively.

4. Advice given by the staff is not always sound. Advice is only theoretical and unrealistic.5. Staffs take credit if the programme (as per the advice of the staff) is successful and blame the line

if it is not successful.b) The staff viewpoint: staff authorities have the following complaints against line officers:

1. Line officers do not make proper use of advice given by itself.

2. Line officers reject the advice without giving reasons.

3. Line officers are slow to accept new ideas and they resist change.

4. Staff authorities feel that they do not have authority to get their ideas implemented.

Improving Line and Staff Relationship:

1. The limits of authority of both line and staff should be prescribed clearly.

2. Staff authority should be restricted to a purely advisory role.

3. Line officers should give due consideration to staff advice. They should state reasons in case they

cannot accept the advice.

4. Line should value the special skills of staff and similarly the staff should try to appreciate the

difficulties in implementing new ideas.5. The advice of staff should be realistic and practicable.

6. Both line and staff should try to understand can others responsibilities and difficulties and try to

co-operate with each other for the achievement of enterprise objectives.

31. Explain about Committee Organisation.COMMITTEE ORGANISATION

A committee is a group of people who meet by plan to discuss or make a decision for a

particular subject.

A committee means a group of persons formed for a stated purpose. It may be a standing

committee, or convened for a special purpose.

There may be executive committee, finance committee, audit committee, bonus committee,

grievance committee, etc.

Characteristics:

1. A committee is a group of person. There should be at least two persons and no limitation on the

maximum.

2. A committee is charge with dealing with dealing specific problems and it cannot go in for actions

in all spheres of activities.

3. A committee may be constituted at any level of organisation.

4. Members of committee have authority to go into details of the problems.

5.

Types of Committee:

1. Standing or Ad Hoc committee:

Standing: it exists continuously for indefinite period.

Ad hoc committee: it is constituted for a specific purpose or to solve a specific problem.2. Decision-making committee.

It is one which is charged with the responsibility of making and executing its decisions.

3. Line and staff committee.

Line committee: it is responsible for controlling coordinating a specific business function havingexecutive authority over the subordinates within a formal chain of command.

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Staff committee: only acts in an advisory capacity, having no authority to impalement itsdecisions.

4. Formal and informal committee:

Formal: it is duly constituted by organizational rules, regulations with specific authority.

Informal: it is not as per any policies or rules of the organisation, and it has no formal authority as

such.Advantages of committee organisation:1. Pooling of knowledge and experience.

2. Facility of coordination

3. Motivation through participation

4. Easy communication5. A tool of management development

6. Consolidation of authority.

Disadvantages of committee organisation:

1. High cost

2. Slowness in decisions

3. Dividend responsibility

4. Misuse of committee.32. Explain about Matrix Organisation.MATRIX ORGANISATION:

When an enterprise undertakes a large number of small projects; a matrix organisaiton is more

suitable. A matrix organisation is characterized by two major features:i.It undertakes a large number of small projects;

ii.There is a dual line of command, in a matrix organisation.

Matrix organisation = Dual line of command + matrix culture + matrix behaviour.

Matrix organisation represents a combination of functional departmental organisation andproject organisation.

Different project managers share resources and authority with functional heads.

When one project is over; its personnel and resources are diverted to some new project.General Manager

Production Finance Marketing personnelManager Manager Manager manager

Project

Mgr 1

Project

Mgr 2

Project

Mgr 3

Project

Mgr 4

-- Authority of project manager --- Authority of functional head.

Advantages:

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1. It is oriented toward end results

2. Professional identification is maintained

3. Pinpoints product-profit responsibility

Disadvantages:

1. Conflict in organisation authority exists2. Possibility of disunity of command exists

3. Requires manager effective in human relations.

33. Explain about SBUs?STRATEGIC BUSINESS UNIT (SBUs)

Companies have been using an organizational device generally referred to as a strategic business

unit (SBU).

SBUs are distinct little businesses set up as units in a larger company to ensure that a certain

product or product line is promoted and handled as though it were an independent business.

In some cases companies have also used the device for a major product line. Occidental Chemical

Company, for example, used it for such products as phosphates, alkalies, and resins.

Generally a business unit must meet specific criteria. An SBU, for example must:

1. Have its own mission, distinct from the mission of other SBUs,

2. Have definable groups of competitors,3. Prepare its own integrative plans, fairly distinct from those of others SBUs,

4. Manage it resources in key areas, and

5. Have a proper size- neither too large nor too small

General

manager

business manager

Production accounting Marketing sales productManager Manager Manager Manager development

Works man works works

Manager manager manager

Altanta Chicago dallas

Regional Regional Regional

manager manager managernew york chicago los angeles

Product product product

Manager manager manager A B C

Key elements of organisation process:

39Organisa

tion

Process


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1. Departmentation.

2. Delegation

3. Decentralization.

34. Define Departmentation. Explain about needs & Importance of

Departmentation.

DEPARTMENTATION:

Departmentation may be defined as the process of grouping individual jobs into departments.

It involves grouping of activities and employees into departments so as to facilitate the

accomplishment of organizational objectives.

Once the total work of an enterprise is divided into individual functions and sub-functions, these

functions are grouped together into work units on a particular basis.

Need and importance of Departmentation:1. Specializations:

When every department looks after one major function of business, division of work becomes

possible.

It enables an enterprise to avail of the advantages of managerial specialization.

2. Expansion:

Grouping of activities and personnel into departments makes it possible to expand an

organisation to an indefinite degree.

3. Autonomy:

The feeling of autonomy provides job satisfaction and motivation which in turn lead to higher

efficiency of operation.

4. Fixation of responsibility:

It enables each person to know the specific part he is to play in the total orgnisation.

The responsibility for results can be defined more precisely and an individual can be held

accountable for performance.

5. Appraisal:

Appraisal of managerial performance becomes easier when specific tasks are assigned to

departmental personnel.

The sources of information, the skills and competence required for total managerial

Documents

MCS Notes 11 Marks