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Questions & Answers

Unit 1 Management

Q. Define Management; list its functions ; what is meant by management

process?

A : Precise definition of management is not so simple, because the term

management is used in variety of ways:

Management is the art of getting things done through people

Mary parker Follet

The above definition has two weaknesses

It uses the word art. To say management is merely an art is only half

truth. It also involves acquisition of knowledge, that is science

This definition does not throw light on various functions of a manager

Management is a process consisting of planning, organizing, actuating and

controlling, performed to determine and accomplish the objectives by the use

of people & resources

- George R Terry

According to the above definition, management is a Process- a systematic way of

doing things . The activities are :planning means that manager think of their action in advance. Their actions are

based on some method, plan or logic rather on hunch.

Organizingmeans that manager co-ordinate the human and material resources of the

organization.

Actuating means that managers motivate & direct subordinates.

Controllingmeans that managers attempt to ensure that there is no deviation from

the norm or plan.

This definition also indicates that managers use people and other resources, such as

finance, equipment etc., in attaining their goals. Finally this definition states that the

management involves the act of Organizations objectives.

Management functions: Again there is no unanimity among writers regarding

management functions. However the following functions are necessarily performed

by management.

Planning: Planning is the function that determines in advance what should be

done. It is looking ahead and preparing for the future. It is a process of deciding

business objectives and charting out the methods of attaining those objectives. In

other words, it is determination of what is to be done, how and where it is to be done,

who is to do it and how results are to be evaluated. This is done not only for the

organization as a whole, but for every division, department or sub unit of theorganization. Thus planning is a function which is performed by managers at all

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levels- top, middle and supervisory. Plans made by top management for the

organization as a whole may cover period as long as five to ten years; plans made by

middle or first line managers cover much shorter periods.

Organizing: to organize a business is to provide it with everything useful to its

functioning : Personnel, Raw materials, Tools & Capital. All this may be dividedinto two main sections- Human organization and the Material organization. Once the

managers have established objectives and developed plans to achieve them, they

must design and develop a human organisation that will be able to carry out those

plans successfully. This organization refers to the structure which results from

identifying and grouping work, defining and delegating responsibility and authority

and establishing relationship.

Staffing is also an important function in building human organization. In

staffing, the manager attempts to find the right person for each job. Staffing involves

the selection and training of manpower and a suitable system of compensation.

Directing: After the plans are made, and the organization has been established and

staffed, the next step is to move towards its defined objectives. In carrying out this

function, the manager explains to his people what they have to do, and helps them to

do it to the best of their ability. Directing thus has three sub functions:

communication, leadership and motivation.

Communication is the process of passing information and understanding from

one person to another. Leadership is the process by which a manager guides and

influences the work of his sub-ordinates. Motivation means arousing desire in the

minds of workers to give their best to the enterprise. It is the act of stimulating or

inspiring the workers. The two broad categories of motivation are financial and non-

financial.

Controlling: The manager must ensure that everything occurs in conformity with the

plans adopted, the instruction issued and the principles established. This is the

controlling function of management and involves three elements:

1. Establishing standards of performance

2. Measuring current performance and comparing it against established

standards

3. Taking action to correct any performance that does not meet those

standards.

Innovation: These days it is not necessary for an organization to grow bigger- but

necessary to grow better. This makes innovation an important function of a manager.

Innovation means creating new ideas which may either result in development of new

products or finding new uses for the old ones.

Representation: A manager is required to represent his organization before various

outside groups which has some stake in the organization. These stake holders can be

government officials, labour unions, financial institutions, suppliers, customers etc,

they wield influence over the organization. A manager must win their support by

effectively managing the social impact of his organisation.

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Q. What are the roles of a manager ? What skills must he posses?

A : A manager who occupies different positions in different situations plays

different roles, because people in each situation have different expectations of him

concerning his functions. The following ten roles are must for manager:

Interpersonal roles:

Figure head: In this role, every manager has to perform some duties of a ceremonial

nature, such as greeting the touring dignitaries, attending the wedding of an

employee, taking an important customer to lunch etc.

Leader: As a leader, every manager must motivate & encourage his employees. He

must also try to reconcile their individual needs with the goals of organisation.

Liaison: In his role of liaison, every manager must cultivate contacts outside his

vertical chain of command to collect information useful to his organisation.

Informational role:

Monitor: As a monitor, the manager has to perpetually scan his environment for

information, interrogate his liaison contacts and his subordinates, and receive

unsolicited information, much of it as a result of the network of personal contacts he

has developed.

Disseminator: In the role of disseminator the manager passes some of his privileged

information directly to his subordinates who would otherwise have no access to it.

Spokesman: In this role the manager informs and satisfies various groups and people

who influence his organisation. Thus he advises shareholders about financial

performance, assures consumer groups that the organisation is fulfilling its social

responsibilities and satisfies government that the organisation is abiding by law.

Decision roles:

Entrepreneur: In this role, the manager constantly looks out for new ideas and seeks

to improve his unit by adapting it to changing conditions in the environment.

Disturbance handler: In this role, the manager has to work like a fire fighter. He

must seek solutions of various unanticipated problems- a strike may be in the offing,

a major customer may go bankrupt, a supplier may fault on his contract etc.,

Resource allocator: In this role, the manager must divide work and delegate

authority among his subordinates. He must decide who will get what.

Negotiator: The manager has to spend considerable time in negotiations. The CEO of

the company may negotiate with the union leaders regarding the new strike issue,

Foreman may negotiate with the workers a grievance problem etc.

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Skills requirement of a Manager:

(1) The conceptual skill: refers to the ability of a manager to take a broad and

farsighted view of the organisation & its future, his ability to think in

abstract, his ability to analyse the forces working in a situation, his creative

and innovative ability to asses the environment and changes taking place in it.

(2) The technical skill: The technical skill is the managers understanding of the

nature of the job that people under him have to perform. It refers to a

persons knowledge & proficiency in any type of process or technique. In a

production department this would mean an understanding of the technicalities

of the process of production. This type of skill and competence will be more

important at the lower levels of management, as he moves higher up, its

relative importance diminishes. At the higher levels, the conceptual

component related to there functional areas become more important and the

technical component becomes less important.

(3)Human relations skill: is the ability to interact effectively with people at all

levels. This skill develops in the manager sufficient ability

- to recognise the feelings and sentiments of others

- to judge the possible reactions to, and outcomes of various courses of

actions he may undertake and

- to examine his own concepts and values which may enable him to

develop more useful attitudes about himself. This type of skill remains

consistently important at all levels.

The figure above gives an idea of the skill-mix requirement of a manager. At

top level, technical skill becomes least important. This is the reason why people at

the top shift with great ease from one industry to other without apparent fall in their

efficiency.

Conceptual skill

Topmanagement

Middle MgtHuman relations

skill

Technicalskill

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Q. Is Management & Administration same? Discuss.

A: There is a lack of unanimity among writers over the meaning and use of words

Management and Administration. According to one group of writers (Sheldon,

Spriegal and Milward) Administration involves thinking. It is a top level function

which centers around the determination of plans, policies and objectives of abusiness enterprise. On the other hand management involves doing. It is a lower

level function which is concerned with execution and direction of policies and

operations. No two separate set of personnel are required, however, to discharge

administration and management functions. Each manager performs both activities

and spends part of his time administering and part of his time managing.

According to second view (EFL Brech & others), Management is a

comprehensive generic term which includes administration. Administration is a

branch of management which encompasses planning and control. The other two

functions of management viz organising & directing can be called operative

management.

The third view as expressed by Peter Drucker, the basic difference between

management and administration lies in the use of these terms in different fields. The

governance of non business institutions (such as government, army, church etc) is

generally called administration, while the governance of business enterprise is called

management. If this argument is accepted, then economic performance becomes the

chief dimension of management.

Q. Is Management a science or an art? Discuss.

A: A discipline becomes scientific if its:1. Method of inquiry are systematic and empirical

2. Information can be ordered and analysed

3. Results are cumulative and communicable

On the basis of above, management can be grouped as scientific. But science is

used to denote two types of systematic knowledge- exact & inexact (behavioral).

Management is not like exact science because in this discipline we study man and a

multiplicity of factors affecting him. It is not possible to predict the outcome and we

may not be able to replicate the results. Therefore management is more of a

behavioral science than exact science.

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Where as under science one normally learns the why of a phenomenon,

under Art one learns the how of it. Art is thus concerned with the understanding

of how a particular work can be accomplished. Management in this sense is more an

art. It is the art of getting things done through others in dynamic and mostly non-

repetitive situations. The resources like men, machine & money have to be co-

ordinated against several constraints to achieve the given objectives in the mostefficient manner. The manager has to constantly analyse the existing situation,

determine the objectives, seek alternatives, implement, co-ordinate, control and

evaluate information and make decisions. A theoretical body of lessons and

principles learnt in class room will not secure him the aimed results, unless he has

also the skill (or art) of applying such principles and body of knowledge to his

special problem. Knowledge of management theory and principles is a valuable aid

and kit of manager, but it can not replace his other managerial skills and qualities.

This knowledge has to be applied and practiced by the manager. In this sense the

management is an art.

We may thus conclude that management involves both elements- those of

science and an art. While certain aspects of management make it a science, certain

others which involve application of skill make it an art.

Q . Mention different schools of management .Trace its evolution.

The period between 1700 & 1850 highlights the industrial revolution and

the writing of classical economists. The advent of a factory system during this period

highlighted for the first time the importance of direction as a managerial function.

Several economists during this period explained in their writing the concepts and

functions of management.

During the last hundred years, management has become a more scientific

discipline with certain standards and principles and practices. The evolution of

management thought during this period can be studied in three parts as under:

(a) Early classical approaches, represented by scientific management,

administration management and bureaucracy.

(b) Non-classical approaches, represented by human relations movement &

behavioral approach.

(c) Modern approaches represented by quantitative approach, system approach

and contingency approach.

Early classical approaches

Scientific management as propagated by F W Taylor

Fredrick Winslow Taylor (1856-1915) is considered to be the father of

scientific management. His contributions are:

(i) Time and motion study: under this, each motion of a job was timed with the

help of a stop watch, and shorter and fewer motions were developed. Thus the

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best way of doing a job was found. This replaced the rule of thumb knowledge

of workman.

(ii) Differential payment: Taylor introduced a new payment plan called the

differential piece work, in which he linked incentives with production. Under this

plan, a worker received low rate if he produced standard number of pieces, andhigh rate if he surpassed the standard. Taylor thought that attraction of high piece

rate would motivate the workers to increase the production.

(iii) Drastic reorganization of supervision: Taylor suggested two new concepts:

(a) separation of planning & doing and

(b) functional foremanship.

In those days it was customary for each worker to plan his own work. The

worker himself used to select the tools and decide the order in which the

operations were to be performed. The Foreman simply told the worker what jobs

to perform, not how to do them. Taylor suggested that the work should be

planned by a Foreman and not by a worker. Further he said that there should be

as many Foremen as there are special functions of a job and each of this Foreman

should give order to the worker on his speciality.

(iv) Scientific recruitment and training: Taylor emphasized the need for scientific

selection and development of the worker. Management should develop and train

each worker to bring out the best faculties and to enable him to do a higher, more

interesting and more profitable class of work than he has done in the past.

(v) Intimate friendly cooperation between the management and the workers:

Taylor said that for the above suggestions to succeed, a complete mentalrevolution on the part of management and worker was required. They should

both try to increase production so that profits will increase which can be shared.

Contributions and limitations of scientific management

Time and motion study: this made us aware that the tools and physical movements

involved in a task can be made more efficient and rational.

Scientific selection of workers: made us recognise that without ability and training, a

person cannot be expected to do his job properly.

Finally the importance that scientific management gave to work design encouraged

managers to seek that one best way of doing a job.

Thus scientific management not only developed a rational approach to solving

organizational problems, but also contributed a great deal to professionalisation of

management.

Limitations:

(1) Taylors belief that economical incentives are strong enough to motivate

workers for increased production proved wrong. A mans behaviour is not

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always dictated by his financial needs. He has other needs such as security

needs, social and egoistic needs which motivate him far more potently than

his desire for money, at least after he has risen above the starvation level.

(2) Taylors time and motion study is not accepted as entirely scientific, this is

because two time studies done by two separate individuals may time the samejob entirely differently.

(3) Separation of planning and doing and the greater specialization inherent in

the system tended to reduce the need for skill and produce greater monotony

of work. Having a worker to take orders from many different bosses results in

confusion, besides increasing the overhead costs.

(4) Advances in methods and better tools & machines eliminated some workers,

who find it difficult to get other jobs. This caused resentment among them.

Administrative management as propagated by Henry Fayol

While Taylor was considered as father of scientific management, Henry Fayol is

considered as father of Administrative management theory which focuses on the

development of broad administrative principles applicable to general and higher

management levels. In his book General and Industrial Administration Fayol

provided a broad analytical frame work of the process of administration. It covers

both administrative and managerial functions and processes at the organizational

level.

Fayol wrote that all activities of business enterprises can be divided into six groups:technical, commercial, financial, accounting, security, and administrative (or

managerial). Fayols primary focus was on this last managerial activity, because he

felt managerial skills had been the most neglected aspect of business operation. He

defined management in terms of five functions- planning, organizing, commanding,

coordinating, and controlling. Fayol also presented 14 principles of management as

general guide lines to the management process & practice. They are as under:

(1) Division of work: Division of work in the management process produces more

and better work with the same effort. Various functions of management like

planning, organizing, directing & controlling cannot be done by a single person

and hence must be entrusted to specialists in related fields.

(2) Authority and responsibility: as management consists of getting the work done

through others, it implies that manager should have the right to give orders and

power to exact obedience. A manager may exercise formal authority and also

personal power. Formal authority is derived from his official position, while

personal power is the result of intelligence, experience, moral worth, ability o

lead, past service etc., Responsibility is closely related to authority and it arises

wherever authority is exercised.

(3) Discipline: Discipline is absolutely essential to smooth running of business. By

discipline, we mean, obedience to authority, observance of the rules of service

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and norms of performance, respect for agreements, sincere efforts to complete

the jobs, respect for superiors. The best means of maintaining discipline are:

(a) Good supervisors at all levels (b) clear and fair agreement between the

employees & employer (c) judicious application of penalties

(4) Unity of command: This principle requires that each employee should receiveinstructions from one boss only.

(5) Unity of direction: There should be complete identity between individual and

organizational goals on one hand and between departmental goals inter se on

the other.

(6) Subordination of individual interest to general interest: In a business concern,

the individual interests are more money, status, recognition etc., while the

organizational interest is more production. Hence the need to subordinate the

individual interest to general interest.

(7) Remuneration: The remuneration paid to the individual must be fair. It should

be based on general business conditions, cost of living, productivity of the

employee and also the capacity of the firm to pay. Fair remuneration increases

the workers efficiency and morale and fosters good relations between them and

the management.

(8) Centralization: the management must decide how much and what authority it

can keep and what could be delegated to the subordinates. It depends on the

circumstances, size of undertaking etc,

(9) Scalar chain: scalar chain means the hierarchy of authority from highest

executive to the lowest for the purpose of communication. It states superior-

subordinate relationship and the authority of the superiors in relation to

subordinates at various levels. As per this principle, the orders or

communications should pass through the proper channels of authority along

scalar chain. In case of need or emergency, the channels must be short circuited

and direct contact made.

(10) Order: to put things in order needs effort. Management should obtain

orderliness in work through suitable orgnisation of men and materials. The

principle of right place for everything and for every man should be observedby the management.

(11) Equity: means equality of fair treatment. Equity results from a combination of

kindness and justice. Employees expect management to be equally just to

everybody. It requires managers to be free from all prejudices, personnel likes

and dislikes. Equity ensures healthy industrial relations between management

and labour which is essential for the successful working of the enterprise.

(12) Stability of tenure of personnel: in order to motivate workers to do more and

better work, it is necessary that they should be assured security of job by the

management.

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(13) Initiative: Initiative means freedom to think and execute a plan. The zeal and

energy of employees are augmented by initiative. It is one of the keenest

satisfactions for an intelligent man to experience and hence management should

give sufficient scope to the employees to show their initiative.

(14) Esprit De Corps: this means team spirit. Since union is strength, the

management should create team spirit among employees. Harmony and unity

among staff are a great source of strength to the undertaking.

Contributions and limitations:

Fayols principles met with wide spread acceptance among writers on management

& by managers themselves. The followers of his thought are Colonel L Urwick &

Koontz & ODonnel. Some of the principles evolved are:

1) There should be clear line of authority

2) The authority and responsibility of each employee should be communicated

to him in writing

3) Each individual should perform one function only

4) The span of control of a manager should never cross six

5) Authority can be delegated but not the responsibility

Ideas of Fayol and his followers are criticised as under:

(1) Fayols principle of specialisation produces following consequences:

a. It leads to small work groups with norms & goals often at odds withthose of management.

b. Results in dissatisfaction of employees as their abilities are not fully

exploited.

c. Results in increase in overheadcost since specialisation needs greater

co-ordination.

(2) For many principles you can find equally plausible and acceptable and

contradictory principle.

(3) These principles are based on few case studies only and have not been tested

empirically.

(5) These principles are stated as unconditional statements while what is neededin certain cases is conditional.

(5) These principles (speacialisation, chain of command, unity of direction and

span of control) results in a mechanistic structure which are sensitive to

social & psychological needs of employees.

(6) These principles are based on assumptions that organisation are closed

systems. But this is not so. Organisations are open systems.

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Bureaucracy:

Max Weber, a German sociologist is known as father of bureaucracy.

According to him, there are three types of administration in any business (including

government): leader oriented, tradition oriented and bureaucratic.

Leader oriented administration is one in which there is no delegation. All

employees serve as loyal subjects of the leader.

In traditional oriented administration, managerial positions are handed down

from generation to generation. Who you are, rather than what you can do becomes

the primary concern for work assignment.

In Bureaucratic administration, delegation of management responsibilities is

based on the persons demonstrated ability to hold the position. No person can claim

a particular position either because of his loyalty to the leader or because the position

has been traditionally held by members of his family. People earn positions because

they are presumed to be best capable of filling them.

Important features of bureaucratic administration:

1. There is insistence on following standard rule: Weber believed that the

authority in an organisation should not be governed by personal preferences,

but should be governed by standard rules.

2. There is a systematic division of work: This increases production by

improving efficiency and saving time in changing over from one job to

another.3. Principle of hierarchy is followed: each lower officer is under the control and

supervision of higher one.

4. It is necessary for the individual to have the knowledge of and training in the

application of rules, because these form the basis on which legitimacy is

granted to his authority.

5. Administrative acts, decisions and rules are recorded in writing. This makes

the organisation independent of people besides making peoples

understanding more accurate.

6. There is rational personal administration: people are selected on the basis of

their credentials and merits, and are paid according to their position in

hierarchy. Promotions are made systematically. There is emphasis on writingpeoples loyalty and commitment.

Contribution: Bureaucracy can be viewed as the logical extension of management,

when one person cannot fulfill all management functions. This concept has enabled

most large scale organisations which require functionally specialized staff to train

and control people with heterogeneous backgrounds and to delegate specific

responsibilities and functions to them.

Limitations: important dysfunctional consequences of Bureaucracy are as follows:

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1. Over conformity to rules: the employees observe stick to the rule policy

because they are afraid of getting penalized for the violation. They follow

only letter of the law without getting into the spirit.

2. Buck passing: in a bureaucratic organisation the employees initiative is

shifted. In situations where there are no rules, employees are afraid of taking

decisions independently. They shift decisions to others or postpone them.3. Categorization of queries: in a bureaucratic organisation queries coming from

outside are generally classified in advance into a few broad categories.

Answers for each category are also prepared in advance. Differences, if any

between the queries within a category are ignored. On receiving a query, the

employees job is to simply determine its category and tick the reply

applicable to that category.

4. Displacement of goals: this is a very common phenomenon in a bureaucratic

organisation. Goal displacement takes place when an organisation substitutes

for its legitimate goal, some other goal for which it was not created, for

which resources were not allocated and which it is not known too serve.

5. No real right of appeal: The clients of a bureaucratic organisation generally

feel dissatisfied because they have no real right of appeal. Superiors very

often side with the view points of their subordinates.

6. Neglect of informal groups: Being social creature, men form informal group s

and play group dynamics which is normal . But bureaucratic organisations

often ignore the existence of informal groups which carry out a big c hunk of

organizational work.

7. Rigid structure: Precise description of roles, and over conformity to rules

make bureaucratic structures rigid. Such structures though they work well in

stable environments, do not cope with changing environments. Organisations

today need flexible structures to be able to frequently interact with theirenvironments for collecting, processing and monitoring information and

changing the job descriptions and the role of their employees.

8. Inability to satisfy the needs of mature individuals: A mature individual

wants independence, initiative, self control, opportunity to use all his skills

and information to plan his future. But the hierarchy, and control features of a

bureaucratic organisation work against these needs.

NEO-CLASSICAL APPROACHES:

The human relations movement:

The human relations movement has emerged because of the lacunae found in

Taylors scientific management and Fayols administrative management. These

theories ignored the human aspects. The real inspiration for the human relations

movement came from Hawthorne experiments conducted by Prof. Elton Mayo & his

colleagues at western electric company. These experiments are described below:

1. Illumination experiments: in the first phase of study, tests were conducted to

correlate productivity versus illumination. Experiments were done on a group

of workers. Their productivity was measured at various levels of illumination.

But the results were erratic. Then two groups were made and were asked to

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work in two different buildings. One group called the control group worked

under constant levels of illumination and the other group called the test group

worked under changing levels of illumination. The post test productivity of the

two groups was then compared and it was found that illumination affected

production only marginally.

2. Relay assembly test room: in this phase, the object of the study was broadened.

It now aimed at knowing not only the impact of illumination on productivity,

but also of such other factors as length of working day, rest pauses, their

frequency and duration and other physical conditions. A group of six women

workers, who were friendly with each other, were selected for this experiment.

These women workers were told about the experiment and were made to work

in a very informal atmosphere with a supervisor-researcher in a separate room.

The supervisor-researcher acted as their friend, philosopher and guide. During

the study, several variations were made in the working conditions to find

combination of conditions ideal for production. Surprisingly the researchers

found that the production of the group had no relation with working conditions.

It went on increasing and stabilized at a high level even when all improvements

were taken away and the poor pre-test conditions were re-introduced. The

following points emerged out of this experiment:

(a) Feeling of importance among girls as a result of their participation in

the research and the attention they got.

(b) Warm informality in the small group and tension free interpersonal

and social relations as a result of the relative freedom from strict

supervision and rules

(c) High group cohesion among girls.

3. Interviewing program: The knowledge about informal group processes which

was accidentally acquired in the second phase made researchers design the

third phase. In this phase, they wanted to know as to what were the factors

responsible for human behaviour at work. For this purpose, they interviewed

more than 20,000 workers. At first direct questions were asked relating to the

type of supervision, working conditions, living conditions and so on. Since the

replies were guarded, the technique was changed to non-directive type of

interviewing, in which workers were free to talk about their favourite topicsrelated to their work environment. This study revealed that the workers social

relations inside the organisation had an unmistakable influence on their

attitudes and behaviours. This study brought to light the all pervasive nature of

informal groups which had their own culture and production norms which the

members were forced to obey.

4. Bank Wiring Observation Room: This phase involved an in-depth

observation of 14 men making terminal Banks of telephone wiring

assemblies, to determine the effect of informal group norms and formal

economic incentives on productivity. It was found that group evolved its

own production norms for each individual worker, which were much lower

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than those set of management. Workers would produce that much and no

more, there by defeating the incentive system. This artificial restriction of

production saved workers from a possible cut in the piece rates or an upward

revision of their standards by the management and protected weaker and

slower workers from being reprimanded or thrown out of the job.

The experience of the Hawthorne studies produced a profound impact on

management gurus of human relations movement. They realized the

importance and part played by the informal groups.

Contributions of Human relations Movement:

1) A business organization is not merely a techno-economic system but is

also a social system. Hence, it is as important to provide social

satisfaction as to production.

2) There is no correlation between improved working conditions and high

production.

3) A workers production norm is set and enforced by his group not by time

and motion study. Those who deviate from group norm are penalized by

their co-workers.

4) A worker does not work for money only. Non financial rewards such as

affection and respect of his co-workers also significantly affect his

behaviour and largely limit the effect of economic incentive plan.

5) Employee-centered, democratic and participative style of supervisory

leadership is more effective than task oriented leadership.

6) The informal group and not the individual is the dominant unit of analysis

in the organization.

Limitations:

1. The movement concentrates only on human aspects and ignores other

aspects of business such as productivity etc.

2. Due to the diverse nature of social groups with incompatible values, it is

difficult to bring them on to common platform.

3. This approach over emphasizes the importance of symbolic rewards and

underplays the role of material rewards.

4. This approach provides an unrealistic picture about informal groups by

describing them as a major source of satisfaction for industrial workers.Workers do not come to the factory to seek affection and affiliation. The

informal group they make can make their day more pleasant and not their

tasks.

5. This approach is more production oriented and not employee oriented as

it claims to be. Many of its techniques trick the workers into a false sense of

happiness, but there is no improvement in their well being.

6. The Leisurely process of decision making of this approach cannot work

during an emergency.

7. This approach makes unrealistic demands on the superior. It wants him to

give up his desire for power.

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8. This approach is based on wrong assumption that safisfied workers are

more productive workers.

Behavioural Approach

This approach is an improved and more mature version of the humanrelations approach to management. Douglas McGregor, Abraham Moslow , Mary

Parker Follet are some of the foremost behavioural scientists who have made

significant contributions to the development of behavioural approach to

management.

The behavioural approach recognizes the practical and situational constraints

on human rationality for making optimal decisions. The behavioural scientists attach

great weightage to participative and group decision making, because business

problems are so complex that it is neither fair nor feasible to make individuals

responsible for solving them.

They underline the desirability of humanizing the administration of the

Control process and encouraging the process of self direction and control, instead of

imposed control. They also favour participation in the establishment, measurement

and evaluation of standards of performance, prompt information feed back to those

whose performance is off the track and the need for positive and reformative

measures instead of punitive measures.

Behavioural Scientists consider organizations as group of individuals with

certain goals. They have, therefore made wide ranging studies on human groups

big & small.

Behavioural Scientists have made extensive studies on Leadership. They

advocate participative democratic style of leadership, and agree that under certain

situations, autocratic task oriented style may be appropriate.

According to them, the realistic model of human motivation is complex man.

It suggests that different people react differently to the same situation or react the

same way to different situations. No two people are exactly alike and manager

should handle each according to their needs.

The behavioural approach to organizational conflict and change is quitepragmatic. It recognizes that conflict is inevitable and sometimes is even desirable

and should be faced with understanding and determination, that every organizational

change involves technological and social aspects and generally it is the social aspect

which people resist.

Modern Approaches

1. Quantitiative Approach: This approach is called the Management Science

approach. It emerged during second world war. The outcome is operations

Research.

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The focus of quantitative approach is on decision making to provide

quantitative tools and techniques for making objectively rational decisions.

This approach facilitates disciplined thinking while defining management

problems and establishing relationship among variables involved.

2. Systems Approach: The very concepts of this approach are

1. A system is a set of interdependent parts which together form a unitary

whole that performs a specific function. An organization is also a system

composed of four interdependent parts namely task, structure, people and

technology.

2. Central to the systems approach is the concept of holism which means

that no part of the system can be accurately analysed and understood

apart from the whole system. Conversely, the whole system cannot be

accurately perceived without understanding all its parts. Each part bears

a relation of interdependence to every other part.

3. A system can be either open or closed. An open system is one which

interacts with its environment. A closed system is one which is

independent of the environment. The organizations are open system.

4. Every system has a boundary. Organisations, being social systems do not

have clearly observable boundaries.

3. Contingency Approach: Contingency approach attempts to integrate the

various schools of management thought. According to this approach,

management principles and concepts of various schools have no general and

universal applicability under all conditions. Methods & Techniques which

are highly effective in one situation may not work in other situations. Results

differ because situations differ. Accordingly, the contingency approachsuggests that the task of managers is to try to identify which technique will,

in a particular situation, best contribute to the attainment of management

goals. Managers therefore have to develop situational sensitivity & practical

selectivity.

(b) What are the characteristics of Management?

The salient characteristics of management are:

(i) Management is a purposeful activity.

(ii) It is getting things done in a desired manner.

(iii) It concerns with the efforts of people working in the enterprise.(iv) It relates to decision making.

(v) It is a process consisting of various functions such as planning,

organizing, leading and controlling.

(vi) Management is both science and art.

(vii) It is a fast developing profession.

(viii) It deals with direction and control of business of activities.

(ix) Management is a dynamic concept which adapts itself to changing

business conditions.

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Unit -2 PLANNING

Q : Discuss the nature of Planning:A:

Planning is the beginning of the process of management. A manager mustplan before he can possibly organize, staff, direct and control.

Planning may be defined simply as Deciding in advance what to do, how todo it, when to do it and who is to do it. Planning provides a method of

identifying objectives and designing a sequence of programs and actions to

achieve these objectives.

Planning is an intellectual process which requires a manager to think beforeacting.

Planning is a continuous process. A manager must continuously watch theprogress of his plans. He must constantly monitor the conditions, both within

and outside the organization to determine whether changes are required in his

plans.

A plan must be flexible. That is, ability to change directions to adopt tochanging situations without undue cost. The five major areas where

flexibility is needed are: technology, market, finance, personnel and

organization.

Planning is an all pervasive function. It is important to all managersregardless of their level in the organization. Top level managers are

concerned with long term periods. Lower level manager are concerned with

short term periods.

Q. Discuss the Importance of Planning

A: Planning has assumed great importatnce in all types of organizations business

or non business, private or public sector, small or big. The importance of

planning is highlighted under the following headings.

Minimises risk and uncertainty.

- In todays increasingly complex organizations, intution alone can no longer

be relied upon as a means of making decisions. This is one reason why

planning has become so important. By providing a more rational, fact basedprocedure for making decisions, planning allows managers and organizations

to minimise risk and uncertainty.

Leads to Success- Planning does not guarantee success, but studies have shown that, all things

being equal, companies which plan, not only out perform the non planners,

but also out- perform their own past results. Planning leads to success by

doing beyond mere adaptation to market fluctuations. It pro-acts.

Focusses attention on the organization goals

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- Planning helps the manager to focus attention on the organizations goals &

activities. This makes it easier to apply & co-ordinate the resources of the

organization more effectively.

Focuses attention on the Organisation goals:

- Planning helps manager to focus attention on the organizations goals &activities. This makes it easier to apply and co-ordinate the resources of the

organization more effectively.

Facilitates Control- In planning, manager sets goals and develops plans to accomplish these

goals. These goals and plans, then become standard or bench marks against

which performance can be measured. The function of control is to ensure

that the activities conform to plans.

Q What do you understand by Objectives? What are its characteristics?

A Objectives are goals or aims which the management wishes the organization

to achieve. These are the end points which all business activities like organizing,

staffing, directing and controlling are directed. Only after having defined these end

points can the Manager determine the kind of organization, the kind of personnel &

their qualifications, the kind of motivation, supervision and direction and the kind of

control techniques which he must employ to reach these points.

Some important Characteristics of the objectives are as under:

Objectives are multiple in number: Objectives can be set out in variouskey areas. Major areas are; Market standing, innovation, productivity,

physical and financial resources, profitability, Manager performance and

development, worker performance and attitude, and public responsibility.

Objectives are either tangible or intangible: For some of the objectiveslike Market standing, productivity and physical and financial resources,

quantifiable values are available. Other areas of objectives like

managers performance, workers morale, public responsibility etc., may

not have tangible values.

Objectives have a priority: This implies that at a given point of time, theaccomplishment of one objective is relatively more important than others.

Priority of goals also says something about the relative importance of

certain goals regardless of time.

Objectives are generally arranged in a hierarchy:

Corporate Objectives

Divisional Objectives

Departmental Objectives

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Objectives sometimes clash with each other: The process of breakingdown enterprise into units (eg. Production, Sales, Finance) requires that

objectives be assigned to each unit. This some times creates the problem

of potential goal conflict and suboptimisation.

Q What are the requirements of sound objectives? Mention the advantages.

Objectives must be both clear and acceptable. The ultimate test of clarityis the employees understanding of the objectives. The objectives must

also be acceptable to the people.

Objectives must support one another: Sometimes objectives of differentdepartments clash with each others. In view of this, there is a need for

co-ordination and balancing the activities of entire organization.

Objectives must be precise and measurable: An objective must always be

spelled out in precise measurable terms. Then it becomes easier toachieve. It also motivates employees and they would develop their own

plans to achieve these goals. Once it is measurable, it will facilitate

managers to know whether they are succeeding or failing.

Objectives should always remain valid: This means the manager mustconstantly review, re-assess and readjust the objectives as per changing

conditions.

The advantages of objectives are:

1. They provide a basis for planning and for developing other types of plans

such as policies, budgets and procedures.2. They act as motivators for individuals and departments who pursue their

activities with a sense of purpose.

3. They eliminate haphazard action which may result in undesirable

consequences.

4. They facilitate coordinated behaviour of various groups.

5. They function as a basis for managerial control by serving as standards

against which actual performance can be measured.

6. They facilitate better management of the enterprise by providing a basis

for leading, guiding, directing and controlling the activities of people of

various departments.

7. They lessen misunderstanding and conflict and facilitate communication

among people by minimizing jurisdictional disputes.

8. They provide legitimacy to organizational activities.

Q What is meant by Decision? What are the steps in Rational Decision

Making?

A : A decision is a choice between two or more alternatives. A decision is rational if

appropriate means are chosen to reach desired ends. The six steps involved in the

process of decision making are:

1. Recognising the problem

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2. Deciding priorities among problems

3. Diagnosing the problem

4. Developing alternative solutions or courses of action

5. Measuring and comparing the consequences of alternative solution.

6. Converting the decision into effective action and follow up.

Recognising the problem: A problem exists

(i) When there is a deviation from past experience

(ii) When there is a deviation from plan

(iii) When other people bring problems to the manager.

(iv) When competitors out perform the managers organization.

Deciding priorities among problems:

A manager should not allow himself to be bogged down by all sorts of

problems. Some problems which can be solved by subordinates should be passed on.

Some problems need to be solved by higher ups. Then only a few problems need to

be solved by the manager.

Diagnosing the problem:

Every problem should be correctly diagnosed. A manager should remember

that symptoms of a problem may sometimes mislead him.

Developing alternative solutions or courses of action

After having diagnosed the problem, the next step is to develop alternative

solutions. The creative process of developing alternates consists of five stages.

Saturation: Thoroughly familiar with problem

Deliberation: Thinking of the problem from several view points

Incubation: In case he is unable to get a fruitful result of deliberation

Illumination: A flash of insight of good ideas

Accommodation: The Manager refines his ideas into a useful proposal.

Another way of finding course of action is through brain storming

Measuring & comparing the consequencies of Alternative Solutions:

Once appropriate alternative solutions are developed, the next step is to

measure and compare their consequences. This involves a comparison of the quality

and acceptability of various solutions. The quality of a solution must be determined

after taking into account its tangible and intangible consequences. Acceptability of a

solution is also very important. Difficulties arise when a solution though good in

quality, is poor in acceptability & vice-versa.

Converting the Decision into effective action & follow-up:

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decide upon policies or projects is an effective device for gaining their acceptance

and commitment.

Ineffective Communication: Another problem in decision making is the ineffective

communication of a decision. This makes implementation difficult. The manager

should therefore take care to communicate all decisions to the employees in clear,precise and simple language.

In correct timing: In decision making, the problem is not merely of taking a correct

decision. It is also of selecting an appropriate time for taking decision. If the

decision is correct but the time is inopportune, it will not serve any purpose.

Q What are the steps in planning?

A: The steps generally involved in planning are as follows:

Establishing verifiable goals to be achieved: The first step in planning isto determine the enterprise objectives. These are most often set by higher

level or top managers. The type of goals selected will depend upon the

basic mission of the organization, the value its managers hold, and the

actual and potential abilities of the organization.

Establishing Planning Premises: The second step in planning is toestablish planning premises, i.e., assumptions about the future on the

basis of which the plan will be ultimately formulated. Planning premises

are vital to the success of planning, as they supply pertinent facts and

information relating to the future. Planning premises can be classified as

under:

(a) Internal & External premises: Premises may exist within and

outside the company. Important internal premises include sales

forecast, policies & programs of the organization, capital

investment in plants & equipment, competence of Management,

skill of the Labour force etc. External premises may be classified

in three groups. Business environment, factors which influence

the demand for the products, and factors which affect the

resources available to the enterprise. Some of the important

external premises are general business & economical

environment, technological changes, Govt. policies & regulations, population growth, political stability, sociological factors and

demand for the product.

(b) Tangible and intangible premises: Tangible premises are those

which can be qualitatively measured, while intangible premises

are those which being qualitative in character cannot be so

measured. Population growth, industry demand, capital and

resources invested are all tangible while political stability,

sociological factors, business and economic environment,

attitudes are intangible.

(c) Controllable and non-controllable premises: Controllable factorsare those which can be controlled and normally cannot upset well

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2. Communication: Best planning occurs when every manager in the

organization has access to complete information, not only pertaining to his

own area of planning, but also to others area. This is necessary to make him

understand how his department goals and policies tie in with those of the

enterprise as a whole. He should know what are the premises upon which heis expected to plan.

3. Participation: Participation of subordinates with superiors is also a key

element in making planning effective. It improves understanding of

objective, and loyalty in the subordinates and makes execution of plans easy.

MBO, Bottom up planning, committees and management clubs are methods

of increasing subordinates participation.

4. Proper Climate: It is critical that top managers establish proper climate for

planning. This involves stimulating planning interest among the rank and file

of managers by setting their goals, establishing planning premises,

communicating policies, and developing a tradition of change in the

organization.

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Unit-3 ORGANISING & STAFFING

Q: Discuss the nature and purpose of organization.

A; An organization is a social unit or human grouping deliberately structured for

the purpose of attaining specific goals.

Organising is the process of identifying and grouping of the work to be

performed, defining and delegating responsibility and authority and

establishing relationships for the purpose of enabling people to work most

effectively together in accomplishing their objectives.

Based on the above definitions, every organization has:

1. A purpose, goal (task of planning).

2. A clear concept of major duties or activities required to achieve the purpose.3. Clarification of activities into jobs and

4. Establishment of relationships between these jobs.

Q. Enumerate the process of organizing

A : In performing the organizing function, the manager differentiates and integrates

the activities of his organization. By differentiation is meant the process of

departmentalization or segmentation of activities. Integration is the process of

achieving unity of effort among various departments. The above can be

described in six steps.

1. Consideration of Objectives: The first step is to know the objectives of the

enterprise. Objectives determine the various activities which need to be

performed and the type of organization which needs to be built for this

purpose. Consideration of objective is the first step in the process of

organizing.

2. Grouping activities into Departments: After consideration of objectives, the

next step is to identify the activities necessary to achieve them and to group

the closely related and similar activities into departments and sections.

3.Deciding which departments will be key departments: Key departments are

those whose activities are essential for fulfillment of goals. Such key

departments need special attention. Unless key departments are identified,

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there is a tendency to focus on minor departments whose managers are vocal.

The key departments should be placed directly under higher management.

4.Determining the levels at which various types of decisions are to be made:

After deciding the relative importance of various departments, the levels at

which various major and minor decisions are to be made must be determined.

Each organization must decide as to how much decentralization of authorityand responsibility it wants to have. Extreme decentralization may lead to loss

of control and effective co-ordination. Extreme centralization may lead to

wrong decisions at wrong times and may break down the morale of employees.

5. Determining the span of Management: The next step to be taken in

designing a structure is to determine the number of subordinates who

should report directly to each executive. The narrower the span, the taller

is the structure with several levels of management. This will affect

communication. A flat structure is generally desirable.

6. Setting up a co-ordination Mechanism : As individuals and departments

carry out their specialized activities, the overall goals of the organization

may become submerged or conflicts among organization members may

develop. Coordinating mechanisms enable the members to keep sight of

the organizations goals and reduce inefficiency and conflict.

Q: What are the Principles of Organising?

In order to develop a sound and efficient organization structure, there is a

need to follow certain principles. These principles are as follows:

Objectives: The objectives of the enterprise influence the organization

structure and hence the objectives of the enterprise should be clearly defined.Then every part of the organization should be geared to the achievement of

these objectives.

Specialisation: Effective organization must promote specialization. The

activities of the enterprise should be divided according to functions and

assigned to persons according to their specialization.

Span of control: As there is a limit to the number of persons that can be

supervised effectively by one boss, the span of control, as far as possible, be

minimum. six to eight would be ideal.

Exception: As the executives at higher levels have limited time, only

exceptionally complex problems should be referred to them and routine

matters should be dealt by subordinate at lower levels.

Scalar Principle: This principle sometimes known as chain of Command

clearly defines the line of authority from chief executive at the top to the first

line supervisor at the bottom.

Unity of Command: Each subordinate should have only one superior whose

command he has to obey. Dual subordination must be avoided, for it causes

uneasiness, disorder, indiscipline and undermining authority.

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Delegation: Proper authority should be delegated at the lower levels of

organization also. The authority delegated should be equal to the

responsibility.

Responsibility: The superior should be held responsible for the acts of hissubordinates. No superior should be allowed to avoid responsibility by

delegating authority to his subordinates.

Authority: The authority is the tool by which a manager is able to accomplish

the desired objective. Hence, authority of each manager must be clearly

defined. Further authority should be equal to responsibility.

Efficiency: The organization structure should enable the enterprise to

function efficiently and accomplish its objectives with lowest possible cost.

Simplicity: The organization structure should be as simple as possible and

the organizational levels should, as far as possible, be minimum. A large

number of levels of organization mean difficulty of effective communication

and co-ordination.

Flexibility: The organization should be flexible, should be adaptable to

changing circumstances and permit expansion and replacement without

dislocation and disruption of the basic design.

Balance: There should be reasonable balance in the size of various

departments, between centralization and de-centralisation, between principlesof span of control and the short chain of command and all factors such as

human, technical and financial.

Unity of Direction: There should be one objective and one plan for a group

of activities having the same objective. Unity of direction facilitates

unification and co-ordination of activities at various levels.

Personnel ability: As people constitute an organization, there is a need for

proper selection, placement and training of staff. Further, the organization

structure must ensure optimum use of human resources and encourage

management development programs.

Q: What do you understand by Departmentalisation? What are the bases on

which departmentalization is done? Discuss their merits and demerits.

A : The horizontal differentiation of tasks or activities into discrete segments is

called departmentalization. It is one of the important steps of building an

organization. The aim is to take advantage of division of labour and

specialization up to a certain limit.

There are several bases for departmentalization. They are described below.

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1. Based on Functions

The most widely used base for departmentalization is function. Each major

function of the enterprise is grouped into departments. Eg. Production Dept.

Finance, Marketing etc.,

Advantages:

1. Suitable for organizations manufacturing only a limited number of

products or render limited number of service. Every one understands

Ones own task, feels secure both in work and in relationship.

2. Promotes excellence in performance because of development of

expertise through specialization.

3. Leads to improved planning and control.

4. Ensures economy. Man power & resources are effectively utilized.

Drawbacks:

1. It fosters subgroup loyalties. It is difficult to understand the task of

the whole and relate his own work to it. Decisions taken by one

department are poorly implemented by others.

2. Not a good training ground for overall development of a manager.

3. Unsuitable for large organizations.

4. Customer needs are not understood properly.5. Complicated procedures, wasteful and time consuming. The structure

is rigid and resists adaptations.

6. Difficult to judge the performance of every department.

2. Based on Products

This form is eminently suited for Large manufacturing organizations,

producing variety of products. Under this method, for each major product, a

separate semi-autonomous department is created and is put under the charge

of a manager who is also responsible for profitability. Within each

department, all needed manufacturing, engineering, marketing, man powerand other facilities are assembled. Eg. Hindustan Levers

Advantages:

1. This form relieves top management of operating task responsibility.

They can now concentrate on Finance, R&D and control.

2. This form enables top management to compare the performances of

different products and invest more on profitable products and

withdraw resources from unprofitable ones.

3. Since the responsibility of products performance is entrusted to the

department head, he is better stimulated.

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4. Employees working within a department derive greater satisfaction

from identification.

Draw backs:

1. Results in duplication of staff and facilities.2. Extra expenditure in maintaining separate sales force for each

product.

3. Large number of managers is required.

4. Full utilization of machinery may not be possible.

3. Based on Customers:

An Enterprise may be divided into a number of departments on the basis of

the customers that it services (eg. BEL has separate depts. For military,

industrial and consumer electronics customers). Advantage is that it ensures

full attention to major customer groups so that goodwill is earned. The

disadvantage is that full utilization of facilities and duplication of facilities

are encountered.

4. Based on Regions (on territory):

When several production and marketing units of an organization are

geographically dispersed in various locations, it is logical to departmentalize

those units on geographical basis eg. Indian Railways.

Advantages:

1. Motivates each regional heads to achieve high performance.

2. Provides each regional head to adopt to Local situations and satisfy

customer needs with speed and accuracy.

3. It affords valuable top management training and experience to mid

level executives.

4. Enables organization to take advantage of local factors such as

availability of raw materials, labour etc.

5. Enables the organization to compare the performance.

Drawbacks:

1. Gives rise to duplication of various activities. Many routine and

service functions performed by all regional units can be performed

economically centrally.

2. Unhealthy competition among region may ruin overall interest of total

organization.

5. Based on time:

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In departmentalization by time, activities are grouped on the basis of timing

of their performance. Example: As a small machine shop grows in size,

owner can add shifts, or rent more shops. Generally departmentalization by

time is found in production function of the enterprise.

The disadvantages are:

1. Accidental occurrence such as Machinery breakdown may affect thenext shift also.

2. Workers from one shift tend to pass on some portion of incomplete

work to the next shift.

3. It becomes difficult to measure the performance of department.

6. Based on Process:

Departmentalisation is done on the basis of discrete stages of process or

technologies in the manufacture of a product. Eg. Paper Bamboo

crushing, Pulp making etc.

Advantages:

1. Facilitates use of heavy and costly equipment in an efficient manner.

2. Follows principles of specialization.

3. Suitable for manufacturing products which involve a number of

processes.

Drawbacks:

1. Does not provide good training ground and opportunity to develop

management talent.

2. When process is sequential, subsequent department complain about thepredecessor dept.

3. Difficult to compare performances of departments.

Combined base:

President

Tractor Dept Appliances Dept Generator Dept Based onproduct

Eastern plant Southern plant Western plant Based ongeographical

dispersion

production sales finance Based onfunctions

Another form is Matrix organization

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R&D Contract Admin Engg group Mfg groupProject Mgr A R & D group contract admin engg group mfg group

Project Mgr B R & D group contract admin Engg group Mfg group

Project Mgr C R & D group contract admin Engg group Mfg group

Here two types of departmentalization Functional & Product exist

simulatensously. Functional departments are a permanent fixture of the

matrix organization. They retain authority for the overall operation of their

respective units. Product departments are created as the need arises.

Members of a project team are assembled from functional departments andare placed under the direction of a project manager. The manager for each

project is responsible and accountable for its success. He has the authority

over team members for the duration of Project.

Benefits:

1. The combination of all necessary inputs of man power, facilities and

information at one place reduces the problems of communication and co-

ordination. There is economy in cost.

2. Stress on optimization of the total project eliminates, chances of

suboptimisation of goals.3. Assignment of specific jobs to employees make them accountable.

4. Change of projects promotes intellectual growth & development of

employees.

Drawbacks:

1. Members tend to show greater loyalty to their parent departments

than to the project organization in which they are working.

2. Members feel frustrated due to lack of formal procedures and rules. They

suffer more anxiety near the completion of the project.

Q: What are the factors to be considered when choosing a base for

Departmentatlisation?

1. Specialisation: The base should ensure maximum specialization of skill and

effort. The questions which should be answered for this purpose are:

- Which approach permits the maximum use of special technical

knowledge?

- How will the choice affect differentiation among specialists?

- Will it allow the necessary differences in view point to develop so

that specialized tasks can be performed effectively?

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2. Co-ordination: The base should ensure proper co-ordination and control of

activities of different departments. The questions which need to be answered

for this purpose are:

- Which base provides the best hope of obtaining the required control

and co-ordination.

- Will a particular base increase the problems of achieving integrationor reduce them.

- How will the decision affect the ability of organization members to

communicate with each other, resolve conflicts and reach the

necessary joint decisions.

3. Economy: The expenditure involved in introducing departmentalization is an

important consideration. Whatever the type of departmentalization used, its

benefits should always be more than its costs. The questions to be asked here

are:

- Which base provides the most efficient utilization of machinery and

equipment.

- What is the financial burden involved in following a particular base.

4. Whole task: The organization should be broken down, such that each

department has a whole task. Depending on the nature of the task, this

wholeness may be achieved either by technological departmentalization or

by time departmentalization or by a combination of these. Thus in each case,

the departmental heads have a realistic accountability and those who work

within the departments derive satisfaction from identification with a

recognizable goal.

Q : What do you understand by Committee Discuss its advantages &

weakness? How do you make committees effective.

A : A committee is a group of people who have been formally assigned some

task (or problem) for their decision and/or implementation. Committees can

be broadly classified into advisory committees and executive committees.

Advisory committees have only a recommendatory role and cannot enforce

implementation of their advise or recommendations (eg: works committee,

sales committees etc.,). The executive committee is vested with line

authority. The executive committees not only take decisions but also enforce

decisions and thus perform a double role of taking a decision and ordering itsexecution.

Advantages of Committees:

1. Where committees consist of all departmental heads as members,

people get an opportunity to better understand each others

problems and to move co-operatively towards organizational

goals.

2. Committees provide a forum for the pooling of knowledge and

experience of many persons of different skills, ages & backgrounds. This

helps in improving the quality of decisions.

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3. Committees provide an opportunity to many persons to participate in the

decision making process. Since they participate in discussions, they

also take interest in implementing their decisions.

4. Committees are excellent means of transmitting information and ideas,

both upward and downwards.

5. By exposing members to different view points, committees contributeindirectly to their training & development.

6. Committees are impersonal in action and hence their decisions are

generally unbiased and are based on facts.

Weaknesses:

1. It takes longer time to arrive at a decision than from an individual

manager.

2. In case of wrong decision, no member can be individually held

responsible. This encourages irresponsibility.

3. Committees are an expensive form of administration. Huge money is

spent.

4. Members tend to protect interest of their departments than to find an

appropriate solution to the problem.

5. Committees have a tendency to perpetuate.

6. Decisions are arrived at on the basis of compromise and hence they are

not the best decisions.

7. Due to large number of members, it is difficult to maintain secrecy.

8. Since chairman of committee keeps changing, influence accumulates inthe hands of permanent secretary who dominates the meeting. This

brings resistance from others.

How to make Committees effective

1. The number of members on a committee should not be very large (

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Responsibility: Responsibility is the obligation of a subordinate to obey the

orders. Responsibility has two dimensions.

- Responsibility for & Responsibility to.

Responsibility for is the obligation of a person to perform certain duties

accepted by him.

Responsibility to is his accountability to his superiors.

Authority can be delegated, but responsibility can not be delegated.

Q: What do you understand by centralization and decentralization of

Authority and responsibility. Discuss their advantages and disadvantages.

In a Centralised set-up, the decision making authority is concentrated in a few

hands at the top. Absolute centralization is not possible except in a one-man

enterprise.

In a decentralized set-up, the decision making authority is delegated to the levels

where the work is to be performed.

Every organization has to decide as to how much decision making authority

should be centralized in the hands of chief executive and how much should be

distributed among the managers at lower levels. In words of Fayol, Every thing

that goes to increase the importance of the subordinates role is decentralizationand everything that goes to reduce it is centralization.

Advantages of Centralisation:

1. Co-ordination of activities of subordinates is better achieved.

2. There is no duplication of efforts or resources.

3. Decisions take into account the interest of entire organization.

4. Strong control leadership develops which may be required in crisis.

Advantages of Decentralisation:

1. Decentralisation reduces problems of communication and Red tape.

2. Decentralisation permits quicker and better decision making.

3. It recognizes & capitalizes on importance of human element. Employees can

exercise more autonomy.

4. It leads to a competitive climate within organization.

5. Ensures employee development.

6. Facilities diversification of products, activities and markets.

Q : Explain Span of Control. What factors are important in deciding span of

control.

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A: The span of control indicates the number of sub ordinates who report directly to a

manager. Determination of an appropriate span of management is important for

two reasons: First, the span of management affects the efficient utilization of

managers and the effective performance of their subordinates. Too wide a span

means managers are overstraining themselves and their subordinates are getting

too little guidance or control. Too narrow a span may mean that Managers areunderutilized and their subordinates are over controlled. Second, there is a

relationship between span of management and organizational structure. A

narrow span results in a tall organization with many levels of supervision

between top management and the lowest organizational levels. This creates more

communication and cost problems. On the other hand a wide span for the same

number of employees means a flat organization with fewer management levels

between top and bottom.

The factors governing the span of management are:

1. Ability of Manager: Some managers are more capable than others and

can therefore handle a large number of subordinates. In planning an

organization, the span of management should be based on a manager of

average ability.

2. Ability of employees: If the employees are competent and possess

necessary skills and motivation, less attention of manager is required and

large span can be used. On the other hand, if employees are dissatisfied

with their jobs, or are incompetent and untrained, close supervision by the

manager is needed. This will reduce the span.

3. Type of work: If employees are doing similar jobs, the span can be larger.

If their jobs are different, a small span may be necessary.4. Well defined authority & responsibility: If the authority and

responsibility of each employee are properly defined, then the burden of

supervising their work is reduced. The manager can then manage a large

number of subordinates.

5. Geographic Location: An office manager can supervise 25 employees if

they are all working in one room. But a sales manager who has 25 sales

people located in 25 different areas would find direct supervision

impossible.

6. Sophisticated information and control system: If a company uses a

sophisticated information and control system and objective standards to

detect deviations from established plans, then the need for closesupervision does not exist.

7. Level of Management: Span of management varies with each level in the

organization. The top level will control smaller span while at lower level

it keeps increasing.

8. Economic considerations: Economic considerations affect the choice of

span. Smaller spans means a larger number of managers with added

salaries and other costs. Wide spans also involve extra costs due to

inefficiencies due to reduced managerial leadership. Hence an economic

balance has to be arrived at between cost savings that result from large

span, and the added costs as the span grows too wide.

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STAFFING

Q: Discuss the nature & importance of Staffing.

A: It is important to have a good organization structure and even more important to

fill the jobs with the right people. Filling and keeping the positions provided for,

by the organization structure filled with the right people is the staffing phase of

management function. It includes several sub functions:

1. Recruitment or getting applicants for the jobs as they open up.

2. Selection of the best qualified.

3. Transfers & promotions.

4. Training those who need further instructions to perform their work effectively or

to qualify for promotions.

It is estimated that Labour cost constitute from 25 percent of production costs to

40% of selling costs in manufacturing enterprise. Therefore a business cannot be

successful for any length of time unless it is capable of bringing in and developing

the right kind of people. The advantages of proper and efficient staffing are:

1. It helps in discovering talented and competent workers and developing them to

move up corporate ladder.

2. It ensures greater production by putting the right man in the right job.

3. It helps to avoid sudden disruption of an enterprises production run by indicating

shortages of personnel, if any, in advance.4. If helps to prevent under utilization of personal through over manning and the

resultant high labour cost and low profit margins.

5. It provides information to management for the internal succession of managerial

personal in the event of an unanticipated turnover.

Q: Describe the Recruitment process:

A: Once the requirement of man power is known, the process of recruitment starts.

Recruitment is defined as the process of identifying the sources for prospective

candidates and stimulate them to apply for the jobs. The management should

have a proper plan of recruitment regarding the quantity and quality of personal

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required and the time when it is needed. The process of recruitment and the cost

involved in it depends on the size of the undertaking and the type of persons to

be recruited.

The sources of recruitment can be broadly classified into two categories. Internal

and External. Internal sources refer to the present working force of a company.Vacancies other than at the lowest level may be filled by selecting individuals

from amongst the existing employees of the company.

For the external source, the following are the methods:

1. Re-employing former employees: Former employees who have been laid

off or have left for personal reasons may be re-employed. These people require

less initial training than that needed by total strangers to the enterprise.

2. Friends and relatives of present employees

3. Applicants at the gate

4. College & technical institutions

5. Employment exchanges

6. Advertising the vacancy

7. Labour Unions

Q: What are the steps in selection process?

In order to determine the qualifications needed to meet the requirements of jobs,

the company has to analyse the jobs, write job descriptions and prepare job

specifications.

Job analysis is the process by means of which a description is developed of the

present methods, and procedures of doing a job, physical conditions in which a job

is done, relation of the job to other jobs and other conditions of employment. Job

analysis is intended to reveal what is actually done as opposed to what should be

done.

The results of a job analysis are set down in job description. The lower level job

descriptions are given by personnel department, but managerial job descriptions

are written by the incumbent executive himself or by his superior.

A job specification is a statement of the minimum acceptable human qualitiesnecessary to perform a job satisfactorily.

The selection procedure steps are as under:

1.Application blank: Filling of the application blank by the candidate is the first

step in the process of selection. In this form, the applicant gives relevant personal

data such as his qualification, specialization, experience etc. The application

blanks are scrutinized against requirement to decide the applicants who are to be

called for interview.

2.Initial Interview: Those who are selected for interview on the basis of particulars

furnished, are called for initial interview by the comp