Principles of Management & Professional Ethics

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Principles of Management & Professional Ethics

Unit 1

Introduction to Management

Groups of people working in an organization to develop or appraise or attain the common

goal of the organization by utilizing the available resources are called Management. In simple

terms it means managing the work done by the people. Just as the mind coordinates and regulates

the various activities of the person, the management coordinates and regulates the activities of

various members of an organization.

Definition of Management

The definitions by some of leading management thinkers and practitioners are as follows:

(i) Management is the art of getting things done through the people. - Mary Park

Flott

(ii) To manage is to forecast and to plan, to organize to command to coordinate and tocontrol. - Henry Fayol

(iii) Management is the art of knowing what you want to do and then seeing that it is

done in the best and the cheapest way. F.W.Taylor.

(iv) Management is the creation and maintenance of an internal environment in an

enterprise where individuals working in groups goals, efficiently and effectively

towards the attainment of group goals . It is a art of getting the work done through

and with people in formally organized groups Koontz and O Donnel

(v) Management is a social and technical process which utilized resources influences

human action and facilitates changes in order to accomplish organizational goals --

Theo Haiman and William G Scott.

Nature of Management :

1. It is an Universal Activity: Management is relevant in every sphere of activity. it is

relevant in army , government , private household work etc. the work can be done in a

more systematic manner with the application of the techniques of management . the

material and human resources can be effectively handled and the foal can be attained with

maximum efficiently. Ex a student study at random ands systematic manner. Later is best

one.

2. It is goal oriented : Management focuses attention on the attainment of specific

objectives. For Ex a business may aim for a particular level of sales. This can be achieved

by proper forecast of sales by planning production by fixing the targets.

3. It is an Intellectual activity: The practice of management requires application of mind

and intelligence . every work needs to be properly planned and execute work has to be

assigned to different Individuals and responsible have to be fixed on them. Ex in an

manufacturing unit production finance and marketing are the important activities


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performed . it has to work in proper co-ordination with the other departments. Then only

objectives of the firm can be achieved.

4. It is a process: It is process consisting of various stages/ functions . Planning is the

starting point of management and control is its last stage.

5. Management is both Art and Science: The practice of science needs knowledge of

theory and formulae. But the practice of art requires skill management is social science.

It focuses attention on the behavior of individuals and groups . the theoretical knowledge

may not help always that time they require skill ex if the workers in a factory demand

more pay and threaten to go on strike if their demand is not considered . here the skill of

the manager will help to avert the strike then its theoretical.

6. It is a Social Process: Management deals with the behavior of individuals and groups . In

a work place individuals work as a team. The behavior of an individual is bound to be

different while he is part of a group ex: an individual worker may be forced to join a

strike program because of the union.

7. It is an on going Activity : It is a continuous process planning , organizing etc haveunlimited use. Management will exist as long as there are human activities.

8. It is Intangible : It is invisible cannot be seen , but it can be felt.

Management is a Profession: Like medical, law and engineering, management has also

come to be recognized as a profession

Need for Management

As the organization grows it faces a lot of problems like shortage of raw material, labour

problem, and misunderstanding among various groups etc. So there is a need to have a central

body or point to a) coordinate the work and b) remove such hurdles both internally and

externally. This center point is called Management.

Usage of Management

Management is very vital

1) To achieve the common goal.

2) To develop overall activity.

3) To motivate the people.

4) To work efficiency.

5) To control the overall operation.

6) To take up overall planning.

7) To maintain mutual relationship among various levels of management.

8) To increase the profit or gain.

9) To reduce the complexity, difficulties and obstacles.


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Functions of Management (POSD CORB)

1) Planning: Planning means forecasting or predicting the future activity in a specific

manner or structure. It is the basic function and essential for all the organization.

2) Organizing: It is collection or joining of all the resources available within the

organizational and outside, in order to achieve the organizational goal with efficiency.

3) Staffing: It involves appointing the right man for the right job at the right time. The

management is to analyze the human resource, see if he is suitable for the job and

accordingly allocate the work in the organization.

4) Directing: It is showing the correct path or correct way to achieve the organizational goal

within the stipulated time.

5) Controlling: Controlling as a function involves regulating the person or examining the

person whether he is working in the right way or not. In order to achieve the common

goal as efficient as possible.6) Coordinating: It is a type of support function. It involves accumulating the work to

achieve the task.

7) Budgeting: It means allocation of the resources. It involves financial planning for the

future activities.

8) Reporting: It is a statement showing the various activities to the top management. It

shows the status of the work done.

Levels of Management

The various levels of management are,Levels of Management

As authority goes up the level of management, responsibility comes down. It means that

the higher officials are more authority, while major responsibility are given to middle and lower

level.


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A) Top LevelManagement: The top level management derives its powers and authority

directly from the owners of the enterprise. They are Board of Directors, Chairman,

Managing Directors, COO, CEO etc.

The functions:

1. They are setting out the fundamental objectives of the enterprises.

2. They frame major policies for the business.

3. They design the strategies for the attainment of organizational objectives.

4. They appoint key managerial personnel for the middle management.

5. Development master plans in areas of finance, human resource, technology,

marketing and other functions of organizational.

6. To represent the business outside, particularly in discussing business problems

with the Government trade association and so on.

B) Middle Level Management: They are departmental managers (Head of Department) like

Production managers, Marketing managers, Personnel managers, Finance manager,

Regional manager and other managers.

The functions:

1. They plan the role of a linking in between top level management and the lower

level management.

2. It explains the objectives, strategies, policies laid down by the top level

management to the low level management.

3. Communicates the problems, suggestions and view points of the lowermanagement to the top management.

4. It prepares the departmental plans.

5. It submits reports on the performance at various departments to the top

management.

6. It offers suggestions and recommendations to the top management for the

betterment of overall management of the enterprise.

C) Lower Level of Management: It is called as operating level management or supervisory

level. This is the level where actual operational work for the enterprise in the areas of

production, finance, marketing, personnel, etc is performed by workers. This level of

management consists of manager like supervisors, the foreman, the sales officers the

accountants the sectional officers etc.

The Functions:

1. It does day to day operational planning in view of the instructions given by the

middle level management.


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2. It provides necessary instructions to operators for the best performance of their

assigned jobs.

3. It supervisors the work of operators to ensure that their performance is in

accordance with the standards laid down in plans.

4. It submits reports on the performance of operating staffs to the middle

management.

5. It operates as a channel of communication between the middle management and

the operators.

6. The problems, suggestions and recommendations of operators are performed by it

to the middle management.

Administration vs Management

Meaning

Administration as a function is concerned with determination of corporate policies,coordination of the various departments (production, finance, distribution etc.) of the

organization under the control of the executives.

Management is concerned with execution of the policy within the limits setup by

administration and employment of the organization for the particular objective before it. In other

words Management is the doing process and administration is the thinking process.

Administration Management

1) All the policies are made by the

Administration.

1) Management has a main function of

implementing the decisions made by the

Administration.2) They are the owners / proprietors of the

company.

2) They are the managers of the company.

3) Conceptual, human skills are necessary. 3) Technical and human skills are more

important here.

4) The main functions are planning and

controlling.

4) The main functions are directing and

organizing.

5) Level of authority:

Administration mainly comprise of Top

level management.

Management mainly carried on by Middle

and lower level management.

6) Administration is thus more permanentin nature.

6) While management may change duringthe course of running the organization.

7) Objective:

They are mainly interested in

Profitability

Sales volume

They actually work for remuneration, thus

they direct their efforts towards the

attainment of goal.

8) They dont take part in the day to day 8) Managers take part in the day to day


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activity of the organization. activity.

9) Administration is the thinking process. 9) While the management are the doing

process.

Who is a Good Managers?

Introduction

Managers is a person who has the ability or strength to coordinate, motivate and guide all

the personnel working under him so as to make sure they attain the organizational goal in the

most efficient manner possible.

Qualities of a Good manager

1) Good Education

2) Technical Knowledge

3) Personality

4) Communication skills

5) Honesty

6) Positive thinking

7) Control Management

8) Motivation

9) Guide

10) Leadership qualities

11) Coordinate

12) Decision making (planning, forecasting)

13) Innovative

14) Good analysis

15) Risk takingRoles of a Manager:

Mintzberg has identified ten roles of a manager which are grouped into three categories.

1. Interpersonal Roles:

a) Figure head Manager performs symbolic duties required by the status of his

office making speeches, bestowing honors, welcoming official visitors, distributing gifts to

retiring employees are examples of such ceremonial and social duties

b) Leader The manager relationship with his own subordinates . the manager sets an

example legitimizes the power of subordinates and brings their needs in accord with those of

his organization.

c)Liaison : It describes a managers relationship with the outsiders ex. Govt, industry

groups.

2. Information Roles:

a) Monitor role :Seeks and collects information to obtain thorough understanding

of organization and environment E.g. Reading periodicals.


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b) Disseminator role: Transmits information received from outsiders or insiders to other

organization members Eg. forwarding mail.

c) Spokes person role :Transmits information to outsiders on organization plans,

Policies, actions Eg. board meetings , handling mail.

3. Decisional roles:

a) Entrepreneurial role : An initiate change adapting to the environment and

supervises Design of organization. Improvement projects as opportunities arise. Prepare

strategies

b) Disturbance handler role: Responsible for corrective action when organization

faces unexpected crisis.

c) Resources allocate role :Responsible for allocation of human monetary and materials

resources .Eg. scheduling , requests

d) Negioation

EVOLUTION OF MANAGEMENT THOUGHT

Management practice is as old as human civilization when people started living together in

groups. For, every human group requires management and the history of human beings is full of

organisational activities.

TAYLOR AND SCIENTIFIC MANAGEMENT

Taylor has defined scientific management as follows:

Scientific management is concerned with knowing exactly what you want your men to do and

then see in that they do it in the best and cheapest way.

On the basis of his experiments, he published many papers and books and all his contributions

were compiled in his book Scientific Management. Taylors contributions can be described intwo parts: Elements and tools of scientific management and principles of scientific management.

ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT

Taylor conducted various experiments at his work places to find out how human beings

could be made efficient by standardizing the work and better method of doing the work. These

experiments have provided the following features of scientific management.

1. SEPERATION OF PLANNING AND DOING: Worker was put under the supervision of a

supervisor commonly known as gang boss. Thus, supervisors job was merely to see how the

workers were performing. This was creating a lot of problems, and Taylor emphasized that

planning should be left to the supervisor and the worker should emphasize only operational

work.


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2. FUNCTIONAL FOREMANSHIP: Separation of planning from doing resulted into

development of supervision system which could take planning work adequately besides keeping

supervision on workers.

For this purpose, Taylor evolved the concept of functional foremanship based on specialization

of functions.

3. JOB ANALYSIS: Job analysis is undertaken to find out the one best way of doing the thing.

The best way of doing a job is one which enquires the least movements, consequently less time

and cost.(i) Time study involves the determination of time a movement takes to complete. The movement

which takes the minimum time is the best one. This helps in fixing the fair work for a period.

(ii) Motion study 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.

This reduces the time taken in performing a work and also the fatigue of workers.

(iii) Fatigue study shows the amount and frequency of rest required in completing the work.

After a certain period of time, workers feel fatigue and cannot work with full capacity.

Therefore, they require rest in between.

4. STANDARDISATION: As far as possible, standardization should be maintained in respect

of instruments and tools, period of work, amount of work, working conditions, cost of

production, etc. These things should be fixed in advance on the basis of job analysis and various

elements of costs that go in performing a work.

5. SCIENTIFIC SELECTION AND TRAINING OF WORKERS: A worker should be given

work for which he is physically and technically most suitable LIKE : education, work

experience, aptitude, physical strength, etc

Workshop manager

Planning in charge Production incharge

Route

clerk

Instructi

on cardclerk

Time

and cost

clerk

discipli

narian

Speed

boss

inspect

or

Mainten

ance

foreman

Gang

boss

worker


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6. FINANCIAL IINCENTIVES: Financial incentives can motivate workers to put in their

maximum efforts. If provisions exist to earn higher wages by putting in extra effort, workers will

be motivated to earn more.

7. ECONOMY:. The economy and profit can be achieved by making the resources more

productive as well as by eliminating the wastages.

8. MENTAL REVOLUTION: Scientific management depends on the mutual co-operation

between management and workers. For this co-operation, there should be mental change in both

parties from conflict to co-operation

PRINCIPLES OF SCIENTIFIC MANAGEMENT

Taylor has given certain basic principles of scientific management. The fundamental

principles are :

1. REPLACING RULE OF THUMB WITH SCIENCE: Taylor has emphasized that inscientific management, organized knowledge should be applied which will replace rule of thumb.

While the use of scientific method denotes precision in determining any aspect of work, rule of

thumb emphasizes estimation.

2. HARMONY IN GROUP ACTION: . Group harmony suggests that there should be mutual

give and take situation and proper understanding so that group as a whole contributes to the

maximum.

3. CO-OPERATION: Scientific management involves achieving co-operation rather than

chaotic individualism.

4. MAXIMUM OUTPUT: Scientific management involves continuous increase in productionand productivity instead of restricted production either by management or by worker.

5. DEVELOPMENT OF WORKERS: In scientific management, all workers should be

developed to the fullest extent possible for their own and for the companys highest prosperity.

FAYOLS ADMINISTRATIVE MANAGEMENT

Perhaps the real father of modern operational management theory is the French industrialist

Henry Fayol. His contributions are generally termed as operational management or

administrative management.

To manage is to forecast and to plan, to organize, to coordinate and to control.

He found that activities of an industrial organization could be divided into six groups:

1. Technical (relating to production);


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2. Commercial (buying, selling and exchange);

3. Financial (search for capital and its optimum use);

4. Security (protection of property and person);

5. Accounting (including statistics) and

6. Managerial (planning, organization, command, coordination, and control).

He has divided his approach of studying management into three parts: (i) managerial qualities

and training, (ii) general principles of management, and (iii) elements of management.

MANAGERIAL QUALITIES AND TRAINING

Fayol was the first person to identify the qualities required in a manager. According to him, there

are six types of qualities that a manager requires. These are as follows:

1. Physical (health, vigour, and address);

2. Mental (ability to understand and learn, judgement, mental vigour, and capability);

3. Moral (energy, firmness, initiative, loyality, tact, and dignity);

4. Educational (general acquaintance with matters not belonging exclusively to the functionperformed);

5. Technical (peculiar to the function being performed); and

6. Experience (arising from the work).

GENERAL PRINCIPLES OF MANAGEMENT

Fayol has given fourteen principles of management. He has made distinction between

management principles and management elements.

1. DIVISION OF WORK : According to him, specialization belongs to natural order. Theworkers always work on the same part, the managers concerned always with the same matters,

acquire an ability, sureness, and accuracy which increase their output.

2. AUTHORITY AND RESPONSIBILITY: The authority and responsibility are related, with

the latter the corollary of the former and arising from it. Fayol finds authority as a continuation

of official and personal factors.

3. DISCIPLINE: Discipline is obedience, application, energy, behavior, and outward mark of

respect shown by employees.

4. UNITY OF COMMAND: Unity of command means that a person should get orders and

instructions from only one superior..

5. UNITY OF DIRECTION: Unity of direction is different from unity of command in the sense

that the former is concerned with functioning of the organization in respect of its grouping of


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activities or planning Unity of direction provides better coordination among various activities to

be undertaken by an organization.

6. SUBORDINATION OF INDIVIDUAL TO GENERAL INTEREST: Common interest is

above the individual interest. Individual interest must be subordinate to general interest when

there is conflict between the two.

7. REMUNERATION OF PERSONNEL: Remuneration of employees should be fair and

provide maximum possible satisfaction to employees and employers.

8. CENTRALISATION: In small firms, centralization is the natural order, but in large firms, a

series of intermediaries is required. Since both absolute and relative values of the managers and

employees are constantly changing, it is desirable that the degree of centralization or

decentralization may itself vary constantly.

9. SCALAR CHAIN: There should be a scalar chain of authority and of communication ranging

from the highest to the lowest. It suggests that each communication going up or coming down

must flow through each position in the line of authority . Fayol has suggested gang plank which

is used to prevent the scalar chain from bogging down action.

10. ORDER: This is a principle relating to the arrangement of things and people. In material

order, there should be a place for everything and every thing should be in its place.

11. EQUITY: Equity is the combination of justice and kindness. Equity in treatment and

behavior is liked by everyone and it brings loyalty in the organization

12. STABILITY OF TENURE:No employee should be removed within short time. There

should be reasonable security of jobs.

13. INITIATIVE: Within the limits of authority and discipline, managers should encourage

their employees for taking initiative. Initiative is concerned with thinking out and execution of a

plan.

14. ESPIRIT DE CORPS: This is the principle of union is strength and extension of unity of

command for establishing team work..

CONTRIBUTIONS OF TAYLOR AND FAYOL : A COMPARISON

Similarity:

1. Both have attempted to overcome managerial problems in systematic way.


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2. Both have developed some principles which can be applied in solving managerial

problems.

3. Both have emphasized that management actions can be effective if these are based on

sound principles.

4. Both of them have emphasized that managerial qualities are acquirable and can be

acquired through training. Therefore, organizations should make attempts to develop

these.

5. Both have emphasized harmonious relationships between management and workers for te

achievement of organizational objectives.

Dissimilarity:

There is more dissimilarity between the approaches of Taylor and Fayol as compared to

similarity. This is because of the fact that Taylor has concentrated on the shop floor efficiency

while Fayol has concentrated on higher managerial levels.

Basis of difference Taylor Fayol

1.Perspective

2.Focus

3.Orientation

4.Results

5.Overall contributions

Shop floor level

Efficiency through work

simplification and

standarisation.

Production and engineering

Scientific observation and

measurement

Basis for accomplishment on

the production line

Higher management level

Overall efficiency by

observing certain principles.

Managerial functions

Personal experiences

translated into universal truths.

Systematic theory of

management.

DEPARTMENTATION:


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Departmentation is the process of dividing and grouping the activites and employees f an

enterprise into the departments. The total work of an enterprise is divided into functions and sub-

functions. Later, these are grouped together to form different departments.

In manufacture concern, the total work may be divided into the following functions:

i. Purchase

ii. Production

iii. Marketing

iv. Personnel and

v. Finance

Each of these functions will be entrusted to different departments. For example, the

production department will look after production and related maters; the marketing departmentwill look after marketing and other related matters and soon.

The activities normally performed by the different departments in a businedd enterprise may

be stated as follows:

1. Purchase Department

i. Purchase of raw materials.

ii. Maintenance of necessary records pertaining to materials.

iii. Stores control, etc.

2. Production Department

i. Manufacture.

ii. Quality control.

iii. Plant maintenance, etc.

3. Marketing Department

i. Departmention of sales targets.

ii. Appointment of dealers and distributors.

iii. Advertisement and sales promotion.

iv. Monitoring the performance of salesman, etc.

4. Personnel Department


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i. Recruitment and selection of employees.

ii. Training

iii. Wage administration, etc.

5. Finance Department

i. Provision of working capital and also

ii. Fixed capital for all other departments.

The concept of departmentation may be explained by means of a chart:

Concept of departmentation

BASIS OF DEPARTMENTATION


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Dividing and grouping of activities and employees may be done by following any of the patterns

given below:

1. Departmentation by functions

2. Departmentation by products

3. Departmentation by Territory

4. Departmentation by Customers

5. Departmentation by Numbers and Time

Departmentation by function:

The most popular basis of departmentation is the one, done according to the major

functions of an enterprise. As mentioned earlier, in a manufacturing concern, production,

marketing, finance and personnel are the major functions. In a trading concern, buying,assembling and selling are the important functions. Separate departments will be established to

perform these functions. Each major function may be divided into sub-functions. Marketing, for

example, may be further divided into advertising, sales promotion, packing, market research,

monitoring sales personnel and so on.

Functional departmentation by a concern selling cars may be shown by means of a chart:


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Advantages of departmentations by functions:

The following are some of the merits of functional departmentation:

1. It is the most natural approach to divide the activities and employees of an enterprise.

2. It recognizes the importance of the basic activities of a concern.

3. It provides sample scope for specialization.

4. As there are separate departments to look after all key activities of an enterprise,

duplication of work is avoided.

5. It makes assessment of the performance of subordinate easier.

Drawbacks

The following are some of the limitation of functional departmentation:


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1. It increases the responsibilities of the departmentation heads.

2. It gives too much importance to specialization. Even within a department, each employee

may specialize only in a particular job.

3. Functional departmentation increases the need for inner-dependence among different

departments. This may, sometimes, result in conflicts between departments.

4. The autonomy enjoyed by each department may give the departmental head undue

authority. This may be used against the interests of the subordinates.

5. It may also be difficult to secure proper co-ordination between the different departments..

Departmentation by products

This approach is suitable for those concerns that market different lines of products. There

may be separate divisions to look after the production, finance, personnel and marketing needs of

each product line of the enterprise. For example, Godrej Ltd., is manufacturing different lines of

products-soaps, locks, refrigerators, furniture, etc. There separate divisions to look after each

product line of the company.

The idea of product departmentation by Godrej Ltd., may be presented by means of a

simple chart:


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Advantages of product departmentations:

The following are the merits of product departmentation:

1. Each division focuses attention on the production and marketing of a specific product

line.

2. It fixes responsibility on individual departments or divisions for the promotion of specific

product lines.

3. It helps to reduce the problem of co-ordination as each division looks after all activities

concerning a product.

4. It is also possible to evaluate the performance of each division am dthe contribution it

makes to the growth of the entire business enterprise.

5. Departmentation by product is the most suitable approach in the cash of an enterprise

undertaking diversification of activities.


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Drawbacks

The following are the disadvantages of product departmentation:

1. Each division must have all the necessary facilities in order to be self-sufficient. This

increases the cost of operations.

2. The top management may find it difficult to exercise control over the various divisions

and their activities.

3. There may also be duplication of certain activities.

Departmentation by Territory

This approach is suitable for such organization as bank, insurance companies, transport

companies etc., whose activities are spread over the different parts of the state or country. Under

territorial departmentation, division of activities is done region-wise or branch-wise.The idea of

territorial departmentation may be explained by means of chart:

Merits of territorial departmentation:

The merits of territorial departmentation may be stated as follows:

1. It enables the organization to cater to the needs of the customers in different places.

2. Obviously, this approach provides scope for geographical expansion of business.

3. It is possible for the business to gain intimate knowledge of the customers in each place.

Limitations


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Territorial departmentation, however, suffers from the following limitations:

1. It makes it difficult for the head office to exercise effective control over the zonal or

branch offices.

2. It becomes necessary to employ more managerial and subordinate staff to manage the

regional offices.

3. It is also important that the staff who are posted to the various regional offices are

familiar with the regional language, customs and habits of the people living there.

Departmentation by Customers

In the case of departmentation by customers, the division of activities is done based on

the needs of the customers. The depositors of a commercial bank are segregated on the basis ofthe nature of their deposit account, i.e., fixed deposit account, recurring deposit account, savings

bank deposit account etc. this has been explained by means of a chart below:

Merits

The advantages of departmentation by customers are given below:

1. The business is able to fulfill the specific needs of the customers.

2. It offers scope for specialization as well.


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3. It also makes it possible for the business to maintain good rapport with different classes

of customers.

Disadvantages

Some of the drawbacks of departmentation by customer are as follows:

1. Certain departments may not be active at all due to lack of clients.

2. There is also a possibility of under-utilisation of men, machines and other resources in

certain departments due to a fall in demand.

3. There is also scope for duplication of activities.

Departmentation by number and time

In the case of departmentation by numbers, grouping of activities is done based on thenumber of persons engaged for the purpose. In the army, for example, the fighting troops are

classified into battalions, brigades, etc., based on the number of person prescribed for each unit.

Departmentation by time is relevant in the case of those concern that work 24 hours a day

and as a result may require additional sifts to cope with the volume of work. There may be

separate departmentation to look after each shift.

CENTRALISATION:

MEANING:

Centralization refers to systematic and consistent retention or concentration of

authority for decision making at higher levels of management.

CONCEPT:

Centralization of authority is that philosophy of top management of an enterprise;

under which maximum authority for management of the enterprise is kept by top management

with itself; and minimum authority for management is pushed down the management hierarchy

i.e. is managers at middle and lower levels.

MERITS OF CENTRALISATION:


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1. CONSISTENCY IN DECISION MAKING:

Centralization leads to consistency in decision-making; because decisions

are taken by a small group of managers at upper levels of management. Accordingly, there are

lesser problems of co-ordination.

2. STRONG TOP MANGEMENT:

Centralization of authority strengthens top management; and it is a position

to provide out-standing leadership to the whole enterprise by virtue of its vast authority.

3. LOWER COST OF ADMINISTRATION:

In a centralized set up of the organisation, cost of administration is lesser;

because the enterprises can operate with a limited number of managers. This is a good advantage

pf centralization, in the present-day-times characterized by highly inflationary conditions.

4. BROAD APPROACH TO MANAGING:

In centralization, the top management has a broad outlook to managing; as it

takes decisions from the systems perspective viewing the functioning of the organization as a

whole.5. DISCOURAGING INTER-DEPARTMENTAL CONFLICTS:

Centralization discourages inter-departmental conflicts; because major

decisions of departments are taken at upper levels of management with an orientation towards

departmental co-operation.

6. NATURE DECISION-MAKING:

In centralization, upper management, because of its experience, wisdom and

broad outlook, is more mature in decision-making. Such decisions carry the chance of being

least risky.

7. RETENTION BY TOP MANAGEMENT.In centralization, top management retains tight control over the whole

organization, because of its vast powers.

8. OPTIMUN UTILISATION OF RESOURCES:

Under centralization, there is an optimum utilization of organisational

resources, because of rational allocation of scarce resources among different uses.

9. EFFICIENT HANDLING OF EMERGENCIES:

In centralization, there is an efficient handling of emergency by top

management; and it can overcome organisational crises in an intelligent and planned manner.

10. SUITABLE IN THE PRESENT-DAY ENVIRONMENTAL SCENARIO:

Centralization is highly suitable for tackling present-day environmental

scenario; which is highly volatile and turbulent. Under these circumstances, top management can

take sound decisions in consultation with specialists, from various fields.

DEMERITS:


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1. HEAVY BURDEN ON TOP MANAGEMENT:

There is heavy burden of management work on top management; as it has to do

strategic planning, policy formulation and controlling over the whole organization.

2. ORGANISATIONAL GROWTH RETARDED:

Centralization retards the growth of organization. Strategies of diversification,

expansion programmes cannot be practical for organization; as top management, already over-

burdened with normal management work, can hardly find time to think in these directions.

3. LOWER STATUS OF LOWER LEVEL MANAGERS:

Centralization decreases the status of over level managers. As such, they have

less motivation to work, because of the non-fulfillment of their ego needs.

4. AUTOCRATIC MANAGEMENT:

Centralization may lead to autocratic management, in the organization. Top

management with unrestricted powers may not hesitate to impose its autocratic policies and

leadership styles on the whole organization i.e. it may misuse its powers.

5. INITIATIVE DISCOURAGED:Centralization discourages the exercise of initiative on the part of lower level

managers. Their creativity and innovative skills have no scope, in the organization.

6. DELAYED DECISION MAKING:

In centralization, there is delayed decision making; because of top management is

burdened with many organisational issues and cannot pay timely attention to decision-making.

7. INFERIOR DECION MAKING:

There is inferior decision making by top management. This may seem

paradoxical; but it is true in the sense that top rank managers are much remote to the situational

factors, in the context of which decisions have to be made.8. MANAGERIAL DEVELOPMENT RETARDED:

Centralization retards managerial training and developmental process. Under this

philosophy, lower rank managers have little chance of development; because their roles in

organizational life are routinised and they have nor or little freedom to exercise initiative and

take bold decisions, in an unrestricted manner.

9. MANAGEMENT BY EXCEPTION RETARDED:

Centralization retards the policy of management by exception; under which top

management must concentrate its attention only on strategic issues. However, under

centralization, this policy is not possible; as top management has to attend to all aspects of

managing, because of reservation of substantial decision making with itself.

10. EGOISTIC PLANNING:

As a matter of great men psychology, top management, sometimes, may indulge in

egoistic planning for ambitious purposes: without caring for the attainment of enterprise

objectives.


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DECENTRALISATION

MEANING:

Decentralization means systematic dispersal of authority in all departments and at all

levels of management.

CONCEPT OF DECENTRALIZATION:

Decentralization of authority is that philosophy of management of an enterprise; under

which maximum authority of the management of the enterprise is dispersed (or distributed)

among managers of middle and specially, lower levels, and minimum authority is kept by the top

management, in reserve, to be exercised by it itself.

DEMERITS:

1. LACK OF CONSISTENCY IN DECISION MAKING:There is a lack of consistency in decision-making; because a large number of

managers at lower levels may decide the same issue in diverse manners despite operating

within the organizational policy framework. Accordingly, problems of co-ordination are

accentuated.

2. WEAK TOP MANAGEMENT:

Top management is rather weak; as most of its powers to given away among lower

levels of management. It is not in a position to provide outstanding leadership to the

organization; because of its reduced.

3. HIGHER COST OF ADMINISTRATION:

The cost of administration is higher; because to operate the decentralized units, alarge number of managers are necessitated.

4. NARROW APPROACH TO MANAGING:

The managers of decentralized units have, usually, a narrow outlook to managing.

For them, their own departmental interests are supreme-as against the overall interests of the

whole organization.

5. ENCOURAGING INTER-DEPARTMENTAL CONFLICTS:

Decentralization encourages inter departmental conflicts; because different

departmental managers take decisions in their own unique manners and style, by virtue of, their

vast powers and hell care for departmental co-ordination and co-operation.

6. RISKY DECISION-MAKING:

Lower level managers, because of its experience, wisdom and narrow are less mature

in decision making. Sometimes, under decentralization such risky decisions might be taken as

might endanger the very survival of the business enterprise.

7. LOSS OF CONTROL BY TOP MANAGEMENT:


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Top managements control over the organization is loosened; as its substantial powers

are passed on to the lower levels of management.

8. OPTIMUM UTILISATION OF RESOURCES:

There may be, at times, less than optimum utilization of resources; because the same

set of activities may be duplicated in various decentralized units-leading to wastage of precious

organizational resources.

9. INEFFICIENT HANDLING OF EMERGENCIES:

Lower level management may be frightened by emergencies and run the seek the

shelter and guidance of top management for handling emergency situations. Failure to

effectively deal with emergencies by lower level management, may tell upon the survival and

prosperity of the whole enterprise.

10. UNSUITABLE IN THE PRESENT-DAY ENVIRONMENT SCENARIO:

Present-day environment scenario makes decentralization impractical. For taking sounddecisions under these circumstances, top management cannot provide specialists to every Tom,

Dick and Harry managers at lower levels in the organizations; because of financial implications.

MERITS:

1. LIGHT BURDEN ON TOP MANAGEMET:

There is light burden on top management; as much of the management work is passed

on to lower levels of management.

2. ORGANISATIONAL GROWTH FACILITATED:

Decentralization facilitates organizational growth. Dynamic and talented managers at

lower levels coupled with power, can easily conceive of and implement growth strategies, of

course, in consultation with top management..

3. HIGHER STATUS OF LOWER LEVEL MANAGERS:

Decentralization adds to the status of lower level managers

4. DEMOCRATIC MANAGEMENT:

Decentralization leads to democratic features in organizational functioning. In fact,

under decentralization, management decision making power gets divided among a large number

of lower rank managers. This phenomenon puts restraints over the dictatorial use of powers by

the top management.


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5. INITIATIVE ENCOURAGED:

Decentralization encourages the exercise of initiative on the part of lower level

managers. They can think out and execute their innovative plans, for the overall betterment of

organizational life. Their creativity and innovative skills have full scope in the organization.

That is why, many decentralized enterprises have progressed a lot, in some cases.

6. QUICK DECISION MAKING:

There is quick decision making. For one thing, lower level managers have comparatively

limited managerial work, as they have to attend to only their own departmental problems. And

for another, they need not seek approval of upper management for decision making on issues, for

which authority has been decentralized to them.

7. SUPERIOR DECISION MAKING:

Decision making is superior, in the sense that lower level managers are close to other

situational factors, in the context of which decisions have to be made. In fact, they practically

deal with situational factors and develop a better sense of their appreciation and tackling.

8. MANAGERIAL DEVELOPMENT FACILITATED:

Decentralization is a systematic way of training and developing managers for higher

management positions. This philosophy more or less does away with the problem of managerial

succession.

9. MANAGEMENT BY EXCEPTION FACILITATED:

Decentralization facilitates the policy of management by exception. By retaining authority

for strategic decision making with itself, top management can decentralize substantial authority

for operational management purposes to lower levels managers.

10. RATIONAL PLANNING:Rational planning is done by lower level managers. They have comparatively little

ambition and ego and care more for attainment of their departmental objectives through

designing and implementing rational plants.

Span of Management :

It refers to the number of subordinates a manager can effectively manage. It is also known as

span of control

What if too many subordinates are placed under a manager?

Loss of control

Communication can be affected


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Frustration can take place

Conflicts may arise very often between managers and subordinates.

What if the number of subordinates is too low?

The mangers potential cannot be fully utilized

The goal of the organization cannot be effectively accomplished

Factors influencing Span of Supervision

Ability of the manager

Capabilities of the subordinates

Nature of work

Facilities available

Extend of Delegation

Quality of plans

MBO (MANAGEMENT BY OBJECTIVE)

MEANING:

MBO is a management system in which each member of organization effectively

participates and involves himself. This system gives full scope and to the individual strength and

responsibility.

DEFINITION:

George S. Ordiorne

The system of management by objectives can be described as a process whereby the

superior and subordinate managers of an organization jointly identify its common goals, define

each individuals major areas of responsibility in terms of results expected of him, and use these

measures as guides for operating the unit and assessing the contribution of each of its members.

Koontz and weihrich

MBO is a comprehensive managerial system that integrates many key managerial

activities in a systematic manner and that is consciously directed toward the effective and

efficient achievement of organizational and individual objectives.

FEATURES OF MBO:

1. IT IS NOT ONLY A TECHNIQUE BUT ALSO A PHILOSOPHY:


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The philosophy of MBO and its concepts guides and influences every aspect of

management. MBO is an approach which includes of management.

2. SETTING OBJECTIVES:

The assumption of MBO is that employee participation and involvement in goal

setting which leads too better commitment and motivation towards the achievement of

organizational objectives. It lay emphasis on participate decision making.

3. PROVIDES EVALUATION AND MECHANISM:

MBO is a systematic approach to managing an organization where in all key

personnel are expected to contribute to achieve the overall goals. It attempts to blend and

balance the goals of all key personnel. It provides evaluation mechanism through which the

contribution of each individual is measured.

4. CREATES LINKAGE BETWEEN ORGANIZATIONAL GOALS AND INDIVIDUALSGOALS:

MBO creates linkage between organizational goals and individuals goals. The

performance targets are derived from the overall objectives of the organization.

5. REWARDS ARE GOVERNED BY THE RESULTS ACHIEVED:

The performances of employees are periodically evaluated in the light of

predetermined targets. MBO emphasis on improving future performance. Rewards are governed

by the results achieved.

6. CONTINUOUS PROCESS:

MBO is a continuous process or a never ending process. The continuous nature ofMBO process not only ensures sustained concentration of efforts towards organizational goals, it

also helps in modifying the goals to suit the changing conditions.

SIGNIFICANCE AND ADVANTAGES OF MBO:

1. TARGETED PLANNING:

MBO results in verifiable goals which can easily be translated into action plans. The

objective setting process of MBO leads to an integrated hierarchy of objectives throughout the

organization.


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2. PARTICIPATION AND COLLABORATION:

Under MBO objectives of each department are consistent with the overall objectives

of the organization. Managers at all levels understand fully their role in total organization. There

is active participation and collaboration among the various levels of the organization.

3. MOTIVATION:

Managers at all levels are involved in goal setting. As a result they are more

committed to the goals of the organization. Rewards are linked with performance. Employees

are allowed considerable discretion in setting individual targets which provides them

psychological satisfaction.

4. EFFICIENT COMMUNICATION:

There is frequent interaction between superiors and subordinate which leads to mutual

faith and understanding among them. It improves the work climate in the organization and leads

to better communication.

5. TRAINING AND DEVELOPMENT:

MBO provides opportunity to subordinate executives to participate in decision makingprocess. This helps in developing their conceptual and human skills. MBO enables an

organization to fully utilize the ability of its members. MBO helps in identifying the areas in

which employees need further training.

6. PERFORMANCE APPRAISAL:

MBO provides objective yardsticks for systematic evaluation of performance. The

performance of subordinates in monitored more effectively due to periodic review of progress.

The greatest advantage of MBO is perhaps that it makes it possible for a manager to control his

own performance.

LIMITATIONS OF MBO

1. DIFFICULTY IN TEACHING MBO PHILOSOPHY:

When managers are clear about this concept only then they can explain to subordinates how it

works, why it is being done, what will be the expected results, how it will benefit participants,

etc. this philosophy is based on self direction and self control and aims to make managers

professionals.

2. FAILURE TO PROVIDE GUIDELINES TO GOAL SETTERS:

The managers who will guide in goal setting should themselves understand the major policies of

the company and the role to be played by their activity. Failure to understand these vital aspects

will prove fatal for this system.

3. DIFFCULTY IN SETTING GOALS:

The main emphasis in MBO technique is on setting objectives. The setting of

objectives is not a simple thing. It requires lot of information for arriving at the conclusions.

4. EMPHASIS ON SHORT TERM OBJECTIVES:


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. There may be possibility that short term and long term objectives may be

incompatible because of specific problems. So proper emphasis should be given to both short

term and long term objectives.

5. DANGER OF INFLEXIBILTY:

It will also be foolish to strive for goals which have become due to revised corporate objectives.

MBE (MANAGEMENT BY EXCEPTION)

MEANING:

Management by exception is a system of identification and communication that signals to the manager w

his attention is needed and implies the use of management by exception particularly in controlling aspect. Thus it

be stated that MBE is a controlling technique.

ADVANTAGES:

Executives are left with more time to tackle bigger and tougher issues, as the details of sma

problems are left to the subordinates. There is better utilization of management talent across the organization as even the subordinat

get to implement their own decisions and solve problems in their own way, however small the

may be.

It increases the span of management and delegation of authority is improved.

It provides greater opportunities and thus increases confidence and motivation.

It uses the latest knowledge on trends, history and business data.

It forces every manager to be thorough and precise and also up-to-date with all releva

information.

It helps to identify problems before they become big.

It also prevents last minute run and panic.

Qualitative and quantitative yardsticks can be established judging the situation and people.

It increases chances of better performance appraisal and hence improves motivation.

Communication is improved between different segments of an organization.

This focus on results causes it identify any problem in any part of the organization.

Better organizational cohesiveness and achievement of objectives.

LIMITATIONS:

Newly established organizations and organizational with a dynamic environment cann

adopt the techniques easily.

Establishing standards i.e., both qualitative and quantitative takes a lot of time and involv

lot of effort and precision (accuracy).

Proper and knowledgeable subordinates need to be found, which is a difficult process.


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Subordinates act out of over-confidence and think they can handle bigger problems too. Th

often tougher problems go unreported and by the time it comes to the superior. It is too la

and hence very difficult to set things.

PROCESS OF MBE

Measurement

Projection

Selection

Observation

Comparison

Decision making

Measurement:

By assigning values to past and present performances, exceptional areas can be identified.

Projection:

All the values that are meaningful too the organizational objectives are to be extended to see futu

requirements.

Selection:

This involves the criteria and method which management will use to follow the progress path toward

organizational objectives.

Observation:

Current performances are observed and measured so that managers are aware of the current state o

affairs in the organization.Comparison:

It involves the evaluation of the actual performance against planned performance, identifying th

exceptions that require attention and reporting the variations to the management.

Decision making:

This involves prescribing the action that must be taken in order to bring performance back into control o

to adjust expectations to reflect changing conditions within and outside the organization or to explo

opportunity.


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ORGANISATION

MEANING

The word organization has come from the word organism which means a structure of

interrelated and interdependent parts.

The part or components of organization consist of men, machines, materials, methods,

money, functions, authority and responsibility.

The task of organization is to unite or integrate these components effectivelt for the

purpose of attaining the common goal.

DEFINITIONS

According to Allen, Organization is the process of identifying and grouping 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

objectives.

According to Wheeler, Organization is the structural framework of duties and

responsibilities required of personnel in performing various futions within the company.

According to Haney, Organization is a harmonious adjustment of specialized parts for

the accomplishment of some common purpose or purposes.

PRINCIPLES OF ORGANISATION:

A sound organization structure should adhere to the following principles:


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Objective- The various activities performed in an organization should help to attain the goal of

the enterprise. The goal of each individual and department must synchronise with that of the

concern.

Division of work-The total work of the enterprise should be divided into identifiable functions

like productions, purchases, marketing, finance, etc., for better performance and control. This

leads to specialization.

Authority and responsibility:-authority is the official right of a manager. Responsibility is the

duty of a subordinate, to whom some work has been assigned, to report to the superior on the

work done.

Delegation-It means transfer of authority by a superior to his subordinate. A subordinate to

whom some work has been given must also be given the necessary authority to carry out the task.

Delegation results in a vertical flow of authority from the top level to the organization structure.

Balance- Authority and responsibility must always be equal. If responsibility exceeds authority,

the subordinate will not be able to perform the task. On the other hand, if authority exceeds

responsibility, there will be misuse of authority.

Responsibility is absolute- responsibility is never delegated. For the performance of his

subordinates, a superior is accountable to his own superior.

Unity of command-It means that subordinate should get orders from one superior only and is

accountable o him alone. Dual subordination results in confusion and leads to indiscipline.

Distinction between line and staff functions-Line functions are concerned with the

performance of the basic activities of the business. Production and sales are the line functions of

a manufacturer. Staff functions are of a supportive nature. Purchases, Personnel, etc., are staff

functions. The staff managers can only advise on certain matters. They cannot take the final

decision.


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Simplicity-The organization structure must not be a complicated one. It should have only few

levels of authority so that there is free flow of communication between persons.

Flexibility-The organization structure should not be rigid. It should be capable of being adjusted

according to the required change in future.

ORGANISATION STRUCTURE:

An organization structure explains the position and official relationships between the

various individuals working in an organization. It helps to understand an organization better. It

provides answer to the following questions:

Who is the top-most official in an organization?

Who are the department heads? What are their functions?

Who are the subordinate staff in each department? Etc.

ORGANIZATION CHART:

Diagrammatic presentation of the organization structure is what is known as an

'organization chart'. It may show the names, designations and functions of the personnel in an

organization. A specimen of an organization chart is given below:


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Merits of an organization chart:

The merits of an organization chart may be stated as follows:

General Manager

Production manager Marketing manager

Foreman 1 Foreman 2 Asst.marketing manager1

Asst.marketingmanager2

Worker1 Worker2 Worker1 Worker2

Salesman1 Salesman2 Salesman2Salesman1


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1. It shows the official positions of each individual in an organization.

2. From the organization chart, it is possible to make out who the superiors and subordinates

are.

3. It gives identity to the personnel in an establishment.

4. It helps an outsider to understand the different designations in an organization.

Drawbacks of an organization chart:

The limitations or drawbacks of an organization chart are given below:

1. An organization chart can only show the formal or official relationships in an

organization. It cannot depict the informal or personal relationships between the

individuals.

2. It may, sometimes, promote ill-feelings among the personnel in an organization. An

individual, who has been indicated in the chart as a subordinate, may not be able to take it

in the true spirit.

3. Often, the organization chart is not updated in accordance with the changes in position

taking place in the organization from time to time.

UNIT 2


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Business: Business means the state of being busy, in other words those activities which involve

production of wealth.

A business is an enterprise which means distributes or provides an article or services which othermembers of the community need and are able and willing to pay for it.

Types of Business Organization1. Sole Proprietorship

2. Partnership

3. Company4. Co-operatives

5. Multinational Companies

1. Sole Proprietorship: Business wholly owned by a single individual is known as sole

trading. The profit and loss is made is fully responsible by that person.

Characteristics: One man ownership and control ,Enjoyment of entire profit, simplicity,

self employment .2. Partnership: A partnership is an association of two or more persons working with a

common goal and zeal and agreed to share the profits and losses mutually.Characteristics: mutual agreement, sharing of profits, unlimited liability, utmost good

faith.

Kinds of partners

(i) Active Partner: a partner who takes full interest in business

(ii) Sleeping Partner: a partner who does not take interest in business but

contributes in capital.

(iii) Partner in Profits only: partners interested in profits only.(iv) Sub Partner: he is stranger to contract as he is not a part to the partnership, he

is not related to business.

(v) Partner by Estoppels : a person may not be really a partner in business but byhis behavior he makes outsider believe that he is a partner.

(vi) Minor Partner: a person who has not completed the age of 18 but due to

compulsion from the court he may be appointed as a partner.

3. Company: company is an association of persons who contribute money or moneys worth

to a common stock and employ it in some trade or business and also share the profit and

loss as the case may be arising there from.(i) Private Limited Company : it is a company which has a minimum paid up

capital as may be prescribed.

(ii) Public Limited Company : minimum number of persons should be seven andmaximum unlimited.

(iii) Government Company : fully taken over or run by the Government (State or

Central )4. Co-Operatives: it is voluntary association of persons for mutual benefit and its aims are

accomplished through self help and collective effort.

5. MNCs : Multi National Companies are companies that manufacture and market products

or services in several countries.


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Recruitment :

It is a process of finding suitable candidates for the various posts in an organization.

Stages involved in selection of candidates:1. Receiving Application forms

2. Scrutiny

3. Preliminary Interview4. Tests

5. Final Interview

6. Checking References

7. Medical Examination8. Appointment

9. Probation

10. Confirmation of Service

Training: training is the process of imparting skill or job knowledge to a person . It takes an

individual from where he is to where he should be

Importance of Training:

1. Improvement in skill and knowledge2. Higher production and productivity

3. Job satisfaction

4. Better use of resources

5. Reduction of accidents6. Reduction in complaints

Performance Appraisal:

It means evaluation of performance of an individual, it is a continuous process, done periodically

to find the employees strength and weakness.

Objectives:

1. To improve management development

2. To improve employees performance3. Work force planning

4. To improve effective communication

Methods of Performance Appraisal:

(i) Trait Based techniques : it means performance evaluated by qualities it can be as such

asJob knowledge having sufficient knowledge in job

Leadership having or acquired leadership qualities

Loyalty


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(ii) Graphical scale method : under this method traits are broadly classified and put in a

graphical form

(iii) Ranking method : this method is very easy here rank is provided on the basis ofcertain traits , ranking can be outstanding, good and below average.

(iv) Grading : here categories such as good, very good and excellent are used.

(v) Group appraisal : here a small number of persons are taken and appraisal is done.(vi) MBO (Management By Objectives) under this method the superiors and subordinate

managers of an organization come and discuss upon the employee whether to

promote or not etc.

Problems in Performance Appraisal:

1. There is no standard yardstick to measure the performance2. Some superiors may be strict in evaluating the other may be not.

3. personal disliking may also affect the appraisal

4. Discrimination may take place based on religion, caste, sex and mother tongue.

5. Many methods may bring in problem.

Steps to make Performance Appraisal effective

1. Continious follow up2. Standard measure to be followed

3. Manager capacity to be taken care off.

4. No discrimination should be done

5. There should be trust and confidence in the Performance Appraisal6. Double appraisal should be done to prevent any mistakes

7. Better communication should be there

Accidents

Accidents and Safety (as per Factories act)

As per the Industrial Dispute act Any occurrence which causes bodily injury to a person makinghim unfits to resume duty within 48 hours. Any untoward incident which causes impairment

(reduction of capacity) to the person, materials , the machinery or to the process.

Causes of Accidents:

1. Monotony and repetitive

2. Work Fatigue and physical exhaustion3. Faulty layout

4. Faulty design of machines

5. Defective systems and process

6. Lack of training


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7. Lack of precautions in handling dangerous substances

8. Accidents prone situations (high tension wire)

9. Accident prone workmen10. Absence of safety systems

11. Failure of safety systems

Cost of Accidents

1. Loss of man days, machines and materials.

2. Injury to employee and compensation for the same.

3. Financial losses like repairing the machine compensation under the act etc.

4. Continuing to keep the workmen who have become less capable due to accidents.5. Breakdown in mutual trust between employer and employee.

6. Bad publicity and image loss.

7. Unwillingness to take up risky jobs in future.

8. Disturbance in production sequence.9. Cost of production lost on that date.

10. Consequential losses like market loss and loss of face with competitors.

How to reduce accidents:

1. Investigate each accident and find out the cause.

2. Fix responsibility and prevent repetition.

3. After each accident, explore the systems and correct them.

4. Promote safety awareness, safety consciousness and safe habits.5. Build up a safety department.

6. Constant training.

7. Preventive maintenance particularly on holidays. Observe safety day or week (3rd

Nov - Bhopal Gas Tragedy)

8. Identify hazardous materials and pay special attention

9. Reduce monotony of work10.Display dos and donts near all the machines

Plant Layout

It means planning for location of all machines , equipments , utilities , work stations material

storages areas, service areas , rest rooms , lunch rooms , coffee/tea rooms , rest areas, movement

of materials , people around into and within the buildings.

Objectives of Layout:-

1. facilitates manufacturing process,2. Proper and efficient utilization of available of floor space.

3. To ensure that work proceeds from one point to another point,

4. provision of control of operations,5. provide adequate safety to the workers,


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6. provision of medical facilities and cafeteria,

7. Careful planning to avoid frequent changes in layout.

Advantages of Good Layout:-

1. To the worker - better safety and security to the worker, less number of operations, time gap

between two motions is reduced considerably, more output productivity.2. Manufacturing Costs wastage is reduced, quality product is achieved, more production in

quantity.

3. Management maximum usage of floor space, effective supervision, more storage facilities,production increased, negligible accidents, there by plant shut down comes to nil.

Types of Layout : - Classified under

1. Process Layout; - or functional layout here more emphasis is given to specialization.

Advantages - similar products with small difference, characteristics is produced in great

quantity. Wide flexibility, easy to adjust any modification can be done. Effective

supervision. More control on machines. Lower capital investment.Disadvantages: more materials needed, more floor space needed, buffer stock needed.

2. Product Layout: - or Line product The machine or equipment is determined at some

definite place where machine is required to perform some operation from a sequence of

operations designed to manufacture the product.Advantages widely used, provides smooth and regular flow of materials to finished

goods, lesser inspection, reduces material handling.

Disadvantages: A break/ halt at one point can affect the other process too. Heavy capital

investment, vulnerability to production line shut down.

3. Stationary Layout: This type of layout is used in those situations where heavy goods or

of huge size and weight that their movement from one place to another is not possible.Here men, materials and raw materials are moved to a place where activities are carried

out.

4. Cellular Type Layout: Here machines are grouped into cells;

each cell is formed to produce a single part family.

5. Hybrid Type: - In this type of layout two layouts are taken together and products aremade out.

6. Service Type Layout: - Here this type of layout is used in hospitals, hotels , businessenterprises shopping malls etc.

Steps in planning the layout for new enterprises.

1. Planning of objectives ,nature of machines, equipments and operation involved in the

manufacture

2. Decide on the machines and involved in the manufacture


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3. Develop process charts.

4. Decide on the best process layout needed to manufacture

5. Space layout should be drawn6. Decide on the number of labors, line man inspectors and supervisors for effective control.

7. Location of toilets, windows break rooms to be decided.

8. Drainage wastages electric fittings tube lights ventilation facilities to be provided.9. Pathway to be constructed

10. All provision should be drawn accordingly to the GoI Factory Act.

Techniques of Plant Layout:-

1. Type and quality of labor required,2. Volume of work to be done fro present space to future,

3. Description of operations their sequence ,

4. Nature of machines and operations,

5. Amount of material buffer stock,6. Size of finished and semi finished goods.

Plant Layout tools and techniques: -

1. Process charts 2. Process flow diagrams

3. Machine data cards.

UNIT 3


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The word Organization originates from the word organism which means a

structure with its parts so integrated that their relation to each other is governed by

their relation to be whole. It also means work together.

Koontz and O Donnell Organizing involves the establishment of an intentional

structure of roles through determination and enumeration of the activities required

to achieve the goals of an enterprise and each part of it, it involves assigning the

activities , delegation of work, coordination etc.

Characteristics of an Organization :

1. Division of Labor Work should be allotted on the basis of specialization,

efficiency and the capacity.

2. Co-ordination : Every organization should adopt their own suitable

methods to ensure proper co-ordination of the different activities performed

at various work points3. Objectives: Any organization should be bound by a set of objectives which

should be common and known to everybody.

4. Social system : Its activities are governed by social and psychological laws.

There are two aspects - the formal and the informal one.

5. Authority and Responsibility : An organization itself means an

arrangement of position into a graded series, the position are arranged in

such a order that subordinates is under a superior. It shows the hierarchy of

the subordinates and superiors

6.Communication

: It also shows the ways of communication, the path of

communication.

Organization Charts : For better and effectiveness of the organizing function, a

manager can make use of several aids or organization design. The chart shows the

functions or positions of the organization and their relationships.

Theories in Organization

1. Classical Theory2. Neo Classical Theory

3. Modern Theory

1. Classical Theory: This theory is derived from F.W.Taylor , it gives the

organization structure . Universal principles, the rules. Job description and


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training. It has four principles Division of Labor, Scalar Chain and

functional process, Structure, Span of Control

2. Neo Classical Theory: This theory is developed by Elton Mayo he took the

principles from classical theory and added some more principles such as

span of control, communication gaps, decision makers.

3. Modern Theory : This theory is based on the above two theories and also

includes, Strategic Parts , the nature of their mutual dependency, the

processes in the system which link the parts together , the goals sought to be

accomplished by the system.

Importance of OB to managers:

1. Ensures cohesiveness and order in the organization.

2. Facilities the effective communication.

3. Foster co ordination.4. Improves efficiency and quality of work.

5. Adapts to new technology.

Motivation

Motivation means a process of stimulating people to action to accomplish desired

goals W.G.Scott.Something that moves the person to action and continues him in the course of

action already initiated

Characteristics of Motivation

1. It is a Psychological concept appreciation from the manager

2. Motivation is always total and not piece meal it means that a person cannot

be motivated in installments.

3. Motivation may be financial or non financial

4. Motivation is a continuous process

Importance :1. Inducement of employee

2. higher efficiency

3. Optimum use of resources

4. better human relations

5. reduction in labor turnover

6. avoidance of strikes and lockouts


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Theories in Motivation

1. Maslow Need Hierarchy theory

2. McGregors X and Y Theories

1.Maslow Theories on Motivation

He classified human needs into five categories and arranged the same in a

particular order

1. Physiological Needs these are primary needs or basic needs such as

food, clothing. Shelter

2. Safety needs the safety or security needs emerge once the basic or

physiological needs of a person are fulfilled.

3. Social needs friendship , companionship, association and love affectioncomes under this

4. Esteem needs the needs arise in view of a persons desire to have has

ego satisfied, ego social status and reputation

5. Self Actualization needs after reaching all the above needs the person

goes for more of capability.\

McGregors X and Y Theories

X Theory This theory is negative or pessimistic in approach. The following

assumptions are

People generally do not like to work

People are un ambitious, lazy

People lack creativity

Employees need to constantly watched or supervised

Y Theory This theory is Positive in approach. The following assumptions are

This theory is positive in approachPeople love their work

People are responsible and positive outlook

Self directive


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MORALE

A Morale is nothing but the attitude of employees of an organization towards their

job, the management, the fellow employees, the superiors and the subordinates.

Characteristics of Morale:

3. It denotes group attitudes,

4. it is a psychological concept,

5. it may be high or low,

6. it is tangible

Job Satisfaction :

It is a pleasurable or positive emotion state resulting from the appraisal of ones

job or job experiences.

Factors affecting job satisfaction:

Personal Factors Organizational Factors

Age nature of work Sex pay and other benefits

UNIT 4

Leadership


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The word leadership refers to the process of leadiong , those entities that perform one or more

acts of leading , the ability to affect human bahavoiur so as to accionmlish a mission a mission

designated byu the leader.Good leaders are made not born : one who has the desiere and will power to lead can become an

effective leader. Good leaders develop through a continiours process of self study , education ,

training , experience and reflection.

Difference between Manager and Leader

Sr No Manager Leader

1. Administrator Innovate

2. Has Subordinates Has Followers

3. Focus on systems Focus on people

4. Rely on control Inspire trust

5. Accept the status quo Challenge the status quo

6. Managers imitate Leaders originate

7. Managers copy Leaders show originality

The process of Great Leadership

1. Challenge the process

2. Inspire a shared vision

3. Enable others to act

4. Model the way

5. Encourage the hearts

Characteristics of Leadership:It is a quality within inner self

It is a process of influencing othersIt requires motivation

It is a continuous process

It requires confidence of followers

Qualities of a Leader:

Ability to analyze

Emotional stabilitySelf confidence

Foresight

Better UnderstandingMental courage

Communication skills

Ability to guidePositive thinking

Functions of Leader

1. Planning


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2. Policy making

3. Execution of plans and policies

4. Controlling

5. Providing reward and punishment

6. Settlement of disputes

7. Role model

Different Kinds of Leadership styles

1. Autocratic Leader here the leader wants his subordinates to work in the manner he

wants. The autocratic leader thinks that his followers are incapable of making decisions.

2. Democratic leader a democratic leader does not make unilateral or one sided decisions.

He allows his subordinates to discuss the problem and put forth their views clearly. He

thinks all the employees are capable.

3. Laissez Faire Leader- He does not lay down guidelines within which his followers have

to work he does not interfere with anybody

4. Functional Leader This type of leader is one who has specialization in particular field

of activity. He always thinks and spends most of the time on the task given to him.

5. Institutional Leader- An institutional leader is one who has become a leader by virtue

of his official position in the organizational hierarchy

Theory on Leadership

The Traits Theory this theory is based on the assumptions that a leader is a person who

possesses certain exceptional traits or qualities. Qualities such as Intelligence, communication

skills, judgment, courage, knowledge, sincerity, determination and physical appearance.The Behavioral Theory : here leaders are made not born. The behavior of a person attracts many

followers towards him. These followers are ready to accept him as their leader as they are

influenced and impressed by his behavior.

The Situational Theory: According to this theory leadership is situation based. According to thesituation leader does his duties.

Communication

Communication: Communication means common derived from the Latin word Communize. It

is a process of sharing facts, ideas and opinions in common.

The information sent is called message, the person who sends the information is called sender orcommunicator, the person who receives the information is called receiver or communicatee . The

act of conveying message is called transmission.

Objectives of Communication

- To give and receive information

- To provide advices and opinions

- To provide counseling


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- To issue orders and instructions

- To impart education and training

- To receive suggestions

- To persuade people

- To improve morale

- To motivate people

The Communication Process

Communication is the process of passing information from one person to another.

Nature of Communication:1. Two way process

2. knowledge of language

3. the message should have substance

4. Communication may be made in gestures too

5. communication is a continuous process

6. communication may be formal or informal

Types of Communication :

1. Formal Communication : This type of communication follows the hierarchy ,(Scalar chain). It

is always authentic and in a written form such as policy manuals, orders, circulars and notices.

Any information that officially reaches an employee is called formal communication.

2. Informal Communication : This type of communication is the result of casual talk or personalcontact between two or more persons. Informal communication is also called as Grapevine.

Types of Grape Vine:

Send

er

Encoding Channel Decoding Receiver

Feedback

A

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Principles of Management & Professional Ethics