PRINCIPLES OF MANAGEMENT

UNIT-I

Management – Definition:

“Management is the art and science of getting work done by other peoples.”

F. W. Taylor - “Management is an art of knowing what is to be done and seeing that it is done in

the best possible manner.”

Henry Fayol - “Management is to forecast, to plan, to organize, to command, to co-ordinate and

control activities of others.”

Importance of Management

1. It helps in Achieving Group Goals - It arranges the factors of production, assembles

and organizes the resources, integrates the resources in effective manner to achieve goals.

It directs group efforts towards achievement of pre-determined goals. By defining

objective of organization clearly there would be no wastage of time, money and effort.

Management converts disorganized resources of men, machines, money etc. into useful

enterprise. These resources are coordinated, directed and controlled in such a manner that

enterprise work towards attainment of goals.

2. Optimum Utilization of Resources - Management utilizes all the physical & human

resources productively. This leads to efficacy in management. Management provides

maximum utilization of scarce resources by selecting its best possible alternate use in

industry from out of various uses. It makes use of experts, professional and these services

leads to use of their skills, knowledge, and proper utilization and avoids wastage. If

employees and machines are producing its maximum there is no under employment of

any resources.

3. Reduces Costs - It gets maximum results through minimum input by proper planning and

by using minimum input & getting maximum output. Management uses physical, human

and financial resources in such a manner which results in best combination. This helps in

cost reduction.

4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated

functions). To establish sound organizational structure is one of the objective of

management which is in tune with objective of organization and for fulfillment of this, it

establishes effective authority & responsibility relationship i.e. who is accountable to

whom, who can give instructions to whom, who are superiors & who are subordinates.

Management fills up various positions with right persons, having right skills, training and

qualification. All jobs should be cleared to everyone.

5. Establishes Equilibrium - It enables the organization to survive in changing

environment. It keeps in touch with the changing environment. With the change is

external environment, the initial co-ordination of organization must be changed. So it

adapts organization to changing demand of market / changing needs of societies. It is

responsible for growth and survival of organization.

6. Essentials for Prosperity of Society - Efficient management leads to better economical

production which helps in turn to increase the welfare of people. Good management

makes a difficult task easier by avoiding wastage of scarce resource. It improves standard

of living. It increases the profit which is beneficial to business and society will get

maximum output at minimum cost by creating employment opportunities which generate

income in hands. Organization comes with new products and researches beneficial for

society.

Nature/ Characteristics of Management

Universal: All the organizations, whether it is profit-making or not, they require

management, for managing their activities. Hence it is universal in nature.

Goal-Oriented: Every organization is set up with a predetermined objective and

management helps in reaching those goals timely, and smoothly.

Continuous Process: It is an ongoing process which tends to persist as long as the

organization exists. It is required in every sphere of the organization whether it is

production, human resource, finance or marketing.

Multi-dimensional: Management is not confined to the administration of people only,

but it also manages work, processes and operations, which makes it a multi-disciplinary

activity.

Group activity: An organization consists of various members who have different needs,

expectations and beliefs. Every person joins the organization with a different motive, but

after becoming a part of the organization they work for achieving the same goal. It

requires supervision, teamwork and coordination, and in this way, management comes

into the picture.

Dynamic function: An organization exists in a business environment that has various

factors like social, political, legal, technological and economic. A slight change in any of

these factors will affect the organization’s growth and performance. So, to overcome

these changes management formulates strategies and implements them.

Intangible force: Management can neither be seen nor touched but one can feel its

existence, in the way the organization functions.

Precisely, all the functions, activities and processes of the organization are interconnected

to one another. And it is the task of the management to bring them together in such a way

that they help in reaching the intended result.

Scope of Management

The field of management is very wide. The operational areas of business management may be

classified into the following categories:

(i) Production Management: Production management implies

planning, organizing, directing and controlling the production

function so as to produce the right goods, in right quantity, at

the right time and at the right cost. It includes the following

activities:

(a) designing the product

(b) location and layout of plant and building

(c) planning and control of factory operations

(d) operation of purchase and storage of materials

(e) repairs and maintenance

(f) inventory cost and quality control

(g) research and development etc.

(ii) Marketing Management: Marketing management refers to the

identification of consumer’s needs and supplying them the goods

and services which can satisfy these wants. It involves the

following activities:

(a) marketing research to determine the needs and expectation of consumers

(b) planning and developing suitable products

(c) setting appropriate prices

(d) selecting the right channel of distribution, and

(e) promotional activities like advertising and salesmanship to communicate with the

customers.

(iii) Financial Management: Financial management seeks to ensure the right amount and type

of funds to business at the right time and at reasonable cost.

It comprises the following activities:

(a) estimating the volume of funds required for both long-term and short-term needs of

business

(b) selecting the appropriate source of funds

(c) raising the required funds at the right time

(d) ensuring proper utilization and allocation of raised funds so as to maintain safety and

liquidity of funds and the creditworthiness and profitability of business, and

(e) administration of earnings

Thus, financial management involves the planning, organizing and controlling of the financial

resources.

(iv) Personnel Management: Personnel management involves planning, organizing and

controlling the procurement, development, compensation, maintenance and integration of human

resources of an organization. It consists of the following activities:

(a) manpower planning

(b) recruitments,

(c) selection,

(d) training

(e) appraisal,

(f) promotions and transfers,

(g) compensation,

(h) employee welfare services, and

(i) personnel records and research, etc.

Levels of Management

Top-Level Management: This is the highest level in the organizational hierarchy, which

includes Board of Directors and Chief Executives. They are responsible for defining the

objectives, formulating plans, strategies and policies.

Middle-Level Management: It is the second and most important level in the corporate ladder,

as it creates a link between the top and lower-level management. It includes departmental and

division heads and managers who are responsible for implementing and controlling plans and

strategies which are formulated by the top executives

Lower Level Management: Otherwise called as functional or operational level management. It

includes first-line managers, foreman, supervisors. As lower-level management directly interacts

with the workers, it plays a crucial role in the organization because it helps in reducing wastage

and idle time of the workers, improving the quality and quantity of output.

The three management levels form the management hierarchy, which represents the position and

rank of executives and managers in the chart.

UNIT - II

Definitions:

Gorge R. Jerry – "Planning is the selection and relating of fact and making & using of

assumptions regarding the future in the visualization and formalization of proposed activities

believed necessary to achieve deserved result".

Mc. Farland – "Planning may be broadly defined as a concept of executive action that embodies

the skills of anticipating, influencing and controlling the nature and direction of change" -

Anticipating, controlling everything for direction of change, believe that environment of

planning is very dynamic & ever changing

Planning is deciding in advance the future course of action. What is to be done in future?

When, what, why, where, who ,how are different aspects of planning .

Need, Importance and advantages of Planning

1. Basis of success

2. Keystone management function

3. To manage by objectives

4. To offset growing complexity of business

5. Better utilization of resources

6. To gain economy in operation

7. Establishes coordinated effort

8. Facilitates control

9. Coping with change

10. Improves competitive strength

11. Creates forward looking attitude

12. Promotes order

13. Prevents hasty judgment and haphazard action

14. Stay on track

15. Managing crises

16. Providing motivation

17. Promotes growth and improvement

18. Encourages creativity

19. Facilitates decentralization

20. It provides alternative courses of action

21. Efficient methods and procedures of action can be developed.

Steps in Planning or Process of planning

Planning involves a number of steps ranging from determining the objectives to follow-up action

as detailed below. The main steps that are taken in planning process are as follows:

1. Establishing Objectives:

Establishing the objectives is the first step in planning. Plans are prepared with a view to achieve

certain goals. Hence, establishing the objectives is an important step in the process of planning.

Plans should reflect the enterprise’s objectives. Objectives should clearly define as to what is to

be achieved by policies, procedures, rules, strategies, budgets and programmes. Plan must make

sure that every activity undertaken contributes to the achievement of objectives.

The objectives fixed must clearly indicate what is to be achieved, where action should take place,

who is to perform it, how it is to be undertaken and when it is to be accomplished. That is,

managers should be able to restate the objectives of the firm in definite and clear terms that will

motivate examination and evaluation of performance against targeted performance in the plan.

Objectives should be measurable.

2. Determining Planning Premises

This is the second step in planning. Premises include actual forecast data, policies and plans of

the enterprise. Planning involves looking into the future which necessitates the enterprise to

know, how future conditions will affect its activities. Thus, forecasting is an important step in

planning. There are two types of forecasting namely,

Prediction of general economic conditions

Prediction of market conditions for a specific product or service dealt with by the

enterprise.

Keeping the general economic conditions in mind, a study of the industry is made. Then the

manager proceeds to make a study of his company’s share of the market. Forecasting will reveal

those areas where control is lacking. Planning will be reliable when the forecast methods are

accurate. Hence, the success of the planning depends very much upon the forecasts.

3. Determining Alternative Courses

Determining alternative courses is the third step in the planning process. The planner should

study all the alternatives, consider the strong and weak points of them and finally select the most

promising ones.

4. Evaluating Alternative Courses

Alternative courses so selected should be evaluated in the light of premises and goals. Evaluation

involves the study of performance of various actions. Various factors such as profitability,

investment requirements, etc., of such alternatives should be weighed against each other. Each

alternative should be closely studied to determine its suitability.

Many other factors such are uncertain future trend, problems faced financially, future

uncertainties renders the evaluation process, complex and difficult. Usually, alternative plans are

evaluated against factors such as cost, risks, benefits, organizational facilities, etc. Computer

based mathematical plans and techniques can also be utilized to identify best course of action.

5. Selecting the Best Course

After having evaluated the various alternatives, the most suitable alternative is selected. With

this, the plan can be considered to have been adopted. It is exactly the point at which decisions

are made. Sometimes, in the best interests of the enterprise, several alternative courses can be

adopted.

6. Formulating Derivative Plans

Planning is not complete as soon as the best course is selected. The main plan should be

supported by a number of derivative plans. Within the framework of a basic plan, derivative

plans are formulated in each functional area. Segregation of master plan into departmental,

sectional and individual plans, helps to understand the real nature of future uncertainties. To

make the planning process more effective, it should also provide for a feedback mechanism.

These plans are meant for the implementation of the main plan.

7. Implementation of Plans

Implementation of plans is the final step in the process of planning. This involves putting the

plans into action so as to achieve the business objectives Implementation of plans requires

establishment of policies, procedures, standards, budgets, etc.

Types of plans

The major types of plans are classified into hierarchical, frequency-of-use (repetitiveness), time-

frame, organizational scope, and contingency.

Hierarchical Plans

Strategic plans (institutional)—define the organization’s long-term vision; articulate the

organization’s mission and value statements; define what business the organization is in

or hopes to be in; articulate how the organization will integrate itself into its general and

task environments.

Administrative plans—specify the allocation of organizational resources to internal

units of the organization; address the integration of the institutional level of the

organization (for example, vision formulation) with the technical core (vision

implementation); address the integration of the diverse units of the organization.

Operating plans (technical core)—cover the day-to-day operations of the organization.

Frequency-of-Use Plans

Standing Plans

Policies—general statements of understanding or intent; guide decision-making,

permitting the exercise of some discretion; guide behavior (for example, no employee

shall accept favors and/or entertainment from an outside organization that are substantial

enough in value to cause undue influence over one’s decisions on behalf of the

organization).

Rules—guides to action that do not permit discretion in interpretation; specify what is

permissible and what is not permissible.

Procedures—like rules, they guide action; specify a series of steps that must be taken in

the performance of a particular task.

Single-Use Plans

Programs—a complex set of policies, rules, and procedures necessary to carry out a

course of action.

Projects—specific action plans often created to complete various aspects of a program.

Budgets—plans expressed in numerical terms.

Time-Frame Plans

Short-, medium-, and long-range plans—differ in the distance into the future projected:

o Short-range—several hours to a year

o Medium-range—one to five years

o Long-range—more than five years

Organizational Scope Plans

Business/divisional-level plans—focus on one of the organization’s businesses (or

divisions) and its competitive position.

Unit/functional-level plans—focus on the day-to-day operations of lower-level

organization units; marketing, human resources, accounting, and operations plans

(production).

Tactical plans—division-level or unit-level plans designed to help an organization

accomplish its strategic plans.

Contingency Plans

Plans created to deal with events that might come to confront the organization (e.g.,

natural disasters, terrorist threats); alternative courses of action that are to be

implemented if events disrupt a planned course of action.

What is Management By Objectives?

Management By Objectives (MBO) is an performance management approach in which a

balance is sought between the objectives of employees and the objectives of an organization. The

essence of Peter Drucker ’s basic principle: Management By Objectives is to determine joint

objectives and to provide feedback on the results. Setting challenging but attainable objectives

promotes motivation and empowerment of employees. By increasing commitment, managers are

given the opportunity to focus on new ideas and innovation that contribute to the development

and objectives of organizations.

However, Peter Drucker sets a number of conditions that must be met:

Objectives are determined with the employees;

Objectives are formulated at both quantitative and qualitative levels;

Objectives must be challenging and motivating;

Daily feedback on the state of affairs at the level of coaching and development instead of

static management reports;

Rewards (recognition, appreciation and/or performance-related pay) for achieving the

intended objectives is a requirement;

The basic principle is growth and development not punishments.

UNIT – III

Organization -

Definition: Organization refers to a collection of people, who are involved in pursuing defined

objectives. It can be understood as a social system which comprises all formal human

relationships. The organization encompasses division of work among employees and alignment

of tasks towards the ultimate goal of the company. It can also be referred as the second most

important managerial function, which coordinates the work of employees, procures resources

and combines the two, in pursuance of company’s goals.

Need and importance of organization

A comprehensive approach to organizing helps the management in many ways. Organizing

aligns the various resources towards a common mission.

Efficient Administration

It brings together various departments by grouping similar and related jobs under a single

specialization. This establishes coordination between different departments, which leads to

unification of effort and harmony in work. It governs the working of the various departments by

defining activities and their authority relationships in the organizational structure. It creates the

mechanism for management to direct and control the various activities in the enterprise.

Resource Optimization

Organizing ensures effective role-job-fit for every employee in the organization. It helps in

avoiding confusion and delays, as well as duplication of work and overlapping of effort.

Benefits Specialization

It is the process of organizing groups and sub-divides the various activities and jobs based on the

concept of division of labor. This helps in the completion of maximum work in minimum time

ensuring the benefit of specialization.

Promotes Effective Communication

Organizing is an important means of creating coordination and communication among the

various departments of the organization. Different jobs and positions are interrelated by

structural relationship. It specifies the channel and mode of communication among different

members.

Creates Transparency

The jobs and activities performed by the employees are clearly defined on the written document

called job description which details out what exactly has to be done in every job. Organizing

fixes the authority-responsibility among employees. This brings in clarity and transparency in the

organization.

Expansion and Growth

When resources are optimally utilized and there exists a proper division of work among

departments and employees, management can multiply its strength and undertake more activities.

Organizations can easily meet the challenges and can expand their activities in a planned

manner.

Process of Organization

Step 1: Determination and classification of firm’s activities.

Step 2: Grouping of the activities into workable departments.

Step 3: Assignment of authority and responsibility on the departmental executives for

undertaking the delegated tasks.

Step 4: Developing relationship amidst superior and subordinate, within the unit or

department.

Step 5: Framing policies for proper coordination between the superior and subordinate

and creating specific lines of supervision.

Organization is a goal oriented process, which aims at achieving them, through proper planning

and coordination between activities. It relies on the principle of division of work and set up

authority-responsibility relationship among the members of the organization.

Organization structure: Organizational structure is a system used to define a hierarchy within

an organization. It identifies each job, its function and where it reports to within the organization.

This structure is developed to establish how an organization operates and assists an organization

in obtaining its goals to allow for future growth. The structure is illustrated using an

organizational chart.

Types of Organization Structure

Formal Organization Structure: The organization structure of jobs and positions, with

specified activities and relationships, is known as formal organization structure. It is created by

management, to attain the objectives of the company.

Line Organization: Line organization is the oldest and simplest pattern of organization, wherein

the supervisor has outright supervision over the subordinate. The flow of authority is from the

top level executive to the person at the lowest level of the organization’s echelon.

Functional Organization: As the name suggests, functional organization structure is one in which

the thorough task of managing and directing the employees, is grouped as per the functions or

type of work involved.

Line and Staff Organization: This type of organization structure is an improvement over the

traditional line organization. In line and staff organization primary and supportive activities are

related to the line of supervision by appointing supervisor and specialist, who are linked to line

authority.

Project Management Organization: Project Organization is not an independent organization,

like the organization structure discussed above. Instead it is a set up within an organization, so as

to accomplish a project or firm’s objectives. It is led by project manager, who is responsible for

project objectives.

Matrix Organization: Matrix organization is the emerging structure of the organization, which

is a combination of functional organization and project organization. In such an organization, the

functional departments such as production, accounting, marketing, human resource, etc.

constitute a vertical chain of command, while project division constitute horizontal line of

authority.

Informal Organization Structure: The relationship between the employees, that relies on

personal attitudes, prejudices and interests rather than procedures. It is system of personal and

social connection, whose creation is not needed by formal organization.

The organization structure is a basic idea, which depends on the activity authority relationship in

the company. It is designed in such a way to realize business objectives.

Span of Management

Definition: The Span of Management refers to the number of subordinates who can be managed

efficiently by a superior. Simply, the manager having the group of subordinates who report him

directly is called as the span of management.

UNIT – IV

Directing – Meaning

Direction is the process of instruction, guiding, supervising, and motivating people towards the

accomplishment of organizational goals. It is the function by which actual performance of

persons is guided towards common goals. Ernest Dale writes, “The directing phase of

management job is what many people think of as management itself: telling people what to do

and seeing that they do it,” The scope of directing is very wide. It includes staffing,

communicating, motivating, and development group performance.

Definition

1. In the words of Lloyd Baird and others, “Directing, the process of guiding the activities of a

group of people towards goal accomplishment, involves staffing, communication, motivating,

and working groups.”

2. In the words of Jon Pierce and Dunham, “Directing is the process though which employees are

led and motivated to make effective, efficient contribution to the realization of organization

goals.”

Importance of Direction

Main characteristics or importance of Directing are as follows:

1. Initiates Action

A directing function is performed by the managers along with planning, staffing, organizing and

controlling in order to discharge their duties in the organization. While other functions prepare a

platform for action, directing initiates action.

2. Pervasive Function

Directing takes place at every level of the organization. Wherever there is a superior-subordinate

relationship, directing exists as every manager provides guidance and inspiration to his

subordinates.

4. Continuous Activity

It is a continuous function as it continues throughout the life of organization irrespective of the

changes in the managers or employees.

5. Descending Order of Hierarchy

Directing flows from a top level of management to the bottom level. Every manager exercises this

function on his immediate subordinate.

6. Human Factor

Since all employees are different and behave differently in different situations, it becomes important

for the managers to tackle the situations appropriately. Thus, directing is a significant function that

gets the work done by the employees and increases the growth of the organization.

Principles of Directing

1. Maximum Individual Contribution

One of the main principles of directing is the contribution of individuals. Management should adopt

such directing policies that motivate the employees to contribute their maximum potential for the

attainment of organizational goals.

2. Harmony of Objectives

Sometimes there is a conflict between the organizational objectives and individual objectives. For

example, the organization wants profits to increase and to retain its major share, whereas, the

employees may perceive that they should get a major share as a bonus as they have worked really

hard for it.

Here, directing has an important role to play in establishing harmony and coordination between the

objectives of both the parties.

3. Unity of Command

This principle states that a subordinate should receive instructions from only one superior at a time.

If he receives instructions from more than one superior at the same time, it will create confusion,

conflict, and disorder in the organization and also he will not be able to prioritize his work.

4. Appropriate Direction Technique

Among the principles of directing, this one state that appropriate direction techniques should be

used to supervise, lead, communicate and motivate the employees based on their needs, capabilities,

attitudes and other situational variables.

5. Managerial Communication

According to this principle, it should be seen that the instructions are clearly conveyed to the

employees and it should be ensured that they have understood the same meaning as was intended to

be communicated.

6. Use of Informal Organization

Within every formal organization, there exists an informal group or organization. The manager

should identify those groups and use them to communicate information. There should be a free flow

of information among the seniors and the subordinates as an effective exchange of information are

really important for the growth of an organization.

7. Leadership

Managers should possess a good leadership quality to influence the subordinates and make them

work according to their wish. It is one of the important principles of directing.

8. Follow Through

As per this principle, managers are required to monitor the extent to which the policies, procedures,

and instructions are followed by the subordinates. If there is any problem in implementation, then

the suitable modifications can be made.

Leadership Definition - “Leadership might be defined as the art of influencing the behavior

and performance of followers (i.e. subordinates) towards the most enthusiastic attainment of

common objectives through inspiring people by the leader’s charisma, conduct and behavior.

“Leadership is a human characteristic which lifts man’s vision to higher sights; raises man’s

performance to higher standards and build men’s personality beyond its normal limits.” – Peter

F. Drucker

STYLES AND PATTERNS OF LEADERSHIP

A) Style based on attitude

1. Positive Leadership- In this style of leadership leader use positive rewards like recognition,

Pride & Praise as well as extrinsic rewards like salary hike, promotion, increase of perks &

allowances to get the work done from people. Positive leader has a mindset that rewards will

make employees happy & satisfied and will motivate them to work effectively and efficiently as

desired from them. People will always focus on improving their performance for getting more

rewards. This style of leadership leads to higher job satisfaction and performance.

2. Negative Leadership- In this style of leadership leaders use negative rewards like fear loss of

job, reprimand, demotion, fear of suspension, force, threats penalties or a few days off without

pay on people to get the work done from them. This style can help in getting good results in

many situations but it is not human in nature and creates a negative & non- acceptable image of

a leader in the mind of followers. It leads of more of bossism than leadership.

B) Style based on

use of Authority

1. Autocratic style- This style of leadership is also known as authoritarian or directive style.

This style involves retention of full authority by the leader. Leader makes all the decisions

without even consulting and involving employees. In this style of leadership leader only gives

order & instructions to their subordinates for getting the work done and also expects from

subordinates to follow the orders and instructions. Leaders assume full responsibility for all the

actions.

2. Democratic or Participative Style- A participative or democratic style of leadership is one in

which managers involve their subordinates in decision making. There is decentralization of

authority by leaders and they consult & encourage subordinates for participation in decision

making process. There is high regard for people and sufficient freedom is allowed to people to

work.

3. Free-rein Style- This style of leadership is also called as laissez- faire. In this style of

leadership leaders abdicate from leadership position and depend mostly upon the group to

establish its own goals and to solve their own problems. Subordinates are given high degree of

freedom in their operations. They are their own trainees and source of motivation. Free rein

leader avoids power & responsibility and only provides information & represents the group to

outsiders. This type of leadership is effective only when the group members are highly

knowledgeable, independent, motivated and fully dedicated to the firm.

C) Style based on Behaviour of leader- This type of leadership focus on behavior of leader

towards the task as well as the people who are performing the task. A four combination style of

leadership can be based on behavior of leader.

i. High-task and Low-Relationship- This type of leadership leader has the main emphasis on

the accomplishment of tasks and spends very less time to maintain relations & to provide

psychological support to employees. This is more of work-oriented approach and is suitable

where the employees are in experiences with the work to be performed. This type of leaders is

not necessarily rude or discourteous.

ii. High-Task and High Relationship- In this type of leadership style a leader gives high

emphasis to both task accomplishment as well as Relationship building with employees. Leader

spends considerable time to get work done and provide psychological support to employees.

This leadership style is best in situations where people need an active & involved leader as well

as in case of lack of self-confidence, or technical in employees.

iii. High Relationship and Low Task- A leader using this type of leadership style gives much

encouragement & psychological support to employees but gives a minimum guidance about the

task accomplishment.

iv. Low Relationship and Low Task- These leaders have a free-rein leadership style and give

very little support, encouragement, praise as well as guidance to do work to employees. This

style can be followed where subordinates are highly skilled & mature.

D) Style based on assumptions about people- Here leadership style depends upon the

assumption which a leader has about his subordinates. This two way classification of leadership

is based on MC Gregor’s theory X & theory Y of motivation. This style is basically of two types

i.Job-Centered Leadership- This is a task oriented style of leadership where by a leader

focus on getting work done effectively by employees. It is concerned with work designing,

production, planning, development of incentives, resource allocation to increase work

productivity. This type of leaders focus on making employee work and plan out for worker’s

job tasks and job out comes. This style of leadership is suitable for theory X leaders who

distrust people and believe in close supervision.

ii. Employee- Centered Leadership- This is people where leaders treat subordinates as

person, avoids close supervision, and actively considers needs of employees and encourages

them to glow, develop. This leadership style is for theory y leaders who trust their

subordinates and encourage their participation and development.

E) Style based on decision making - Renises likert classified four styles of leadership

i. Exploitive Authoritative- He is highly autocratic, little trust on subordinates; limits

decision-making at the tap, avoid upward communication & motivate people through fear.

ii. Benevolent authoritarian- This kind of leader has a patronizing attitude towards

employees, invites new ideas from subordinates allow some delegation and motivate then

by rewards and some use of punishment.

iii. Consultative Authoritarian- Leaders have substantial but not complete trust in

employees. They invite ideas from subordinates, allow for decision making by subordinates

in some case but act consultatively in various matters.

iv. Participative authoritarian- Leaders have complete trust in decision-making of

employees in all matters. He involves high level participation of subordinates, set high

performance of goals & act a source of knowledge & guidance for subordinates. According to

Likert those who apply 4th style of leadership are more successful as leaders.

F) Style based on concern for production versus concern for people:

Managerial Grid Style- This leadership style was given by Blake & Mouton. This grid

classifies leaders as having five dimensions- concern for people and concern for production. Grid

shows five combination of leadership style.

i. Impoverished Management- It has low concern for both people and production. The

leader has minimum involvement in his job and only act as a messenger for communicating

information from superiors to subordinates.

ii. Country club Management- Under this style a leader has no concern for production but

has only concern for people. He concentrates on warm human relations.

iii. Task Management- Under this style leads is highly concern for task management and little

or no concern for subordinates needs & motivation

iv. Team Management- Leaders has strong regard for both people and production. Team

leader’s leads to high morale and high efficiency.

v. Middle Road Management- Leader give medium concern for production and for people

and leader attains adequate level of performance by balancing efficiency with reasonable

goods human relations. Blake & Mouton suggests that the team leaders’ style (9, 9) is most

effective because it combines a high degree of concern for people as well as production.

Qualities for effective leadership

The following qualities are required to become a successful leader:

Attitude of accepting overall responsibility

Physical fitness

Pleasant personality

Administrative and Organizing ability

Farsightedness

Self-determination and control

Justice

Cooperative attitude

Courage and Initiative

Time consciousness

Work related knowledge

Motivation - Definition: Motivation is a driving force which affects the choice of alternatives

in the behaviour of a person. It improves, stimulates and induces employees leading to goal-

oriented behaviour.

For example, promotion is a motivating factor as employees work to achieve preset targets for

getting a promotion. Motivation can be monetary, e.g., rewards given in the form of a car or a

hike in the salary or it can be non-monetary in the form of public appreciation.

UNIT – V

Coordinating

Definition: Coordination can be described as that invisible cord, which runs through all the

activities of the organization and binds them together. It is not a function of the management;

rather it is the essence of management, which is needed at all levels and at each step of the firm,

to achieve the objectives of the organization. Coordination is that hidden force that links all the

functions of the management, i.e. planning, organizing, staffing, directing and controlling.

Need

We all are aware of the fact that there are several departments in an organization, such as

Finance, Purchase, Production, Sales, Human Resource, Marketing, Research and Development

etc. and the work of all the departments are interlinked and interdependent. Further, there are

three levels in organizational hierarchy, wherein:

1. Top-level: Comprises of the Board of Directors, Chief Executives, Managing Directors, etc.

2. Middle-Level: Comprises of departmental heads and managers.

3. Lowest-Level: Comprises of supervisors, first-line managers and foreman.

Coordination is a process, which ensures that various departments, units and levels of the

organization work smoothly and continuously in tandem, i.e. in the same direction, towards the

accomplishment of organizational goals, while effectively utilizing the resources.

It aims at involving all the elements of the company, in the plan, strategy or task, to get input

from everyone and attain best results.

Coordination tends to lineup the resources, people and efforts in such a way that there is no

chaos, hustle, disorder and conflict, regarding any issue in an organization. Hence it is not wrong

to say “With coordination comes harmony in the performance of organizational tasks”.

Principles of coordination

The various principles of coordination, according to Mary Parker Follet, may be listed

thus:

(i) Principle of Direct Contact: In the first principle, Mary Parker Follet states that coordination can be achieved by direct

contact among the responsible people concerned. She believes that coordination can be easily

obtained by direct interpersonal relationships and direct personal communications.

Such personal contacts bring about agreement on methods, actions, and ultimate achievement of

objectives. Direct contacts also help wither away the controversies and misunderstandings. It is

based on the principle, that coordination is better achieved through understanding, not by force,

order and coercion.

(ii) Early Stage: Coordination should start from the very beginning of planning process. At the time of policy

formulation and objective setting, coordination can be sought from organisational participants.

Obviously, when members are involved in goal-setting, coordination problem is ninety percent

solved. It is because participative goal-setting enables agreement and commitment to

organizational goals and there is no question of conflict and incongruence of goals of individuals

and organizations. Coordination, if not initiated in the early stages of planning and policy

formulation, becomes difficult to exercise in the later stages of execution of plans.

(iii) Reciprocal Relationship: As the third principle, Mary Follet states, that all factors in a situation are reciprocally related. In

other words, all the parts influence and are influenced by other parts. For example, when A

works with B and he, in turn, works with C and D, each of the four, find themselves influenced

by others that is influenced by all the people in the total situation.

Follet contends that this sort of reciprocal relation and this sort of interpenetration of every part

by every other part, and again by every other part, as it has been? Permeated by all, should be the

goal of all attempts at coordination.

(iv) Principle of Continuity: The fourth principle, advocated by Follet, is that coordination is a continuous and never-ending

process. It is something which must go on all the times in the organization. Further, coordination

is involved in every managerial function.

(v) Principle of Self-Coordination: In addition to the four principles listed by Follet above, Brown has emphasized the principle of

self-coordination. According to this principle, when a particular department affects other

function or department, it is in turn, affected by the other department or function.

This particular department may not be having control over the other departments. However, if

other departments are modified in such a fashion, that it affects the particular department

favorably, then self-coordination is said to be achieved. For instance, as we know, there must be

coordination between the level of production and sales.

When the production department alters its total production in such a way, so as to suit the sales

capacity of the marketing department [even before the marketing department makes request to

cut down production or to increase production, then self-coordination is said to have taken place.

This, of course, requires effective communication across the departments. This principle is rarely

practiced in day-to-day life.

Approaches to achieve effective Co-ordination or

Techniques of effective Coordination in Organization

Some of the techniques that are used to achieve effective coordination are given below:

1. Direct Contact: One of the most effective means of achieving coordination is direct contact.

Written communication, modern electronic, mechanical devices, etc., can also be used.

2. Group Meetings: Group meetings are said to be an effective means of achieving coordination.

At the time of meeting, superior comes into personal contact with those connected with the

actual problems. Such meetings encourage the people to integrate their efforts. Coordination can

be achieved through regular meetings of superiors and subordinates.

3. Organizational Structure: Coordination can be achieved only when the authority and

responsibility of each and every person are clearly defined. In this connection, it was quoted

by J.O. Shaughnessy as follows:

“You cannot always bring together the results of department activities and expect to co-ordinate

them. You must have an organization which will permit inter-weaving all along the line “

In other words, the organizational structure should be designed properly so as to permit

coordination among various activities along the line itself.

4. Effective Communication: In achieving coordination, effective communication plays a vital

role. Communication greatly helps in coordination. The purpose of communication is to promote

deep understanding among members by bringing and maintaining coordination in order to

achieve the ultimate goals.

Effective Communication is a process whereby ideas and images of one person are transmitted to

another person. Coordination between various individuals and activities is brought out by

communication. Effective communication facilitates information and exchange of ideas which

helps to achieve the common purpose. Coordination is facilitated by exchange of such ideas and

information and brings people together.

5. Committees: In order to coordinate the various activities, various types of committees may be

appointed. Committees provide the means for synchronizing various efforts. Committees develop

better understanding and morale among the members. They are greatly advisory in nature and

make use of the best efforts of the members.

The success of the committee depends very much on its composition and the manner in which it

functions. Examples of such committees are – committees on manufacturing methods, complaint

committee, suggestion committee on welfare work, etc.

6. Staff Meetings: Staff meetings at regular intervals helps in achieving effective coordination

because such meetings provide opportunities for frank discussions and better exchange of ideas

of people from different sections. This infuses a feeling of unity among the members which

makes them to jointly work for the organization.

7. Effective Leadership: Leader inculcates a feeling of collectivism in the employees and forces

them to work as a team. Individuals within the group may possess varied interests and multiple

goals. Leader reconciles these conflicting goals and restores equilibrium. A good leader can

achieve coordination at all stages. Hence, effective leadership is essential for achieving

coordination.

8. Informal Coordination: Many organizations adopt informal means of coordination through

processes of social, unofficial interactions, relationship and mutual adjustments. They are very

often more effective than formal means.

Controlling – Meaning

Definition: Control is a primary goal-oriented function of management in an organization. It is a

process of comparing the actual performance with the set standards of the company to

ensure that activities are performed according to the plans and if not then taking corrective

action.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking

corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Elements of controlling

The four basic elements in a control system are:

1. the characteristic or condition to be controlled

2. the sensor

3. the comparator

4. the activator

They occur in the same sequence and maintain consistent relationships to each other in every

system.

The first element is the characteristic or condition of the operating system to be measured.

Specific characteristics are selected because a correlation exists between them and the system's

performance. A characteristic can be the output of the system during any stage of processing

(e.g. the heat energy produced by a furnace), or it may be a condition that is the result of the

system (e.g. the temperature in the room which has changed because of the heat generated by the

furnace). In an elementary school system, the hours a teacher works or the gain in knowledge

demonstrated by the students on a national examination are examples of characteristics that may

be selected for measurement, or control.

The second element of control, the sensor, is a means for measuring the characteristic. For

example, in a home heating system this device would be the thermostat, and in a quality-control

system this measurement might be performed by a visual inspection of the product.

The third element of control, the comparator, determines the need for correction by comparing

what is occurring with what has been planned. Some deviation from the plan is usual and

expected, but when variations are beyond those considered acceptable, corrective action is

required. It involves a sort of preventative action which indicates that good control is being

achieved.

The fourth element of control, the activator, is the corrective action taken to return the system to

its expected output. The actual person, device, or method used to direct corrective inputs into the

operating system may take a variety of forms. It may be a hydraulic controller positioned by a

solenoid or electric motor in response to an electronic error signal, an employee directed to

rework the parts that failed to pass quality inspection, or a school principal who decides to buy

additional books to provide for an increased number of students. As long as a plan is performed

within allowable limits, corrective action is not necessary; however, this seldom occurs in

practice.

Information is the medium of control, because the flow of sensory data and later the flow of

corrective information allow a characteristic or condition of the system to be controlled.

Significance or Advantages of controlling

Saves time and energy

Allows managers to concentrate on important tasks. This allows better utilization of the

managerial resource.

Helps in timely corrective action to be taken by the manager.

Managers can delegate tasks so routinely chores can be completed by subordinates.

On the contrary, controlling suffers from the constraint that the organization has no control over

external factors. It can turn out to be a costly affair, especially for small companies.

Steps in control process or Process of Controlling

Control process involves the following steps as shown in the figure:

Establishing standards: This means setting up of the target which needs to be achieved to

meet organizational goals eventually. Standards indicate the criteria of performance.

Control standards are categorized as quantitative and qualitative standards. Quantitative

standards are expressed in terms of money. Qualitative standards, on the other hand,

include intangible items.

Measurement of actual performance: The actual performance of the employee is measured

against the target. With the increasing levels of management, the measurement of

performance becomes difficult.

Comparison of actual performance with the standard: This compares the degree of

difference between the actual performance and the standard.

Taking corrective actions: It is initiated by the manager who corrects any defects in actual

performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to

the standard plan. An effective control system enables managers to avoid circumstances which

cause the company’s loss.