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National Institute of Business ManagementChennai - 020
FIRST SEMESTER EMBA/ MBA
Subjet ! "#ini$les an% "#aties of Management
En#ollment No! ! MBA&/MA'&(N/))*2&+,2,.2&&F Roll No! ! N&(N/))*2
1. What are the fundamentals of staffing and manpower? Explain the
different methods of selection recruitment, training and development.
FUNDAMENTALS OF STAFFING
Organizations require the services of a large number of personnel. These
personnel occup the various positions created through the process of organizing.
Each position of the organization has certain specific contributions to achieve
organizational ob!ectives. "ence the person occuping the position should involves
matching have sufficient abilit to meet its requirements. #taffing basicall
involves matching !obs and individuals. This ma require a number of functions
li$e manpower planning, recruitment, selection, training and development,performance appraisal promotion, transfer, etc. %arious authors loo$ at staffing as
one of the elements of organizing &rocess.
The responsibilit for #taffing rests on all managers at all levels of the
organization. 't increases as one goes up in the organizational hierarch. (or
example chief executive ta$es active interest in the selection of personnel
particularl at higher levels. #imilarl managers at other levels are involved in
some form of staffing function for example, )esides selection of subordinates for
their departments, the are involved in their *aining performance appraisal ,etc.+ormall, managers tr to ensure two things. (irst, the want that the get
subordinates who are capable of performing the wor$ of their departments .#econd,
the want that their subordinates re trained and developed appropriatel so that
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their performance increases and there is suitable replacement of personnel whose
positions fall vacant because of an reason.
'n order to facilitate the effective performance of staffing function, personneldepartment is created in large organizations. This department is basicall staff
department. 'ts primar responsibilit is to ta$e those aspects of staffing which
cannot he performed well b line managers either because discharge of such a f
action requires the use of specific s$ills not adequatel possessed b line managers
or because line managers ma not get enough time to go through these aspects.
MANPOWER PLANNING
&lanning for manpower resources ma!or managerial responsibilit to ensure
adequate suppl of personnel are the right time both in terms of their qualit and
aptitude and effective utilization of these personnel.
Objectives of Manpowe P!annin"
. -an power planning enables an organization forecast its manpower
requirement
. -anpower planning helps the organization to match its power with s$ills
necessar for achieving its ob!ectives
/. -anpower planning helps organization to $now how its personnel are
emploed and how their s$ills are being used
0. #stematic manpower planning facilities similar approach in other aspects of
staffing
MANPOWER PLANNING PRO#ESS
-anpower planning considers matching all !obs and individuals in future. #incethere is enough time, the organization can achieve this b ta$ing sstematic
manpower planning. The process of manpower planning entails consideration of
several steps with relevant inputs before the manpower demand can be arrived
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at, on the one hand, and identification of the sources of suppl to meet the
demand ta$ing into account the several constraints on the other hand.
$%Pojectin" Manpowe Re&'ie(ents
The first essential step in manpower planning is to forecast
organization structure that will meet the future needs of the
organization. The basic exercise that has to be underta$en in this
context is to arrive at the scale of business activit over a time period.
2. )ob Ana!*sis1
2ob analsis can be directed along the following lines3
4i5 What is the basic ob!ective of the !ob? What is the purpose of the
segment of the organization to which the !ob is related?
4ii5 What tpes of plans and pro!ects are underta$en in this !ob?
4iii5 What tpes of decisions are to be made b the incumbent on the
!ob?
4iv5 What is the authorit of the !ob? "ow man subordinates will
wor$ under him? 6an this !ob alter the present organization
structure? 'f es, in what wa?
4v5 What tpe of personnel does the incumbent contact?
4vi5 What are the requirements of personal attributes of incumbent in
terms of education, training, experience, apprenticeship, phsical
strength, mental capabilities, social s$ills, etc.
3. Manpowe Invento*1
-anpower inventor is related to the identification of $e personnel in
the organization and cataloguing their characteristics without reference to
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the present positions held b them. 't provides information about present
and future personnel being available in the organization.
4i5 The first step in manpower inventor is the determination ofpersonnel whose inventor is to be prepared.
4ii5 7fter determination of personnel to be included in manpower
inventor, detailed information about them is collected. The
information ma be factual regarding age, education, experience,
emploment records, merit rating histor, health status, retirement
data, results of pschological and other tests etc.
4iii5 The third step of manpower inventor involves appraisal of
personnel included in inventor. This will give the information
about present and potential talents of each individual.
4iv5 7fter appraising all personnel included in manpower inventor,
detailed stud will be made of those individuals who have high
potential for promotion and holding of $e positions in the
organization.
0. I+entification of Gap between Avai!ab!e an+ Re&'ie+ Manpowe
When all these exercises arc underta$en, the organization is in a position
to determine the actual needs of personnel and their availabilit. These
factors will, however, be affected b the rate of loss of personnel.
Therefore, the additional requirement of personnel will be equal to
manpower required and manpower available without considering loss of
personnel.
RE#RUITMENT AND SELE#TION
*ecruitment and selection process starts after the identification ofvacancies to be filled up. While recruitment is concerned with the
identification of sources from where the personnel can be emploed and
motivating them to offer for the emploment, selection ta$es care of
choosing the most suitable personnel for emploment. (lippo has defined
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recruitment as follows3 8*ecruitment is the process of searching for
prospective emploees and stimulating them to appl for !obs in the
organization8.
So'ces of Manpowe S'pp!*
+ormall, an organization can fill up its vacancies either through
promotion of people available in the organization or through the selection
of people from outside. Thus there can be two sources of suppl of
manpower 9 external and internal. The first problem is to identif outside
sources. +ormall, following outside sources are utilized for different
positions.
. A+vetise(ent97dvertisement is the most effective means to search
potential emploees from outside the organization.
. E(p!o*(ent A"encies 9 -an organizations get the information
about the prospective candidates through emploment agencies. 'n our
countr, two tpes of emploment agencies are operating3 public
emploment agencies and private emploment agencies. There are
emploment exchanges run b the government almost in all districts. The
emploment see$ers get themselves registered with these exchanges.
/. On #a(p's Rec'it(ent: -an organizations conduct preliminar
search of prospective emploees b conducting interviews at the
campuses of various institutes, universities, and colleges. This source is
quite useful or selecting people to the posts of management trainees,
technical supervisor, scientist, and technicians.
0. Dep'tation: -an organizations ta$e people on deputation from
other organizations. #uch people are given choice either to return to their
original organization after a certain time or to opt for the present
organization.
;. E(p!o*ee Reco((en+ations: Emploee recommendations can be
considered to emplo personnel particularl at the lower levels.
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-% Se!ection Tests : -an organizations hold different $inds of
selection tests to $now more about the candidates or to re!ect the
candidates who cannot be called for interview etc.
.% Inteview : #election tests are normall followed b personal
interview of the candidates.
/% #0ec1in" of Refeences9 -an organizations as$ the candidates to
provide the names of referees from whom more information about the
candidates can be solicited.
2% P0*sica! E3a(ination 9 &hsical examination is carried out to
ascertain he phsical standards and fitness of prospective emploees. The
practice of phsical examination varies a great deal both in terms of
coverage and timing.
4% Appova! b* Appopiate A't0oit* 9 On the basis of the above
steps, suitable candidates are recommended for selection b the selection
committee or personnel department.
5% P!ace(ent97fter all the formalities are completed, the candidates are
placed on their !obs initiall on probation basis. The probation period
ma range from three months to two ears.
TRAINING AND DE6ELOPMENT
The term training is concerned with imparting specific s$ills for
particular purposes. (or example, (lippo has defined training as 8the act
of increasing the $nowledge and s$ills of an emploee for doing a
particular !ob8. >evelopment has been defined as follows3 8-anagement
development is all those activities and programmes when recognized and
controlled, have substantial influence in changing the capacit of theindividual to perform his assignment better and in so doing are li$el to
increase his potential for future management assignments8.
Ro!e of Tainin" an+ Deve!op(ent
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+o organization has a choice of whether to train its emploees or not, the
onl choice is that of methods. The primar concern of an organization is
its viabilit, and hence its efficienc. There is continuous environment
pressure for efficienc, and if the organization does not respond to thispressure, it ma find itself rapidl losing whatever share of mar$et it has.
Training can pla the following roles in an organization.
. Incease Efficienc*9 Training plas active role in increasing efficienc
of emploees in an organization. Training increases s$ills for doing a !ob
in better wa.
% Incease in Moa!e of E(p!o*ees 9Training increases morale of
emploees. -orale is a mental condition of an individual or group whichdetermines the willingness to cooperate.
/. 7ette ,'nan Re!ations9 Training attempts to increase the qualit of
human relations in an organization.
0. Re+'ce+ S'pevision9 Trained emploees require less supervision.
The require more autonom and freedom.
;. Incease+ O"ani8ationa! 6iabi!it* an+ F!e3ibi!it*9 Trained people
are necessar to maintain organizational viabilit and flexibilit. %iabilit
relates to the survival of the organization during bad das, and flexibilit
relates to sustain its effectiveness despite the loss of its $e personnel and
ma$ing short9term ad!ustment with the existing personnel.
I+entif*in" Tainin" Nee+s
The basic aim of training is to induce a suitable change in the individual
concerned.
. O"ani8ation Ana!*sis9 Organization 7nalsis is the first factor for
identifing training needs. 't is a sstematic effort to understand where
training effort needs to be emphasized in the organization.
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. Tas1 Ana!*sis9 Tas$ analsis entails a detailed examination of a !ob,
its various operations, and the conditions under which it has to be
performed.
/. Man Ana!*sis 9 The focus of man analsis is on the individual
emploee, his abilities, his s$ills, aria the inputs required for !ob
performance, or individual growth and development in terms of career
planning. -an analsis helps to identif whether the individual emploee
requires training and, if so, what $ind of training.
TRAINING MET,OD
The range of training methods is such that the can provide opportunit
to uns$illed to become s$illed the offer people to be promoted at
various levels of the organization. Training methods are means of
attaining the desired ob!ectives in a learning situation. These methods can
be grouped in some categories on various bases.
On9the !ob training methods
. On specific !ob3
7. Experience
). 6oaching
6. @nderstud
. &osition rotation
/. #pecial pro!ects, tas$ forces, etc.
0. 7pprenticeship
;. %estible school
Off9the !ob training methods
. #pecial courses and lectures
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. 6onference
/. 6ases
0. *ole plaing
;. -anagement games
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'n off9the9!ob training, a trainee has to leave his place of wor$ing and
devote his entire time for training purpose. >uring this period, the trainee
does not contribute anthing to the organization.
% Specia! #o'ses an+ Lect'es 9 #pecial courses and lectures are
$nowledge based training methods. 'n these programmes, an effort is
made to expose participants to concepts and theories, basic principles,
and pure and applied $nowledge in an sub!ect area.
. #onfeence9 'n order to overcome the limitations of lecture method
which emphasizes onl one wa of communication, that is, from trainer
to trainee, man organizations have adopted guided9discussion tpe of
conferences in their training programmes.
/. #ases 9 6ase method of training has been developed b "arvard
)usiness #chool of @.#.7. 't is one of the most commonl used training
methods not onl for business executives but also for management
institutes.
0% Ro!e P!a*in"9 *ole plaing is a 4mining technique which can be used
ver easil as a supplement to various training techniques. The concept
of role plaing has been drawn from drama and pla in which actors plathe various roles.
;. Mana"e(ent Ga(es9 -anagement games are used to stimulate the
thin$ing of people to run an organization or its department. The game can
be used for developing s$ills for a variet of purposes li$e investment
strateg, mar$eting strateg, production strateg, collective bargaining,
etc.
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=. In9bas1et E3ecise 9 'n9bas$et exercise is a simulation technique
designed around the Cincoming mailC of a manager. 7 variet of situations
is presented in this exercise which would usuall be dealt b a manager
in his tpical wor$ing da.
A. Sensitivit* Tainin" 9 &robabl no other training technique has
attracted so much attention or controvers in recent ears as sensitivit
training. -an of its advocates have an almost religious zeal in their
enchantment with the training experience. #ome of its critics match this
fervor in their attac$s on the technique. 'n part as a result of criticisms
and experience, a somewhat revised approach, often described as team
development training, has appeared.
B. Tansactiona! Ana!*sis : Transactional analsis 4T75 is used to
develop better interpersonal interactions among individuals. 't involves
understanding of personalit factors of individuals and their ego with
which the interact.
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4. Explain the nature and functions of >irecting.
NATURE AND FUN#TION OF DIRE#TING
Etmologicall directing is to point or aim to point out the proper course to
guide to order, to plan and superintend to command to counsel. >irecting
ma thus be conceived as a vector with two dimensions namel 4a5
magnitude and 4b5 aim or direction. Therefore directing must have an aim
which in fact is the goal of the enterprise. Without an aim there is no
direction and therefore, no directing. The areas that are directed are the
enterprise as a whole, the total sstem, loc$ stoc$ and barrel9the enterprise
structure and the human elements that man it.
T0e ,'(an E!e(ent
"uman element is emphasized in the tas$ of directing. The enterprise must
produce tangible goods and services of a qualit and at a price that must sell
in the competitive -ar$et. 7nd this managing has to be achieved through
the human element of the enterprise. Without harnessing the manpower to
its full productive capacit, good wor$ done in the other managerial
functions, such as planning, organizing and staffing, would remain sterile
and unproductive. The human clement itself is a productive factor, whether
emploees at lower levels or managers from bottom upward. Each wor$er is
thin$ing and feeling unit. Each has a compulsion 4wages and discipline5 to
wor$ each also has a will 4the natural human passion for fulfillment5 to
wor$. 't is the tas$ of the directing function that the will and the compulsion
are not at loggerheads. -ore than this, each man is either a co9operator or a
contender. 7 man is seldom a piece, alone he is alwas the member of a
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group, and then the manager. "e is the more complex man : b education
and environment. "e occupies a higher centre of power and influence in the
organization hierarch. "e is closer to the enterprise goal9has more access toit9wields more influence on it, for good or evil.
In+ivi+'a! 9 an+ t0e Go'p
The @niverse of the directing functions is the world of men within the
enterprise. 'ts sub!ect is the man as the unit. We will attempt here a surve of
the human behavior individuall and in groups which has a distinct
relevance to their status as participants in the process of enterprise
management and therefore, a direct bearing on the directive function. -an is
a bundle of conflicts. This conflict shapes his conduct within the enterprise,
in his interpersonal relationships, how he wor$s for the enterprise, how he
discharges his obligations to other groups and to the enterprise. #econd man
is self9inconsistent. 't is both a strength and wea$ness in hispartnership in
the enterprise effort. 't is also a challenge and opportunit of the directing
authorit. "e can be changed, directed, managed or developed. Third man is
primaril emotional, egoistic. "e is logical to a point. )ut if ou can rouse
him 4and muse is an emotional word5 he can wor$ wonders beond normal
boundaries. +egativel, if he is hurt, affronted, his wrath is roused, he can be
a nuisance. The range between his use and uselessness is enormous.
-anaging the ego 4and the ego status5 of the human element of the
enterprise need to be consciousl pursued b the directing function. Ever
man has a secret life and this is not onl in his emotional and pschological
self but in his wa of life. &art of it need not concern us, as the enterprise
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manager, but quite a part reveals itself in his in9enterprise behaviour which
cannot be overloo$ed. This element decides between his openness, candour,
cooperative team spirit and his secretiveness, slness, subterfuge, habit ofpulling strings and spreading stench and foul air all around. 't should be
understood that the organizational man cannot be all open, direct,
straightforward. #ecretiveness should not be encouraged it is the one surest
wa how dsfunctional conflicts raise their heads. #ixth, there are formal
groups within the enterprise, functions divisions, departments, cadres,
grades and others. These groups function openl with assigned tas$s, within
the recognized organizations structure. There are other groups, man of
which are unobserved9onl felt and perceived. The inner logic of such
informal grouping ma be divided into six motives3
4i5 #urvival. 7s in nature, so in an enterprise, the group is a more
effective unit than the lone individual in the struggle for survival.
4ii5 7 genuine fondness, commonness of li$es and disli$es ma provo$e
an informal group, although the cementing of such a group is often
looser apt to snap under stress and strain.
4iii5 The motive of gain is a good bond holding together a group. 't is one
step more active than the survival group.
4iv5 7 group often functions for revenge.
4v5 7 man also forms or !oins a group for sport and pleasure, to combat
boredom and drudger of the wor$place. #uch a group is
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comparativel harmless and neutral to enterprise interest but ma still
cause waste and dissipation of enterprise time and direction.
4vi5 (inall, a man see$s a group where he can feel important, here he can
show off, where he has others who praise him for qualities of which
he see$s to boast and which he desires to possess.
Two important points need to be remembered b the directing functionar.
4i5 #uch informal groups often spell potential harm to the enterprise. The
have to be watched, spotted and discouraged.
4ii5 The groups do not wor$ within the rigid boundaries under which the
have been described. #eventh, no man is free from worries and
frustrations. "e does not leave these behind, at home, when he
centers the wor$ place he carries the stress and strain into it. Eight,
the emploee is not interested in the organization unless it is for what
the organization can give him. The lesson of this observation is thatthe enterprise and the !ob must be made worthwhile for the man.
+inth, the man is usuall s$eptical about the senior. This is not an
intrinsic situation but a derived one. Tenth, both the managerial staff
and others can be
changed and for the benefit of the enterprise. Eleventh, the unit of the
enterprise man is his famil. -ore precisel, the manCs world iscomposed of three concentric spheres. The inner sphere is he and his
famil. The interest of this inner group is paramount. 't will easil
oven ide the interest9all that concern the enterprise. The second
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sphere of his interest comprehends his friends and closest associates.
"e will use his position in the enterprise to wor$ for this group. The
third sphere includes the manCs wide social contract9hisacquaintances with whom he ma have a bond of shifting quid pro
quo give and ta$e. (inall, directing and leadership consist in
directing and leading people. 'n all wal$s of life, leaders are few,
followers are man. "ero worship is a trait not uncommon in human
nature.
The 7verage -an The concept of the average man9the averageeconomic man or the average social man9can be traced to the
classical economic theorists. The economic behavior of the common
man was postulated and theorized on assumptions on how the
average economic man would behave, given certain economic
environmental conditions. Dater studies and empirical testing
established that there are man ifs and butCs and exceptions in the
application of the classical economic theories in real life situations.
>irecting men is no substitute for directing the man as he is. The
enterprise man contributes to the wor$ and ob!ective of the group to
which he belongs 4and through the group, to the enterprise ob!ective5
his own wor$ and attitudes, roup dnamics, in which the members
of the group combine and participate disclose a pattern of group
behaviour, but no two groups behave ali$e nor does the same getup
behave or react to environment identicall at different times or under
different sets of impulses.
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The >irecting (unction and the (ollowers 't needs to be emphasized
that the directing function directs, guides, harmonizes and manages
the human element9not as power or wisdom from outside the zone ofoperation. The truth is far from it. The followers and subordinates are
ver much part of him and of his function. "e appraises through their
experience and their own assessment of situations. "e gleans their
wisdom and their s$ills4 much as a s$illed gardener gleaning flowers5
puts the string of harmon round them and snthesizes their efforts9
labor, initiative, resourcefulness and gives them a direction, a goal to
achieve, and avenue to reach the goal. "is followers and subordinates
are his raw materials his bric$s and mortar, cla and timber, the
colour and the brush out of which all, he must raise the architecture, a
wor$ or art and achievement. The elements are all there, bonded,
recreated as it were, into a new weapon of power and success.
#ome Theories and 6oncepts of -an and his +ature &schologist,
Edgar ". #chein, in his boo$, COrganizational &schologC,
formulated four concepts of the developing man. These in summar
are, 4i5 -an is basicall an economic animal and will pursue the aim
of maximizing his economic gain.
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;.Explain the methods of >epartmentation.
4iv5 The demand on the ma!or departments li$e production, mar$eting, finance
etc, for ad!ustments to cater to the needs of the customer9wise departmental
setup, often cause overall managerial problems. 4A5 ) &rocess or &lant This
method is similar to product9based departmentation. 'nstead of the product
forming a ma!or division of the enterprise, a ma!or process or composite plant or
equipment constitutes a significant segment 4centre5 of enterprise operation. 4B5
) 6ommittees 6ommittees sometimes are placed in charge of functions and
ta$e the place of department. This method of depirlmentation is seen in
operation in academic and research institutions and universities, although in an
organization where the ma!or functions are mainl deliberative and directive and
where the output of the function demands independent specialist views to be
brought to bear on it, this method ma be adopted. 4F5 -atrix or rid -ethodof >epartmentation The -atrix 4or rid5 structure is a mosaic of tas$ and
functions. Often the situation is, as in a sizeable program or pro!ect the tas$ is
large and rewarding, et temporar, as all programmed must be completed.
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The advantages of the method are3 4i5 @nit of command so far as the pro!ect is
concerned the pro!ect leader or manager is accountable for the success of the
pro!ect. 4ii5 The pro!ect manager can draw on the specialist 4functional5 servicesof the other departments to complete the networ$. 4iii5 7s individual pro!ects are
completed and wound up, the functional services are released, with ease and
flexibilit. These ma !oin other pro!ects which ma replace the completed ones
or attend to other basic ob!ectives of the 'nstitution. 4iv5 The method provo$es
functional 4as opposed to dsfunctional5 conflicts which is health :especiall
in academic institution. 4v5 't produces econom of efforts and expenses. 4vi5 't
helps speed and flexibilit in organizing pro!ects and consultation services.
7mong its limitations ma be mentioned3 4i5 'nter functional 4interdisciplinar5
dsfunctional conflicts cannot be ruled out. 4ii5 >iscordance between the pro!ect
manager and the functional hands is li$el. 4iii5 When the organization has other
demands on the functional services for its other ob!ectives besides the pro!ects,
competing claims 4and quarrels5 on the functional resources ma result.
>E&7*T-E+T7T'O+
The logic of departmentation is two9fold3 4a5 the size of an enterprise, 4b5 the
growth of specialization 4division of labour5 in the activities of the enterprise.
+ormall, a manager can 4directl5 control up to a limit of the size of activities.
Dogicall, it helps a manager to control the subordinate activities in the form of
logicall bound 4homogeneous5 tas$s and functions. >epartmentation, then is
the process of dividing the enterprise activities into manageable units 4b size5,
grouped on the logic of their internal similarit 4homogeneit5.
-ethods of >epartmentation9 &attern and 6riteria
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4'5 ) #imple +umbers The number of persons pursuing a set of activities can
be the basis of departmentation. This method is limited and is suitable in
situations where the wor$ is repetitive where manpower is the most importantcondition, where group efforts are as important as individual efforts and where
the group tas$ 4output5 can be related to number in the group.
45 ) Time This method of forming groups has limited applicabilit. 't often
goes with the first methods so that number in the group wor$ing for a defined
period ma$es the !oint criterion of grouping.
4/5 ) (unction 7 function stands for a composite concept which includes3
4a5 4b5 4c5 4d5
the tas$ 4homogenous5 the s$ill 4specialization5 required for the tas$ the service9
discrete and well defined, and clear cut ob!ective.
(unctional departmentation offers one of the most logical method of divisioning
4grouping5 enterprise activities. 't is one of the most commonl used methods,
either independentl or in combination with others. The ma!or functional
divisions are production, mar$eting, finance and personnel. +ote that these are
lin$ed with the ma!or4divisions5 ob!ectives of an enterprise demand specific
s$ill and training for their operation possess a well9laid9out tas$ set apart from
each and cover discrete, well demarcated areas of activities within the
enterprise.
The merits of the functional method of departmentation are 4a5 't is most logical
and consistent with the natural division of the enterprise tas$ and ob!ective. 4b5 't
gives necessar status to these functions b placing their heads high in the
organizational echelon.
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4c5 't gives full weightage to the s$ill and specialization required in the discharge
of the several functions. 4d5 The ma!or functions need cooperation and team
wor$, starting from the highest level, for effective implementation of enterprisegoal. The limitations of this method are not so much inherent as situational and
empirical. These are3 4i5 7n excessive emphasis on the functions rather than on
the operational goals. The functions are sometimes misconceived as an end in
themselves rather than as the means to an end. 4ii5 (unctional goals and group
interests tend to develop, cutting across organizational goal. 4ii5 7s
specialization grows, each function seems to carve out a niche, ruling out
communication with other department. 4iv5 't confuses 4often5 the line of
operational authorit. 6onflicts arise when a functional director vetoes the line
general managerCs suggestions on functional grounds.
4v5 7 serious doubt exists whether the functional heads li$e finance, personnel,
etc. should not be located one step below in the organizational echelon, sa
under the second level of the main line authorit, for example, general
manager4 production5, in a manufacturing organization. 405 ) &roducts or
#ervice This method ma wor$ well when a few ma!or products or services
absorb most of the activities 4manufacture, sales profits5 of the enterprise. Each
of these products is then constituted into a ma!or >ivision, which functions
largel on independent basis.
The merits of this arrangement are3 4i5 The operational integrit and
accountabilit of the line management is not blurred or underrated. 4ii5 Each
ma!or product constitutes a cost and profit9centre. 't is proper that functional
services should be placed subordinate to the divisional4line5 chief as sub9
functions, in the organization structure. 4iii5 This method helps product
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development, diversification, innovation and products research. 4iv5 The pattern
is suited to rapid growth and product and mar$et expansion. 't helps the 6hief
46hairman or &resident5 of the enterprise to divest himself of responsibilit,transfer a high degree of autonom to the >ivisions and enforce aggressive
profit and growth targets. The limitations of this methods coincide with the
problems of 4a5 duplication of functional services, 4b5 high overheads, 4c5
divisional goals overriding enterprise goals 4when the two diverge5, 4d5 it
requires more manpower and s$illed managers9 which often is a constraint, and
4e5 in certain functional areas, especiall, finance, personnel and industrial
relations, product9wise division of these functions leads to basic difficulties of
harmon and uniform standards.
4;5 ) eographical *egion >epartmentation b geographical region is
sometimes seen as a compul#ion when the enterprise produces and sells in the
wide national mar$et, often in intemational mar$ets.
>E&7*T-E+T7T'O+
The logic of departmcntation is two9fold3 4a5 the size of an enterprise, 4b5 the
growth of specialization 4division of labour5 in the activities of the enterprise.
+ormall, a manager can 4directl5 control up to a limit of the size of activities.
Dogicall, it helps a manager to control the subordinate activities in the form of
logicall bound 4homogeneous5 tas$s and functions. >epartmentation, then is
the process of dividing the enterprise activities into manageable units 4b size5,
grouped on the logic of their internal similarit 4homogeneit5.
-ethods of >epartmentation9 &attern and 6riteria
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45 ) #imple +umbers The number of persons pursuing a set of activities can
be the basis of departmentation. This method is limited and is suitable in
situations where the wor$ is repetitive where manpower is the most importantcondition, where group efforts are as important as individual efforts and where
the group tas$ 4output5 can be related to number in the group.
45 ) Time This method of forming groups has limited applicabilit. 't often
goes with the first methods so that number in the group wor$ing for a defined
period ma$es the !oint criterion of grouping. 4/5 ) (unction 7 function stands
for a composite concept which includes3 4a5 the tas$ 4homogenous5 4b5 the s$ill
4specialization5 required for the tas$ 4c5 the service9discrete and well defined,
and 4d5 clear cut ob!ective. (unctional departmentation offers one of the most
logical method of divisioning 4grouping5 enterprise activities. 't is one of the
most commonl used methods, either independentl or in combination with
others. The ma!or functional divisions are production, mar$eting, finance and
personnel. +ote that these are lin$ed with the ma!or4divisions5 ob!ectives of an
enterprise demand specific s$ill and training for their operation possess a well9
laid9out tas$ set apart from each and cover discrete, well demarcated areas of
activities within the enterprise. The merits of the functional method of
departmentation arc 't is most logical and consistent with the natural division of
the enterprise tas$ and ob!ective. 't gives necessar status to these functions b
placing their heads high in the organizational echelon.
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hat distinguishes a leader from the common run of
manager is the measure of willingness on the part of the
followers #the led$ that the leader can ring into the system.
Tanneaum&s #and his colleagues$ de7nition 8uietlyintroduces the term in a situation in its formulation. This has
the 8uality of ringing in the situational "ariale which
dierentiates contingency models of leadership from the
asolute models. It emphasi1es leadership eecti"eness as
distinct from leadership 8ualities #or traits$ percei"ed
asolutely irrespecti"e of the situational "ariales.
The Trait -pproach
Traits are innate, inherent personal 8ualities. It follows that #y
this approach$ if a leader is seen to possess certain traits,
his leadership inde! can e read #almost$ o a leadership
meter. Three necessary and su9cient conditions which
must e satis7ed if traits should e uni8ue determinants of
the leadership inde!. These may e summari1ed thus5
#i$ The trait 8uality should follow a descending order as one
tra"erses from the highest #top e!ecuti"es in leadershipposition$ to the lowest #employees$ le"els of the enterprise
system. #ii$ There must e a high correlation etween the
le"el of a manager&s traits and the le"el of his success. #iii$
The correlation etween success #achie"ement$ and traits
should e higher as one goes up the management hierarchy
from ottom #employees$ le"el upward to top e!ecuti"e
le"els. There is a large measure of consensus that certain
essential traits are common elements of leadership as
oser"ed from dierent sur"eys and in"estigations. These
are5
#a$ Intelligence #$ Con7dence #c$ Initiati"e #d$ Urge for
achie"ement #e$ :trong power need
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-ttitude Criterion -pproach to 'eadership
The leader)attitude approach to leadership studies registers
and appraises the "ariales in terms of attitudes
#orientation to or concern fro$ conditioning leadership
eha"iour and eecti"eness. :tudies de7ned two "ariales
#attitudes$ which were termed employees orientation and
production orientation. - parallel set of concepts was
e"ol"ed y Don"in Cartwright and -l"ing ;andar as a result
of a numer of research studies. They identi7ed the aim of a
group as a composite of two elements #group dynamics$.
#i$ -chie"ing a group goal
#ii$ :er"ice of the group itself
The goal)oriented manager will set tas%s, impro"e
techni8ues and producti"ity and structure his acti"ities
toward the group goal. The manager, on the other hand,
who concentrates on group ser"ice and group maintenance,
will e relations oriented, with concern for people,
culti"ating popular participation, fostering and trusting
informal group eha"iour, trustful and communicati"e. :till
another parallel concept may e oser"ed under what maye styled -uthoritarian Democratic eha"iour tapering o
into the laisse1 faire leadership style. In terms of the group
dynamics phraseology #discussed ao"e$, authoritarian
leader style is set parallel to achie"ing the group goal as
against group maintenance or ser"ice which appro!imates
to the democratic leader style. The authoritarian leader will
decide and tell his followers what to do< the democratic
leaders will opt for a participati"e style of decision ma%ing.
0anagement and 'eadership -ll management includes #and
needs$ leadership, ut leadership e!ists and is called into
play e"en where management, strictly is not in"ol"ed.
0anagement is a weapon of achie"ing group or enterprise
in+uencing followers to mo"e toward the goal leadership is
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in"ol"ed. =ut leadership is a much more uni"ersal attriute.
The followers to a leader are not necessarily his unior or
suordinates. 'eadership is an instrument of management
ut its content is neutral to management.
6osition of 6ower
6ositional power of a leader falls into two groups)classi7ed
according to their source and nature. These are5 #i$ coerci"e
power and #ii$ persuasi"e power. =roadly spea%ing, coerci"e
leader #manager$ power +ows from the owner&s position of
authority, his power to do good positi"e power and to do
harm negati"e power. Coerci"e power wor%s y imposition
e!ternal to the followers. The e!ercise of coerci"e power aspercei"ed y the followers may e actual or threatened.
-ctuali1ed coerci"e power is a spent force. Coerci"e power
li%ewise, must carry a continued element of e!pectancy.
Coerci"e power that has e!hausted and reali1e its full
potential for good is dislodged from its power position. Oilier
attriutes of coerci"e power and its e!ercise that help
sustain its potency are