1.1 Perspective Management-dr.meena

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PERSPECTIVE MANAGEMENT

Dr. Meena Sharma


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PERSPECTIVE MANAGEMENT

PREPARED BYDr. MEENA SHARMA

MAHATMA EDUCATION SOCIETYSPILLAIS INSTITUTE OF MANAGEMENT

STUDIES AND RESEARCHNAVI MUMBAI


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Perspective Management

Contents

1. Introduction to Management Science, Theory & Practice, Environment ofManagement, Managers & Entrepreneurs, Managerial Roles & Skills, Managers

Social & Ethical Responsibilities.

2. Planning Role, Need for planning, Types of Planning, Levels of Planning,Corporate Planning & Long range planning

3. Organizing Nature, Types of organizations, Designing Organization structure,Delegation and Autonomy

4. Leadership & Management Role of committees & Group decision Making inManagement, organizational communication, Management of Change

5. Control process & Techniques: Use of Information Technology for controlling

Reference texts

1. Essential of Management Harold Koontz and Heinz Weihrich2. Management text and cases VSP Rao and V Hari Krishna3. Management principles and practices Dr. M. Sakthivel Murugan4. Principles of Management Davar5. Essentials of Management Massie, Joseph L.6. Principles of management G. R. Terry7. Management and organization L.A. Allen


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Introduction

Management is needed to manage individual, local, regional, national or public problems.Everybody, from the head of the family to the Prime Minister of a country or the

Managing Director of a company is engaged in the management of the different types of

affairs that he comes across in the performance of his obligations. It is also needed tomanage specific resources and operations such as personnel management, financial

management or marketing management etc. Increasing size of business units, the growth

of technical knowledge, changes in the methods of production, joint stock companieswith separation between ownership and management, increasing government interference

in business and the growth of labour movement, which have caused the growth offunctional specialists, has also increased the importance of the study of management as a

subject. Today, it has developed as a specialized knowledge and it is often considered as

a profession itself. As a science, management has its own principles and as an art, it has

its skill of application.

Meaning and Definition of Management

Management has been defined by different people in several ways such as plan of action,

the art of maximizing efficiency, a social process, method of getting things done through

the efforts of other people, direction of action by a co-operative group towards a commongoal, art and science of decision-making and executive leadership, etc. In its wider sense,

it denotes utilization of available resources to achieve some objectives. It is considered as

a method, system or a discipline which adds effectiveness to human activities and brings

order to them.

In a more specific sense, management is defined to include the functions of planning,

organizing, staffing, forecasting, coordinating, commanding, controlling, motivating theefforts of others to achieve the specific objectives. Management can precisely be called

the rule-making and the rule-enforcing body.

Management is the process of getting activities completed efficiently and effectively with

and through other people.

According to Henri Fayol : To manage is to forecast and to plan, to organize, tocommand, to co-ordinate and to control, to foresee and provide means to examine the

future and drawing up the plan of action. To organize means building up the dual

structure. To command means maintaining activity among the personnel. To co-ordinate

means binding together. To control means seeing that everything occurs in conformitywith established rules and expressed command.

F.W. Taylor: Management is the art of knowing exactly what you want to do andseeing that they do it in the best and cheapest way.

Harold Koontz: Management is the art of getting things done through and with peoplein formally organized groups.


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Management is:

Concept of Management from different viewpoints:

Productivity : Art of securing optimum productivity Human Relations : Art of getting things done through people Decision making : Art of correct decision making Leadership : Art of executive leadership Coordination: Manager is what a manager does.

Management focuses on the entire organization from both a short and a long-term

perspective. Management is the managerial process of forming a strategic vision, settingobjectives, crafting a strategy and then implementing and executing the strategy.

Management goes beyond the organizations internal operations to include the industryand the general environment. The key emphasis is on issues related to environmental

scanning and industry analysis, appraisal of current and future competitors, assessment of

core competencies, strategic control and the effective allocation of organizationalresources.

Art and Science

It has its rules, principles and laws having universal applicability. But the result of all

managerial policies always depends upon the personal skill of the manager. Besides

being a science, it very much takes the form of an art.

Management is both art and science. It is the art of making people more effective than

they would have been without you. The science is in how you do that. With the growth

and development in the principles and techniques of management, it is now very muchbecoming a profession. It needs special training.

1. As a science: Science is a systematized body of knowledge based on certainprinciples, capable of general application. This knowledge is obtained through the

process of observation, experimentation and testing. Key elements are ;

Systematic body of knowledge, universal principles, scientific experiments,cause-and-effect relationship, validity and predictability.

Getting work

done throughothers

Efficiency

Effectiveness


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2. As an art: Art is the application of knowledge and personal skills to achieveresults. Practical knowledge, personal skill, result-oriented approach, creativity

and continuous practice are the key elements. Management is basically an art as it

involves the use of knowhow and skills like any other art such as music, painting,sculpture, etc. The practical knowledge acquired in the areas of planning,

decision-making and motivating helps the managers to tackle problems in a betterway.3. As a profession: Specialized body of knowledge, formal education and training,

service motive, representative association, and code of conduct. It is an (a)

occupation for which specialized knowledge, skills and training are required and

(b) these skills are used for larger interests of the society and (c) the success of

these skills is not measured in monetary terms always.

Management and Administration

Distinction between Management and Administration

Points of

Distinction

Administration Management

1. Nature It is a determinative or thinkingfunction

It is an executive or doingfunction

2 Type of work It is concerned with thedetermination of major

objectives and policies

It is concerned with theimplementation of policies.

3 Level of

authority

It is mainly a top-level function It is largely a middle and lower

level function

4 Influence Administrative decisions areinfluenced mainly by public

opinion and other outsideforces.

Managerial decisions areinfluenced mainly by objectives

and policies of the organization.

5 Direction of

human efforts

It is not directly concerned with

direction of human efforts.

It is actively concerned with

direction of human efforts inthe execution of plans.

6 Main functions Planning and control are the

main functions involved in it.

Directing and organizing are

the main functions involved in

it.

7 Skills required Conceptual and human skill Technical and human skill

8 Usage Used largely in government and

public sector.

Used mainly in business

organizations.

9 Illustrations Minister, Commander,

Commissioner, Registrar, Vice-

chancellor, Governor, etc.

Managing Director, General

Manager, Sales Manager,

Branch manager, etc.


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Levels of Management

The term levels of management refers to a line of demarcation between variousmanagerial positions. In every organization there is a chain of superiors and subordinates

from the highest level to the lowest. This chain is known as chain of command or scalar

chain. The chain consists of a series of managerial positions like chief executive,departmental heads, section officers and supervisors. The level of manager in this chain

determines his authority and status. Generally, this chain is divided into three levels of

management;

Top level management

Middle level management

Front line/Supervisory

Management

Top Managers

Responsible for

Laying down the overall objectives and broad policies of the enterprise. Organizing the business into various departments and divisions. Provides guidance and direction. Coordinating the work of different departments. Monitoring business environments Maintaining good public relations


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Middle Managers

Responsible for

Setting objectives consistent with top management goals, planning, strategies, etc.

Issues detailed instructions. Coordinating and linking groups, departments, and divisions. Monitoring and managing the performance of subunits and managers who report

to them.

Implementing the changes or strategies generated by top managers Participates in operating decisions, Trains other managers.

First-Line Managers

Responsible for

Managing the performance of entry-level employees Teaching entry-level employees how to do their jobs Making schedules and operating plans based on middle managements

intermediate-range plans

Team Leaders

Responsible for..

Facilitating team performance

Managing external relationships Facilitating internal team relationships

Principles of Management

A principle is a fundamental statement of fact which establishes a cause-andeffect

relationship. A principle may be descriptive or prescriptive. A principle is called

descriptive, if it simply describes a relationship between variables. It is known as

prescriptive or normative, when it indicates what a person should do.

The nature of principles of management; universal, flexible, cause-and-effect

relationship, equality and human aspects.

Need for principles of management; to increase efficiency, to highlight the true nature

of management, to aid in training of managers, to improve research and to attain social

goals.


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Scientific management

F.W. Taylor is the Father of Scientific management. According to him Scientific

Management means knowing exactly what you want men to do and seeing that they do it

in the best and cheapest way.

Principles of Scientific Management

1. Science not rule-of-thumb2. Development of each employee to his greatest efficiency3. Close cooperation between workers and management4. Equal division of work and responsibility5. Maximum prosperity for both employers and employees6. Cooperation not individualism- mental revolution

Fayols Principles of Management

Henry Fayol suggested the following 14 principles of management in order to make the

job of managing more effective.

1. Division of work 8. Centralization2. Authority and responsibility 9. Scalar Chain3. Discipline 10.Order4. Unity of command 11.Equity5. Unity of direction 12. Stability of tenure6. Subordination of individual interest to general interest 13. Initiative7. Remuneration of personnel 14. Esprit de corps

Environment of Management

All organizations whether they are engaged in business or non-business activities draw

the inputs from the environment, convert the inputs into outputs and send them back to

the environment. The environment of the business consists of two components- internal

as well as external environment.

Internal refers to the various systems inside the organization such as, technology,

structure, processes and people. External environment have a bearing on the successfulfunctioning and survival of the business. The external environment affecting the

organization is divided into two major categories Direct action and indirect actionenvironment. Direct consists of those factors that directly affect and are affected by the

organizations operations. These factors would include suppliers, labour unions, thevarious laws of land, customers and competitions. The indirect environment consists of

those factors that may not have an immediate, direct effect on operations but nevertheless

influence the activities of the firm. These include such as technology, socio-cultural and

political factors, general economic conditions and so on.


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The managers success lies in understanding the trend in the environment. The trends

contain signals and give clues about the potential opportunities and impending threats.

The investment in large business enterprise today runs into hundreds of crores of rupees.

The gestation period is too long. During this period many things may change.

For eg; the case of the Enron Power Project in Maharashtra. The agreement to construct a

mega power project was entered into by the U.S. Enron power corporation and the thenMaharashtra government. The company also commenced the work. In the meantime, the

changes in the state government resulted in the reversal of the earlier governments

decision, causing lot of embarrassment to the parties involved. This case demonstrates theneed for close monitoring of the potential threats in the environment.

In one of the example converting the threats in to opportunities by the organizational

decisional is , when the crude oil prices were hiked in 1973 by the OPEC countries itcreated a have on petro-based industries. Automobile companies as a result were forced

to change to small fuel efficient cars. In this case, the threat was converted into anexcellent opportunity. Small car thus has become the fashion of the day.

Managers & Entrepreneurs

The entrepreneur brings in overall change through innovation for the maximum socialgood. Human values remain scared and inspire him to serve society. He has firm belief in

social betterment and he carries out this responsibility with conviction. In the process, he

accelerates personal, economic as well as human development. The entrepreneur is avisionary and an integrated man with outstanding leadership qualities. With a desire to

excel, the entrepreneur gives top leadership qualities, priority to research and

development, etc. Entrepreneurial activities, encompasses all fields/sectors and fosters asport of enterprise for the welfare of mankind.

Concept of Entrepreneurship

Entrepreneur Entrepreneurship Enterprise

Person Process of Action Object


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Functions of Management

Management is what management does. It is the art of getting things done through and

with people in formally organized groups. Management includes two types of functions:

i) Preparation for actual work, i.e., management in preparation, which includesplanning and organization, andii) Getting the actual work done, i.e., management in action, to include direction,

motivation, coordination and control.

A manager is a man who gets things done by working with people and other resources inorder to achieve an objective. He coordinates the activities of others rather than performs

the operations himself.

According to George Terry, The four functions of management planning, organizing,

actuating and controlling - constitute the management processes.

Planning is the ongoing process of developing the business' mission and objectives and

determining how they will be accomplished. Planning includes both the broadest view ofthe organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a

specific goal. It involves taking decisions in advance of action. The process of planningconsists of:

Establishing objectives Making forecasts Formulating policies, Procedures and rules Drawing programmes, schedules, budgets, etc.

Organizing

Controlling

Planning

Staffing

Directing

Functions of

Mana ement


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Organizing is establishing the internal organizational structure of the organization. Thefocus is on division, coordination, and control of tasks and the flow of information within

the organization. It is in this function that managers distribute authority to job holders.

The process of organizing involves:

Identifying the activities necessary to achieve the objectives Grouping the activities into manageable units Assigning duties or tasks to appropriate individuals Delegating necessary authority to individuals and fixing responsibilities for

results

Defining authority-responsibility relationships among individualsStaffing is filling and keeping filled with qualified people all positions in the business.

Recruiting, hiring, training, evaluating and compensating are the specific activities

included in the function. In the family business, staffing includes all paid and unpaid

positions held by family members including the owner/operators. It is concerned with

human resources. Its aim is to fit individuals and jobs, i.e., right man for the right job.Staffing consists of the following activities:

Manpower planning, i.e., determining the number and quality of employeesrequired in organization

Recruitment, selection and placement Training and development Appraisal, promotion and transfer Employee remuneration, etc.

Directing is influencing people's behavior through motivation, communication, group

dynamics, leadership and discipline. The purpose of directing is to channel the behaviorof all personnel to accomplish the organization's mission and objectives while

simultaneously helping them accomplish their own career objectives. Directing isconcerned with the execution of plans. it initiates organized action and breathes life into

the organization. It constitutes the life spark of the enterprise and sets into motion like the

electric power. Directing is also known as management in action. It involves:

Influencing, guiding and motivating the subordinates for the achievement oforganizational objectives.

Supervision, motivation, leadership and communication are the sub-functions ofdirecting.

Controlling is a four-step process of establishing performance standards based on thefirm's objectives, measuring and reporting actual performance, comparing the two, and

taking corrective or preventive action as necessary. The essence of control is in

determining whether the activity is achieving the desired results. It is to ensure thateverything in the organization occurs in accordance with the predetermined plans. The

process of control consists of the following steps:


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Setting standards or norms for the desired performance Measuring the actual performance Interpreting and comparing actual performance with the set standards Analyzing deviations to fix responsibility Taking corrective actions

No business can succeed without proper planning and without direction; no plan can be

put in operation. Better operation and correct performance of business can be achieved

only by motivation, co-ordination and control of its different activities.

Achievement of the objectives of business requires

Planning Organizing Staffing Direction Control

Of

Men Money Materials Machines Methods


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Managerial Roles & Skills

Manager

Works for Definite Objectives

With the assistance of

Administrative Skills Technical Skills

i) Planning i) Productionii) Organizing ii) Purchaseiii)Motivating iii) Financeiv)Directing iv) Marketingv) Controlling v) Office & Recordsvi)Coordinating vi) Personnel

To satisfy the interests of

i) Businessii) Employeesiii)Consumersiv)Community

Managerial Roles

According to Mintzberg (1973), managerial roles are as follows:

1. Informational roles

2. Decisional roles

3. Interpersonal roles


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Interpersonal Informational Decisional

Figure head Monitor Entrepreneur

Leader Disseminator Disturbance handler

Liaison Spokesperson Resource Allocator and

negotiator

1. Informational roles: This involves the role of assimilating and disseminatinginformation as and when required. Following are the main sub roles,which managers

often perform:

a. Monitor-collecting information from organizations, both from inside and outside of the

Organization

b. Disseminator-communicating information to organizational members

c. Spokesperson-representing the organization to outsiders

2. Decisional roles: It involves decision making. Again, this role can be subdivided

in to the following:

a. Entrepreneur-initiating new ideas to improve organizational performance

b. Disturbance handlers-taking corrective action to cope with adverse situation

c. Resource allocators-allocating human, physical, and monetary resources

d. Negotiator - negotiating with trade unions, or any other stakeholders

3. Interpersonal roles: This role involves activities with people working in theorganization. This is supportive role for informational and decisional roles. Interpersonal

roles can be categorized under three subheadings:

a. Figurehead-Ceremonial and symbolic role


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b. Leadership-leading organization in terms of recruiting, motivating etc.

c. Liaison-liasoning with external bodies and public relations activities.

Management Skills

Katz (1974) has identified three essential management skills: technical, human, and

conceptual.

Technical Skills Human Skill

Conceptual Skill Motivation to Manage

Technical skills: The ability is to apply specialized knowledge or expertise. All jobsrequire some specialized expertise, and many people develop their technical skills on the

job. Vocational and onthejob training programs can be used to develop this type of skill.

Human Skill: This is the ability to work with, understand and motivate other people

(both individually and a group). This requires sensitivity towards others issues andconcerns. People, who are proficient in technical skill, but not with interpersonal skills,

may face difficulty to manage their subordinates,. To acquire the Human Skill, it is

pertinent to recognize the feelings and sentiments of others, ability to motivate others

even in adverse situation, and communicate own feelings to others in a positive and

inspiring way.

Conceptual Skill: This is an ability to critically analyze, diagnose a situation and

forward a feasible solution. It requires creative thinking, generating options and choosing

the best available option.

Managers Social & Ethical Responsibilities

To be truly effective, organizations should interact with their external environment. The

external environment can be divided into the general or mega environment and the

specific task environment. Social responsibility refers to the obligation of a business firmto enhance the condition of society along with its own interests. Business firms are

accountable to six major stakeholder groups: shareholders, employees, customers,creditors and suppliers, society and the government.

Social responsiveness refers to the ability of a firm to implement policies and take part inactivities that would benefit both society and the firm. The following categories are

generally considered when measuring social responsiveness: contributions, fund-raising,

volunteerism, recycling, diversity policies, direct corporate investment, quality of worklife, attention to consumers and pollution control. The need to measure social


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responsiveness led to the development of social audits. Social audits are of two types -audits required by the government and voluntary audits. Although social audits are not

legally mandatory, many organizations make social involvement disclosures in their

annual reports. This shows the growing concern among major firms about their socialresponsibility.

The ethical conduct of an organization depends on the ethical standards of its managers.Business should be conducted in a manner that it earns the good will of all concerned

through quality, transparency and good values. Three types of management have been

identified, depending on the ethical or moral nature of their decisions. These are moral,

amoral and immoral management. Moral management is in the best interests of theorganization in the long run. However, most companies follow the principles of amoral

management. To conduct business in an ethical manner, managers should be aware of the

factors that affect ethical behavior. Through mechanisms such as top managementcommitment, code of ethics, ethics committees, ethics audits, ethics training and ethics

hotlines, managers can inculcate ethical behavior in the employees.

Responsibilities to various groups

Towards the customers

Production and supply of quality goods and services at an affordable price is the primaryresponsibility of business. Customer service should be the motto of the business. It

involves offering a fair deal to the customer by indulging in ethical business practice.

Therefore, every manager in order to serve the customers in an effective way should

restrain from:

Making misleading advertisements aimed at deceiving the consumer;

Giving wrong or false information about the ingredients, quality, origin, etc., ofthe product.

Entering into collusive agreements with other firms to exploit the customers; Making false claims of being an authorized dealer/importer of certain goods; and Giving misleading names to the products, etc.

Towards the Employees

Proper election, training and promotion; Recognition of the value of human resource; Maintaining cordial relations with employees; Recognition and encouragement of constructive unionism; Fair wage in relation to the cost of living; Better working conditions; Initiating appropriate measures for the development of human resource; and Increase in productivity and efficiency by recognition of merit, by providing

opportunities for creative talent and incentives.


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Towards the Shareholders

Shareholders are the real owners of a corporation. In view of the several practical

limitations for them in overseeing the day-to-day operations of the business, an

organization must strive to provide:

Security to their funds Fair rate of return on their investment Correct information about the operations of the company; and Proper appreciation of the value of their investment in the company by identifying

new opportunities that contributes for the growth of business.

Towards the Creditors/suppliers

Creditors or suppliers provide the necessary inputs to the business. Business management

has certain responsibilities to them. These can be discharges by;

realizing the importance of maintaining good business relations with them; meeting the payment obligations timely; providing true and correct picture about the financial aspects of the company; and Helping them grow along with the growth of the company, etc.

Towards Government

Government provides various facilities for the development of business. Infrastructuralfacilities like roads, telecommunication, transport, banking, insurance, etc. Therefore,

business also in turn owes to the government in the following ways:

business enterprises should act like law-abiding citizens; taxes and other duties should be paid timely and honestly; Compliance with the rules and regulations as stipulated by various laws of the

land, and

Supplementing the governments efforts in the developmental activities, etc.Towards the society at large

Any business can exist as long as it enjoys societal sanction. If it fails to safeguard the

interests of the society, the pressure from various segments of the society mounts up. An

organization can act in a socially responsible way by:

Properly deciding the product policies in line with the national priorities; Preventing the creation of monopolies; Ensuring hygienic disposal of smoke and waste and other effluents; Providing to the community accurate information about its working; and


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Preserving the national resources of the nation by not indulging in recklessexploitation of the resources, etc.

Questions

1. What is management? Distinguish clearly between management andadministration.

2. Management is the art of getting things done through and with people informally organized groups. Do you agree? Give reasons.

3. Managers should be leaders but leaders need not be managers. (Koontz)Comment.

4. Explain the functions of management.5. Describe in brief Fayols Principles of management.6. Briefly describe the social responsibilities of business.7.

If you are a practicing manager, analyze the various skills you posses in relationto the level o your job.

8. Select the two best companies and explain how they responded to changes in theenvironment.

Case Study

Function of Management

The Personal Manager of Bharti Steels, an engineering unit based at Salem, has beenbanging the executive conference table of the company for some months asserting that

the true function of management is to take care of the needs of the staff and let the staff

take care of the goals of the organization. The Marketing Manager has, on the other hand,been expressing the view that the real function of management is to take care of the

market and staff must fall in line with the objectives, plans and priorities of the company.

Questions

Which of these views is correct and why?


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CHAPTER II

PLANNING

Meaning and definition of Planning Role and need for planning Characteristics of a good plan Types of planning Levels of planning Corporate planning and Long-range planning


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Meaning and Definition

Management starts with planning. Good management starts with good planning.

Planning is the most basic function of management. Planning and forecasting are two

essential conditions for the success of any human activity.

Planning means looking ahead or thinking before acting, i.e., anticipating problems anddeveloping their solution. Planning is deciding in advance what is to be done, when

and where it is to be done, how it is to be done and by whom. It is a projected course

of action. It involves the functions of decision making and problem solving, i.e., theselection of business objectives from amongst the various alternatives and deciding the

future course of action for achieving those objectives. It is a kind of future picture

wherein proximate events are outlined with some distinctness whilst remote events

appear progressively less distinct.

According to Henry Sick: Planning is defined as the relevant information from thepast and the present and the assignment of the probable future development so that a

course of action may be determined to enable the organization to meet its objectives.

Planning formally correlates the organization to its present and future environment. Once

the objectives are chosen, the manager has to formulate policies and programme toachieve them within a certain specified time. He has to decide what is to be done, how,

when and where it is to be done and who is to do it. Planning is the most important step

in the process of getting results by adjusting present actions in view of the established

goals. It enables the management to be a step ahead of each activity.

In the words of Fayol: Planning means to assess the future and make provision for it.

Terry has defined a plan as a predetermined integrated programme. It requires ability

to foresee, to look ahead purposefully.

Planning includes determination of the objectives, policies, rules, programmes, strategies,budgets and procedures. The task of planning is to minimize the risk and to give at the

same time full advantage of the available opportunities.

It bridges the gap from where we are and where we want to go. Good planning must beflexible and capable of adjustment to the changing circumstances. Planning may be for

the entire enterprise as a whole and also for each department of the enterprise. It may beshort-term as well as long-term. It is an essential preliminary to every effective action.


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Planning pervades all managerial activity. It is an intellectual process. It is always goaloriented. It is a primary function and involves a choice between alternative courses of

action. It is an interdependent and a consistent process. It is direct towards efficiency.

Without a plan you will never succeed. If you happen to make it to the goal, it will havebeen by luck or chance and is not repeatable. You may make it as a flash-in-the-pan, an

overnight sensation, but you will never have the track record of accomplishments of

which success is made.

Figure out what your goal is (or listen when your boss tells you). Then figure out the best

way to get there. What resources do you have? What can you get? Compare strengths andweaknesses of individuals and other resources. Will putting four workers on a task that

takes 14 hours cost less than renting a machine that can do the same task with one worker

in 6 hours? If you change the first shift from an 8 AM start to a 10 AM start, can theyhandle the early evening rush so you don't have to hire an extra person for the second

shift?

Look at all the probable scenarios. Plan for them. Figure out the worst possible scenarioand plan for that too. Evaluate your different plans and develop what, in your best

judgment, will work the best and what you will do if it doesn't.

The key terms of planning are defined as follows:

Vision :Nonspecific directional and motivational guidance for the entire organization.

Top managers normally provide a vision for the business. It is the most emotional of thefour levels in the hierarchy of purposes.

Mission: An organization's reason for being. It is concerned with scope of the business

and what distinguishes this business from similar businesses. Mission reflects the culture

and values of top management.

Identification

What is to be done

Right Time

When it is to be

done

Right Place

Where it is to be

done

Right Methods

How it is to be done

Planning is looking

Ahead


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Objectives: Objectives refine the mission and address key issues within the organizationsuch as market standing, innovation, productivity, physical and financial resources,

profitability, management and worker performance and efficiency. They are expected to

be general, observable, challenging, and untimed.

Goals: Goals are specific statements of anticipated results that further define theorganization's objectives. They are expected to be SMART: Specific, Measurable,

Attainable,Rewarding, and Timed.

Need for planning

Planning is one of the most important project management and time management

techniques. Planning is preparing a sequence of action steps to achieve some specific goal.

If you do it effectively, you can reduce much the necessary time and effort of achievingthe goal.

A plan is like a map. When following a plan, you can always see how much you have

progressed towards your project goal and how far you are from your destination.Knowing where you are is essential for making good decisions on where to go or what to

do next.

One more reason why you need planning is again the 80/20 Rule. It is well established

that for unstructured activities 80 percent of the effort give less than 20 percent of the

Importance

of Planning

To focus

attention on

objectives

Caring for future

uncertainty and

change

Securing coherentand consistent

decisions

Operations in

securing

economy

Improvingmotivation and

morale

Making control

effective


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Corporate Planning & Long range planning

Corporate planning and long-range planning is the process of determining the major

objectives , policies and strategies that will govern the acquisition, use and disposition ofresources to achieve those objectives of an organization and is done at high /top level of

the organization. It provides the answer to the basic questions like; Where are we now? Where we want to go? Why do we want to go? How we will go? Etc.

Features of corporate planning:

i) Systematic: Corporate planning is asystematic way of setting the Long-term goals of a company and deciding the

means to achieve them taking internal as well as external factors into account.

ii)

Continuous: Corporate planning is acontinuous, on-going process. Corporate plans move in tune with internal as

well as external changes. They are subject to revision and updating from time to

time.

iii) Company wide plan: Corporateplan is a kind of master plan covering the company as a whole. All functional

plans are offshoots of the corporate plan.

iv) Long-term view: Corporate planningtakes a long-term view of business and does not deal with day-to-day

operations.v) Top level activity: Establishing long-

term corporate goals and the means of achieving these, is a top management

responsibility. Of course, in the process of building corporate goals, inputs fromexecutives working at various levels are also taken into account.

vi) Forward looking: Corporateplanning tries to put the company ahead of its rivals through a carefulevaluation of all relevant internal as well as external factors having a bearing on

overall performance. The whole exercise is forward looking in nature, in that it

tries to match a companys internal strengths with external opportunities and

utilize the corporate resources in the best possible way.vii) Comprehensive: Corporate planning

covers both strategic planning and operational planning. Strategic planning is

designed to help companies achieve competitive advantage by trying toexploit external opportunities through unique internal capabilities. Operational

plans such as production plan, marketing plan, and finance plan are designed to

implement strategic plans.


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Every company has its own strategies, corporate mission, planning, organization visionetc.

Eg; Public sector giant HMT which prided itself, for a long time on its dominance in theIndian wrist watch market. The company was on a high tide for a long time and failed to

understand the shift in the consumer preference towards the trendier, sleek quartzwatches. It took the market for granted and in the meantime HMTs traditional marketscaptured by TITAN with its innovative marketing strategies and changed the face of the

Indian watch market.

Corporate planning Vs. Long-range planning

Corporate planning is the comprehensive planning of business operations for effective

implementation of corporate policies and attainment of corporate goals. It involvespreparation of strategic plans and determination of objectives to be pursued in the long-

run as well as short-run. It commits resources for a future period that can be clearly

looked into. It has nothing to do with the range. For example, in groundnut cultivation,resources are deployed for a few months and the time frame of a corporate plan is less

than a year. On the other hand, in iron and steel industry, the resources are deployed,

having a long-term framework in mind.

Long-range planning is a part of corporate planning. It is a plan that covers many ears

and affects many departments or divisions of an organization in a major way. It is

concerned with the preparation of realistic estimates for distant future. It indicates the

extent of future time horizon which is fairly long in nature and which can bemeaningfully expressed in the form of tentative goals by management. The time horizon

of a long-term plan is usually dependent on the nature of industry in which it is pressed

into service. Such planning is basically concerned with the economic, financial andtechnological aspects of the environment with special reference to the problems of

corporate growth.

Questions

1. Define Planning? Explain the various steps involved in the planning process.2. .a manager organizes staffs, directs and controls to assume the

attainment of goals according to plans. (Koontz). Explain and show how

planning is the most basic of all management functions.3. Planning is looking ahead. Comment.4.

Planning is an intellectual process. Explain in 50 words.5. Explain the various types of planning.

6. What do you mean by standing plans? How do they differ from single-use plans?


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Case Study

Ramesh Publishing Company

Mr. Ramesh was the founder off a publishing company specializing in accounting books.

Within a short span of time, the company prospered and grew very fast. Its sales rosefrom Rs. 60,000 the first year to Rs. 6 lakhs three years later. The editing, production and

sales staff grew almost as fast.

But the company was having problems, and of late uncertainty and confusion grew in the

company. New people were making decisions to the best of their ability but many of

them did not fit together. One of Mr. Rameshs key associates suggested that thecompany ought to have better planning and certainly needed clear policies to guide

decision making, but Mr. Ramesh was unimpressed. His response was that if he took timeoff to plan and develop policies today, he might not have a company tomorrow, and that

he had no choice but to spend his time meeting todays problems as they came up.

Questions

If you were one of the newer managers in the company and had taken a course inthe basics of management, what would you say to Mr. Ramesh?

Outline exactly how would you show him that planning and policy making areimportant to the company if it has to grow effectively.


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Exercise

Raju was the maintenance supervisor for Hyderabad Products Company (HPC), producer

of plastic pipe and fittings. In early December, 2000, he was tole by the plant manager to

make plans to refurbish the number 4 extruding machine. This was to be done before

January 13 and 14. The extruding machine was an important part of HPC. Raju had beenkeeping a checklist of needed repairs. But, carrying out repairs had not been possible

because the machine had not been shut down for a single day since August. Raju stayedon the job late that evening to inspect the machine and to update his checklist. He

checked the stores section to see whether all the spares are readily available or not. The

next day, Raju held a meeting with his maintenance workers so that they would get ready.

Over the next several days, he looked at each repair item and prepared a written taskassignment schedule. He assigned each task to the worker, he considered most competent

to do it. Raju knew that after the machine was shut down, he would encounter some

unexpected defects. After all, everything does not go exactly as planned. So, he picked uphis best worker, Babu Lal, to handle the unexpected repairs and help the other workers

when needed.

When the workers returned from the Pongal holidays, Raju handed over each person a list

of that persons repair task for the machine. On January 16, he held a final meeting toprepare for the shutdown. Raju worked some extra hours that weekend. But because

everything had been planned well, the machine was back on line in good condition on

Monday morning.

In your view, was Raju an effective planner?


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CHAPTER III

ORGANIZING

Meaning and definition of organizing Nature of organization Types of organizations Organizational structure and designing Delegation and Autonomy


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Meaning and Definition

The term organizing has come from the word organism. Different parts of a bodyperform different functions in close co-operation with each other. It is a process by which

men relate themselves to each other to get work done. It is a system of co-operative

activities of two or more persons.

Organizing provides the necessary framework for the management. Management derives

its authority from organization. Management integrates the interest of the organization

into those of the society.

Organizing is the creation of a structure of duties and functions so as to identify and

divide work. It defines responsibility and delegates authority. It involves the assignment

of the grouped activities to various managerial levels.

Organizing is the creation of a harmonious structure of authority responsibility

relationship. It is the mechanism through which management directs, coordinates andcontrols the business. It aims at achieving optimum coordination of the functions of any

business and its workers.

According to L.A.Allen, organizing is the process of identifying and grouping the work

to be performed, defining and delegating responsibility and authority, establishingrelationships for the purpose of enabling people to work most effectively together in

accomplishing objectives.

Identification of

activities

Assignment of

activities

Delegation of

Authority

Grouping of

activities

Organizing


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Organizing is the human relationship in group activity equivalent to social structure. It isconcerned with the authority structure of an enterprise. It involves the extent of

delegation, degree of work, specialization, span of control and use of specialists as well

as informal organization.

In the words of Terry: the task of organizing is to harmonize a group of differentpersonalities, to fuse various interests and to utilize abilities all towards a given

direction.

Organizational Structure

Each organization has an organizational structure. Organizational structure is described

on the organization chart that shows all the positions in an organization and their formal

relationships to one anther. It illustrates an organizations overall shape and the levels ofmanagement in a comprehensible manner. Ideally, in developing an organizational

structure and distributing authority, managers' decisions reflect the mission, objectives,

goals and tactics that grew out of the planning function.

Organizational Chart

Organizational chart shows the hierarchical structure of the organization with the number

of management levels. Scope of authority and status of the individuals as indicated by the

location of their positions in relation to other positions. Organisations activities are

grouped in terms of departments (whether by function, by territory and so on).

Manager

Production

Chairman

Manager

MarketingManager

Finance

Manufacturing Quality Sales Advertising Accounting Taxes


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The organization chart of any company enables one to understand easily three classical

principles of organizing, viz., chain of command, unity of command and span of control.

Chain of command

Chain of superiors from top to bottom ranging from ultimate authority to lower ranks. Italso suggests the routes through which information flows within an organization and

facilitates quick communication between one link of the chain and the other. It is also

called scalar chain.

Unity of command

One subordinate - one boss. If the efforts of subordinates are to be effectively coordinated,

it is necessary that they must have a reporting relationship with only one superior. Unityof command principle avoids the confusion as to who should report to whom and who

should issue orders to whom.

Chairman

Plant

Manager

Production

Manager

DepartmentHead

Supervisor


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Span of Control

Span of control refers to the number of subordinates that report directly to a manager.

Division of Labor

Division of labor is captured in an organization chart, a pictorial representation of an

organization's formal structure. An organization chart is concerned with relationships

among tasks and the authority to do the tasks. Eight kinds of relationships can be

captured in an organizational chart:

1. The division/specialization of labor

2. Relative authority

3. Departmentation

4. Span of control

5. The levels of management

6. Coordination centers

7. Formal communication channels

8. Decision responsibility

Delegation of Authority

Authority is legitimized power. Power is the ability to influence others. Delegation isdistribution of authority. Delegation frees the manager from the tyranny of urgency.

Delegation frees the manager to use his or her time on high priority activities.

Delegation of authority is guided by several key principles and concepts:

Exception principle - Someone must be in charge. A person higher in the organization

handles exceptions to the usual. The most exceptional, rare, or unusual decisions end upat the top management level because no one lower in the organization has the authority to

handle them.

Scalar chain of command - The exception principle functions in concert with theconcept of scalar chain of command - formal distribution of organizational authority is in

a hierarchial fashion. The higher one is in an organization, the more authority one has.


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Decentralization - Decisions are to be pushed down to the lowest feasible level in theorganization. The organizational structure goal is to have working managers rather than

managed workers.

Parity principle - Delegated authority must equal responsibility. With responsibility for a

job must go the authority to accomplish the job.

Span of control- The span of control is the number of people a manager supervises. Theorganizational structure decision to be made is the number of subordinates a manager can

effectively lead. The typical guideline is a span of control of no more than 5-6 people.

However, a larger span of control is possible depending on the complexity, variety andproximity of jobs.

Unity principle - Ideally, no one in an organization reports to more than one supervisor.

Employees should not have to decide which of their supervisors to make unhappy

because of the impossibility of following all the instructions given them.

Line and staff authority - Line authority is authority within an organization's or unit's

chain of command. Staff authority is advisory to line authority. Assume a crew leader

reports to the garden store manager who in turn reports to the president. Further assumethat the crew leader and store manager can hire and fire, and give raises to the people

they supervise. Both the crew leader and store manager have line authority. To contrast,

assume that the president has an accountant who prepares monthly financial summarieswith recommendations for corrective action. The accountant has staff authority but not

line authority.

Departmentation

Departmentation is the grouping of jobs under the authority of a single manager,

according to some rational basis, for the purposes of planning, coordination and control.The number of departments in an organization depends on the number of different jobs,

i.e., the size and complexity of the business.

Farm businesses are most likely to have departments reflecting commodities and services.For example, a large dairy farm might be organized into dairy, crop, equipment and

office departments. The dairy department might be further divided into milking, mature

animal and young stock departments.

Informal Structure

The formal structure in each organization that has been put in place by management has

an accompanying informal structure. Management does not and cannot control the

informal structure.


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The informal structure has no written rules, is fluid in form and scope, is not easy to

identify, and has vague or unknown membership guidelines.

For management, the informal structure may be positive or negative. Positive qualities

include the ability to quickly spread information and provide feedback to the information.

The informal structure gives people a sense of being in the know. Management can feedinformation into the informal structure at very low cost. The informal structure can also

help satisfy employees' social needs.

The negative qualities of the informal structure mirror the positive qualities in several

ways. The more juicy a rumor, the more likely is the informal structure to repeat it,expand it and make it into the "truth." Management may not know what information is

flowing through the informal structure. Employees can waste a great deal of timenurturing and participating in the informal structure. Finally, the informal structure can

fence out new employees, "rate breakers," and change agents no matter the extent to

which the formal structure makes them a part of the organization.

Types of organizations/Organizational designing

The organizations are in different sizes and may be producing single product or multiple

products may be operating in small geographic area or different areas in the world. Tocope with these varied objectives, strategies and situations, managers adopt different

designs or organization structure. The different types of organizational designs are;

1. Formal and Informal2. Line organization3. Functional organization4. line and staff

Formal Organization: It refers to the structure of jobs and position with clearly defined

functions and relationships. Under a formal organization, the activities of two or morepersons are consciously co-ordinated towards a given objective. In formal organization,

every subordinate must obey his superior, whether he likes him or not. As such

everybody becomes responsible for the performance of a given task.

Characteristics of a Formal Organization

Formal organization is consciously designed.

It provides for specialization. It is based on delegated authority. It is based on ideal relationship i.e., the authority, responsibility and

accountability of each level is clearly defined.

The principle of unity of command is usually observed. It is deliberately impersonal. It is usually supported by organizational charts.


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It is based on the rabble hypothesis of the nature of man, i.e., there will be thesame kind of reaction if human beings are punished or rewarded.

Informal organization: It refers to the personal relationships developing spontaneouslyas people work together outside the formal organizational structure, like friendship, etc.,

which are unconsciously co-ordinated. In this case, a subordinate may offer an advice tohis superior as his friend. Management cannot be effective unless it recognizes and makesuse of the informal organization.

Characteristics of an Informal Organization

An informal organization arises spontaneously. It is based on personal attitudes, emotions, likes and dislikes etc. It provides for social satisfaction to its members. It is an integral part of a total organization and the management cannot eliminate

it.

It has no place in the formal chart.

It is a net-work of personal and social relations. It has its own rules and traditions. It is indefinite and has no structure.

A manager can establish or cancel any of the formal organizations. However, he can

neither create nor cancel an informal organization. Informal relationships do affect the

workers behavior. A good management must recognize the impact of informal groups if itwants to succeed.

Difference between formal and informal organizations

Basis Formal Organization Informal Organization

1 Formation Deliberately planned andcreated by management

Emerges spontaneously as aresult of social interactions

among people

2 Purpose To achieve planned goals of the

organization

To provide social satisfaction to

members

3 Structure A well-defined structure oftasks and relationships No clear-cut structure. Acomplex network of relations

4 Flexibility Rigid, stable and predictable Flexible, unstable andunpredictable

5 Focus Jobs, functions and technicalaspects

Interests and other humanaspects

6 Standards of

behaviour

Standards of behavior are

prescribed and enforced by

Standards of behavior are

evolved by mutual consent


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management among members

7 leadership Managers act as leaders by

virtue of their superior position

Members voluntarily choose

their leaders

8 Communication Formally established or officiallines of communication

Members communicateaccording to convenience

9 OrganizationChart

Official structure, can be shownin the form of a chart

Unofficial structure, not shownon the chart of the company

10 Rules and

Regulations

Written and fixed Oral norms

Line Organization: It is also known as military or departmental or scalar type

organization and is the oldest form of organization structure. It is called military system

for the reason that it was followed in the army in its pure form.

Line organization is characterized by clear cut division of authority and responsibility. It

does not make any provision for staff specialist. It provides for downward flow ofauthority and upward flow of responsibility. The authority flows directly and verticallyfrom the boss to sub-executives, from the man at the top to the man at the bottom, i.e.,

only one chain of command. Every manager enjoys general authority over all the lower

managers in the organization hierarchy.

Koontz and ODonnel have defined organization as, Authority relationships in an

organization position where one person has responsibility for the activities of anotherperson.

No subordinate is required to obey two bosses. The command is given to the subordinates

through the immediate superiors and the number of subordinates whose work is directlycommanded by the superiors is kept within reasonable limits.

Features of Line organization

Chain of command Chain of communication, and Carrier of accountability

Line, as a chain of command, establishes superiors right to order and subordinates

obligation to obey the orders. Line also serves as a means of communication between the

members of the organization. Vertical communication flows through the line relationship.Line facilitates effective communication. As a carrier of accountability, line organization

makes all superiors accountable for the activities of their subordinates. Since the line

organization is established through the authority-responsibility relationships, the

assignment of activities will go down to the lowest levels of management where actualwork is done and the accountability for tasks assigned will automatically be created

throughout the management hierarchy.


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Line organization may be classified into two types

1) Pure line organization: Wherein the activities at every level are the same andeverybody performs the same type of work. The divisions exist solely as a basisof control and direction. It is simple in nature and is possible only in small

enterprise units not in bigger enterprises.

WORKERS WORKERS WORKERS

2) Departmental line organization: In this the business is first divided into broaddepartments which are put in charge of various departmental heads. These

departmental heads have complete authority and control over their departments.They form an autonomous body in themselves. They purchase their own raw

materials, hire their own labour and do all what is necessary for the working oftheir departments. The only interrelationship between the various departments is

such as the general manager or the chief executive may establish. The flow of

authority under this system can be shown by means of the following diagrams:

PRODUCTION

MANAGER

FORMAN X FORMAN Y FORMAN Z


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WORKERS WORKERS WORKERS WORKERS

The line organization, whether pure of departmental, is best suited where,

The scale of operation is small, The work is simple and of routine type, Machines used are mainly automatic, The labour management relations are simple, and Where the process of manufacture is continuous.

The success of such an organization depends mainly upon the capacity of the generalmanager and the departmental head. Under a strong man, capable of carrying a great

responsibility, this system thrives best.

Merits and Demerits of Line organization

PRODUCTION

MANAGER

FORMAN

SPINNING

DEPT.

FORMAN

WEAVING

DEPT.

FORMAN

DYEING DEPT.

FORMAN

FINISHING

DEPT.

Simple and economic Accountability Discipline Speedy action All-round development Self-confidence Flexible

Over loading Lack of specialization Creates confusion Lacks coordination Dictatorial tendencies Causes inefficiency Instability

MERITS DEMERITS


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Functional Organization: Functional organization is based upon the existence offunctional authority in the organization. It is established by grouping activities of the

enterprise into certain major functional departments. Under this system, the whole task of

management and direction of subordinates is divided according to the type of workinvolved, and thus, the scope of the work is kept limited but the area of authority is left

unlimited.

Functional organization refers to the organization which is divided into a number of

functions such as finance, production, sales, personnel, office and research and

development and each of the functions are performed by an expert. The following

diagram illustrates the functional organization:

Under this system each worker receives instructions not only from one supervisor, but

from a group of specialists. He does not remain under one boss, but has as many as his

work warrants. The system proves successful in concerns manufacturing a limited line ofproducts and where organization is not complicated, e.g., Shoe manufacturing.

GENERAL

MANAGER

PRODUCTION MARKETING FINANCE PERSONNEL

PLANT A PLANT B PLANT C


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services. The staff occupies only an advisory capacity. They have no control over theworkers or the foremen, and thus, they cannot give them any direct instructions. They

simply assist the line officials by providing advice on special subjects. The final decision

is taken by the top officer, who may, at his own responsibility, reject the advice of theexpert staff, if not satisfied.

To illustrate, a production manager who is directly responsible for achieving the fixedtargets may be advised and supported by an industrial engineer who is not directly

responsible for those production targets. Similarly, a marketing manager who is

responsible for the selling of goods may obtain wide support from the market research

manager who collects market information.

Line and staff organization came into being as a result of inability of the departmental

managers to investigate, think and plan at the same time, as they were performing theordinary tasks of production and selling. Consequently, the work of investigation,

research, recording, standardization and advising, i.e., the work of the experts was wholly

distinguished and separated from the routine process of manufacturing and selling withthe result that there arose a clear demarcation between thinking and doing, the staff

being the thinkers and the line being the doers.

Line and Staff organization

Director of Public

Relations

Market

ResearchOfficer

Managing Director

OrGeneral Mana er

Board of Directors

Sales Manager Production Manager

ForemenAsstt. Sales

Manager

WorkersSalesmen

Personal

Assistant

Industrial

En ineer


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Merits and Demerits of Line and Staff organization

Delegation and Autonomy

Delegation is the dynamics of management. It is a total philosophy or concept how tomanage people. Just as authority is key to the managers job, delegation of authority is

the key to organization. Managers competence is not judged by the work he actually

performs on his own but by his ability to multiply himself through others, i.e., to obtainresults through others. Delegation of authority is indispensable for the success of

management. Delegation is an art of management and has certain working rules andprinciples. It leads to managerial development and makes specialized service available to

the business.

According to L.A.Allen It is the ability to get results through others. It is the dynamics

of management; it is the process a manager follows in dividing the work assigned to him

so that he performs that part which only he, because of his unique organizationalplacement, can perform effectively and so that he can get others to help him with what

remains.

EfficientManagement

GreaterCoordination

Quick action Balanced decision Training

Facilities

Discipline Flexibility

Confusion inorganization

Harmful tobusiness

Conflict betweenline and staff

Expensive Ineffectiveness of

staff

Merits Demerits


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Questions

1. Organization is an important tool to achieve enterprise objectives. Discuss.2. What do you understand by informal organization? How does it differ from

formal organization?

3.

Explain the term organization. Why is it regarded as the foundation upon whichthe whole structure of management is built.4. What is line organization? State its advantages and disadvantages.5. Distinguish between line organization and functional organization.6. Line and staff are characterized by relationship and not by departmental

activities. (Koontz), Discuss.


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Meaning and Definition of Leadership

Leadership is the process of influencing the behavior of the people. Leaders are themoving spirits and guiding stars of inspiration to their followers. A leader interprets the

objectives of the business, suggests course of action and guides people to achieve the set

objectives. He seeks active support and acceptance of the employees in following theproposed course of action. A successful leader is able to influence his subordinates by hisconduct and expression to carry out his wishes and command.

In the words of Koontz, ODonnel, Leadership is the ability of a manager to inducesubordinates to work with confidence and zeal.

According to Allen, a leader is one who guides and directs the people. He must givetheir efforts, direction and purpose.

Need for Leadership

Right leadership is the soul of any organization. Effective and successful leadership leads

an organization to achieve business goals. Good leadership is essential for the success of

a business because of;

Imperfect organizational structure, Occurrence of fast technical, economic and social changes, Internal imbalances due to growth, Human nature and behavior, and Psychological reasons.

Types of leadership

Leadership may be ;I) Laissez-faire LeadershipII) Autocratic leadershipIII)Democratic leadershipIV)Intellectual or functional leadershipV) Institutional leadershipVI)Paternalistic leadership

Laissez faire leadership is free from any interference by the superior in the work of

subordinates. The leader only fixes the goals and leaves the steps to achieve them entirely

to his subordinates. The leader even does not check the performance. Such a leadershipgenerally proves to be a failure.

An autocrat leader does not entertain any suggestions or initiative from his subordinates.He expects complete obedience to his command. Such a leadership is difficult to last for

long.


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Democratic leadership is a compromise between laissez faire and autocratic leadership.In this, solutions to the problems are found out by mutual discussions. It is more

rewarding and stable.

Intellectual or functional leadership is based on informal authority. Leadership is

acquired by technical superiority such as Accountant, Engineer, etc.

Under institutional leadership, a person becomes leader and commands authority

because of his high official position though he may not be an expert in the field of

activity, e.g., IAS officers acting as directors of some enterprises.

Paternal leadership is based on sentiments and emotions of the people. A paternal

leader though gives protection and support to all his subordinates but under him no one

grows. The worker is spoiled like a pampered child.

Leadership basically is a process of motivation. Different leaders have different styles to

motivate the people. Some leaders motivate their subordinates by introducing a severesystem of punishment for the disobedient ones, while others adopt persuation and active

participation as their techniques of motivation. An effective leader can motivate his

workers better by enlisting their voluntary cooperation, directing and disciplining them

and by keeping open channels of communication.

Functions of a LeaderA leader has to undertake three major functions as given below in order to guide and

motivate the employees and to understand their feelings and emotions:

Developing voluntary cooperation

Proper communication Direction and discipline

Voluntary cooperation may be obtained by offering friendliness and reposing trust in the

subordinates. It can be obtained by inviting subordinates for a democratic participation

and giving necessary support to the subordinates. A leader must maintain consistent andfair behavior. He must establish his reputation for genuineness of purpose and integrity of

character. He must adopt a positive approach and help in removing the legitimate

grievances of the employees in order to seek their best cooperation. He must alsorecognize differences in individual temperaments of the subordinates and change his

behavior to suit each individual.

Two way communications between the manager and workers are indispensable for goodleadership. Information, must flow both upward and downward, i.e., from the leader to

the subordinate and vice-versa. Due consideration must be paid to differences in personal

view-point, difficulties of language, organizational distances and inferred meaning. Allcommunications must be complete, clear and easily understandable. Undesirable

behavior of the subordinate must immediately de disciplined and corrected by adopting


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fair and impersonal methods. Power must be used with humility and with a sense ofobligation to use it carefully and discretely.

Qualities of a good leader

1)

Good personality physical and mental fitness2) Emotional stability3) Good understanding and better judgment and foresight4) Balanced approach and behavior5) Ability to guide and motivate subordinates6) Communicating skill7) Sociability8) Technical superiority with sound general education9) Sincere, fair and honest dealings10)Courage to accept responsibility.

Role of committees

A committee consists of a group of people specifically designated to perform some

administrative acts. It functions only as a group and requires the free interchange of ideasamong its members. There is no piece of work in a modern business house which does

not affect the work in other departments. For example, If the production manager wants

to change the product even slightly, the sales manager would be deeply concernedbecause he has to convince his customers that the change is all to the good. Similarly, the

sales manager cannot follow a policy without consulting the finance manager or the

production manager.

The decisions in a particular department should be made by the managers with thecommittees of the departments. This committee should preferably be presided over by the

general manager. This will ensure that when a decision is arrived at, all departments areconsulted and that, therefore, when the decision is put in to effect all departments will co-

operate. When important policy decisions are arrived at only through committees, the

various departmental managers will automatically begin to consider the viewpoints ofother departments when they decide matters.

Benefits of committees

Committees have become popular with business organizations on account of the

following advantages: These provide opportunities for pooling of ideas and lead to integrated group judgment. Personal bias and prejudice is eliminated from decisions and the

problems are looked at from diverse angles.

Committees promote co-ordination of various activities of an enterprise. This ispossible because committee work develops awareness of the problems of other

organizational units among members.


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Committees secure co-operation of the various parts of the organization in theexecution of plans. When an executive participates in the formulation of a plan in

a committee, he naturally acquires a special interest in its execution.

Committees train members in the problems of various divisions and make forcontinuity as some members may stay on the committees while others retire.

Committees provide a safeguard against the evils of the concentration of powerand bring about dispersal of authority.

Group decision making in Management

It is quite common in organizations that some decisions are taken by a manager

individually while some decisions are taken collectively by a group of managers.

Individual decisions are taken where the problem is of routine nature, whereas importantand strategic decisions which have a bearing on many aspects of the organization are

generally taken by a group. Group decision making is preferred these days because it

contributes for better coordination among the people concerned with the implementation

of the decision.

Rational decision making process contains the following steps

a) Define the problem A problem well defined is a problem half-solved. Wrongdefinition of the problem leads to wrong solutions. The problem has to be

examined from different angles so as to identify the exact causes. Unless exactcauses are identified, right decisions cannot be taken.

b) Analyze the problem The problem has to be thoroughly analyzed. The pastevents that contributed to the problem, the present situation and the impact of the

problem on the future have to be examined. Problems do not grow up overnight.The geneses of the problem and the various contributing factors have to be

analyzed. Proper analysis of the problem helps the manager to assess the scopeand importance of the problem.

c) Develop alternatives There are hardly few problems for which there are notmany alternatives. Effective decision-making depends on the development of, as

many alternative solutions, as possible. The underlying assumption is that a

decision selected from among many alternatives tends to be a better one.Theability to identify and develop alternative courses of action depends on the

managers creativity and imagination.

d) Evaluate alternatives Alternatives have to be evaluated in the light of theobjectives to be achieved, and the resources required. Evolution involves a

through scruitiny of the relative merits and demerits of each of the alternatives in

relation to the objectives sought to be achieved by solving the problems.

e) Select and implement the decision After weighing the pros and cons in detail,the best alternative has to be selected and implemented. It may not always be


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possible to select the best alternative for a given problem for want of completeinformation, time and resources. In such a case, the manager ha to satisfy with

limited information and optimize the yields under a given set of circumstances.

Once an alternative is selected, it has to be implemented in a systematic way. The

required resources for the implementation and the necessary cooperation from thepeople concerned with or affected by the decision have to be ensured.

f) Follow-up and feed back Once the decision is implemented, it has to be closelymonitored. Adequate follow-up measures have to be taken. Constant follow-up

helps to take corrective measures as and when necessary and enables to identifythe shortcomings or negative consequences of the decision. It provides valuable

feed-back on which the decision may be reviewed or reconsidered.

Management of Change

In large scale organizations, changes seldom occur without a bit of chaos. Usually changeagents try to minimize it by imposing some order on the change process. Change

becomes orderly when it is planned and implemented in a systematic way. The process of

planned change comprises the following steps:

1. Identify the need for change: The manager should identify the forces demandingchange. Those forces may be internal or external. Internal forces include;employee turnover, change related role conflicts, mounting problems from its

growing size, any other internal change like; introduction of new department due

to expansion in sales, production, etc. External sources include; technological

changes, new marketing strategies, new production techniques, etc.

2. Diagnose the problem: This step involves the identification of the root cause.Several techniques are used for diagnosis, e.g. interviews, attitude surveys, team

meetings, questionnaires, etc. Where the problem can be traced to a single

department, the focus of diagnosis is limited to that area. If the problem has wider

implications and affects a large number of departments, organizational analysis isrequired. Organizational analysis includes exhaustive study of organizational

goals, principles, practices and performance at a macro level. After such an

exhaustive analysis, the change agent would be in a position to identify the areaswhere modifications have to be made.


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Types of organizational change

3.

Plan the change: This is a critical step in the management of change. It involvesanswering three important questions (i) when to bring the change (timing), (ii)

how to bring the change (methods), and (iii) who will introduce the change(change agent). While introducing change, reactions from people must be

carefully assesses. People affected by change must be consulted; the likely impact

should be explained patiently; sufficient time to pick up new skills should be

given and adequate reward to those who follow change should be indicated.

4. Implement the change: While implementing any change programme, managersencounter three programmes- resistance, power and control.

Implementation of change: action steps

Problem Implication Action Steps

Resistance Need to motivate Invite participation from people. Offer appropriate rewards. Encourage open communication. Explain

why change is essential.

Control Need to manage the

transition

Use multiple and consistent leverage points. Develop organizational arrangements fortransition. Build in feedback machinations.

Power Need to shape thepolitical domain

Assure the support of key groups. Use leader behavior to get support of change. Use symbols and language.

Technology

Structure

Products

Culture/people

Strategy


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5. Follow-up and feedback: Management of change is incomplete without properfollow-up. Organization must evaluate the effects of change. Objectives must be

present and be compared with the performance to see the degree of success in

change. End results should be operationally defined and measurements must be

done both before and after the implementation of change.

Management versus Leadership

A burning question is how management differs from leadership. For some, there is nodifference. But increasing complexity drives ever greater specialization, so we reallyneed to recognize that leadership and management are two different functions. This is the

same as saying they serve two different purposes. A clear way of differentiating the two

is to say that

Leadership promotes new directions while management executes existingdirections as efficiently as possible. But the work of the manager is not just the

mundane monitoring of daily operations. It includes getting the most complexprojects done, like putting the first man on the moon. Unfortunately, managementis mistakenly seen as task-oriented, controlling and insensitive to people's needs.

By contrast, leaders are portrayed as emotionally engaging, visionary and

inspiring. But, separating leadership from management in terms of style is a deadend, simply because leadership can be shown by quiet or forceful arguments

based on hard facts.

An inspiring leader induces us to change direction while an inspiring managermotivates us to work harder to get a tough job done on time.

The best managers are very strategic about themselves. They recognize that time and

other resources are scarce, that competitive pressures demand efficient use of everything.Being strategic about themselves is the same thing as being a proactive, studious investorwho regularly monitors his or her investments in order to shift them around to get a better

return. Managers also have to be strategic about the business. It is not enough to do the

work efficiently, it is essential to do the right things. Both of these imperatives can bethought of in terms of wise investment. Management is primarily a decision making role.

Managers are charged with the responsibility to make a profit and this requires them to

make sound decisions.

By contrast, leadership is strictly informal influence. Leaders persuade people to changedirection. This way of thinking about leadership means that it is not a position and that

there is no such thing as autocratic leadership. It is vitally important to recast leadershipin this way. Otherwise, how can we explain the leadership of Martin Luther King whoinfluenced the Supreme Court to outlaw segregation on buses without any formal

authority over this body? We confuse ourselves when we call senior executives leaders.

The truth is that they are managers by virtue of their positions and they only showleadership when they influence people informally, like Martin Luther King did, to change

direction. Leadership is a

1.1 Perspective Management-dr.meena

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