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NATURE AND SIGNIFICANCE OF MANAGEMENT

Consider the following

A school without a principal

A cricket team without a captain,

An army

WHAT IS MANAGEMENT

Management is considered to be the activity that enables the performance

of a job, by organizing the effort of other people. This aspects is

extremely important in a business organization because most businesses

have a number of people working together and therefore it becomes

essential to ensure that all of them work together harmoniously, for

achieving the goals of the business. Just consider what would happen to

the working of a country if there was no government. There would be

anarchy and unrest. In such a context then, the government works as a

manager just as the principal of a school or the directors of a company or

partners in a business etc. What about a sole trader? Is he / she is doing

all the work alone, there is no management because the latter requires

people, but if there are employees working in such a business there will

be a management.

(A manager creates conditions for his people to achieve results)

In the case of a business unit, different people get together to achieve

some objectives and in the process, there can arise different problems

that need to be solved, thereby making management essential. It is the

management that will:


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1. Assemble resources

2. Assemble people

3. Provide instructions and guidance about the work

4. Check on the performance of the employees

5. Generally ensure that all related aspects are looked after

Management has been defined as follows:

C.S. George: Management consists of getting things done

through others, a manager is one who accomplishes objectives by

directing the effort of others. Koontz and ODonnell: Management is the creation and

maintenance of an internal environment in an enterprise where

individuals, working in groups, can perform efficiently and

effectively towards the attainment of group goals.

John F. McFarland: Management may be defined as the art of

securing maximum results with minimum of efforts so as to

secure maximum prosperity and happiness for both employer and

employee and give the public the best possible service.

Joseph Massie: Management is defined as the process by which a

cooperative group directs action towards common goals.

L.A. Appley: Management is the development of people and not

the direction of things. Management is personnel administration.

Stanley Vance: Management is simply the process of decision

making and control over the action of human beings for the

purpose of attaining pre-determined goals.


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American Society of Mechanical Engineers: Management is the

art and science of organizing and directing human efforts applied

to control the forces and utilize the materials of nature for the

benefit of man.

Taking a cue from the above quoted definitions it is easy to conclude

that parents at home, teachers in classrooms, principals in schools,

supervisors in stores or factories, chairmen of multinationals or even the

Prime Minister or President of a country are all involved with

management in some way or the other.

FEATURES OF MANAGEMENT

It is now right to examine the features of management and they are:

1. It is a group Effort. Management is required only when there is a

group of people working towards the achievement of any goal.

Take the example of a vegetable hawker such a person moves

from place to place along with the goods meant for sale, in search

of customers. Assuming that the person is operating alone, there is

no scope for management as used in the business sense. People can

argue that the person needs to manage ones own self and there can

be merit in that opinion, but when used in business terminology,

management refers to the channelizing of group effort and

therefore there is a need for plurality of persons.

2. It aims to Attain Pre-Determined Goals. All business

organizations are established with the aim of achieving a specific

purpose which is determined at the outset by the management of

the organization. It is then the duty of the management to make all


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possible efforts to achieve the goals that have been established so

that the purpose of establishing the organization can be justified. It

is possible that the goals may undergo minor / major changes with

changing times and conditions but the effort of the management

must not change and it should continue to strive whatever goals are

established over long and short periods of time.

3. It is Universal. Management is found in all types of organized

activity involving group effort and should not be incorrectly linked

with business organizations. Thus, whether an organization is a

school, college, hospital, club, religious establishment, etc., there

will be an effort made to get people to do the work so that the pre-

determined goals can be achieved. In other words, there is

management. This aspect of universality covers all types of

organizations involving group offers and also extends to all types

of organizations (small or large, simple or complex) spread out all

across the globe. University also implies that management exists

throughout an organization and not just at the top levels.

4. It is tangible. This refers to the fact that management as an

activity does not have a visible presence and therefore there is no

solid thing to show up as management. There are of course the

managers of an enterprise who can be referred to as the

management but this is not the physical presence of the activity

involving management. Therefore, although it is possible to

understand the impact of management, it is not possible to view the

concept as such and accordingly management is considered to be

intangible.


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5. It is Social. Management involves the working of a number of

people together, for the purpose of achieving common goals. Since

there is a multiplicity of people, there is bound to be interaction

between them and that creates a society. Thus. Management is

regarded as a social activity since it influences the behaviour of

people and also because it is modified by the manner in which

people of an organization behave.

6. It has the Quality of Integrating Goals . Most organizations have

a single primary objective and multiple secondary objectives. It

is the duty of any management to ensure that all the objectives of

an organization are linked together so that they can be achieved in

an efficient manner. There should also be integration between the

long term and short term aims of a business and the duty of linking

all the objectives is performed by the management of an enterprise.

7. It is activity based. Management has been defined by one writer

as management does. This and other definitions (quoted earlier),

make it clear that management is an activity based exercise and

therefore it involves the performance of some or the other thing.

Management is not static but dynamic because it involves the

performance of some or the other activity continuously.

(Features of Management at a Glance)

1. It is a group effort

2. It aims to attain pre-determined goals

3. It is universal

4. It is intangible

5. It is social


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6. It has the quality of integrity goals

7. It is activity based

OBJECTIVES OF MANGEMENT

The section is an attempt to discover what goals or targets are desired to

be achieved by management. The following can be stated as the main

aims of management:

1. Survival of the Enterprise. This aims at trying to ensure that an

organization continues to exist in the future despite competition

from external forces and changes in environmental conditions.

Every management needs to be dynamic enough to anticipate

changes and also be prepared to manage them so that an

organization can survive successfully.

2. Profitability of the enterprise: The main aim of any business is to

earn profits and it is the management of any enterprise that strives

to achieve that aim by making meaningful decisions for the success

of the organization.

3. Building up the image of the organization. This refers to the

establishment of a good name for a business and then striving to

maintain it. Businesses like Wipro, Reliance, Toyota, Nokia,

General Motors, etc. have all been led by management teams that

have worked hard to ensure that their organizations were at the

helm in their respective fields so that they have the special

advantage that goodwill brings to them.

4. Aiming to Expand the Business. The is essential in order to

increase the profits because there is a direct relationship between

the scale of operations and the earning of profits. It is no wonder


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then, that multinational corporations normally earn the highest

profits. Naturally, every management must try to increase the scale

of operations.

5. Supply of Quality Goods at Reasonable Prices. This is essential

because consumers these days are very aware of their rights and do

not accept sub standard products / unreasonable prices. Therefore

the sellers need to take account of these facts and the managements

must act accordingly.

6. Environmental protection and conservation. With growing

awareness of environmental protection and the increasing laws

applicable to the business sector it has become very important for

the management of business enterprises to ensure that their

organization does not defy and laws and in fact, contributes

positively to the conservation of natural resources as well as

environmental protection.

7. Promotion of Moral Values. It is believed that modern managers

generally adopt ethical principles in the process of managing. This

practice would help people in distinguishing between the right

and the wrong aspects in life and thereby promote a more

civilized society.

8. Payment of Taxes on Time to the Government. This becomes

possible due to the maintenance of appropriate records, which

makes it easy to calculate the correct taxes. Moreover, the

existence of ethical managements makes it necessary to pay taxes

on time.

9. Employment opportunities. Management is a field where there

are plenty of job opportunities. This is true whether or not a person


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possesses specialized managerial education from business

schools. With the growing world economies and increasing

globalization, the job opportunities extend not only to ones own

country but also to other parts of the world if people are prepared

to take up the option.

10. Fair wages and reasonable working conditions for employees.

Most modern managements recognize the fact that satisfied

employees lead to organizational success. They, therefore, make

an attempt to provide as many facilities as are possible, for the

employees so that the organization may finally gain. Thus, whether

it is fair earnings or good working conditions or free travel

etc., the aim is to make the organization finally gain.

11. Provision of Training and Development Opportunities. Every

contemporary management aims to improve the efficiency of its

work force because that would led to organizational efficiency.

This would also include the ascertaining of the employees that

need to be trained from time to time and all other such measures

that an organization can take so that the employees feel generally

good working where they are. The importance of this aspect lies at

the core of the increasing importance of the concept of Human

Resource Management.

12. Job Security and Job Enrichment for workers. This is related to

the previous point to the extent that it deals with the aspect relating

to employees. In this specific case, there is emphasis on the

provision of a sense of security to the employees so that they can

work more efficiently they need to be free from the problems


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associated with the thought What happens if I am jobless

tomorrow?.

Objectives of Management at a Glance

1. Survival of the enterprise

2. Profitability of the enterprise

3. Building up the image of the organization

4. Aiming to expand the business

5. Supply of quality goods at reasonable prices

6. Environmental protection and conservation

7. Promotion of moral values

8. Payment of taxes on time to the government

9. Employment opportunities

10. Fair wages and reasonable working conditions for employees.

11. Provision of training and development opportunities for the

workers

12. Job security, job enrichment for workers.

Management can be interpreted as an activity, process, discipline and as a

group

MANAGEMENT AS AN ACTIVITY

We know that:

Dancing is an activity

Trekking is an activity

Painting is an activity

Why?


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The underlying answer is that they all involve the doing of something.

What about management does it involve the doing of anything? The

answer is Yes! in that case, it is reasonable to regard it as an activity.

The question that can arise is what does management do? The answer is

that it consists of making and implementing decisions for the purpose of

achieving targets. Or, as Harold Koontz has observed, it is the art of

getting things done through and with people in formally organized

efforts.

Thus, management does the work of setting goals (through the various

plans) and then it does the work of getting people to achieve those goals.

All these involves considerable decision making and therefore this forms

the decision making activities performed by the management.

The other activity is related to the passing on of information and such

activity is entitled informational activity.

Finally, management performs activities connected to maintaining good

relations among the people working in the organization and such

activities are entitled inter personal activities, e.g. addressing the

grievances of subordinates.

MANAGEMENT AS A PROCESS

Some people regard management as process. What then is a process? The

answer could be a course of action or a manner of working or a route

taken, etc. The underlying idea is that a process involves a series of steps

for the purpose of accomplishing some goals. It is, therefore, like cooking


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or tailoring or computer programming or even surgery, all of which

involve the performance of a series of steps, in order to achieve specific

targets.

The process of management likewise involves certain steps like

planning, organizing, staffing, directing and controlling all of which

are undertaken for the specific purpose of accomplishing targets like

profit earning, employee welfare, customer satisfaction, etc.

As a process, management is regarded as a social process because it aims

to make people work together, it is also regarded as an integrating

process because it aims to ensure that all the resources (financial,

physical and human), work together in an integrated manner and

management is regarded as a dynamic or continuous process because it

never stops rather, it is carried on continuously.

MANAGEMENT AS A DISCIPLINE

When viewed in this context, management is considered to be a

specialized field of knowledge, which is not only studied as a distinct

field of knowledge but also has extensive application.

The western world has already recognized the importance of

management by making it essential to appoint qualified managers for

large scale organizations, the underlying assumption being that the more

qualified they are, the better is their ability to make successful decisions.

Qualified managers would mean those managers who have studied the

theory of management and also learnt to apply it. They should have


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completed the requisite course of study that are available and accordingly

make management eligible to be considered as a discipline.

Management can be considered to be a multidisciplinary subject, as it is a

combination of various subjects like economics, statistics, sociology,

mathematics, psychology, anthropology, etc. Also, the study of

management can be divided into several sub fields like production

management, financial management, marketing management etc.

Management is being studied as a discipline these days both within the

country and globally. There are numerous management schools or

institutes imparting the required knowledge and there is great demand

for qualified managers. No one can deny that there is a high premium on

the products of elite business or management schools like the Indian

Institutes of Management in India and the Harvard Business School in

the United States.

MANAGEMENT AS A GROUP

A group is understood to be a collection or assembly of various people,

e.g. a group of students, a group of teachers or a group of employees or

even a group of managers. Thus, when management is regarded as a

group, it is viewed as a collection of people who are doing the work of

managing or organization. The group may be divided into several levels,

viz. the top level, the middle level and the lower level.

The group would include managers at various levels of the organization

(top, middle and supervisors) but the fact is that together all the levels

form the group of management. For example, the management of


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Reliance Industries or the management at Infosys or at Coca Cola or at

the Reserve Bank of India etc. Thus management being universal, the

group will be found everywhere irrespective of the size of the

organization, the country being considered or the type of industry being

researched, etc. some people suggest that when referred to as a group,

management includes only the top level people this cannot be denied but

it applies in a narrow context.

Thus, according to Drucker: Management is a multipurpose organ that

manages a business and manages managers and manages workers

and work.

IMPORTANCE OF MANAGEMENT

It can be seen by one and all the management is becoming a very

important activity these days and qualified managers are much sought

after persons, as is entry to good management schools, like the Indian

Institutes of Management. This would lead one to accept that

management serves a important and useful purpose. Fortunately, these

are no two opinions about this conclusion and thus one needs to study the

aspects that make management so important. Some of these aspects are:

1. Best Use of Owned Resources: It is essential that the resources

available to a business be used in the best of most efficient manner

so that the business is able to earn the maximum from those

resources. The efficiency of the management normally determines

the degree of efficiency with which the resources are used.

Efficient managers will be able to decide with greater precision

about the type of goods / services that should be produced and


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marketed, the type of labour to be hired and the accompanying

remuneration packages and many other important decisions

relating to the organization.

2. Best Use of National Resources. Efficient managements not only

benefit the organization that they look after, but also the entire

nation. This happens because the efficiency of one organization

can lead to the conservation of resources of the nation since each

one makes a difference. Thus, Dhirubhai Ambani, the late founder

of Reliance Industries was able to increase his personal, corporate

and national wealth by simply managing his organization in an

efficient manner.

3. Lowest Possible Costs. This aspects relates to the fact that it is

the duty of any management to ensure, that wherever possible, it

should reduce the cost of operations. This is on account of the

simple logic that profit (the main goal of any business) is the

difference between the sales revenue and the cost of sales. It is

therefore possible to improve profits by reducing costs, wherever

possible. However, it should also be remembered that lowering of

costs should not be achieved at the expense of quality of products /

services, e.g. the Indian Railways should not aim to reduce the fare

of its Shatabdi trains by offering poor quality food or reduced

efficiency in services to customers.

Thus, the management seeks to lower the costs at any

predetermined level of quality of operations.

4. Improving Human Relations. Management is important because

it aims to improve the relationship between the people working

together in an organization. Good managers know that the


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efficiency of an enterprise is determined greatly by the level of

satisfaction of the people working therein and therefore they strive

to provide an environment for the best performance of the people

in the organization, and ultimately benefit everyone involved.

5. Achieving organizational goals. This is achieved by the efficient

combination of the different factors of production which is the

main task of any management. It is the management that is

responsible for acquiring the various resources, deciding how they

are to be combined and then implementing their decisions. The

management must also check on the efficiency of its decisions by

collecting information from the dealers, suppliers, customers, etc.

and then make the required changes for the future.

6. Creating job opportunity. These days, there are many jobs for

managers and real life experiences will vouch for the fact that

efficient managers are able to command very good remuneration.

Ever since 1991, when liberalization on a large scale was

introduced in India, leading to the entry of the multinational

companies, which in turn brought in expert management and the

accompanying high salaries there has been in an all round interest

in management jobs in this country. The opportunities are

numerous despite the competition but the fact is that management

is now a lucrative source of employment.

Importance of Management at a Glance

1. Best of owned resources

2. Best use of national resources

3. Lowest possible costs


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4. Improvement of human relations

5. Achievement organizational goals

6. Creating job opportunity.

LEVELS OF MANAGEMENT

In management the word level is used to refer to the differences in the

degrees of importance enjoyed by the various people managing an

organization. The importance consists of the right to make decisions for

the organization and everyone can agree to the conclusion that in all

organizations there are some people whose decisions affect the entire

unit, while there are three levels of management i.e. top, middle and

supervisor (low).

Top Level

This is so named because it includes that part of management which

enjoys the maximum importance in the organization. It includes the

owners of a business and also their chosen representatives appointed for

the purpose of making overall decisions, eg. The Manager, General

Manager, Managing Directors etc. Such people are rarely seen to be

doing any work in fact they appear to be enjoying themselves. The fact,

however, is that they are the ones who make decisions that can make or

break the organization and there fore shoulder the entire responsibility of

the organization. They:

(a) Set the overall goals

(b) Choose the important personnel

(c) Communicate important decisions to the concerned people

(d) Link all the people / departments / regions


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(e) Check the working of the branches and departments

Middle Level

This normally consists of that level of management, which provides

assistance to the top managers for the purpose of managing the

organization. It is known as the middle level of management because it is

in the middle of the top and the low levels of management and it has the

function of linking both the other levels to one another. This level has

less authority than the top level and naturally its area of responsibility is

also limited as compared to the top level. This level generally includes

Assistant Managers, Deputy Managers or even Area Managers, in the

case of those organizations that have offices in different areas.

Supervisor or Low Level

This level of management consists of all those managers who operate at

the lowest levels of authority in an organization and do not have any

managers working below them. Also known as operative management, it

is this level, which has an authority to get work done from others. This

level includes Factory Supervisors. Factory forement. Office

superintendents. Section officers, etc. and such manager arrange for the

performance of the actual work on a day to day basis by assigning work

to people, arranging the required resources conveying the essential

instructions and providing guidance wherever needed.


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NATURE OF MANAGEMENT

Management as a Science

The world science brings to mind subjects like physics, chemistry,

biology or other such subjects that have a systematic and organized

content, which is also supported by practical experiments.

If one looks into the details of the term science, the following features

can be distinguished

1. There exists a systematic and organized field of knowledge

2. There exists a cause and effect relationship between the different

variables under consideration

3. The principles are developed through observation, experimentation

and analysis

LEVELS OF MANAGEMENT

TOP MANAGEMENT(Board of Directors, Chairman,

Managing Director, General Manager)

MIDDLE MANAGEMENT

(Departmental heads, Viz. MarketingManager, Production Manager,

Manager Finance)

LOWER MANAGEMENT(Office Manager, Superintendents,

General Foremen, Foreman, Chief

Clerks Supervisors)


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4. The truth of the principles can be tested under the specified

conditions

5. The principles apply universally

Having listing the features of a subject that qualifies as a science, it is

now time to ascertain whether management is a science. For this purpose,

it is essential to relate the above stated features to management.

1. As an organized field of knowledge. Does management have this

quality? The answer to this one is a definite yes! There exist

various principles, theories and extensive research work related to

management.

2. Cause and effect relationship between the various elements.

This is true of management too. The underlying reason is that the

principles have been developed through a study of the cause of

certain behaviour and its resulting effect. Take the example of

Piece Rate Payment Plans they suggest that if a person is paid

according to the number of units (pieces) produced, he / she will

try to increase the output.

3. Principles Developed through Experiment and Analysis. This

feature is also applicable to management since the management

theories and principles have been developed after carefully

observing and experimenting with the behaviour of human beings.

An important management theory is Taylors Scientific

Management and in that he has brought out the fact that if human

beings work in harmony they can increase productivity.


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4. Testing of Theories and Principles. This one also applies to

management because under the stated conditions managerial

theories can be tested for similar results.

5. Universal applicability. Although there are some managerial

principles and theories that appear to apply universally, i.e. to all

the all the aspects being considered mostly this is where

managerial theories fail to pass the test, unlike the other science

subjects. For example, it is a scientific fact that a burning object

will be extinguished if it is deprived of oxygen this fact applies

whether the fact is tested in India or Egypt or Australia or Canada!

However, in the case of management theories, this need not

happen. A theory application in America need not have the same

conclusion in India or elsewhere, for the simple reason that

management relates to human behaviour and that is different

places and also at different times thereby altering the conclusions

at various times of experimentation. Take the case of Money as

an incentive! In India it may be possible to motivate an employee

by offering more money for more work but in Germany, it may not

be possible to do so especially at the higher income levels for the

simple reason that the Indian worker behaves in a different way

compared to the German worker.

Thus, management can be regarded as a science to a large extent but not

in an exact sense. Since it fails to satisfy all the principles applicable to a

science. It would therefore be reasonable to regard it as a behavioral

science because the outcome of managerial principles depends on the

behavior of human beings.


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Management as an Art

When we think of an art, we think of drawing, painting, acting, dance,

music or any other such activity that requires some kind of skill or talent

that a person is born with. Some of the distinct features of an art are:

1. The existence of individual skill or talent

2. the existence of a creative approach

3. the existence of practical knowledge

4. the ability of apply the knowledge and skill for achieving desired

results

5. Results practice by the individual.

The reader would surely agree that all these features would be present in

the lives of Lata Mangeshakr, M.F. Husain, Amitabh Bachan, Picasso.

Mozart, Pandit Ravi Shanker, Ustad Amjad Ali Khan and Many other

artistic personalities. The question that needs to be considered now is

whether management is an art and to find the answer we need to correlate

the features of an art with management.

1. Existence of Individual Skill or Talent. This feature is clearly

visible in management because every manager has his / her own

style of managing the work and the level of skill and talent

possessed by him / her will determine his / her style. This aspect

may be contradicted by the products of management schools who

believe in the principle that managers are made not born, but the

can, in turn easily asked to explain the existence of successful

managers from the business world who may even be totally

illiterate! We shall leave this matter to rest on the conclusion that

in order to be a successful manager one needs to possess skill and


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talent. The example of the late Dhirubhai Ambani who is a

success story in managing Indias largest private enterprise,

Reliance, bears fruit to this conclusion.

2. Existence of a Creative Approach. This implies the desire to

make something new something that does not already exist.

Management also satisfies this feature of an art since each

manager in order to accomplish the work. In the process he/she

may discover and create new things and new ways of doing the

assigned jobs.

3. Existence of Practical knowledge. This refers to the availability

of various aspects of knowledge relating to a subject and the use

of that knowledge in actual life. Just like any other art,

management also has many theories, principles and in fact,

extensive knowledge to be acquired about the subject. There is

full scope to apply the knowledge in real life and accordingly

management is also regarded as an art.

4. Ability to apply the knowledge to Achieve the desired results .

The mere existence of knowledge is not enough there should be

an attempt to apply or use that knowledge if a subject is to qualify

as an art. This aspect is satisfied by management because the

existing knowledge on the subject is actually put into use for the

purpose of accomplishing the goals of the organization by

regulating human behaviour e.g. one theory of management

because the existing knowledge on the subject is actually put into

use for the purpose of accomplishing the goals of the organization

by regulating human behaviour e.g. one theory of management

suggests that a worker is subject to fatigue levels after


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accomplishing a certain level of work and therefore needs to be

given some rest. This theory is put into actual practice by

managers in the form of rest time or breaks (something which

we get even while watching television).

5. Regular Practice by the Individual. Every art requires that the

practitioner be regular in applying the art if he / she desires to

improve the subsequent performances. The underlying philosophy

of the maxim is practice makes perfect. Thus, dancers like Raja

and Radha Reddy will improve their performance with regular

practice, as will Lucky Ali or Adnan Sami (the singers). This

aspect is visible in management also because the more

experienced the manager, the better is his ability to manage. No

wonder then, there is such a high monetary package for

experienced manages.

From the above analysis it is possible to conclude that management is

more of an art than a science some people go as far as to say that

managing a business is an art and not a science.

Management as a Profession

To recognize any body of knowledge as a profession, one has to look for

the following distinct features.

1. There should be specialized

2. the entry should be regulated through testing / examinations

3. There should be a strict code of conduct prescribed for the persons

practicing the profession.

4. There should be an inherent motive of service to the people,


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5. There should exist a regulating agency for the working of the

professionals.

All these features can be found in professions like Law, Medicine,

Architecture, etc. However, one needs to determine if they are present in

the case of management because if they are not, then management cannot

be regarded as a profession.

1. Specialized Knowledge. Is there specialized knowledge relating to

management?

The answer to this one is positive, because there is sufficient

theoretical knowledge related to management that has been

developed over the previous century. Outstanding managerial

writers include Taylor, Fayol, Drucker, Sheldon, Lyndall, Urwick

and many others. Since management is regarded as a dynamic

subject, there is research effort being made even now and therefore

there will be improvements and more new theories on the subject,

in the future.

2. No regulated Entry. Is there any restriction on individuals

regarding the entry to management? In other words, does a person

have to compulsorily pass any tests / examinations in order to

become a manager? The answer to this one is negative, because in

reality, anyone can be a manager tests and examinations are not

necessary to become a manager. If a person has the ability to

organize people get them to work jointly, he will be regarded as a

managers (think of Mahatma Gandhi). Of course, there are people

who become managers, after pursuing simple and complex


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managerial courses, but the fact remains that there is no restriction

on the entry to management.

3. No code of conduct. Is there a strict code of conduct regulating the

working of the members? The answer to this is also negative since

there is no code of conduct for the working of managers and each

manager is on his / her own.

4. Motive of Service. Do managers work with the aim of service to

the people? This is a debatable point since some people feel that it

is only money that motivates managers and they are willing to

compromise on all levels so long as their decisions get them the

monetary return. On the other hand, there is a school of thought

that feels that managers work together with people in order to

achieve the goals of an organization and therefore they have an

attitude of caring and understanding their subordinates. Thus, they

work with a service motto. We can then conclude that to some

extent managers work with a service objective.

5. No regulating agency. Is there an agency that regulates the

working of managers? This aspect will also be answered in the

negative because in India there is no such organization that

governs / regulates the working of managers? The existence of the

All India Management Institute may be cited as an example of a

central level governing body for the working of managers but the

fact remains that it is not in a position to lay down rules and then

enforce them with regard to managers. Even on the global level,

there is no such governing body.


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The obvious conclusion then is that management is not a profession.

This section can then is that management is not a profession. This section

can then be summed up as follows management has some principles

that have been scientifically derived (to that extent it is regarded as a

science), it even exhibits certain features of a profession (there is the

existence of specialized knowledge) but over and above all the related

aspects, it is more of an art than anything else. This finding is based on

the fact that management is practical in nature since it aims to deal with

reality and it definitely improves with practice like any other art.

MANAGEMENT AND ADMINISTATION

Consider the following:

In a business organization, when a newly appointed worker met with

an accident while at work and had to be subsequently hospitalized, the

question of granting a leave of absence could not be decided by his

immediate boss he was informed that the matter was under

managements consideration. It was only after the administration

rules on the matter, would the employee know, whether he was being

granted a leave of absence.

Having read the above example, it is possible that some readers of this

text would conclude that management and administration are two

different words that have a similar meaning and can therefore be used

interchangeably. This conclusion is not entirely incorrect but actually it is

incomplete. Management and administration are two different terms and

are regarded as such by one school of thought while another school of

thought regards them a different terms.


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Management and Administration are Interchangeable Terms. This

school of thought believes that managers as well as administrators are

those people in an organization who make decisions at various levels

throughout an organization and therefore they are essentially the same

the terms management and administration interchangeable authors like

Henri Fayol, McFarland, Koontz and Duse hold this view.

Management and Administration are Distinct Concepts. This school

of thought believes that the two concepts are different from one another.

However, there is no consensus on the nature of difference between

them. The European writers believe that management is the all important

aspect since administration is only a part of it, while the American

writers feel that it is administration that is supreme or most important and

that management is subordinate to it.

The further explain the concept the Europeans feel that management is

the most important activity undertaken in any organization because it

involves undertaken in any organization because it involves the making

of over all decisions and policies of the organization. Administration on

the other hand, is concerned with the implementation of the policies laid

out by the management.

The American think the reverse because they believe that it is the

administration that lays down the policies for the entire organization

while management is concerned with the execution of the policies. Thus,

according to the Americans, it is administration that is most important

and management is subordinate to it. The importance of administration is


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visible as one goes up the levels of management and simultaneously, the

significance of management decreases thus, the two concepts have an

inverse relationship.

ADMINISTATION AND MANAGEMENT

Top

Middle

Supervisory

Management and Administration at a Glance

Basis of difference Management Administration

1. Essence It is a going activity It is a thinking activity

2. Level at which practiced Middle and low Top

3. Commonly used in Business organizations Government

organizations

4. Affected by Internal environment External environment

5. Generally undertaken by Employees Owners

6. Aim To implemented policies To formulate policies7. Important at Middle and low levels of

an organization

Top level of the

organization

8. Title of practitioner Manager, Managing

Director, General

Manager etc.

Minister, Governor,

Commissioner,

Registrar etc.

New Terms Learnt

Management It consists of getting work done through the effort ofother people.

Management as an activity consists of the doing of some thing.

Management as a Process Consists of the performance of a series of

steps, in order to achieve specific goals.

Administration

Management


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Management as a Discipline Refers to a specialized field of knowledge

Management as a Group Refers to the people who undertake the task of

managing an organization.

Administration The top level management that has the task of making

important decisions for the entire organization.

Functions of Management

1. Planning:- It is the conscious determination of future course of

action. This involves why an action, what action, how to take

action and when to take action. Thus, planning includes

determining of specific objectives, determining programmes,

setting policies and strategies, setting rules and procedures

and preparing budget. Planning depend upon forecasting.

Planning can be long term or short term.

2. Organizing: It is the process of dividing work into convenient

tasks or duties to the individuals according to their positions.

Organizing functions also includes structure and hierarchy levels

in the organization.

3. Staffing: It includes creating human resources for the

organization, it includes the function of recruiting, training, fixing

financial compensation, appraisal of performance etc.

4. Directing:- When people are available in the organization they

must know what they are expected to do in the organization

superiors communicate about their goal, then they motivate lower

level to work and thus lead them to achieve higher efficiency

towards goal.


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5. Controlling:- Controlling involves identification of actual

results, comparison of actual results with expected results,

identification of deviation between two, if any, and take corrective

action. So that result match with expected results.


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CHAPTER 3

ORGANISING

Organizing has defined by Koontz et.al., as the grouping of activities.

Which are necessary to attain objectives, the assignment of each such

grouping to a manager with the authority necessary to supervise it, and

the provision for coordination horizontally and vertically in the enterprise

structure.

The purpose of organizing is to create an organization structure that is

designed to clarify who is supposed to do what and who is responsible

for which results; to remove obstacles to performance caused by

confusion and uncertainty of assignment, and to furnish decision making

and communication networks reflecting and supporting the enterprise

objective.

Organization is basically used with reference to:

A certain company or group of persons working together. E.g. Tata Iron

and steel company limited, or Torrent Pharmaceuticals Limited.

The organization is a structure or a network with specified relationship

among its members.

According to G.R. Terry, organizing is the establishing of

effective behavioural relationship among selected work persons

and work places so that the groups can work together efficiently.

According to John Pfiffner, Organization is essentially a matter of

relationship


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Chester Bernard, Organization is a system of cooperative

activities of two or more persons.

L.Urwick Organization is the process of dividing up the activities,

which are necessary to any purpose and arranging them in groups,

which are assigned to individual.

Mooney and Reiley, Organization is the form of every human

association for attainment of a common purpose.

PRINCIPLES OF ORGANISATION

There is a need to follow certain principles in order to formulate and

develop and sound and efficient organization structure. Some of the

important principles of organization are as follows:

Principles of Objectives: The formulation or organization

structure is very much influenced by the objectives of the

business concern. In view of this, the objectives of the business

concern should be clearly stated. This helps the management informulating the org structure and also in achieving the enterprise

objectives with minimum cost and effort.

Principle of specialization: It is similar to the principles of

division of work. In this the org structure should be formulated in

such a way that the activities of the enterprise are divided

according to different functions and the same are assigned to

persons according to different functions and the same are

assigned to persons according to their specialization.

Principles of Span of Control: The span of control should be

minimum because there is a limit to the number of persons that


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can be effectively supervised by one boss. The number of

subordinates may be few or many. This depends upon the ability,

the job, the complexity of the duties of the subordinates may be

few or many. This depends upon the ability, the job, the

complexity of the duties of the subordinates, the nature and

importance of the work to be supervised etc. these factors should

be considered at length before taking any final decision in this

respect.

Principles of Exception: Only exceptionally complex matters

should be referred to the executives for their decision and thesubordinates themselves should decide matter of routine nature.

This is necessary because the executive at a higher level instead

of spending their time for deciding routine matters can

concentrate on more important matters.

The Solar Principle: This principles is sometimes known as the

the chain command also. The line of authority should be clearly

stated. The line of authority from the Chief Executive at the top

of the enterprise to the bottom must be clearly defined.

The principle of Authority: authority is the element of Org

Structure. It is the tool by which a manager is able to create an

environment for individual performance. So the responsibility

and authority of each manager and supervisor should be clearly

defined. Authority that is given to the manager enables him to

accomplish the objective of the enterprise. Hence the authority,

should be clearly defined and it should be equal to the

responsibility entrusted to him


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The principle of unity of command: according to this principle,

each subordinate should have only one superior and dual

subordination should be avoided. Dual subordination may result

indiscipline of subordinates, under mining of authority, disorder,

delay and confusion. This principle avoids the possibility of

conflicts in instructions and develops the feeling of personal

responsibility for the work

Principle of Delegation: The org structure should provide for the

delegation of authority at every level. The authority delegated

should be equal to responsibility so as to enable the concernedperson to accomplish the task assigned to him by his superior.

Principle of Flexibility: The org structure should be such which

should be adaptable to the changing circumstances. There should

be a possibility, if the circumstances warrant, for expansion and

replacement without disrupting the basic design of the structure.

Principle of simplicity: The org structure should be simple with

a minimum number of levels. If the org structure has a large

number of levels, the problem of effective co-ordination and

communication may arise.

Principle of Continuity: There should be continuity in the org

and it is possible only if the org is dynamic and capable of

adopting itself to the needs of changing circumstances.

Principle of Unity of Direction: It means, for a group of

activities having the same objective, there should be one plant

and one objective. The facilities verification and coordination of

activities and also completion of task as per the schedule.


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Principle of Efficiency: The structure that is formulated should

enable the business concern to function efficiently and achieve its

objectives with minimum cost and effort.

The principle of Balance: In every org structure there is need for

balance. For effective grouping and assigning activities, this

principle calls for putting balance on all types of factors human

technical as well as financial.

Process of Organization

Organization is a continuous process. Even after the organization hasbeen created, changes may need to be made from time to time. Since the

org is created in order to meet the enterprise objectives. It must change

whenever what change can help achieve the organizational objectives

better.

The process of org. as described by Koontz et.al. is a follows:

1. Establishment of enterprise objectives

2. formulation of supporting objectives, strategies and plans

3. Identification and classification of activities necessary to

accomplish these objectives.

4. Grouping these activities in the light of human and material

resources and best possible way of utilizing them and assigning

responsibility for performing those activities.

5. Delegation to the lead of each group, the authority necessary to

perform activities in effective manner.


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6. Coordinating those activities horizontally and vertically through

flow of information and authority relations.


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DEPARTMENTATION

This first real task in designing an org structure is the identification of

activities and top group them properly. The process of grouping the

activities is commonly known as departmentation. The terms used to

denote the departments that result from departmentation are different as

in the business organizations, such terms as division, departments and

section are used. In government, these are called branch, department,

bureau and section, in military, these are referred to as battalion, group

company, etc. moreover, the terms used to designate departments may

differ in different organizations of the same nature. However, the process

of departmentalization will remain the same.

Need and importance of Departmentation

1) Advantages of specialization: The basic advantage of the

specailisation lies in terms of efficiency with which the work is

performed because a person focuses his attention on a narrow

aspect of the work and he gets mastery over that aspect. Naturally,

this results into performing the work more efficiently. Thus, if the

managerial function is conceived as a set of activities facilities the

work of the org. these activities can be carried out more efficiently

and effectively through the division of work leading to a

specialization of managerial function.

2) Fixation of Responsibility: Departmentation helps in fixing the

responsibility and consequently accounting for the results.

Responsibility can be discharged properly when it is clear, precise

and definite. Through departmentation, the work is fixed

accurately. The manager concerned to whom responsibility and


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authority are clearly specified, a manager knows what exactly he

has to do in the org. this helps the manager to become more

effective.

3) Development of Managers: Departmentation helps in the

development of managers. Development is possible because of the

two factors. First, the managers focus their attention on some

specific problems, which provides them effective on the job

training. Second, managerial need for further training can be

identified easily because the managers role is prescribed and

training can provide them opportunity to work better in their area

of specialization. Thus, need for training and its methods can be

easily identified.

4) Facility in appraisal: Managerial performance can be measured

when the area of activities can be specified and standards in

respect of these can be fixed. Departmentation provides help in

both these area. When a broader function is divided into small

segments and a particular segment is assigned to each manager the

area to be appraised is clearly known: the factors affecting the

performance can be fixed easily because factors affecting the work

performance can be known clearly. Thus, performance appraisal

will be more objective when departments have been created.

5) Feeling of Autonomy: Departmentation provides motivation by

developing feeling of autonomy to the extent possible. Normally

departments are created in the org with certain degree of autonomy

and freedom. The manager in charge of a department can take

independent decisions with in the overall framework of the org.


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thus, he enjoys satisfaction of being important to the org. This

feeling itself is a source of better performance among managers.

BASES OF DEPARTMENT

There are several bases of departmentation

1. Functional department

2. Product department

3. Territory department

4. Process department

5. Customer department

Functions

The grouping of common activities to from an org unit is known as

functional departmentation. Functional departmentation is the most

widely used basis for organizing activities and is present almost in every

large org at some level. Since functional departmentation can be adopted

at various levels of the org., the various functions of the org are divided

into basic and secondary functions.

Basic Functions: The basic or major functions are those, which are

essential for the organizations, and their operations contribute to the

organizational efficiency. E.g. in a manufacturing org, basic functions

may be produced. Marketing and finance. Similarly in a finance

company, financing activities may be basic functions. Thus, basic

functions are determined on the basis functions are determined on the

basis of their importance to the achievement of organizational activities.


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Secondary Functions: When departments are created on the basis of

major functions and a manager feels that his span of management is too

wide to manage effectively or take the advantages of specialization, he

may create departments within the major functional department. Such

departments will be created by dividing the major function into sub

functions. This process may go down further when a department may be

created at the top level. However, in order to perform marketing function

properly, particularly in large organization. It may be divided into

selling, marketing research, advertising etc. further advertising may be

divided into print media advertising. T.T. Advertising etc. Thus the

process of functional differentiation will continue through several levels

in the org.

Advantages of Functional Departmentation:

Advantages of specialization

Ensuring performance of activities necessary for the achievement

of organization objectives.

Elimination of unnecessary activities.

Maintaining the relative importance of functions in the org.

Disadvantages of Functional departmentation

Lack of responsibility for the end results

Over specialization and consequently lack of general

management point of vie

Problems of conflicts and coordination among functional

departments


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Therefore the functional departmentation is useful only up to top or

immediately below the top level.

Production Departmentation:

Product departmentation involves the grouping together of all activities

necessary to manufacture a product for product line. As the org grows in

size, it becomes difficult for managers to coordinate the activities of the

expanding product lines. One commonly adopted strategy is to establish

departments based on products. Product departmentation is preferred

expansion and diversification when manufacturing and marketing

characteristics of each product are of primary concern. It is generally

used when the product is relatively complex and a great deal of capital is

required for plant and other facilities such as automobile electronics.

Advantages of product departmentation

Beneficial for multiple products

Takes care of product lines more efficiently

Reduces problems of coordination for different products

Provides opportunities fur further diversification and expansion

of org

Provides product specialization necessary for managers specially

when each product is different from others.


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Disadvantages of product departmentation

Problem at top level management for coordination, multiplicity of

efforts because same functional facilities are required for

different products and problem in maintaining economical central

staff services.

Territory Departmentation

Territorial or geographical departmentation is specially useful to large

sized organizations having activities which are physically or

geographically spread such as banking insurance, transportation, etc. Insuch as case, all the activities in a given are of operations are grouped

into zones, branches, divisions etc. The assumption is that if markets are

widely dispersed, an improved cost profit situation will result if all

activities affecting a product line or service in a specific geographical

region are grouped totter. E.g. LIC.

Advantages

Territorial departmentation is specially to large scale

organizations of other organizations whose activities are

physically or geographically spread

In such cases, territorial departmentation provides certain

efficiency in operation.

Local factors such as customers, culture, styles, preferences etc.

always affect organizational functioning. In fact, the same kind of

work is always different when location is different. Thus,


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knowledge of local conditions is an important element in

effective management.

Moreover, some costs of operations can be save for example,

serving of customers at different location. The corresponding

facilities are created looking into the needs for local conditions.

Territorial depatmentation may provide training to mangers to

look after every aspects of organizational operations. Therefore,

they can develop a skill of looking at the org as a whole and can

progress at the tope level of the org where general management

qualities are needed.

Disadvantages :

The first importance problem is of communication. However, this

problem can be overcome without much difficulty once the

system of communication is developed added with modern

communication facilities.

Another problem that comes in the way is the distance between

policy framers and policy executors. Often both of them are at a

distance not only in terms of physical distance but also in terms of

mental distance because of different local conditions. However,

this problem can be overcome by providing suitable training to

the managers concerned.

Some problems or coordination may also arise between top level

and territorial level managers as some of the functions are to be

performed at the head office level. This arrangement requires


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many managers with general management skills. Therefore,

training and development should be a continues process.

Process Departmentation:

The process departmentation processes involved in the production or

various types of equipments used are taken as basis for departmentation.

When the production activities involve the use of several distinctive

processes, these can be used as the base for grouping of activities. Such

activities may be textiles, oil production etc.

Advantages:

The basic purpose of such departmentation is to achieve

economic advantages.

The processes are set in such a way that a series of operations is

feasible making operations economic. In such a case, efficient can

be achieved if department are created for each process as each has

its peculiarities.

It provides advantage of specializations required at each level of

total processes, maintenance of plant can be done in a better way

and manpower can be utilized effectively.

Disadvantages

This arrangement has the problem of coordination because the

work of each process is dependent fully on the entire process.

Therefore, there are chances of conflicts among managers looking

after different processes. However, this problem can be overcome


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by developing suitable norms and understanding among

managers.

Another problem that comes in the way is the distance between

policy framers and policy executors. Often both of them are at a

distance not only in terms of physical distance but also in terms of

mental, distance because of different local conditions. However,

this problem can be overcome by providing suitable training to

the managers concerned.

Some problems of condition may also arise between top level and

territorial level. This arrangement requires many managers withgeneral management skills. Therefore, training and development

should be a continues process.

Process Departmentation

The process departmentation, process involved in the production or

various types of equipments used are taken as basis for departmentation.

When the production activities involve the use of several distinctive

processes, these can be used as the base for grouping of activities. Such

activities may be textiles, oil production etc.

Advantages:

The basic purpose of such departmentation is to achieve

economic advantages.

The processes are set in such a way that a series of operations is

feasible making operations economic. In such a case, efficient can


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be achieved if department are created for each process as each has

its peculiarities.

It provides advantage of specializations required at each level of

total processes, maintenance of plant can be done in a better way

and manpower can be utilized effectively.

Disadvantages

This arrangement has the problem of coordination because the

work of each process is dependent fully on the entire process.

Therefore there are chances of conflicts among managers lookingafter different processes. However, this problem can be overcome

by developing suitable norms and understanding among

managers.

Customer Departmentation

Customer based departmentation is basically market oriented in which

departments are created around the markets served or around marketing

channels. While both these approaches to departmentation are used to

emphasis marketing and make it more effective they differ in some

respects. Grouping of activities around marketing channels involves

making an org structure reflect the ways an org reaches an ultimate

customer market centered grouping supports marketing efforts for

different types of customers. Therefore such a grouping is suitable to

these organizations which either serves different customers such as a

pharmaceutical company supplying to hospitals government, retail stores


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etc. for applying different marketing channels like wholesale, retail,

installment and hire purchase, export etc.


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Advantage of Customer departmentation

If focuses on customer who are the ultimate suppliers of money to

the org. Therefore different types of customers can be satisfied

easily through specialized staff. In fact the basic idea of this

departmentation is to provided services to clearly identified, group

of customers. Each group of customers has different purchase

behaviour, payment schedule, demand pattern, etc. Therefore, they

can be attracted to the organizations business by satisfying them

by providing services most suitable to each of them.

Disadvantages

Coordination between sales and other functions becomes difficult

because this method can be followed only in marketing division.

Duplication and confusion may raise in product, research and

development activities as well as in manufacturing, as the market

oriented managers demand special attention and services. This may

generate more conflicts in the org.

Further, there may be unemployment of manpower in some

departments, specially when demand for the customer group

decreases. Therefore, customer oriented departments should be

created to the extent they justify their existence.


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DELEGATION OF AUTHORITY

Delegation of authority is one of the important factors in the process

of organizing It is essential to the existence of a formal organization.

To delegate means to grant or confer. Here delegation means

conferring authority from one manager or organizational unit to

another in order to accomplish particular assignments. A manager

simply does not delegate authority: he delegates authority to get certain

work accomplished. By means of delegation the manager extends his

area of operations, without delegation, his actions are confined to what he

himself can perform.

Features of Delegation

The Important features of delegation are as follows :

1 Delegation of Authority : Delegation of authority is an

authority to a manager to act in a certain manner. The degree of

delegation defines the limit within which a sub ordinate

manager has to decide the things .Being formal authority org at

top level. it is distributed delegation or re- delegation.

2 Person Delegating Holds Authority : A subordinate staff

receives authority from his superior still holds his original

authority.

3 Delegated Authority can be enhanced, reduced or

withdrawn : This may happen at any time depending upon the

situation and requirement E.g. Change in policy. Procedure or

method etc may bring a change in the degree of delegation of

authority.


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4 No delegation without Authority : A manager cannot delegate

authority , which he himself does not possess. or what is vested

to him.

5 There cannot be total delegation : A manager cannot delegate

the entire authority vested in him because if he delegates all his

authority. He is no more required. Therefore only a part of the

authority is delegated.

6 Delegation may be general or specific : Delegation is called

specific when courses of action for particular objectives are

specified. It is general when these are not specified. Though

objectives may be specified, delegation may also be formal or

informal written or implied.

7 Authority to delegate depends upon several factors : These

factors are the ability of the executive to delegate, the ability of

the subordinate to accept delegation, the philosophy of

management the confidence of the superior in the subordinate

etc.

8 No escape from Responsibility : No manager can escape from

his obligation by delegation authority to sub ordinates.

Therefore, he has to provide a means to check whether the work

assigned to the subordinate has been done as the wishes.


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Importance of Delegation of Authority

The Importance of delegation can be judged from the following

1 It has dynamics of management and essence of sound

organization: It has been observed that an individual cannot

manage an control everything in the org due to various limitations.

Therefore, he has to divide the work load and share the

responsibility with his subordinates. When a mans job grows

beyond his capacity, he must share it to get it done successfully

through other people.

2 It is an art of getting things done : Delegation of authority has

been recognized as an art of getting things done in the best possible

manner. By delegating, the superior or senor share their workload

with others and concentrates on more important policy matters. He

is relieved of the routine matters.

3 It establishes healthy relationship: In this healthy relationship

between the executive and his subordinates are established. it

increases interaction and understanding among managers and

subordinate. It is managements best technique to help, to improve

the job satisfaction, motivation and morale of subordinates. It is

helpful in satisfying the needs for recognition responsibility and

freedom.

4 It facilities management authority: A manager who does not

delegate. It is because of simple reason that the management

harnesses fully the skills and the capabilities of the sub ordinates.

Therefore the managers cannot do much more than they could do if

they had not delegate. By delegation they multiply themselves.


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5 Delegation aids to executive development Delegation aids to

managers at lower levels to get valuable experience in decision-

making. They develop their abilities and team fill the higher

position in case of need. It facilities the diversifleation and

expansion of business through a team of component and contented

workers. Its is practically definite that an org cannot expand itself

without delegation.

6 Creation of right and responsibilities : Through the delegation

process each position in the org become a cluster of high,

responsibilities, relationship and obligations, which demand the

person to function in certain defined ways.


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Principles of Delegation

Delegation of authority is a conscious effort on the part of the manager.

Therefore, in delegating authority, he should observe certain principles so

as to make delegation effective.

1 Delegation by Results Expected : Delegation should be based on

results expected from a position in the org, Delegation by results

expected implies that planning exercise has been taken and goals

for each position have been set, communicated and properly

understood by those who are responsible for achieving these golas,

Often managers fail to delegate adequately because either they

have very vague ides about the contributions of their subordinates

or they just do not bother to determine whether the subordinates

have authority to do the things.

2 Functional Definition : Closely related with the principle of

delegation based on results expected is principle of functional

definition. In an org, activities are classified and grouped to create

departments or units. Each department contributes to

organizational objectives but at the same time has its own

objectives. Thus, there is a need for coordination of objectives and

activities of the department in such a way that they contribute

maximum to the org. This gives rise to the principle of functional

definition. The more a department has clear definitions of results

expected, activities to be undertaken, authority delegated and

authority and information relationships with other departments.

The more adequately the department can contribute towards

accomplishing the organizational objectives.


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3 Clarity of Lines of authority :Each position in the org is linked

with others through authority relationship: some directly through

line authority, others indirectly. More clearly these lines of

authority are defined, more effective is the delegation of authority.

In this respect, classical authors have given two principles, which

guide the delegation of authority. These principles are scalar chain

and unit of command. Scalar chain principle refers to the chain of

direct authority and relationship from superior to subordinate

throughout the org. Clearer the line of authority from the top

manager to every subordinate position in the org, the more

effective will be responsible decision making and organizational

communication. The other principle, that is unity of command

suggests that a subordinate should be responsible to a single

superior and he should receive instructions from the same superior

only. The more complete an individual has a reporting relationship

to a single superior, the less is the problem of conflict in

instructions and greater the feeling of personal responsibility for

results.

4 Level of authority: Authority level principle suggests that

maintenance of intended delegation requires that decisions within

the authority competence of individuals are made by them and not

refers upward in the org structure. Thus, managers should make

whatever decisions they can in the light of their delegated authority

and only matters that authority limitations keep them from

deciding should be referred upward. This is possible if authority

delegation is clear and managers at each level are sure what

authority they have.


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A problem comes when two or more managers can decide the things

jointly without referring the matter upward but singly none of them can

decide. Such a mater may be related with inter deter mental functioning.

A single manager cannot make decision because of splintered authority.

Splintered authority exists whenever a problem cannot be solved or a

decision made without pooling the authority delegation of two or more

manages. Eg. production manager of plant A can reduce his costs by

some procedural changes in plan B However. he cannot do this unless he

pools his authority with manager of plant B. Alternatively, he can refer

the mater upward and positive thing can happen by the action of

common superior In such a case it is preferable to consolidated and

pool splintered authority rather than referring the matter upward fro

decision

Splintered authority rather than referring the matter upward for decision,

Splintered authority cannot be wholly avoided in making decisions.

However, recurring decisions on the same matters may indicate the need

for recognition and red legation of authority.

5 Absoluteness of Responsibility : Responsibility is an obligation

to get the assigned work done. Since responsibility cannot be

delegated, a superior cannot be absolved of his responsibility for

the activities assigned to his subordinates to their superiors for

performance is absolute; once they have accepted an assignment

and the authority to carry it out, superior cannot escape

responsibility for the performance of activities of their

subordinates.


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6 Parity of Authority and responsibility : A common saying in

management is that authority and responsibility should be always

equal, It implies that since authority is the discretionary right to

carry out assignment s and responsibility is the obligation to

accomplish them, authority should correspond to the

responsibility. Thus, responsibility for actions cannot be greater

than authority delegated, nor should be less. This parity is not

mathematical but, rather, coextensive, because both relate to the

same assignment.

Blocks to Effective Delegation

There are many factors that can blocks effective delegation of authority.

Factors in Delegation (Superior)

The qualities of superior managers play an important part in determining

the kind of functional and social equilibrium that will achieved in the

superior subordinate relationships, and consequently the delegation of

authority. A superior manager is likely to delegate less authority in the

following situations.

1 Love for Authority : A superior will delegate his authority

specially if is an autocrat. Such a manager has intense desire to

influence others, to make his importance felt in the org. and to see

that his subordinates come frequently to get their decisions

approved. Such desires on the part of the manager keep him away

from delegation of adequate authority to his subordinates

irrespective of their needs.


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2 Maintenance of Tight control : A manager does not delegate

authority because he wants to maintain tight control over the

operations assigned to him. He likes to show business and security

created by work piled high on his desk. Doing tangible work is a

pleasurable activity, whereas spending ones time thinking

planning and other less tangibles is a difficult process. The

manager may become habituated to the constant contact of

subordinates bringing matters to him for approval.

3 Fear of Subordinates: A manager may not delegate adequate

authority because of fear of subordinate. The fear of a

subordinates growth may be real. It can take two forms.

The subordinate might show that he can perform the

superiors work so well that he becomes entitled to his

position, status, title, or prestige.

The subordinates increasing ability might earn him a

promotion to some other part of the org and the superior

may lose the best subordinate.

In this case, the may adopt defensive behavior. He simply fails to

delegate simply because adequate delegation may reveal managerial

shortcomings being practiced. This may happen specially when the

superior has poor operating procedures, methods and practices.

5 Attitudes towards subordinates : Delegation of authority is a

particular kind of trust between superior and his subordinates.

Therefore his attitude towards subordinates, and their attitudes

towards him become important in the process of delegation.


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Negative attitudes work against delegation of authority in several

ways.

If a superior has a lack of confidence in his subordinates

capacity he will not like to delegate them authority.

The superior may feel that his subordinates just do not

require more authority than they have been delegated

Such feeling may result into inadequate delegation of

authority.

The superior may not have good interpersonal

relationship with subordinates, which may result into less

delegation of authority.

6. Personality of Superior : Personality factors of superior also

affect the degree of delegation of authority E.g. An autocrat

superior will delegate less authority as compared to a democrat.

Similarly, a superior believing in the application of modern

techniques likes to delegate adequately. A superior coming from

the rank and file may delegate less, Similarly a manager who has

not been delegated adequate authority in his career is likely to

delegate less.


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Factors in Delegant (Subordinates)

The degree of delegation of authority is also determined by the

qualities of subordinates While superior a perception about the

qualities of subordinates plays an important role in delegation of

authority, subordinates themselves after the degree of delegation of

authority . They affect the delegation in several ways

Some subordinates have more capability to assume more

responsibility Since responsibility and authority go together,

competent subordinates may get more authority. The delegation of authority is formal and institutional but is

exercise is personal. Thus a competent subordinate may assume

and exercise more authority than others although working within

the context of same set of delegation.

In the following situations however subordinates are expected to exercise

less authority.

1 When they fear jarsh criticism for unfavourable results.

2 When they lack self confidence

3 When they lack resources.

4 When the have inadequate positive incentives

5 When their superior is easily available for making decision

on their part.

Organizational Factors Although personal factors affect the authority

delegation to a very great extent, other organizational factors also affect

the degree of authority delegation. Individual managers do not have


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control over these factors but have to work within the context of these

factors. Eg. even the autocrat has to delegate authority if the

organizational factors so warrant factors so warrant. Various

organizational factors such as management philosophy policy towards

centralization or decentralization availability of managerial personnel.

control techniques etc. determine the delegation of authority at various

levels of managements. If these factors are not favorable delegation of

authority will be affected adversely.


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DECENTRALISATION OF AUTHORITY

In the words of Satya Saran Chatterjee:- Decentralization is the pushing

down of authority and power of decision making to lower levels of

organization

According to Henri Fayol Everything that goes to increase the

importance of the subordinates role decentralization. He has obviously

referred the division of authority with certainty is the essence of

decentralization.

Factors Determining Degree of Decentralization

The factors determining the degree of decentralization are:

1. Size of Organization: Decentralization depends on the size of the

org. The larger the size of an org. the m

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