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NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET PEINCIPLE OF MANAGEMENT NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET BA7101 NPRCETNPRCETNPRCETNPRCET 2013 REGULATION DEPARTMENT OF MANAGEMENT STUDIES NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPRCETNPRCETNPRCETNPRCET NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] BA7101 PRINCIPLES OF MANAGEMENT LT P C3 0 0 3 COURSE OBJECTIVE: To expose the students to the basic concepts of management in order to aid in understanding how an organization functions, and in understanding the complexity and wide variety of issues managers face in today’s business firms. COURSE OUTCOME: i)The students should be able to describe and discuss the elements of effective management, ii) discuss and apply the planning, organizing and control processes, iii) describe various theories related to the development of leadership skills, motivation techniques, team work and effective communication, iv) communicate effectively through both oral and written presentation. UNIT I INTRODUCTION TO MANAGEMENT 9 Organization- Management- Role of managers- Evolution of management thoughtOrganization and the environmental factors- Managing globally- Strategies for International business. UNIT II PLANNING 9 Nature and purpose of planning- Planning process- Types of plans- Objectives- Managing by Objective (MBO) strategies- Types of strategies – Policies – Decision Making- Types of decision- Decision making process- Rational decision making process- Decision making under different conditions. UNIT III ORGANISING 9 Nature and purpose of organizing- Organization structure- Formal and informal groups/ organization- Line and staff authority- Departmentation- Span of control- Centralization and decentralization- Delegation of authority- Staffing- Selection and Recruitment- OrientationCareer development- Career stages- Training- Performance appraisal UNIT IV DIRECTING 9 Managing people- Communication- Hurdles to effective communication- Organization culture-Elements and types of culture- Managing cultural diversity. UNIT V CONTROLLING 9 Process of controlling- Types of control- Budgetary and non-budgetary control techniquesManaging productivity- Cost control- Purchase control- Maintenance control- Quality controlPlanning operations. TOTAL: 45 PERIODS TEXT BOOKS: 1. Andrew J. Dubrin, Essentials of Management, Thomson Southwestern, 9th edition,2012. 2. Samuel C. Certo and Tervis Certo, Modern management: concepts and skills, Pearson education, 12th edition, 2012. 3. Harold Koontz and Heinz Weihrich, Essentials of management: An International & Leadership Perspective, 9th edition, Tata McGraw-Hill Education, 2012. 4. Charles W.L Hill and Steven L McShane, ‘Principles of Management, McGraw Hill Education, Special Indian Edition, 2007. 7 REFERENCES: 1. Don Hellriegel, Susan E. Jackson and John W. Slocum, Management- A competencybased approach, Thompson South Western,11th edition, 2008. 2. Heinz Weihrich, Mark V Cannice and Harold Koontz, Management- A global entrepreneurial perspective, Tata McGraw Hill, 12th edition, 2008. 3. Stephen P. Robbins, David A.De Cenzo and Mary Coulter, Fundamentals of management, Prentice Hall of India, 2012. Department of Management Studies 1 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] OVERVIEW OF MANAGEMENT 1.1 Introduction Management is a vital aspect of the economic life of man, which is an organised group activity. A central directing and controlling agency is indispensable for a business concern. The productive resources – material, labour, capital etc. are entrusted to the organizing skill, administrative ability and enterprising initiative of the management. Thus, management provides leadership to a business enterprise. Without able managers and effective managerial leadership the resources of production remain merely resources and never become production. Under competitive economy and ever-changing environment the quality and performance of managers determine both the survival as well as success of any business enterprise. Management occupies such an important place in the modern world that the welfare of the people and the destiny of the country are very much influenced by it. Definition of Management Management may be defined in many different ways. Many eminent authors on the subject have defined the term "management", some of these definitions are reproduced below: According to Lawrence A Appley - "Management is the development of people and not the direction of things". According to Joseph Massie - "Management is defined as the process by which a cooperative group directs action towards common goals". In the words of George R Terry - "Management is a distinct process consisting of planning, organising, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources". According to James L Lundy - "Management is principally the task of planning, coordinating, motivating and controlling the efforts of others towards a specific objective". In the words of Henry Fayol - "To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control". According to Peter F Drucker - "Management is a multi-purpose organ that manages a business and manages managers and manages worker and work". In the words of J.N. Schulze - "Management is the force which leads, guides and directs an organisation in the accomplishment of a pre-determined object". In the words of Koontz and O'Donnel - "Management is defined as the creation and maintenance of an internal environment in an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goals". According to Ordway Tead - "Management is the process and agency which directs and guides the operations of an organisation in realising of established aims". According to Stanley Vance - "Management is simply the process of decision-making and control over the actions of human beings for the express purpose of attaining predetermined goals". According to Wheeler - "Business management is a human activity which directs and controls the organisation and operation of a business enterprise. Management is centred in the administrators of managers of the firm who integrate men, material and money into an effective operating limit". In the words of William Spriegel - "Management is that function of an enterprise which concerns itself with the direction and control of the various activities to attain the business objectives". In the words of S. George - "Management consists of getting things done through others. Manager is one who accomplishes the objectives by directing the efforts of others". Department of Management Studies 2 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] In the words of Keith and Gubellini - "Management is the force that integrates men and physical plant into an effective operating unit". According to Newman, Summer and Warren - "The job of management is to make cooperative endeavour to function properly. A manager is one who gets things done by working with people and other resources". According to John F M - "Management may be defined as the art of securing maximum results with a minimum of effort so as to secure maximum results with a minimum of effort so as to secure maximum prosperity and happiness for both employer and employee and give the public the best possible service". In the words of Kimball and Kimball - "Management embraces all duties and functions that pertain to the initiation of an enterprise, its financing, the establishment of all major policies, the provision of all necessary equipment, the outlining of the general form of organization under which the enterprise is to operate and the selection of the principal officers. The group of officials in primary control of an enterprise is referred to as management". In the words of E.F.L. Brech - "Management is a social process entailing responsibility for the effective and economical planning and regulation of the operations of an enterprise, in fulfilment of a given purpose or task, such responsibility involving: (a) judgement and decision in determining plans and in using data to control performance, and progress against plans; and (b) the guidance, integration, motivation and supervision of the personnel composing the enterprise and carrying out its operations". According to E. Peterson and E.G Plowman - Management is "a technique by means of which the purpose and objectives of a particular human group are determined, classified and effectuated". According to Mary Cushing Niles - "Good management or scientific management achieves a social objective with the best use of human and material energy and time and with satisfaction for the participants and the public". From the definitions quoted above, it is clear the "management" is a technique of extracting work from others in an integrated and co-ordinated manner for realising the specific objectives through productive use of material resources. Mobilising the physical, human and financial resources and planning their utilisation for business operations in such a manner as to reach the defined goals can be referred to as "management". If the views of the various authorities are combined, management could be defined as "a distinct ongoing process of allocating inputs of an organisation (human and economic resources) by typical managerial functions (planning, organising, directing and controlling) for the purpose of achieving stated objectives namely – output of goods and services desired by its customers (environment). In the process, work is preformed with and through personnel of the organisation in an ever-changing business environment". Management is a universal process in all organised social and economic activities. It is not merely restricted to factory, shop or office. It is an operative force in all complex organisations trying to achieve some stated objectives. Management is necessary for a business firm, government enterprises, education and health services, military organisations, trade associations and so on. 1.3 Characteristics of Management An analysis of the various definitions of management indicates that management has certain characteristics. The following are the salient characteristics of management. Department of Management Studies 3 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 1. Management aims at reaping rich results in economic terms: Manager's primary task is to secure the productive performance through planning, direction and control. It is expected of the management to bring into being the desired results. Rational utilisation of available resources to maximise the profit is the economic function of a manager. Professional manager can prove his administrative talent only by economising the resources and enhancing profit. According to Kimball "management is the art of applying the economic principles that underlie the control of men and materials in the enterprise under consideration". 2. Management also implies skill and experience in getting things done through people: Management involves doing the job through people. The economic function of earning profitable return cannot be performed without enlisting co-operation and securing positive response from "people". Getting the suitable type of people to execute the operations is the significant aspect of management. In the words of Koontz and O'Donnell - "Management is the art of getting things done through people in formally organised groups". 3. Management is a process: Management is a process, function or activity. This process continues till the objectives set by administration are actually achieved. "Management is a social process involving co-ordination of human and material resources through the functions of planning, organising, staffing, leading and controlling in order to accomplish stated objectives". 4. Management is a universal activity: Management is not applicable to business undertakings only. It is applicable to political, social, religious and educational institutions also. Management is necessary when group effort is required. 5. Management is a Science as well as an Art: Management is an art because there are definite principles of management. It is also a science because by the application of these principles predetermined objectives can be achieved. 6. Management is a Profession: Management is gradually becoming a profession because there are established principles of management which are being applied in practice, and it involves specialised training and is governed by ethical code arising out of its social obligations. 7. Management is an endeavour to achieve pre-determined objectives: Management is concerned with directing and controlling of the various activities of the organisation to attain the pre-determined objectives. Every managerial activity has certain objectives. In fact, management deals particularly with the actual directing of human efforts. 8. Management is a group activity: Management comes into existence only when there is an group activity towards a common objective. Management is always concerned with group efforts and not individual efforts. To achieve the goals of an organisation management plans, organises, co-ordinates, directs and controls the group effort. 9. Management is a system of authority: Authority means power to make others act in a predetermined manner. Management formalises a standard set of rules and procedure to be followed by the subordinates and ensures their compliance with the rules and regulations. Since management is a process of directing men to perform a task, authority to extract the work from others is implied in the very concept of management. 10. Management involves decision-making: Management implies making decisions regarding the organisation and operation of business in its different dimensions. The success or failure of an organisation can be judged by the quality of decisions taken Department of Management Studies 4 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] by the managers. Therefore, decisions are the key to the performance of a manager. 11. Management implies good leadership: A manager must have the ability to lead and get the desired course of action from the subordinates. According to R. C. Davis - "management is the function of executive leadership everywhere". Management of the high order implies the capacity of managers to influence the behaviour of their subordinates. 12. Management is dynamic and not static: The principles of management are dynamic and not static. It has to adopt itself according to social changes. 13. Management draws ideas and concepts from various disciplines: Management is an interdisciplinary study. It draws ideas and concepts from various disciplines like economics, statistics, mathematics, psychology, sociology, anthropology etc. 14. Management is Goal Oriented: Management is a purposeful activity. It is concerned with the achievement of pre-determined objectives of an organisation. 15. Different Levels of Management: Management is needed at different levels of an organisation namely top level, middle level and lower level. 16. Need of organisation: There is the need of an organisation for the success of management. Management uses the organisation for achieving pre-determined objectives. 17. Management need not be owners: It is not necessary that managers are owners of the enterprise. In joint stock companies, management and owners (capital) are different entities. 18. Management is intangible: It cannot be seen with the eyes. It is evidenced only by the quality of the organisation and the results i.e., profits, increased productivity etc. 1.4 Scope of Management It is very difficult to precisely state the scope of management. However, management includes the following aspects:1.4.1 Subject-matter of Management Management is considered as a continuing activity made up of basic management functions like planning, organizing, staffing, directing and controlling. These components form the subject-matter of management. 1.4.2 Functional Areas of Management Management covers the following functional areas:l Financial Management: Financial management includes forecasting, cost control, management accounting, budgetary control, statistical control, financial planning etc. l Human Resource Management: Personnel / Human Resource Management covers the various aspects relating to the employees of the organisation such as recruitment, training, transfers, promotions, retirement, terminations, remuneration, labour welfare and social security, industrial relations etc. l Marketing Management: Marketing management deals with marketing of goods, sales promotion, advertisement and publicity, channels of distribution, market research etc. Production Management: Production Management includes production planning, quality control and inspection, production techniques etc. l Material Management: Material management includes purchase of materials, issue of materials, storage of materials, maintenance of records, materials control etc. l Purchasing Management: Purchasing management includes inviting tenders for Department of Management Studies 5 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] raw materials, placing orders, entering into contracts etc. l Maintenance Management: Maintenance Management relates to the proper care and maintenance of the buildings, plant and machinery etc. l Office Management: Office management is concerned with office layout, office staffing and equipment of the office. 1.4.3 Management is an Inter-Disciplinary Approach Though management is regarded as a separate discipline, for the correct application of the management principles, study of commerce, economics, sociology, psychology, and mathematics is very essential. The science of management draws ideas and concepts from a number of disciplines making it a multi-disciplinary subject. 1.4.4 Principles of Management The principles of management are of universal application. These principles are applicable to any group activity undertaken for the achievement of some common goals. 1.4.5 Management is an Agent of Change The techniques of management can be improved by proper research and development. 1.4.6 The Essentials of Management The essentials of management include scientific method, human relations and quantitative techniques. 1.5 IS MANAGEMENT A SCIENCE OR AN ART? A question often arises whether management is a science or art. It is said that "management is the oldest of arts and the youngest of sciences". This explains the changing nature of management but does not exactly answer what management is? To have an exact answer to the question it is necessary to know the meanings of the terms "Science" and "Art". 1.5.1 What is "Science"? Science may be described- "as a systematic body of knowledge pertaining to an area of study and contains some general truths explaining past events or phenomena". The above definition contains three important characteristics of science. They are 1. It is a systematized body of knowledge and uses scientific methods for observation 2. Its principles are evolved on the basis of continued observation and experiment and 3. Its principles are exact and have universal applicability without any limitation. Judging from the above characteristics of science, it may be observed that1. Management is a systematized body of knowledge and its principles have evolved on the basis of observation. 2. The kind of experimentation (as in natural sciences) cannot be accompanied in the area of management since management deals with the human element. 3. In management, it is not possible to define, analyse and measure phenomena by repeating the same conditions over and over again to obtain a proof. The above observation puts a limitation on management as a science. Management like other social sciences can be called as "inexact science". 1.5.2 What is "Art"? 'Art' refers to "the way of doing specific things; it indicates how an objective is to be achieved." Management like any other operational activity has to be an art. Most of the managerial acts have to be cultivated as arts of attaining mastery to secure action and results. The above definition contains three important characteristics of art. They are1. Art is the application of science. It is putting principle into practice. 2. After knowing a particular art, practice is needed to reach the level of perfection. 3. It is undertaken for accomplishing an end through deliberate efforts. Judging from the above characteristics of art, it may be observed that- Department of Management Studies 6 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 1. Management while performing the activities of getting things done by others is required to apply the knowledge of certain underlying principles which are necessary for every art. 2. Management gets perfection in the art of managing only through continuous practice. 3. Management implies capacity to apply accurately the knowledge to solve the problems, to face the situation and to realise the objectives fully and timely. The above observation makes management an art and that to a fine art. 1.5.3 Management is both a Science as well as an Art Management is both a science as well as an art. The science of management provides certain general principles which can guide the managers in their professional effort. The art of management consists in tackling every situation in an effective manner. As a matter of fact, neither science should be over-emphasised nor art should be discounted; the science and the art of management go together and are both mutually interdependent and complimentary. Management is thus a science as well as an art. It can be said that-"the art of management is as old as human history, but the science of management is an event of the recent past." 1.6 PROFESSIONALISATION OF MANAGEMENT There has been a growing trend towards professionalisation of management. Professionalisation imparts a certain social responsibility and dignity to management. A professional cannot be controlled or directed by the client. He has professional knowledge and judgment which he uses to make his decision. Thus, professionalisation makes business more efficient, dynamic and socially responsible. The growth of management education in India has contributed to professionalisation in the business field. The company form of business organization which has split ownership from management and the gaining popularity of the company form of business organization have increased the need for professional managers. Is management a profession? To answer this question, first of all we should understand what a profession is. Many authorities on the subject have attempted to define a profession. According to Abraham Flexner, A profession is 1. A body of specialized knowledge and recognized educational process of acquiring it. 2. A standard of qualifications governing admission to the profession. 3. A standard of conduct governing the relationship of the practitioners with clients, colleagues and the public. 4. An acceptance of the social responsibility inherent in an occupation and the public interest. 5. An association or society devoted to the advancement of the social obligations as distinct from the economic interests of the group. According to Lewis Allen, " a professional manager is one who specializes in the work of planning, organizing, leading and controlling the efforts of others and does so through a systematic use of classified knowledge, a common vocabulary and principles, who subscribes to the standards of practice and code of ethics established by a recognized body". According to Peter Drucker, "Professional management is a function, a discipline, a task to be done; and managers are the professionals who practice this discipline, carry out the functions and discharge these tasks. It is no longer relevant whether the manager is also an owner; if he is it is incidental to his main function, which is to be a manager.‖ The World Council of Management has recommended the following criteria for professionalisation. They are 1. Members of a profession subordinate self-interest to the client interest and the Department of Management Studies 7 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] official interest. 2. A profession is based on a systematic body of knowledge that is held to common and lends to application. 3. Membership of a profession should depend on the observance of certain rules of conduct or behaviour. A critical evaluation of the above definitions show that professionalisation of business management shows that 1. There exists a systematic body of knowledge on management. A professional should have formally acquired the specialized knowledge and skill for management. Management is taught as a discipline in various educational institutes, throughout the world. 2. Membership of a profession should depend on the observance of certain rules of conduct and behaviour. The decisions and actions of a professional are guided by certain ethical considerations. 3. A profession is based on a systematic body of knowledge that is held in common and lends itself to application. Thus, a profession should have no ideological bias in the discharge of his functions. A close scrutiny of management shows that management unlike law or medicine is not a full-fledged profession. The reasons are 1. It is not obligatory to possess specific qualifications for being appointed as a manager. 2. There is no single association to regulate the educational and training standards of managers. 3. Uniform professional standards have not been set up for the practicing managers. Thus, from the above mentioned discussion we can understand that management fulfils certain criteria to call it a profession. Whereas, it fails to meet certain other criteria. Therefore, we can conclude that management is not a full-fledged profession but it is advancing towards professionalisation. 1.7 EVOLUTION OF MANAGEMENT THOUGHT The origin of management can be traced back to the days when man started living in groups. History reveals that strong men organized the masses into groups according to their intelligence, physical and mental capabilities. Evidence of the use of the wellrecognized principles of management is to be found in the organization of public life in ancient Greece, the organization of the Roman Catholic Church and the organization of military forces. Thus management in some form or the other has been practiced in the various parts of the world since the dawn of civilization. With the on set of Industrial Revolution, however, the position underwent a radical change. The structure of industry became extremely complex. At this stage, the development of a formal theory of management became absolutely necessary. It was against this background that the pioneers of modern management thought laid the foundations of modern management theory and practice. Evolution of management thought may be divided into four stages 1. Pre-scientific management period. 2. Classical Theory (a) Scientific Management of Taylor (b) Administrative Management of Fayol (c) Bureaucratic Model of Max Weber 3. Neo-classical Theory or Behaviour Approach 4. Modern Theory or Systems Approach Department of Management Studies 8 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Fig 1.1 explains the evolution of management thought. Figure 1.1: Evolution of Management Thought. 1.7.1 Pre-scientific Management Period The advent of industrial revolution in the middle of the 18th century had its impact on management. Industrial revolution brought about a complete change in the methods of production, tools and equipments, organization of labour and methods of raising capital. Employees went to their work instead of receiving it, and so, the factory system, as it is known today, become a dominant feature of the economy. Under this system, land and buildings, hired labour, and capital are made available to the entrepreneur, who strives to combine these factors in the efficient achievement of a particular goal. All these changes, in turn, brought about changes in the field of management. Traditional, conventional or customary ideas of management were slowly given up and management came to be based on scientific principles. In the words of L. F. Urwick - "Modern management has thrown open a new branch of human knowledge, a fresh universe of discourse". During the period following the industrial revolution, certain pioneers tried to challenge the traditional character of management by introducing new ideas and character of management by introducing new ideas and approaches. The notable contributors of this period are: (A) Professor Charles Babbage (UK 1729 -1871): He was a Professor of Mathematics at Cambridge University. Prof Babbage found that manufacturers made little use of science and mathematics, and that they (manufacturers) relied upon opinions instead of investigations and accurate knowledge. He felt that the methods of science and mathematics could be applied to the solution of methods in the place of guess work for the solution of business problems. He advocated the use of accurate observations, measurement and precise knowledge for taking business decisions. He urged the management of an enterprise, on the basis of accurate data obtained through rigid investigation, the desirability of finding out the number of times each operation is repeated each hour, the dividing of work into mental and physical efforts, the determining of the precise cost for every process and the paying of a bonus to the workers in proportion to his own efficiency and the success of enterprise. (B) James Watt Junior (UK 1796 - 1848) and Mathew Robinson Boulton (1770 - 1842): James Watt Junior and Mathew Robinson Boulton contributed to the development of management thought by following certain management techniques in their engineering factory at Soho in Birmingham. t Production Planning t Standardization of Components t Maintenance t Planned machine layout t Provision of welfare for personnel t Scheme for executive development t Marketing Research and forecasting t Elaborate statistical records (C) Robert Owens (UK 1771 - 1858): Robert Owens, the promoter of co-operative and trade union movement in England, emphasized the recognition of human element in industry. He firmly believed that workers' performance in industry was influenced by the working conditions and treatment of workers. He introduced new ideas of human relations - shorter working hours, housing facilities, training of workers in hygiene, education of their children, provision of canteen etc. Robert Owen, managed a group of textile mills in Lanark, Scotland, where he used his ideas of human Department of Management Studies 9 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] relations. Though his approach was paternalistic, he came to be regarded as the father of Personnel Management. (D) Henry Robinson Towne (USA 1844 -1924): H.R Towne was the president of the famous lock manufacturing company "Yale and Town". He urged the combination of engineers and economists as industrial managers. This combination of qualities, together with at least some skill as an accountant, is essential to the successful management of industrial workers. He favoured organized exchange of experience among managers and pleaded for an organized effort to pool the great fund of accumulated knowledge in the art of workshop management. (E) Seebohm Rowntree (UK 1871- 1954): Rowntree created a public opinion on the need of labour welfare scheme and improvement in industrial relations. The Industrial Welfare Society, The Management Research Groups and the Oxford Lecture Conferences in the U.K owed their origin and progress to the interest and zeal of Rowntree. 1.7.2 Classical Theory Prof. Charles Babbage, James Watt Junior and Mathew Robinson Boulton, Robert Owen, Henry Robinson Towne and Rowntree were, no doubt, pioneers of management thought. But, the impact of their contributions on the industry as a whole was meagre. The real beginning of the science of management did not occur until the last decade of the 19th century. During this period, stalwarts like F.W. Taylor, H.L. Gantt, Emerson, Frank and Lillian Gilberth etc., laid the foundation of management, which in due course, came to be known as scientific management. This epoch in the history of management will be remembered as an era in which traditional ways of managing were challenged, past management experience was scientifically systematized and principles of management were distilled and propagated. The contributions of the pioneers of this age have had a profound impact in furthering the management know-how and enriching the store of management principles. F.W. Taylor and Henry Fayol are generally regarded as the founders of scientific management and administrative management and both provided the bases for science and art of management. Features of Management in the Classical Period: 1. It was closely associated with the industrial revolution and the rise of large-scale enterprise. 2. Classical organization and management theory is based on contributions from a number of sources. They are scientific management, Administrative management theory, bureaucratic model, and micro-economics and public administration. 3. Management thought focussed on job content division of labour, standardization, simplification and specialization and scientific approach towards organization. A. Taylor's Scientific Management: Started as an apprentice machinist in Philadelphia, USA. He rose to be the chief engineer at the Midvale Engineering Works and later on served with the Bethlehem Works where he experimented with his ideas and made the contribution to the management theory for which he is so well known. Frederick Winslow Taylor well-known as the founder of scientific management was the first to recognize and emphasis the need for adopting a scientific approach to the task of managing an enterprise. He tried to diagnose the causes of low efficiency in industry and came to the conclusion that much of waste and inefficiency is due to the lack of order and system in the methods of management. He found that the management was usually ignorant of the amount of work that could be done Department of Management Studies 10 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] by a worker in a day as also the best method of doing the job. As a result, it remained largely at the mercy of the workers who deliberately shirked work. He therefore, suggested that those responsible for management should adopt a scientific approach in their work, and make use of "scientific method" for achieving higher efficiency. The scientific method consists essentially of (a) Observation (b) Measurement (c) Experimentation and (d) Inference. He advocated a thorough planning of the job by the management and emphasized the necessity of perfect understanding and co-operation between the management and the workers both for the enlargement of profits and the use of scientific investigation and knowledge in industrial work. He summed up his approach in these words: l Science, not rule of thumb l Harmony, not discord l Co-operation, not individualism l Maximum output, in place of restricted output l The development of each man to his greatest efficiency and prosperity. Elements of Scientific Management: The techniques which Taylor regarded as its essential elements or features may be classified as under: 1. Scientific Task and Rate-setting, work improvement, etc. 2. Planning the Task. 3. Vocational Selection and Training 4. Standardization (of working conditions, material equipment etc.) 5. Specialization 6. Mental Revolution. 1. Scientific Task and Rate-Setting (work study): Work study may be defined as the systematic, objective and critical examination of all the factors governing the operational efficiency of any specified activity in order to effect improvement. Work study includes. (a) Methods Study: The management should try to ensure that the plant is laid out in the best manner and is equipped with the best tools and machinery. The possibilities of eliminating or combining certain operations may be studied. (b) Motion Study: It is a study of the movement, of an operator (or even of a machine) in performing an operation with the purpose of eliminating useless motions. (c) Time Study (work measurement): The basic purpose of time study is to determine the proper time for performing the operation. Such study may be conducted after the motion study. Both time study and motion study help in determining the best method of doing a job and the standard time allowed for it. (d) Fatigue Study: If, a standard task is set without providing for measures to eliminate fatigue, it may either be beyond the workers or the workers may over strain themselves to attain it. It is necessary, therefore, to regulate the working hours and provide for rest pauses at scientifically determined intervals. (e) Rate-setting: Taylor recommended the differential piece wage system, under which workers performing the standard task within prescribed time are paid a much higher rate per unit than inefficient workers who are not able to come up to the standard set. Department of Management Studies 11 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 2. Planning the Task: Having set the task which an average worker must strive to perform to get wages at the higher piece-rate, necessary steps have to be taken to plan the production thoroughly so that there is no bottlenecks and the work goes on systematically. 3. Selection and Training: Scientific Management requires a radical change in the methods and procedures of selecting workers. It is therefore necessary to entrust the task of selection to a central personnel department. The procedure of selection will also have to be systematised. Proper attention has also to be devoted to the training of the workers in the correct methods of work. 4. Standardization: Standardization may be introduced in respect of the following. (a) Tools and equipment: By standardization is meant the process of bringing about uniformity. The management must select and store standard tools and implements which will be nearly the best or the best of their kind. (b) Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely to result in damage to machinery. (c) Conditions of Work: To attain standard performance, the maintenance of standard conditions of ventilation, heating, cooling, humidity, floor space, safety etc., is very essential. (d) Materials: The efficiency of a worker depends on the quality of materials and the method of handling materials. 5. Specialization: Scientific management will not be complete without the introduction of specialization. Under this plan, the two functions of 'planning' and 'doing' are separated in the organization of the plant. The `functional foremen' are specialists who join their heads to give thought to the planning of the performance of operations in the workshop. Taylor suggested eight functional foremen under his scheme of functional foremanship. (a) The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it. (b) The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work. (c) The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper returns of work from them. (d) The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism. (e) The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal motions in the quickest and best way. (f) The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers. (g) The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around him and his machines. (h) The Inspector: To show to the worker how to do the work. 6. Mental Revolution: At present, industry is divided into two groups – management and labour. The major problem between these two groups is the division of surplus. The management wants the maximum possible share of the surplus as profit; the workers want, as large share in the form of wages. Taylor has in mind the enormous gain that arises from higher productivity. Such gains can be shared both by the management and workers in the form of increased profits and increased wages. Benefits of Scientific Management: Taylor's ideas, research and recommendations brought into focus technological, human and organizational issues in industrial management. Department of Management Studies 12 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Benefits of Taylor's scientific management included wider scope for specialization, accurate planning, timely delivery, standardized methods, better quality, lesser costs, minimum wastage of materials, time and energy and cordial relations between management and workers. According to Gilbreths, the main benefits of scientific management are "conservation and savings, making an adequate use of every one's energy of any type that is expended". The benefits of scientific management are:(a) Replacement of traditional rule of thumb method by scientific techniques. (b) Proper selection and training of workers. (c) Incentive wages to the workers for higher production. (d) Elimination of wastes and rationalization of system of control. (e) Standardization of tools, equipment, materials and work methods. (f) Detailed instructions and constant guidance of the workers. (g) Establishment of harmonious relationship between the workers. (h) Better utilization of various resources. (i) Satisfaction of the needs of the customers by providing higher quality products at lower prices. Criticism 1. Worker's Criticism: (a) Speeding up of workers: Scientific Management is only a device to speed up the workers without much regard for their health and well-being. (b) Loss of individual worker's initiative: Scientific Management reduces workers to automatic machine by taking away from them the function of thinking. (c) Problem of monotony: By separating the function of planning and thinking from that of doing, Scientific Management reduces work to mere routine. (d) Reduction of Employment: Scientific Management creates unemployment and hits the workers hard. (e) Weakening of Trade Unions: Under Scientific Management, the important issues of wages and working conditions are decided by the management through scientific investigation and the trade unions may have little say in the matter. (f) Exploitation of workers: Scientific Management improves productivity through the agency of workers and yet they are given a very small share of the benefit of such improvement. 2. Employer's Criticism: (a) Heavy Investment: It requires too heavy an investment. The employer has to meet the extra cost of the planning department though the foreman in this department do not work in the workshop and directly contribute towards higher production. (b) Loss due to re-organization: The introduction of Scientific Management requires a virtual reorganization of the whole set-up of the industrial unit. Work may have to be suspended to complete such re-organization. (c) Unsuitable for small scale firms: various measures like the establishment of a separate personnel department and the conducting of time and motion studies are too expensive for a small or modest size industrial unit. Is Taylorism Really Dead? Fred Taylor took a lot of flack during his heyday. Unions were suspicious of him, employers were skeptical of his claims and the government thought he needed to be investigated. Taylor's philosophy permeated his whole life. Sudhin Kakar, in his study, Frederick Taylor: A Department of Management Studies 13 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Study in Personality and Innovation (Cambridge: MIT Press, 1970), notes that he did such strange things as experiment with his legs on cross-country walks to discover the step that would cover the greatest distance with the least expenditure of energy; as a young man, before going to a dance, he would conscientiously and systematically list the attractive and unattractive girls with the object of dividing his time equally between them; and he often incurred the wrath of his playmates when he was more concerned that the playing field for sports be scientifically measured than he was with actually playing the game. Taylor's "one best way" philosophy has often been misunderstood; though he believed that in terms of physical motions there should be "one best way", he also recognized that the equipment needed to perform the "one best way" would vary from person to person. His famous example of equipping a large man and a small man with shovels of different sizes to match the equipment with the person. While it is fashionable today to blast Taylor as being insensitive to human needs and treating people like machines, it is painfully obvious that his influence is probably as great now as it ever was. Though Taylor is criticized for treating people only as economic beings, surveys show that dollar motivation is still strong, particularly in manufacturing organizations. If one includes managerial personnel who are on some type of bonus or profit-sharing scheme, then we probably have more people today on economic incentive systems than ever before. Contributions of Scientific Management: Chief among these are: 1. Emphasis on rational thinking on the part of management. 2. Focus on the need for better methods of industrial work through systematic study and research. 3. Emphasis on planning and control of production. 4. Development of Cost Accounting. 5. Development of incentive plans of wage payment based on systematic study of work. 6. Focus on need for a separate Personnel Department. 7. Focus on the problem of fatigue and rest in industrial work. Taylor was the pioneer in introducing scientific reasoning to the discipline of management. Many of the objections raised were later remedied by the other contributors to scientific management like Henry L Gantt, Frank and Lillian Gilbreth and Harrington Emerson. Frank (USA, 1867 - 1924) and Lillian (U.S.A, 1878 - 1912): The ideas of Taylor were also strongly supported and developed by the famous husband and wife team of Frank and Lillian Gilbreth. They became interested in wasted motions in work. After meeting Taylor, they combined their ideas with Taylor's to put scientific management into effect. They made pioneering effort in the field of motion study and laid the entire foundation of our modern applications of job simplification, meaningful work standards and incentive wage plans. Mrs. Gilbreth had a unique background in psychology and management and the couple could embark on a quest for better work methods. Frank Gilbreth is regarded as the father of motion study. He is responsible for inculcating in the minds of managers the questioning frame of mind and the search for a better way of doing things. Gilbreth's contributions to management thought are quite considerable. His main contributions are: (a) The one best way of doing a job is the way which involves the fewest motions performed in an accessible area and in the most comfortable position. The best way can be found out by the elimination of inefficient and wasteful motions involved Department of Management Studies 14 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] in the work. (b) He emphasized that training should be given to workers from the very beginning so that they may achieve competence as early as possible. (c) He suggested that each worker should be considered to occupy three positions - (i) the job he held before promotion to his present position, (ii) his present position, and (iii) the next higher position. The part of a worker's time should be spent in teaching the man below him and learning from the man above him. This would help him qualify for promotion and help to provide a successor to his current job. (d) Frank and Lillian Gilberth also gave a thought to the welfare of the individuals who work for the organization. (e) Gilbreth also devised methods for avoiding wasteful and unproductive movements. He laid down how workers should stand, how his hands should move and so on. Henry Lawrence Gantt (USA, 1861 - 1819): H.L Gantt was born in 1861. He graduated from John Hopkins College. For some time, he worked as a draftsman in an iron foundry. In 1884, he qualified as a mechanical engineer at Stevens Institute. In 1887, he joined the Midvale Steel Company. Soon, he became an assistant to F.W Taylor. He worked with Taylor from 1887 - 1919 at Midvale Steel Company. He did much consulting work on scientific selection of workers and the development of incentive bonus systems. He emphasized the need for developing a mutuality of interest between management and labour. Gantt made four important contributions to the concepts of management: 1. Gantt chart to compare actual to planned performance. Gantt chart was a daily chart which graphically presented the process of work by showing machine operations, man hour performance, deliveries, effected and the work in arrears. This chart was intended to facilitate day-to-day production planning. 2. Task-and-bonus plan for remunerating workers indicating a more humanitarian approach. This plan was aimed at providing extra wages for extra work besides guarantee of minimum wages. Under this system of wage payment, if a worker completes the work laid out for him, he is paid a definite bonus in addition to his daily minimum wages. On the other hand, if a worker does not complete his work, he is paid only his daily minimum wages. There was a provision for giving bonus to supervisors, if workers under him were able to earn such bonus by extra work. 3. Psychology of employee relations indicating management responsibility to teach and train workers. In his paper "Training Workmen in Habits of Industry and Cooperation", Gantt pleaded for a policy of preaching and teaching workmen to do their work in the process evolved through pre-thinking of management. 4. Gantt laid great emphasis on leadership. He considered management as leadership function. He laid stress on the importance of acceptable leadership as the primary element in the success of any business. Gantt's contributions were more in the nature of refinements rather than fundamental concepts. They made scientific management more humanized and meaningful to devotees of Taylor. Harrington Emerson (USA, 1853 - 1931): Emerson was an American Engineer. He devoted his attention to efficiency in industry. He was the first to use the term 'efficiency engineering' to describe his brand of consulting. He called his philosophy "The Gospel of Efficiency". According to him, "efficiency means that the right thing is done in the right manner, by the right man, at the right place, in the right time". Emerson laid down the following principles of efficiency to be observed by management:(1) Ideals (2) Common Sense Department of Management Studies 15 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] (3) Competent Counsel (4) Discipline (5) Fair Deal (6) Proper Records (7) Dispatching (8) Standards and Schedules (9) Standard Conditions (10) Standardized Operations (11) Standard practice instructions and (12) Efficiency Reward. B. Administrative Management Theory: Henry Fayol was the most important exponent of this theory. The pyramidal form, scalar principle, unity of command, exception principle, span of control and departmentalisation are some of the important concepts set forth by Fayol and his followers like Mooney and Reiley, Simon, Urwick, Gullick etc. Henry Fayol (France, 1841 - 1925): Henry Fayol was born in 1941 at Constantinople in France. He graduated as a mining engineer in 1860 from the National School of Mining. After his graduation, he joined a French Coal Mining Company as an Engineer. After a 1. couple of years, he was promoted as manager. He was appointed as General Manager of 2. his company in 1888. At that time, the company suffered heavy losses and was nearly 3. bankrupt. Henry Fayol succeeded in converting his company from near bankruptcy to a 4. strong financial position and a record of profits and dividends over a long period. 5. Concept of Management: Henry Fayol is considered the father of modern theory of 6. general and industrial management. He divided general and industrial management into 7. six groups: 1. Technical activities - Production, manufacture, adaptation. 2. Commercial activities - buying, selling and exchange. 3. Financial activities - search for and optimum use of capital. 4. Security activities - protection of property and persons. 5. Accounting activities - stock-taking, balance sheet, cost, and statistics. 6. Managerial activities - planning, organization, command, co- ordination and control. These six functions had to be performed to operate successfully any kind of business. He, however, pointed out that the last function i.e., ability to manage, was the most important for upper levels of managers. The process of management as an ongoing managerial cycle involving planning, organizing, directing, co-ordination, and controlling, is actually based on the analysis of general management by Fayol. Hence, it is said that Fayol established the pattern of management thought and practice. Even today, management process has general recognition. Fayol's Principles of Management: The principles of management are given below: 1. Division of work: Division of work or specialization alone can give maximum productivity and efficiency. Both technical and managerial activities can be performed in the best manner only through division of labour and specialization. 2. Authority and Responsibility: The right to give order is called authority. The obligation to accomplish is called responsibility. Authority and Responsibility are the two sides of the management coin. They exist together. They are complementary Department of Management Studies 16 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] and mutually interdependent. 3. Discipline: The objectives, rules and regulations, the policies and procedures must be honoured by each member of an organization. There must be clear and fair agreement on the rules and objectives, on the policies and procedures. There must be penalties (punishment) for non-obedience or indiscipline. No organization can work smoothly without discipline - preferably voluntary discipline. 4. Unity of Command: In order to avoid any possible confusion and conflict, each member of an organization must received orders and instructions only from one superior (boss). 5. Unity of Direction: All members of an organization must work together to accomplish common objectives. 6. Emphasis on Subordination of Personal Interest to General or Common Interest: This is also called principle of co-operation. Each shall work for all and all for each. General or common interest must be supreme in any joint enterprise. 7. Remuneration: Fair pay with non-financial rewards can act as the best incentive or motivator for good performance. Exploitation of employees in any manner must be eliminated. Sound scheme of remuneration includes adequate financial and nonfinancial incentives. 8. Centralization: There must be a good balance between centralization and decentralization of authority and power. Extreme centralization and decentralization must be avoided. Scalar Chain: The unity of command brings about a chain or hierarchy of command linking all members of the organization from the top to the bottom. Scalar denotes steps. 10. Order: Fayol suggested that there is a place for everything. Order or system alone can create a sound organization and efficient management. 11. Equity: An organization consists of a group of people involved in joint effort. Hence, equity (i.e., justice) must be there. Without equity, we cannot have sustained and adequate joint collaboration. 12. Stability of Tenure: A person needs time to adjust himself with the new work and demonstrate efficiency in due course. Hence, employees and managers must have job security. Security of income and employment is a pre-requisite of sound organization and management. 13. Esprit of Co-operation: Esprit de corps is the foundation of a sound organization. Union is strength. But unity demands co-operation. Pride, loyalty and sense of belonging are responsible for good performance. 14. Initiative: Creative thinking and capacity to take initiative can give us sound managerial planning and execution of predetermined plans. C. Bureaucratic Model: Max Weber, a German Sociologist developed the bureaucratic model. His model of bureaucracy include (i) Hierarchy of authority. (ii) Division of labour based upon functional specialization. (iii) A system of rules. (iv) Impersonality of interpersonal relationships. (v) A system of work procedures. (vi) Placement of employees based upon technical competence. (vii) Legal authority and power. Bureaucracy provides a rigid model of an organization. It does not account for important human elements. The features of Bureaucracy are:- Department of Management Studies 17 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 1. Rigidity, impersonality and higher cost of controls. 2. Anxiety due to pressure of conformity to rules and procedure. 3. Dependence on superior. 4. Tendency to forget ultimate goals of the organization. Bureaucratic Model is preferred where change is not anticipated or where rate of change can be predicated. It is followed in government departments and in large business organizations. 1.7.3 Neoclassical Theory Neo-classical Theory is built on the base of classical theory. It modified, improved and extended the classical theory. Classical theory concentrated on job content and management of physical resources whereas, neoclassical theory gave greater emphasis to individual and group relationship in the workplace. The neo- classical theory pointed out the role of psychology and sociology in the understanding of individual and group behaviour in an organization. George Elton Mayo (Australia, 1880 - 1949): Elton Mayo was born in Australia. He was educated in Logic and Philosophy at St. Peter's College, Adelaide. He led a team of researchers from Harvard University, which carried out investigation in human problems at the Hawthorne Plant of Western Electrical Company at Chicago. They conducted some experiments (known as Hawthorne Experiments) and investigated informal groupings, informal relationships, patterns of communication, patterns of informal leadership etc. Elton Mayo is generally recognized as the father of Human Relations School. Other prominent contributors to this school include Roethlisberger, Dickson, Dewey, Lewin etc. Hawthorne Experiment: In 1927, a group of researchers led by Elton Mayo and Fritz Roethlisberger of the Harvard Business School were invited to join in the studies at the Hawthorne Works of Western Electric Company, Chicago. The experiment lasted up to 1932. The Hawthorne Experiments brought out that the productivity of the employees is not the function of only physical conditions of work and money wages paid to them. Productivity of employees depends heavily upon the satisfaction of the employees in their work situation. Mayo's idea was that logical factors were far less important than emotional factors in determining productivity efficiency. Furthermore, of all the human factors influencing employee behaviour, the most powerful were those emanating from the worker's participation in social groups. Thus, Mayo concluded that work arrangements in addition to meeting the objective requirements of production must at the same time satisfy the employee's subjective requirement of social satisfaction at his work place. The Hawthorne experiment consists of four parts. These parts are briefly described below:1. Illumination Experiment. 2. Relay Assembly Test Room Experiment. 3. Interviewing Programme. 4. Bank Wiring Test Room Experiment. 1. Illumination Experiment: This experiment was conducted to establish relationship between output and illumination. When the intensity of light was increased, the output also increased. The output showed an upward trend even when the illumination was gradually brought down to the normal level. Therefore, it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity. 2. Relay Assembly Test Room Experiment: This phase aimed at knowing not only the impact of illumination on production but also other factors like length of the working day, rest hours, and other physical conditions. In this experiment, a small Department of Management Studies 18 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] homogeneous work-group of six girls was constituted. These girls were friendly to each other and were asked to work in a very informal atmosphere under the supervision of a researcher. Productivity and morale increased considerably during the period of the experiment. Productivity went on increasing and stabilized at a high level even when all the improvements were taken away and the pre-test conditions were reintroduced. The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity. 3. Mass Interview Programme: The objective of this programme was to make a systematic study of the employees' attitudes which would reveal the meaning which their "working situation" has for them. The researchers interviewed a large number of workers with regard to their opinions on work, working conditions and supervision. Initially, a direct approach was used whereby interviews asked questions considered important by managers and researchers. The researchers observed that the replies of the workmen were guarded. Therefore, this approach was replaced by an indirect technique, where the interviewer simply listened to what the workmen had to say. The findings confirmed the importance of social factors at work in the total work environment. Bank Wiring Test Room Experiment: This experiment was conducted by Roethlisberger and Dickson with a view to develope a new method of observation and obtaining more exact information about social groups within a company and also finding out the causes which restrict output. The experiment was conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers. After the experiment, the production records of this group were compared with their earlier production records. It was observed that the group evolved its own production norms for each individual worker, which was made lower than those set by the management. Because of this, workers would produce only that much, thereby defeating the incentive system. Those workers who tried to produce more than the group norms were isolated, harassed or punished by the group. The findings of the study are:(i) Each individual was restricting output. (ii) The group had its own "unofficial" standards of performance. (iii) Individual output remained fairly constant over a period of time. (iv) Informal groups play an important role in the working of an organization. Contributions of the Hawthorne Experiment: Elton Mayo and his associates conducted their studies in the Hawthorne plant of the western electrical company, U.S.A., between 1927 and 1930. According to them, behavioural science methods have many areas of application in management. The important features of the Hawthorne Experiment are:1. A business organization is basically a social system. It is not just a techno-economic system. 2. The employer can be motivated by psychological and social wants because his behaviour is also influenced by feelings, emotions and attitudes. Thus economic incentives are not the only method to motivate people. 3. Management must learn to develop co-operative attitudes and not rely merely on command. 4. Participation becomes an important instrument in human relations movement. In order to achieve participation, effective two-way communication network is essential. 5. Productivity is linked with employee satisfaction in any business organization. Department of Management Studies 19 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Therefore management must take greater interest in employee satisfaction. 6. Group psychology plays an important role in any business organization. We must therefore rely more on informal group effort. 7. The neo-classical theory emphasizes that man is a living machine and he is far more important than the inanimate machine. Hence, the key to higher productivity lies in employee morale. High morale results in higher output. Elements of Behavioural Theory: There are three elements of behavioural theory. 1. The Individual: The neoclassical theory emphasized that individual differences must be recognised. An individual has feelings, emotions, perception and attitude. Each person is unique. He brings to the job situation certain attitudes, beliefs and ways of life, as well as skills. He has certain meaning of his job, his supervision, working conditions etc. The inner world of the worker is more important than the external reality in the determination of productivity. Thus human relations at work determine the rise or fall in productivity. Therefore human relationists advocate the adoption of multidimensional model of motivation which is based upon economic, individual and social factors. 2. Work Groups: Workers are not isolated; they are social beings and should be treated as such by management. The existence of informal organization is natural. The neo-classical theory describes the vital effects of group psychology and behaviour on motivation and productivity. 3. Participative Management: The emergence of participative management is inevitable when emphasis is laid on individual and work groups. Allowing labour to participate in decision making primarily to increase productivity was a new form of supervision. Management now welcomes worker participation in planning job contents and job operations. Neoclassical theory focuses its attention on workers. Plant layout, machinery, tool etc., must offer employee convenience and facilities. Therefore, neoclassical approach is trying to satisfy personal security and social needs of workers. Human relationists made very significant contribution to management thought by bringing into limelight human and social factors in organizations. But their concepts were carried beyond an appropriate limit. There are many other factors which influence productivity directly. Modern management thought wants equal emphasis on man and machine and we can evolve appropriate man- machine system to secure both goals – productivity and satisfaction. Limitations of Human Relations Approach:1. The human relationists drew conclusions from Hawthorne studies. These conclusions are based on clinical insight rather than on scientific evidence. 2. The study tends to overemphasize the psychological aspects at the cost of the structural and technical aspects. 3. It is assumed that all organizational problems are amenable to solutions through human relations. This assumption does not hold good in practice. 4. The human relationists saw only the human variables as critical and ignored other variables. 5. The human relationists overemphasize the group and group decision-making. But in practice, groups may create problems and collective decision-making may not be possible. 1.7.4 Modern Theory (System Approach) The systems approach to management indicates the fourth major theory of management thought called modern theory. Modern theory considers an organization as an adaptive system which has to adjust to changes in its environment. An organization is now defined Department of Management Studies 20 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] as a structured process in which individuals interact for attaining objectives. Meaning of "System": The word system is derived from the Greek word meaning to bring together or to combine. A system is a set of interconnected and inter-related elements or component parts to achieve certain goals. A system has three significant parts: 1. Every system is goal-oriented and it must have a purpose or objective to be attained. 2. In designing the system we must establish the necessary arrangement of components. 3. Inputs of information, material and energy are allocated for processing as per plan so that the outputs can achieve the objective of the system. Systems Approach Applied to an Organization: When systems approach is applied to organization, we have the following features of an organization as an open adaptive system:1. It is a sub-system of its broader environment. 2. It is a goal-oriented – people with a purpose. 3. It is a technical subsystem – using knowledge, techniques, equipment and facilities. 4. It is a structural subsystem – people working together on interrelated activities. 5. It is a psychosocial system – people in social relationships. 6. It is co-ordinate by a managerial sub system, creating, planning, organizing, motivating, communicating and controlling the overall efforts directed towards set goals. Characteristics of Modern Management Thought: 1. The Systems Approach: An organization as a system has five basic parts (1) Input (2) Process (3) Output (4) Feedback and (5) Environment. It draws upon the environment for inputs to produce certain desirable outputs. The success of these outputs can be judged by means of feedback. If necessary, we have to modify out mix of inputs to produce as per changing demands. 2. Dynamic: We have a dynamic process of interaction occurring within the structure of an organization. The equilibrium of an organization and its structure is itself dynamic or changing. 3. Multilevel and Multidimensional: Systems approach points out complex multilevel and multidimensional character. We have both a micro and macro approach. A company is micro within a business system. It is macro with respect to its own internal units. Within a company as a system we have:(1) Production subsystem (2) Finance subsystem (3) Marketing subsystem (4) Personnel subsystem. All parts or components are interrelated. Both parts as well as the whole are equally important. At all levels, organizations interact in many ways. 4. Multimotivated: Classical theory assumed a single objective, for instance, profit. Systems approach recognizes that there may be several motivations behind our actions and behaviour. Management has to compromise these multiple objectives eg: - economic objectives and social objectives. 5. Multidisciplinary: Systems approach integrates and uses with profit ideas emerging from different schools of thought. Management freely draws concepts and techniques from many fields of study such as psychology, social psychology, Department of Management Studies 21 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] sociology, ecology, economics, mathematics, etc. 6. Multivariable: It is assumed that there is no simple cause-effect phenomenon. An event may be the result of so many factors which themselves are interrelated and interdependent. Some factors are controllable, some uncontrollable. Intelligent planning and control are necessary to face these variable factors. 7. Adaptive: The survival and growth of an organization in a dynamic environment demands an adaptive system which can continuously adjust to changing conditions. An organization is an open system adapting itself through the process of feedback. 8. Probabilistic: Management principles point out only probability and never the certainty of performance and the consequent results. We have to face so many variables simultaneously. Our forecasts are mere tendencies. Therefore, intelligent forecasting and planning can reduce the degree of uncertainty to a considerable extent. Contingency Theory: Systems approach emphasizes that all sub- systems of an organization along with the super system of environment are interconnected andinterrelated. Contingency approach analysis and understands these interrelationship so that managerial actions can be adjusted to demands of specific situations or circumstances. Thus the contingency approach enables us to evolve practical answers to problems demanding solutions. Organization design and managerial actions most appropriate to specific situations will have to be adopted to achieve the best possible result under the given situation. There is no one best way (as advocated by Taylor) to organize and manage. Thus, Contingency Approach to management emphasizes the fact that management is a highly practice-oriented discipline. It is the basic function of managers to analyse and understand the environments in which they function before adopting their techniques, processes and practices. The application of management principles and practices should therefore be continent upon the existing circumstances. Contingency approach guides the manager to be adaptive to environment. It tells the manager to be pragmatic and open minded. The contingency approach is an improvement over the systems approach. It not only examines the relationships between sub-systems of the organization, but also the relationship between the organization and its environment. However, the contingency approach suffers from two limitations:1. It does not recognize the influence of management concepts and techniques on environment. 2. Literature on contingency management is yet not adequate. UNIT II PLANNING: What is planning? There are many definitions of planning. Planning may define as: According to Fayol - "The plan of action is, at one and the same time, the result envisaged, the line of action to be followed, the stages to go through, and the methods to use. It is a kind of future picture wherein proximate events are outlined with some distinctness...." Planning is deciding in advance what is to be done. It involves the selection of objectives, policies, procedures and programmes from among alternatives. A plan is a Department of Management Studies 22 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] predetermined course of action to achieve a specified goal. It is a statement of objectives to be achieved by certain means in the future. In short, it is a blueprint for action. According to Louis A Allen - "Management planning involves the development of forecasts, objectives, policies, programmes, procedures, schedules and budgets". According to Theo Haimann - "Planning is deciding in advance what is to be done. When a manager plans, he projects a course of action, for the future, attempting to achieve a consistent, co-ordinated structure of operations aimed at the desired results". According to Koontz O‘Donnell - "Planning is an intellectual process, the conscious determination of courses of action, the basing of decisions on purpose, acts and considered estimates". 1. PLANNING IS THE PRE-SELECTION: Planning is the pre-selection of objectives and outlines the action before starting any business. 2. ANOTHER WORDS Planning is selection of mission, objectives and true strategies, polices programs and procedure to achieve them. 3. SIMPLEST DIFINATION OF PLANNING: Planning is decision making in advance. 4. ANOTHER DEFINATION: Choosing the alternatives and making the decision is called planning. THE NUTURE & PURPOS OF PLANNING: The essential nature of planning can be defined by dividing it into four Major aspects. 1. THE CONTRIBUTION OF PLANNING TO PURPOSE AND OBJECTIVE: Every plan and all its supporting plans should contribute accomplishment of the purpose and objectives of the enterprise. This concept an use in organized enterprise which try to accomplishment of group purpose through deliberate cooperation. 2. THE PRAMACY OF PLANNING: Since managerial functions like organizing, Staffing, Leading and controlling support to the accomplishment of enterprise objectives, planning logically precedes or help the accomplishment of all other managerial functions. Because Manager must plan on order to know what kinds f organization relationship and personal qualifications are needed, which method should be fild by subordinates and what kind of control is to applied. All the other Managerial functions must be planned if they are to be effective. 3. THE PERVASIVENESS OF PLANNING: Planning is the function of all Managers, although the character and breadth of planning will vary with each Managers authority and with nature of polices and plans outlined by superiors. If Managers are not allowed a certain degree of discretion and planning responsibility they are not truly Managers. If we recognize the pervasiveness of planning, we can more easily understand why some people distinguish between the ―manager‖ and the ―administrator‖ or ―supervisor‖ one manager, because of his or her authority or position in the organization, may do more important planning than another, or the planning of one may be more basic than that of another and applicable to a large portion of the enterprise. However, all managers from presidents to first level supervisors plan. Even the head of a road gang or a factory crew plans in a limited area under fairly 4. ANOTHER DEFINATION: Department of Management Studies 23 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Choosing the alternatives and making the decision is called planning. THE NUTURE & PURPOS OF PLANNING: The essential nature of planning can be defined by dividing it into four Major aspects. 1. THE CONTRIBUTION OF PLANNING TO PURPOSE AND OBJECTIVE: Every plan and all its supporting plans should contribute accomplishment of the purpose and objectives of the enterprise. This concept an use in organized enterprise which try to accomplishment of group purpose through deliberate cooperation. 2. THE PRAMACY OF PLANNING: Since managerial functions like organizing, Staffing, Leading and controlling support to the accomplishment of enterprise objectives, planning logically precedes or help the accomplishment of all other managerial functions. Because Manager must plan on order to know what kinds f organization relationship and personal qualifications are needed, which method should be fild by subordinates and what kind of control is to applied. All the other Managerial functions must be planned if they are to be effective. 3. THE PERVASIVENESS OF PLANNING: Planning is the function of all Managers, although the character and breadth of planning will vary with each Managers authority and with nature of polices and plans outlined by superiors. If Managers are not allowed a certain degree of discretion and planning responsibility they are not truly Managers. If we recognize the pervasiveness of planning, we can more easily understand why some people distinguish between the ―manager‖ and the ―administrator‖ or ―supervisor‖ one manager, because of his or her authority or position in the organization, may do more important planning than another, or the planning of one may be more basic than that of another and applicable to a large portion of the enterprise. However, all managers from presidents to first level supervisors plan. Even the head of a road gang or a factory crew plans in a limited area under fairly - 33 strict rules and procedures. A principal factor in a success of supervisors at the lowest organization level is their ability to plan. 4. THE EFFIENCY OF PLANS Plans are efficient, if they achieve their purpose at a reasonable cost, when cost is measured not only in terms of times or money or production but also in degree of individual and group satisfaction. Many managers have followed plans whose costs were greater than the revenue that could be obtained. For example, one airline acquired certain aircraft with costs exceeding revenues. Companies have also tried to sell products that were unacceptable to the market. Plan can even make it impossible to achieve objects if they make enough people in an organization this satisfied or unhappy. TYPES OF PLANNING The failure of some managers is inability to recognize the several types of plans. This makes difficulty in making planning effective. Plans are classified as:1. PURPOSE AND MISSIONS & OBJECTIVES This mission identifies the basic functions or tasks of an enterprise. However, an objective is the end toward which an activity is aimed. Objectives in other words. Are ends toward which organizational and individual activities or directed. Objectives are the end point toward which all managerial functions, (Planning, Organizing, Leading, Staffing, and Controlling) are aimed. Objectives form a hierarchy ranging from Department of Management Studies 24 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] individual objectives to broad aims. 2. STRATEGIES & POLICIES Strategies and policies are the basis of operational plans and framework for plans. Both gives direction and are closely related. The word strategy is derived from a Greek word ―STRATEGOS‖ meaning General. Strategies is the determination of the basic long term objectives of an enterprise and the adoption of courses of action and allocation of resources necessary to achieve these goals policies are general statements or understandings that guide manager‘s thinking and decision making. - 34 3. PROCEDURE & RULES Procedures are plans that establish a required method of handling future activities. Briefly, procedures guide actions. Rules are those required actions or non-actions allowing no discretion. Rules are simply called simple plans. 4. PROGRAMMS Programs are a complex of goals, policies, procedures, rules, tasks and steps to be taken, resources to be employed and other elements necessary to carryout a given course of action and normally supported by capital and operating budgets. 5. BUDGET A budget is a numerized program. It is a statement of plans and expected results expressed in numerical terms or forms. The budget of an enterprise represents the sum total of income and expenses with profit or surplus. STEPS IN PLANNING There are eight applicable steps in planning which should be followed by managers in connection with major programs and in any other through planning. 1. AWARENESS OF OPPERTUNITIES An awareness of opportunities in the external environment as well as within the organization is the real starting point for planning. All managers should take look at future opportunities and see them clearly and completely. They should know where they stand in light of their strengths and weakness, understand what problems they wish to solve and why, and know what they expect to gain. Setting realistic objectives depends on this awareness. (i) About market (ii) About expected competition (ii) What customers wants (iv) Awareness about their qualities and weakness 2. SETTING OBJECTIVES The second step in planning is to establish or set objectives for the entire enterprise and then for each subordinate work unit. Objectives specify the expected results and indicate the end points of (i) What is to be done (ii) Where the primary emphasis is to be placed (iii) What is to be accomplished by the network of strategies, policies, procedures, rules, budgets and programs. - 35 3. DEVELOPING PREMISES The third logical step in planning is to establish planning premises. Such as forecasts, applicable basic policies and existing company plan. The are assumptions about the environment in which the plan is to be the carried out. It is important for all the managers involved in planning to agree on the premises. Forecasting is important in premising: What kind of markets will be there? What volume of sales? What prices? What products? What technical developments? What cost? Etc 4. INDENTIFYING ALTERNATIVE COURSES OF ACTION Department of Management Studies 25 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] The forth step in planning is to search and examined alternative courses of actions. The planner must usually make preliminary examination alternative courses to accomplish the goal. 5. EVALUATING ALTERNATIVE COURSES After determining alternative courses and examining their strong and weak points, the next step is to evaluate the alternatives. That which alternative will give the best of meeting goals at the lowest cost and highest profit in a given period. 6. SELECTING A COURSE Selecting an alternative is the real point of decision making. This is the point at which the plan is adopted. After identifying and evaluating alternative the manager has to decide one best alternative or several alternative courses of action. 7. FORMULATING DERIVATIVE PLANS The seventh step in planning is formulating derivative plans. When a decision is made next step is to formulate a supporting plan, such as to buy equipment, materials, hire and train workers and develop a new product. 8. NUBERISING PLANS BY MAKING BUDGETS After decision making and formulating plans the final step in planning is to numberise decision and plan by converting them into budgets. The overall budgets of an enterprise represent the sum total of income and expenses with resulting profit. Budgets are important thing in planning process. - 36 STEPS IN PLANNING Bing aware of opportunityin the light of the marketcompetition what costumerwant our strength ourweakness.Settings objectives wewant to be and what wewant to accomplished and when.Considering planningpremises in whatenvironment external orinternal will our plan operates.Identifying alternativeswhat are the mostpromising alternatives toaccomplishing to our objectives.Comparing alternatives inlight of goals whichalternative will give as the best of meeting our goals atthe lowest at highest profit.Choosing and alternativeselecting the course of actionwe will pursue.Formulating supporting planssuch as plans to buyequipment, buy materials, hireand train workers develop anew product.Numberising plans by making budgets develops such budgetsas; volume and price of sales.Operating expenses expenditures for capitalequipment. THE PLANNING PROCESS A rational approach to goal achievement planning is a rational approach to accomplishing objectives. The process can be shown by figure. X Figure Y X n.x T-n t o Progress, time, critical planning, premises In this diagram, progress (toward more sales, higher profits, lower costs, and so forth) is on the vertical axis, and time is on the horizontal axis. Here x indicates where we are (at to or time zero) and y where we want to be at future time (at tn). In short, we are at ax and want to go to y. often we do not have all the data, but we start planning anywhere. We may even have to start our planning study at x (at t-n). the line x y is the decision path. Department of Management Studies 26 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] If the future work completely certain, the line x y would be relatively easy to draw. Because we cannot forecast or consider everything, we try to develop our path x to y in light of the most critical premises. The essential logic of planning applies regardless of time interval between TO and TN, weather it is five minutes or twenty years. If the time span is long, premises may be unclear, goals may be more difficult to achieve and other planning complexities may be great. Various critical premises Various critical premises - 38 MANAGEMENT BY OBJECT (MBO) Management by objectives (MBO) is now practiced all over the world. Yet, despite its wide applications, it is not always clear what is meant by MBO. Some says that it is an appraisal tool; other sees it is a motivational technique; still others consider MBO a planning and control device. In other words, definitions and applications of MBO differ widely. MBO process consists of setting goals at the highest level of the organization, clarifying the rules of responsible persons for achieving the goals. Some still define MBO in a very narrow, limited way. BENEFITS OF MBO There are four benefits of MBO. 1. MBO IMPRVOES MANAGEMENT: All the objectives of management by objective can be summarized by saying that it results in greatly improved Management. objective can not be establish without planning.MBO force Managers to think about planning for results.MBO also requires that Managers think about the way from which they will accomplish results. They will think about need of assistance to achieve the objectives. 2. MBO CLASSIFY ORGANIZATION MBO classify the organizational roles and structure. It force managers to delegate authority according to the results they expect. 3. MBO INCOURAGE PERSONAL COMMITMENTS; One of the great advantages of management by objective is that it encourages people to commit themselves to their goals. Because of MBO people can understand their area of discretion, there authority, the part in setting their objectives. 4. MBO DEVLOPES EFFECTVE CONTROL MBO help people to develop effective control. As MBO guides in setting result oriented planning. It is also guides people to develop effective control towards the accomplishment of the goals. - 39 WEAKNESSES OF MANAGEMENT BY OBJECTIVES With all its advantages, MBO has a number of weaknesses. There are several weakness of MBO. 1. MBO FALIURE TO EXPLIAN PHILOSPHY MBO As MBO emphasis self-control and self direction therefore sometimes managers fail to explain the philosophy of MBO to their subordinates. Managers often fail to explain about MBO that it is? How it works? Why it is being done? What part in performance appraisal? How participants can benefits? 2. MBO FAILURE TO GIVE GUIDE LINES FOR GOAL SETTING One of the weaknesses of MBO is that it fails to give guide line for goal setting to Department of Management Studies 27 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] managers. Managers need planning premises and knowledge of major company polices. People must have some assumptions about future. They should have some understanding about objectives affecting their areas of operations. They should know about objectives and programes.MBO fails to give guideline to Managers. 3. DIFFICULTY OF SETING GOALS Truly verifiable are difficult to set. MBO difficult and verifiable goals. 4. EMPHASIS ON SHORT TIMES GOALS In most MBO programs, managers set goals for the short term for yearly or quarterly. Emphasis on short term goals lead to danger more expensiveness as of the longer range. 5. DANGER OF INFLAXIBILITY In MBO program managers often hesitate to change objectives. Change in objective can affect results. So in MBO managers often hesitate to know flexibility. OTHER WEAKNESSES There are some other dangers and difficulties in MBO. 1- There may be a danger of overuse of quantitative goals or low gradation of important goals. 2- Difficulty in applying goal oriented planning. 3- Difficulty of converting broad objective into subordinate objectives. 4- Difficulty in measuring performance. 5- Difficulty in providing feedback. - 40 6- Difficulty in setting long-range objectives and planning. 7- Difficulty in adjusting to the fast changing environment DECISSION MAKING Decision making is defined as the selection of course of action from among alternative. It is the core of planning. A plan cannot be said to exist unless a decision has been made. Managers sometimes see decision making as their central job because they must constantly choose what is to be done, who is to do it and when, where and how it will be done. Decision making is the part of planning and everyone‘s daily living. RATIONAL DECISION MAKING; It is the rational decision making that goals cannot be attain without action. People acting or deciding rationally are attempting to reach some goal that cannot be attained without action. They must have a clear understanding of alternatives. Thy must have ability and information to analyze and evaluate alternatives in order to achieve goals. Finally they must have desire to come the best solution by selecting alternative. STEPS IN DECISION MAKING There are three steps in decision making. 1- THE SEARCH FOR ALTERNATIVES. The first steps of decision making are to develop alternatives. There are almost always alternatives to any course of action. If we think of only one course of action, clearly we have not thought hard enough. The ability to develop alternatives is often as important as being able to select correctly from among them. One of the other hand ingenuity research and common sense will often unearth so many choices that all of them cannot be evaluated. The manager needs help in this situation, and this help can be solved by decision making. Department of Management Studies 28 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 2- EVALUATION OF ALTERNATIVES. When an appropriate alternative has been found, the next steps in planning one best alternative to achieve the goals. There are three ways of evaluated decision making. 1- QUANTITIVE AND QUALITIVE FACTOR Quantitative factor can be measured in numerical terms. This factor is vary important but the success of the venture would be endangered qualitative factors were ignored. Qualitative factor are those that are difficult to measure numerically such as the quality of labor relations, the risk of technological change etc. 2- MANAGERIAL ANALYSIS In evaluating alternatives managerial analysis is very important. Marginal analysis can be used in comparing factors other then costs and revenue. For example to find the best output of a machine, inputs could be varied against outputs until the additional input equals the additional output. 3- COST EFFECTIVENESS ANALYSIS Cost effectiveness analysis seeks the best ratio of benefits and costs. For example finding the least costly way of reaching objectiveness is a technique for choosing the best plan. SELECTING AN ALTERNATIVE During the selection among the alternatives, managers can use three basic approaches (1) Experience (2) Experimentations (3) research and analysis. Bases for selecting from among alternatives Experimentation How to select from among alternatives. Research and analysis Reliance on past Choice made EXPERIENCE Reliance on past experience plays a larger part in decision making to some extent, experience is the best teacher. The very fact that managers have reached there position appears to justify their past decisions. Moreover, the process of thinking problems through making decisions and seeing programs succeed or fail. EXPERIMENTATION One way of deciding among alternatives is to try one of them and see what happens. Experimentation is often used in scientific theory. The experimental technique can be most expensive, especially if a program requires heavy expenditures firm cannot afford to attempt several alternatives. RESEARCH AND ANALYSIS One of the most effective techniques for selecting from alternatives is research and analysis of decisions. This approach means solving problems by first comparing it. It is pencil and paper approach to decision making UNIT III ORGANIZING Organization involves division of work among people whose efforts must be coordinate To achieve specific objectives and to implement pre-determined strategies. Organization is the foundation upon which the whole structure of management is built? It is the backbone of management. After the objectives of an enterprise are determined and the plan is Prepared, the next step in the management process is to Department of Management Studies 29 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] organize the activities of the Enterprise to execute the plan and to attain the objectives of the enterprise. The term Organization is given a variety of interpretations. In any case, there are two broad ways in which the term is used. In the first sense, organization is understood as a dynamic process and a managerial activity which is necessary for bringing people together and tying them together in the pursuit of common objectives. When used in the other sense, Organization refers to the structure of relationships among positions and jobs which is Built up for the realizations of common objectives. Without organizing managers cannot function as managers. Organization is concerned with the building, developing and maintaining of a structure of working relationships in order to accomplish the objectives of the enterprise. Organization means the determination and assignment of duties to People, and also the establishment and the maintenance of authority relationships among these grouped activities. It is the structural framework within which the various efforts are coordinated and related to each other. Sound organization contributes greatly to the Continuity and success of the enterprise. The distinguished industrialist of America, Andrew Carnegie has shown his confidence in organization by stating that: "Take away our factories, take away our trade, our avenues of transportation, our money, leave nothing but our organization, and in four years we shall have reestablished ourselves." That shows the significance of managerial skills and organization. However, good organization structure does not by itself produce good performance. But a poor organization structure makes good performance impossible, no matter how good the individual may be. The term 'Organization' connotes different things to different people. Many writers have attempted to state the nature, characteristics and principles of organization in - 45 their own way. It can be used as a group of persons working together or as a structure of relationships or as a process of management. Now, let us analyze some of the important definition of organizing or organization, and understand the meaning of organization. ACCORDING TO SHELDON "Organization is the process of so combining the work which individuals or groups have to perform with facilities necessary for its execution, that the duties so performed provide the best channels for efficient, systematic, positive and coordinated application of available effort." In the words of Chester I Bernard, "Organization is a system of co-operative activities of two or more persons." MC FERLAND HAS DEFINED Organisation as, "an identifiable group of people contributing their efforts towards the attainment of goals". ACCORDING TO LOUIS A ALLEN, "Organisation is the process of identifying and grouping the work to be performed, defining and delegating responsibility and authority, and establishing Relationships for the purpose of enabling people to work most effectively together in accomplishing objectives. ACCORDING TO NORTH WHITEHEAD Organisation is the adjustment of diverse elements, so that their mutual relationship may exhibit more pre-determined quality. IN THE WORDS OF THEO HAIMANN Department of Management Studies 30 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationships among them. In performing the organizing function, the manager defines, departmentalizes and assigns activities so that they can be most effectively executed. IN THE WORDS OF MOONEY AND RAILEY, "Organisation is the form of every human association for the attainment of a common purpose.‖ - 46 ACCORDING TO JOHN M PFIFFNER AND FRANK P SHERWOOD, "Organisation is the pattern of ways in which large number of people, too many to have intimate face-to-face contact with all others, and engaged in a complexity of tasks, relate themselves to each other in the conscious, systematic establishment and accomplishment of mutually agreed purposes.‖ SPAN OF CONTROL (1) Span of control refers to the number of immediate subordinate who report a manager. (2) Different level of organization level is also called span of control. FACTORS DETERMINING AN EFFECTIVE SPAN There are several factors which influence the span of management. 1- TRAINING OF SUBORDINATES The better training of subordinates increases the necessary superior subordinate‘s relationship. Well trained subordinates require less time of their managers also they have less contact with their managers. Training programs increase in new and more complex industries. 2-CLARITY OF DELEGATION OF AUTHORITY Although training enables managers to reduce the frequency of time consuming contact but delegation of authority should be clear. If a manager clearly delegates authority to task with a minimum of the managers time and attention. But if a manager delegate‘s authority unclearly than subordinate give his maximum. 3-CLARITY OF PLANS If plans are well defined if they are workable, if the delegation of authority toward plan is clear, if the subordinate understands what expected than little of a supervisor time will be required on the other hand if plan cannot be drawn accurately and subordinates do much of their own planning, they may require considerable guidance. 4- USE OF OBJECTIVE STANDARD A manager must find out, either by personal observation or through the use of objective standards, whether subordinates are following plans. Obviously, good objective standards enable managers to avoid many time consuming contact. - 47 5- RATE OF CHANGE Certain enter rises change much more rapidly than others. The rate of change is very important in formulating and maintaining policies. It may explain the organization structure of company‘s railroad, banking and public utility companies. 6- COMMUNICATION TECNIQUES Communication techniques also influence the span of management. If every plan, instruction, order or direction has to be communicated by personal contact than managers time will be heavily burdened. An ability to communicate plans and instructions clearly and concisely also tends to increase a managers span. 7- AMOUNT OF PERSONAL CONTACT NEEDED Department of Management Studies 31 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Many instances, face to face meetings are necessary. Many situations cannot be completely policy statements planning documents or other communications that do not involves personal contact. An executive may and valuable information‘s by meeting to subordinates and by discuss problems with them. Some problems can be handled only in face to face meeting so the best way of communicating problems, instructor, and subordinates is to spend time in personal contact. 8- VARIATION BY ORGANIZATION LEVEL Several research projects have found that the size of the most effective span differs by organizational level. For example, it was studied that when a greater number of specialties were supervised, effective spans were narrower at lower and middle levels of organization but were increased at upper levels. 9- COMPETENCY OF MANAGERS A manager who is competent and well trained can effectively supervise more people than who is not. 10- MATURITY AND MOTIVATION OF SUBORDINATES The more mature subordinates may delegate more authority, thus widening the span. - 48 TABLE: - FACTORS INFLUCING THE SPAN OF CONTROL DEPARTEMENTATION: Departmentation is process of grouping activities and people onto department make it possible to expend organization. After reviewing the plan, usually the first step in the organization process is departmentalization. Once job have been classified through work specialization, they are grouped so those common tasks can be coordinated.Departmentlization is the biases on which work or individuals are grouped into manageable units. There are five traditional methods for grouping work activities. Thus workflow analysis can be used tighten the connection between employees‘ work and customers needs. Also it can help to make major performance breakthroughs throughout business process reengineering (BPR).A functional rethinking and radical redesign of business process to achieve dramatic improvements in costs, quality, service, and speed.BPR use workflow analysis to identify jobs that can be eliminated or recombined to improve company. TYPE OF DEPARTMENTATION: 1-DEPARTMENTATION BY NUMBERS: Dpartmentation by number is telling off persons who are to perform the same duties and putting them under the superior of a manager the essential fact is not what these people do, where they work? Or what they work with, it is that the success of the NARRO SPAN RELATED TO: WIDE SPAN RELATED TO: 1-little or no training. 1-through training of subordinate. 2-unclear authority, delegation. 2-Clear delegation of authority. 3-nonverefiyable objectives & standard. 3-Will define plans. 4-fast changes in external and internal environment. 4-Slow changes in external and eternal 5-use of communication techniques. Environment 6-ineffectiv interrogation of superior and subordinate.5-use of appropriate techniques such as written, 7-greater number of specialization at lower and oral communication. Middle level. 6effetive interaction between superior & superiors. 8-Infactive meetings. 7-Number of specialist at upper levels. 9-Incompletent & untrained managers. 8-Effective meetings. Department of Management Studies 32 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 10-Complex task. 9-Competent & train managers. 11-Imature subordinate. 10-Simple task. 11-mature subordinates. - 49 understanding depends only on the number of persons include in it. This method is rapidly applying in army. DISADVANTAGES OR DECLINES REASONS; There are many reason of decline of departmentation by numbers. 1-It has declined due to advance technology and demand of specialized and different skills. 2-A second reason is groups composed of specialized personnel are more efficient then those based on number. 3-Departmentation by number is useful only at the lowest level of the organization. 4-Departation by number fails to produce good results 2-DEPARTMENTATION BY TIME It is grouping activities on the basis of time. It is oldest form of departmentation and it is generally used in low level of departmentation. It is particularly applied in hospitals and steel manufacturing enterprise where continue process of service and manufacturing is used. ADVANTAGES 1- It is process of working and services throughout 24 hours. 2- It is continuing service process. 3- Expensive machinery is used in shifts. 4- Students can work evening or at night. DISADVANTAGES 1- There is lacking supervision at night. 2- Exhaustion factor. 3- DEPARTMENTATION BY FUNCTION It is grouping activities on the basis on function of an enterprise. The basic enterprise functions are production, selling, and financing functional departmentation is bases for organizing activities and in organizational structure. It organizes by function to be performed. The function reflects the nature of the business. The advantage of this type of grouping is obtaining efficiencies from consoliding similar specialties and people with common skills, knowledge and orientations together in common units. - 50 ADVANTAGES 1- It is logical reflection of function. 2- Maintains power of major functions. 3- Simplifies training. DISADVANTAGES 1- De-emphasis of overall company objectives. 2- Reduces coordination between function. 3- Slow adoption to change in environment. 4- DEPARTMENTATION BY GEOGRAPHY Departmentation by geography is followed where geographic marked appear to offer advantages. Geographic department most often use in sales and production, it is not use in finance. Departmentalization by geographical regions groups jobs on the basis of territory or geography. For example merek, a major pharmaceutical company, have its domestic sales departmentalized by regions such as Northeast, Southeast, & Department of Management Studies 33 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Northwest ORGANIZING CHART President Manager southern region Manager central region Manager north region ADVANTAGES 1- It emphasis on local markets and problems. 2- Improves coordination in a region. 3- Better face to face communication. DISADVANTAGES 1- Increases problem of top management control. 2- Requires more persons with general manager abilities. 5. DEPARTMENTATION BY CUSTOMER Departmentalization by customer groups jobs on the basis of a common set of needs or problems of specific customers. For instance, a plumbing firm may group its work according to whether it is serving private sector, public sector, government, or notfor-profit organizations. A current departmentalization trend is to structure work according to customer, using cross-functional teams. This group is chosen from different functions to work together across various departments to interdependently create new products or services. For example, a cross-functional team consisting of managers from accounting, finance and marketing is created to prepare a technology plan. ORGANIZING CHART Executive Manger Manager Manager Manager Manager Business loans students loans Personal loans Army loans There is different difficult decision to be made in separating some type of customer departments from product departments. Business owners and managers arrange activities on the basis of customer requirements. Departmentation by customer can be defined by figure ADVANTAGES 1- Departmentation by customer emphasis on customer needs. 2- It develops experience in customer area. DISADVANTAGES 1- It may be difficult to analysis customer demands. 2- It requires managers and staff expert in customer problems. 3- Customer groups may not always be clearly defined. 6- DEPARTMENTATION BY PROCESS This type of departmentation is found in production and operative levels. Such type of departmentation can be found in paint or electroplating process. Departmentalization by process groups jobs on the basis of product or customer flow. Each process requires particular skills and offers a basis for homogeneous categorizing of work activities. A patient preparing for an operation would first engage in preliminary - 52 diagnostic tests, and then go through the admitting process, undergo a procedure in surgery, receiver post operative care, be discharged and perhaps receive out-patient attention. These services are each administered by different departments. PRESIDENT Manager Purchases Manager Finance Manager Production Manager Department of Management Studies 34 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Sales Dept by process Heat treatment welding section Assembling section finishing section ADVANTAGES 1- It simplifies training. 2- Achieve economic advantage. 3- Uses specialized technology. DISADVANTAGES 1- Coordination of departments is difficult. 2- Responsibility for profit is at the top. 7- DEPARTMENTATION BY PRODUCT This type of departmentation used in organization where more than one product is producing. In this department all the sources and authority are placed under the control of one manager.Departmentlization by product assembles all functions needed to make and market a particular product are placed under one executive. For instance, major department stores are structured around product groups such as home accessories, appliances woman‘s clothing, men‘s clothing and children clothing. - 53 PRESIDENT ADVANDTAGES 1- Places attention on production. 2- Increase growth of product. 3- Places responsibility for profit at division level. DISADVANTAGES 1- Requires more persons with general manager abilities. 2- Presents problems of top management control. Formal and Informal Organization FORMAL ORGANIZATION Formal organization means the intentional structure of rods informally organized enterprise. Formal organization must be flexible. Formal organization does not mean that there is anything inflexible. If a manager is to organize well, the structure must furnish an environment in which individual performance, both present and future contributes most effectively to group goals. President Marketing Finance Production President Cosmetics Clothing Appliances President Central Northeast Southwest President Receiving Sewing Shipping President Governement Industrial consumer Product Departmentalization Geographical Departmentalization Process Departmentalization Department of Management Studies 35 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Customer Departmentalization Functional Departmentalization - 55 INFORMAL ORGANIZATION Informal organizational is define by different authors one says, Informal organization is any joint personal activity without conscious joint purpose, even though contributing to joint results. Thus informal relation ships established in the group of people playing chess during lunch time may aid in the achievement of organization goals. It is much easier to ask for help on an organization problem from someone you know personally, even if he or she may be in different departments than from some one you know only as a name on an organization chart. Another author describes informal organization as a network of personal and social relationships not required by the formal organization but arising spontaneously as people but associate with one another. AUTHORITY & POWER Power is much broader concept than authority power is the ability of individuals or groups to informal the actions of other persons or groups. AUTHORITY Authority is the legal right to command actions by others and to enforce compliance. Authority may also be defined as the degree of discretion in organizational position conferring on persons occupying these positions the right to use their judgment in decision making. TOP TO DOWN AUTHORITY Share holder Board of director Chief Executive Managers Supervisors POWER Power is border concept then authority. I may be defined as a strong influence on direction on individuals is behaviors power may also define as the ability of individuals or groups to influence the action of other persons. There are five bases / sources or kind of power. 1- LEGITIMATE POWE The official position of a person is an organization is known as legitimate power . for example, a major in army has power over Captain and subordinate. 2- COERCIVE POWER A person‘s ability to create fear in other individuals and is based on subordinates expectation that punishment will be received for not completing work. It is closely related to reward power and normally arising from legitimate. Worker - 57 3- REWARD POWER Power arises from ability of some people to grant reward reward is known as reward power. University Professors have considerable reward. power they made high grade. 4- EXPERT POWER Power may also come from the expertness of a person or a group. This power of Department of Management Studies 36 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] knowledge. Physician lowers, &university professors may have considerable influence for their special knowledge. 5- REFERENT POWER This is the power of admiring high esteemed leader by individuals. 6- DECESION MAKING POWER This power arises from the power of positions. When people speak pf authority in managerial setting, they are usually referring to the decision making power. LINE & STAFF CONCEPT LINE AUTHORITY Line authority gives a superior a line of authority over subordinates. It exists in all organizations. Line authority can also be defined as the superior – subordinate authority relationship where by a superior makes decision and tells them to a subordinate who is turn makes decision and tells to his subordinates and on from a line from top to low level of organization structure. This line of authority is known as line of authority. It is directly from superior to his subordinate. LINE AUTHORITY chain of command President Voice President Supervisor Employee STAFF CONCEPT The nature of the staff relationship is advisory. The function of people in pure staff capacity is to investigate research and give advice to line managers. In other words, staff functions are those that help the line persons work more effectively in accomplishing the objectives. PRESIDENT LINE & STAFF ORGANIZATION OF A TYPICAL MANUFACTURING COMPANY NATURE OF LINE & STAFF CONCEPT Line authority gives a superior a line of a authority over a subordinate. Line authority is that relationship in which superior exercises direct supervision over a subordinate. On the other hand the nature of the staff relationship is advisory. The function of a person in staff capacity is to investigate research and give advice to line manager. BENEFITS OF STAFF 1. Provide highly specialized knowledge indifferent areas, i-e- economics, technical, legal etc. 2. Specialist staff avails lines to analysis collected data and make advice for managers. 3. Staff analysis and advices help in resolving problems arrised during process WEAKNESSES OF STAFF 1. Danger of understanding line authority. 2. Lake of staff responsibility. 3. Thinking in a vacuum 4. Managerial problems. 1. Prepare 2. Plan 3. Discuss 4. Audit 6. Appreciate Department of Management Studies 37 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] DELEGATION OF AUTHORITY Delegation is necessary for an organization to exist. Authority is delegated when a superior gives a subordinate discretion to make decision. Clearly , supervisors cannot delegate authority they do not have ,whether they are board members, Presidents, Voice Presidents or superiors. The process of delegation involves. 1. Determining the results expected from a position. 2. Assigning tasks to the positions. 3. Delegating authority to accomplishment of the tasks. 4. Holding the persons in that position responsible for the accomplishing meat of the tasks. 5. Authority is delegate from higher level to lower level. - 60 STEPS IN DELEGATING SPLINTERERD AUTHORITY Splintered authority exits whenever a problem cannot solve. In day to day operations of any company. There are many cases of splintered authority. Many Managerial Conferences are held because of the necessity of splintered authority to make decisions. RECOVERY OF DELEATED AUTHORITY A manager who delegates authority does not permanently dispose of it , delegated authority can always be regained. Re organization involves reorganization, rights are recovered by the responsible head of the firm or a departments, to head of a new department may receive authority formally held by other Managers. THE ART OF DELEGATIONOF AUTHORITY The most failure in effective delegation occurs not because Manager does not understand the nature and principles of delegation because they are unable to apply them. There are many reasons for poor delegation. PERSONAL ATTITUDE TOWARD DELEGATION There are many kinds of personal attitudes which cause poor delegation of authority so Managers should fallow these steps. 1- RESPECTIVENESS Decision making always involves some discretion and a subordinates decision is not likely to be exactly the one superior would have made the manager who known how to delegate must be able to help other and to compliment on their ingenuity. 2- WILLINGNESS TO LET GO A manager who will effectively delegate authority must be willing to release the right to make decisions to subordinates. A major fault of some managers is that they want to continue to make decisions for the positions they have left. Corporate president and vice presidents who insist on confirming every purchase do not realize that doing so takes their time and attention away from more important decisions. - 61 3- WILLINGNESS TO LET OTHER MAKE MISTAKES Since every one makes mistakes, a subordinate must be allowed to make some, and their cost must be considered an investment in personal development serious or repeated mistakes can be largely avoided without multifying delegation. 4- WILLINGNESS TO TRUST SUBORDINATES Superiors have no alternative to trusting their subordinates; for delegation implies a Department of Management Studies 38 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] trustful attitude among them. A superior may put off delegation will the thought that subordinates have not yet experienced enough, they cannot handle people, they have not developed Judgment etc. Sometimes these considerations are true but then a superior or should either train subordinates or else select others who are prepared to assume the responsibility. 5- WILLINGNESS TO ESTABLISH AND USE BROAD CONTROLS Superiors should not delegate authority unless they are willing to find means of getting feed back. Obviously, controls cannot goals, policies and plans are used as basic standard for judging the activities of subordinates. GUIDES FOR OVERCOMING WEAK DELEGATION The following guide can overcome weak delegation. 1- Define assignments and delegate authority in the light of results expected. 2- Select the person in light of the job to be done. 3- Maintain open lines of communication. 4- Establish proper control. 5- Reward effective delegation and successful assumption of authority. STAFFING What is staffing? Staffing is define as ―Filling and keeping filed, positions in the organization structure‖ This process is done by ten concepts. 1. Identifying the work force requirements. 2. Inventorying the people available. 3. Recruiting 4. Selecting candidates. 5. Planning candidates. 6. Promoting candidate. 7. Appraising candidates. 8. Planning careers of candidates. 9. Training candidate. 10. Developing and compensating candidates and current jobholders. DEFINING THE MANAGERIAL JOB There is no agreed definition of managerial job of a manager. There are several different definition of managerial job by different writers. One group of writers studied successful managers and described their behaviors and habits. Although the stories about these people are interesting but authors do not provide a theory to explain the success of these successful managers. Other writers focus on profit maximization, innovation, risk taking and similar activities. Yet another group of writers emphasizes decisions that cannot be easily programmed. Managerial job also define as leadership having power and influence over the environment and subordinates. One says, managerial job is process of observing the activities of managers. However the key tasks of managers are planning, organizing staffing, leading, and controlling. THE SYSTEM APPROCH TO HUMAN RESOURCE MANAGEMENT Figure shows the managerial function of staffing relates to the total management. in system approach to staffing enterprise plan or organization plane become important inputs for staffing tasks. The organization structure determines required numbers and kinds of managers. These demands for managers are compared with the available Department of Management Studies 39 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] talents through management inventory. Internal environment personal policies reward system External Environment On the basis of this analysis, external and internal resources are utilized in the process of recruitment, selection, placement, promotion and sepration.Other aspects of staffing are appraisal, career strategy and training and development of managers. Staffing effects leading and controlling. Well trained managers create an environment in which people working together in the organization setup can achieve enterprise objectives and accomplish personal goals. Staffing requires an open system approach. It is carried out within the enterprise which is linked to the external environment. Therefore it cannot be carried out within the enterprise which is linked to the internal environment. ASPECTS IN THE SYSTEM APPROCH TO STAFFING In system approach to human resource management or staffing the fowling aspects are to considered. 1. FACTORS AFFECTING THE NUMBER & KINDS OF MANAGER REQUIRED The number of managers needed in an enterprise depends on (1) Size of business (2) plans of expansion (3) Rate of turnover of managers (4) Complexity of organization structure. 2. DETERMINATION OF AVAILABLE MANAGERIAL RESOURCS It is also known as management inventory. It is common for any business and non business enterprises, to keep an inventory of new materials and goods on hand to enable it to carry on its operations. 3. ANALYSIS THE NEED FOR MANAGERS. Analysis of the need for managers depends upon internal resources. INTERNAL RESOURCES 1. Plane for growth. 2. Replacement or out replacement staff. 3. demotions 4. Early retirement. 5. External factors. 6. Internal factors. 7. External factor include - 66 ETERNAL RESOURCES 1. Economic factor. 2. Technological factors. 3. Social factors. 4. Political factors. 5. Legal factors. 4. OTHER IMPORTANT ASPECTS After the need for managerial personnel a number of candidates may have to be. 1. Recruited 2. selected 3. place 4. promote THERE ARE MANY OBJECTIVES & PURPOSES OBJECTIVES OF STAFFING Department of Management Studies 40 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] The objective and purpose of managerial staffing is to ensure that organizational positions are filled by the qualified personnel, who are able to willing to occupy them. 2ndly, the purpose / objective of managerial staffing is to define job, performance appraisal training and development of people. 3rdly, the purpose / objective of managerial staffing is to matching the persons with job, identifying job requirement, job, design etc. SITUATIONAL FACTORS AFFECTING STAFFING The actual process of staffing is affected by many environmental factors. For example external and internal factors. EXTERNAL FACTORS Factors in external environment do affect staffing to various degrees. These influences can be grouped into educational, social cultural, legal political and economic opportunities. External factors include. 1. Well trained managers. 2. Well educated managers. 3. Highly skilled managers. - 67 Ignorance of external factors may keep away an enterprise from growing at design rate INTERNAL FACTORS Internal factors include 1. Personal policies. 2. Organizational climate. 3. Reward system. Internal factors of staffing are required to be taking consideration. THE SELECTION PROCESS Selection is the process of choosing from among the candidates, from within the organization or from the outside organization the most suitable person for the current position or for future positions. THE SELECTION PROCESS There are many steps in the selection process, for example, the interview of a candidate, tests, assessment centers etc. There are some variations in the steps of selection process For example the interview of candidate for a first level supervisory position may be relatively simple then interviews for a top level executive. In the selection process firstly, the selection criteria are established in the basis of current and future job requirements. These criteria include. 1. Education, knowledge, skills and experience. 2. The candidate is requested to complete the application form. 3. A screening interview is conducted. 4. Candidates are tested for additional information. 5. Formal interviews conducted on the basis of test. 6. Information provided by candidates are checked and verified. 7. Physical fitness is examined. 8. On the basis of previous step the candidate is offered job or information about that he/she has not been selected for the position. Lets determine some parts of selection process. - 68 INTERVIEW In a structured interview the Manager ask a set of prepared questions, such as the Department of Management Studies 41 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] following. 1. What were your specific duties and responsibilities in your last job? 2. What did you achieve in that job? 3. Who could be asked to verify these achievements? 4. Who are they? 5. What did you like or dislike about your job? 6. Why do you want to change your job? TESTS The primary aim of test is to obtain data about the applicants. Some of the benefits from testing include finding the best person for the job obtaining a high degree of job satisfaction for the applicant, and reducing turnover. The most commonly used tests can be classified as follows. 1. INTELEGENCE TEST Intelligence test are design to measure mental capacity, to test memory , speed of thought and ability to see relationship in complex problem situations. 2. PROFICIENCY TEST It constructed to discover interest, existing skills and potential for acquiring skills. 3. VOCATIONAL TESTS Vocational test are designed to show a candidates most suitable occupation. 4. PERSONALITY TESTS Personality tests are designed to show or discover candidate‘s personal characteristics. ASSESSMENT CENTERS The assessment center is not a location but a technique for selecting and promoting managers. This approach may be used in training assessment centers were first used for selecting and promoting lower level but now they are applied to middle level managers as well. - 69 LIMITATION OF SELECTION PROCESS There are many limitation of the selection process. 1. There is no one perfect way to select managers. 2. There is distinction between what person can do, 3. Testing process and especially psychological testing is limited. 4. Time and cost involved in making personnel decisions. It is important to identify such factor as advertising expenses, agency fees, cost of test materials, time spent interviewing candidate, costs for reference check etc. When recruiting costs are recognized it becomes evident that turnover can be very expensive to an enterprise. STEPS/PROCESS/PRINCIPLES OF STAFFING There are six steps/process or principles of staffing. 1. Principle of job definition 2. principle of managerial appraisal 3. Principle of open competition. 4. Principle of management training & development. 5. Principle of training objectives. 6. Principle of continuing development. 1. PRINCIPLES OF JOB DENIATION The more precisely the results expected of managers are identified the dimensions of their positions can be defined. Department of Management Studies 42 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 2. PRINCIPLE OF MANAGERIAL APPRASIAL The more clearly verifiable objectives and required managerial activities are identified. 3. PRINCIPLE OF OPEN COMPETETION The enterprise encourages open completion among all candidates for management positions. Open competition shows the quality management. Open competition better candidate can be brought in the organization. - 70 4. PRINCIPLES OF MANAGEMENT TARINING & DEVELOPMENT Training and develop efforts are related to managerial function. Management training and development Leeds to the effective developed programs and activity of an enterprise. 5. PRINCIPLES OF TRAINING OBJECTIVES The principle of training objectives gives direction to development and facilitates the measurement of the effectiveness of training efforts. This principle suggest that in a fast changing and competitive environment, manages cannot stop learning. Instead they have to update their managerial knowledge continually and improve their managerial skills and performance to achieve enterprise result. RECRUITMENT Recruitment is the process of locating and encouraging potential applicants to applyfor existing and anticipated job opening. It is actually a linking function, joining togetherthose with jobs to fill and those seeking jobs. Recruitment Goals The recruitment process will work effectively only when there is a significant poolof candidates to choose from. Among these groups, we can select the right candidatebased on the job specification. This may however not be easy due to non-availability of potential employees in the market. Therefore the organization should: Communicate the positions in such a way that jobseekers respond Provide enough information about the job that unqualified applicants can self-select themselves out of the job Reduce the cost and time spent on recruitment process (acknowledgement, application review, second letter, rejecting the applications and so on). Have a good recruiting program attracting the qualified and not the unqualified. Factors Affecting Recruitment Efforts 1.Every organization at one time or another is engaged in recruiting, adding on to the size of the organization, hence size of the organization is one of the factor (e.g.; infosys, wipro) affecting recruitment efforts. 2.Recruitment being conducted in the community where the organization is located will influence how many people have come for recruitment 3.Working conducts, salary and benefit packages offered by the organization willinfluence turnover and subsequently the need for future recruitment. 4.Finding quality employees has become tough. Department of Management Studies 43 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Constraints On Recruitment Image of the organization Attractiveness of the job Internal organizational policies Government influence Recruiting cost Image of the Organization The image of the organization is considered as a potential constraint because candidatemay not be interested in pursuing job opportunities in a particular organization if the imageis perceived low, then the chances of attracting a large pool, of applicants gets reduced. Attractiveness of the job An unattractive job may not lead to recruiting a large qualified pool of applicants Results in shortage of employees if the unemployment rate is low and a wide rangeof opportunities exist. If the job is hazardous, boring, anxiety-creating, low paying/lacking in promotionthen attracting pool of qualified applicants may not be easy. Internal organizational policies Internal organization policies are nothing but promoting individual working in theorganization wherever possible. This is done in order to fill all the positions withinranks except for the lowest level entry positions. One of the disadvantages is that,it reduces the no of applicants. Government influence Employers should no longer seek individuals based on non-job related factorssuch as physical appearance, sex, and religious background. Sometimes governmentpolicies come in the way of recruiting people as per the rules of the company. Recruiting cost The expenses involved for recruitment are more. A search for long periods of time is not possible because of budget restriction An organization uses various sources as interviewing employees over phone/videoconferencing. This is done to reduce the traveling cost Sources of recruitment The sources of recruitment may be broadly divided into two categories: internal sourcesand external sources. Both have their own advantages and disadvantages. Lets examinethese. Internal Recruitment Persons who are already working in the organization constitute the ‗internal sources‘.Retrenched employees, retired employees, dependents of deceased employees may alsoconstitute the internal sources. Whenever any vacancy arises, someone from within theorganization is upgraded, transferred and promoted. Department of Management Studies 44 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] The advantages Helps in building a good public relation Helps to build morale Encourages good individuals who are ambitious Improves the probability of a good individualsperformance is readily available selection, since information on the Cost is less Candidates who are chooses internally know the organization When carefully planned, promoting from within can also act as a training devicefor developing middle and top mangers. The disadvantages It can also be dysfunctional to organization to utilize inferior internal source onlybecause they are there, when candidates are available outside Generates infighting among the rival candidates for promotion, as well as decreasesthe morale of those not selected. Methods of internal recruitment Job PostingThe standard procedure followed for internal source of recruitment is to post anynew job openings and to allow any current employee to apply for the position. Theposition notification can be communicated on a central ―position open‖ bulletin boardin the plants/office whenever required. Employee referrals/recommendations When the current employees are not interested in the position posted then they canuse these notices for other individuals for the post, both within the organization as well asoutside the organization -this is what is called employee referral. Advantages It gives realistic information about the job than by other agencies It is an excellent means of locating potential employees in those hard to fill position The employees who make referrals are given monetary reward. Disadvantages Recommending by the people may confuse friendship with the job performance Individuals like to have their friends join them at their place of employment due toeconomic reasons. Department of Management Studies 45 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Leads to nepotism-hiring individuals who are related to persons already employedby the organization Minimizes an organizations desire to add diversity to the work place. Promotion and transfers Many organizations prefer to fill vacancies through promotions or transfers from withinwherever possible. Promotion involves movement of an employee from a lower position toa high level position accompanied by change in duties, responsibilities, status and value.A transfer on the other hand, involves lateral movement within the same grade, fromone job to another. It may lead to changes in duties, responsibilities, working conditionsbut not necessarily salary. External Recruitment The external sources lie outside the organization. The search is done only when theposition is not closed internally. Some of the advantages and disadvantages of this methodare The Advantages The organization has the freedom to select candidates from a large pool. Peoplewith requisite qualifications can be selected. It paves the way for innovation It helps in motivating internal employees to work hard and compete with externalcandidates. This creates competitive atmosphere. Talented people join senior managerial positions and help in the growth of theorganization. The Disadvantages Hiring cost can go substantially high. It takes time to advertise, to screen, to test and to select suitable employees. Existing employees, who have put in considerable service, may resist the processof filling up vacancies from outside External selection may also end up hiring someone who does not ‗fit‘ and whomay not be able to adjust in the new set-up. Methods of External Recruitment Advertisements Employment agencies Students from colleges and universities Professional organization Cyberspace recruiting Department of Management Studies 46 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Unsolicited applicants Job fair Advertisement The factors that influence the response rates to advertisement are1.Image of the organization2.Labor market3.Degree to which specific requirements are included in the advertisement. Employment agencies The three forms of employments are 1. Public/State 2. Private 3. Executive search State agencies/public agencies Most public agencies tend to attract and list individuals who have minimum training.Therefore public agencies tend to attract and place predominantly lowskilledemployees. Private employment agencies The private agencies are believed to offer positions and applicants of higher caliber. Private agencies also provide a guarantee covering six months or a year as protectionto the employer in case the applicant does not perform satisfactorily. The private agencies collect their fee either from the employees or the employer,or it can be split Students from colleges and universities Educational institutions at all levels offer opportunities for recruiting recent graduates.These institutions provide employers an opportunity to witness a prospective employee‘sperformance through cooperative arrangements. Educational institutions are an excellent source of potential employees. High schools/vocational provide lower level applications. Business/secretarial schools provide administrative staff personnel. Two and four year college provide professional and managerial level persons Executive search The executive search executiveplacement. /headhunter specialize in middle-level and top level The distinguishing features of executive search are their fees. These agencies chargea certain percentage of the cost (cost to company) of recruitment from the candidatewhom they refer in their client company. A fee up to 35% of the executive‘s first year salary is not unusual as a charge forfinding and recruiting individuals. These firms do preliminary screening. It acts as a buffer for screening the candidatesand keep prospective employer anonymous Cyber spacing The new arena for locating resumes of qualified employees is looking on Internet. Department of Management Studies 47 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Nearly half of all the major U.S companies use Internet facilities to recruit forpositions from the entry-level jobs to senior executive posts. We now have web searches for both employee and employers to reduce the gapbetween them in the recruiting process Unsolicited applicants Unsolicited applicants are those which reach the employee by letter, telephone, orin person, constitute a source of prospective applicants. This source does provide an excellent supply of stock pilled applicants. Even if there are no particular openings, when the applicants contact the organizationthe applications can be kept in the files for later need. Unsolicited application made by unemployed individuals has a short life. Applications from individuals who are already employed can be referred to manymonths later and can provide recruitment to applicants who are interested inconsidering other employment opportunities. Some of the other sources of recruitment efforts Temporary help services Employee leasing Independent contractor Outsourcing Temporary help services These temporary help services can be a source of employees when individualsare needed on a temporary basis These employees are particularly valuable in meeting short-term fluctuations inHRM needs. In addition to specific temporary help services, another quality source of temporaryworkers is older workers, those who have already retained or have been displacedby right sizing in many companies. When there is a need for temporary help somewhere in the organization these helpservices provide the needed talent pool. Employee leasing Leased employees typically remain with an organization for longer periods of time. When an organization has a need for specific employee skills, it contracts with theleasing firm to provide a certain number of trained employees. Department of Management Studies 48 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] The acquiring organization pays a flat fee for the employees. The leased employees are employees of the leased firm, hence the company is notresponsible for benefits The employees are returned after the project is over; this eliminates the costassociated with layoffs/discharge. Even if one employee doesn‘t work out, the company can get a new employee ormake arrangements to have it‘s fee returned Independent contractors Independent contractors are none other than the consultants. Company‘s hire independent contractors to do very specific job within or outsidethe company premises. An independent contract arrangement benefits both the organization and theindividual. The company saves cost associated with full time/part-time personnel like socialsecurity taxes etc. Outsourcing Any activity in which the firm lacks internal expertise can be outsourced When the company does not have the time to deal with the situation. ORIENTATION Definition Orientation refers to activities involved in introducing a new employee to the organization and his/her work unit. It expands the information received during the recruitment and]selection stages, and helps to reduce the initial anxiety a new employee has when entering a new job. Orientation can be done by any of the following people Employee supervisor People in HRM In most organization HRM takes charge of explaining such matters as overallorganization policies. In dynamic organizations, orientation is imperative that the newemployees understand what the organization is about. Organization culture in relation to orientation Every organization has its‘ unique culture. Culture includes the following Long standing Unwritten rules and regulations Communication among members Shared standards of relevance about the critical aspects of work that is to bedone. How members should relate to peers, employees, bosses and outsiders. Department of Management Studies 49 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] CEO’S role in organization with regard to orientation The senior managers become highly visible in the organization meeting and greetingemployees and listening to employees concern. At the same time they are given theopportunity to talk about the company i.e., where it is going and how it is going to get there.In management terminology it is called ―visioning‖. The CEO‘s first responsibility is to welcome new employees aboard and to talk tothem about the job choice that they have made. The CEO is in a position to turn on these new employees by talking about what itis like to work for the organization. He also discusses what really matters in a company. The presence of CEO helps in sending truthful message that cares for its employees. He helps the new employees feel better, more comfortable and also removes thefear they have. Role of human resource manager with regard to orientation The role of is to ensure that the appropriate components are in place. Based on the recruitment that takes place, there should be a systematic scheduleof when the new employee should join a company. It is the duty of the HRM to instruct the new employees when to report for work,before their formal arrival. The HRM must be prepared to handle some of the more routine needs of the individuals (e.g., long list of questions about benefits) SOCIALIZATION Definition Socialization refers to the process of adaptation. This aims at helping new managersadapt to their new organization and work responsibilities. Purpose The main purpose is to assist managers to fully understand what working is about inan organization. It helps them to understand and accept the behaviors that organizationviews as desirable. Assumptions Strongly influences employee performance and organizational stability Organizational stability is increased through socialization New members suffer from anxiety Socialization does not occur in vacuum Department of Management Studies 50 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Individuals adjustment to new situation is remarkably similar Stages of Socialization Pre-arrival Encounter Metamorphosis Pre-arrival stage This stage explicitly recognizes each individual‘s set of organizational values,attitudes and expectations. In this stage success depends on the degree to which aspiring members havecorrectly anticipated the expectations and desires of those already working indifferent departments of the organization. Encounter Individuals confront the possible dichotomy between their expectations about jobsand that of their colleague, their seniors and the organization in general. When expectations do no go hand in hand with reality the new manager mustundergo socialization that will detach them from their previous assumption andreplace these with the organizations standard. Socialization cannot solve all the expectation differences. If there were properselection, including the realistic job preview, it would significantly reduce thisproblem Metamorphosis In this stage the new manager must work out any problem discovered during theencounter stage. Here the new manager has become comfortable with the organization and theirwork team. As a result they feel confident that they have the competence to complete their jobsuccessfully. A successful metamorphosis will have a positive effect on the new managersproductivity, commitment and turnover in the organization. MANAGERIAL SKILL DEVELOPMENT Executive Development Executive development is a systematic process of growth and development by whichthe managers develop their abilities to manage. It is concerned with improving theperformance of the manager by giving them opportunities to grow. Objectives of Executive Development Programs To over haul the management machinery. Department of Management Studies 51 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] To improve the performance of the managers To identify the person with the required potential and prepare them for seniorpositions. To increase morale of the members of the management group. To increase versatility of the management group. To keep the executives abreast with the changes and developments in theirrespective fields. Importance of Training Programs Training is a learning experience in that it seeks a relatively permanent change in anindividual that will improve the ability to perform on the job. Training involves change in skills, knowledge, attitude and behavior. Training implies a change in what employees know, how they work, their attitudetowards their work, their interaction with their coworkers or superiors. IMPORTANT METHODS OF EXECUTIVE DEVELOPMENT on the job training Under this method, the manager is placed on a regular job and the necessary skillis taught to perform the job efficiently. On the job training has the advantage of giving firsthand knowledge and experience under the actual working condition (see exhibit 2.1). 1. Coaching In coaching the trainee is placed under a particular supervisor who acts as an instructorand teaches job knowledge and skills to the trainee. He tells him what he wants him to do,how it can be done and followed up while it is being done and corrects errors. 2. Job Rotation The transferring of executives from job to job and from department to department ina systematic manner is called job rotation. He has to assume full responsibility and performall kinds of duties. The idea behind this is to give him the required diversified skills and abroader outlook, which is important at the senior manager level. 3. Under Study An understudy is a person who is training to assume at a future time, the full responsibilityof the position held by his superiors. This method supplies the organization a person withas much competence as the superior to fill his post, which may fall vacant because of promotion, retirement or transfer. 4. Multiple Management Multiple management is a system in which permanent advisory committee of managersstudy problems of the company and makes recommendations to the higher management.It is also called junior board of executive system. The committee discusses the actualproblems and different alternative solutions are suggested. Off the Job Training 1. The Case Study Cases are presented on the basis of actual business situations that happen in variousorganizations. These trainees are given case for discussion. Then they are asked to identifythe apparent and hidden problems for which they have to suggest solutions. This wholeexercise improves the participant‘s decision-making skill by sharpening their analytical and judging skills. Department of Management Studies 52 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 2. Conferences The conference method is another commonly used method for executive development.Topics such as human relations, safety education, customer relations, sales training andmany more are often discussed, debated and spoken about at the conference. A conferencemay be divided into small groups for focused discussions. Participants are expected to airtheir opinions and thoughts freely. It aims to develop the managers in the areas of intellectualability, practical judgment and social awareness. 3. Role Playing A problem situation is simulated by asking the participant to assume the role of aperson in managerial position in the organization. For example, a trainee might be asked toplay the role of a supervisor who is required to discipline an employee smoking in the plantin violation of the rules. Another participant would assume the role of the employee. Theindividual playing the supervisory role would then proceed to take whatever action hedeems appropriate. This action then provides the basis for discussion and comments bythe groups. The whole play may be tape-recorded and the trainee may thus be given theopportunity to examine his or her performance. 4. In basket method The trainees are first given background information about a simulated company, itsproducts, key personnel, various memorandum, requests and all data pertaining to thefirm. The trainee has to under stand all this, make notes, delegate tasks and prepare memos within a specific amount of time. 5. Business games Under this method, the trainees are divided into groups or different teams. Each teamhas to discuss and arrive at decisions concerning such subjects as production, pricing,research expenditure, advertising etc, assuming it to be the management of a simulatedfirm. The other teams assume themselves as competitors and react to the decisions. Thisimmediate feedback helps to know the relative performance of each team. 6. Sensitivity training The main objective of sensitivity training is the awareness and sensitivity of behavioralpatterns of one self and others. The role-play by the trainee here is not a structured one asin role-play. It is a laboratory situation where one gets a chance to know more abouthimself and the impact of his behavior on others. 7. Managerial grid It is a six-phase program lasting from three to five years. It starts with upgradingmanagerial skills, continues to group improvement, improve their inter group relations,goes into corporate planning, develops implementation method and ends with an evaluationphase. Systems Approach To Training Determining training needs. Choose right approach. Define objectives of training efforts. Develop training program to meet the objectives. Identify individuals Conduct training Department of Management Studies 53 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Evaluate training out come with objectives. Methods of Training Evaluation Post-training performance evaluation Pre- training performance evaluation Attitudinal change. Test scores. Improvement in production or methods of problem solving. PERFORMANCE APPRAISAL Introduction By means of human resource development activities, the manager develops thetechnical, managerial, behavioral knowledge, skill ability and values, which are necessaryto perform present and future role. The process of performance appraisals helps the managerand management to know the actual performance level of manager when compared tostandard level. Performance appraisal is the basis of HRD based on which promotionsdemotion, salary fixing etc. can be decided. It is the basis for the individual development Strategic Management and Performance Appraisal It is a method of evaluating the behavior of the manager in work spot, both qualitativeand quantitative aspect. It is the degree of accomplishment of the task that makes up anindividual job. It is different from effort. Performance is measured in degree of the resultachieved. Characteristic feature of performance appraisal Performance appraisal is the systematic description of the manager job relevantstrength and weakness. Basic purpose is to find out how well the manager is performing the job. Appraisals are arranged periodically. Performance appraisal is a continuous process. Performance appraisal is followed by corrective measures NEED FOR PERFORMANCE APPRAISAL Provides information about the performance rank. Helps in taking decisionsregarding salary fixation promotion, transfer and demotion. Provide feedback information about the level of achievements and behaviors of subordinate. Prevent grievances and maintains discipline Creates and maintain satisfactory level of performance. Contributes to manager growth and development through training programs. Department of Management Studies 54 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Helps the superior to have proper understanding about their subordinates. Helps to adopt job changes with the help of continuous ranking. Facilitates fair and equitable compensation, based on performance. Facilitates in testing and validating selection tests, interview techniques, bycomparing their scores with performance standards. Provides information for making decisions regarding layoff, retrenchment etc. It is a method of evaluating the behavior of the manager in work spot, both qualitativeand quantitative aspect. It is the degree of accomplishment of the task that makes up anindividual job. It is different from effort. Performance is measured in degree of the resultachieved. Characteristic feature of performance appraisal Performance appraisal is the systematic description of the manager job relevantstrength and weakness. Basic purpose is to find out how well the manager is performing the job. Appraisals are arranged periodically. Performance appraisal is a continuous process. Performance appraisal is followed by corrective measures NEED FOR PERFORMANCE APPRAISAL Provides information about the performance rank. Helps in taking decisionsregarding salary fixation promotion, transfer and demotion. Provide feedback information about the level of achievements and behaviors of subordinate. Prevent grievances and maintains discipline Creates and maintain satisfactory level of performance. Contributes to manager growth and development through training programs. Helps the superior to have proper understanding about their subordinates. Helps to adopt job changes with the help of continuous ranking. Facilitates fair and equitable compensation, based on performance. Facilitates in testing and validating selection tests, interview techniques, bycomparing their scores with performance standards. Provides information for making decisions regarding layoff, retrenchment etc. The appraisal process (Exhibit 2.10) begins with the establishment of performancestandards in accordance with the organization strategic goals. These performance standardsshould also Department of Management Studies 55 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] be clear and objective enough to be understood and measured. Once thestandard is set it should be communicated to all through proper communication channel.The next step in the performance appraisal process is the measurement of performancethrough various performance measuring techniques. Following this the actual performanceis compared with the desired performance and the gap is filled by means of human resourcedevelopment activities. The final step in the appraisal process is the identification of correctiveactions Performance appraisal methods With the evolution and development of the appraisal system a number of methods ortechniques of performance appraisal have been developed. They can be classified as Traditional method Modern method Traditional method 1. Graphic rating scales Individual performance is compared with the absolute standard. The judgment aboutthe performance is recorded on the scale. It is an oldest and frequently used method.The appraisers are supplied with printed forms one for each. These forms contain anumber of objectives, behavior taint and characters. These forms contain rating scales.Points are given to each item and they are added up to find the overall performance.Managers are ranked based on the total points they obtain and these are plotted in thegraph. 2. Ranking method The managers are ranked from best to worst based on some characteristics. Therater first finds the manager with highest performance and the manager with lowestperformance. Rates the former as the best and the later as poor. Thus all the employees ina group are given ranks.Ranking can be easy and inexpensive, but its reliability and validity may be open todoubt. It is possible that low ranker in one group may turn to be superstar in anothergroup. The limitation of the ranking method is that the size of the difference between individualbeing ranked is not well defined. 3. Paired Comparison Method This method is simple. Under this method the appraiser ranks the manager based onhis performance in comparing with all the others in the group one at a time. It will beeffective if the numbers of managers are less. The total number of comparison is givenby the formula N (N-1)/2.The limitation is that managers are simply compared with each other on the totalperformance rather than specific job criteria. 4. Forced Distribution Method It develops to prevent the rater from rating too high or too low. Under this method therater after assigning the points to the performance of each manager has to distribute the rating in a pattern to confirm frequency distribution. It eliminates central tendencyand leniency biases. This method is based on the rather questionable assumption thatall group of manager will have the same distribution of excellent, average and poor. 5.Check List Method The checklist is a simple rating technique in which the supervisor is given a list of statements and is asked to check if the statements represent the characteristics andperformance of each manager. There are three types of checklist Simple checklist Department of Management Studies 56 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] It consists of large number of statements and words. The raters are asked to marpositive or negative check. The negative checks are neglected and the positive checks arecounted. The limitation is that the raters may interpret the statement and the word differently. Forced checklist In this there are large number of statements in groups. Each group consists of 4statements.2 are favorable and 2 are unfavorable, some time 5 statements are given one isneutral. The rater has to select one from the favorable and one from unfavorable. Theweight-age for the statement is not shown to the rater. There is a mixture of the positive andnegative statements. Based upon the score they are ranked. Weighted checklist The weighted checklist method involves weighting different items in the checklist,having a series of statements about an individual, to indicate that some are more importantthan others. The rater is expected to look into the questions relating to the employee‘sbehavior and tick those traits that closely describe the employee behavior. Often the weightsare not given to the supervisors who complete the appraisal process, but are computedand tabulated by someone else, such as a member of the personnel unit. In this method, theperformance ratings of the employee are multiplied by the weights of weighted performancescore of the employee. Weighted performance score is compared with the overall assessmentstandards in order to find out the overall performance of the employee. 6. Critical Incident Method The critical incidents method of employee assessment has generated a lot of interestthese days. The approach focuses on certain critical behaviors of an employee that makeall the difference between effective and non-effective performance of a job. The incidentsare recorded as and when they occur 7. Essay Appraisal Form In this, the rater is asked to write an essay about the manager‘s strength and weakness.Based upon that they are ranked. The major drawback of this method is that it is timeconsuming and subjective. Modern Methods 1. BARS (Behaviorally Anchored Rating Scales) The bars method combines elements of the traditional rating scales and critical incidentmethod _ effective and ineffective behaviors are described more objectively. The methodemploys individuals who are familiar with a particular job to identify its major components.They then rank and validate specific behavior for each of the components.The various steps involved in constructing BARS Collect critical incidents Identify performance dimensions Reclassification of incidents. Assigning scale values to the incidents Producing the final instrument. 2.Assessment center This method of appraising was first applied in German army in 1930.this is not atechnique of performance by itself. It uses procedures that incorporate group and individualexercises. These exercise are designed to simulate the type of work, which the candidatewill be Department of Management Studies 57 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] expected to do. They participate in in-basket exercises, work groups, computersimulations, role-playing and other similar activities. Their performance in the situationalexercises is observed and evaluated by a team of trained assessors. 3. Management By Objective MBO requires the management to set specific, tangible and measurable goals witheach manager and then periodically discuss the latter‘s progress towards these goals. Thistechnique emphasizes participative management viz. goals that are agreed upon both bythe managers and their superiors. It is a kind of goal setting and appraisal program involvingsix steps Set the organization‘s goals Set departmental goals Discuss departmental goals Define expected results Performance reviews Provide feedback 4. Psychological Appraisal It is conducted to assess the employee‘s behavioral and psychological aspect. It consistsof indepth interviews, psychological tests and discussion reviews. It is useful for decisionmaking with regard to placement, career planning and training of managers. 5.360-Degree Feedback Where multiple raters are involved in evaluating performance, the technique is called360degree appraisal. The 360-degree technique is understood as systematic collection of performance data on an individual or group, derived from a number of stakeholders. Thestakeholders are the immediate supervisors, team members, customers, peers, and self. Problems of Performance Appraisal :A completely error-free performance appraisal is only an ideal we can aim for. Inreality most appraisals fall short of this ideal. This is often due to one or more actions thatcan significantly impede objective evaluation. It is briefly described below. 1. Rating biases The problem with subjective measure has the opportunity for biases Halo effect It is the tendency of the rater to depend on the rating of one trait or behavioralconsideration. It takes place when one aspect of an individual‘s performance influences theevaluation of the entire performance of the individual. In an organization, a halo error occurswhen an employee who works late constantly might be rated high on productivity andquality of output as well as on motivation. The Error of Central tendency Some raters play a safe role by rating all in the middle point of the rating scale and theyavoid rating the people at both extremes of the scale. The leniency and strictness Department of Management Studies 58 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] The leniency bias crops when some rater have tendency to be liberal in their rating byassigning higher rates consistently. Equally damaging is assigning low rate. It doesn‘t serveany purpose. Personal prejudices If the rater dislikes any employee or any group he may rate them low. Such decisionaffects the career of the manager. Recent effect The raters generally remember the recent action of the manager at the time of ratingthem. These recent actions may either be favorable or unfavorable. Such type of subjectiveperformance appraisal has certain drawbacks like Less reliability and validity of the performance appraisal techniques. Negative rating affect interpersonal relation and industrial relation system. Absences of inter rater reliability. Gives rise to unpleasant situation at the time of feedback interview. How to minimize the problems The problems of performance appraisal can be minimized through the following means: By covering an open meeting with the appraisers and discussing the performanceof the manager before an after performance review discussions. By encouraging every one to comment on each other‘s achievements and areasrequiring improvement. The appraiser should be objective and speak the truth. By conducting counseling meeting with the managers to apprise them of theirperformance and consequences. Feedback Feedback is a planned, systematic intervention in the life of an individual who is capableof choosing the goal and the direction of his own development. Thus the purpose of counseling is to help the employee become aware of his own performance, his strengthsand weaknesses, opportunities available for performance development and the threats inthe form of technological change etc. 360-Degree Feedback 360-degree appraisal is basically a Multi-rater appraisal and feedback system. In thissystem, the employee is assessed periodically (once in a year and sometimes even half yearly) by a number of assessors including his supervisor, immediate subordinates,colleagues, internal customers and external customers (see exhibit 2.11). Appraisers The appraiser may be any person who has thorough knowledge about the job contentsto be appraised. The appraiser should be capable of determining what is more importantand what is relatively less important. He should prepare reports and make judgmentswithout bias. Typical appraisers are supervisors, peers, subordinates, employees themselves,users of service and consultants. Performance appraisal by all these appraisers is called―360 degree performance Appraisal Department of Management Studies 59 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Supervisors: Supervisors include superiors of the employee, other superiorshaving knowledge about the work of the employee and department head ormanager. General practice is that immediate superiors appraise the performance,which in turn is reviewed by the departmental head or manager. Peers: Peer appraisal may be reliable if the work group is stable over areasonably long period of time and performs tasks that require interaction.However, little research has been conducted to determine how peers establishstandards for evaluating others or the overall effect of peer appraisal on thegroup‘s attitude. Subordinates: the concept of having superiors rated by subordinates is beingfollowed in most organizations today, especially in developed countries. Sucha novel method can be useful in other organizational settings too provided therelationships between superiors and subordinates are cordial. Self Appraisal: if individuals understand the objectives they are expected toachieve and the standards by which they are to be evaluated, they are to agreat extent in the best position to appraise their own performance. Also, sinceemployee development means self-development, employees who appraise theirown performance may become highly motivated. Wipro and many otherindustries have implemented self-appraisal. The assessment is made in a questionnaire behaviorsconsidered as critical for performance specially designed to measure Others do the Appraisal anonymously and the assessment is collected by an externalagent (consultant) or specially designated internal agent (for example the HRDepartment). The assessment is consolidated. Feedback profiles are prepared and given to theemployee. This type of multi-perspective evaluation is more complete and accurate than thetraditional top-down evaluation Importance of 360-degree feedback Superiors only see a part of a manager‘s performance, they need other perspectivesto fill in the blanks. Subordinates, for example, can provide information on the leadershipqualities of a manager. Customers are in a better position than anyone else to evaluate howemployees perform with them.A 360-degree evaluation is also valuable because people don‘t act the same towardseveryone. The interpersonal skills of a manager are probably more accurately reflected infeedback from subordinates or peers than in feedback from his superiors.Another important aspect of 360-degree feedback is the inclusion of self-evaluations.Ratings by others will probably be more accurate, but self-evaluations force employeesand managers to sit down and think about their strengths and weaknesses.360-degree feedback evaluations have the advantage of confidentiality. Since 360-degree feedback involves groups of raters, the results are anonymous. These results aretherefore less likely to be biased or skewed either positively or negatively. The ratersevaluate those dimensions or elements, of a person‘s performance that they know best.360-degree feedbacks are known as multi-rater assessments since the number of evaluations is increased to include peers, supervisor and subordinates to offer a morebalanced and comprehensive view and improve the quality of performance Department of Management Studies 60 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] measures.Through the assessments, not only do organizations gain access to credible, quantitativeinformation, but also the assessment provides reasonable benefits to the stakeholdersincluding the supervisors, customers, employees, team members, leaders and managers. Objectives Of 360-Degree Feedback Insight into the strong and weak areas of the candidate in terms of the effectiveperformance of roles, activities, styles, traits, qualities, competencies knowledge,attitudes and skills, impact on others and the like. Identification of developmental needs and preparing developmental plans moreobjectively in relation to current or future roles and performance improvementsfor an individual or a group of individuals. Data generation to serve as a more objective basis for rewards and otherpersonnel decisions. Alignment of individual and group goals with organizational vision, values andgoals. Reinforcement of other change management efforts and organizationeffectiveness directed interventions. 360-degree feedback can be used for Self development and individual counseling Part of organized training and development Team building Performance management Strategic or organization development Validation of training and other initiatives Fixing Remuneration Advantages of 360-Degree Feedback It is more objective than a one-person assessment of traits and qualities. It adds objectivity and supplements the traditional appraisal system. It is more participative and enhances the quality of HR decisions. It is suitable for new organizational cultures being promoted by most world-class organizations (participative culture, learning culture, quality culture teamwork,leadership culture etc) Provides quality and large quantity of detailed information about a person. Department of Management Studies 61 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] It has morale boosting effect. Phases Of Feedback Exercise Orientation Questionnaire distribution Monitoring and follow up Data feeding and reports Counseling Career Development The Concept of Career Douglas T. Hall defines career as a sequence of work related activities that providescontinuity, order and meaning in a person‘s life. There is also a subjective element in theconcept of career. A career consists of the changes in values, attitudes and motivation thatoccur as a person progresses in his professional life.A career can mean Advancement Profession Stability over time Individual Vs Organizational Perspective From an organizational or HRM point of view career development involves trackingcareer paths and developing career ladders. HRM seeks information to direct and to monitor the progress of special groups of employees, and to ensure that capable professional,managerial and technical talent will be available to meet the organization‘s needs. Careerdevelopment from the organizations perspective is also called organizational career planning.In contrast individual career development or career planning focuses on assistingindividuals to identify their major goals and to determine what they need to do to achievethese goals. Career Development Vs Employee Development Career development looks at the long-term career effectiveness and success of organizational personnel. A successful career program in attempting to match individual‘sabilities and aspirations with the needs of the organization should develop managers withan objective to match the long term needs of the organization and address the dramaticchanges that will take place over time in the business environment. Career Development: Value For The Organization 1. Ensures needed talent will be available Changing staff requirements over the intermediate and long term should be identifiedwhen the company sets long term goals and objectives. Working with individual employeesto help them align their needs and aspirations with those of the organization will increasethe probability that the right people will be available to meet the organization‘s changingstaff requirements. 2. Improves the organization‘s ability to attract and retain talented managers Importantly career planning appears to be a natural response to the rising concern byemployees for the quality of work life and personal life planning. Social values have changedthat more members of the work force no longer look at their work in isolation. Their Department of Management Studies 62 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] work must be compatible with personal, family interests and commitments. Career developmentshould result in a better individual-organizational match for employees and result in fewerturnovers. 3.Ensures that minorities and women get opportunities for growth and development Equal employee legislation and affirmative programs have demanded that minoritygroups and women receive opportunities for growth and development that will preparethem for greater responsibilities within the organization. 4. Reduces employee frustration When organizations cut costs by downsizing, career paths, career tracks and careerladders often collapse. Career counseling can result in more realistic rather than raisedemployee expectations. 5. Enhances cultural diversity Attracting and retaining the people from different cultures, enhances cultural diversity. 6. Promotes Organizational Goodwill When employees think their organizations are concerned about their long-term wellbeing, they respond in projecting positive images of the organization outside whereverthey go and hence people may view it in a greater perspective. Career Development: Value for the Individual 1.The process of career planning helps the individual to have the knowledge of variouscareer opportunities, his priorities.2.This Knowledge helps him select the career, which is suitable to his personality,lifestyles, preferences, family environment and which has scope for selfdevelopmentetc.3.It improves the efficiency and performance of the individuals.4.Increases job satisfaction and enhanced employee commitment.5.It satisfies employees esteem needs. Career stages A career, as mentioned before, includes many positions, stages and transitions just asa person‘s life does. It can be easily understood if we think of a career consisting of severalstages. Most of us have gone or would go through the five stages (see exhibit 2.12). Exploration Establishment Mid-Career Late Career Decline Exploratory stage As the term itself denotes it is a stage in which a person explores, possible careeroptions for oneself and it happens usually in mid-twenties when one makes transition fromeducation to earn i.e., work. Experiences suggest that several factors like the careers of the parents, their interest, and their aspirations for their children, and their financial resourcesshape the children‘s future career options. Since this stage occurs prior to employment, ithas least relevance for the organization. Establishment stage This stage begins with choosing a job, or say, career, for oneself. This stage is markedby the first experiences on the job, acceptance and evaluation by peer groups. In thisstage, one tries to make his/her mark and in the process commits mistakes, learns frommistakes, and gradually assumes increased responsibilities. However, one does not reachthe summit or peak productivity at this stage. Putting it differently, this stage is like going uphill making lot of efforts, spending lot of time and energy all the while. Mid Career Stage This is a stage marked by improved performance, level off or starting deterioration.This is the stage when one is no longer seen as a learner. Hence, mistakes committed areviewed seriously and invite serious penalties. At this stage, some managers may feelplateaued. Plateauing is a condition of stagnating in one‘s current job. In one case, anexecutive at the age of 40 moved to journalism and was quite successful. Several suchcases of career movement abound in the society. Department of Management Studies 63 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Late Career Stage This stage is usually a pleasant stage for those who continued to grow during the mid-career stage. Based on one‘s good performance during the earlier stage, one now enjoysplaying the part of the elder statesman and command respect from younger employees.During this stage, the people do not have to learn but to suggest and teach others how togo about with their jobs. But for those who have either stagnated or deteriorated duringthe mid-career stage, the late career stage brings the reality for them that they are no longerrequired in the organization and therefore, it is better for them to direct themselves toretire. Decline Stage This is the final stage in one‘s career to retire from one‘s job or career. Impendingretirement scares everyone but more to those who have sparkling career earlier. This is sobecause these persons have to step out of the limelight and give up a major component of their identity. On the contrary, decline stage is less painful for modest performers or failures.Their frustration associated with work is left behind Achieving Your Career Goals Select your first job judiciously A power department is one where crucial and important organizational decisions aremade. If we start out in such a department in an organization then we are more likely toadvance in the organization and ultimately throughout our career. Do good work Good work performance is a necessary condition for career success. A good work performance is no guarantee of success but without it the probability of a successful career is low. Present the right image We should assess the organizations culture so that we get an idea of what are theorganizations wants and values. Then we need to project that image in terms of style of dress, organizational relationships that should cultivate, shouldn‘t cultivate etc. Learn the power structure Instead of just going through the organizational chart we need to find out ―who‘s reallyin charge, which has the goods on whom, what are the major debts and dependencies‖.Once these aspects are learnt navigation through the power structure can be done with skilland ease. Gain control Knowledge and expertise are particularly more effective resources to control. Theymake us more valuable to the organization and therefore more likely to gain job securityand advancement. Stay visible Since performance effectiveness is very subjective it‘s important that your boss andthose in power in the organization are made aware of your contributions. Tactics adoptedcan be being seen at social functions and being active in professional associations. Don‘t stay too long in your first job Department of Management Studies 64 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] There is a choice in staying in your first job. One should have ―really made a difference‖in his first job if not should choose to move on to other jobs. Find a mentor Evidence indicates that finding a mentor who is part of the organization‘s power coreis essential to help you grow in your career Support your boss Don‘t undermine your boss. Don‘t speak negatively of him to others. If he is competent,visible and possesses a power base he or she is likely to be on the way up in the organization.In case he turns out to be incompetent you need to move to another job. Stay mobile You are likely to move upward more rapidly if you indicate willingness to move todifferent geographic locations and across functional lines within the organization, or changeorganizations. Working in a slow, stagnant or declining organization should make mobilitymore important to you. Think laterally ‗Lateral shifts are now a viable career consideration. They give a wide range of experiences, which enhances long-term mobility; also makes work more interesting andsatisfying. So if we are not moving ahead in the organization then we have to consider alateral move internally or externally. Continue upgrading skills By focusing on current skills and continuing to learn new ones we can establish ourvalue to the organization. It is managers who don‘t add value to an organization whose jobs are in jeopardy. Develop network A network can prove to be a useful tool if your job is eliminated. Even if your jobis in danger of being cut, having a network can prove beneficial in getting things done. UNIT IV CREATIVITY AND INNOVATION An important factor in managing people is creativity. A distinction can be made betweencreativity and innovation. The term creativity usually refers to the ability and power todevelop new ideas. Innovation, on the other hand, usually means the use of these ideas. Inan organization this can mean a new product, a new service, or a new way of doing things. The Creative Manager All too often it is assumed that most people are noncreative and have little ability todevelop new ideas. This assumption, unfortunately, can be detrimental to the organization,for in the appropriate environment virtually all people are capable of being creative, eventhough the degree of creativity varies considerably among the individuals.Generally speaking, creative people are inquisitive and come up with many new andunusual ideas; they are seldom satisfied with the status quo. Although intelligent, they notonly rely on the rational process Department of Management Studies 65 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] but also involve the emotional aspects of their personalityin problem solving. They appear to be exited solving a problem, even to the point of tenacity. Creative individuals are aware of themselves and capable of independent judgment.They object to conformity and see themselves as being different.Unquestionably, creative people can make great contributions to an enterprise. Changeas any manager knows is not always popular. Moreover, change frequently has undesirableand unexpected side effects. Similarly, unusual ideas, pursued stubbornly, may frustrateothers and inhibit the smooth functioning of an organization. Finally, creative individualsmay be disruptive by ignoring established policies, rules, and regulations. As a result creativityof most individuals is probably underutilized. However, individual and group techniquescan be effectively used to nurture creativity, especially in the area of planning. But creativityis not a substitute for managerial judgment it is the manager who must determine and weighthe risks involved in pursuing unusual ideas and translating them into innovative practices. The Creative Process The creative process is seldom simple and linear. Instead, it generally consists of fouroverlapping an interacting phases: (1) unconscious scanning, (2) intuition, (3) insight, and(4) logical formulation.The first phase, unconscious scanning , is difficult to explain because it is beyondconsciousness. This scanning usually requires an absorption in the problem, which may bevague in the mind. Yet managers workings under time constraints often make decisionsprematurely rather than dealing thoroughly with ambiguous ill-defined problems.The second phase, intuition, connects, the unconscious with the conscious. Thisstage may involve a combination of factors that may seem contradictory at first. For example in the 1920s Donaldson Brown and Alfred Sloan of General Motors conceived the idea of a decentralized division structure with centralized control – concepts which seem tocontradict each other. Yet the idea makes sense when one recognizes the underlyingprinciples of (1) giving responsibility of the operations to the general manager of eachdivision, and (2) maintaining centralized control in head quarters over certain functions. Ittook the intuition of two great corporate leaders to see that these two principles couldinteract in the managerial process. Intuition needs time to work. It requires that people findnew combinations and integrate diverse concepts and ideas. Thus, one must thing throughthe problem. Intuitive thinking is promoted by several techniques such as brainstormingand synectics. Insight, the third phase of the creative process, is mostly the result of hard work. Forexample many ideas are needed in the development of a usable product, a new service, ora new process.The last phase in the creative process is logical formulation or verification. Insightneeds to be tested through logic or experiment. This may be accomplished by continuingto work on an idea or by inviting critiques form others. Brown and Sloan‘s idea of decentralization. Techniques to enhance creativity Creativity can be taught. Creative thoughts are often the fruits of extensive efforts,and several techniques are available to nurture those kinds of thoughts, especially in thedecision-making process. Some techniques focus on group interactions; others focus onindividual actions. Brainstorming: One of the best-known techniques for facilitating creativity has beendeveloped by Alex F Osborn, who has been called ―the father of brainstorming‖. Thepurpose of this approach is to improve problem solving by finding new and unusual solutionsin the brainstorming Department of Management Studies 66 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] session; a multiplication of ideas is sought. The rules are as follows:1.No ideas are ever criticized2.The more radical the ideas are, the better.3.The quantity of idea production is stressed.4.The improvement of ideas by others is encouraged.Brainstorming, which emphasizes group thinking, was widely accepted after itsintroduction. However, the enthusiasm was dampened by research, which showed thatindividuals could develop better ideas working by themselves than could work in-group. Synectics: Originally known as the Gordon technique, this system was further modifiedand became known as synectics. In this approach, the members of the synectics team are carefully selected for their suitability to deal with the problem, a problem that may involvethe entire organization.The leader of the group plays a vital role in this approach. In fact, only the leaderknows the specific nature of the problem. This person narrows and carefully leads thediscussion without revealing the actual problem itself. The main reason for this approach isto prevent the group from reaching a premature solution to the problem. The system involvesa complex set of interactions from which a solution emerges – frequently the invention of anew product. Innovation and Entrepreneurship Recently, innovations and entrepreneurship have received considerable attention. Itmay be an appealing thought to get rich quick, often by establishing new companies. PeterDrucker suggests that innovation applies not only to high-tech companies but also equallyto low-tech, established businesses. Worthwhile innovations are not a matter of sheer luck;it requires systematic and rational work, well organized and managed for results.What does entrepreneurship imply? It suggests dissatisfaction with how things areand awareness of a need to do things differently. Creativity and innovation in ones work,helps a person to be a successful entrepreneur. Innovation comes about because of someof the following situations. The unexpected events, failure, or success The incongruous – what is assumed and what really is The process or task that needs improvement Changes in the market or industry structure Changes in demographics. Changes in meaning or in the way things are perceived Innovation based on knowledgeInnovations based solely on bright ideas may be very risky and are, at times, notsuccessful. The most successful innovations are often the mundane ones. Innovation is notonly relevant to high-tech firms but also crucial for old-line, traditional companies, whichmay not service without the infusion of innovation. Managers in such companies must createan environment that fosters entrepreneurial spirit and actions MOTIVATION Definition A manager gets result through other people. His effectiveness depends, to a largeextent, on the willingness of his employees to do the assigned tasks with interest andenthusiasm. Department of Management Studies 67 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] According to Scott, ―Motivation is a process of stimulating people to action toaccomplish desired goals‖. Motivation has three distinct features It results from a felt need It is goal directed It persist until the satisfaction of a need state occurs. Meaning of motivation Motivation is the set of processes that moves a person toward a goal. Thus, motivated behaviors are voluntary choices controlled by the individual employee. The supervisor(motivator) wants to influence the factors that motivate employees to higher levels of productivity Any influence that triggers, directs or maintains behavior The Process that account for an individual‘s intensity, direction and persistence of efforts towards attaining a goal. Process and Content theories- Relationship with Managerial Motivation Approaches understanding motivation differ because many individuals theorist havedeveloped their own views and theories of motivation. They approach motivation fromdifferent perspective, with different ideas in mind and from different background. Motivationtheories are classified into two, content theories and process theories (see exhibit 2.2).Process theories, as opposed to the content theories suggest that a variety of factors proveto be motivating, depending on the needs of individual, the situation the individual is in, andthe rewards he expects for the work done Content Theories of Motivation This theory explains why people have different needs at different times (see exhibit2.3) Assumptions All Employees are alike All situations are alike There is one best way to motivate all employees Maslow’s Hierarchy of Need Theory Each individual has needs, or feelings of deficiency that drive their behavior Once a need is satisfied, then it is no longer motivating Needs are in a hierarchy that an individual moves up as they satisfy levels of needs Levels of Needs Physiological/Survival needs Food, Clothing, Shelter, Air Department of Management Studies 68 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Security Feel safe, absence of pain, threat, or illness Affiliation Friendship, company, love, belonging First clear step up from physical needs Esteem Needs Self-respect, achievement, recognition, prestige Cues a persons worth Self-Actualization Personal growth, self-fulfillment, realization of full potential Managerial perspectiveSelf-esteem needs Internal esteem factors such as self-respect, autonomy, achievement will act as aninternal motivator for managers. Managers are also in need of external esteem factors such as status, recognitionand attention in order to get refreshed and perform their work efficiently. Self Actualization Need The Drive to become what one is capable of becoming This includes Ones growth, potential and self-fulfillmentThe above-mentioned two factors are important for a manager who is an achievement-oriented person. Alderfer’s ERG Theory Consolidates Maslow‘s hierarchy of needs into 3 categories (see exhibit 2.4) Existence-physiological and security Relatedness-affiliation Growth-esteem and self-actualization Differs from Maslow‘s Hierarchy When unable to satisfy upper level needs, the individual will revert to satisfyinglower level needs Managerial perspective Alderfer‘s growth need is closely related with Managerial Motivation. An intrinsic desire for personal development Department of Management Studies 69 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] This include intrinsic component from Maslow‘s esteem and self actualizationcomponent McClelland’s needs The Theory envisages that each person has a need for all three (as well as others),but that people differ in the degree to which various needs motivate their behavior Needs are acquired through interaction with environment Types of Needs NAch (Need for Achievement)-This is a motive to meet some standard of excellence or to compete with others. NAff (Need for Affiliation)-This describes a motive to develop and maintain closeand meaningful relationships with others. NPow (Need for Power)-This is based upon desire to influence and control othersand the environment Managerial perspective Task managers show high on achievement and power need and low on affiliation People centered managers show high on affiliation need. Herzberg’s Two-Factor Theory Some variable prevent job dissatisfaction and some variables produce motivation Hygiene factors-basic needs that normaltemperature, pay, parking etc. will prevent dissatisfaction e.g. ventilation, Motivators, when present cause high levels of motivation. Work gets moreinteresting, advancement and growth becomes possible. Managerial perspective The manager in an organization can be motivated by Challenging assignments Recognition. Responsibility Career growth Process Theories Reinforcement Theory Expectancy Theory Equity Theory Goal Setting Theory Department of Management Studies 70 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Reinforcement Theory Behaviors are functions of consequences that they produce (see exhibit 2.5) If a behavior is followed by a pleasant experience it will be repeated In order to change behaviors the consequences must be changed Types of Reinforcement Positive Reinforcement-rewards Negative Reinforcement-punishments Types of Rewards Extrinsic-external rewards such as money, fringe benefits, job security Intrinsic-internal satisfaction outcomes derived from doing work- Satisfaction Relation with Managers Managers are highly attracted by the intrinsic rewards and internal satisfaction thatcomes out of his work rather than monetary benefits Vroom’s Expectancy Theory Combines goal setting and reinforcement theories Three questions drive motivation–Will effort lead to performance? Will performance lead to reward?–Will the reward be of value to the person?–This theory is more applicable to both employees and managers (see exhibit 2.6) Terms Expectancy-increases the belief that employees effort will lead to successfulperformance Instrumentality-increases the belief that performance leads to valued rewards Valence-increases the expected value of outcomes resulting from desiredperformance Expectancy Theory in Practice Increasing the E-to-P expectancy Training, selection, resources, clarify roles, provide coaching and feedback Increasing the P-to-O expectancy Measure performance accurately, explain how rewards are based on past andpresent performance Increasing outcome valences Department of Management Studies 71 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Use valued rewards; individualize rewards preferred by the employees. Equity Theory Stacy Adams has proposed this theory. According to this theory individuals try to finda balance between their inputs, viz amount of effort, time and energy expended to do thework and the corresponding output received in return for the work done, in the form of pay, incentives and other benefits. They compare this input-output ratio, with that of others,in the same position, working both within the organization and outside. If the person‘sperceived ratio is not equal to the others he or she will strive to restore the ratio to equity. Elements of Equity Theory Outcome/input ratio–Inputs — what employee contributes (e.g. skill, time, effort)–Outcomes — what employees receive (e.g. pay, incentives) Equity evaluation–Compare outcome/input ratio with others who are in the same line. Goal Setting Theory Assignment of specific, results oriented, moderately difficult goals, combined withadequate feedback will provide motivation to work Employee participation in goal setting Receive rewards on the accomplishment of goals Provide competencies necessary for achievement of these goals Relation with Managerial motivation It is usual for employees to take lighter task first Managers who are highly achievement oriented will accept to take up heavier tasks APPLICATION OF MOTIVATION THEORIES Knowledge about the theories of motivation though useful is not enough to motivateemployees at work situations. Managers must know specific ways, by which they couldhelp and motivate their subordinates. Some amongst them is Money Job design Participative Management Quality of work life Behavioral modification Others Money Money is understood to be a powerful motivator for more than one reason. In thefirst place money is fundamental for completion of a task (see exhibit 2.7). The employeetakes pay as a reward for his work, and the employer views it as a price for using theservices of the employee. Second, as a medium of exchange, money is a vehicle by whichemployees can buy Department of Management Studies 72 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] numerous need satisfying goods and services they desire. Third, moneyis one of the hygiene factors and improving maintenance factors is the first step in effortsdirected towards motivation. Fourth, money also performs the function of a scorecard by which employees assess the value that the organization places on their services and bywhich employees can compare their values to others. Fifth, reinforcement and expectancytheories attest to the value of money as a motivator Pay and Performance relationship But, behavioral scientist thinks otherwise. They downgrade money as a motivator.They prefer, instead other techniques such as challenging jobs, goals, participation indecisionmaking and other non-monitory incentives for motivating employees. Theconclusion is that money can motivate some people under some conditions i.e. moneycannot motivate all people under all circumstances. Job design Job design involves conscious efforts on the part of the management to organizetasks, duties and responsibilities into the unit of work in such a way that meets the needs of the employees and the organization. The design of jobs has a critical impact on organizationand employee objectives. From the organization‘s perspective the way tasks andresponsibilities are grouped can affect productivity and cost.Poorly designed jobs may lead to lower productivity, employee turn over, absenteeism,complaints, sabotage, unionization, resignations and other problems. It was Herzbergwho conceived job design as an important instrument to motivate employees. Job enrichment First coined by Herzberg in his famous research with motivators and maintenancefactors, job enrichment, has become a popular concept. It simply means adding a fewmore motivators to job to make it more rewarding. A job is enriched when the nature of the job is exciting, challenging, and creative or gives the jobholder more decision makingplanning and controlling powers. Job rotation This involves shifting managers from one job to another. It reduces boredom anddisinterest through diversifying the employee‘s activities. Managers with a wider range of skills give management more flexibility in scheduling work, adapting to changes, and fillingvacancies. Some of the drawback of this method is that the training costs increases, work gets disrupted as managers take time to adjust to a new set-up, and it may demotivateintelligent and ambitious managers who seek specific responsibilities in their chosen specialty. Participation Managerial participation at all levels encourages and permits contributions to decisions,goals and plans along with suggestions on how these can be implemented.Participative management is compatible with motivation-hygiene and ERG theories of motivation. In terms of the two-factor theory, participative management could provideemployees and managers with intrinsic motivation by increasing opportunities for growth,responsibility and involvement in the work itself. Similarly, the process of making andimplementing a decision and then seeing how it works could satisfy the growth needs of theERG theory. Quality of Work Life The term ―quality of work life‖ means different things to different persons. For eg, toa worker on an assembly line, it may just mean a fair day‘s pay, safe working conditions,and a supervisor who treats him with dignity. To a new entrant, it may mean opportunitiesfor advancement, creative tasks, and a successful career.Factors affecting quality of work life Adequate and fair compensation Department of Management Studies 73 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] A congenial working environment Jobs aimed at developing and using employee skill and abilities An environment in which employees develop self-esteem and a sense of identity. Protection and respect for employee‘s rights to privacy and equity. A sensible integration of job career and family life and leisure time Behavior Modification Organizational behavior modification is yet another technique of influencing behaviorof people in organizations. Step 1- Identification of critical behaviors Step 2-Measurement of the behaviors Step 3-Functional analysis of the behavior Step 4-Development of an intervention strategy Step 5-Evaluation to ensure performance improvement other application of motivation theories 1. Management by objectives (MBO) It is defined as a process whereby superiors and subordinates jointly identify thecommon objectives (see exhibit 2.8), set the results that should be achieved by thesubordinates assess the contribution of each individual in terms of results expected of himand integrate individuals with the organization so as to make best use of organizationalresources.Steps in MBO Setting objectives: To establish verifiable objectives for the organization as a wholeand for various positions in the organization. The objectives are established at several stages. Developing Action Plan: The responsibility for achievement of each goal is fixed. Conducting periodic reviews: At frequent intervals the superior and subordinatereview actual performance jointly. Appraising Annual performance: A thorough evaluation of individual Performance is done at the end of the year Mgr vs leader 2. Flexible working hoursAlso called as flexi time to suit the convenience of individualemployees has often been pointed out as one of the techniques of motivation. It leads to reduced absenteeism, increased productivity, reduced over time expenses, elimination of tardiness, a lessening in the hostility towards management etc. 3. Two-tier pay system : - This provides for offering significantly lower wage rates tonewly hired employees than those already employed in the same job. For example, a junior lecturer in a university is paid less than a senior grade lecturer. 4.Flexible benefits Department of Management Studies 74 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] : - These allow employees to pick and choose from among a menu of benefits package that is individually tailored to his or her own needs and situations. Modern motivation techniques Employee stock option schemea)Compulsory offs on Saturdays and Sundaysb)Family tour either domestic or foreign once in a yearc)Dating allowanced)Free lunche)Recreation program for childrenf)Crèche facility for women employeesg)Free transport facilityh)Celebration of important festivals Manager’s motivation tool kit Appraise, approval and recognition Trust, respect and high expectations Loyalty, given that it may be received Removing organizational barriers Job enrichment Communications People have different needs at different times. Offer employees a choice of flexiblerewards. Do not rely too heavily on financial rewards. They mainly address lower levelneeds. Managers who are highly achievement oriented will accept to take up heavier tasks. Meaning of Leadership In the words of Louis A. Allen, “A leader is one who guides and directs otherpeople. He gives the efforts of his followers a direction and purpose by influencing theirbehavior‖. Managers at all levels must perform this function of leadership to lead thesubordinates towards organizational goals. Leadership is the physical process influencingfollowers or subordinates and providing guidance to them. It is always related to a situation,which means a leader may be effective in one situation while ineffective in another. To beeffective, a leader should change his leadership style depending upon the requirements of the situation.Leadership is a process of influence on a group. It is an important part of a manager‘s job. Leadership is the ability of a manager to induce subordinates to work with confidenceand zeal. It is the driving force, which get things done by others. A good leader achievesmaximum cooperation from the group members by providing two-way communicationand by motivating. He is also able to coordinate the activities of the followers to achievecommon objectives.Leadership can be an important modifier of behaviour of people working in theorganization. Effective leadership is necessary for inspiring the people to work for theaccomplishment of given objectives. Importance of Leadership The significance of leadership in management will be clear if we study the functions,which are performed by a leader. The functions are as follows: Determination of goals: A leader performs the creative function of lying down goals andpolicies for the followers. He acts as a guide in interpreting the goals and policies. Organization of activities: A good leader divides organization activities among theemployees in a systematic manner. The relationships between them are clearly laid down.This reduces the chances of conflict between them. Achieving coordination: Department of Management Studies 75 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] A leader integrates the goals of the individuals with theorganizational goals and creates a community of interests. He keeps himself informed aboutthe working of the group. He shares information with the group for the coordination of itsefforts. Representation of workers: A leader is a representative of this group. He takes initiativein all matters of interest to the group. He also attempts to fulfill the psychological needs of his followers. Providing guidance: A leader guides the subordinates towards the achievement of organizational objectives. He is available for advice whenever a subordinate faces anyproblem. Inspiration of employees: A good leader inspires the subordinates for better performance.Motivation is necessary for getting the desired work from the subordinates. The leadermotivates the employees by providing them economic and non-economic rewards. Building employees’ morale: Good leadership is indispensable for high employee morale.The leader shapes the thinking and attitudes of the group. He develops good human relationsand facilities interactions among the members of the group. He maintains voluntarycooperation and discipline among followers. Facilitating change: Leadership is the mechanism to convince workers about the needfor change. Dynamic leadership is the corner stone of organizational change. An effectiveleader is able to overcome resistance to change on the part of workers and thus facilitateschange. Characteristics of leadership Leadership is a process of influence: Leadership is a process whose important ingredientis the influence exercised by the leader on group members. A person is said to have aninfluence over others when they are willing to carry out his wishes and accept his advice,guidance and direction. Such successful leaders are able to influence the behaviour, attitudesand beliefs of their followers. Leadership is related to a situation: Leadership styles will be different underdifferent circumstances. At one point of time, the subordinates may accept the autocraticbehaviour of the leader while at a different point of time and under a different situation,only participative leadership style may be successful Leadership is the function of stimulation: Leadership is the function of motivating people to strive willingly to attain organizational objectives. Leaders areconsidered successful when they are able to subordinate the individual interests of theemployees to the general interests of the organization. A successful leader allows hissubordinates to have their individual goals set up by themselves in such a way that they donot conflict with the organizational objectives. Leadership gives and experience of helping attain the common objectives: Under successful leadership, every person in the organization feels that his operation,however minor it may be, is vital to the attainment of organizational objectives. It happenswhen the manager‘s feels the importance of individuals gives them recognition and tellsthem about the importance of activities performed by them. Employees must be satisfied with the type of leadership provided: Onlyshort-term productivity of employees can increase by pressure and punishment. Thisapproach is not in the long-term interests of the organization. Force Department of Management Studies 76 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] generates counter-force which results in a decreased long-term productivity. Long-term interest of theorganization are best served when managers allow subordinates to influence their behaviour,particularly when subordinate are knowledgeable and competent. Leadership Theories Trait Theory Of Leadership Trait theory seeks to determine universal personal characteristics of effective leaders.Numerous physical, mental and personality traits were researched during the period from1930 to 1950. Leaders were characterized by a wide variety of traits ranging all the wayfrom neatness to nobility.In late 1940‘s Ralph Stogdill reported on the basis of at least fifteen studies thatleaders possess intelligence, scholarship, dependability in exercising responsibilities, activityand social participation and socio-economic status. Persons who are leaders are presumedto display better judgement and engage themselves in social activities. The study of thelives of successful leaders reveals that they possessed many of these traits. Some of theimportant traits of an effective leader are discussed as below: 1.Intelligence: This trait seems to hold up well than any other. Leaders generallyhave somewhat higher level of intelligence than the average of their followers.They possess the ability to think scientifically, analyze accurately and interpretclearly and precisely the problems before them in terms of different aspects andperceptive. 2.Physical features: Physical characteristics and level of maturity determinepersonality of an individual, which is an important factor in determining success of leadership. Height, weight, physique, health and appearance of an individual areimportant for leadership to some extent. 3.Inner Motivation Drive: Leaders have relatively intense achievement typemotivational drives. They have the inner urge to keep accomplishing something. Toinitiate suitable activities at proper time is the habit of a leader. He works hardmore for the satisfaction of inner drives than for extrinsic material rewards. 4.Maturity: Leaders generally have broad interests and activities. They are emotionallymature and have balanced temperaments avoiding menacing extremes so that theymay not become thoughtless victims of the circumstances. They also have highfrustration tolerance. 5.Vision and Foresight: A leader can‘t maintain his influence unless he exhibits histrait of looking forward well in advance and imagination for handling his followers.So he should imaginatively visualize trends and devise his policies and programmeswith foresight based on logical programmes. 6.Acceptance of Responsibilities: A reliable leader is one who is prepared toshoulder the responsibility for the consequences of any steps he contemplates ortakes. He is always aware of the duties and obligations associated with the positionhe holds. 7.Open-mind and Adaptability: A leader is ready to absorb and adopt new ideasand views of others as may be demanded by the situation. Flexibility is the othername for open-mindedness, which makes the leader more identified with the group. 8.Self-confidence: a good leader has conceptual clarity about the things he is goingto do. He has confidence in himself whenever he initiates any course of action.Self-confidence is essential to motivate the followers and boost up their morale. Department of Management Studies 77 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 9.Human Relations Attitude: A good leader is considerate of the followers as hissuccess as a leader largely depends on the cooperation of the people. He alwaystries to develop social understanding with other people. He is constantly busy inachieving the voluntary cooperation of the followers. 10.Fairness and Objectivity: A good leader is fair and objective in dealing withsubordinates. He must be free from bias and prejudice while becoming emotionallyinvolved with the followers. Honesty, fairplay, justice and integrity of character areexpected of any good leader. Behavioral Theory Of Leadership The behavioral approach is based on the premise that effective leadership is the resultof effective role behavior. A leader uses conceptual, human and technical skills to influence the behavior of his subordinates. There is a dynamic interaction between the leader and thefollowers, and leaders produce different styles while dealing with the employees.Some of the important contributions in this regard include Ohio State Studies, MichiganUniversity Studies and Managerial grid of Blake and mouton. The behavioral scientistsdon‘t concentrate on the traits of leaders; rather they study the activities of leaders toidentify their behavioral patters.The behavioral approach has failed to explain why a particular leadership behavior iseffective in one situation, but fails in another situation. Thus, situational variables are notconsidered. In practice, it is the situation, which determines the effectiveness of a particularleadership style. Michigan Studies The institute for Social Research at the university if Michigan conducted empiricalstudies to identify styles of leader behavior that results in higher performance and situationof a group. As a result of these studies, two distinct styles of leadership were identified: Production-centered (task oriented) leadership: The production-orientedleaders emphasize productivity by the use of procedures, rules and close supervisionof subordinates. They concentrate on the technical aspect of the job; employeesare seen as tools to accomplish the goals of the organization. Employee-centered (Relation oriented) leadership: The employee-centeredleaders concentrate on human relations and emphasize delegation of authority,concern for employees needs, welfare, advancement, etc. Leaders who aredescribed as employee-oriented stress the relationship aspect of the job. Theyfeel that every employee is important and take interest in everyone, accepting theirindividuality and personal needs. Ohio State Leadership Studies The leadership studies initiated by the Bureau of Research at Ohio State Universityattempted to identify various dimensions of leader behavior. Ultimately, these studiesnarrowed the description of leader behavior to two dimensions: Initiating Structure andConsideration (see exhibit 4.4). Initiating structure refers to the leader‘s behavior in delineating the relationshipbetween him and members of the work-group and in endeavoring to establish well-definedpatterns of organization, channels of communication, and methods or procedures. On theother hand, consideration refers to behavior indicative of friendship, mutual trust, respect,and warmth in the relationship between the leader and the member of his staff The research studies also showed that initiating structure and consideration are twodistinct dimensions and not mutually exclusive. A low score on one does not require Department of Management Studies 78 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] highscore on the other. Thus, leadership behavior can be plotted on two separate axes ratherthan on a single continuum. The four quadrants show various combinations of initiatingstructure and consideration and a manager can adopt any one style. Situational Theory Of Leadership This theory advocates that leadership is strongly affected by the situation from whicha leader emerges and in which he works. It is based on the assumptions that there exists aninteraction between a group and its leader and that people tend to follow the leader who iscapable of fulfilling their aspirations. Thus, leader is a means of achieving the goals of thegroup and its members. He recognizes the needs of the situation and then acts accordingly.The focus in the situational approach to leadership is on observed behavior and noton any hypothetical inborn or acquired ability or potential for leadership. The emphasis ison the behavior of leaders and their followers and the type of the situation. In other words,a person becomes a leader not only because of his personal attributes, but also because of various situational factors and the interactions between the leader and the group members. Fiedler’s Contingency Model The situational theory contends that there is no one best style of leadership universallyapplicable to all situations. A leadership style may be effective under one situation andineffective under the other. Fiedler identified two basic styles of leadership and on the basisof the study tried to analyze their effectiveness under different situations: (i) taskorientedor controlling, structuring leadership under which the leader gains satisfaction from seeingtasks performed; and (ii) relationship-oriented or considerate leadership under which theleader tries to achieve good interpersonal relations with the subordinates. Least-preferred co-worker scale (LPC): Fiedler developed a least preferredcoworker scale to measure the two basic styles, viz., taskoriented and relationship-oriented.In developing this scale, Fiedler asked the respondents to identify the traits of a personwith whom they could work least well Fiedler found that low-LPC leaders emphasize completing task successfully, even atthe expense of interpersonal relationships, gaining self-esteem through task completionand valuing job performance. High-LPC leaders emphasize good interpersonal relationships,are more considerate, derive major satisfaction from relationships with other, and are notinfluenced by success or task accomplishment. Low LPC reflects task-oriented leadershipand high LPC reflects relationship-oriented leadership.Situational Variables: Fred E. Fiedler analyzed three major situational variables, whichexert powerful influence on the leader‘s behavior and his effectiveness. The three variablesare:(i) Leader-member relations: these refer to the compatibility between group membersand managers. If group members respect the manager and also feel a personalattachment, then formal authority is less important in getting work accomplished.(ii) Task structure: The nature of jobs and how tasks are structured influence leadership.If tasks are highly structured, with formal guidelines and well-defined expectations,authority is also formalized and both managers and employees will be at ease witha directive style of leadership. If tasks are unstructured, such as in creative researchlabs, group members and managers expect less directive leadership with moreconciliatory behavior.(iii) Position power: The position power of leaders is influenced by organizationalculture, the formality of management hierarchy and the style of work environment.Therefore, the values and beliefs of employees and managers, the philosophy of top management towards leadership and the prevailing attitude towards leadershipwill partially determine what style is acceptable. Leadership as an Influence Process Leadership is the process of influencing others to get the job done effectively over asustained period of time. Leaders play a crucial role in influencing the work behaviour of employees in Department of Management Studies 79 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] the system. The term influence is a nebulous concept; however, it could bedescribed as the power to shape the potential behaviour of others, as desired. Three types of Influence Patterns There are three ways people are influenced – compliance, identification andinternalization.Compliance occurs when people are influenced to do something against their will becausethey have been coerced into doing it. People may obey because the repercussions of failure to do so may have serious consequences, as for example, stoppage of their increments,or a bad report that might jeopardize their future career in the organization Identification relates to the situation when people perform what the leader wants themto because they like him or her and want to put forth the effort to please the person. Thisliking may be either because the leader is attractive, likeable, acts as a role model orpossesses qualities that are valued and draw the admiration of others in the organization.Such a leader has charisma and people voluntarily behave in functional ways when theyidentify themselves with him.Internalization occurs when followers are convinced that acting as the leader‘sdirections serves their interest best. Leadership StylesCharismatic LeaderDefinition: Followers make attributions of heroic or extraordinary leadership abilitiesWhen they observe certain behaviors. How do charismatic leaders actually influence followers? It is a four-step process. It begins by the leader articulating an appealing vision. The vision provides asense of continuity for followers by linking the present with a better future for the organization.The leader then communicates high performance expectations and expresses confidencethat followers can attain them. This enhances follower self-esteem and selfconfidence.Next, the leader conveys, through words and actions, a new set of values and, by his orhere behavior, sets an example for followers to imitate. Finally, the charismatic leader makesself-sacrifices and engages in unconventional behavior to demonstrate courage andconvictions about the vision. Key characteristics of charismatic leaders 1.Vision and articulation. Has a vision—expressed as an idealized goal. – thatproposes a future better than the status quo; and is able to clarify the importance of the vision in terms that are understandable to others. 2.Personal risk. Willing to take on high personal risk, incur high costs, and engagein self-sacrifice to achieve the vision. 3.Environmental sensitivity. Able to make realistic assessments of the environmentalconstraints and resources needed to bring about change. 4.Sensitivity to follower needs. Perceptive of others‘ abilities and responsive totheir needs and feelings. 5.Unconventional behavior. Engages in behaviors that are perceived as novel andcounter to norms. Transactional and Transformational leaderTransactional Leaders Department of Management Studies 80 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] : Leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements. Transformational Leaders : Leaders who inspire followers to transcend their own self-interests and who are capable of having a profound and extraordinary effect onfollowers.Transactional and transformational leadership shouldn‘t be viewed as opposingapproaches to getting things done. Transformational leadership is built on top of transactionalleadership—it produces levels of follower effort and performance that go beyond whatwould occur with a transactional approach alone. Moreover transformational leadership ismore than charisma. ―The purely charismatic leader may want followers to adopt thecharismatic‘s world view and go no further; the transformational leader will attempt toinstill in followers the ability to question not only established views but eventually thoseestablished by the leader.‖Characteristics of Transactional and Transformational Leaders Transactional Leader 1.Contingent Reward: Contracts exchange of rewards for effort, promises rewardsfor good performance, recognizes accomplishments. 2.Management by Exception (active): Watches and searches for deviationsfrom rules and standards, takes corrective action. 3.Management by Exception (passive): Intervenes only if standards are notmet. 4.Laissez-Faire: Abdicates responsibilities, avoids making decisions. Transformational Leader 1.Charisma:Provides vision and sense of mission, instills pride, gains respect andtrust. 2.Inspiration:Communicates high expectations, uses symbols to focus efforts,expresses important purposes in simple ways. 3.Intellectual Stimulation: Promotes intelligence, rationality, and careful problemsolving. 4.Individualized Consideration: Gives personal attention, treats each employeeindividually, coaches, and advises. Visionary leaderDefinition: The ability to create and articulate a realistic, credible, attractive vision of the future for an organization or organizational unit that grows out of andimproves upon the present. Qualities of a vision The key properties of a vision seem to be inspirational possibilities that are valuecentered, realizable, with superior imagery and articulation. Visions should be able to createpossibilities that are inspirational, unique, and offer a new order that can produceorganizational distinction. Desirable visions fit the times and circumstances and reflect theuniqueness of the organization. People in the organization must also believe that the visionis attainable. It should be perceived as challenging yet workable. Qualities of a Visionary Leader What skills do the visionary leaders exhibit? Department of Management Studies 81 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] First is the ability to explain the vision to others. The leader needs to make thevision clear in terms of required actions and aims through clear oral and writtencommunication. Second is to be able to express the vision not just verbally but through the leader‘sbehavior. This requires behaving in ways that continually convey and reinforce thevision. The third skill is being able to extend the vision to different leadership contexts.This is the ability to sequence activities so the vision can be applied in a variety of situations. Team Leader Leadership is increasingly taking place within a team context. As teams grow inpopularity, the role of the leader in guiding team members takes on heightened importance.Here we shall consider the challenge of being a team leader and review the new role thatteam leaders take on.The challenge for most managers is to learn to become an effective team leader. Theyhave to learn skills such as the patience to share information, to trust others, to give upauthority, and understanding when to intervene. Effective leaders have mastered the difficultbalancing act of knowing when to leave their teams alone and when to intercede.A meaningful way to describe the team leader‘s job is to focus on the following fourspecific roles: First, team leaders are liaisons with external constituencies. These include uppermanagement, other internal teams, customers, and suppliers. The leader representsthe team to other constituencies, secures needed resources, clarifies others‘expectations of the team, gathers information from the outside, and shares thisinformation with team members Second, team leaders are troubleshooters.When the team has problems andasks for assistance, team leaders sit in on meetings and help try to resolve theproblems. This rarely relates to technical or operation issues because the teammembers typically know more about the tasks being done than does the teamleader. Where the leader is most likely to contribute by asking penetrating questions,helping the team talk through problems, and by getting needed resources fromexternal constituencies. Third, team leaders are conflict managers.When disagreements surface, theyhelp process the conflict. What‘s the source of the conflict? Who is involved?What are the issues? What resolution options are available? By getting teammembers to address questions such as these, the leader minimizes the disruptiveaspects of intra-team conflicts. Finally, team members are coaches.They clarify expectations and roles, teach,offer support, cheerlead, and do whatever else is necessary to help team membersimprove their work performance. Mentoring A mentor is a senior employee who sponsors and supports a less-experiencedemployee (a protégé). The mentoring role includes coaching, counseling, and sponsorship.As a coach, mentors help to develop their protégés‘ skills. As counselors, mentors providesupport and help bolster protégés‘ self-confidence. And as sponsors, mentors activelyintervene on behalf of their protégés; lobby to get their protégés visible assignments and tofacilitate protégés rewards such as promotions and salary increases. Why would a leader want to be a mentor? There are personal benefits to theleader as well as benefits for the organization. The mentorprotégé relationship gives thementor unfiltered access to the attitudes and feelings of lowerranking employees. Protégéscan be an excellent source of potential problems by providing early warning signals. Theyprovide timely information to upper managers that shortcircuit the formal channels. So thementor-protégé relationship is a valuable communication Department of Management Studies 82 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] channel that allows mentors tohave news of problems before they become common knowledge to others in uppermanagement. Self-leader: A set of processes through which individuals control their own behavior How do leaders create self-leaders? The following have been suggested: 1.Model self-leadership. Practice self-observation, setting challenging personalgoals, self-direction, and selfreinforcement. Then display these behaviors andencourage others to rehearse and then produce them. 2.Encourage employees to create self-set goals. Having quantitative, specificgoals is the most important part of self-leadership Encourage the use of self-rewards to strengthen and increase desirablebehaviors. In contrast, self-punishment should be limited only to occasionswhen the employee has been dishonest and destructive. 4.Create positive thought patterns. Encourage employees to use mentalimagery and self-talk to further stimulate self-motivation. 5.Create a climate of self-leadership. Redesign the work to increase thenatural rewards of a job and focus on these naturally rewarding features of work to increase motivation. 6.Encourage self-criticism. Encourage individuals to be critical of their ownperformance. Leadership Vs Manager Leadership is the ability to enthuse the followers towards a definite goal. It is theprocess of stimulating members of the group towards a particular direction. Leadership isa part of management, but not all of it. A manager is requires planning and organizing. Astrong leader can be a weak manager because he is weak in planning or some othermanagerial duty.Earl P. Strong is of the opinion that leadership in business is not synonym of theboss. He makes the following distinctions between the two terms MANAGERIAL STYLES:(ALSO REFERRED AS LEADERSHIPSTYLES) 1.The formal style: Skillful use of formal style will involve a good working knowledge, of the laws of theland, rules and regulations and aggregates the willingness to use former power of rooms toget what one wants. Increasingly, the use of former power has been managed where manymanagement‘s and organizational development thinkers, developers and practitioners believein order to map of the need for competency mapping with that of roles that are deployedby respective individual. The use of power is still a potent means to influence our originalevents provided those in word recognize the use of former power as being legitimate. 2. The political style: The political style of behaviour relies principally on informal influence to get thingsdone and has different but something complimentary strategies. The first of these is theformation of alliance and usually those that all originally powerful groups or individualsaccept and agreed and mutual self-interest. These alliances will usually be convert butoccasionally strong groups which will form an overt that they want to put them in anunchangeable position. The Department of Management Studies 83 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] basis of relationship within such an arrangement is usuallyproud negotiations, for the promotion and support of some goal or object and of mutualbenefit of all parties. If an individual reasons to deploy negative behaviour so that it canbenefit one‘s own group, it is foolhardy and is detrimental to the opposite group as abehavioral disposition. Then the alliance might well be broken on the parties will tend to compete against rather than support each other‘s activities. The second basis of the style of influence relies on the use of information. Information tends to be used in the strategic way.Distortions of information, including impression management, posturing propaganda rumourmongering under strategic use of lying are ways in which the quality of information in whichthe quality of information is manipulated to have maximum effect on the target. 3. Open style: The open style of influence in behaviour, can generally be seen to be the style thatorganizational development specialist advocated. Essentially it offers an idea of the – individualbeing aware of him, as a person with feelings, attitudes, knowledge, skills and behavioralresponses, being prepared to share this awareness of him, and behave in ways that arecoherent. Organizations should create climates of trust and acceptance or the employees.But by its very nature an open approach also involves being prepared to express feelings of hostility, anger and confrontation and not just feelings of love and support. In dealing withthe reality, it is hoped that a much more insightful understanding of the problems can bedeveloped and that solutions to problems will be long-term, since they deal with fundamentalsas supposed to peripheral issued. In a sense, the open style of behaviour can be seen as theopposite of a political style of behaviour, since it values reveals the use of standard issues. 4. The laissez faire style: The laissez faire behaviour is essentially a style of non-intervention in events whenthings are going well and according to plan. It is perhaps the most difficult style to getmanagers to consider, because it seems like an application of manageable responsibility. Infact it is fairly close to the principle of management by exception. Roles of effective leaders 1. Make a commitment at all levels-especially at the top level: Research clearly shows that strong leadership is paramount in creating a positiveorganizational climate for nurturing the management and helping in its growth. Seniormanagement leadership is vital throughout the competency measurement and improvementprocess. By senior management, we mean the organizational level that can realisticallyfoster cross-functional, mission-oriented performance improvements, from senior operatingor functional managers in the various acquisition and program offices throughout a federalagency, to the secretary or administrator of the agency. Senior managements should havefrequent formal and informal meetings with employed and managers to show their supportfor improvement efforts implementation initiatives. Also, they should frequently reviewprogress and the results of improvement efforts. 2. Develop organizational goals: Goals need to be specified and publicized to be able to provide focus and directionto the organization. Vision statement and strategic/tactical plans (including systematic waysto evaluate competency based performance) are important for methodically planning thetargeted competency based performance improvements. To be meaningful, they must includemeasurable objectives along with realistic timetables for their achievement. 3. Offer training in improvement techniques: Training should be provided to appropriate personnel to help them properly makeprocess improvements. The scope of training should include the operation of Department of Management Studies 84 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] integratedproject improvement teams, the role employees play in exercising sound business judgment,and the specific techniques for making process improvements (e.g. flowcharts,benchmarking, cause and effect diagram etc.,) comprehensive training is need to expandthe employees‘ technical capabilities and to achieve ―buy-in‖ for undertaking meaningfulimprovement efforts. Use of facilitators can provide ―just-in-time‖ training to members of process action teams 4.Establish a reward and recognition systems to foster competency basedperformance improvements: In our view, organizations should tie any reward and recognition system to competencybased performance improvement as measured by the competency maps. Thus, employeeincentives will tend to reinforce the organizational objectives being measured by thecompetency maps. While handing out rewards to individual employees has its own place,certain group reward and recognition systems are needed to encourage integrated, cross-functional teams of employees, customers and managers to undertake targeted competencybased performance improvement. 5. Break down organizational barriers: To overcome unfounded fears about the perceived adverse effects of competencybased performance measurement and improvement, we believe that the official uses of thecompetency maps need to be spelled out to all the employees and managers. 4.10.2 Co- ordination, the essence of Managerial role Some authorities consider coordination to be a separate function of the manager. Itseems more accurate, however, to regard it as the essence of Managership, for achievingharmony among individual efforts made towards the accomplishment of group goals. Eachof the managerial functions is an exercise contributing to coordination.Even in the case of a church, individuals often interpret similar interests in differentways, and their efforts towards mutual goals do not automatically mesh with the efforts of others. The central task of the manager is, therefore, to reconcile differences in approach,timing, effort or interest and to harmonize individual goals to contribute to organizationgoals. COMMUNICATION: INTRODUCTION Communication is the exchange of messages between people for the purpose of achieving common meanings. Unless common meanings are shared, managers find it extremely difficult to influence others. Whenever group of people interact, communication takes place. Communication is the exchange of information using a shared set of symbols. It is the process that links group members and enables them to coordinate their activities. Therefore, when managers foster effective communication, they strengthen the connections between employees and build cooperation. Communication also functions to build and reinforce interdependence between various parts of the organization. As a linking mechanism among the different organizational subsystems, communication is a central feature of the structure of groups and organizations. It helps to coordinate tasks and activities within and between organizations. DEFINITIONS OF COMMUNICATION Whenever a group of people interact, communication takes place. Communication is the exchange of information using a shared set of symbols. It is the process that links group members and enables them to coordinate their activities. Therefore, when managers foster effective communication, they strengthen the connections between employees Department of Management Studies 85 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] and build cooperation. The term "communication" is derived from the Latin word "communis" which means "common". This stands for the sharing of ideas in common. It is the process of passing information and understanding from one person to another. According to Theo Haimann, "Communication, fundamental and vital to all managerial actions, is the process of imparting ideas and making oneself understood by others". According to Dalton McFarland, "Communication may be broadly defined as the process of meaningful interaction among human beings. More specifically, it is the process by which meanings are perceived and understandings are reached among human beings". According to Louis A Allen, "Communication is the sum of all the things one person does when he wants to create understanding in the mind of another. It is a bridge of meaning. It involves a systematic and continuous process of telling, listening and understanding". In the words of Newman and Summer, "Communication is an exchange of fact, ideas, opinions or emotions by two or more persons". According to Hudson, " Communication in its simplest form is conveying of information from one person to another". According to Charles E Redfield, communication is "the broad field of human interchange of facts and opinions and not the technologies of telephone, telegraph, radio and the like". According to Koontz and O'Donnell, "Communication, is an intercourse by words, letters symbols or messages, and is a way that the organization members shares meaning and understanding with another". In the words of Jacques, "Communication is the sum total of directly and indirectly, consciously and unconsciously transmitted feeling, attitudes and wishes". In the words of Mockler, "Communication is the process of passing information, ideas or even emotions from one person to another". In the words of Kelly, "Communication is a field of knowledge dealing with systematic application of symbols to acquire common information regarding an object or event". In the words of Brown, communication is "a process of transmitting ideas or thoughts from one person to another, for the purpose of creating understanding in the thinking of the person receiving the communication". According to Sigmund, Communication is "the transmission and reception of ideas, feelings and attitudes both verbally and non-verbally eliciting a response. It is a dynamic concept underlying all lands of living systems". According to Ordeay Tead, "Communication is a composite: l Of information given and received, l Of learning experience in which certain attitudes, knowledge and skills change, carrying with them alternations of behaviour, l Of a listening effort by all involved, l Of a sympathetic fresh examination of issues by communicator himself, l Of a sensitive interaction of points of view – leading to a higher level of shared understanding and common intention". It should be clear from the above definitions that communication is not merely sending or receiving message. It is much more than that. It includes proper understanding of message, its acceptance and action on it. Unless common meanings are shared, managers find it extremely difficult to influence others. Communication is a critical part of every manager's job. Without effective communication, even the most brilliant strategies and the best-laid plans may not be successful. As a result, it is not surprising that high-level executives, as well as managers at other levels, often mention effective communication skills, both oral and written, as crucial elements for managerial success. Communication is thus an attempt Department of Management Studies 86 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] to share understanding by two or more persons. It is a two-way process and is completed when there is some response from the receiver of information. It has two basic objectives: To transmit message, ideas or opinions, and To create an impression or understanding in the minds of the receiver of information. 7.3 IMPORTANCE OF COMMUNICATION Communication is an indispensable activity in all organizations. No organization can think of its existence without effective communication. That is why, Chester Bernard remarked, "the first executive function is to develop and maintain a system of communication". An organization's very survival depends on its employees' ability to communicate with one another and with the members of its environment. The free flow of ideas and information is an essential ingredient in the drive for quality and continuous improvement. The organization relies on communications to learn what its customers want, to foster cooperation among its employees, and to identify and adapt to changes in the environment. An effective communication system is essential to pass messages, ideas and information for explaining objectives and plans, controlling, performance and taking corrective action. The importance of communication in management can be judged from the following: 1. Gaining acceptance of policies, winning cooperation of others, getting instructions and ideas clearly understood and bringing about the desired changes in performance are dependent upon effective communication. 2. Communication helps the management in arriving at vital decisions. In its absence, it may not be possible for the top-level management to come in closer contact with each other and discuss the important problems pertaining to the organization. 3. Constant communication with personnel helps the management to remain informed about their problems, difficulties and grievances. Appropriate steps can be taken in time to remove the worker's difficulties. Conflicts often arise because of communication gap. They can be averted by setting up a regular arrangement of keeping contact with the workers through communication media. 4. Communication is quite essential for coordination, which is the essence of effective management. It brings about mutual understanding between the personnel at all levels and fosters the spirit of cooperation. In the words of Mary Crushing Niles, "Good communications are essential to coordination. They are necessary upward, downward and sideways, through all the levels of authority and advise for the transmission, interpretation and adoption of policies, for the sharing of knowledge and information, and for the more subtle needs of good morale and mutual understanding". 5. Greater, better and cheaper production are the aims of all managers. In today's organizations; the information passes through a variety of filters and there is always a chance for misinterpretation. An effective system of communication can play a vital role in avoiding this illusion. The employees should be told clearly what exactly to do and the way in which an instruction is to be carried out. In this process certain directions are to be given, certain feelings must be expressed and a certain amount of interpersonal perceptions must be exchanged. In the words of Shobhana Khandwala, "For this, management has to sell ideas, motivate the workers to work with a will, and build up higher morale in the company. Communication, as an influence, process, plays a vital role here. It becomes, thus, a part of education, propaganda, leadership and guidance function of the management". 6. Under an effective system of communication it is quite convenient for the employees to express their grievances, and bring all their problems to the notice of the Department of Management Studies 87 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] management. Proper communications between the interested parties reduce the point of friction and minimize those that inevitably arise. Hence by effective communication, a group having 'skill' and 'will' to do is to be built up. 7. Communication helps in securing the largest possible participation or consultation in decision making, planning and general administration. This will give democratic character to managerial process and strengthen the morale of the staff. FUNCTIONS OF COMMUNICATION Communication serves four major functions within an organization. 7.4.1 Control Communication acts to control the employees' behaviour. Organizations have authority hierarchies and formal guidelines that employees are required to follow. The control mechanism can work only when the communication – oral and written, is effective. Informal communication also controls behaviour. 7.4.2 Information Communication is a vital necessity to an organization, just as the bloodstream is to the person. It is essential that information must be communicated to the managers on the basis of which the plans can be developed; these plans must be communicated to the operating managers and employees. 7.4.3 Motivation Communication fosters motivation by clarifying to employees what is to be done, how well they are doing and what can be done to prove performance if it is unsatisfactory. 7.4.4 Emotional Expression Communication provides a release for the emotional expression of feelings and for fulfillment of social needs. Employees show their frustrations and feelings of satisfaction through communication. COMMUNICATION STYLES When people communicate, they differ not only in non-verbal behaviours and language but in the degree to which they provide and seek information. Such differences constitute various communication styles. A popular model for describing differences in communication style is the Johari window developed by Joseph Luft and Harry Ingham. The name Johari is derived from the first names of its developers. The Johari window is a grid that describes tendencies for facilitating or hindering interpersonal communication The model classifies an individual's tendencies to facilitate or hinder interpersonal communication along two dimensions: exposure and feedback. Exposure is defined as the extent to which an individual openly and candidly divulges feelings, experiences, and information when trying to communicate. Feedback is the extent to which an individual successfully elicits exposure from others. As shown in the figure above, these dimensions translate into four "windows" – open self, hidden self, blind self and undiscovered self. 1. Open Self: The open self is the arena information known to the person and to others. A large arena results from behaviour that is high in both exposure and feedback. There would generally be openness and compatibility and little reason to be defensive. This type of interpersonal relationship would tend decrease interpersonal conflict. 2. Hidden Self: In this situation the hidden information is known to the person but not to others; it encompasses those things or feelings that we are aware of but don't share with others for fear they will think less of us or possibly use the information against us. Very large hidden knowledge can cause problems if the person expends Department of Management Studies 88 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] too much effort in keeping secrets or others if suspicious about the lack of disclosure. There is potential interpersonal conflict in this situation because the person may keep his or her true feelings or attitudes secret and will not open up to the others. 3. Blind Self: The blind self are information known to others but not to yourself. This is the result of no one ever telling you or because you are defensively blocking them out. The person may be unintentionally irritating to the other. The other could tell the person but may be fearful of hurting the person's feelings. Such a configuration is rarely total human resources. Furthermore, the person is likely to make many blunders, reflecting insensitivity to others. As in the "hidden self", there is potential interpersonal conflict in this situation. 4. Undiscovered Self: The undiscovered self includes feelings, experience, and information that neither you nor others are aware of. It arises from lack of communication. A manager whose unknown area is very large tends to be an autocratic leader, perceived as aloof. Employees may have trouble discerning what this person wants. In other words, there is much misunderstanding and interpersonal conflict and is almost sure to result. The Johari window only points out possible interpersonal styles. It does not necessarily describe but rather helps analyze possible interpersonal conflict situations. The National Training Laboratory (NTL) recommends seven guidelines for providing feedback for effective interpersonal relations. These guidelines given below can help to decrease the potential for interpersonal conflict. BARRIERS TO EFFECTIVE COMMUNICATION Barriers to communication are factors that block or significantly distort successful communication. Effective managerial communication skills helps overcome some, but not all, barriers to communication in organizations. The more prominent barriers to effective communication which every manager should be aware of is given below: 7.11.1 Filtering Filtering refers to a sender manipulating information so it will be seen more favourably by the receiver. The major determinant of filtering is the number of levels in an organization's structure. The more vertical levels in the organization's hierarchy, the more opportunities for filtering. Sometimes the information is filtered by the sender himself. If the sender is hiding some meaning and disclosing in such a fashion as appealing to the receiver, then he is "filtering" the message deliberately. A manager in the process of altering communication in his favour is attempting to filter the information. 7.11.2 Selective Perception Selective perception means seeing what one wants to see. The receiver, in the communication process, generally resorts to selective perception i.e., he selectively perceives the message based on the organizational requirements, the needs and characteristics, background of the employees etc. Perceptual distortion is one of the distressing barriers to the effective communication. People interpret what they see and call it a reality. In our regular activities, we tend to see those things that please us and to reject or ignore unpleasant things. Selective perception allows us to keep out dissonance (the existence of conflicting elements in our perceptual set) at a tolerable level. If we encounter something that does not fit out current image of reality, we structure the situation to minimize our dissonance. Thus, we manage to overlook many stimuli from the environment that do not fit into out current perception of the world. This process has significant implications for managerial activities. For example, the employment interviewer Department of Management Studies 89 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] who expects a female job applicant to put her family ahead of her career is likely to see that in female applicants, regardless of whether the applicants feel that way or not. 7.11.3 Emotions How the receiver feels at the time of receipt of information influences effectively how he interprets the information. For example, if the receiver feels that the communicator is in a jovial mood, he interprets that the information being sent by the communicator to be good and interesting. Extreme emotions and jubilation or depression are quite likely to hinder the effectiveness of communication. A person's ability to encode a message can become impaired when the person is feeling strong emotions. For example, when you are angry, it is harder to consider the other person's viewpoint and to choose words carefully. The angrier you are, the harder this task becomes. Extreme emotions - such as jubilation or depression - are most likely to hinder effective communication. In such instances, we are most prone to disregard our rational and objective thinking processes and substitute emotional judgments. 7.11.4 Language Communicated message must be understandable to the receiver. Words mean different things to different people. Language reflects not only the personality of the individual but also the culture of society in which the individual is living. In organizations, people from different regions, different backgrounds, and speak different languages. People will have different academic backgrounds, different intellectual facilities, and hence the jargon they use varies. Often, communication gap arises because the language the sender is using may be incomprehensible, vague and indigestible. Language is a central element in communication. It may pose a barrier if its use obscures meaning and distorts intent. Words mean different things to different people. Age, education and cultural background are three of the more obvious variables that influence the language a person uses and the definitions he or she gives to words. Therefore, use simple, direct, declarative language. Speak in brief sentences and use terms or words you have heard from you audience. As much as possible, speak in the language of the listener. Do not use jargon or technical language except with those who clearly understand it. 7.11.5 Stereotyping Stereotyping is the application of selective perception. When we have preconceived ideas about other people and refuse to discriminate between individual behaviours, we are applying selective perception to our relationship with other people. Stereotyping is a barrier to communications because those who stereotype others use selective perception in their communication and tend to hear only those things that confirm their stereotyped images. Consequently, stereotypes become more deeply ingrained as we find more "evidence" to confirm our original opinion. Stereotyping has a convenience function in our interpersonal relations. Since people are all different, ideally we should react and interact with each person differently. To do this, however, requires considerable psychological effort. It is much easier to categorize (stereotype) people so that we can interact with them as members of a particular category. Since the number of categories is small, we end up treating many people the same even though they are quite different. Our communications, then, may be directed at an individual as a member of a category at the sacrifice of the more effective communication on a personal level. 7.11.6 Status Difference The organizational hierarchy pose another barrier to communication within organization, especially when the communication is between employee and manager. This is so because the employee is dependent on the manager as the primary link to the organization and Department of Management Studies 90 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] hence more likely to distort upward communication than either horizontal or downward communication. Effective supervisory skills make the supervisor more approachable and help reduce the risk of problems related to status differences. In addition, when employees feel secure, they are more likely to be straightforward in upward communication. 7.11.7 Use of Conflicting Signals A sender is using conflicting signals when he or she sends inconsistent messages. A vertical message might conflict with a nonverbal one. For example, if a manager says to his employees, "If you have a problem, just come to me. My door is always open", but he looks annoyed whenever an employee knocks on his door". Then we say the manager is sending conflicting messages. When signals conflict, the receivers of the message have to decide which, if any, to believe. 7.11.8 Reluctance to Communicate For a variety of reasons, managers are sometimes reluctant to transmit messages. The reasons could be:l They may doubt their ability to do so. l They may dislike or be weary of writing or talking to others. l They may hesitate to deliver bad news because they do not want to face a negative reaction. When someone gives in to these feelings, they become a barrier to effective Communication communications. 7.11.9 Projection Projection has two meanings. (a) Projecting one's own motives into others behaviour. For example, managers who are motivated by money may assume their subordinates are also motivated by it. If the subordinate's prime motive is something other than money, serious problems may arise. (b) The use of defense mechanism to avoid placing blame on oneself. As a defense mechanism, the projection phenomenon operates to protect the ego from unpleasant communications. Frequently, individuals who have a particular fault will see the same fault in others, making their own fault seem not so serious. 7.11.10 The "Halo Effect" The term "halo effect" refers to the process of forming opinions based on one element from a group of elements and generalizing that perception to all other elements. For example, in an organization, a good attendance record may cause positive judgements about productivity, attitude, or quality of work. In performance evaluation system, the halo effect refers to the practice of singling out one trait of an employee (either good or bad) and using this as a basis for judgement of the total employee (e.g., seeing the welldressed manager as the "good" manager). UNIT V CONTROLLING THE SYSTEM &PROCESS OF CONTROLLING DEFINATIONS There are many definitions of controlling. 1. Controlling is the process of determining what is being accomplished. Department of Management Studies 91 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 2. Controlling is evaluating the performance and if necessary applying corrective measures so that the performance takes place according to plans. 3. Controlling is measurement and correction of performance in order to make sure that enterprise objectives and the plane advised to attain then are being accomplish. 4. Controlling is looking behind planning bears a close relationship to controlling. 5. Effective controlling assists to regulate actual performance to assure that it takes place as planned. 6. Controlling exists at every management level from president to supervisor of a company Control is the process through which managers assure that actual activities conform to planned activities. ACCORDING TO BREACH "Control is checking current performance against predetermined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance." ACCORDING TO GEORGE R TERRY – "Controlling is determining what is being accomplished i.e., evaluating the performance and if necessary, applying corrective measures so that the performance takes place according to plans." ACCORDING TO BILLY E GOETZ "Management control seeks to compel events to conform plans". ACCORDING TO ROBERT N ANTHONY – "Management control is the process by which managers assure that resources are obtained and used effectively and efficiently." IN THE WORDS OF KOONTZ AND O'DONNELL "Managerial control implies measurement of accomplishment against the standard and the correction of deviations to assure attainment of objectives according to plans." IN THE WORDS OF HAYNES AND MASSIE "Fundamentally, control is any process that guides activity towards some predetermined goal. The essence of the concept is in determining whether the activity is achieving the desired results‖. IN THE WORDS OF HENRY FAYOL "Control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and the principles established. Its object is to find out the weakness and errors in order to rectify them and prevent recurrence. It operates on everything, i.e., things, people and actions". From the above definitions it is clear that the managerial function of control consists in a comparison of the actual performance with the planned performance with the object of discovering whether all is going on well according to plans and if not why. Remedial action arising from a study of deviations of the actual performance with the standard or planned performance will serve to correct the plans and make suitable changes. Controlling is the nature of follow-up to the other three fundamental functions of management. There can, in fact, be not controlling without previous planning, organizing and directing. Controlling cannot take place in a vacuum. THE BASIC CONTROLL PROCESS The basic control process involves three steps. Department of Management Studies 92 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 1. Establishing standards. 2. Measuring performance against these standards. 3. Correcting variations from standard and plans / correction of deviations. 1. ESTABLISHING STANDARD Standards are by definition is simply criteria of performance. Standards are the selected points in a planning performance at which performance is measured, so that managers can receive signals about how things are going. There are many kinds of standard. (1)Physical Standard (2) cost Standard (3) capital Standard (4) revenue Standard (5) program Standard (6) intangible Standard (7) goals/ objectives Standard (8) Strategic plans as control point strategic control. 2. MEASUREMENT OF PERFORMANCE It is the second step of control process. Although such measurement is not always predictable, but if standard are appropriately drown and if means are available for determining exactly what subordinates are doing then measurement of performance is fairly easy. But there are many activities for which it is difficult to develop accurate standards and there are many activities that are hard to measure. Technical kind of work is hard to measure performance. 3. CORRECTION OF DEVIATIONSS It is third and last step of control process. If performance is measured accurately, t is easier to correct deviations manage know exactly where the corrective measure measure must be applied correction of deviations is the point at which contact can be related to the other managerial factions. Managers may correct deviations by redrawing their plans or by modifying their goals or they may correct deviations by clarification of duties. CRICTICAL CONTREL POINTS & STANDARDS Standards are yardsticks against which expected performance is measured. In simple operation a manager may control through careful observations. But, in most operations this is not possible because of the complexity of the operations. Manager must choose points for special attention and then watch them to be sure that the whole operation is proceeding as planned. The points selected for control should be critical. With such standards, manager can handle a large group of subordinates and plans are working out the principle or critical. Points control states ―effective control requires attention to these factors critical to evaluating performance against plans. QUESTION OF SELECTED CRITICAL POINT OF CONTROL In selection of critical control points, manager must ask themselves such questions. 1- What will best reflect the goals of my department? - 88 2- What will best show me when these goals are not being met? 3- What will best measure critical deviation? 4- What will tell me who is responsible for any failure? 5- What standard will cost the least? 6- For what standards is information economically-available? TYPES OF CRITICAL POINT STANDARDS There are many types of standards 1- PHYSICAL STANDARDS Physical standards are non monetary measurements and common at operating level Department of Management Studies 93 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] where material is used, labor is employed, services are rendered and goods- are produce-they may-reflect quantities such as labor hours per unit of output, unit of production per machine hour etc. physical standards may also reflect quality such as hardness of bearing, durability of fabric, fastness of color etc. 2- COST STANDARDS Cost standards are monetary measurements and common at the operating level. Cost standards are widely used to measure direct and indirect costs per unit produced, labor cost per unit or per hour material cost per unit, machine cost per hour etc. 3- CAPITAL STANDARDS There are varieties of capital standards. These standards are primarily related to the balance sheet rather than to the income statements. Capital standards range from monetary measurements to physical items. These standards may be indifferent ratios such as the ratio of current assets to current liabilities etc. REVENUE STANDARDS Revenue standards arise from attaching monetary values to sales. They may include such standards as average sales per customer etc. PROGRAME STANDARDS Such standards are determined for installing a variable budget program, for example program for improving the quality of a sale fore. INTANGIBLE STANDARDS Sometime it is difficult to establish standards for quantitative and qualitative measurement, especially when human relationships count in performance. It is very difficult to measure human attitudes, in connection with individual‘s loyalty, efficiency, etc. All this need to be based on intangible standards. GOALS AS STANDARDS Goal can be used as performance standards. Both in simple in complex operations quantitative and qualitative Goals represents an important development in the area of standards. STRATEGIC PLANS AS CONTOL POINTS FOR STRATEGIC CONTROL Strategic plans require strategic control. Through the use of strategic control awareness about the organizational performance and about ever changing environment by monitoring it. CONTROL AS FEEDBACK SYSTEM This system places control in more complex way. These systems including steps, establishing standards, measuring performance and correcting for deviations. Managers do measure performance, establish standards and identify deviations, they must then to make the necessary corrective action. RAEL TIME INFORMATION & CONTROL FEEDBACK FORWARD CONTROL Feed forward control is system that attempts to identify future deviations. This control shows the deficiency of historical data. For example one of the difficulties with such historical data is that they tell business managers is November that they lost money in October or even September because of some thing that was don in July. At this late time such information is only a interesting historical fact. Feed forward control is manager have been so dependent for purposes of control on accounting and statistical data. CONTROL TECHNIQUES Department of Management Studies 94 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] THE BUDGET A widely used device for managerial control is the budget. Budgeting is the device for accomplishing control. THE CONCEPT OF BUDGETING Budgeting is the formulation of plans for a given future period in numerical terms. THE PURPSE OF BUDGETING Starting plans in terms of numbers and breaking into parts parallel the parts of an organization. Budgets enables managers to see clearly what capital will be spent by whom and where, and what expense, revenue the plans will involve. A budget must reflect the organizational pattern. When plans are completed, co-coordinated and developed a departmental budget can be used as an instrument of control. TYPES OF BUDGETS Budgets may be classified in to several basic types 1. REVENUE AND EXPENSE BUDGETS Revenue and expense budgets are most common budget which are used to make plans for revenue and expenses in dollar terms. 2. TIME , SPACE , MATERIAL &PRODUCT BUDGETS Many budgets are better expressed in quantities rather then in numerical terms or monetary terms. Although such budgets are usually translated into monitory terms but if they are expressed in terms of quantities, they are must significant at certain stage of planning and control. I.e. machine hours, etc. 3. CAPITAL EXPENDITURE BUDGETS Capital expenditure budgets shows capital expenditure for plant, machinery, equipment, inventories etc. 4. CASH BUDGETS The cash budget is a fore cast of cash receipts. Cash budgeting shows the availability of excess cash etc. EFFECTIVE BUDGETARY CONTROL If budgetary controls are to work well managers have limitations and they must be tailored to each job. There are many effective budgetary controls. 1. TOP-MANAGEMENT SUPPORT To make most effective budget, administration must receive the whole hearted support of top-management. 2. PARTICIPATION Real participation in budget making is necessary for success. 3. STANDARDS One of the key to successful budgeting is to develop and make available standards by which programs and work can be translated in to need for labor, operating expenses , capital expenditures , space and other resources. Many budgets fail for lake of such standards. 4. INFORMATIONS Finally if budgetary control is to work managers need ready information about actual and forecast performance under budgets by their departments. This information must be designed to show them how well thy are doing. DANGERS IN BUDGETING Budgets are used for planning and control. Unfortunately, some budgetary control programs are so complete and detailed that they must become meaningless and expensive. Department of Management Studies 95 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] There are many dangers in budgeting. 1. Over budgeting. 2. Hiding influences. 3. Causing inflexibility. 4. Overriding enterprise goals. METHODS FOR DECREASING DANGERS 1. VARIABLE BUDGETS Because dangers arise from inflexibility in budgets so these dangers can e decrease by variable or flexible budgeting? 2. ALTERNATIVE AND SUPLEMENTARY BUDGETS Another method of obtaining variable budgeting is to establish alternative budgets and variable budgets can also be obtained by supplementary budgets. 3. ZERO BASE BUDGETING Another method to obtained budget flexibility is zero- base budgeting. - 93 TRADITIONAL NON BUDGETORY ONTROL TECHNIQUES There are also many traditional non-budgetary control techniques used for budgetary control. The more important are 1. STATISTICAL DATA Statistical analysis of an operation and the clear presentation of statistical data (historical forecast nature) are important to control. Most managers understand statistical data best when the data are presented in chart or graphic form. In chart or graphic trends and relationship are easier to see. Moreover, if data are meaningful, when presented on chart then data should be formulated in such a way that comparison with some standard can be made. What is the significance of a 3 or 10 percent rise or fall in sales or costs? Who is responsible clear presentation of statistical data in chart in an art that requires imagination? Moreover, since no manager can do anything about history so the data, presented an charts should be made available about information like variations due to accounting adjustment and other periodic difference. SPECIAL REPORTS AND ANALYSIS Special reports and analyses help in problems for control purposes.Althouh accounting and statistical reports gives necessary information‘s but there are some problems in which they are inadequate. One successful manager of a completed operation hired a small staff of trained analysts and gives them no assignment other then investigating and analyzing activities under his control. This group developed of a surprising sense for situations in which things did not seem just right. Almost invariable, their investigation disclosed opportunities for cost improvement. OPERATIONAL AUDIT Another effective tool of managerial control is the internal audit or operational audit. Operational auditing is the regular and independent appraisal of the accounting, financial and other operations of an enterprise by a staff of internal auditors. The operational auditors reflect the fact, appraise polices procedure, use of authority, quality of management, effectiveness of methods, special problems and other phases of operations. PERSONAL OBSERVATION One should never over-look the importance of control through personal Department of Management Studies 96 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] observation.Budgets, charts, reports, ratios, auditors, recommendations and other devices are essential to control. But the manager who depends wholly on these devices and sit cannot make effective control. Managers should have task of seeing the enterprise objectives are accomplished by people. A manager can get information and experience from personal observation. TIME-EVENT NET WORK ANALYSIS DEFINITION Time- event network analysis is a planning & control technique. It is also called (PERT). Performance, evaluation and review technique. EXPLANATION What is PERT? P- Program E- Evaluation R- Review T- Techniques PERT is a planning and control technique through which we evaluate a program and courses of implementation and on the basic of that evaluation we review over program. In this time event analysis introduced in PERT from and then introduced further two more techniques. First is Gantt chart Second Milestone budgeting. Department of Management Studies 97 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] Question Bank UNIT - I 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Trace the evolution of management thought. Explain the elements of scientific management thought. State and explain the 14 principles of management. What are the elements of behavioural theory? Explain the characteristics of the systems approach to management. Explain the contingency theory. What do you mean by Organisational Management Analysis (OMA)? Why are management consultants used by organisations? Define management and explain its scope. "Management is the art of getting things done through and with people in formally organised groups." Explain. Management is regarded as an art by some, a science and inexact science by others. The truth seems to be somewhere in between. In the light of this statement, explain the nature of management. UNIT - II 1. 2. 3. 4. What are the characteristics of Decision-Making? Explain the types of decisions. Explain the characteristics of effective decisions. Describe the process of management and explain how it can be used to accomplish results in any organisation? 5. Name the various functions which constitute the process of management and discuss each of them briefly. 6. "Decision making is the primary task of the management". Discuss this statement and explain the process of decision making. 7. What are the essential characteristics of a good decision? How can a manager make effective decisions? UNIT - III 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Define organisation. Explain the process of organisation. What is the significance of organisation structure? State the principles of organisation. Explain the term formal organisation. What is the attitude of management towards informal organisation? Explain the difference between formal and informal organisation. What is the importance of an organisation? Explain with a neat diagram the different types of organisation charts. What is an organisation manual? Explain the different forms of organisations. What is organizational culture? Describe the seven dimensions of organizational culture. Define organising and explain the importance of organising in the present business environment. 15. "Organisation is the backbone of management". Comment. Department of Management Studies 98 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. Enunciate and explain the important principles of organisation. What is an organisation chart? Define organisation as a structure and give its basic principles. Discuss the uses and limitations of organisation charts. Compare line, functional and line-staff organisations. Which of these will be appropriate for a large manufacturing enterprise? " A committee is made up of the unfit selected by the unwilling to do the unnecessary". Comment. Discuss the merits and limitations of line and staff organisation. What are the merits and demerits of management by committees? What is the source of an organisation‘s culture? Explain the elements of a successful organizational culture. UNIT - IV 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. Define leadership. Explain the characteristics of leadership. What are the different leadership styles? What are the skills that a leader should possess? What are the differences between leadership and management? What is the importance of leaders? Explain the functions of a leader. What are the different types of leaders? What are the different types of autocratic leaders? What do you mean by paternalistic leadership? What do you mean by group decision-making? How does the syndrome of groupthink take place? What is leadership? What are its characteristics? "A good leader is one who understands his subordinates, their needs and their sources of satisfaction." Comment. Briefly discuss the essential opacities of leadership. Critically examine the different approaches to the study of leadership behaviour. Is there one best style of leadership? Explain the various Theories of leadership. "A Successful Leader is not necessarily effective." Comment. Explain the qualities of a good leader. Explain managers use groups to make decisions. What are the symptoms of Groupthink and how to Prevent it? Define communication? What is the importance of communication? State the functions of communication? Explain the Johari window. Explain the communication process. Explain the direction of communication. Explain the different grapevine patterns. What do you mean by the old boys network? Explain the various categories of non-verbal communications. What suggestions do you give to supervisors to improve their communication? Define Communication. Why has communication assumed importance in modern industrial organizations? "Communication is sharing of understanding". Comment. Department of Management Studies 99 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 34. . What are the elements of communication? Explain the process of communication. 35. . Bring out clearly the importance of communication. 36. . Explain the various types of communication. Discuss the comparative advantages of oral and written communications. 37. Bring out clearly the characteristics of a good communication system. 38. Name and describe briefly the five different patterns of communication networks within an organization. 39. What are the five communication skills of effective supervisors? 40. What is kinesics? Why is it important? 41. Explain the term 'Grapevine' as a channel of communication. What are its benefits to the management? 42. Explain the principal barriers to communication and suggest measures for removing them. 43. How does perception affect the communication process? 44. Contrast encoding and decoding? 45. Describe the communication process and identify its key components. 46. What is the main function of "effective listening"? What are the common organizational situations in which this technique might be useful? 47. What function does feedback serve in the communication process? 48. What conditions stimulate the emergence of rumours? UNIT - V 1. Define 'control'. What are the elements of control? How do managers exercise control? 2. Discuss the concept and process of control. State the requirements of an effective control system. 3. Why is control a must in business management? What are the requirements of an effective control system? 4. "The essence of control is action". Comment. 5. "The controlling function of management is similar to the function of the thermostat in a refrigerator". Comment. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. Define Attitudes. . Explain the characteristics of Attitude. What are the functions of Attitudes? How attitudes are formed? Describe the ABC model of an attitude. How should each component be measured? What is cognitive dissonance and how is it related to attitudes? Define Values. Distinguish between instrumental values and terminal values. How values are formed? How does our values affect our behaviour. What is Ethics? What is the relationship between values and ethics? What is learning? How does it take place? Define the terms learning, reinforcement, punishment and extinction. What are positive and negative consequences in shaping behaviour and how should they be managed? 19. Discuss the nature of classical conditioning and operant conditioning. How do they differ from each other? 20. Contrast Classical conditioning, Operant conditioning and Social learning 21. What are the major dimensions of social learning theory? Department of Management Studies 100 NPR COLLEGE OF ENGINEERING & TECHNOLOGY NPR. Nagar, Natham - 624 401, Tamil Nadu, India. Phone No. : 04544 - 305500, 501 & Fax No: 04544-305562 Website: www.nprcolleges.org E-Mail: [email protected] 22. Explain the concept of learning in detail and with examples. How learning differs from the change in behaviour that occurs due to natural growing up such as a baby ―learning‖ to talk? 23. How do you relate Pavlov‘s experiments with dogs to human behaviour? 24. How can reinforcement be used to generate change in behaviour? 25. What factors should be considered when using punishment for behaviour modification? 26. Describe in detail the various types of learning curves. Give examples of ―diminishingreturn curves‖ and ―increasing-return curves‖. 27. Does punishment strategy work in changing undesirable behaviour? 28. What are the limitations on behaviour modification? Is there any type of behaviour that cannot be changed? If so give reasons and examples. 29. What are the purposes for conducting performance appraisals? Department of Management Studies 101