Organizing and Staffing

Organizing is the function of management which

follows planning.



It is a function in which the synchronization and
combination of human, physical and financial
resources takesplace.



All the three resources are important to get
results.



organizational function helps in achievement of
results which in fact is important for the
 Definitions for ORGANIZATION

According to Amitai etizoni’, an Organization is a social unit or human grouping

deliberately structured for the purpose of attaining specific goals.

Sehein’,defines an organization as the rational co-ordination of the activities of a

number of people for the achievement of some common explicit purpose.

According to Koontz and O'Donnell, "Organization involves the grouping of activities

necessary to accomplish goals and plans, the assignment of these activities to
appropriate departments and the provision of authority, delegation and co-
ordination."
Organization involves division of work among people whose efforts must be co-
ordinated to achieve specific objectives and to implement pre-determined strategies.

The word ‘ Organization’is derived from the word “organism” which mean a structure
in which parts are so interlinked that they assist the whole and become integrated
parts of whole.
Conceptual organizational structure
of a Company
Characteristics of an Organization

Every organization can have:

A purpose, goal or set of goals for the task of planning.

A clear concept of major duties or activities required to achieve the purpose.

Classification of activities into jobs and establishment of relationships

between these jobs.
Classification of Organizations
based on benefits
1. Organizations which benefit their owners. (all Business
organizations)

2.Organizations which benefit their members. (A wide class of unions,

co-operatives and clubs).

3.Organizations which benefit their clients.(insurance companies,

private schools).

4. Organizations which benefit the whole society.(common wealth

organizations like govt. Depts, UNO, UNESCO, WHO, etc).
 Process of Organizing
It involves differentiation and integration of activities of a company or
any organization.
The different steps involved in the differentiation and integration are as
follows:

1.Consideration or to know the Objectives of the enterprise.

2.Grouping of activities into department and sections.

3. Deciding which departments will be key departments.

4.Determining levels at which various types of decisions are made.

5. Determining the span of management.

6.Setting up a co-ordination mechanism.

 Purpose of Organization
Main purpose is to form a frame or structure of an enterprise.

Purpose includes following logical components:

1. establishes the pattern of relationship by giving duties and
responsibilities to a group or an individusal.

2.Demarcates the authority, responsibility and duties of each group.

3. It tells manager where accountability lies and who are in his

sphere of command.

4. provides adequate communication.

5. co -ordinates or controls the activities of individuals or groups.

 Factors governing span of
Management
The appropriate span can be determined by the specifics of the manager’s
particular situation, they are:

1. Ability of the manager.

2.Ability of the employees.

3.Type of work.

4. Well defined authority and responsibility.

 Span of Management
Span of management refers to the span of control, span of supervision or
span of authority or span of responsibility.

It indicates the number of subordinates who report directly to a manager.

Determination of span of management is important for two reasons:

1. Span of management affects the efficient utilisation of managers and
2. the effective performance of their subordinates.

Wide span v/s Narrow span

 Departmentalisation
The horizontal differentiation of tasks or activities into discrete segments is called
Departmentalisation.

It is an important step in building an organization.

It is to take advantage of division of labour and specialization upto certain limit.

Several bases can be considered for departmentalisation as follows:

1.Functions
2.Products
3.Customers
4.regions or territory
5.Divisional Structures
6.Time
7.Processes
8.Combined base
 Functions – as a base
Each major function of the enterprise is grouped into a department.

Ex: Production, finance and marketing departments.

Advantages with ‘Functions’- as a base:

1.It is a simple form of grouping activities for small organizations which

manufacture only a limited number of products or render a limited number of
services.

2.It promote excellence in performance because of development of enterprise in

only a narrow range of skills.

3. It leads to improved planning and control of the key functions.

4. It ensures economy, as manpower and other resources of company are

efficiently utilized.
Drawbacks of function – as a base

1. It is difficult for any one to understand the task of the whole and relate his own
work to it.

2. Each manager thinks only about his own departmental goals .

3.May result in inter-departmental conflicts and disagreements.

4.It does not offer a good training ground for the overall development of a manager.

5. Unsuitable for organizations which are larger in size, complexity or innovative

scope.

6. This form of system is rigid and resists adaptation.

 Product – as a base
In this method, for each product, a separate semi – autonomous dept. is created and is
put under the charge of a manager, who is responsible for producing a profit.

Several indian companies like Hindustan lever, Johnson & Johnson have Product based
departments.

ADVANTAGES:

1. This form relieves top management of operating task responsibility.

2. management can compare the performances of different products in terms of profit.

3.The responsibility of each product’s performance is entrusted to a particular

departmental head.
4. Natural team work develops.
 Drawbacks of Product as a base

This calls for duplication of staff and facilities.

Separate work force are required in sales, marketing and finance resulting in extra
expenditure.

More managers are required.

May result in under utilization of facilities and equipment.

 Customers – as a base

An enterprise may be divided into a number of departments on the basis of

the customers that it services.

For ex: An Electronics company may have separate departments for military,
industrial and consumer customers.

Advantage of these type of firms is to pay full attention to major customer

groups which have a very different set of criteria governing their decisions to
purchase.

Diasadvantages:

1. may result in under utilization of resources and facilities in some

departments.
2. Or there may be duplication of facilities.
 Regions or Territory – as a base

If units of an organization are geographically dispersed in various locations, it is

logical to departmentalize those units on a geographical basis.

Ex: Indian railways, Food corporation of India.

Advantages:
1. it motivates each regional head to achieve high performance.

2. It provides each regional head an oppurtunity to adapt to his local situation and
customer need with speed and accuracy.

3.It affords valuable management training and experience to middle – level

executives.

4. It enables the organisation to take advantage of locational factors, such as

availability of raw materials, labour , market, etc.
 Continued......
5.it enables the organisation to compare regional performances and invest more
resources in profitable regions.

Drawbacks:

1. It gives rise to duplication of various activities.

2. various regional units may involve in short- term competition among themselves.
 Departmentalisation based on
Divisional structures

Large organisation can be segmented into number of divisions on the basis of product,
territory or customers.

Each divisional head can operate his division within the framework of general company
wide policies.

Problems with more manageable size can be solved within each division.
Departmentalisation based on Time

Activities can be grouped on the basis of timing of their performnace.

Generally, departmentalisation by time is found in the production unit of an

enterprise.

It is in the form of time – shifts for a group of employees or workers.

Disadvantages:

1. Accidental occurences such as machine breakdown is carried from one time – shift
to next time- shift.
2. Workers of one shift may develop a tendency to pass on some portion of their
incomplete work to other time – shifts.
3. It becomes difficult for the management to correctly measure the performance of a
certain department.
 Departmentalisation based on
Process
Departmentalisation is done on the basis of several discrete stages in the process
or technologies involved in the manufacture of a product.

Ex: Textile industry, oil refining, Electronic chip fabrication.

Departmentalisation by process is a special case of departmentalisation by

function.

Advantages:
1. It facilitates the use of heavy and costly equipment in an efficient manner.

2. it follows the principles of specialization, which increase production efficiency.

3. It is suitable for organizations which manufacture products which involve

number of processes.
 Drawbacks of process based
departmentation
1.In this workers tend to feel less responsible for the whole product.

2. It does not provide good training and opportunity for the overall development of
managerial talent.

3. Technical problem of one department will affect the work of other departments.

4. It is difficult to compare the performance of different process based departments.

5. top level management needs to spend extra attention to maintain inter-

departmental co-operation.
 Departmentation based on
Combined base
In this type of departmentalisation organization follows a different base of Sub-
departmentation at different organizational levels.

For ex: in an organisation primary departmentation is based on Products, secondary

departmentation is based on number of regions, and tertiary departmentation is
based on functions.

Another form of combined base is matrix organisation, very popular nowadays.

Here an organisation is grouped vertically in a matrix based on functions and

horizontally based on number of projects or products.
 Benefits and Drawbacks of
combined base departmentation
Benefits:
1. Combination of all necessary inputs of manpower, facilities and information at one
place reduces problems of communication and co-ordination.

2. flexibility in organizing firm’s internal resources around the priorities of individual

customers creates the ability to innovate around specific customer needs.

3. Optimisation of total project development will be in a better way.

4. Assignment of specific jobs to employees makes them more responsible.

5. Change of projects promotes the intellectual growth and development of

employees.

Drawbacks:
1. employees may show greater loyalty to parent departments.

2. Employees may feel ambiguity of authority as they are involved in different types
of projects.
 COMMITTEES
A committee is a group of people who have been formally assigned some task or
problem for their decision and or implementation.

Committees are often set up where new kinds of work and or unfamiliar problems
seem to involve decisions, responsibilities and powers beyond the capabilities of
any one man or department.

In business enterprise there is a widespread use of committees in all areas of

management and administration.

According to Rensis Likert, committees can be framed based on the concept of

“interlocking groups”.
Under this proposal, each unit head and his subordinates work as a decision
making committee.
Each unit head would serve as a “Cheif” to the level below him and subordinate to
the level above him, and he would be performing a linking pin function as shown
below:
 THE LINKING PIN MODEL APPROACH

A company thus organized could avoid the major risks but reap the full advantages of
“authoritative” group decision making.
Committees can be broadly classified into “Advisory” and “Executive” committees.

Whenever the committees are vested with staff authority they are known as
advisory committees. These committees have only recommendatory role and
cannot enforce implementation f their advice or recommendation.
Ex: Work committees, sales committees, finance committees , etc.

Committees vested with line authority are called “Executive committees” or Plural
Executives.

Executive committees along with decision making, also enforce decisions.

Ex: Board of directors of a company.

And these committees may have same individuals as members, but these
individuals has to see themselves as a different group in each committee.

Their functions are seperated by time, place or title.

Committees may also be classified as “Standing committees” and Adhoc task

forces.
Standing committees:
Ex: Finance committee in a company, loan approval committee in a bank, or
admission committee in a college.
Members are choosen according to their positions irrespective of their qualifications
or skills.

Adhoc Task forces, these are of very short duration, and dissolved after the work or
task is executed.
The members are choosen based on their experience and technical skills.

ADAVANTAGES OF FRAMING COMMITTEES:

1. Committees consisting of all departmental heads get the oppurtunity to better

understand each other’s problems and to move towards organisational goals.

2. Provide a forum for pooling up of knowledge and experience of many people of

different skills, ages and backgrounds, which helps in improving quality of decisions.

3. Committees are excellent means of transmitting information and ideas both

upward and downward.

4. By exposing members of different view points, committees contribute indirectly to

their training and development.

5.Committees decisions are based on facts, and hence they are unbiased.
WEAKNESSES OR DISADVANTAGES OF COMMITTEES
1) Committees keep up minutes and waste hours by setting up a committee
which takes a longer time to get action than from an individual manager.
2) If wrong decision taken, no member can be individually blamed which
encourages irresponsibility among members of the committee.
3) Can be expensive form of administration where huge amount is spent on
convening meetings and giving allowances to the members.
4) Members of the coordinating committees feel appointed to protect their
interests of the departments rather than finding appropriate solution to the
problem.
5) Have a tendency to perpetuate themselves and difficult to dissolve them.
6) Decisions are generally based on some compromise among members which
are not best decisions which results in log rolling.
7) Consists of large number of persons, difficult to maintain secrecy.
8) Chairman often changes, influence accumulate in the hands of some other
person which may result indomination and may bring about resistance from
others.
SUGGESTIONS FOR MAKING COMMITTEES EFFECTIVE

1.The number of Members on a committee should not be large.

2. A committe’s authority shuld be carefully defined, and its activities should be

correctly chosen.

3. The members of a committee should enjoy approximately equal status so

that they interact with each other freely.

4. The members should give prcedence to organizational interests over

departmental interests and should be prepared in advance on issues.

5. The chairman of the committee should plan and conduct the meeting with
firmness and fairness.

6.The work of the committee should be periodically reviewed to determine its

effectiveness.
Authority and responsibility:

Authority:
Is the institutionalized right of a superior to command and compel his subordinates to perform a
certain act.
Rests in the chair or position. If position changes the authority of the individual also changes.

Henri Fayol defines authority as “the right to give orders and power to exact obedience.”

According to Herbert A. Simon, authority:

enforces obedience to norms
secures expertise in the making of decisions
permits centralization of decision-making and coordination of activity

Use of authority:

1) It enforces the obedience to norms.

2)secures expertise in making the decisions.

3)permits centralization of decision making and coordination of activity.

Responsibility:

Responsibility is the obligation of the subordinate to obey the commands.

Whenever a superior assigns a task to him, it is the responsibility of the
subordinate to perform it.

It has two dimensions:

1.Responsibility for
2.Responsibility to

Responsibility cannot be delegated or transferred.

Responsibility is divided into two parts at the time of delegation:
1.Operating responsibility
2.Ultimate responsibility
Responsibility may be specific or continuing.
Authority should be responsibility

 It means that the subordinate must have been

delegated enough authority to undertake all the
duties which have been assigned to him and for
which he has accepted responsibility.

 The advocates of this parity principle say that

authority and responsibility should be exactly
equal. 

 Inequality between the two produces undesirable

results.
 Line, Staff and Functional authority

LINE AUTHORITY
In this, a superior exercises direct command over a subordinate.
It is represented by the standard chain of command that starts with
the board of directors and extends down through the various levels
in the hierarchy to the point where the basic activities of the
organization are carried out.
STAFF AUTHORITY
Its nature is advisory. In this, a staff officer has the ‘authority of ideas’
only. There are four levels of authority of a staff man:
Voluntary consultation
Compulsory consultation
Concurring authority
Functional authority.
DELEGATION OF AUTHORITY:

Delegation of authority can be defined as subdivision and sub-

allocation of powers to the subordinates in order to achieve
effective results.
ADVANTAGES OF EFFECTIVE DELEGATION:

 It relieves the manager of his heavy workload

 It leads to better decisions
 It speeds up decision-making
 It helps train subordinates and builds morale
 It serves as compensation to those employees who
face the prospect of limited advancement
 It helps create a formal organization structure
 Barriers to effective delegation
(Manager side)
 Fear of Loss of Power
 The “I Can Do it Better Myself’ Fallacy
 Lack of Confidence in Subordinates
 Fear of Being Exposed
 Difficulty in Briefing
 Inability to Establish and Exercise Proper Controls
 Barriers of effective delegation
(Subordinate side)
 They may refuse to accept authority because of their fear of
criticism by their superior in case they commit mistakes in
decision-making.
 They may avoid accepting any authority if they feel that they
lack mental and physical ability, adequate information and
resources to help them discharge their duties properly.
 They may believe that the authority is inconsistent with the
purposes of the organization and this may be the cause for
their unwillingness to accept it.
 They may avoid accepting any authority because there are
no positive personal gains to them for assuming extra
responsibility.
 They may refuse to accept the authority because it is outside
certain limits.
 Guidelines for effective delegation
 Make sure that delegation is not loss of power or that
you cannot do it yourself.
 Remember that only two tasks in a list of ten tasks
deserve topmost priority.
 Select the subordinate in the light of the job.
 Before delegating authority, make the nature and the
scope of the task clear. Avoid overstepping the
subordinate’s “area of acceptance”.
 Assign authority proportionate to the task.
 Make the subordinate clearly understand the limits of
his authority and deadlines.
 Give the subordinate some positive incentives for accepting
responsibility.
 Train the subordinate properly.
 Create a climate of mutual trust and goodwill.
 Do not make the subordinate accountable to more than one
superior.
 Let there be no overlaps or splits in delegation which usually result
from the superior’s desire that the authority over a given situation
should be shared by individuals or units.
 Learn to manage time.

Once a delegated job is done well, acknowledge and

appreciate.
 Decentralization of authority
 Decentralization is the policy of delegating
decision-making authority down to the lower
levels in the organization, relatively away from
and lower in a central authority.
 A decentralized organization shows fewer tiers in
the organizational structure, wider span of control,
and a bottom-to-top flow of decision-making and
flow of ideas.
Difference between Delegation and
Decentralization
Delegation Decentralization
Delegation is the process. It mainly Decentralization is the end result of
refers to the granting of the delegation and dispersal of
authority and the creation of the authority. It is the system that
responsibility as between one exists as the result of the
individual and another systematic delegation of authority
through out the delegation.

In this, the superior continues to be In this, the superior is relieved from

responsible for the work delegated his responsibility of the work and
to his subordinate. the subordinate becomes liable.

Delegation is vital and essential to Decentralization is optional in the

the management process. Only sense that it may not be followed
through delegation, subordinates systematically.
can be involved in the organization
and management can get things
done.
 Advantages of decentralization

➢ Decentralization reduces problem of communication and red tape.

➢ Decentralization permits quicker and better decision-making.
➢ Decentralization recognizes and actually capitalizes on the
importance of the human element.
➢ Under decentralization, employees are able to exercise more
autonomy.
➢ Decentralization leads to a competitive climate within the
organization.
➢ Decentralization ensures the development of employees.
➢ Decentralization facilitates diversification of products, activities and
markets.
 Centralization - Advantages

 Coordination of activities of subordinates is

better achieved.
 There is no duplication of efforts or resources.
 Decisions take into account the interest of the
entire organization.
 Strong central leadership develops which may
be required in crisis.
 Factors considered for
Decentralization
➢ Size of the Organisation
➢ History and Age of the Organisation
➢ Philosophy of Top Management
➢ Abilities of Lower-level Managers
➢ Strategy and the Organization's Environment
➢ Nature of Management Function
➢ Available Controls
➢ Costliness and Significance of Decision
 Staffing
➢ Filling and keeping the positions provided for by the organisation
structure filled with the right people is the staffing phase of the
management function.
➢ It includes several sub-functions:
➢ Recruitment, or getting applicants for the jobs as they open up.
➢ Selection of the best qualified.
➢ Training those who need further instructions to perform their work
effectively or to qualify for promotions.
➢ Performance appraisal.
➢ Administration of compensation plans.
 Importance and need for proper
staffing
 It helps in discovering talented and competent
workers
 It ensures greater production
 It helps to avoid a sudden disruption of an enterprise’s
production run
 It helps to prevent under-utilization of personnel
 It provides information to management for the internal
succession of managerial personnel
 Recruitment
Sources of Recruitment
 Re-employing former employees
 Friends and relatives of present employees
 Applicants at the gate
 College and technical institutions
 Employment exchanges
 Advertising the vacancy
 Labour unions
EVALUATION OF ALTERNATIVE SOURCES

1. Time lag between requisition and placement.

2. Recruitment ratio, i.e no. of persons hired to actually applied.

3. Employee attitude studies to discover the reactions of present employees

to both external and internal recruiting.

4.Correlation between different sources of recruitment and factors of

success on the job.

5. To draw the comparison between relative merits of each source based on

available data on grievances and disciplinary action.

6. Gross cost per hire.

INTERNAL V/S EXTERNAL SOURCES OF RECRUITMENT

From the point of view of its impact on motivation, recruitment from

external sources is not desirable, particularly when an adequate
number of qualified persons is already available inside the organisation.
On the other hand, when the internal candidates are too advanced in
age, it may become imperative for the management to tap outside
sources for recruitment.
 Advantages of internal recruitment
● A sense of security develops among employees.

● Employees remain loyal to the organisation.

● People recruited from within the organisation do not need induction training.

● Employees in the lower ranks are encouraged to look forward to higher positions
in the concern.

● Labour turnover is reduced.

● People are motivated to become efficient.

● Valuable contacts with major suppliers and customers remain intact.

● A better employer- employee relationship is established.

 Disadvantages of internal
recruitment
● This method limits the choice of selection to the few candidates available within the
enterprise.
● It may encourage favouritism.
● May become a wrong tradition.
● Some internal candidates may be unsuitable for new positions.
 Advantages and Disadvantages of
external recruitment
ADVANTAGES:
● New blood brings with it a fresh outlook, originality and old habits are replaced by

new ideas and the concern becomes more dynamic.

● Possibility of selecting the people with rich and varied experience.

DISADVANTAGES:
● Internal employees may feel frustrated and their morale is adversely affected.
● Present employees may lose their sense of security and become disloyal to he
employer.
● Deterioration in the employer- employee relationship.
STEPS IN SELECTION PROCEDURE

➢ Application blank
➢ Initial interview of the candidate
➢ Employment tests:
Aptitude / Interest / Intelligence / Performance / Personality
test
➢ Checking references
➢ Physical or medical examination
➢ Final interview
 DIRECTION AND SUPERVISION
Direction and requirements of effective direction:

● Direction means issuance of orders and leading and motivating

subordinates as they go about executing orders.

● Without the issuance of orders, without leading and motivating

subordinates, nothing, or at best very little, can be accomplished.

● The function of direction thus breaks down into two major activities:
● Giving orders to employees
● Leading and motivating them
 Requirements of Effective Direction
● Direction is one of the most complex functions of management which can
be learned and perfected only through long experience.

● Harmony of Objectives
● Unity of Command
● Direct Supervision
● Efficient Communication
● Follow-through
Principles to be Followed in Giving Orders

 The order is a device employed by a line manager in

directing his immediate subordinates to start an activity,
stop it and modify it.
 Mary Parker Follett lays down the following principles which
should be followed in giving orders:
 The attitude necessary for the carrying out of an order should
be prepared in advance. People will obey an order only if it
appeals to their habit patterns. Therefore, before giving
orders, it should be considered how to form the habits which
will ensure their execution.
 Face-to-face suggestions are preferable to long-distance
orders.
 An order should be depersonalized and made an integral part
of a given situation so that the question of someone giving
and someone receiving does not come up. Thus the task of
the manager is to make the subordinates perceive the need of
the hour so that the situation communicates its own message
to them. Identification with the results to be accomplished
fosters a natural willingness to cooperate with a program of
action. This is known as the Law of the situation.
 Principles followed, continued..
 Chester Barnard lays down four conditions which make
an order acceptable. These are:
 Order should be clear and complete
 Order should be compatible with the purpose of the
organization
 Order should be compatible with the employee’s personal
interest
 Order should be operationally feasible.
 Orders may be communicated verbally or in writing.
 Written orders are appropriate when:
 The subject is important
 Several individuals are affected
 Many details are involved
 Considerable time will pass before the work is completed
 There is geographical distance between the order-giver and
the recipient.
A manager may follow four types of methods to ensure compliance to
his orders:
● Force

● Paternalism

● Bargain

● Harmony of objectives
 Meaning, Nature and Process of
Motivation
● The term motivation can be traced to the Latin word movere, which
means “to move”. This meaning is evident when we remember that a
manager gets work done through others.
● Motivation, therefore, concerns those dynamic processes which
produce a goal-directed behavior.
● The process always begins with the individual feeling certain needs.

Accomplishme
Interpretation of nt
goals according Goal- of goals and
to one’s directed need-
Needs perception behavior reduction
(Motives)

Incentives
(Positive, Negative)
 Nature of Motivation
Motivation is not an easily observed phenomenon. We observe
an individual’s actions and then interpret his observed behavior in
terms of underlying motivation.

 Individuals differ in their motives - The viewpoint (called

“monistic approach”) that there is only one “economic drive”
which determines behavior is untenable. there is no single motive
that determines how all workers will react to the same job and,
therefore, there can be no single strategy that will keep
motivation and productivity high for everyone everywhere.

 Sometimes the individual himself is unaware of his motive

- The presence of below-the-surface concept is unconscious
motive explains why man cannot always verbalize his motive to
attain certain goals or even tell what his goals are.
 Motives change - Hierarchy of motives of each individual called
“structure” is not fixed. It changes from time to time. An
individual’s primary motive today may not be primary tomorrow,
even though he may continue to behave in the same way.
 Motives are expressed differently - The ways in which motives
are eventually translated into actions also vary considerably
between one individual and another. One individual with a strong
security motive may play it safe and avoid accepting responsibility
for fear of failing and being fired. Another individual with the same
security motive may seek out responsibility for fear of being fired
for low performance.
 Motives are complex - It is difficult to explain and predict the
behavior of workers. The introduction of an apparently favorable
motivational device may not necessarily achieve the desired ends
if it brings opposing motives into play.
Continued….
 Multiple motives make the choice of goals difficult for
an individual - Motives do not exist one at a time. This is
hardly the case. The fact is that multiple motives operate
simultaneously to influence an individual’s behavior.

 Furthermore, some of these motives are incompatible with one

another. This results in the following three types of
motivational conflicts which make the person’s choice of goal
difficult:
i. Approach-approach conflict where the person has two motives
which he likes equally well, but it is possible to have only one.
ii. Avoidance-avoidance conflict where the person is forced to
choose between two motives, both of which are considered
equally undesirable by him.
iii. Approach-avoidance conflict where the person is attracted to
the positive characteristics of his motive, but wants to avoid its
negative characteristics.
 Determinants of Motivation
1.Influences operating within an individual

2.Influences operating within the organisation climate

3.Job characteristics

4. influences operating in external environment (exogenous variables)

 Motivation Theories
There is no shortage of motivation theories. We can classify them
under three broad heads:
 Content theories
The content theories tell us what motivates an individual.
They throw light on the various needs and incentives which
cause behavior.
The process theories, on the other hand, answer the question
how behavior is caused.
Reinforcement theory explains the ways in which behavior is
learned, shaped or modified.
Some important theories under each head are as under:
 Maslow’s Need Hierarchy Theory
 Alderfer’s ERG Theory
 Herzberg’s Two-Factor Theory
 McClelland’s Achievement Theory

Continued….
 Process Theories
 Victor Vroom’s Expectancy Theory
 Adam’s Equity Theory
 Reinforcement Theory
 Skinner’s Behavior Modification Theory
 Maslow’s Need-Hierarchy Theory
 All people have a variety of needs.
 At any given time, some of these needs are satisfied and others
are unsatisfied.
 An unsatisfied need is the starting point in the motivation
process. It begins the chain of events leading to behavior.

Continued…..
 Self-
fulfillment

Esteem

Social

Safety
security

Basic
Physiologic
al
needs
Order of Priority of human needs
Comparison between high order and
low order needs
Lower-order needs Higher-order needs
Being related to the physiology of an Being related to the mind and spirit of
individual, these needs are explicit and an individual, these needs are hidden
not hidden. It is, therefore, easy to and nebulous. It is, therefore, very
understand these needs. difficult for others, even for the individual
These needs are finite himself to understand them.
These needs are universal but vary in These needs are infinite.
intensity from individual to individual. These needs are not universal and may
These needs are conditioned by social even exist as opposites in two persons.
practice, e.g., if it is customary to eat One person may find satisfaction in being
breakfast in the morning then the body aggressive, another in being submissive.
comes to respond accordingly. These needs are strongly conditioned
These needs are primarily satisfied by experience, and maturity.
through the economic These needs are primarily satisfied
behavior, i.e., by earning more money. through symbolic behavior of the
psychic and social content.
 Herzberg’s Two-Factor Theory
 According to Herzberg, the absence of certain job factors
tends to make workers dissatisfied. However, the presence of
these same factors in themselves does not produce high
levels of motivation.
 They merely help avoid dissatisfaction and the problems it
creates, such as absenteeism, turnover and grievances.
 Herzberg called these factors maintenance or hygiene factors
since they are necessary to maintain a reasonable level of
satisfaction to serve as a take-off point for motivation.
 A good relationship with one’s subordinates
 A fair salary
 Job security
 Personal life
 Good working conditions
 Status, i.e., relative ranking that a person holds in a group
 To build high levels of motivation, a different set of factors is
necessary. Herzberg called these as ‘motivators’ or ‘satisfiers’.
 These are six in number:
i. Opportunity to accomplish something significant
ii. Recognition for significant accomplishments
iii. Chance for advancement
iv. Opportunity to grow and develop on the job
v. Chance for increased responsibility
vi. The job itself
 Communication
According to Newman and summer, it is an exchange of facts, ideas, opinions or
emotions by two or more persons.

Allen Louis defines it as the sum of all the things one person does when he wants to
create understanding in the minds of another.

In simple terms communication is the process of passing information and

understanding from one person to another.

It is not only correct transmission of the information but also correct interpretation and
understanding of the information.

IMPORTANCE OF COMMUNICATION:

Communication is necessary in an organization structure which involve the

interactions of people working at different levels and proper communication among
them is necessary for achieving the goals of the organization.
 Purposes of Communication
● Communication is needed in the recruitment process to inform about its structure, policies
and practices.
● It is needed in the area of orientation to make people acquainted with peers, superiors
and with company’s rules and regulations.
● Communication is needed to enable employees to perform their functions effectively.
● Needed to acquaint the subordinates with the evaluation of their contribution to enterprise
activity.
● Communication is needed to teach the employees about personal safety on the job.
● Communication is of vital importance in projecting the image of an enterprise in the
society.
● It helps the manager in his decision making process.
● It helps in achieving coordination in a large organization, working on the basis of division
of labour and specialization.
● Communication promotes cooperation and industrial peace.
● Communication increases managerial efficiency and the success of a manager in the
performance of his duties depends on his ability to communicate.
 Leadership

The success of every industrial enterprise is dependent upon the quality of its
leadership.
Examples for Leaderships:
J.N TATA, Dhirubhai ambani, N.R Narayanamurthy etc.

Leadership include determing the objectives of the enterprise, designing the methods to
achieve them, directing and coordinating the activities of various departments.

According to Peter Drucker, leadership is the lifting man’s performance to a higher

standard, the building of man’s personality beyond its normal limitations.

According to keith davis, leadership is the ability to persuade others to seek defined
objectives enthusiastically.
It is the human factor which binds a group together and motivates it towards goals.
 Characteristics of Leadership

1. leadership implies the existence of followers.

2. Leadership involves a community of interest between the leaders and his followers.

3. It involves an unequal distribution of authority among leaders and group members.

4. leadership implies that leaders can influence their followers or subordinates in

addition to being able to give their followers legitimate directions
Behavioural approach of Leadership
Prominent in the behavioural approach is lesders are not born but can be trained.
Under behavioural approach researchers have studied leadership behaviour from
3 points of view: Motivation, authority and supervision.

1.Motivation: Positive vs negative

2. Authority: leadership style can be autocratic, democratic or freerein

Autocratic:
Leader may behave like an authoritarian or benevolent

Merits of Autocratic leadership:

● It is appropriate to increase efficiency, save time and get quick results, especially

in crisis or an emergency situation.

● The paternalistic form of this style of leadership works well with employees who have

a low tolerance for ambiguity.

● Chain of command and divison of work are clear and fully understood by all.
Demerits of autocratic Leadership:
● One way communication without feedback typically leads to misunderstandings,

communication breakdowns and costly errors.

● Autocratic manager is alone in his decision making, he may receive little information

by his people as inputs into his decision making, this is dangerous in today’s
environment of technological and organisational complexity.
● Employees may become machine like, without human dignity or importance, and they

may express their resentment in the form of massive resistance, low morale and low
productivity.

Democratic Leadership:
● Known as participative or person-oriented leadership. Here entire group is involved in
and accepts responsibility for goal setting and achievement.
● Subordinates have considerable freedom of action.
● The leader shows great concern for his people than for production.
● Leader develops constructive inter-relationships among subordinates to reduce
conflicts or tensions.
● The group can function even in the absence of its leader.

Merits:
Leader can motivate his subordinates to work hard and get ideas from them to
become himself a participative leader.
● This kind of leadership permits, encourages people to develop, grow and rise in the
organisation.
Demerits of democratic leadership:
● Participative style can take enormous amounts of time, and sometimes the leader

can loss his/her control.

● Some leaders may use this style as a way of avoiding responsibility.

Freerein type of Leadership

In this type of leadership, the leader exercises absolutely no control.
He just provides raw materials, information and facilities to his men to enable them
to accomplish group objectives.
This form can be a disaster if the leader does not know the competence and integrity
Of his people and their ability to handle this kind of freedom.
 Coordination
 Coordination is the management of
interdependence in work situations.
 Interdependence may be between persons of a
department, or between different departments,
or between organization and outsiders.
 It may relate to procedures or content of the
organization's activities.
 Coordination is not a separate activity of a
manager, for it underlies all managerial
functions.
Requisites for excellent coordination

 Direct Contact
 Early Start
 Continuity
 Dynamism
 Clear-cut Objective
 Simplified Organization
 Clear Definition of Authority and Responsibility
 Effective Communication
 Effective Leadership and Supervision
 Types of Coordination
 Internal Coordination: Coordination among the employees
of the same department or section, among workers and
managers at different levels, among branch offices, plants,
departments and sections.
 External Coordination: Coordination with customers,
suppliers, government and outsiders with whom the
enterprise has business connections.
 Vertical Coordination: It is what exists within a department
where the departmental head is called upon to coordinate the
activities of all those placed below him.
 Horizontal Coordination: It takes place sideways. It exists
between different departments such as production, sales,
purchasing, finance, personnel, etc.
 Procedural Coordination: It is the specification of the
organization itself—that is, the generalized description of the
behaviors and relationships of the members of the
organization.
 Substantive Coordination: It is concerned with the content
of the organization's activities.
 Techniques of Coordination
 Basic Coordinating Techniques
 Rules, Procedures and Policies
 Planning
 Hierarchy
 Increasing Coordination Potential
 Direct Contact
 Task Force
 Committees
 Induction
 Indoctrination
 Incentives
 Liaison Departments
 Workflow
 Reducing Need for Coordination