1

Functions Of Management

Management has been described as a social process involving responsibility for economical and effective planning &
regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of
various elements and activities. These activities are different from operative functions like marketing, finance,
purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There are four
fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol,
“To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a
keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-
ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by
KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but practically these functions
are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the
performance of others.

1. Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in
advance the most appropriate course of actions for achievement of pre-determined goals. According to
KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from
where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem
solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus,
planning is a systematic thinking about ways & means for accomplishment of pre-determined goals.
Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2. Organizing

It is the process of bringing together physical, financial and human resources and developing productive
relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize
a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”. To organize a business involves determining & providing human and non-human resources to
the organizational structure. Organizing as a process involves:
2

 Identification of activities.
 Classification of grouping of activities.
 Assignment of duties.
 Delegation of authority and creation of responsibility.
 Coordinating authority and responsibility relationships.
3. Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater
importance in the recent years due to advancement of technology, increase in size of business, complexity
of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in
square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing
involves manning the organization structure through proper and effective selection, appraisal & development
of personnel to fill the roles designed un the structure”. Staffing involves:

 Manpower Planning (estimating man power in terms of searching, choose the person and giving
the right place).
 Recruitment, selection & placement.
 Training & development.
 Remuneration.
 Performance appraisal.
 Promotions & transfer.
4. Directing

It is that part of managerial function which actuates the organizational methods to work efficiently for
achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion
the action of people because planning, organizing and staffing are the mere preparations for doing the work.
Direction is that inert-personnel aspect of management which deals directly with influencing, guiding,
supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following
elements:

 Supervision
 Motivation
 Leadership
 Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing
work & workers.

Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative,
monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which manager guides and influences the work of subordinates in
desired direction.

Communications- is the process of passing information, experience, opinion etc from one person to another. It
is a bridge of understanding.

1. Controlling

It implies measurement of accomplishment against the standards and correction of deviation if any to ensure
achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in
conformities with the standards. An efficient system of control helps to predict deviations before they actually
occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is
being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to
Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in
order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”.
3

Therefore controlling has following steps:

 Establishment of standard performance.

 Measurement of actual performance.
 Comparison of actual performance with the standards and finding out deviation if any.
 Corrective action.

Difference Between Administration and Management

It may appear that both the terms, namely administration and management are connotative of one and the same
meaning, but there is actually some kind of difference between the two.  Administration is the science of determining
the policies and objectives of an organization or a firm, where as management is the act of putting into practice the
policies and objectives framed by the administration.

It can thus be said that administration is a determinative function whereas management is executive function.  It is
executive in the sense that it executes the objectives and policies that are already framed by the administration and
included in the constitution.  Top level activity controls an administration where as middle level activity controls a
management.  Administration comprises of top level personnel that have contributed to the capital, that are partners
of the firm or the organization.  Management comprises of a group of managers that exhibit their skill in putting into
practice the objectives of the organization.  In short it can be said that the management is directly under the control of
administration or the administration controls the management.

A management would survive only if the administration is satisfied by its academic show.  Hence management should
strictly comprise of talented managers that show their dexterity in translating into practice what the administration
expects of them.  Planning is the key factor of an administration whereas motivation is the key factor of a
management.  It is important to note that administrative handles the most vital aspect of an organization, namely,
finance.  Administration organizes resources so as to use them to fulfill their mission.  Management does not handle
the sensitive issue of finance but does handle the method of operation to carry out the strategy of the administration.

It is the administration that takes vital decisions of an organization whereas management is not authorized to take
vital decisions of an organization but can take decisions within a certain framework, by the approval of the
administration.  Administration is made of administrators whereas management is made of managers.  Administrators
are found only in government, religious, military and educational organizations, whereas managers are found in
business firms only.  The relationship between administration and management is that management is construed to
be a subset of administration in the sense that everything management does gets included in the administration. 
Everything a management achieves gets included in the administration and everything a management fails to achieve
also gets included in the administration.  In fact it would be appropriate to say that a managerial failure is actually an
administrative failure.  A managerial success is an administrative success too.

The major differences between administration and management can be summed up as follows:

Administration frames the objectives and policies of an organization, whereas management does work hard to put
into practice these policies and objectives.

Administration is determinative in character while management is executive in character.

Administration is the body that takes vital decisions of an organization, whereas management too takes decisions, but
confines them to a certain framework only.

Administrators are found in government, educational and religious bodies whereas managers are found in business
firms.
4

WORKERS’ PARTICIPATION IN MANAGEMENT

Introduction:
Three groups of managerial decisions affect the workers of any industrial establishment and hence the
workers must have a say in it.
o Economic decisions – methods of manufacturing, automation, shutdown, lay-offs, mergers.
o Personnel decisions – recruitment and selection, promotions, demotions, transfers, grievance settlement,
work distribution.
o Social decisions – hours of work, welfare measures, questions affecting work rules and conduct of
individual worker’s safety, health, sanitation and noise control.
Participation basically means sharing the decision-making power with the lower ranks of the organization
in an appropriate manner.

Definitions:
The concept of WPM is a broad and complex one.
Depending on the socio-political environment and cultural conditions, the scope and contents of
participation change.
International Institute of Labour Studies: WPM is the participation resulting from the practices which
increase the scope for employees’ share of influence in decision-making at different tiers of organizational
hierarch with concomitant assumption of responsibility.
ILO: Workers’ participation, may broadly be taken to cover all terms of association of workers and their
representatives with the decision-making process, ranging from exchange of information, consultations,
decisions and negotiations, to more institutionalized forms such as the presence of workers’ member on
management or supervisory boards or even management by workers themselves as practiced in Yugoslavia.

Objectives:
According to Gosep, workers’ participation may be viewed as:
o An instrument for increasing the efficiency of enterprises and establishing harmonious relations;
o A device for developing social education for promoting solidarity among workers and for tapping human
talents;
o A means for achieving industrial peace and harmony which leads to higher productivity and increased
production;
o A humanitarian act, elevating the status of a worker in the society;
o An ideological way of developing self-management and promoting industrial democracy.
Other objectives of WPM can be cited as:
o To improve the quality of working life (QWL) by allowing the workers greater influence and involvement in
work and satisfaction obtained from work; and
o To secure the mutual co-operation of employees and employers in achieving industrial peace; greater
efficiency and productivity in the interest of the enterprise, the workers, the consumers and the nation.
The main implications of workers’ participation in management as summarized by ILO:
o Workers have ideas which can be useful;
o Workers may work more intelligently if they are informed about the reasons for and the intention of
decisions that are taken in a participative atmosphere.

Importance:
 Unique motivational power and a great psychological value.
Peace and harmony between workers and management.
Workers get to see how their actions would contribute to the overall growth of the company.
They tend to view the decisions as `their own’ and are more enthusiastic in their implementation.
Participation makes them more responsible.
o They become more willing to take initiative and come out with cost-saving suggestions and growth-
oriented ideas.
5

Scope and ways of participation:

One view is that workers or the trade unions should, as equal partners, sit with the management and
make joint managerial decisions.
The other view is that workers should only be given an opportunity, through their representatives, to
influence managerial decisions at various levels.
In practice, the participation of workers can take place by one or all the methods listed below:
o Board level participation
o Ownership participation
o Complete control
o Staff or work councils
o Joint councils and committees
o Collective Bargaining
o Job enlargement and enrichment
o Suggestion schemes
o Quality circles
o Empowered teams
o TQM
o Financial participation

Participation at the Board level:

This would be the highest form of industrial democracy.
The workers’ representative on the Board can play a useful role in safeguarding the interests of workers.
He or she can serve as a guide and a control element.
o He or she can prevail upon top management not to take measures that would be unpopular with the
employees.
o He or she can guide the Board members on matters of investment in employee benefit schemes like
housing, and so forth.
The Government of India took the initiative and appointed workers’ representatives on the Board of
Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized banks.
 The Tatas, DCM, and a few others have adopted this practice.
Problems associated with this method:
o Focus of workers’ representatives is different from the focus of the remaining members of the Board.
o Communication and subsequently relations between the workers’ representative and the workers suffers
after the former assumes directorship.
He or she tends to become alienated from the workers.
o As a result, he or she may be less effective with the other members of the Board in dealing with employee
matters.
o Because of the differences in the cultural and educational backgrounds, and differences in behaviour and
manners, such an employees’ representative may feel inferior to the other members, and he or she may feel
suffocated. Hence, his or her role as a director may not be satisfying for either the workers or the
management.
o Such representatives of workers’ on the Board, places them in a minority. And the decisions of the Board
are arrived at on the basis of the majority vote.

Participation through ownership:

This involves making the workers’ shareholders of the company by inducing them to buy equity shares.
o In many cases, advances and financial assistance in the form of easy repayment options are extended to
enable employees to buy equity shares.
Examples of this method are available in the manufacturing as well as the service sector.
Advantage:
o Makes the workers committed to the job and to the organization.
Drawback:
o Effect on participation is limited because ownership and management are two different things.
6

Participation through complete control:

Workers acquire complete control of the management through elected boards.
The system of self-management in Yugoslavia is based on this concept.
Self-management gives complete control to workers to manage directly all aspects of industries through
their representatives.
Advantages:
o Ensures identification of the workers with their organization.
o Industrial disputes disappear when workers develop loyalty to the organization.
o Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of participation because the
workers do not evince interest in management decisions.

Participation through Staff and Works Councils:

Staff councils or works councils are bodies on which the representation is entirely of the employees.
There may be one council for the entire organization or a hierarchy of councils.
The employees of the respective sections elect the members of the councils.
Such councils play a varied role.
o Their role ranges from seeking information on the management’s intentions to a full share in decision-
making.
Such councils have not enjoyed too much of success because trade union leaders fear the erosion of their
power and prestige if such workers’ bodies were to prevail.

Participation through Joint Councils and Committees:

 Joint councils are bodies comprising representatives of employers and employees.
o This method sees a very loose form of participation, as these councils are mostly consultative bodies.
Work committees are a legal requirement in industrial establishments employing 100 or more workers.
o Such committees discuss a wide range of topics connected to labour welfare.
o Examples of such committees are welfare committee, safety committee, etc.
o Such committees have not proven to be too effective in promoting industrial democracy, increasing
productivity and reducing labour unrest.

Participation through Collective Bargaining:

Through the process of CB, management and workers may reach collective agreement regarding rules for
the formulation and termination of the contract of employment, as well as conditions of service in an
establishment.
Even though these agreements are not legally binding, they do have some force.
For CB to work, the workers’ and the employers’ representatives need to bargain in the right spirit.
But in practice, while bargaining, each party tries to take advantage of the other.
This process of CB cannot be called WPM in its strongest sense as in reality; CB is based on the crude
concept of exercising power for the benefit of one party.
o WPM, on the other hand, brings both the parties together and develops appropriate mutual understanding
and brings about a mature responsible relationship.

Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in industries, leads to
boredom and associated problems in employees.
Two methods of job designing – job enlargement and job enrichment– are seen as methods of addressing
the problems.
o Job enlargement means expanding the job content – adding task elements horizontally.
o Job enrichment means adding `motivators’ to the job to make it more rewarding.
This is WPM in that it offers freedom and scope to the workers to use their judgment.
But this form of participation is very basic as it provides only limited freedom to a worker concerning the
method of performing his/her job.
7

The worker has no say in other vital issues of concern to him – issues such as job and income security,
welfare schemes and other policy decisions.

Participation through Suggestion Schemes:

 Employees’ views are invited and reward is given for the best suggestion.
 With this scheme, the employees’ interest in the problems of the organization is aroused and maintained.
Progressive managements increasingly use the suggestion schemes.
Suggestions can come from various levels.
The ideas could range from changes in inspection procedures to design changes, process simplification,
paper-work reduction and the like.
o Out of various suggestions, those accepted could provide marginal to substantial benefits to the company.
The rewards given to the employees are in line with the benefits derived from the suggestions.

Participation through Quality Circles:

Concept originated in Japan in the early 1960s and has now spread all over the world.
A QC consists of seven to ten people from the same work area who meet regularly to define, analyze, and
solve quality and related problems in their area.
Training in problem-solving techniques is provided to the members.
QCs are said to provide quick, concrete, and impressive results when correctly implemented.
Advantages:
o Employees become involved in decision-making, acquire communication and analytical skills and improve
efficiency of the work place.
o Organization gets to enjoy higher savings-to-cost ratios.
o Chances of QC members to get promotions are enhanced.
The Indian Scenario:
o Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.
o Experienced mixed results:
M&M (jeep division) with 76 QCs has experienced favourable results.
• Technical problems got solved.
• Workers got to get out of their daily routine and do something challenging.
Trade unions look at it as:
• A way of overburdening workers, and
• An attempt to undermine their role.
These circles require a lot of time and commitment on the part of members for regular meetings, analysis,
brainstorming, etc.
Most QCs have a definite life cycle – one to three years.
o Few circles survive beyond this limit either because they loose steam or they face simple problems.
QCs can be an excellent bridge between participative and non-participative approaches.
 For QCs to succeed in the long run, the management needs to show its commitment by implementing
some of the suggestions of the groups and providing feedback on the disposition of all suggestions.

Empowered Teams:
 Empowerment occurs when authority and responsibility are passed on to the employees who then
experience a sense of ownership and control over their jobs.
Employees may feel more responsible, may take initiative in their work, may get more work done, and
may enjoy the work more.
For empowerment to occur, the following approach needs to be followed as compared to the traditional
approach:
Element Traditional Org. Empowered Teams
Organizational structure Layered, individual Flat, team
Job design Narrow, single task Whole process, multiple tasks
Management role Direct, control Coach, facilitate
8

Leadership Top-down Shared with the team

Information flow Controlled, limited Open, shared
Rewards Individual, seniority Team-based, skill-based
Job process Managers plan, control, improve Teams plan, control, improve

Features of empowered or self-directed teams:

o Empowered to share various management and leadership functions.
o Plan, control and improve their work.
o Often create their schedules and review their performance as a group.
o May prepare their own budgets and co-ordinate their work with other departments.
o Usually order materials, keep inventories and deal with suppliers.
o Frequently responsible for acquiring any new training they might need.
o May hire their own replacement to assume responsibility for the quality of their products or services.
 Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are empowering
employees – both frontline as well as production staff, and are enjoying positive results.

Total Quality Management:

TQM refers to the deep commitment, almost obsession, of an organization to quality.
Every step in company’s processes is subjected to intense and regular scrutiny for ways to improve it.
Some traditional beliefs are discarded.
o High quality costs more.
o Quality can be improved by inspection.
o Defects cannot be completely eliminated.
o Quality in the job of the QC personnel.
New principles of TQM are:
o Meet the customer’s requirement on time, the first time, and 100% of the time.
o Strive to do error-free work.
o Manage by prevention, not correction.
o Measure the cost of quality.
TQM is called participative because it is a formal programme involving every employee in the organization;
making each one responsible for improving quality everyday.

Financial Participation:
This method involves less consultations or even joint decisions.
Performance of the organization is linked to the performance of the employee.
The logic behind this is that if an employee has a financial stake in the organization, he/she is likely to be
more positively motivated and involved.
Some schemes of financial participation:
o Profit-linked pay
o Profit sharing and Employees’ Stock Option schemes.
o Pension-fund participation.

Pre-requisites for successful participation:

 Management and operatives/employees should not work at cross-purposes i.e. they must have clearly
defined and complementary objectives.
Free flow of communication and information.
Participation of outside trade union leaders to be avoided.
Strong and effective trade unionism.
Workers’ education and training. Trade unions and government needs to work in this area.
Trust between both the parties.
Workers should be associated at all levels of decision-making.
Employees cannot spend all their time in participation to the exclusion of all other work.

Limitations of participation:
9

Technology and organizations today are so complex that specialized work-roles are required.
o This means employees will not be able to participate effectively in matters beyond their particular
environment.
 Everybody need not want participation.
The role of trade unions in promoting participative management has been far from satisfactory.
 Employers are unwilling to share power with the workers’ representatives.
 Managers consider participative management a fraud.

Evolution of participative management in India:

The beginning towards WPM was made with the Industrial Disputes Act, 1947, which made Works
Committees mandatory in industrial establishments employing 100 or more workers.
The Industrial Policy Resolution adopted by the government in 1956 stated that there should be some
joint consultation to ensure industrial peace, and improve employer-employee relations.
The functions of both these joint bodies were to be consultative and were not binding on the
management.
The response to these schemes was encouraging to begin with, but gradually waned.
o A study team was appointed in 1962 to report on the working of joint councils and committees.
The team identified some reasons for their failure.
No concrete steps were taken to remove the difficulties, or change the pattern of participative
management.
During the emergency of 1975-77, the interest in these schemes was revived by the then Prime Minister
by including Workers’ Participation in industry in the government’s 20-point programme.
o The government started persuading large enterprises to set up joint consultative committees and councils
at different levels.
The Janata Government who came to power in 1977 carried on this initiative.
In was again emphasized by the Congress government who came back n 1979.
This continued in a “non-statutory vein” till the late 1980s, and the response from the employers and
employees stayed luke-warm.
o Then, the 42nd Amendment to the Constitution was made.
Now, Article 43-A reads: The State shall take steps, by suitable legislation, or in any other way, to secure
the participation of workers in the management of undertakings, establishments or other organizations
engaged in any industry.
Thus, participative management is a constitutional commitment in India.
o And then, on May 30,1990; the government introduced the Participation of Workers in Management Bill in
the Rajya Sabha.
The bill requires every industrial enterprise to constitute one or more `Shop-Floor Councils’ at the shop
floor level, and`Establishment Council’ at the establishment level.
These councils will have equal representation of employers and employees.
Shop-Floor councils enjoy powers over a wide range of functions from production, wastage control to
safety hazards.
The Establishment Council enjoys similar powers.
The bill provides for the constitution of a Board of Management of every corporate body owning an
industrial establishment.
The bill also provides for penalties on individuals who contravene any provision of the bill.
In spite of all these efforts, only the government and the academicians have been interested in
participative management.
But participative management is staging a comeback.
o The compulsions of emerging competitive environment have made employee involvement more relevant
than ever before.
o Managers and the managed are forced to forget their known stands, break barriers, and work in unison.

Managers and workers are partners in the progress of business.

10

Human communication
Human spoken and picture languages can be described as a system of symbols (sometimes
known as lexemes) and the grammars (rules) by which the symbols are manipulated. The
word "language" also refers to common properties of languages. Language learning normally
occurs most intensively during human childhood. Most of the thousands of human languages use
patterns of sound or gesture for symbols which enable communication with others around
them. Languages seem to share certain properties, although many of these include exceptions.
There is no defined line between a language and a dialect. Constructed languages such as
Esperanto, programming languages, and various mathematical formalisms are not
necessarily restricted to the properties shared by human languages.

A variety of verbal and non-verbal means of communicating exists such as body language, eye
contact, sign language, paralanguage, haptic communication, chronemics, and media
such as pictures, graphics, sound, and writing.

Convention on the Rights of Persons with Disabilities also defines the communication to
include the display of text, Braille, tactile communication, large print, accessible multimedia,
as well as written and plain language, human reader, and accessible information and
communication technology.[1]

[edit] Nonverbal communication

Nonverbal communication describes the process of conveying meaning in the form of non-
word messages. Research shows that the majority of our communication is non verbal, also
known as body language. some of non verbal communication includes gesture, body language
or posture; facial expression and eye contact, object communication such as clothing,
hairstyles, architecture, symbols infographics, and tone of voice as well as through an
aggregate of the above. Non-verbal communication is also called silent language and plays a key
role in human day to day life from employment relations to romantic engagements.

Speech also contains nonverbal elements known as paralanguage. These include voice quality,
emotion and speaking style as well as prosodic features such as rhythm, intonation and stress.
Likewise, written texts include nonverbal elements such as handwriting style, spatial
arrangement of words and the use of emoticons to convey emotional expressions in pictorial
form.

[edit] Visual communication

Visual communication is the conveyance of ideas and information through creation of visual
representations. Primarily associated with two dimensional images, it includes: signs,
typography, drawing, graphic design, illustration, colours, and electronic resources, video and
TV. Recent research in the field has focused on web design and graphically oriented usability.
Graphic designers use methods of visual communication in their professional practice.
11

[edit] Oral communication

Oral communication, while primarily referring to spoken verbal communication, typically
relies on both words, visual aids and non-verbal elements to support the conveyance of the
meaning. Oral communication includes discussion, speeches, presentations, interpersonal
communication and many other varieties. In face to face communication the body language and
voice tonality plays a significant role and may have a greater impact on the listener than the
intended content of the spoken words.

A great presenter must capture the attention of the audience and connect with them. For example,
out of two persons telling the same joke one may greatly amuse the audience due to his body
language and tone of voice while the second person, using exactly the same words, bores and
irritates the audience.[citation needed] Visual aid can help to facilitate effective communication and is
almost always used in presentations for an audience.

A widely cited and widely misinterpreted figure used to emphasize the importance of delivery
states that "communication comprise 55% body language, 38% tone of voice, 7% content of
words", the so-called "7%-38%-55% rule".[2] This is not however what the cited research shows –
rather, when conveying emotion, if body language, tone of voice, and words disagree, then body
language and tone of voice will be believed more than words.[3][clarification needed] For example, a
person saying "I'm delighted to meet you" while mumbling, hunched over, and looking away will
be interpreted as insincere. (Further discussion at Albert Mehrabian: Three elements of
communication.)'

[edit] Written communication and its historical development

Over time the forms of and ideas about communication have evolved through progression of
technology. Advances include communications psychology and media psychology; an emerging
field of study. Researchers divides the progression of written communication into three
revolutionary stages called "Information Communication Revolutions" (Source needed).

During the 1st stage written communication first emerged through the use of pictographs. The
pictograms were made in stone, hence written communication was not yet mobile.

During the 2nd stage writing began to appear on paper, papyrus, clay, wax, etc. Common
alphabets were introduced and allowed for the uniformity of language across large distances. A
leap in technology occurred when the Gutenberg printing-press was invented in the 15th century.

The 3rd stage is characterised by the transfer of information through controlled waves and
electronic signals.

Communication is thus a process by which meaning is assigned and conveyed in an attempt to

create shared understanding. This process, which requires a vast repertoire of skills in
interpersonal processing, listening, observing, speaking, questioning, analyzing, gestures and
evaluating enables collaboration and cooperation.[4]

Barriers to successful communication include message overload (when a person receives too
many messages at the same time), and message complexity.[5]
12

BARRIERS TO EFFECTIVE COMMUNICATION

No matter how good the communication system in an organisation is, unfortunately

barriers can and do often occur. This may be caused by a number of factors which can
usually be summarised as being due to physical barriers, system design faults or
additional barriers.

Physical barriers  are often due

to the nature of the environment.
Thus, for example, the natural
barrier which exists, if staff are
located in different buildings or on
different sites.
Likewise, poor or outdated
equipment, particularly the failure of
management to introduce new
technology, may also cause
problems.
Staff shortages are another factor
which frequently causes
communication difficulties for an
organisation.
Whilst distractions like background
noise, poor lighting or an
environment which is too hot or cold
can all affect people's morale and
concentration, which in turn interfere
with effective communication.
System design  faults refer to
problems with the structures or
systems in place in an organisation.
 Examples might include an
organisational structure which is
unclear and therefore makes it
confusing to know who to
communicate with.
Other examples could be inefficient
or inappropriate information
systems, a lack of supervision or
training, and a lack of clarity in roles
and responsibilities which can lead
to staff being uncertain about what
is expected of them.
13

Attitudinal barriers  come

about as a result of problems with
staff in an organisation.
These may be brought about, for
example, by such factors as poor
management, lack of consultation
with employees, personality conflicts
which can result in people delaying
or refusing to communicate, the
personal attitudes of individual
employees which may be due to
lack of motivation or dissatisfaction
at work, brought about by
insufficient training to enable them
to carry out particular tasks, or just
resistance to change due to
entrenched attitudes and ideas.

OTHER COMMON BARRIERS TO EFFECTIVE COMMUNICATION

INCLUDE:

Psychological factors  such as people's

state of mind. We all tend to feel happier and
more receptive to information when the sun
shines.
Equally, if someone has personal problems
like worries about their health or marriage,
then this will probably affect them.
Different languages  and cultures
represent a national barrier which is
particularly important for organisations
involved in overseas business.
Individual linguistic ability  is also
important. The use of difficult or inappropriate
words in communication can prevent people
from understanding the message.
Poorly explained or misunderstood messages
can also result in confusion. We can all think
of situations where we have listened to
something explained which we just could not
grasp.
14

Physiological barriers  may result from

individuals' personal discomfort, caused, for
example, by ill health, poor eye sight or
hearing difficulties.

Presentation of information  is also

important to aid understanding.
15

The Basic Essentials of Leadership

There are literally hundreds of books written on leadership, and eventually there will be
dozens of articles posted on this website, but when you strip everything else away, an
effective leader has one overriding characteristic...

VISION

Who, in their mind can't hear Dr. Martin Luther King state "I have a dream.", and who isn't
immediately inspired when they hear that phrase? (to read the entire transcript from this
speech click here ). You may notice in this speech that Dr. King never asked to be
followed. He simply shared with the masses what HIS dream was. He painted a clear and
vivid picture of what he envisioned his new reality to be. In this case, he envisioned
freedom and equality among all men. If this was a reality that the people who heard him
wanted to share, then they naturally became his followers. Dr. King appeared to have a plan
and a strategic map for making change possible and thus this was somebody worth
supporting.

Similarly, if you read my biography on the about Mike Caldwell page, you will see a
story where during an adventure race 2 teams were following us through a trekking section
to lead them out of the bush. In this instance, although I was a leader who had 8 followers
for limited period of time, my followers were following me for the same reasons Dr. Kings
followers were following him.

1) I had vision. My vision was to make it back to my canoes while Dr. King envisioned
freedom.
2) I had a plan to make it happen. I was going to use my map and compass and chart the
easiest way back to the water. Dr. King was going to use his powers of speech and
motivation to get more and more people to listen.
3) I had the tools to make my plan happen. It was known that I was a successful adventure
racer and regularly gave courses in map and compass navigation. Dr. King already had a
reputation for motivating people for initiating change.
4) Following me was a better alternative than trekking through the forest alone. The groups
that were following me had weak navigation skills, by following me they were assured to
reach their destination. On their own, there was a strong likelihood of becoming lost.
Similarly, by joining Dr. King an individual could play a role in making change happen. On
their own, their efforts would be unrecognized and futile.

Thus we have 2 examples of leadership from both ends of the spectrum. One example deals
with bringing forth freedom to a nation, and the other speaks of a dozen people hiking in
the woods. Yet the basic elements of leadership are the same in both examples.

First you have to have a vision that can motivate others. This means you can't have a
selfish vision and expect others to follow you. If my vision is to earn a million dollars this
year so I can buy a new house and car, why would anybody want to put their effort in to
helping me? However, if I wanted to raise a million dollars this year to develop a treatment
that would cure cancer, I think I would have the support of many more people.
16

Dr. King's vision was to bring freedom and equality to the United States. His vision wasn't to
become president or earn a lot of money giving speeches. If Martin Luther King were alive
today and run for the presidency I believe he would win in a landslide because you wouldn't
be voting for him, you would be voting for a vision that both you and he share.

But vision alone isn't enough, a leader must also possess a strategy and the tools to make
the game plan a reality. There are a number of people in leadership roles today that want
"world peace". Don't we all want world peace? Then why is it today, there is no one over-
riding leader who we support to bring about world peace?

Because nobody has a plan that can realistically be implemented. If I am going to follow
somebody, I don't just want to share in their dream to reach the same destination, I have
to trust they have the plan and the tools to make it there. And I also need to believe that
they can get me there quicker and easier than I could make it on my own.

So if you are aspiring to lead the first thing you need to examine is your values and
motivation. Do you want to lead people for the good of the people or the good of yourself?
There is nothing wrong with having a primary goal that is selfishly motivated. Perhaps your
first priority is to make more money so you can purchase a larger house so that your son
and daughter can each have their own bedrooms. That is an excellent goal and one that will
definitely inspire your spouse and children. But don't expect your coworkers in the office to
get behind you on this one.

If you want to try and lead your coworkers so that you will get noticed by management and
promoted, thus earning more money to buy a house... you probably won't be a very
successful leader. Your primary vision is family oriented and not work focused and
eventually your "followers" will pick up on this.

A leader and his/her followers form a TEAM. Thus the shared vision and motivating factor
needs to be one shared by everyone on that team.

So if a vision, a plan, and the right tools are all that are needed to be a leader, then why
are there so many books and articles on the subject of leadership?

Most of the books today aren't on what is in the heart of a leader, rather they are pertaining
to what makes an effective leader. You may have an excellent, selfless vision, and you may
have created a roadmap that guarantees success, but if you are weak in communicating
your ideas nobody will ever listen to you. This was one of Dr. King's greatest strengths. He
knew how to speak and motivate others.

And regardless of how "bomb proof" you believe your plan to be, there will always be
roadblocks and unforeseen detours along the way. Thus you also need to be a master of
problem solving, minimizing resistance,and managing conflict and change. You also need to
have the ability to motivate yourself and stay true to your values and the vision when times
get rough.

This is why there is so much literature on leadership today. Because there really is much to
know to be effective. But the starting point for any leader is to "know thyself" and examine
your values. Stay true to those two things and before long you will find yourseld in the role
of a leader.
17

Difference between transactional and transformational

leaders
1. Transactional leaders are leaders who guide or motivate their followers in the direction of established
goals by clarifying role and task requirements.
2. Transformational leaders are leaders who provide individualized consideration and intellectual
stimulation and possess charism
a.
3. Transformational leadership is built on top of transactional leadership.
4. The evidence supporting the superiority of transformational leadership over the transactional variety is
overwhelmingly impressive.
a. Transformational leaders motivate subordinates to perform at expected levels by helping them
recognize task responsibilities, identify goals, acquire confidence about meeting desired performance
levels, and understand how their needs and the rewards that they desire are linked to goal achievement.
b. Transformational leaders motivate individuals to perform beyond normal expectations by inspiring
subordinates to focus on broader missions that transcend their own immediate selfinterests, to concentrate
on intrinsic higher-level goals (such as safety and d security), and to have confidence in their abilities to
achieve the extraordinary missions articulated by the leadership.
c. Transformational leadership is not a substitute for transactional leadership; it is an enhancement.
d. Charisma is the leader’s ability to inspire pride, faith, and respect; to recognize what is really
important, and to articulate effectively a sense of mission, or vision, that inspires followers.
1) Charisma was once thought to be an inborn personality trait.
See below for more information.

Transactional leadership is basically rewarding your employees with bonuses (money) or gifts...etc So
they motivate employees by financial rewards

Whereas a Transformational leader motivate their employees with visions and inspiring talk...etc

Depending on the type of employees, transactional works better with shallow ones, where as
transformational works better with ones that strive to work.
18

Human resources purpose and role

In simple terms, an organization's human resource management strategy should maximize return
on investment in the organization's human capital and minimize financial risk.

Human resource managers seek to achieve this by aligning the supply of skilled and qualified
individuals and the capabilities of the current workforce, with the organization's ongoing and
future business plans and requirements to maximize return on investment and secure future
survival and success.

In ensuring such objectives are achieved, the human resource function is to implement an
organization's human resource requirements effectively, taking into account federal, state and
local labor laws and regulations; ethical business practices; and net cost, in a manner that
maximizes, as far as possible, employee motivation, commitment and productivity.

Key functions
Human Resources may set strategies and develop policies, standards, systems, and processes that
implement these strategies in a whole range of areas. The following are typical of a wide range
of organizations:

 Maintaining awareness of and compliance with local, state and federal labor laws
 Recruitment, selection, and on boarding (resourcing)
 Employee recordkeeping and confidentiality
 Organizational design and development
 Business transformation and change management
 Performance, conduct and behavior management
 Industrial and employee relations
 Human resources (workforce) analysis and workforce personnel data management
 Compensation and employee benefit management
 Training and development (learning management)
 Employee motivation and morale-building (employee retention and loyalty)

Implementation of such policies, processes or standards may be directly managed by the HR

function itself, or the function may indirectly supervise the implementation of such activities by
managers, other business functions or via third-party external partner organizations. Applicable
legal issues, such as the potential for disparate treatment and disparate impact, are also
extremely important to HR managers.

Human resources management trends and influences

In organizations, it is important to determine both current and future organizational requirements
for both core employees and the contingent workforce in terms of their skills/technical abilities,
competencies, flexibility etc. The analysis requires consideration of the internal and external
factors that can have an effect on the resourcing, development, motivation and retention of
employees and other workers.
19

External factors are those largely outside the control of the organization. These include issues
such as economic climate and current and future labor market trends (e.g., skills, education level,
government investment into industries etc.). On the other hand, internal influences are broadly
controlled by the organization to predict, determine, and monitor—for example—the
organizational culture, underpinned by management style, environmental climate, and the
approach to ethical and corporate social responsibilities.

Major trends
To know the business environment an organization operates in, three major trends must be
considered:

1. Demographics: the characteristics of a population/workforce, for example, age, gender or

social class. This type of trend may have an effect in relation to pension offerings, insurance
packages etc.
2. Diversity: the variation within the population/workplace. Changes in society now mean that a
larger proportion of organizations are made up of "baby-boomers" or older employees in
comparison to thirty years ago. Advocates of "workplace diversity" simply advocate an
employee base that is a mirror reflection of the make-up of society insofar as race, gender,
sexual orientation etc.
3. Skills and qualifications: as industries move from manual to more managerial professions so
does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for
the jobs), employers must compete for employees by offering financial rewards, community
investment, etc.

Individual responses
In regard to how individuals respond to the changes in a labor market, the following must be
understood:

 Geographical spread: how far is the job from the individual? The distance to travel to work
should be in line with the pay offered, and the transportation and infrastructure of the area also
influence who applies for a post.
 Occupational structure: the norms and values of the different careers within an organization.
Mahoney 1989 developed 3 different types of occupational structure, namely, craft (loyalty to
the profession), organization career (promotion through the firm) and unstructured
(lower/unskilled workers who work when needed).
 Generational difference: different age categories of employees have certain characteristics, for
example, their behavior and their expectations of the organization.

Framework
Human Resources Development is a framework for the expansion of human capital within an
organization or (in new approaches) a municipality, region, or nation. Human Resources
Development is a combination of training and education, in a broad context of adequate health
and employment policies, that ensures the continual improvement and growth of both the
individual, the organization, and the national human resourcefulness. Adam Smith states, “The
capacities of individuals depended on their access to education”.[2] Human Resources
Development is the medium that drives the process between training and learning in a broadly
fostering environment. Human Resources Development is not a defined object, but a series of
20

organised processes, “with a specific learning objective” (Nadler,1984)[3] Within a national

context, it becomes a strategic approach to inter sectoral linkages between health, education and
employment.[4]

Structure
Human Resources Development is the structure that allows for individual development,
potentially satisfying the organization's, or the nation's goals. Development of the individual
benefits the individual, the organization—and the nation and its citizens. In the corporate vision,
the Human Resources Development framework views employees as an asset to the enterprise,
whose value is enhanced by development, "Its primary focus is on growth and employee
development…it emphasizes developing individual potential and skills" (Elwood, Olton and
Trott 1996)[5] Human Resources Development in this treatment can be in-room group training,
tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a
desired outcome that develops the individual's performance. At the level of a national strategy, it
can be a broad inter-sectoral approach to fostering creative contributions to national productivity.
[6]

Training and development

At the organizational level, a successful Human Resources Development program prepares the
individual to undertake a higher level of work, "organized learning over a given period of time,
to provide the possibility of performance change" (Nadler 1984). In these settings, Human
Resources Development is the framework that focuses on the organization's competencies at the
first stage, training, and then developing the employee, through education, to satisfy the
organization's long-term needs and the individual's career goals and employee value to their
present and future employers. Human Resources Development can be defined simply as
developing the most important section of any business, its human resource, by attaining or
upgrading employee skills and attitudes at all levels to maximize enterprise effectiveness.[2] The
people within an organization are its human resource. Human Resources Development from a
business perspective is not entirely focused on the individual's growth and development;
"development occurs to enhance the organization's value, not solely for individual improvement.
Individual education and development is a tool and a means to an end, not the end goal itself"
(Elwood F. Holton II, James W. Trott Jr).[5] The broader concept of national and more strategic
attention to the development of human resources is beginning to emerge as newly independent
countries face strong competition for their skilled professionals and the accompanying brain-
drain they experience.

Recruitment and selection

Applicant recruitment and employee selection form a major part of an organization's overall
resourcing strategies, which identify and secure people needed for the organization to survive
and succeed in the short- to medium-term. Recruitment activities need to be responsive to the
increasingly competitive market to secure suitably qualified and capable recruits at all levels. To
be effective, these initiatives need to include how and when to source the best recruits, internally
or externally. Common to the success of either are: well-defined organizational structures with
sound job design, robust task and person specification and versatile selection processes, reward,
employment relations and human resource policies, underpinned by a commitment for
strong employer branding and employee engagement and onboarding strategies.
21

Internal recruitment can provide the most cost-effective source for recruits if the potential of the
existing pool of employees has been enhanced through training, development and other
performance-enhancing activities such as performance appraisal, succession planning and
development centres to review performance and assess employee development needs and
promotional potential.

Increasingly, securing the best quality candidates for almost all organizations relies, at least
occasionally if not substantially, on external recruitment methods. Rapidly changing business
models demand skill and experience that cannot be sourced or rapidly enough developed from
the existing employee base. It would be unusual for an organization to undertake all aspects of
the recruitment process without support from third-party dedicated recruitment firms. This may
involve a range of support services, such as: provision of CVs or resumes, identifying
recruitment media, advertisement design and media placement for job vacancies, candidate
response handling, shortlisting, conducting aptitude testing, preliminary interviews or
reference and qualification verification. Typically, small organizations may not have in-house
resources or, in common with larger organizations, may not possess the particular skill-set
required to undertake a specific recruitment assignment. Where requirements arise, these are
referred on an ad hoc basis to government job centres or commercially-run employment
agencies.

Except in sectors where high-volume recruitment is the norm, an organization faced with sudden,
unexpected requirements for an unusually large number of new recruits often delegates the task
to a specialist external recruiter. Sourcing executive-level and senior management as well as
the acquisition of scarce or ‘high-potential’ recruits has been a long-established market serviced
by a wide range of ‘search and selection’ or ‘headhunting’ consultancies, which typically form
long-standing relationships with their client organizations. Finally, certain organizations with
sophisticated HR practices have identified a strategic advantage in outsourcing complete
responsibility for all workforce procurement to one or more third-party recruitment agencies
or consultancies. In the most sophisticated of these arrangements the external recruitment
services provider may not only physically locate, or ‘embed’, their resourcing team(s) in the
client organization's offices, but work in tandem with the senior human resource management
team in developing the longer-term HR resourcing strategy and plan.

Other considerations
Despite its more everyday use, terms such as "human resources" and, similarly, "human capital"
continue to be perceived negatively and may be considered insulting. They create the impression
that people are merely commodities, like office machines or vehicles, despite assurances to the
contrary.

Modern analysis emphasizes that human beings are not "commodities" or "resources", but are
creative and social beings in a productive enterprise. The 2000 revision of ISO 9001, in
contrast, requires identifying the processes, their sequence and interaction, and to define and
communicate responsibilities and authorities. In general, heavily unionised nations such as
France and Germany have adopted and encouraged such approaches. Also, in 2001, the
International Labour Organization decided to revisit and revise its 1975 Recommendation 150 on
Human Resources Development.[7] One view of these trends is that a strong social consensus on
22

political economy and a good social welfare system facilitates labor mobility and tends to
make the entire economy more productive, as labor can develop skills and experience in various
ways, and move from one enterprise to another with little controversy or difficulty in adapting.
Another view is that governments should become more aware of their national role in facilitating
human resources development across all sectors. which includes following[citation needed]

Trans-national labor mobility

An important controversy regarding labor mobility illustrates the broader philosophical issue
with usage of the phrase "human resources". Governments of developing nations often regard
developed nations that encourage immigration or "guest workers" as appropriating human capital
that is more rightfully part of the developing nation and required to further its economic growth.

Over time, the United Nations have come to more generally support the developing nations'
point of view, and have requested significant offsetting "foreign aid" contributions so that a
developing nation losing human capital does not lose the capacity to continue to train new people
in trades, professions, and the arts.[8]

Ethical management
In the very narrow context of corporate "human resources" management, there is a contrasting
pull to reflect and require workplace diversity that echoes the diversity of a global customer
base. Such programs require foreign language and culture skills, ingenuity, humor, and careful
listening. These indicate a general shift through the human capital point of view to an
acknowledgment that human beings contribute more to a productive enterprise than just "work":
they bring their character, ethics, creativity, social connections and, in some cases, pets and
children, and alter the character of a workplace. The term corporate culture is used to
characterize such processes at the organizational level.[citation needed]

Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a
significant part of management concerned with employees at work and with their relationship within the
organization.

According to Flippo, “Personnel management is the planning, organizing, compensation, integration and
maintainance of people for the purpose of contributing to organizational, individual and societal goals.”

According to Brech, “Personnel Management is that part which is primarily concerned with human resource of
organization.”

Nature of Personnel Management

1. Personnel management includes the function of employment, development and compensation- These
functions are performed primarily by the personnel management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with promoting and
stimulating competent work force to make their fullest contribution to the concern.
3. Personnel management exist to advice and assist the line managers in personnel matters. Therefore,
personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, work
methods. The problems and grievances of people at work can be solved more effectively through rationale
personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern.
23

6. It also motivates the employees through it’s effective incentive plans so that the employees provide fullest
co-operation.
7. Personnel management deals with human resources of a concern. In context to human resources, it
manages both individual as well as blue- collar workers.

Role of Personnel Manager

Personnel manager is the head of personnel department. He performs both managerial and operative functions of
management. His role can be summarized as :

1. Personnel manager provides assistance to top management- The top management are the people who
decide and frame the primary policies of the concern. All kinds of policies related to personnel or workforce
can be framed out effectively by the personnel manager.
2. He advices the line manager as a staff specialist- Personnel manager acts like a staff advisor and assists
the line managers in dealing with various personnel matters.
3. As a counsellor,- As a counsellor, personnel manager attends problems and grievances of employees and
guides them. He tries to solve them in best of his capacity.
4. Personnel manager acts as a mediator- He is a linking pin between management and workers.
5. He acts as a spokesman- Since he is in direct contact with the employees, he is required to act as
representative of organization in committees appointed by government. He represents company in training
programmes.

Functions of Personnel Management

Follwoing are the four functions of Personnel Management:

1. Manpower Planning
2. Recruitment
3. Selection
4. Training and Development
24

Economic indicators

Economic indicators or business indicators are markers about an economy. Future

performance predictions and economic performances can be analyzed through these
indicators.

There are economic summaries, various indices, and earnings reports like housing,
unemployment, bankruptcies, Consumer Price Index (a measure for inflation),
broadband internet penetration, stock market prices, industrial production, retail sales,
and money supply changes in economic indicators.

Indicators which change about same time and in same direction with economy are
called coincident indicators. These provide information regarding present economic
state. Coincident indicators include retail sales, GDP, industrial production, and
personal income. A coincident index can be used to identify troughs and peaks in a
business cycle.

These indicators are studied in a branch of macroeconomics called “business cycles”.

Economic indicators have three major attributes - relation to business cycle or an
economy, frequency of data, and timing. In relation to business cycle or economy,
indicators have one of three different economic relationships like procyclic,
countercyclic, and acyclic.

Procyclic economic indicator moves along same direction as an economy. means that
when economy is well, this number increases. An example is gross domestic product
(GDP). Countercyclic economic indicator moves in reverse direction of economy.
Unemployment rate increases as economy gets worse. Acyclic economic indicator
doesn’t have any relation to an economy’s health. An example would be a sports result
which doesn’t have any effect on economy.
25

In frequency of data, most countries release quarterly GDP figures and monthly
unemployment rates. Indicators like Dow Jones Index is immediately available and
changes every minute.

In timing, indicators of economy can be leading, lagging, or coincident. It indicates

timing of changes of indicators in relation with economic changes. In leading times,
indicators change before economy changes. Stock market returns are such indicators
that decline before economy declines and improve before economy begins to grow out
of recession.

Lagged economic indicator doesn’t change direction till a few quarters after changes in
economy. One example is unemployment rate which increases after 2 or 3 quarters
following an economic improvement