FY – Semester 1

PRINCIPLES OF
MANAGEMENT
NATURE AND SCOPE OF
MANAGEMENT
INTRODUCTION
Managing has become one of the most important areas of human
activity.

MANAGEMENT: Manage Men Tactfully

WHAT IS AN
ORGANIZATION?
A formal and coordinated group of people who
function to achieve particular goals

These goals cannot be achieved by individuals

acting alone
WHY DO PERSONS FORM
GROUPS?
People work together to meet their mutual needs.

Man is a social animal and likes to live with other people.

Satisfaction of economic and social needs.

To achieve goals which cannot be achieved by individual efforts.

MANAGEMENT COMPONENTS
Management is applied to all kinds of organization.

Management is applied to everybody at all levels in an organization.

The aim of all managers is to generate profit.

Management is related with productivity .

Functions of managers are – Planning, organizing, staffing, leading

and controlling.
BASIC PURPOSE OF
MANAGEMENT
EFFICIENTLY
Using resources wisely and
in a cost-effective way
And

EFFECTIVELY
Making the right decisions and
successfully implementing them
NATURE/FEATURES OF
MANAGEMENT
Management is a process
Group activity
Involves getting things done through people
Result oriented
Follows established principles
Management need not be ownership
Dynamic in nature
Adopts professional approach
Aided but cannot be replaced by computers
All pervasive
Intangible
Management is required at all levels
Management is a system of authority
Management has a vast scope
Management is an art, science and a profession
PROCESS OF MANAGEMENT
Planning

Controllin Organizin
g g

Directing Staffing
 6 M’S OF MANAGEMENT
Men

Material

Machine

Method

Money

Market
SCOPE OF MANAGEMENT
Subject matter of management

Functional areas of management

Financial management
Personnel management
Purchasing management
Production management
Maintenance management
Transport management
Marketing management
Office management
Development management
CONTINUED…
Management is an interdisciplinary approach

Universal application

Three essentials of management:

Human relations, quantitative techniques and scientific method

Agent of change
MANAGEMENT AS AN ART
Art is the most creative of all human pursuits.

It is a technique of using:
Information
Knowledge
Expertise
Experience
JUSTIFICATION
Management is creative:

It is an art of decision-making. Every manager has to decide the best available options.
JUSTIFICATION
Management is based on three factors:

Management like art, is based on three factors:

judgement
feeling
intuition.
JUSTIFICATION
Management is innovative.

Management involves the use of skills, knowledge and intelligence.

MANAGEMENT AS A SCIENCE
Science is defined as an organized body of knowledge pertaining to a
specific area, critically tested and generalized into theories,laws and
principles.
JUSTIFICATION
Scientific methods for decision making

Management is a body of knowledge

Universal application of management principles.

MANAGEMENT AS A
PROFESSION
Profession is an occupation carried on by professional people like
doctors, lawyers, architects, etc.

It involves application of expert knowledge to solve specific problems

or to handle specific task.
JUSTIFICATION
Formal education required

Expert knowledge

Specialization in particular fields

Socially responsible
MANAGER
A person who plans, organizes, directs and controls the allocation of
human, material, financial, and information resources in pursuit of the
organization’s goals.
MANAGERIAL SKILLS
Technical

Interpersonal/human

Conceptual

Diagnostic
OTHER MANAGERIAL SKILLS
Administrative skills
Analytical skills
Communication skills
Interpersonal skills
Time management skills
Computer skills
Political skills
THE NATURE OF MANAGERIAL
WORK
How CEOs spend a typical day—
Desk
Work
22
%

Scheduled
Meetings Unscheduled
59 Meetings
% 10
%
Telephone
6%

Touring Facilities
3%
MANAGERIAL ROLES
Interpersonal
Figurehead
Leadership
Liaison(link)

Informational
Monitor
Disseminator
Spokesperson

Decisional
Entrepreneur
Conflict handler
Resource allocator
Negotiator
KINDS OF MANAGERS BY
LEVEL AND AREA
Levels of Management

Top managers

Middle
managers

First-line
managers
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ar

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Areas of Management
H
TOP LEVEL MANAGEMENT
Top level Management is the ultimate authority in an enterprise.

It finalizes the overall objectives and formulates the master strategy and
broad business policies.
TOP LEVEL MANAGEMENT-MAIN
FUNCTIONS
Determining the business objectives
Formulation of business policies and preparation of plans for achieving
the objectives.
Designing an appropriate organizational framework.
Bringing together resources to put plans into practice.
Exercising effective supervision over all the departments.
Introducing suitable remedial measures, if shortfalls are noticed.
MIDDLE LEVEL MANAGEMENT
The middle level management comprises of heads of departments such
as production, marketing and finance manager.

These managers are expected to understand and support the ideas and
policies of the top management.
FUNCTIONS OF MIDDLE LEVEL
MANAGEMENT
Selection of efficient executives and staff.

Introduction of proper procedures and operating routines for orderly

functioning of the departments.

Motivating personnel for higher productivity and rewarding them.

Collecting reports, statistical information and similar other records

about the work done in the department and forwarding the same with
necessary observations to the top management.

Securing better performance by revising departmental policies.

LOWER LEVEL MANAGEMENT
The lower level management includes foremen, supervisors and
sub-departmental executives assisted by workers and clerks.

Their authority is limited.

They have to abide by the decisions taken by the higher management.

FUNCTIONS OF LOWER LEVEL
MANAGEMENT
Directing and supervision over the entire work force in the factory, in the
office and in the sales field.

Acting a link between the higher management and the workers.

Communicating the management’s decisions and policies to the workers.

Reporting actual performance of the workmen along with their difficulties

and problems to the higher level management.

Maintaining discipline amongst the workers.

THE MANAGERIAL GRID
H
1,9 9,9
i Country club management Team management
9
g Thoughtful attention needs of Work accomplishment is from
people committed people, interdependence
h for satisfying relationships leads to through a “common stake” in
8 A comfortable, friendly organization
organization purpose leads to relationship
7 of trust and respect
atmosphere and work tempo
Concern for

6 5,5
people

Organization Man Management

Adequate organization performance
5 possible through balancing the
necessity to
get out work with maintaining
4
morale of the people at a satisfactory
level

3 1,1 9,1
Impoverished Management Authority-Obedience
Exertion of minimum effort to get Efficiency in operations results
2 required work done is appropriate from arranging conditions of
L to sustain organization work in such a way that human
o membership elements interfere to a minimal
1 degree
w
1 2 3 4 5 6 7 8 9
Concern for
Low High
CONCEPT OF POSDCORB
Planning

Budgeting Organizing

Reporting Staffing

Coordinating
and Directing
Controlling
TRADITIONAL VS
CONTEMPORARY
MANAGEMENT
TRADITIONAL MANAGEMENT
Based on Old conditions and traditions
Family based business
Preference for same community
Autocratic Style
Decisions by owners
Emphasis on profit and quick results
Priority to traditions
Reward for personal loyalty
Limited professionalisation
CONTEMPORARY
MANAGEMENT
Large size units
Use of modern technology
Growing consumer orientation to business
Growing market competition
Globalisation of business
Participative management
SCOPE OF CONTEMPORARY
MANAGEMENT
Six Sigma

Kaizen

Benchmarking

TQM

JIT

BPR
HENRI FAYOLS PRINCIPLES
Division of Work

Authority and Responsibility

Discipline

Unity of Command

Unity of Direction

Subordination of individual interest to general interest

Centralization

Remuneration

Scalar Chain

Order

Equity

Stability of tenure

Initiative

Esprit De Corps
FW TAYLOR’S SCIENTIFIC
MANAGEMENT
Scientific Task Setting
Work Study
Scientific Method
Functional Foremanship
Mental Revolution
Cost Accounting
Differential payment
Standardisation
Specialisation
Reorganisation of supervision
PETER DRUCKER
MBO
Nature of Management
Dynamic Organisation
Organisation Structure
Management Functions
Federalism
PLANNING
PLANNING

“Planning involves selecting mission and objectives

and the actions to achieve them; it requires
decision-making that is, choosing from alternative
courses of action.”
-Heinz and Koontz

“A plan is a trap laid to capture.”

-Allen
 PLANNING PROCESS

Analyzing Establishing
Determining
opportunities objectives
Planning
premises

Quantifying plans
by Identification of
making budgets alternatives

Formulating of Choice of Evaluation of

Supporting plans Alternative plans alternatives

44
TYPES/ELEMENTS OF
PLANNING Standing Single Use
Plans Plans

Mission Programmes

Objectives Budgets

Policies Schedules

Procedures Projects

Rules Standards

Strategies

45
CONTINUED…
▪Corporate Planning

▪Short-range and long-range plans

▪ Short-range plans = 1 year or less
▪ Intermediate-range plans = 1 to 2 years
▪ Long-range plans = 3 or more years

46
CONTINUED…
Strategic and operational plans
Strategic plans — set broad, comprehensive, and
longer-term action directions for the entire organization.

Operational plans — define what needs to be done in

specific areas to implement strategic plans.
Production plans
Financial plans
Facilities plans
Marketing plans
Human resource plans

47
CONTINUED…
Proactive Planning

Reactive Planning

Formal Planning

Informal Planning
LIMITATIONS OF PLANNING
Time consuming and expensive
Rigidity
Absence of correct information
False sense of security
Resistance to change
Environmental constraints
Dynamic conditions

49
MANAGEMENT BY
OBJECTIVE (MBO)
50
OBJECTIVES
Objectives are the goals which the management wishes the organization to
achieve. (Specific Targets)

Objective should be distinguished from other words “Vision”, ”Purpose”

and “Mission”

Vision: is the dream that an entrepreneur creates in his /her waking hours
of his/her preferred future.

Purpose: The primary role defined by the society in which it operates.

(Broad Aim)

Mission: It is the unique aim that sets the organisation apart from others of
its types. (specialization)

51
S.M.A.R.T OBJECTIVES

52
MANAGEMENT BY OBJECTIVES
(MBO)
A method whereby managers and
employees define objectives for every
department, project, and person and use
them to monitor subsequent performance.

53
PROCESS OF MBO
Setting Formulation of Setting
organizational departmental subordinates
objectives objectives objectives

Periodic
Developing Establishing
review
action plans check points
progress

Performance Employee
appraisal counseling

54
 CASE STUDY
The Marketing manager of AMK Enterprises, Roopali Deshmukh (Deshmukh) stepped out of the
conference hall in a pensive mood after an important meeting called by the CEO. The meeting was
attended by the heads of various departments in the company and was convened to discuss the
targets for the coming assessment year. Deshmukh had a formidable sales target to achieve and
wondered how she would be able to meet those seemingly impossible goals. This fear was further
aggravated by the fact that the productivity levels of employees in the company had been falling.
Deshmukh was under tremendous pressure from the management to improve the performance of her
team. She also had to deal with the decreasing levels of employees’ morale in her 24-member
team. As a first step, Deshmukh informed her team members about a meeting that she planned to
hold the next day. She then drafted a plan of action that she intended to discuss with her team.
The next day, Deshmukh began the meeting by informing her team members about the corporate
meeting she had attended. She then said, “We have a difficult task ahead for this year, and your
participation and involvement is essential to achieve the goals”. She then invited suggestions from
her team members regarding the role to be played by each of them. The meeting then progressed
on to setting of individual targets for by each team member as, it was felt that this would help in
accomplishing the organizational goals. Specific goals were, therefore, set and agreed upon by all
the team members. The team aimed to increase the organizational profits by 18% over the next six
months. They sketched out a plan of action to achieve the targets set for the team and decided that
they would meet once every two months to monitor their progress.

55
 Two months later, the team met again and received their progress. Deshmukh also gave a feedback
on the performance of every member of the team. The team then collectively identified the areas
of improvement and decided upon the measures they would take to overcome their deficiencies. This
continued for the rest of the year. The final review meeting was held just before the yearly
corporate meeting attended by the top management. The team was surprised to see that they had
achieved their targets.
Thus, effective planning and control mechanisms helped the team achieve their short term goals, and
this in turn, helped in the achievement of the organizational objectives. Besides, the employees were
also motivated as the management gave adequate recognition to their involvement and
participation in achieving team goals. The target to be achieved by the team was highly
challenging. This further motivated the team members as they had better opportunities to prove
their problems solving skills. Thus, the outstanding performance of the sales team helped the
organization achieve in the long term.

Questions :
1. Roopali Deshmukh followed the practice of management by objectives (MBO) while setting goals
for team members. Discuss the various phases of the MBO process that helped her team achieve its
goals.

2. Explain briefly the process of MBO and the various advantages of implementing MBO in
organizations.

56
MANAGEMENT BY EXCEPTION
(MBE)
OGSM
DECISION MAKING
 DECISION
MAKING.......????

•
 DECISION
MAKING

A decision is one when there are different

things you can do and you pick one of
them. You make lots of decisions everyday!
SOME DECISIONS ARE EASY
LIKE.......

What to eat in breakfast????

WHAT TO WEAR????
SOME DECISIONS ARE DIFFICULT
LIKE.......

Choosing a career
CHOOSING GOOD
FRIENDS
CHANGING A
JOB
IN EVERY SITUATION YOU HAVE
TO SEARCH FOR...
HOW TO MAKE RIGHT
DECISIONS???
 EXAMPL
E
Ayush really wants a new cell.
Unfortunately, the one he
wants costs Rs. 15000, and he
has only Rs. 10000. He
wonders how he will get the
rest of thel money?
 STEP 1:
RELAX

Take a deep breath and let all of the

air out.
 STEP 2: SAY SOMETHING
POSITIVE....I CAN DO THIS...I
CAN DEAL WITH THIS...
• Thi
s

This gives you confidence and makes you

feel good about yourself.
STEP 3: IDENTIFY THE
PROBLEM

Try to search out actual

problem.
STEP 4: WHAT ARE YOUR
CHOICES??

Think of all the possible

solutions.
 STEP 5: CONSIDER THE
CONSEQUENCES OF YOUR
SOLUTIONS.

List both the negative and

positive
consequences.
STEP 6: WHAT IS
IMPORTANT TO
YOU???
STEP 7: MAKE THE
DECISION
INTRODUCTION
Decision making can be regarded as the mental processes resulting in
the selection of a course of action among several alternatives. Every
decision making process produces a final choice. The output can be an
action or an opinion of choice.

81
DEFINITION

Decision :

Making a choice from two or more alternative.

Decision Making:
The process of examining your possibilities and options,
comparing them, and choosing a course of action.

82
DECISION-MAKING PROCESS
1. Identifying a problem

2. Identifying decision criteria

3. Allocating weights to criteria

4. Developing alternatives

5. Analyzing alternatives

6. Selecting an alternative

7. Implementing the alternative

8. Evaluation (of decision effectiveness)

6 C'S OF DECISION MAKING

1. Construct
.

2. Compile.

3. Collect.

4. Compare
.

5. Consider.
 DECISION-MAKING STYLES
Reflexive Style
Makes quick decisions without taking the time to get
all the information that may be needed and without
considering all the alternatives.

Reflective Style
Takes plenty of time to make decisions,
gathering considerable information and
analyzing several alternatives.

Consistent Style
Tends to make decisions without either rushing
or wasting time.
TYPES
Programmed and Non Programmed

Major and minor

Routine and Strategic

Policy and Operative

Organizational and Personal

Individual and Group Decisions

Long term, departmental and Non economic

DECISION MAKING
TECHNIQUES
Pareto analysis
SWOT
NGT
Group discussions
Break even analysis
Financial analysis
Delphi technique
Brainstorming
 PARETO ANALYSIS
This is the idea that 80% of tasks can be completed in 20% of
the disposable time. The remaining 20% of tasks will take up
80% of the time. This principle is used to sort tasks into two
parts.

The 80-20-rule can also be applied to increase productivity: it is

assumed that 80% of the productivity can be achieved by doing
20% of the tasks. Similarly, 80% of results can be attributed to
20% of activity. If productivity is the aim of time management,
then these tasks should be prioritized higher.

Pareto's Principle, the 80/20 Rule, should serve as a daily

reminder to focus 80 percent of your time and energy on the 20
percent of you work that is really important. Don't just "work
smart", work smart on the right things
NOMINAL GROUP THINK

The NGT is designed to help all team members participate and

express opinions while still building team consensus

The nominal group technique is a structured decision making

process in which group members are required to compose a
comprehensive list of their ideas or proposed alternatives in
writing

NGT is designed to help with group decision making by ensuring

that all members participate fully.
h
DELPHI TECHNIQUE

Another technique which capitalises group's resources, while

avoiding several possible disadvantages of relying on group
decision-making processes

This approach, called the Delphi Technique, is similar to NGT in

several respects, but also differs significantly in that the
decision-makers never actually meet.

Its greatest advantage is that it avoids many of the biases and

obstacles associated with interacting groups (that is, groups
where the members meet face-to-face)
STEPLADDER TECHNIQUE

A problem-solving structure recently proposed as a solution to

the problem of unequal participation in groups.
The technique is intended to improve group decision-making
by structuring the entry of group members into a core group.
Encourages all members to contribute on an individual level
before being influenced by anyone else.
This results in a wider variety of ideas, it prevents people from
"hiding" within the group, and it helps people avoid being
"stepped on" or overpowered by stronger, louder group members.
GROUP DECISION-MAKING

The factors requiring group decisions

include:

1. Involving sensitive issues

2. High cost alternatives

3. Involving very high risk factor

4. Strategic impact
“ Successful leaders have the courage to take action
while others hesitate.” - John C. Maxwell
BARRIERS TO GOOD DECISION MAKING

1. Hasty - Making quick decisions without having

much thought.

2. Narrow - Decision making is based on very

limited information.

3. Scattered - Our thoughts in making decisions

are disconnected or disorganized.

4. Fuzzy - Sometimes, the lack of clarity on

important aspects of a decision causes us to
overlook certain important considerations.
ORGANIZING
MEANING OF ORGANIZING
The process of arranging people and other resources to work together to accomplish a goal.

It is the process of establishing relationship among the people

working in an organization.
DEFINITION
Organizing is the process of identifying and grouping the work to be
performed, defining and delegating the responsibility and authority
and establishing a pattern of relationship for the purpose of enabling
people to work most effectively to accomplish objective.
Louis Allen
NATURE OF ORGANIZING
Managerial function
Concerned with group activity
Pattern or structure or chain of relationships
Common objectives
Group of individuals
Division of work
Coordination
Authority
Responsibility
Rules and regulation
ORGANIZATION STRUCTURE
The system of tasks, workflows, reporting relationships, and communication
channels that link together diverse individuals and groups.

Organisational chart: it is a diagrammatic presentation of relationships in an

enterprise.

FORMAL ORGANISATION
INFORMAL ORGANISATION
FORMAL ORGANIZATION

The structure of the organization in its official

state.

The formal organization is a system of well defined jobs, each

bearing a definite measure of authority, responsibility and
accountability.
INFORMAL ORGANIZATION
A “shadow” organization made up of the unofficial, but
often critical, working relationships between
organization members.

It is a joint personal activity without conscious common

purpose through contributing to joint results
CENTRALIZATION
Centralization occur in small enterprise where, the
manager handles all the situation, takes decision himself
and entrusts only implementation to the subordinates.

There is a direct link between the proprietor and his

employees.

He personally supervises all managerial functions.

DECENTRALIZATION
Decentralization means the division of a group of functions
and activities into relatively autonomous units with overall
authority and responsibility for their operation delegated
to a head for each unit.
DEPARTMENTATION
According to James and Stoner, “Departmentation is the grouping of
work functions so that similar and logically related activities occur
together.”
BASES OF DEPARTMENTATION
Functional
Product
Geographical
Process
Customer
Time
Alpha Numerical
FUNCTIONAL
DEPARTMENTATION
Board of directors

Managing/general
manager

Personnel Dept Finance Dept Production Dept Marketing Dept

PRODUCT DEPARTMENTATION
Board of
directors

Managing
director

Passenger
Jeeps trucks
cars

Marketing
research

Advertising

Sales
 GEOGRAPHICAL
DEPARTMENTATION
Head
Office

Western Eastern Southern Northern

zone zone zone zone

Jalendhar Chandigarh New Delhi Ajmer

division division division Division

Branch
PROCESS DEPARTMENTATION Board of
directors

Managing
director

Production Finance General Sales

Manager Manager Manager manager

Spinning

Dyeing

Bleaching

printing
CUSTOMER
DEPARTMENTATION Board of
directors

Managing director

Production Finance General Marketing

Wholesale

Retail

Exports
TIME DEPARTMENTATION
Supervisor

Day Shift Evening Shift

Night Shift
AUTHORITY
Authority is the right to give orders and the power to exact obedience.

There are three kinds of authority:

Authority of knowledge

Authority of position

Legal authority
SOURCES OF AUTHORITY
Formal authority Theory

Acceptance Theory

Competency Theory
RESPONSIBILITY
The obligation to perform assigned tasks.

Supervisors may have authority, but may have trouble getting others to act in the
desired way.

By accepting the position, supervisors are accepting the responsibility to achieve

the goals of the organization.

A supervisor’s success is dependent on his or her ability to meet the organization’s

objectives.

The supervisor has the authority and responsibility to accomplish the tasks and is
held accountable for the outcome.
ACCOUNTABILITY
It is the liability for the proper discharge of duties by the subordinate.

It is the obligation to carry out responsibility and exercise authority in terms of

performance standards established

“Accountability is the obligation of an individual to report formally to his

superior about the work he has done to discharge the responsibility.”
McFarland
DELEGATION OF AUTHORITY

By means of delegation, the manager extends his

area of operations, for without delegation, his
actions are confined to what he himself can
perform.
 PROCESS OF DELEGATION
To size up the work load

Assignment of work

Granting authority

Creation of Accountability
SPAN OF MANAGEMENT
It is also called
as span of
control or
span of supervision.

It refers
to the number
of
subordinates that
report directly to
a single manager
or supervisor.
 TWO TYPESOF SPAN
NARROW SPAN OF MANAGEMENT
Tall organization.
Manager oversees “ few”subordinates.
better communication.
example : handicraft , ivory work ,
etc.
WIDESPAN OF MANAGEMENT
Flat organization .
Manager oversees “large” number of
subordinates.
Less overhead cost.
example: large firms .
 SPAN
narrow
span of OF
control CONTRO
L
FACTORS DETERMINING THE
SPAN OF MANAGEMENT
Ability of the managers
Ability of the employees
Time available for supervision
Well defined authority and responsibility
Degree of decentralization
Effectiveness of communication
Control mechanism
Geographic location
Nature of work
Staff assistance
Type of technology
Levels of management
THEORY OF GRAICUNA’S
Hewas a French
management
consultant.
Hedeveloped a
formula for
analyzing superior
subordinate
relationship.
THREE TYPES OF
RELATIONSHIP
DIRECT RELATIONSHIP (SUPERIOR HAS
DIRECT LINK WITH SUBORDINATES).

Direct group relationship(arises

between manager and group
of
subordinates ).

Gross relationship ( relationship

among subordinates).
DIRECT SINGLE
RELATIONSHIP
DIRECT GROUP
RELATIONSHIP
GROSS RELATIONSHIP
ORGANIZATION
STRUCTURE
 INTRODUCTION
Identifies activities required to achieve objectives.

Groups activities into workable units also called departmentation.

Assigns duties and responsibilities to subordinates to achieve assigned tasks.

Delegates authority necessary and useful for the accomplishment of tasks

assigned.

Establishes superior-subordinate relationships.

Provides a system of co-ordination for integrating activities of individuals and

departments.
DETERMINING THE TYPE OF
STRUCTURE
Activities Analysis

Decision analysis

Relations Analysis
FEATURES OF A GOOD
ORGANIZATION STRUCTURE
Simple
Flexible
Clear line of Authority
Application of Ultimate responsibility
Proper delegation of Authority
Minimum possible managerial levels
Unity of Direction and command
Proper emphasis on Staff
Provision for Top management
 TYPES OF ORGANISATION
STRUCTURES

1. Line/Simple Organisation structure.

2. Line and staff Organisation structure.
3. Functional /Bureaucracy Organisation structure.
4. Committee organisation
5. Project Organization
6. Matrix Organisation structure.

133
LINE ORGANIZATION
Line structure consist of direct vertical relationship which connects the
position and task of each level with those above and below it.

It represent the structure in direct virtual relationship through which

authority travels.

Oldest and the simplest form

Top-level management takes all major decisions and issues directions

for actual execution.
CONTINUED….
TYPES OF LINE
ORGANIZATION
Pure Line Organization

Departmental Line Organization

PURE LINE ORGANIZATION
Works
Manager

Foreman Foreman Foreman

Dept1 Dept 2 Dept 3

Workers Workers Workers

DEPARTMENTAL LINE
ORGANIZATION
Factory
Superintendent

Foreman Foreman Press Foreman

Shearing Dept Dept Welding Dept

Workers Workers Workers

 ADVANTAGES
Simplicity
Clear Definition of authority and responsibility
Unity of Command
Prompt decisions
Discipline
No scope of confusion
Quick communication, high efficiency, flexibility and high employee morale.
Economical
 DISADVANTAGES
No Specialization
Overburdened
Non-availability of experts
Favouritism
Dependence on limited executives
Autocratic control
Instability
Unsuitable
LINE AND STAFF
ORGANIZATION
• Combines line departments and staff departments.

• Line departments participate directly in decisions that

affect the core operations of the organization.

• Staff departments lend specialized technical support.

• The line executives are doers were as staff refers to

experts and act as thinkers.
CONTINUED…
ADVANTAGES
Specialization
Better coordination
Flexible
Expert advice
Better decision
Reduction of Burden
Discipline
Employees Development
Undivided Responsibility
DISADVANTAGES
Line staff conflicts
Confusion
Expensive
Overdependence
Delay in decision making
Ineffective staff
Coordination
Frustration
HOW TO RESOLVE THE CONFLICTS?
FUNCTIONAL ORGANIZATION
A functional organizational structure is one on which the tasks,
people, and technologies necessary to do the work of the business are
divided into separate “functional” groups (such as marketing,
operations, and finance) with increasingly formal procedures for
coordinating and integrating their activities to provide the business’s
products and services .
CONTINUED…
ADVANTAGES
Specialization
Reduction in functional heads burden
Economical
Coordination
Higher efficiency
Better control
DISADVANTAGES
No unity of command
Coordination problem
Complexity of relationship
Centralization
Delayed decision
Succession problems
Ineffective control
Expensive
COMMITTEE FORM
A committee is a group of people who meet by plan to discuss or
make a decision for a particular subject

A committee is a group of persons performing a group task in order

to solve certain problems.
TYPES OF COMMITTEES
Formal and informal

Standing/Permanent and Ad hoc/temporary

Executive and Advisory

Line and Staff

Coordinating
PROJECT ORGANIZATION
Project is a complex set of activities which are diverse, specialized
and technical.

The project structure is designed to handle such activities within an

already existing structure.

Example: setting up a thermal power plant, building hospital, etc

 CONTINUED…

President

Project
Project Engineerin
Sales Finance Production Manager
Manager1 g
II

Manufactu Manufactu
Design Test Personnel Quality Design Test Personnel Quality
ring ring
ADVANTAGES
Use of specialized knowledge
Adaptability
Flexibility
Focus of attention
Effective control
Unity of command
Fast decisions
Flexible structure
DISADVANTAGES
Job insecurity
No formal authority
Less loyalty
Problems in motivating project members
Conflict between project and departmental manager
MATRIX ORGANIZATION
▪A matrix organization frequently uses teams of employees to
accomplish work.

▪In the matrix structure, the employees have to work under dual
authority.

▪One authority is functional and the other is project manager

who is an expert in the specific area.

▪In the matrix organisation, the group members have to report to

two bosses i.e functional departmental head and project
manager.
 Board of directors

Managing directors

Production Marketing Finance

manager manager department

Project manager A B C
(a)

Project manager D E F
(b)
157
 ADVANTAGES
Higher motivation(team work).
Better coordination and control.
Reduces pressure of work on top management.
Fullest use of available resources.
Improves efficiency.
 DISADVANTAGES
Dual control on employees
Costly
Difficult to manage
Pressure of work on subordinates.
Impact of stress
STAFFING
INTRODUCTION
Staffing is concerned with obtaining, utilizing and maintaining a
satisfied work force.

It is the process involved in identifying, assessing, placing, evaluating

and directing individuals at work
S Benjamin
RECRUITMENT

Recruiting
Once an organization identifies its human resource
needs through employment planning, it can begin the
process of recruiting potential candidates for actual
or anticipated organizational vacancies.
It brings together those with jobs to fill and those
seeking jobs.
 SOURCES OF
RECRUITMENT

Internal External
 SOURCES OF RECRUITMENT

Internal Sources:
Promotions
Transfers
Job postings
Recall of retired and ex-employees
Employee referrals
Skills inventories
HRIS
CONTINUED….
Advantages of Internal Source:
Familiarity
Saving on costs and time
Greater motivation
Morale
Reduced employee turnover
Loyalty and commitment
Limitations:
Fresh talent
Restricted choice
Unavailability of talent
Favoritism
Discontent
CONTINUED…
External Sources:
Campus recruitment
Advertisements
Employment agencies
Employee recommendations
Professional bodies
Deputation
Poaching
Unsolicited or casual applications
E-recruitment/online recruitment
CONTINUED…
Advantages of Internal Source:
New talent and approach
Wider choice
Maintain balance
Start-ups

Limitations:
Expensive
Time consuming
Affects morale
Training and orientation
Selection – the process by which an
organization chooses from a list of
applicants the person or persons who
best meet the selection criteria for the
position available, considering current
environmental conditions
SELECTION PROCESS
Preliminary interview

Application blank

Selection test

Employment interview

Medical Examination

Reference Checks

Final Selection
PRELIMINARY INTERVIEW
It is the first step in the selection procedure
Objectives of this interview is to discard those candidates who are
totally unqualified for the job
Candidates who seem suitable are given application blanks to fill
 APPLICATION BLANKS

Purposes of Applications
Record of applicant’s interest in the job
Provides a profile of the applicant
Basic record for applicants who are hired
Helps in formulation questions for the interview
SAMPLE APPLICATION FORM
SAMPLE APPLICATION FORM (CONT’D)
SELECTION TESTS
Mechanism that attempts to measure certain characteristics of
individuals,
Types of tests
Aptitude
Ability
Interest
Personality
EMPLOYMENT INTERVIEWS
It serves three purposes:
It is an opportunity to obtain additional information
about the candidate and determine his suitability for
the job
It provides information to the candidate about the
organization, the specific job for which he has applied
and personnel policies
It helps to establish a friendly relationships with the
candidate and motivate suitable candidates to join the
organization.
CONTINUED…
Interviews involve a face-to-face meeting with the
candidate to probe areas not addressed by the
application form or tests
Two strategies for effective use of interviews:
1. Structuring the interview to be reliable and valid
2. Training managers on best interview techniques
CONTINUED…
Types of Interviews:
Unstructured interview
Structured interview
Behavioral Interviews
Candidates are observed not only for what they say, but how they behave.
Role playing is often used.

Stress Interviews.
MEDICAL EXAMINATION
It helps to determine whether the candidate is mentally and physically
fit to perform the job.
It prevents employment of employees suffering from contagious
diseases.
It saves expenditure that the organization may have to incur for
medical treatment of the candidate.
REFERENCE CHECKS
Applicants are frequently asked to provide the
names and addresses of two or three persons who
know them well.
These persons are commonly referred to as
referees or references.
The organization contacts the referees through
mail or by telephone.
These persons may be previous employers, heads
of educational institutions or other public figures
FINAL SELECTION

Experience and
Formal Education
Past Performance

Personal
Physical
Characteristics and
Characteristics
Personality Type
USE OF GROUP
DISCUSSIONS IN SELECTION
It is an important selection tool.
It involves a free exchange if ideas among group
members of the group
The number of participants varies but typically from
8-15 people
The usual time for a GD is between 20-30 minutes
GD is useful for assessing:
Social Skills
Intellectual Skills
Attitudes
DIRECTING
INTRODUCTION
Directing is a complex function that includes all those activities which
are designed to encourage subordinates to work effectively and
efficiently in both the short and long run
PRINCIPLES OF DIRECTION
Directing Objectives
Harmony of the objective
Unity of command
Direct supervision
Unity of direction
Democratic process
STEPS IN DIRECTION
Setting and Defining the Objectives

Organizing the Efforts

Measuring the work

Developing the People

IMPORTANCE OF DIRECTION
Initiates Action

Integrates employee efforts

Gets maximum Out of individuals

Facilitates organization changes

Provides stability and Balance in the Organization

DIRECTING
Issuing orders and instructions
Providing continuing guidance
Maintaining discipline
Motivating subordinates
LEADERSHIP
LEADERSHIP

The ability to influence a group toward the achievement

of goals

“Leadership is the activity of influencing people to strive

willingly for group objectives.”
- George terry
FEATURES OF LEADERSHIP
Influence process
The followers
Reciprocal relationship
Common goals
Commonity of interest between the leader and his followers
Leadership is situational
Power based
Satisfaction of members
Scope of leadership
Leadership is a personal quality
Ability to inspire
FUNCTIONS OF A LEADER
Determination of goals
Organization of activities
Accomplishing coordination
Providing guidance
Building employee morale
Representation of group
Inspiration of employees
Facilitating change
Creating confidence
Resolving conflicts
 MANAGERS VS LEADERS
Manager Characteristics
Leader Characteristics
Administers • Innovates
Maintains • An original
Focuses on systems and structures • Develops
• Focuses on people
Relies on control
• Inspires trust
Short range view
• Long range perspective
Asks how and when • Asks what and why
Eye on bottom line • Eye on horizon
Imitates • Originates
• Challenges the status quo
Accepts the status quo
• Own person
Classic good soldiers • Does the right thing
Does things right
LEADERSHIP TRAITS/QUALITIES
Physical features
Intelligence
Emotional stability
Empathy
Objectivity
Human relations
Motivating skills
Technical skills
Communication skills
Social skills
LEADERSHIP STYLES
Autocratic
Democratic
Bureaucratic
Free Rein/Laissez Faire
Situational Leadership
Paternalistic
Charismatic
Transformational
Transactional
TYPES OF LEADERSHIP STYLE

Autocratic:
Leader makes decisions without reference to anyone else
High degree of dependency on the leader
Can create de-motivation and alienation
of staff
May be valuable in some types of business where
decisions need to be made quickly and decisively
TYPES OF LEADERSHIP STYLE

Democratic:
Encourages decision making
from different perspectives – leadership may be
emphasised throughout
the organisation
Consultative: process of consultation before decisions are
taken
Persuasive: Leader takes decision and seeks to persuade
others that the decision
is correct
TYPES OF LEADERSHIP STYLE
Democratic:
May help motivation and involvement
Workers feel ownership of the firm and its ideas
Improves the sharing of ideas
and experiences within the business
Can delay decision making
TYPES OF LEADERSHIP STYLE
Laissez-Faire:
‘Let it be’ – the leadership responsibilities
are shared by all
Can be very useful in businesses
where creative ideas are important
Can be highly motivational,
as people have control over their working life
Can make coordination and decision making
time-consuming and lacking in overall direction
Relies on good team work
Relies on good interpersonal relations
TYPES OF LEADERSHIP STYLE
Paternalistic:
Leader acts as a ‘father figure’
Paternalistic leader makes decision but may consult
Believes in the need to support staff
 CHARISMATIC LEADERSHIP
Key Characteristics of Charismatic leaders
1. Self Confidence- They have complete confidence in their judgment and ability.

2. A vision- This is an idealized goal that proposes a future better than the status quo. The greater the disparity between idealized goal
and the status quo, the more likely that followers will attribute extraordinary vision to the leader.

3. Ability to articulate the vision- They are able to clarify and state the vision in terms that are understandable to others. This articulation
demonstrates an understanding of the followers’ needs and, hence acts as a motivating force.

4. Strong convictions about vision- Charismatic leaders are perceived as being strongly committed, and willing to take on high personal
risk, incur high costs, and engage in self-sacrifice to achieve their vision.

5. Behavior that is out of the ordinary- Those with charisma engage in behavior that is perceived as being novel, unconventional, and
counter to norms. When successful , these behaviors evoke surprise and admiration in followers.

6. Perceived as being a change agent- Charismatic leaders are perceived as agents of radical change rather than as caretakers of the
status quo.

7. Environmental sensitivity- These leaders are able to make realistic assessments of the environmental constraints and resources needed
to bring about change.
TRANSACTIONAL VS TRANSFORMATIONAL
LEADERS

Characteristics of Transactional and transformational leaders

Transactional Leaders
Contingent Reward: Contracts exchange of rewards for effort, promises rewards for good performance, recognizes
accomplishment

Management by exception (active): Watches and searches for deviations from rules and standards, takes corrective action.

Management by exception (passive): Intervenes only if standards are not met

Laissez faire: Abdicates responsibilities, avoids making decisions

Transformational Leaders
Charisma : Provides vision and sense of mission, instills pride, gains respect trust.

Inspiration: Communicates high expectations, uses symbols to focus efforts, expresses important purposes in simple ways.

Intellectual Stimulations: Promotes intelligence, rationality, and careful problem solving.

Individualized consideration: Gives personal attention, treats each employee individually, coaches, advises.
MOTIVATION
INTRODUCTION
▪ Motivation is the process of boosting the morale of employees
to encourage them to willingly give their best in accomplishing
assigned tasks.

▪ Motivation is the reason or reasons for engaging in a

particular behavior, especially human behavior as studied in
economics, psychology and neuropsychology.
FEATURES
Personal and internal feeling
Continuous process
Complex Process
Motives change from time to time
Goal directed behavior
Positive or negative
Person motivated in totality
Motivation is different from satisfaction
Product of anticipated values
MOTIVATING
Encouraging
Creating pleasant working conditions
Developing effective communication
Reducing employee grievances
Recognizing positive efforts
INCENTIVES
Financial incentives
Pay and Allowances
Productivity linked wage incentives
Bonus
Perquisites
Profit sharing
Co partnership/ Stock option
Retirement benefits
 CONTINUED…
Non Financial Incentives
Job Security
Responsibility
Competition
Team Spirit
Promotion
Participation in management
Recognition and status
Quality of working life
Morale
Group incentives
Praise
Job Enrichment
Knowledge of Results
Suggestion Scheme
Organizational Climate
COORDINATION
INTRODUCTION
◻ Coordination is the process of linking or connecting the various activities of
an organization.

◻ “Coordination is integration or synchronization of group efforts in the

organization to achieve its objectives.”
Theo haimann

◻ It is concerned with the activities of the departments of an organization, in

order, to achieve the common goal.
NATURE OF COORDINATION
The need for coordination arises due to inter dependence
It aims at achieving the common goal
It is the duty of every manager
Continuous process
Required in group activity
Deliberate effort
Coordination is different from cooperation
IMPORTANCE OF COORDINATION
◻ Integration of group efforts and goals
◻ Facilitates mutual discipline
◻ Motivates subordinates
◻ Development of team spirit
◻ Better relations
◻ Higher efficiency
◻ Reduces wastages
◻ Corporate image
◻ Key to other functions
◻ Synergy
◻ Interdependence
TECHNIQUES OF EFFECTIVE
COORDINATION
◻ Well defined objectives
◻ Clear lines of authority and responsibility
◻ Precise, comprehensive and well understood, programmes and policies
◻ Effective communication channel
◻ Effective leadership and supervision
◻ Common nomenclature
◻ Voluntary teamwork
◻ Cooperation simplified organization
◻ Liaison officers
◻ Staff groups
◻ Proper organization structure
◻ Committees
◻ Real community of interest
◻ Coordination through leadership
◻ Proper timing
COORDINATION AS AN ESSENCE OF
MANAGEMENT

Planning

Decision Organizi
Making ng

Motivati Coordina
Staffing
on tion

Commun
Directing
ication
Controlli
ng
PRINCIPLES OF COORDINATION
Principle of direct Contact
Principle of Early start
Principle of Reciprocal Relationship
Principle of continuity
Principle of Self coordination
 COORDINATION VS.
COOPERATION
Coordination Cooperation
◻ It is a deliberate effort by a ◻ It is a voluntary attitude of
manager.
organizational members.

◻ It is to provide unity of action in the

pursuit of common objectives ◻ It denotes collective efforts of the
group to accomplish a particular
objective
◻ Essential where a group of people
work together for a common purpose
◻ Voluntary in nature. Arises out of the
people to work together.
◻ Achieved through both formal and
informal relations
◻ Arises out of informal relations
◻ It seeks wholehearted support of
employees and departments
◻ Cooperation without coordination is
fruitless
CONTROLLING
INTRODUCTION
A process of monitoring performance and taking action to ensure
desired results.

It sees to it that the right things happen, in the right ways, and at the
right time.
FEATURES OF CONTROLLING
Focus on objectives
Continuous process
Elements of control process
Pervasive function
Future activities
Planning is the basis of control
Corrective action
Object oriented
 STEPS IN CONTROL PROCESS
Establishment of Comparison of
Measurement of
Performance Performance
Performance
standards against Standards

Take Determination of
Meets Standards
Corrective Deviation
Action

Reinforce
No Yes
Success
CONTROL TECHNIQUES

Control
Techniques

Traditional Modern
Techniques Techniques
TRADITIONAL TECHNIQUES
Budgetary control

Direct Supervision and Personal Observation

Break even analysis

Financial Statements
MODERN TECHNIQUES
Self control
Management audit
Social Audit
MIS
HRA
Programmed Evaluation and Review Technique (PERT)
CPM
Quality control
TQM
ROI
BUDGETING
INTRODUCTION:
For effective running of a business, management must
know:
• where it intends to go i.e. organizational objectives •
how it intends to accomplish its objective i.e. plans •
whether individual plans fit in the overall
organizational objective. i.e. coordination
• whether operations conform to the plan of operations
relating to that period i.e. control
“Budgetary control is the device that a company
uses for all these purposes.”
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 CLASSIFICATION OF BUDGETS

ACCORDING TO ACCORDING TO ACCORDING TO TIME FUNCTION

FLEXIBILITY

1. Long term budget 1. Sales budget 1. Fixed budget 2. Short term budget 2. Production
budget 2. Flexible budget 3. Current budget 3. Cost of Production budget

4. Rolling budget 4. Purchase budget

5. Personnel budget
6. R & D budget
7. Capital Expenditure budget
8. Cash budget
9. Master budget

6
REPORTING
The definition of management reporting can be expressed broadly
as reports that management uses to run the organization, make
business decisions, and monitor progress. Management
reports help managers monitor the smaller details of their
department. Employees submit managerial reports to their managers.
TYPES OF REPORTS
Business reports
Status reports
Process reports
Project report
Analysis report