An Organizational Structure and Personnel Management course typically focuses on

the principles, theories(Concepts), and practices related to how organizations

are designed, structured, and managed, particularly in relation to their human
resources or personnel.
Here are some key topics that are typically covered in such a course
Organizational Structure
Organizational Culture
Personnel Management and HR Practices
Leadership and Management Styles
Team Dynamics
Workplace Diversity and Inclusion
Employee Engagement and Motivation
Legal and Ethical Considerations
Change Management
 Unit – I
What is Management? Definitions
According to Harold Koontz,
"Management is the art of getting things done through and with people in
formally organized groups.“
Harold Koontz gave this definition
of management in his book "The Management Theory Jungle".
According to Henri Fayol,
"To manage is to forecast and to plan, to organise, to command, to co-
ordinate and to control.“
Henri Fayol gave this definition of management in his book "Industrial and
General Administration".
Management is an individual or a group of individuals that accept
responsibilities to run an organization.
They Plan, Organize, Direct and Control all the essential activities of the
organization. Management does not do the work themselves.
They motivate others to do the work and co-ordinate (i.e. bring
together) all the work for achieving the objectives of the organisation.
Management brings together all Six Ms i.e.
1. Men and Women,
2. Money,
3. Machines,
4. Materials,
5. Methods and
6. Markets.
They use these resources for achieving the objectives of the organisation such as
1. high sales,
2. maximum profits,
3. business expansion, etc.
Nature of Management
Continuous and never ending process
Management is a Process. It includes five main functions, viz., Planning
Organizing, Staffing, Directing and Controlling.
Getting things done through people
The managers do not do the work themselves. They get the work done
through the workers. The workers should not be treated like slaves. They
should not be tricked, threatened or forced to do the work.
Result oriented science and art
Management is result oriented because it gives a lot of importance to
"Results". Examples of Results like, increase in market share, increase in
profits, etc
Multidisciplinary in nature
Therefore, management uses knowledge from many different subjects such as
Economics, Information Technology, Psychology, Sociology, etc. Therefore, it is
multidisciplinary in nature.
A group and not an individual activity
Management is not an individual activity. It is a group activity.
It uses group (employees) efforts to achieve group (owners) objectives.
It tries to satisfy the needs and wants of a group (consumers).
importance is given to the team (group) and not to individuals.
Follows established principles or rules
Management follows established principles, such as division of work, discipline,
unity of command, etc.
Aided but not replaced by computers

Now-a-days, all managers use computers. Computers help the managers to

take accurate decisions. However, computers can only help management.

Computers cannot replace management. This is because management takes

the final responsibility.

Situational in nature

Management makes plans, policies and decisions according to the

situation. It changes its style according to the situation. It uses

different plans, policies, decisions and styles for different situations.

Need not be an ownership
In small organisations, management and ownership are one and the same.
However, in large organisations, management is separate from ownership.
The managers are highly qualified professionals who are hired from outside.
The owners are the shareholders of the company.
Both an art and science
Management is result-oriented. Therefore, it is an Art. Management
conducts continuous research. Thus, it is also a Science.
Management is all pervasive
Management is necessary for running a business. It is also essential for
running business, educational, charitable and religious institutions.
Management is a must for all activities, and therefore, it is all pervasive.
Management is intangible

Management is intangible, i.e., it cannot be seen and touched, but it can be felt and

realised by its results. The success or failure of management can be judged only by

its results

Uses a professional approach in work

Managers use a professional approach for getting the work done from their

subordinates. They delegate (i.e., give) authority to their subordinates.

Dynamic in nature
Management is dynamic in nature. That is, management is creative and innovative.
An organisation will survive and succeed only if it is dynamic. It must continuously
bring in new and creative ideas, new products, new product features, new ads, new
Importance of management
1. It facilitates the achievement of goals through limited resources.
2. It ensures smooth sailing in case of difficulties.
3. It ensures continuity in the organization.
4. It focuses on group efforts.
5. It is the key to the economic growth.
Challenges to management
Managers may have to face many challenges in the years to come in doing their job.
These challenges involve complex issues to deal
1. LPG
2. Changing life styles and changing values
3. Economic Uncertainty, Technological Disruption, Talent Management
4. More expectations of customers and employees in particular and society as a
whole in general
5. Eroding business ethics
6. Depleting financial and non financial resources
7. Changing technology
8. Bottlenecks in the basic infrastructure
9. Environmental degradation through pollution
FUNCTIONS OR PROCESS OF MANAGEMENT
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 Pstands 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.
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.
• Thus, planning is a systematic thinking about ways & means for accomplishment
of predetermined goals.
Planning is necessary to ensure proper utilization of human & nonhuman resources.
It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion,
uncertainties, risks, wastages etc.
 Planning involves essentially four stages
1. Identifying the goals to be achieved
2. Exploring the courses of action available to search this goal
3. Evaluating each course of action on merits
4. Finally selecting the best course of action for implementation
Elements of planning
1. Forecasts
2. Objectives
3. Policies
4. Strategies
5. Programme
6. Procedures
7. Schedules
8. Budgets
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”.
Organizing as a process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
Staffing
The main purpose of 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
1. Manpower Planning (estimating manpower in terms of searching, choose the
2. person and giving the right place).
3. Recruitment, selection & placement.
4. Training & development.
5. Remuneration.
6. Performance appraisal.
7. Promotions & transfer.
Directing
It is that part of managerial function which actuates the organizational methods to
work efficiently for achievement of organizational purposes.
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
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.
Therefore, controlling has following steps:
(i) Establishment of standard performance.
(ii) Measurement of actual performance.
(iii) Comparison of actual performance with the standards and finding out deviation
if any.
(iv) Corrective action.
Apply the function of management

An e-commerce company planning to expand its market share

may set a goal of increasing online sales by 20% over the next
year. To achieve this, they plan to launch a new mobile app,
optimize their website for better user experience, and increase
their social media advertising budget.
SIGNIFICANCE OR IMPORTANCE OF MANAGEMENT
Encourages Initiative Management encourages initiative. Initiative means to do the right
thing at the right time without being told or influenced by the superior. Encourages
Innovation Management also encourages innovation in the organisation. Innovation brings
new ideas, new technology, new methods, new products, new services, etc.
Facilitates growth and expansion Management makes optimum utilization of available
resources. It reduces wastage and increase efficiency. It encourages team work and motivates
employees. It also reduces absenteeism and labor turnover.
Improves life of workers Management shares some of its profits with the workers. It
provides the workers with good working environment and conditions. It also gives the
workers many financial and non-financial incentives.
Improves corporate image If the management is good, then the organization will
produce good quality goods and services. This will improve the goodwill and
corporate image of the organization
Motivates employees Management motivates employees by providing financial and
non-financial incentives. These incentives increase the willingness and efficiency of
the employees.
Improves relations Management improves relations between individuals, groups,
departments and between levels of management. Better relations lead to better team
work. Better team work brings success to the organization.
Encourages Team Work Management encourages employees to work as a team. It develops
a team spirit in the organisation. This unity brings success to the organisation
Levels of Management
Many managers work in an organisation. However, these managers do not work at the same
level.
They work and operate at different positions. Hierarchy of these managerial positions is
called Levels of Management.
.
Three Levels of Management
Generally, there are Three Levels of Management, viz.,
Administrative or Top Level of Management.
Executive or Middle Level of Management.
Supervisory or Lower Level of Management.
At each level, individual manager has to carry out different roles and functions.
Top Level of Management
1. The Top Level Management consists of the Board of Directors (BOD) and the Chief
Executive Officer (CEO).
2. The Chief Executive Officer is also called General Manager (GM) or Managing Director
(MD) or President.
3. The Board of Directors are the representatives of the Shareholders, i.e. they are selected
by the Shareholders of the company.
4. Similarly, the Chief Executive Officer is selected by the Board of Directors of an
organisation.
The main role of the top level management is summarized as follows :-
1. The top level management determines the objectives, policies and plans of the
organisation.
2. They mobilises (assemble and bring together) available resources.
3. The top level management does mostly the work of thinking, planning and
deciding. Therefore, they are also called as the Administrators and the Brain of
•They spend more time in planning and organising.
•They prepare long-term plans of the organisation which are generally made for 5
to 20 years.
•The top level management has maximum authority and responsibility. They are the
top or final authority in the organisation. They are directly responsible to the
Shareholders, Government and the General Public. The success or failure of the
organisation largely depends on their efficiency and decision making.
•They require more conceptual skills and less technical Skills.
Middle Level of Management

1. The Middle Level Management consists of the Departmental Heads (HOD),

Branch Managers, and the Junior Executives.
2. The Departmental heads are Finance Managers, Purchase Managers, etc.
3. The Branch Managers are the head of a branch or local unit.
4. The Junior Executives are Assistant Finance Managers, Assistant Purchase
Managers, etc.
5. The Middle level Management is selected by the Top Level Management.
The middle level management emphasize more on following tasks :-
1. Middle level management gives recommendations (advice) to the top level management.
2. It executes (implements) the policies and plans which are made by the top level
management.
3. It co-ordinate the activities of all the departments.
4. They also have to communicate with the top level Management and the lower level
management.
5. They spend more time in co-ordinating and communicating.
6. They prepare short-term plans of their departments which are generally made for 1 to 5
years.
7. The middle Level Management has limited authority and responsibility.
8. They are intermediary between top and lower management.
9. They are directly responsible to the chief executive officer and board of directors.
Require more managerial and technical skills and less conceptual skills.
Lower Level of Management
The lower level management consists of the Foremen and the Supervisors. They are selected
by the middle level management. It is also called Operative / Supervisory level or First Line
of Management.
The lower level management performs following activities :-
1. Lower level management directs the workers / employees.
2. They develop morale in the workers.
3. It maintains a link between workers and the middle level management.
4. The lower level management informs the workers about the decisions which are taken by
the management. They also inform the management about the performance, difficulties,
feelings, demands, etc., of the workers.
5. They spend more time in directing and controlling.
6. The lower level managers make daily, weekly and monthly plans.
7. They have limited authority but important responsibility of getting the work done from
the workers.
8. Along with the experience and basic management skills, they also require more
technical and communication skills.
Objectives of Management

The objectives of management are narrated as under.

(i) Organizational objectives: Management is expected to work for the achievement of the

objectives of the particular organization in which it exists.

Organisational objectives include:

(a) Reasonable profits so as to give a fair return on the capital invested in business

(b) Survival and solvency of the business, i.e., continuity.

(c) Growth and expansion of the enterprise

(d) Improving the goodwill or reputation of the enterprise.

ii) Perssonel objectives: An organisation consists of several persons who have their own
objectives. These objectives are as follows:
(a) Fair remuneration for work performed
(b) Reasonable working conditions
(c) Opportunities for training and development
(d) Participation in management and prosperity of the enterprise
(e) Reasonable security of service.
iii) Social objectives: Management is not only a representative of the owners and workers,
but is also responsible to the various groups outside the organization. It is expected to fulfill
the
objectives of the society which are given below:
(a) Quality of goods and services at fair price to consumers.
(b) Honest and prompt payment of taxes to the Government.
(c) Conservation of environment and natural resources.
(d) Fair dealings with suppliers, dealers and competitors.
(e) Preservation of ethical values of the society
Different Management theories or approaches of management
a) Classical approach
b) Behavioral approach
c) Systems approach
d) Contingency approach
a) THE CLASSICAL APPROACH:
The classical approach is the oldest formal approach of management thought. Its
roots pre-date the twentieth century.
The classical approach of thought generally concerns ways to manage work and
organizations more efficiently.
Three areas of study that can be grouped under the classical approach are
1. Scientific management
2. Administrative management
3. Bureaucratic management.
(i) Scientific Management.
Frederick Winslow Taylor is known as the father of scientific management.
Scientific management (also called Taylorism or the Taylor system) is a
theory of management that analyzes and synthesizes (produces) workflows, with
the objective of improving labor productivity.
In other words, Traditional rules of thumb are replaced by precise
procedures developed after careful study of an individual at work.
(ii) Administrative Management.
Administrative management focuses on the management process and principles of
management.
In contrast to scientific management, which deals largely with jobs and work at
the individual level of analysis, administrative management provides a more
general theory of management.
Henri Fayol is the major contributor to this approach of management thought.
(iii) Bureaucratic Management.
Bureaucratic management focuses on the ideal form of organization.
Max Weber was the major contributor to bureaucratic management.
Based on observation, Weber concluded that many early organizations
were inefficiently managed, with decisions based on personal relationships
and loyalty.
He proposed that a form of organization, called a bureaucracy, characterized by
1. Division of labor,
2. Hierarchy,
3. Formalized rules,
4. Impersonality,
5. Selection and
6. Promotion of employees based on ability, would lead to more efficient
management.
Weber also contended that managers‘ authority in an organization should be
based not on tradition or charisma but on the position held by managers in the
organizational hierarchy
THE BEHAVIORAL APPROACH:
The behavioral approach of management thought developed, in part,
because of perceived weaknesses in the assumptions of the classical
approach.
The classical approach emphasized efficiency, process, and principles.
Some felt that this emphasis disregarded important aspects of organizational
life, particularly as it related to human behavior.
Thus, the behavioral approach focused on trying to understand the factors
that affect human behavior at work.
(i) Human Relations.
The Hawthorne Experiments began in 1924 and continued through the early 1930s.
A variety of researchers participated in the studies, including Elton Mayo.
1. One of the major conclusions of the Hawthorne studies was that workers'
attitudes are associated with productivity.
2. Another was that the workplace is a social system and informal group influence
could exert a powerful effect on individual behavior.
3. A third was that the style of supervision is an important factor in increasing
workers' job satisfaction.
(ii) Behavioral Science.
Behavioral science and the study of organizational behavior emerged in the 1950s
and1960s.
The behavioral science approach was a natural progression of the human
relations movement.
It focused on applying conceptual and analytical tools to the problem of
understanding and predicting behavior in the workplace.
The behavioral science approach has contributed to the study of management
through its focus on
1. personality,
2. attitudes,
3. values,
4. motivation,
5. group behavior, leadership, communication, and conflict, among other issues.
QUANTITATIVE APPROACH
1)Management Science (Operations Research)
Management science (also called operations research) uses mathematical and statistical
approaches to solve management problems. It developed during World War II as strategists
tried to apply scientific knowledge and methods to the complex problems of war.
Industry began to apply management science after the war. The advent of the computer made
many management science tools and concepts more practical for industry
(ii) Production And Operations Management.
This approach focuses on the operation and control of the production process that
transforms resources into finished goods and services.
It has its roots in scientific management but became an identifiable area of
management study after World War II.
It uses many of the tools of management science. Operations management emphasizes
productivity and quality of both manufacturing and service organizations.
W. Edwards Deming exerted a tremendous influence in shaping modern ideas
about improving productivity and quality.
Major areas of study within operations management
include capacity planning
facilities location
facilities layout
materials requirement planning
scheduling
purchasing and inventory control
quality control, computer integrated
Manufacturing
just-in-time inventory systems
and flexible manufacturing systems.
SYSTEMS APPROACH
One of the modern approach to understand management is the system approach .
Thus systems approach helps to study the basic features and functions of the
organization. A system by concept is a collection of interrelated parts called
subsystem, which constitute one whole unit.
1. Here the organization is viewed as a system.
2. Every department of the organization is considered as a sub system .
3. It is also possible that every department can be viewed as a system and every
section in the department can be viewed as subsystem .
Example: human body is often cited as the best example for a system . In human
body we have different subsystems such as digestive system, central nervous
system and so on. Every part of the body such as the eyes , brain, heart and so
on. A study of each of the parts of the body is necessary to understand the whole
body
From the system point of view, the functions of management are:
1. Interlinked
2. Interdependent
3. Complex and intertwined that each function of management can be found in other
functions
organising

staffing
planning

controlling directing
It shows that in the planning function (shown horizontally across or vertically down ) ,
there are other functions of management such as organising , staffing , directing ,
controlling.
The letter X shows the overlapping area and hence , it is to be ignored this shows
that each of the management functions can be found in the other functions also

P O S D C
P X
O X
S X
D X
C X
 Interdependent

Planning

Organizing

Managerial
Staffing Efforts Solution
problem

Directing

Controlling
 Interdependent

Planning

Organizing

Managerial
Staffing Efforts Solution
problem

Directing

Controlling
CONTINGENCY APPROACH
The contingency approach focuses on applying management principles and
processes as dictated by the unique characteristics of each situation.
It emphasizes that there is no one best way to manage and that it depends
on various situational factors, such as the
1. External environment,
2. Technology,
3. Organizational characteristics,
4. Characteristics of the manager, and
5. Characteristics of the subordinates.
Contingency theorists often implicitly or explicitly criticize the classical
approach for its emphasis on the universality of management principles;
however, most classical writers recognized the need to consider aspects of the
situation when applying management principles.
MANAGEMENT APPROACHS Beginning Dates Emphasis
CLASSICAL APPROACH
Scientific Management 1880s Traditional rules of thumb are
replaced by precise procedures
developed after careful study of an
individual at work.
Administrative 1940s Gives idea about the primary
Management functions of management and The 14
Principles of Administration
Bureaucratic Management 1920s Replaces traditional leadership and
charismatic leadership with legal
leadership
Human Relations 1930s workers' attitudes are associated with
productivity
Behavioral Science 1950s Gives idea to understand human
behavior in the organization.
QUANTITATIVE APPROACH
Management Science 1940s Uses mathematical and statistical
(Operation research) approaches to solve management
problems.
Production and Operations 1940s This approach focuses on the operation and
Management control of the production process that
transforms resources into finished goods and
services
RECENT DEVELOPEMENTS

SYSTEMS APPROACH 1950s Considers the organization as a system that

transforms inputs into outputs while in
constant interaction with its' environment.
CONTINGENCY APPROACH 1960s Applies management principles and processes
as dictated by the unique characteristics of
each situation.
A leader is "a person who influences a group of people towards the
achievement of a goal“.
Leader provides direction , guidance , restores confidence and makes
the way easy for achieving the objectives .
Definitions
According to wendell french has defined leadership as the process of
influencing the behaviour of others on the direction of a goal or set
of goals or , more broadly ,towards a vision of the future.
According to koontz and o donnell defined leadership as influence
the art or process of influencing people so that they will strive
willingly towards the achievement of group goals.
A leader is "a person who influences a group of people towards the
achievement of a goal“.
Leader provides direction , guidance , restores confidence and makes
the way easy for achieving the objectives .
Definitions
According to wendell french has defined leadership as the process of
influencing the behaviour of others on the direction of a goal or set
of goals or , more broadly ,towards a vision of the future.
According to koontz and o donnell defined leadership as influence
the art or process of influencing people so that they will strive
willingly towards the achievement of group goals.
 Leadership may be defined as
L = F(f, g, w, s)
f = followers
g = goal
w = a measure of willingness on the part of subordinates
s = a given situation
A leader is an individual who holds a position of authority or
influence, while leadership refers to the qualities and actions that
make someone an effective leader. Leadership is a broader
concept that can be exhibited by anyone, not just those in formal
leadership roles.
Importance of leadership
1. A leader should act as a friend , philosopher and guide to the
people whom he is leading
2. He must have the capacity to recognize their potentialities and
transform them into realities
3. A leader should win the confidence of his people
4. He must be able to unite the people as a team and build up
team spirit
5. He maintains discipline among his group and develops a sense
of responsibility
6. He must build up a high morale among his people
7. He should motivate his people to achieve goals . He should try
to raise high moral and ethical standards among his people
 Leadership characteristics
According to jago
1. Energy , drive
2. Appearance
3. Behavior
4. A sense of co-operation
5. Enthusiasm
6. Initiative
7. Intelligence
8. Judgment
9. Self confidence
10. Sociability
11. Tact and diplomacy
12. Moral courage and integrity
Following are the important functions of a leader
1. Setting Goals
2. Organizing
3. Initiating Action
4. Co-Ordination
5. Direction and Motivation
6.Link between Management and Workers
Leadership styles
•Autocratic or dictatorial leadership style
•Participative or democratic
•Laissez or free rein
•Bureaucratic
Autocratic Leadership:
•When to Use: In emergency situations or when quick, decisive
decisions are necessary. It can also be suitable in organizations
where there's a need for strong central control, such as the military.
Democratic Leadership:
•When to Use: In organizations that value collaboration, creativity,
and input from team members. This style is often used in knowledge-
based industries like tech, where innovation is crucial.
Transformational Leadership:
When to Use: In organizations aiming for significant change and
growth. This style is often effective in startups and organizations
going through a major transformation.
Transactional Leadership:

When to Use: In structured and routine environments where tasks are well-

defined, and employees respond well to rewards and consequences. This style can

be useful in manufacturing or production-focused organizations.

Laissez-Faire Leadership:

When to Use: In organizations with highly skilled and self-motivated teams.

It can work well in creative industries and research organizations.

Bureaucratic Leadership:
When to Use: In highly regulated industries or organizations where strict
adherence to rules and procedures is critical, like government agencies
and financial institutions.
Administrative management / Fayol’s 14 principles of management
Henry fayol was a major contributor to administrative management
approach .
Henry fayol a French industrialist has been regarded as the real father of
modern management.
He was mining engineer and worked at all positions to the position of the
managing director in a coal mining company.
Fayol looked at the problem of managing with the management point of
view and not with the workers point of view , as was done by Taylor.
Fayol divided the activities of an industry into six groups
1. Technical ( production)
2. Commercial (buying and selling)
3. Financial (working capital)
4. Security (safety for materials and so on)
5. Accounting (book keeping)
6. Managerial (planning and controlling)
Fayol’s 14 principles of management
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Emphasis on Subordination of Personal Interest to General or Common Interest
7. Remuneration
8. Centralization
9. Scalar Chain
10. Order
11. Equity
12. Stability of Tenure 13. Initiative 14. Esprit de corps
Scientific management
Scientific management became increasingly popular in the early 1900s.
In the early 19th century , scientific management was defined as that kind of
management which conducts a business or affairs by standards established , by facts or truths
gained through systematic observation ,experiment or reasoning.
Contribution of taylor
The concept of scientific management was introduced by Frederick Winslow Taylor in USA in
the beginning of 20th century .
This concept was further carried on by Frank and Lillian Gilbreth , Henry Gantt, George Berth
etc.
scientific management was concerned essentially with improving the operational
efficiency at the shop floor level
According to Taylor scientific management is concerned with exactly what you want men to
do and then see in that they do it in the best and cheapest way.
F . W. Taylor was the pioneer of the scientific management theory . He was a scientist and
made researches how men can be used efficiently at work.
During his research he found that the main cause of inefficiency and wastage in factories was
ignorance on the part of both workers and managers of scientific methods.
For this purpose he developed a theory known as scientific management
Features of scientific management
Separation of planning and doing
Functional foremanship for supervision and direction

Planning Operational
1. Route clerk 1. Speed boss
2. Instruction clerk 2. Inspector
3. Time and cost clerk 3. Maintenance
4. disciplinarian 4. Gang boss
Elements of SM
1. Work study , motion study , method study
2. Standardization of tools and equipment for workmen , machine speeds and working
conditions
3. Scientific selection , placement and training of workers by a centralized personnel
department.
Financial incentives
Economy
Mechanism of management
1. Time study
2. Functional foremanship
3. Standardization of tools and equipment
4. The desirability of a planning room
5. Instruction cards for the workman
6. Differential rate
7. Modern cost system
Criticism of Taylor's contribution
1. Scientific management is nothing but an approach to management
2. His principles mostly confined to production management
3. His functional foreman ship violates the principle of unity of command
4. Trade unions criticized Taylor's
Meaning
Social responsibility of business implies the obligations of the management of a business
enterprise to protect the interests of the society.
According to the concept of social responsibility the objective of managers for taking
business decisions is not merely to maximize profits or shareholders’ value but also to serve
and protect the interests of other members of a society such as workers, consumers and the
community as a whole.
Responsibility to Shareholders:
1. In the context of good corporate governance, a corporate enterprise must recognise the
rights of shareholders and protect their interests.
2. It should respect shareholders’ right to information and respect their right to submit
proposals to vote and to ask questions at the annual general body meeting.
Responsibility to Employees
The success of a business enterprise depends to a large extent on the morale of its
employees.
1. Employees make valuable contribution to the activities of a business organisation.
2. The corporate enterprise should have good and fair employment practices and industrial
relations to enhance its productivity.
3. It must recognise the rights of workers or employees to freedom of association and free
collective bargaining.
4. Besides, it should not discriminate between various employees.
Responsibility to Consumers:
1. Some economists think that consumer is a king who directs the business enterprises to
produce goods and services to satisfy his wants.
2. However, in the modern times this may not be strictly true but the companies must
acknowledge their responsibilities to protect their interests in undertaking their
productive activities.
Obligation towards the Environment:
1. The foremost responsibility of business enterprises is to ensure that they should not
damage the environment and for this purpose they should reduce as much as possible
air and water pollution by their productive activities.
2. They should not dump their toxic waste products in rivers and streams to avoid their
pollution.
3. Pollution of environment poses a great health hazard for the people and is a cause of
several respiratory and skin diseases.
Responsibility to Society
1. Business enterprises function by public consent with the basic objective of producing
goods and services to meet the needs of the society and provide employment to the
people.
2. The traditional view is that in performing this function businesses maximise profits or
shareholders’ value and doing so they do not behave in any socially irresponsible way
 Organization
Definitions: “Organization are collectivities of people that have been established for the
pursuit of relatively specific objectives on a more or less continuous basis’’ William Scot
“Organization is the form of every human association for the attainment of a common
purpose”. Mooney and Reilly
Designing Organizational structures
Designing organizational structures is a crucial aspect of building an effective and
efficient organization.
The right structure can help clarify roles, responsibilities, and reporting
relationships, leading to improved communication, productivity, and overall
performance.
Here's a step-by-step guide to help you design an organizational structure
Define Your Objectives: Start by clearly defining your organization's objectives

and goals. Understand what you want to achieve, both in the short term and long

term.

Analyze Your Environment: Consider the external and internal factors that might

influence your organization's structure. Factors like industry norms, competition,

regulatory requirements, and your organization's size and culture should be taken

into account.

Identify Key Functions and Roles: List all the essential functions and roles that

need to be performed within your organization. This includes both core operational

functions and support functions like HR, finance, and IT.

Group Functions:
Group similar functions together. This could be based on their nature, goals, or
processes. Common grouping methods include functional, divisional, matrix, and
network structures.
•Functional Structure: Organizes employees based on their skill sets or
functions, such as marketing, sales, or production.
•Divisional Structure: Groups employees based on specific products, services,
geographic locations, or customer segments.
•Matrix Structure: Combines elements of both functional and divisional
structures, creating dual reporting relationships.
•Network Structure: Focuses on collaboration and outsourcing, allowing the
organization to be more agile and responsive.
Define Reporting Relationships: Clearly define reporting relationships. Who

reports to whom? This is crucial for establishing authority and accountability

within the organization.

Allocate Resources: Determine how resources (human, financial, and

technological) will be allocated to each function or division. This includes

budgeting, staffing, and technology infrastructure.

Establish Communication Channels: Set up formal communication channels

within and between functions or divisions. Effective communication is essential for

a well-functioning organization.
Assign Responsibilities: Clearly define roles and responsibilities for each position
within the organization. This helps prevent role ambiguity and ensures everyone
knows their duties.
Consider Scalability: Think about how your organizational structure can adapt to
growth or changes in your industry. A structure that can scale easily is often more
sustainable.
Test and Refine: Before fully implementing the new structure, consider piloting it
or seeking feedback from key stakeholders. This will help identify any potential
issues or areas for improvement.
Implement the Structure: Roll out the new organizational structure gradually,
ensuring that all employees are informed about the changes and receive any
necessary training or support.
 Basic concepts related to Organization

Here are some fundamental concepts related to organizations

1.Mission and Vision: The mission statement defines the organization's purpose, its
reason for existence, and what it aims to achieve. The vision statement outlines the
desired future state or long-term goals of the organization.
2.Goals and Objectives: Goals are the broad, overarching aims of the organization,
while objectives are specific, measurable targets that help achieve those goals.
Objectives should be SMART (Specific, Measurable, Achievable, Relevant, Time-
bound).
3.Structure: The organizational structure defines how tasks, roles, and
responsibilities are organized and distributed within the organization. Common
structures include functional, divisional, matrix, and network structures.
Hierarchy: Hierarchy refers to the vertical levels of authority and decision-

making within an organization. It establishes who reports to whom and the chain

of command.

Culture: Organizational culture encompasses the shared values, beliefs, norms,

and behaviors that define how people within the organization interact and work

together. Culture significantly influences the organization's identity and the way it

operates.

Leadership: Effective leadership is crucial for guiding the organization toward

its goals. Leadership styles, traits, and skills impact the culture and performance

of the organization.
Management: Management involves planning, organizing, leading, and controlling

the organization's resources and activities to achieve its objectives.

Communication: Effective communication is essential for transmitting

information, ideas, and decisions within the organization.

Decision-Making: Decision-making processes determine how choices are made

within the organization.

Change Management: Organizations often undergo changes, whether in response

to external factors or internal initiatives.

Teamwork: Collaboration and teamwork are critical for achieving goals and
solving complex problems.
Performance Evaluation: Organizations measure and evaluate performance to
assess progress toward goals and objectives.
Ethics and Social Responsibility: Organizations have a responsibility to conduct
their operations ethically and consider their impact on society and the
environment.
Stakeholders: Stakeholders are individuals, groups, or entities with an interest in
or affected by the organization's activities
Innovation: Innovation involves developing and implementing new ideas,
processes, products, or services to stay competitive and adapt to changing
circumstances.
Type of organization: On the basis of authority relationships organization classified as
follows
1. Line organization or Military organization or Scalar organization
2. Functional organization
3. Line and Staff organization
4. Project organization
5. Committee organization
6. Matrix organization
Line organization is the most oldest and simplest method of administrative organization.
According to this type of organization, the authority flows from top to bottom in a
concern. The line of command is carried out from top to bottom. This is the reason for
calling this organization as scalar organization
Ex an engineer setting up a consultancy , employs a few young graduate engineers
and draughtsman to prepare designs and drawings, plans and specifications.

Engineer

Draughtsman II Draughtsman III

Draughtsman I
Merits
1. Simplicity
2. Identification of Authority and Responsibility
3. Co-ordination
4. Effective Communication
5. Economical
6. Quick Decisions
7. Unity of Command
8. Effective Control and Supervision
Demerits
1. Excess Work
2. Lack of Specialization
3. Lack of Initiative
4. Favoritism
 Line and Staff Organisation
According to Allen,
“Line refers to those positions and elements of organization, which have
the responsibility and authority and are accountable for the accomplishment of
primary objectives.
Staff elements are those which have responsibility and authority for
providing advice and service to the line in the attainment of objectives.”
Line relationship is a decision maker and staff personnel are an advisor.
According to Henry Fayol, “Staff is a group of men who have the strength,
knowledge and time which the line manager may lack”.
Merits Demerits
It enhances the quality of decisions It may create more friction or conflict
between line and staff managers
There is a greater scope for Staff suggestion are seldom
advancement implemented
It relives the line managers It is expensive to have both staff and
line managers
It is mostly beneficial where there is a
line of command within staff
departments as in the case of the armed
forces
Functional organization: This structure most widely used, in the medium and large
organizations having limited number of products. This was introduced by F.W.Taylor and is
logical extension of the division of labour cover departments as well as men.
Taylor observed that one single foreman was overburdened with all the operations such as
task setting ,time , recording , quality inspection ,disciplinary jobs.
Planning task
Route clerk
Instruction clerk
Time and cost clerk
Shop disciplinarian
Control task
Gang boss
Speed boss
Repair boss
Quality inspector
 Works manager

Planning function Controlling function

RC TCC GB RB

SD
IC
SB INSP

Workers
 MERITS DE MERITS

Planned specialization Ineffective controls as workers have

more than one boss

Separate activities related to planning Very costly

and control

Facilities large scale production through Calls for more coordination

standardization

The disciplinary controls are well Less appropriate when an organization

defined diversifies

Appropriate when there is a single No clear line of authority

product or services
Committee organization
A committee organization is an association of people set up to arrive at solutions to
common problems. The line people are given opportunities to discuss their problems in the
committee. The committee organizational structure is not like line or functional
organization, but is similar to staff organization. Its decisions are implemented, whereas
staff decisions are not necessarily implemented. It is a formal part of the organizational
structure wherein the members are specifically mentioned.

Executive Council VC Academic senate

Finance committee Rector Board of Studies

Register

Selection committee Purchase committee Convocation committee

 MERITS DE MERITS

It pools up the organizational Responsibility for decisions cannot be

resources in terms knowledge , skills fixed on a participate person
and experience
It represents all interested groups and It calls for high degree of coordination
thus facilitates group decision
It yields good results It involves high cost in terms of time
and money
It minimizes the fear of too much
authority vested in one person
It motivates all the concerned or
affected groups to participate
Matrix organization
•This is also called project organization. It is a combination of all relationships in the
organization vertical and horizontal and diagonal
•It is mostly used in complex projects. It provides a high degree of operational freedom
flexibility and adaptability for both line and staff managers in performing their respective

president

VP Production VP Marketing VP finance

Project A
Manager w w w

w w w
Project B manager
Matrix Organization
Merits:
1. It offers operational freedom and flexibility
2. It seeks to optimize the utilization of resources
3. It focuses on results
4. It maintains professional identity
5. It holds employees responsible for management of resources
Demerits:
1. It calls for greater degree of coordination
2. It violates unity of command principle
3. It may be difficult to define authority and responsibility precisely
4. Employees may find it frustrating to work with two bosses
 BASIS FOR COMPARISON CENTRALIZATION DECENTRALIZATION
Meaning The retention of powers The dissemination of
and authority with respect authority, responsibility
to planning and decisions, and accountability to the
with the top various management
management, is known as levels, is known as
Centralization. Decentralization.
Communication Flow Vertical Open and Free
Decision Making Slow Comparatively faster
Advantage Proper coordination and Sharing of burden and
Leadership responsibility
Power of decision making Lies with the top Multiple persons have the
management. power of decision making.
Reasons Inadequate control over Considerable control over
the organization the organization
Best suited for Small sized organization Large sized organization
Advantages of centralization
•Provide power and prestige for manager.
•Promote uniformity of policies, practices and decisions.
•Minimal extensive controlling procedures and practices.
•Minimize duplication of function.
Disadvantages of centralization
•Neglected functions for mid levels , and less motivated beside personnel.
•Nursing supervisor functions as a link officer between nursing director and
first line management
 Basis Formal Organisation Informal Organisation
1. Formation Formal Relationship that is personal and social in
nature.
2. Purpose / Legally Constituted rationally designed It arises naturally and spontaneously and
objective and consciously planned. is an integral dimension of formal
organisation
3. Relationship It is meant for achieving specific goals. It is Its purpose is to satisfy social and
meant to engage in production of goods personal needs of employees.
and/or performing service required by
society.
4. Rationality It has a high degree of rationality and It is influenced by social, personal and
leaves no scope for personal, social and emotional factors.
emotional factors.
5. Communication Line of authority and formal relationship Communication takes place through
become channel of communication. personal and social relationship.
6. Leadership Based on formal authority and position in Based on competence of individual and
organisation. group acceptance.
7. Boundaries It operates within set boundaries. It has no set boundaries; rather it
operates in different directions.
8. Nature It is normative and idealistic in nature. It is realistic reflecting actual functioning.
9. Systems and It operates through predetermined It operates through group norms, values
procedures systems and procedures. and standards.
Advantages of Formal Organisation:
1. Systematic Working:
Formal organisation structure results in systematic and smooth functioning of an
organisation.
2. Achievement of Organisational Objectives:
Formal organisational structure is established to achieve organisational objectives.
3. No Overlapping of Work:
In formal organisation structure work is systematically divided among various
departments and employees. So there is no chance of duplication or overlapping
of work.
4. Co-ordination:
Formal organisational structure results in coordinating the activities of various departments.
5. Creation of Chain of Command:
Formal organisational structure clearly defines superior subordinate relationship,
i.e., who reports to whom.
6. More Emphasis on Work:
Formal organisational structure lays more emphasis on work than interpersonal
relations.
Disadvantages of Formal Organisation:
1. Delay in Action: While following scalar chain and chain of command actions get
delayed in formal structure.
2. Ignores Social Needs of Employees : Formal organisational structure does not
give importance to psychological and social need of employees which may lead to
de motivation of employees.
3. Emphasis on Work Only: Formal organisational structure gives importance to
work only; it ignores human relations, creativity, talents, etc.
Advantages of Informal Organisation:
1. Fast Communication:
Informal structure does not follow scalar chain so there can be faster
spread of communication.
2. Fulfills Social Needs:
Informal communication gives due importance to psychological and social
need of employees which motivate the employees.
3. Correct Feedback:
1. The knowledge of informal group can be used to gather support of
employees and improve their performance.
2. Through grapevine important information can be transmitted quickly.
3. By cooperating with the informal groups the managers can skillfully take
the advantage of both formal and informal organisations
Disadvantages of Informal organisation:
1. Spread Rumors:
According to a survey 70% of information spread through informal
organisational structure are rumors which may mislead the employees.
2. No Systematic Working:
Informal structure does not form a structure for smooth working of an
organisation.
3. May Bring Negative Results:
If informal organisation opposes the policies and changes of management,
then it becomes very difficult to implement them in organisation.
4. More Emphasis to Individual Interest:
Informal structure gives more importance to satisfaction of individual
interest as compared to organisational interest.