Module-3 DIRECTING AND CONTROLLING

DIRECTING
Directing refers to a process or technique of instructing, guiding, inspiring, counselling, overseeing and
leading people towards the accomplishment of organizational goals.

Directing is the process by which personnel are inspired or motivated to accomplish work.

Objectives of Directing:--The directing function of management has the following six

objectives:

1. Provide clear instructions.

2. Motivate employees.
3. Guide employees toward goals and objectives.
4. Offer feedback and coaching.
5. Ensure coordination and teamwork.
6. Foster a positive work environment.

Characteristics of Directing
Direction is one of the most essential management functions. Its characterisitics include
1. Top-Down Approach:- Directing are issued from the higher level to lower levels in the
organisational hierarchy.
2. Command Function:- Directing as a command function typically involves the issue of orders or
instructions by the superiors to their subordinates.
3. Pervasive function:-- Directing is performed at different levels across the whole organization.
4. Influences human behaviour:- Directing is the act of influencing the behaviour of the subordinates
by the superiors.
5. Delegated function:- Directing powers are usually delegated to the lower levels of the management
for the sake of better administration and time management..

Importance of Directing
1. Directing facilitates managers to get the best out of their employees through their effective
performance and willing cooperation
2. Directing helps the employees to know what is expected from them in their job.
3. It enables managers to continuously coordinate the different activities performed by their
subordinates.
4. Directing helps the management to make optimum utilization of human and physical resources of t
he organization.
5. Directing enables managers to encourage and motivate the employees to willingly cooperate and
perform better in their job .
6. Good direction helps in improving the relationship existing among the organizational members.

Elements of Directing
Directing function includes five elements – Supervision, Motivation, Leadership,
Communication.

Supervision: Supervision in directing involves closely overseeing and guiding employees in their
tasks.
Supervision implies one to one and prompt guidance provided to the employees, along with
instructing, monitoring and controlling them when they carry out any task or job to check if they
are working according to the organization’s plans and policies, in a timely manner.
 Characteristics of Supervision

• Element of Directing: Supervision is one of the four important elements of directing. The
other three being – motivation, communication and leadership.
• Universal activity: Supervision is a very common activity, which is required at different
levels of management.
• Continuous Process: Constant and frequent supervision is required by the employees to
perform various tasks as well as to resolve issues related to the work or job which occur abruptly.
• Direct Contact: The two parties involved in the process of supervision are –
Supervisor and Subordinate. Hence, there is a direct and one to one contact between the two.
• Overseeing work: Supervision is done with an aim of guiding as well as keeping an eye on
the work performed by the employees, to ensure that they are working in an appropriate manner.
Also, there are no deviations from the plans, policies and objectives of the concern.
• Utilization of Resources: It facilitates optimum utilization of resources, which leads to the
elimination of wastage and achieving maximum output at minimum cost.
Supervision aims to ensure that the employees work in an efficient and effective way, to
accomplish the tasks satisfactorily, which is assigned to them, by their supervisor.
 Importance of Supervision
,1. Issues Instructions:
2. Facilitates control:
3. Effective Utilization of Resources:
4. Maintains Discipline
5. Provides Feedback:
6. Improves Communication:
7. Provides Motivation:
8. Maintains Group Unity:

Functions of Supervisor
1. Maintains a direct and day to day contact with the functional level staff and maintain a healthy
relationship with them.
2. Explain all the rules, clarify the instructions and also advise the employees to work in
cooperation with one another as a team.
3. Prepares a schedule of the tasks and activities to be performed by the subordinates, to facilitate
a continuous and uninterrupted flow of work.
4. Conveys the orders and instructions which are given to the subordinates and ensures full-
fledged compliance.
5. Ensures that the subordinates have all the facilities and tool and equipment, which are required
to perform the task.
6. Keeps a close watch and directs the activities of the subordinates, to carry out the task.
7. Coordinates the work and efforts of numerous subordinates working under his/her control and
also maintains unity among them.
8. Acts as a knot between workers and management.
9. Identifies mistakes, errors and omissions, and takes corrective actions.
10. Ensures the performance of the worker is as per the set target.
11. Provides feedback to the workers about their strengths, weaknesses and performance.

II.COMMUNICATION
Communication is a two-way process wherein the message in the form of ideas, thoughts, feelings,
opinions is transmitted between two or more persons with the intent of creating a shared
understanding.

Communication Process
Communication is an ongoing process that mainly involves three components namely. sender,
message, and recipient. The components involved in the communication process are described below
in detail:

Sender:- The sender or contact generates the message and transmits it to the recipient. He is the
source and the first contact
Message:- It is an idea, knowledge, opinion, truth, feeling, etc. produced by the sender and intended
for reference.
Encoding:- The message produced by the sender is encrypted in a symbolic way such as words,
pictures, touches, etc. before transfer.
The media:- This is how the coded message is conveyed. The message can be conveyed orally or in
writing.
Recording:- It is a process of modifying the signals sent by the sender. After recording the message is
received by the recipient.
Receiver:- You are the last person in the chain and the message you sent was sent. If the recipient
receives the message and understands it correctly and acts on the message, only then the purpose of
the communication is achieved.
Decoding:-Once the recipient confirms to the sender that you received the message and understood it,
the communication process is complete.
Noise:- Refers to any restrictions caused by the sender, message or recipient during the
communication process. For example, incorrect telephone connection, incorrect coding, incorrect
recording, careless recipient, incorrect understanding of message due to discrimination or
inappropriate touch, etc.

Types of Communication
I. Intrapersonal Communication and Interpersonal communication
Intrapersonal communication is communication with oneself. It’s the internal dialogue that takes
place in your mind, often referred to as self-talk or inner speech.

Interpersonal Communication:- It is a communication process that involves face to face contact

between two or more individuals. In this communications sender and receiver communicate
through words, sounds, facial expressions, gestures, etc.

Interpersonal communication are classified into Verbal and Non-Verbal communication.

II.Verbal and Non-verbal Communication

Verbal communication:
When messages or information is exchanged or communicated through words, it is called verbal
communication.
Verbal communication may be two types: Written and Oral communication.
Verbal communication takes place through face-to-face conversations, group discussions, counseling,
interview, radio, television, calls, memos, letters, reports, notes, email etc.
ORAL COMMUNICATION:- Oral communication is the communication through mouth using
words. It includes individuals conversing with each other, be it direct face-to-face conversation or
indirect conversation.
Speeches, presentations, discussions are all forms of oral communication. Oral communication is
generally recommended when the communication matter is of temporary kind or where a direct
interaction is required.
Face to face communication (meetings, lectures, conferences, interviews, etc.) is significant so as to
build a good rapport and trust.
Advantages of Oral Communication
1. There is high level of understanding and transparency in oral communication as it is interpersonal.
2. There is no element of rigidity in oral communication.
3. There is flexibility for allowing changes in the decisions previously taken.
4. The feedback is spontaneous in case of oral communication. Thus, decisions can be made quickly
without any delay.
5. Oral communication is not only time saving, but it also saves upon money and efforts.
6. Oral communication is best in case of problem resolution. The conflicts, disputes and many
issues/differences can be put to an end by talking them over.
7. Oral communication is an essential for teamwork and group energy.
8. Oral communication promotes a receptive and encouraging morale among organizational
employees.
Disadvantages/Limitations of Oral Communication
1. Relying only on oral communication may not be sufficient as business communication is formal
and very organized.
2. Oral communication is less authentic than written communication as they are informal and not as
organized as written communication.
3. In case of meetings, long speeches consume lot of time and are unproductive at times.
4. Oral communication (such as speeches) is not frequently used as legal records except in
investigation work.
WRITTEN COMMUNICATION
Written Communication‘ means the sending of messages, orders or instructions in writing through
letters, circulars, manuals, reports, telegrams, office memos, bulletins, etc.
It is a formal method of communication and is less flexible. A written document preserved properly
becomes a permanent record for future reference. It can also be used as legal evidence.
It is time consuming, costly and unsuitable for confidential and emergent communication. Written
communication, to be effective, should be clear, complete, concise, correct, and courteous.
Advantages of written communication
1. Easy to preserve: The documents of written communication are easy to preserve. Oral and non-
verbal communication cannot be preserved. If it is needed, important information can be
collected from the preserved documents.
2. Easy presentation of complex matter: Written communication is the best way to represent any
complex matter easily and attractively.
3. Permanent record: The documents of written communication act as a permanent record. When
it is needed, important information can be easily collected from the preserved documents.
4. Prevention of wastage of time and money: Written communication prevents the waste of
money and time. Without meeting with each other the communicator and communicate can
exchange their views.
5. Accurate presentation: Through the documents of the written communication top executive can
present the information more accurately and clearly. As it is a legal document everybody takes
much care does draft it.
6. Use as a reference: If it is needed, written communication can be used as future reference.
7. Delegation of authority: Written communication can help the authority to delegate the power
and authority to the subordinate. It is quite impossible to delegate power without a written
document.
8. Longevity: Written document can be preserved for a long time easily. That is why; all the
important issues of an organization should be back and white.
9. Effective communication: Written communication helps to make communication effective. It
is more dependable and effective than those of other forms of communication.
10. Maintaining image: Written communication helps to maintain the images of both the person
and the organization. It also protects the images of the company or organization.
11. Proper information: It is a proper and complete communication system. There is no
opportunity to include any unnecessary information in a written document.
12. Less distortion possibility: In this communication system information is recorded permanently.
So, there is less possibility of distortion and alteration of the information.
13. No opportunity to misinterpret: there is any opportunity to misinterpret the information or
messages of written communication.
14. Controlling tool: Written communication can help to control the organizational activity. The
written document may be used as a tool for controlling.
 15. Easy to verify: The information and messages that are preserved can be verified easily. If there
arises any misunderstanding any party can easily verify the information.

DISADVANTAGES OF WRITTEN COMMUNICATION

1. Expensive: Written communication is comparatively expensive. For this communication paper, pen,
ink, typewriter, computer and a large number of employees are needed.
2. Time consuming: Written communication takes time to communicate with others. It is a time
consuming media. It costs the valuable time of both the writer and the reader.
3. Useless for illiterate person: It messages receiver is illiterate, written communication is quite
impossible. This is major disadvantage written communication.
4. Difficult to maintain secrecy: It is an unexpected medium to keep business secrecy. Secrecy is not
always possible to maintain through written communication. Because here needs to discuss
everything in black and white.
5. Lack of flexibility: Since writing documents cannot be changed easily at any time. Lack of
flexibility is one of the most important limitations of written communication.
6. Delay in response: It takes much time to get a response from the message receiver; prompt response
is not possible in case of written communication that is possible in oral communication.
7. Delay in decision making: Written communication takes much time to communicate with all the
parties concerned. So the decision maker cannot take decisions quickly.
8. Cost in record keeping: It is very difficult and expensive to keep all the records in written
communication.
9. Complex words: Sometimes the writer uses complex words in writing a message. It becomes
difficult to meaning out to the reader. So the objectives of the communication may lose.
10. Lack of direct relation: If there is no direct relation between the writer and the reader,
writer communication cannot help to establish a direct relation between them.

NON – VERBAL COMMUNICATION

Non-verbal communication involves the transfer of meaning information from one person to another
by means without using written or spoken words.
Non verbal communication includes pitch, speed, tone and volume of voice, gestures and facial
expressions, body posture, stance, and proximity to the listener, eye movements and contact, and
dress and appearance.
Managers can adopt three forms of non-verbal languages to transmit their message.
1. Sign Language
2. Object language
3. Action language
The important kinds of non-verbal communication are
A. BODY LANGUAGE
Message can be transmitted with the help of our body movements which is called body language.
Body language is a form of non-verbal communication, which consists of posture, gestures, facial
expressions, eye movements etc.

1. Facial expression: A facial expression is one or more motions or positions of the muscles in the
skin of face. These movements convey the emotional state of the individual to observers.
Facialexpressions for happiness, sadness, anger and fear are similar throughout the world.

2. Gestures: Gestures refers to visible bodily actions communicate particular messages which include
movement of the hands, face, eyes, head or other parts of the body. Common gestures include waving,
pointing, and using fingers to indicate numeric amounts. Culture-specific gestures that can be used as
replacement for words, such as the hand wave used in western cultures for ―hello‖ and ―goodbye‖.

3. Posture: Posture indicates the position in which we hold the body when standing or sitting. It can
help to communicate non-verbally. Consider the following actions and note cultural differences:
Bowing not done criticized or affected in US; shows rank in Japan. Slouching rude in most Northern
European areas. Hands in pocket-disrespectful in Turkey. Sitting with legs crossed-offensive in
Ghana, Turkey. Showing soles of feet-offensive in Thailand, Saudi Arabia.

4. Eye Gaze or Eye contact: Eye contact indicates looking, staring and blinking etc. which is
important in nonverbal behaviors. Looking at another person can indicate a range of emotions,
including hostility, attention, interest, and attraction, defines power and status and has a central role in
managing impressions of others.

5. Appearance and dress: External appearances also play a vital role to communicate others. Our
dressing provide a good visual signal to our interest, age, personality, taste, and sex. Our choice of
color, clothing, hairstyles and other factors affecting appearance are also considered a means of
nonverbal communication which can evoke different moods. For example, seeing the dress of army
officers, we can easily determine the job status, similarly that of a doctor, advocate, professionals, etc..

6. Touch: Touch is culturally determined. But each culture has a clear concept of what parts of the
body one may not touch. Basic message of touch is to affect or control,protect, support and
disapprove (i.e. hug, kiss, hit, kick). In USA-Handshake is common (even for strangers), hugs and
kisses for those of opposite gender or of family (usually) on an increasingly more intimate basis.
Islamic and Hindu- typically don‘t touch with the left hand. Left hand is for toilet functions.

7. Silence: Silence is another form of non-verbal communication which expresses the positive or
negative meanings of particular messages. In a classroom, silence indicates that students are listening
carefully and attentively.

B. SPACE OR PROXIMITY: People often refer to their need for ―personal space, which are also
important types of non verbal communication. The physical distance between you and others signals
your level of intimacy and comfort. If someone you don‘t know stand too close or touches too often,
you will probably begin to feel uncomfortable.

C. TIME: Another type of non-verbal communication involves time. That is how we give meaning to
time communicates to other. For example, being late in work every time, then the worker can be
considered as carelessness but if a politician does it; we say it is a symbol of power. We know, time
can play a vital role to reduce tension, conflict among groups, heve effectiveness in work, build
efficiency etc.. It is said that- ―Kill the time to delay the justice.

D. PARALINGUISTIC (TONE AND VOLUME OF VOICE) Paralinguistic refers to vocal

communication that is separate from actual language. Paralanguage also include s such vocal
characteristics as rate (speed of speaking), pitch (highness or lowness of tone), inflection, volume
(loudness) and quality (pleasing or unpleasant sound). Vocal characterizers (laugh, cry, yell, moan,
whine, belch and yawn). These send different message in different cultures.

E. VISUAL COMMUNICATION When communication takes place by means of any visual aid, it
is known as visual communication. Such as signals, map, chart, poster, slide, sign etc. for example, to
indicate danger‘, we use red sign, to indicate no smoking‘, we use an image showing a lighted
cigarette with across mark on it, the different traffic signals of caution, mandatory rules, and
importanct information giving signboards, etc.

FORMS OF COMMUNICATION
1. Oral and Written communication
2. Formal and Informal Communication

Formal communication:- Communication that flows from sender to receiver through a formal,
pre-defined channel and having a formal structure is called formal communication. There will be a
clearly defined line of authority, reporting structure and channel for formal communication.

Informal Communication:- Communication occurring outside the formal channel which doesn’t
have a well defined structure or a defined route to flow is called informal communication. It is also
called grapevine communication. Through this grapevine communication rumour, gossips and
other urgent information can be passes from one person to another. Also this informal
communication can be used in organizations to build relationship and for social interaction between
employees of all level within the workplace.

Difference between formal and informal communication

BASIS FOR
FORMAL COMMUNICATION INFORMAL COMMUNICATION
COMPARISON
Definition A type of verbal communication in which the interchange A type of verbal communication in
of information is done through the pre-defined channels which the interchange of information
and a structure is known as formal communication.. does not follow any channels i.e. the
communication stretches in all
directions and doesn’t have a formal
structure..
Another Name Official Communication Grapevine communication
Reliability More reliable Comparatively less reliable
Speed Passes from one point to another point Slowly Moves Very Fast
Evidence As the communication is generally written, documentary There is no documentary evidence.
evidence is present.
Time Consuming Yes, it is time consuming No. It passes quickly
Advantage Effective due to timely and systematic flow of information. Efficient because employees can discuss
work related problems, this saves time
and cost of the organization.
Disadvantage Distortion due to long chain of communication. Spread of rumors
Secrecy Full secrecy is maintained. It is difficult to maintain the secrecy.
Flow of Only through predefined channels. Can move freely.
Information

3. Based on the flow pattern Vertical, Horizontal and Diagonal Communication

(a) .Vertical communication:- Communication which passes vertically from one level to another
is called vertical communication. Vertical communication can be upward and downward.

Upward communication:-Communication which passes upward through the hierarchical level is

called upward communication. It flows from subordinates to superiors. Normally appeals,
suggestions, grievance, complaints, feedback, reports, statements, explanations, etc. flows in
upwards communication. Communication from clerical staff to functional manager is an example
of upward communication.

Downward communication:- Communication that passes down the organizational hierarchy is

called downward communication. This is a traditional form of communication through which
superiors passes orders, instructions, notices, directives, circulars, memos,performance feedback,
and guidelines to the subordinates. Downward Communication moves from Functional manager to
clerical staff.
 (b)Horizontal Communication:- Horizontal communication is also called Lateral
communication. It is the communication which passes between persons in the same level in the
organisation. Communication passing from HR manager to Marketing manager is a horizontal
communication

(c) Diagonal Communication :- Communication among individuals who occupy different level in
an organizational hierarchy is called diagonal communication. Example, communication moving
from Finance manager and Assistant marketing manager.

Barriers to Communication
The process of communication has multiple barriers. The intended communique will often be disturbed
and distorted leading to a condition of misunderstanding and failure of communication. The Barriers to
effective communication could be of many types like linguistic, psychological, emotional, physical, and
cultural etc. We will see all of these types in detail below.

I-Language/ Semantic Barriers:

Barriers arising due to differences in languages, words meaning or pronunciation can create confusion
among the people. Linguistic means related to the language. Semantic means the meaning of the
words.
Following are some of the examples of language barriers.
• Different Languages or lack of Common Language can create obstacles in Communication. A
person who does not understand the native language or even foreign language cannot communicate
well. This becomes very difficult situation.
• Multiplicity of words: words can have different meanings. Word power is gift to human beings but
at the same times multiple meaning or spellings of the words can create the problems in
communication.
• Words with similar pronunciation but different meaning [Homophones]also create problems in
communication. E.g. Except-accept, fair-fare, council-counsel,principal principle[etc].
• Jargon words[Technical words]used by professionals such as Engineers/Doctors or any other
professionals. Many times, jargon words are used unintentionally. But common people or those who
do not understand the meaning of these words face problems.
• By-passed Instructions: Means many times short cuts are used while passing the messages. Eg. A
Manager ordered the newly appointed secretary to go and burn the C.D.She literally burned it . He
meant to copy the C.D.

II-Psychological Barriers:
Psychological barriers arise in the minds. Human mind it very complex thing to understand. We face
many times some conflicts due to situations or surrounding events. So these barriers are bound to
arise. But the real problem is that people do not accept that these barriers exists in their minds. Due to
status, old age and ego problems many times psychological barriers are created. These are difficult to
overcome.Because people do not accept that they face barriers or they lack proper understanding to
face the world.
The following are situations or examples of psychological barriers.
1. Ego: `I’ Attitude means I am great feeling can create barrier in mind. Ego barriers create conflict in
human relations.
2. Prejudice: bias[wrong opinion] about people on the basis of community, caste, religions or on
personal basis is very negative for communication. Prejudice can hamper the communication.
3. Emotions and feelings : Emotional Disturbances of the sender or receiver can distort[change] the
communication .
4. Halo Effect: like or dislike about a person can create halo or horn effect. This can affect
communication.
5. Self Image: Positive or Negative image about self is the way of looking at the world. Negative self-
image can destroy or hamper communication . Such people always think negatively and do not look
at the things or events properly.
6. Filtering in Messages: Messages are filtered [ changed ] intentionally. We always try to defend
ourselves or protect ourselves during some problems so that many times messages are changed by the
inferiors
7. Closed Mind : Most of the time our minds are closed or not able to learn new things. With old age
or change in attitude this problem is observed. This is also a very barrier in communication.
8. Status : Status create barriers in the employees . Higher or lower status create obstacles in thinking
or mixing with people. People keep distance while communicating due to status barriers.
9. Perceptions :The way we look at the world or attitude determines our Communication strategy.
Wrong or negative perceptions can create difficulty in communication . People who have negative
perceptions or think negatively look at every thing or event negatively.
10. Poor Retention : ability to retain the message or remember is important. But if it is poor then
communication becomes difficult.
11. Interest and Attitudes : Interests and Attitudes of people determines communication strategy.
Lack of interest or wrong attitude can lead improper communication.
12. Day-Dreaming: Many students have habits of dreaming or thinking about something else when
some lecture is going on or talk is going on. This obstructs the communication and messages are not
reached properly.

III.Socio-Cultural Barriers: Culture is way of life, values or principles .Cultural differences

between people can create barriers . Different religious practices are followed around the world. Due
to many time differences in the culture can create misunderstanding in communication. Due to
globalization and liberalized policies in business, people around the world are travelling and working
in multinational corporates or companies. This led to mixing or intermingling between people But due
to differences in language, religious practices, dressing styles, food habits many times people get
confused and are not able to understand each other properly. This led to communication failure.
The following are examples or socio-cultural barriers.
1. Concept of Time : The time is not perceived similarly across the cultures. In Western culture
Time is important. In Asian culture Time is taken leisurely. The concept of punctuality differs in
cultures.
2. Assumptions about social strata or caste system. Caste system is observed in India. But in every
culture some kind or differences in the society in the form of religion, community differences or sects
or class division is observed. We should not always assume someone superior or inferior because of
caste or class system.
3. Etiquettes and Mannerisms: In every society or cultures different types of mannerisms are
observed. This includes rule of behaviors or how to follow certain code of conduct . Different forms
of address and salutation or different methods of dressing [formal or informal wearing] are observed.
This can be confusing sometimes. Food preparation method or serving methods are not the same.
There are certain expected norms of eating food in meeting .These are called dining etiquettes.
4. Body Language[Non Verbal Behavior] methods around the world are not same. There can be
misunderstandings because of this.
5. Proximity[Concept of Space]differs from culture to culture. In some culture close distance
between people is not approved. In some culture close distance is accepted.
6. Value system is not same across the cultures.Values or good behavior or ethical principles guide
in our life. But the methods of these value system is not same around the world.

1. Organizational Barriers: The effectiveness of communication is also highly affected by

various elements inherent in the organization.Organizational factors such as organizational policies,
rules & regulations, authority structures etc. may also put a hindrance in the communication process.
Different organizatonal culture effects communication effectiveness. Language difference among
employees, the unclear sgtrucure of organization, ststus difference between employees, etc. Creates
barrier in organisations.
2. Personal Barriers:- There are also various kinds of barriers which are directly concerned with
the receiver and sender of communication. Such kind of barriers are called personal barriers which
will affect the effective flow of communication. The explanation of these barriers is as follows:
1. Fear of Challenge to the Authority:
2. Lack of Confidence in Subordinates:
3. Unwillingness to Communicate:
4. Filtering information
5. Lack of active listening
6. Time pressures on individuals,
7. Being defensive
8. Have preconceived nortion, etc. Brings in personal barrier in communication

How to overcome the Barriers

1.Physical Barriers: By overcoming defects in communication system ,by controlling noise ,physical
distance Physical Barriers can be overcome to some extent. Though we can’t overcome some physical
barriers such as time , distance or defects in machine, we can control Physical barriers to some extent.
Efforts are required by all people to overcome physical barriers.

2. Language Barrier: Lot of efforts are required to overcome Language Barriers. There should be
respect for any language before learning new language. It requires many efforts to learn foreign
language. So learning the correct pronunciation and accent and improving vocabulary [word
power]we can master a language. We have to improve listening skills and then only language can be
understood properly.
3. Psychological Barriers: It is true that psychological barriers are difficult to overcome or solve.
There must be acceptance of ones mistakes or limitations. This will led to understanding of human
life. People do not accept their faults or limitations. This leads to many problems. We have to be
humble and respectful towards other people. Many times the sender and the receiver are not in proper
frame of mind. So this creates problems in Communication. Misunderstanding, lack of interests,
mental and physical disturbance can cause problems because of that. Efforts should be taken by
superiors and all reporting people to overcome the problems.
4. Socio –Cultural Barriers: These Barriers can be overcome by proper study of other cultures . It
is very much essential to learn new cultural values and observing people and accepting their
cultures .We have to develop open mindedness in this regard. We have to understand the mannerisms
of other people.

Other measures to overcome communication barriers are:

1. Employee orientation initiatives giving systematic information regarding the job.
2. Building effective communication plans and policies.
3. Enhancing interpersonal communication
4. Efficient listening
5. Ease of language
6. Enhancing both verbal non-verbal communication skills,
7. Maintaining emotional stability
8. Effective feedback
9. Being empathetic.

Factors influencing organizational communication

1. Organizational climate:-- Style of communication and coordination depends upon the
organisational climate. Organizations maintain different climate like- supportive climate,
innovative climate, respect for rule climate, goal-oriented and information flow climate.
2. Role and relationship between sender and receiver
3. Value system prevailing in the organization
4. Attitude of individuals of different levels in an organisation.
 7 C’s of Communication
1. Clear:- The message should be clear and easily understandable.
2. Correct: The message should be correct,
3. Complete: The message should be complete, i.e. it must include all the relevant information as
required.
4. Concrete: -All the facts and figures should be clearly mentioned in a message so as to
substantiate to whatever the sender is saying.
5. Concise:- Concise: The message should be precise and to the point.
6. Consideration: The sender must take into consideration the receiver’s opinions, knowledge,
mindset, background, etc.
7. Courteous: The message should not be biased and must include the terms that show respect for
the recipient.

Making Communication Effective

Effective communication is the exchange of ideas, thoughts, opinions, knowledge, and information so
that the message is received and comprehended clearly and purposefully. In particular, good
communication:

1. Be clear and concise:- Communication is primarily about word choice. The key to powerful and
persuasive communication—whether written or spoken—is clarity and, when possible, brevity.

2. Prepare ahead of time:--Know what you are going to say and how you are going to say it before
you begin any type of communication.

3. Be mindful of nonverbal communication:--Our facial expressions, gestures, and body language

can, and often do, say more than our words.

3. Watch your tone:--Tone can be an especially important factor in workplace disagreements and
conflict. A well-chosen word with a positive connotation creates good will and trust. A poorly chosen
word with unclear or negative connotations can quickly lead to misunderstanding.

5. Practice active listening:--When it comes to communicating successfully, listening is just as

important as speaking. But active listening is far more challenging than we realize.

6. Build your emotional intelligence:---Communication is built upon a foundation of emotional

intelligence. Simply put, you cannot communicate effectively with others until you can assess your
own feelings and understand theirs.

7. Develop a workplace communication strategy:---Today's workplace is a constant flow of

information across a wide variety of formats. Every single communication must be understood in the
context of that larger flow of information.

Benefits of effective communication in the workplace

Clear, effective workplace communication can:
1. Boost employee engagement and belonging
2. Improve interpersonal skills and emotional intelligence
3. Encourage team buy-in
4. Increase productivity
5. Build a healthy workplace and organizational culture
6. Reduce conflict
7. Increase retention

III.MOTIVATION

The term ‘Motivation’ is derived from the word ‘motive’ which may be defined as needs, wants,
drives or impulses within an individual.
Motivation can be defined as stimulating, inspiring and inducing the employees to perform to their
best capacity.
“Motivation means a process of stimulating people to action to accomplish desired goals.”

Importance of Motivation
1. Motivation helps to improve performance levels of employees as well as the organisation.
2. Motivation is an important tool to get people work hard in their job and effectively fulfill the
organisations goal.
3. Motivation helps to reduce absenteeism in the organisation.
4. Motivation helps to reduce employee turnover and therefore saves the cost of new
recruitment and training.
5. Motivation helps mangers to introduce challenges smoothly without much resistance from
people.
6. Motivation through its two-pronged system (coin and kind) creates a desirable work relation
between the management and the workers. Such motivational plans benefit both the employee
and the employer.

Types of Motivation
1.Positive Motivation or Pull-Mechanism:

Motivating people through positive measures like rewards, appreciaton, recognition etc. which
positively influence an individual is called positive motivation.

Negative Motivation or Push-Mechanism:

The method of motivation through negative measures like fear of consequences of doing
something or not doing something, punishments, penalties, pay cuts, punishment transfers, etc
keeps the worker in the desired direction and is called negative motivation. .

This method has got several limitations. Fear creates frustration, a hostile state of mind and an
unfavourable attitude towards the job which hinders efficiency and productivity. So the use of it
should be kept to its minimum and should be practiced discretely.

II. Motivation can be monetary and non-monetary. Reward may be financial or non-financial.
Monetary motivation may include motivating individuals through different incentives, wage
plans, productive bonus schemes, etc.

Non-monetary motivation may include praise for the work, participation in management, social
recognition, etc.

III. Motivation can be intrinsic and extrinsic:--The drive or desire which arises from within
individual to do something is called Intrinsic motivation. Factors that promote intrinsic
motivation in individuals are cllanges, curiosity, cooperation, control, competition,
recognition,etc.

Extrinsic Motivation:- When the drive to do something or accomplishment comes from outside
of an individual, then it is called extrinsic motivation. Factors like pay raise, material reward,
promotion, praise, social approval, status, special assignments, etc constitute extrinsic
motivation.
I. Maslow’s Hierarchy of Needs:

The Hierarchy of need theory proposed by Abraham Maslow in 1943 is one of the well known
theories of motivation. According to Maslow, human needs are hierarchical in nature. The
need hierarchy has five stages of needs. They are

The five levels of the hierarchy of needs are:

1. Physiological Needs
2. Social Needs
3. Security Needs
4. Esteem Needs
5. Self-Actualization Needs

1. Physiological need:-- These need include the need for basic necessities of an individual such as,
the need for food, water, cloth, shelter,sleep and other physical requirement. Fulfillment of these
physiological need is essential for people to continue living. As long as the physiological need
remain unfulfilled, the other higher order need cannot motivate an individual. Only when the
physiological need is fulfilled, people think about achieving the next higher level need.
Organisations usually satisfies these basic level needs of employees through their basic salary and
wages.
2. Safety and Security needs:- Once the physiological needs are fulfilled, the need for safety and
security arises among people. Safety and security need include physical security, job security,
emotional security, stability, freedom from fear, anxiety, safe drinking water and food, etc. In
organisations, , fringe benefits, retirement benefits, etc. Are provided in order to fulfill the safety
and security needs of employees.
3. Social needs:- Once the safety and security need is completely fulfilled, then now the social
needs become the dominenet need for prople. People now look to satisfy their need forlove,
affection, friendship, social acceptance and a sense of belonging. Individuals wish to be in the
company of others. Socializing with co-workers, superiors, customersand others in an
organisationenables the employees to fulfill their social needs.
4. Esteem needs:-- when the primary needs of physiological, safety and security needs and social
needs are fulfilled, now the desire to achieve esteem need dominates with people. People satisfy
their internal or self esteem needs by acquiring competence, strength, confidence, mastery, fredom
etc. And external esteem needs by gaining prestige, status, recognition, appreciation and attention
of others. Organisation provides rewards, recognition, promotion, incresed responsibilities, job
enrichment, etc. To enable employees to fulfill their esteem needs.
5. Self- Actualisation needs:-- This is the highest need in the hierarchy of needs of Maslow’s
theory. This include a person’s need to grow and realise his or her full potential in life. It is the
need to achieve what one is capable to achieve in their life and not all can do. In organisation
employee expect opportunities for growth and development, creativity, better training to increase
their knowledge and skills, etc. Which facilitates to fulfill their self- actualisation needs.

According to Maslow, when one set of need is fulfilled, people desires to achieve the other
set of higher level needs. For majority of the people the hierarchy of need follows the order.
Maslow’s needs theory is considered as the simplest and straightforward theory which has gained
wide acceptance among practicing managers. Maslow also highlights that people require desire,
initiative and effort to rise from one hierarchial level of needs to another.

The major limitations of Maslow’s hierarchy of need theory was that the needs cannot be
achieved in the order specified by Maslow. The self actualization need can be achieved without
fulfilling all other lower level needs. Also another criticism was that none of the need can be said to
be fully achieved in an individual.

II Hertzberg’s Two Factor Theory

Frederick Hertzberg, an American psychologist, developed the motivation-hygiene theory also

known as two-factor theory. Through his study on 200 engineers and accountant in five different
companies, Herzberg several important determinants for job satisfaction and job dissatisfaction.
They were Hygiene factors/ Maintenance factors and Motivators. Determinants which are job
satisfiers are called motivators, and determinants which prevent job dissatisfaction are called
hygience or maintenance factors.

Motivators when present leads to motivation or job satisfaction. But when motivators are absent it
prevents job satisfaction.( A situation of no satisfaction). Similarly, when hygiene factors are present,
it helps to prevent job dissatisfaction but do not increase satisfaction or motivation. And when
hygiene factors are absent it increases dissatisfaction. Hygiene factors does not help to bring about
growth in worker out, but they can prevent loss of performance caused by work restrictions.

The factors responsible for motivation (Motivators) are:

1. Achievement,
2. Recognition,
3. Attraction of work itself,
4. Responsibility
5. Advancement
6. Growth

The factors which prevent job dissatisfaction (Hygiene/ Maintenance factors)

1. Company policies and administration
2. Supervision
3. Working condition
4. Interpersonal relationship
5. Status
6. Security (job as well as physical)
7. Personal life
8. Salary

According to this theory, of the two factors, the motivators are more important in organisations,
because it directly affect the motivational drive of employees leading them to better employment
engagement, high productivity, and job satisfaction.

Limitations:

1. The theory has been criticized for the confusion in the classification of factors as satisfiers and
non disatisfiers.
2. Hertzberg’s theory was criticized for including salary/ money as a maintenance factor.

Self actualisation Motivation factors

Esteem need

Social need

Safety & security need Hygiene factors

Physiological need

III. McGregor’s theory X and theory Y

Douglas McGregor explains two different kinds of assumptions about human behaviour.

The first part of McGregor’s theory is Theory X. Managers have many assumptions about their
employees in Theory X:

Workers dislike their jobs and they are inherently lazy.

Workers have little motivation and prefer direction from their superiors.
Workers need consistent rewards and punishments to ensure their task is completed.
Workers do not have a desire to grow or achieve personal or professional goals.
The next part of McGregor’s theory is Theory Y. Managers also have assumptions about their
employees in Theory Y:
Workers enjoy their work if it can be as natural as playground or resting place.
Workers are self directed and controlled in fulfilling the objectives to which they are committed.
Workers are willing to accept challenges and are proud of the work that they do.
Workers have the capacity to find solutions for the organisational problems using high degree of
crativity and imagination..
Workers are eager to participate in decision-making.
Workers are happy to contribute and feel internally satisfied.
The goal of the workers are the same as that of thee organization
Here McGregor, recommended that organisation adopts managerial techniques such as worker’s
participation in management, decentralisation and delegation of authority, job enlargement and
teamwork to improve employee motivation. He also believes that there is little possibility to
improve relationship McGregor suggested that organizations would experience greater success if
they focused on satisfying interpersonal needs, which led to the development of Theory Y.

IV. ERG theory

Alderfer’s ERG theory of motivation builds on Maslow’s Hierarchy of Needs and states that humans
have three core types of need: Existence, Relatedness and Growth. These needs may be of different
levels of priority for different individuals, and their relative importance for an individual may vary
over time.

Clayton Alderfer developed Maslow’s Hierarchy of Needs into a three factor model of motivation
know as the ERG model. In this model the letter E, R, & G each stand for a different human need:
existence, relatedness and growth. The ERG model is a content theory of motivation.

E-Existence Need:- it include all form of material and physiological desire for people which is similar
to the physiological and safety&security needs given by Maslow.

R- Relatedness Need:- it involves the need for maintaining satisfactory relationship with other
people in the organisaton. It also can be equated to Maslow’s social and external esteem needs.

F-Growth level Needs:- This refers to personal growth, creativity and competence and self
development needs of the people. It is similar to the fourth (Internal esteem) and fifth level needs
of Maslow.

Alderfer’s model says that all humans are motivated by these three needs. The most concrete and
motivating of Alderfer’s three needs is existence, which really relates to physical and psychological
survival. The next level is the need for relatedness, a sense of community and a good relationship
with yourself. The least concrete, but still important, of Alderfer’s needs in the ERG model is growth,
which really relates to self-development, fulfillment and the sense of achieving your potential. The
theory assumes that people will be going up and down in the hierarchical level of need depending
on the situation, time and need.

Other Motivation theories

1. McClelland’s Acquired Needs theory: Include Need for Achievement (nAch), Need for
affiliation (nAff) and Need for Power (nPow).
2. Equity Theory
3. Victor Vroom’s Expectancy Theory of Motivation
4. Theory Z
5. Goal setting theory
6. Reinforcing theory
7.

IV.LEADERSHIP
Leader:-They are individuals who guide, inspire, and influence others toward a shared vision.

Leadership:- Leadership is defined as a process of influencing people in such a way that they
willingly contribute to the accomplishment of the desired goal.

Different Types of Leadership?

1. Autocratic:--An autocratic management style puts the manager at the top of the pyramid on a
team. They make decisions and control projects without soliciting input from team members or
other stakeholders.

2. Democratic:--A democratic management style, opposite of autocratic, puts the voice of the team
at the forefront of decision-making and project management. The manager seeks input from
subordinates and other stakeholders to drive the vision and direction of projects..

3. Laissez-faire/Free Rein Leadership:--A laissez-faire management style is a hands-off approach to

leadership that lets team members work independently and make decisions for themselves. The
never comes forward to take the responsibility if mistakes haapens with the employees. Free-rein
leadership offer minimal supervision, trusting their team to work independently and take ownership
of their tasks, thereby fostering innovation and autonomy.

4. Bureaucratic:--A bureaucratic management style relies on rules, policies and standard operating
procedures, rather than a leader’s personality, interests or charisma. Team members are evaluated
on standard criteria, projects are planned according to procedure and goals are meticulously
measured and reported.

5. Servant leadership:--A servant leadership style puts employees’ needs, growth and professional
development ahead of the needs of the manager, company or project. It prioritizes team bonding
and employee well-being.

6. Coaching:--A coaching management style focuses on employee professional development. It

incorporates regular feedback, training and day-to-day support to develop and hone employee
skills and strengths.

7. Charismatic:---A charismatic management style relies on a leader’s personality and energy to

inspire, engage and motivate employees.

8. Transactional:--A transactional management style rewards employees for meeting specific

milestones and objectives. It sets clear expectations and relies on the promise of a reward to
motivate employees.
9. Transformational:--A transformational management style focuses on inspiring and motivating
employees to think outside of the box to raise the bar, both to achieve business goals and reach
their full professional potential.

10. Situational:---A situational management style is a mix of all of them: Management style is
adapted to the situation and team members’ needs.

11.Participative/ Democratic Leadership:--In the democratic or participative leadership, team

members and leaders equally contribute to actualizing business goals. Moreover, they work
together and motivate each other to achieve their personal goals too.

12. Agile Leadership:--Agile leaders are flexible and responsive to change, fostering a collaborative,
iterative environment, and adapting to evolving goals and circumstances.

13.Empathetic Leadership:--A more modern alternative to understanding what is leadership is the

emergence of empathetic leaders. They prioritize understanding their team’s feelings and
perspectives, thus creating a supportive, inclusive atmosphere that boosts morale and productivity.

14.Visionary Leadership:-Visionary leaders inspire and guide their teams with a clear, compelling
vision, motivating individuals to work toward a common goal with passion and creativity.

15. Ethical Leadership:--Ethical leadership prioritize integrity and transparency, ensuring that their
decisions and actions align with moral values and societal norms.

What are the Qualities of a Good Leader?

Any professional who becomes a leader must know what is leadership in terms of the traits they
must possess. Here are some of the necessary qualities of a good leader:

1. Integrity:--Leaders value virtuousness and honesty. Furthermore, they also surround themselves
with like-minded people who believe in them and their vision.

2. Inspiration:--Leaders are self-motivating, and this makes them great influencers. They are a good
inspiration to their team members and help others to understand their roles in a bigger context.

3. Communication Skills:--Leaders must possess great communication skills to enable their team
members to understand their vision. They are also transparent with their team and share failures
and successes with them.

4. Vision:--What is leadership without the vision for company growth? Leaders, therefore, need to
be visionaries. They must have a clear idea of what they want and how to achieve it. This is essential
to steer their organization to the path of success.

5. Resilience:--Leaders challenge the status quo. Hence, they never give up easily. They also have
unique ways to solve a problem.

6. Intuition:--Leadership coach Hortense le Gentil believes that leaders should rely on intuition for
making hard decisions. Intuition heavily relies on a person’s existing knowledge and life learning,
especially useful in complex situations.
7. Empathy:--A leader should be an emotional and empathetic fellow because it will help them
develop a strong bond with their team. Empathy, in fact, will help a leader address the problems,
complaints, and aspirations of their team members.

8. Fairness:--Although empathy is an important quality a leader must imbibe, getting clouded by

emotions while making an important business decision can be potentially problematic. Hence, a
good leader should balance empathy with fairness.

9. Intelligence:--A good leader must be intelligent enough to arrive at business solutions to difficult
problems. Furthermore, a leader should be analytical and should weigh the pros and cons before
making a decision. This quality can be polished with an all-inclusive leadership training program.

10. Creativity:--An effective leader is also someone open to new ideas, possibilities, and
perspectives. They are always ready to listen, observe, and willing to change. They are also out-of-
the-box thinkers and encourage their teams to do so.

11. Patience:--Successful leaders understand that a business strategy takes time to develop and
bear results. Additionally, they believe that continuous improvement and patience are the key to
growth.

12. Flexible:--Leaders understand the concept of continuous improvement but they also know that
adaptability will lead them to success. Nothing goes as planned. Hence, being flexible and intuitive
helps a manager to hold his ground during complex situations.

Importance of Leadership

The importance of leadership lies in its ability to ensure success, especially in a business. Here’s why:

1. Offers Direction:---Leaders provide a roadmap for a future, a compelling vision that unites
employees. The lack of it can result in groups struggling consequently because they are unsure of
their goals.

2. Instills Motivation:--Leaders know how to ignite a spark to cultivate enthusiasm. They can take a
team from simply doing their jobs to believing in the purpose of the organization.

3. Simplifies Decision-Making:--It is crucial to make clear and strategic decisions to solve pressing
problems. They help teams navigate through obstacles and devise innovative solutions.

4. Manages Change:--Another reason why leadership is important is to navigate change effectively,

especially when the world is evolving constantly. It becomes critical to transition smoothly and
embrace new opportunities.

5.Builds Autonomy: Leaders make sure that there is trust and enable employees to work
independently. It is possible due to clear communication and a results-oriented mindset

6.Ensures Collaboration: There is isolation in physical distance. Hence, leadership bridges the gap
between employees to smoothen interaction in a virtual space

7.Maintains Company Culture: It is difficult to implement company culture in a remote setting. So

an important aspect of leadership in today’s work environment is finding ways to do so. They can,
for instance, leverage technology to hold team-building activities, encourage informal interactions,
and recognize achievements

8.Boosts Employee Well-Being: Remote work can cause an imbalance between work and personal
life. It is, therefore, imperative for leaders to promote healthy boundaries and well-being practices
for their teams

CONTROLLING
Controlling is the process of monitoring, comparing and correcting work performance.

Importance of Controlling

1. Controlling enables managers to know whether the organizational members are working towards
the predetermined goals and objectives.
2. It ensures the effective and optimal utilization of resources.
3. It enables managers to determine the under-performing employees and shortage or wastage of
resources.
4. It facilitates to effectively impose work discipline among employees.
5. It enables managers to protect the organizational resources from dangers of financial scandals,
theft, security breach, work place violence, etc.
6. Controlling enables managers to be swift and flexible in responding to the environmental
changes by detecting the changes that affect the organizational plans and policies.

Controlling process

A control process involves various steps which are essential for effective implementation of
planning. These steps are mainly classified into four parts: a). Fixing standards, b) Measurement of
actual performance, c) Comparison of actual and standard performance and d) Correcting
deviations from standards.

A control process involves various steps which are essential for effective implementation of
planning. These steps are mainly classified into four parts: a). Fixing standards, b) Measurement of
actual performance, c) Comparison of actual and standard performance and d) Correcting
deviations from standards.

1. Establishing Performance Standards:--The first step in controlling process is establishment of

standards of performance. Standards serve as a criteria or a test on the basis of which actual
performance can be measured.

2 Measurement of Actual Performance:--After setting standards, the second step of controlling

process is to measure actual performance of various individuals, groups or units. Actual
Performance can be measured by using any method of evaluation e.g. supervision, observation,
reporting, sampling, accounting statements etc. the actual performance should be measured
according to fixed standards.

3 Comparing Actual performance against the Standards

Once actual performance has been measured, the third main step of control process is comparing
actual performance with the fixed standards of performance. It includes two steps:
a) finding out the extent of deviations and

b) identifying the causes of these deviations. The comparison of actual performance with standards
will be easy when standards have been fixed numerically.

4 Analyzing Deviations and detecting the need for corrective action

The deviations coming out of comparison of actual performance with standards are analysed. If
there are no deviations, there is no need to take any action regarding this. The control process ends
here.

But if standards are not achieved and actual performance is below standards, it will be checked and
correcting actions are taken to improve the performance of employees.

if deviation is acceptable i.e. if deviation is within deviation tolerance limits, then again there is no
need to do anything, the status quo is maintained, which is ‘do nothing’ option.

However, if deviation is large and not acceptable, they should be reported to management and
finally, causes of such deviation will be identified and responsibility will be fixed accordingly. If
the standard is not achievable, then standards are changed.

Types of Control

There are different types of control in an organization that are needed to monitor and regulate
organizational processes. The various types of controlling are as follows

Feedback Control: Feedback control involves collecting information about a finished task,
assessing the information and improvising these type of tasks in the future. Example: Managers
may take feedback from their employees and improve the processes based on the feedback.

Concurrent Control: Concurrent control is real-time control wherein the problems are checked in
real time and the action is also taken in real-time to avoid any losses. A typical example is Real
time traffic analysis of a website in case server goes down.

Feed Forward Control or Predictive control: A preventive control is one where you foresee the
problem before it occurs and therefore you are able to prevent it.

Steering control: As with any vehicle that is on the road, a steering control is one which steers the
process onto the right path. In this scenario, the process is ideally an ongoing process and is
continually steered in the right direction. It is a combination of feedback control and concurrent
control.

Yes / No Control: Most typically used in production scenarios, Yes and No control are like lasers
on an assembly line. Either the product is up to quality, or it is not. Similarly, the Yes/No control is
a simple control that decides whether an activity should proceed or not.

Budgetary control: Budgetary control is a type of financial control that controls organizational
resources and budgets. This can be done by observing forecasted budget vs actual budget usage and
bringing control mechanisms to stop overutilization of the budget.

Operational Control: Day-to-day activities are the operations that take place in any organization
and the more productive an organization is, the better its operations. Thus, operational control
manages the day-to-day activities and processes to ensure efficiency and regulation.
Strategic Control: Every organization has long-term goals and objectives. Strategic Control
observes the strategic planning and organizational directions and controls the company’s alignment
with its own goals.

Objectives control: SMART goals are best for any organization and Objectives control utilizes the
principles of Management by objectives. Goal-setting is extensively used to give responsibility to
employees and control them via Objective control.

Methods/ Techniques of controlling

I. Traditional Techniques of Managerial Control

Traditional techniques are those which have been used by the companies for a long time now.
These include:

1. Personal observation
2. Statistical reports
3. Break-even analysis
4. Budgetary control

1. Personal Observation

This is the most traditional method of control. Personal observation is one of those techniques
which enables the manager to collect the information as first-hand information.

It also creates a phenomenon of psychological pressure on the employees to perform in such a

manner so as to achieve well their objectives as they are aware that they are being observed
personally on their job. However, it is a very time-consuming exercise & cannot effectively be used
for all kinds of jobs.

2. Statistical Reports

Statistical reports can be defined as an overall analysis of reports and data which is used in the form
of averages, percentage, ratios, correlation, etc., present useful information to the managers
regarding the performance of the organization in various areas.

This type of useful information when presented in the various forms like charts, graphs, tables, etc.,
enables the managers to read them more easily & allow a comparison to be made with performance
in previous periods & also with the benchmarks.

3. Break-even Analysis

Breakeven analysis is a technique used by managers to study the relationship between costs,
volume & profits. It determines the overall picture of probable profit & losses at different levels of
activity while analyzing the overall position.

The sales volume at which there is no profit, no loss is known as the breakeven point. There is no
profit or no loss. Breakeven point can be calculated with the help of the following formula:

Breakeven point = Fixed Costs/Selling price per unit – variable costs per unit
4. Budgetary Control

Budgetary control can be defined as such technique of managerial control in which all operations
which are necessary to be performed are executed in such a manner so as to perform and plan in
advance in the form of budgets & actual results are compared with budgetary standards.

Therefore, the budget can be defined as a quantitative statement prepared for a definite future
period of time for the purpose of obtaining a given objective. It is also a statement which reflects
the policy of that particular period. The common types of budgets used by an organization.

Some of the types of budgets prepared by an organisation are as follows,

❖ Sales budget: A statement of what an organization expects to sell in terms of quantity as

well as value
❖ Production budget: A statement of what an organization plans to produce in the budgeted
period
❖ Material budget: A statement of estimated quantity & cost of materials required for
production
❖ Cash budget: Anticipated cash inflows & outflows for the budgeted period
❖ Capital budget: Estimated spending on major long-term assets like a new factory or major
equipment
❖ Research & development budget: Estimated spending for the development or refinement of
products & processes

II.Modern Techniques of Managerial Control

Modern techniques of controlling are those which are of recent origin & are comparatively new in
management literature. These techniques provide a refreshingly new thinking on the ways in which
various aspects of an organization can be controlled. These include:

1. Return on investment
2. Ratio analysis
3. Responsibility accounting
4. Management audit
5. PERT & CPM
6. MBO
7. MBE

1. Return on Investment

Return on investment (ROI) can be defined as one of the important and useful techniques. It
provides the basics and guides for measuring whether or not invested capital has been used
effectively for generating a reasonable amount of return. ROI can be used to measure the overall
performance of an organization or of its individual departments or divisions. It can be calculated as
under-

Net income before or after tax may be used for making comparisons. Total investment includes
both working as well as fixed capital invested in the business.

2. Ratio Analysis

The most commonly used ratios used by organizations can be classified into the following
categories:
❖ Liquidity ratios
❖ Solvency ratios
❖ Profitability ratios
❖ Turnover ratios

3. Responsibility Accounting

Responsibility accounting can be defined as a system of accounting in which overall involvement

of different sections, divisions & departments of an organization are set up as ‘Responsibility
centers’. The head of the center is responsible for achieving the target set for his center.
Responsibility centers may be of the following types:

❖ Cost center
❖ Revenue center
❖ Profit center
❖ Investment center

4. Management Audit

Management audit refers to a systematic appraisal of the overall performance of the management of
an organization. The purpose is to review the efficiency &n effectiveness of management & to
improve its performance in future periods.

5. PERT & CPM

PERT (programmed evaluation & review technique) & CPM (critical path method) are important
network techniques useful in planning & controlling. These techniques, therefore, help in
performing various functions of management like planning; scheduling & implementing time-
bound projects involving the performance of a variety of complex, diverse & interrelated activities.

Therefore, these techniques are so interrelated and deal with such factors as time scheduling &
resources allocation for these activities.

6.MBO- Management by Objective:- Management by Objectives (MBO) is a systematic approach to

guide employees and organizations by setting clear goals. It involves defining specific objectives within a
company to provide direction and purpose for its workforce. Peter Drucker, an influential management author,
introduced this concept in 1954.
In MBO, both management and employees collaborate to identify common goals. These objectives are
typically measurable and realistic. It encourages open communication and emphasizes individual
contributions toward achieving broader company objectives.

6.MBE-- Management By Exception:--Management by exception (MBE) is a management tactic is

where managers will only take a step in when there are significant deviations from strategic results.
These would be operational or financial outcomes.