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PRINCIPLES OF MANAGEMENT AND ORGANISATIONAL

BEHAVIOUR (R19 & A19)


UNIT - I
INTRODUCTION TO MANAGEMENT

INTRODUCTION

In the present context, managing has become one of the most important areas of human
activity because of increasing role of large and complex organisations in the society.
Because of their increasing role, the organisations have attracted the attention of both
practitioners and academicians to find out the solutions for business problems.

Concept

Defining the term management precisely is not so simple because the term management
is used in a variety of ways. Being a new discipline, it has drawn concepts and
principles from a number of disciplines such as economics, sociology, psychology,
anthropology, statistics and so on.

Each group of contributors has treated management differently. For example,


economists have treated management as a factor of production; sociologists have treated
it as a class or group of persons; practitioners have treated it as a process comprising
different activities.

DEFINITION :

“Management is the art of getting things done through and with people in formally
organized groups” --- Koontz

“Management is the art of knowing what you want to do and then seeing that it is done
in the best and cheapest way” – F.W. Taylor

“Management is the art of securing maximum results with minimum effort so as to


secure maximum prosperity and happiness for both employer and employee and give the
public the best possible service” --- John Mee.

“Management is the accomplishment of results through the efforts of other people”-


-Lawrence

“Management is simply the process of decision making and control over the action of
human beings for the expressed purpose of attaining pre-determined goals” – Stanley V.

“Management is a process involving planning, organizing, staffing, directing and


controlling human efforts to achieve stated objectives in an organization.”

FEATURES/ NATURE/ CHARACTERISTICS OF MANAGEMENT :

1) Multidisciplinary: Management has been developed as a separate discipline, but


it draws knowledge and concepts from various disciplines like psychology,
sociology, anthropology, economics, statistics, operations research etc.,.
Management integrates the idea and concepts taken from these disciplines and
presents newer concepts which can be put into practice for managing the
organisations
2) Dynamic nature of Principles: Principle is a fundamental truth which
establishes cause and effect relationships of a function. Based on integration and
supported by practical evidences, management has framed certain principles.
However, these principles are flexible in nature and change with the changes in
the environment in which an organization exists.
3) Relative, Not absolute Principles: Management principles are relative, not
absolute, and they should be applied according to the need of the organization.
Each organization may be different from others. The difference may exist
because of time, place, socio-cultural factors, etc.,.
4) Management: Science or Art: There is a controversy whether management is
science or art.
An art is personal skill of business affairs. Art is characterized by practical
knowledge, personal creativity and skill. The more one practices an art, the more
professional one becomes. Management can be considered as an art because it
satisfies all these criterion of an art.
A science is a systematized body of knowledge of facts. It can establish
cause-and-effect relationships among various factors. It involves basic
principles, which are capable of universal application. Management can be
considered as science because it satisfies all these criterion of a science.
5) Management as profession: Management has been regarded as a profession by
many while many have suggested that it has not achieved the status of a
profession.
Profession refers to a vocation or a branch of advanced learning such as
engineering or medicine.
6) Universality of management: Management is a universal phenomenon.
However, management principles are not universally applicable but are to be
modified according to the needs of the situation.

IMPORTANCE OF MANAGEMENT :

Management has been important to the daily lives of people and to the organisations.
The importance of management may be traces with the following.

1) Effective utilisation of Resources: Management tries to make effective


utilisation of various resources. The resources are scarce in nature and to meet
the demand of the society, their contribution should be more for the general
interests of the society.
Management not only decides in which particular alternative a particular
resource should be used, but also takes actions to utilize it in that particular
alternative in the best way.
2) Development of Resources: Management develops various resources. This is
true with human as well as non-human factors. Most of the researchers for
resource development are carried on in an organized way and management is
involved in these organized activities.
3) It ensures continuity in the organization: Continuity is very important in the
organisations. Where there are no proper guidelines for decision making
continuity cannot be guaranteed. It is quite natural that new people join while
some others retire or leave the organization. It is only management that keeps the
organization continuing.
4) Integrating various interest groups: In the organized efforts, there are various
interest groups and they put pressure over other groups for maximum share in
the combined output. For example, in case of a business organization, there are
various pressure groups such as shareholders, employees, govt. etc. these interest
groups have pressure on an organization. Management has to balance these
pressures from various interest groups.
5) Stability in the society: Management provides stability in the society by
changing and modifying the resources in accordance with the changing
environment of the society. In the modern age, more emphasis is on new
inventions for the betterment of human beings. These inventions make old
systems and factors mostly obsolete and inefficient. Management provides
integration between traditions and new inventions, and safeguards society from
the unfavorable impact of these inventions so that continuity in social process is
maintained.

FUNCTIONS OF MANAGEMENT :
To achieve the organisational objectives managers at all levels of organization should
perform different functions. A function is a group of similar activities.
The list of management functions varies from author to author with the number of
functions varying from three to eight.

Writers Management Functions


Henry Fayol Planning,Organizing,Commanding,Coordinating,
LutherGullick Controlling
R. Davis POSDCORD-Planning,Organising,Staffing,Directing,
E.F.L.Breech Coordinating, Reporting, Directing
Koontz Planning,Organising,Controlling

Planning,Organising,Motivating,Coordinating, Controlling

Planning,Organising,Staffing,Leading, Controlling

Different authors presented different variations. By combining some of the


functions, these are broadly grouped into Planning, Organising, Staffing, Directing, and
Controlling.
1) Planning: Planning is the conscious determination of future course of action.
This involves why an action, what action, how to take action, and when to take
action. Thus, planning includes determination of specific objectives, determining
projects and programs, setting policies and strategies, setting rules and
procedures and preparing budgets.

2) Organising: Organising is the process of dividing work into convenient tasks or


duties, grouping of such duties in the form of positions, grouping of various
positions into departments and sections, assigning duties to individual positions,
and delegating authority to each positions so that the work is carried out as
planned. It is viewed as a bridge connecting the conceptual idea developed in
creating and planning to the specific means for accomplishment these ideas.

3) Staffing: Staffing involves manning the various positions created by the


organizing process. It includes preparing inventory of personal available and
identifying the sources of people, selecting people, training and developing
them, fixing financial compensation, appraising them periodically etc.

4) Directing: when people are available in the organization, they must know what
they are expected to do in the organization. Superior managers fulfill this
requirement by communicating to subordinates about their expected behavior.
Once subordinates are oriented, the superiors have continuous responsibility of
guiding and leading them for better work performance and motivating them to
work with zeal and enthusiasm. Thus, directing includes communicating,
motivating and leading.

5) Controlling: Controlling involves identification of actual results, comparison of


actual results with expected results as set by planning process, identification of
deviations between the two, if any, and taking of corrective action so that actual
results match with expected results.
EVOLUTION OF MANAGEMENT THOUGHT :
14

TAYLOR & SCIENTIFIC MANAGEMENT :

The concept of scientific management was introduced by Frederick Winslow Taylor


in USA in the beginning of 20th century.

“Scientific management is concerned with knowing exactly what you want to do and
then see in that they do it in the best and cheapest way”

Since Taylor has put the emphasis on solving managerial problems in a scientific way,
often, he is called as father of scientific management and his contributions as the
principles of scientific management. Taylor carried experiments about how to increase
the efficiency of people. On the basis of experiments, he published many papers and
books and all his contributions were compiled in his book “scientific management”. His
contributions are divided into two parts.

 Elements and tools of scientific management


 Principles of scientific management

FEATURES/ELEMENTS AND TOOLS OF SCIENTIFIC MANAGEMENT :


1) Separation of planning & doing: Taylor emphasized the separation of planning
aspect from actual doing of the work. In other words planning should be left to
the supervisor and the worker should concentrate only operational work.
2) Functional foremanship: Taylor introduced the concept of functional
foremanship based on specialization of functions. In this system, eight persons
are involved to direct the activities of workers. Out of these four persons are
concerned with planning viz., route clerk, instruction card clerk, time and cost
clerk and disciplinarian. The remaining four persons are concerned with doing
aspect of the job, viz., speed boss, inspector, gang boss and maintenance
foreman. It is against to the principle of unity of command.

1) Job Analysis: It is useful to find out the one best way of doing the things. The
best way of doing a job is one which requires the least movements, consequently
less time and cost. The best way of doing the thing can be determined by taking
up time – motion - fatigue studies.
 Time study involves the determination of time a movement takes to
complete.
 Motion study involves the study of movements in parts which are
involved in doing a job and thereby eliminating the wasteful movements.
 Fatigue study shows the amount and frequency of rest required in
completing the work.
Thus, job analysis identifies the fair amount of a day’s work requiring certain
movements and rest periods to complete it.
2) Standardization: As far as possible, standardization should be maintained in
respect of instruments and tools, period of work, amount of work, working
conditions, cost of production etc.,. These things should be fixed in advance on
the basis of job analysis and various elements of costs that in performing a work.
3) Scientific selection and training of workers: Taylor has suggested that workers
should be selected on scientific basis taking into account their education, work
experience, aptitude, physical strength, etc., A worker should be given work for
which he is physically and technically most suitable. Apart from selection,
proper training should be provided to workers to make them more effective and
efficient.
4) Financial Incentives: Financial incentives can motivate workers to put intheir
maximum efforts. If provisions exist to earn higher wages by putting in extra
effort, workers will be motivated to earn more. Taylor himself applied the
concept of differential piece rate system which was highly motivating.
According to this scheme, a worker who completes the normal work gets wages
at higher rate per piece and one who does not complete gets at lower rate.
5) Economy: while applying scientific management, not only scientific and
technical aspects should be considered but adequate consideration should be
given to economy and profit. The economy and profit can be achieved by
making the resources more productive as well as by eliminating the wastages.

PRINCIPLES OF SCIENTIFIC MANAGEMENT :

Taylor has given certain basic principles of scientific management.

1) Replacing rule of thumb with science: According to Taylor, exactness of


various aspects of work like day’s fair work, standardization in work, differential
piece rate for payment, etc.., is the basic core of scientific management, it is
essential that all these are measured precisely and should not be based on mere
estimates.
2) Harmony in group action: Taylor has pointed out that attempts should be made
to obtain harmony in group action rather than discord. Group harmony suggests
that there should be mutual give and take situation and proper understanding so
that group as a whole contributes to the maximum.
3) Co-operation: Scientific management involves achieving cooperation rather
than chaotic individualism. It is based on mutual confidence, co-operation and
goodwill. Co-operation between management and workers can be developed
through mutual understanding and a change in thinking.
4) Maximum output: scientific management involves continuous increase in
production and productivity instead of restricted production either by
management or by worker. Taylor heated inefficiency and deliberate curtailment
of production.
In his opinion, “there is no worse crime to my mind than that of deliberately
restricting output”
5) Development of workers: all workers should be developed to the fullest extent
possible for their own and for the company’s highest prosperity. Training should
be provided to the workers to keep them fully fit according to the requirement of
new methods of working which may be different from non- scientific methods.

FAYOL’S ADMINISTRATIVE MANAGEMENT :

Henry Fayol is a French Industrialist and the father of modern operational


management theory. Fayol recognized the following organizational activities.

Organizational Activities: Fayol divided the activities of organization into six


groups---
 Technical (related to production)
 Commercial ( buying, selling and exchange)
 Financial (search for capital and its optimum use)
 Security (protection of property and person)
 Accounting
 Managerial (planning, organizing, commanding, coordinating and
controlling)
Among the above activities Fayol considered managerial activities are the most
important for the success of business and he concentrated more on that. His
contributions are divided the following categories.
 Qualities of a manager
 General principles of management
 Elements of management

Managerial Qualities and Training: According to Fayol the following are the list of
qualities required in a manager.
 Physical (Health, Vigor and Health)
 Mental (Ability to understandand learn, judgment, mental vigor and capability)
 Moral (energy, firmness, initiative, loyalty, tact etc.,)
 Educational
 Technical (peculiar to the function being performed)
 Experience

GENERAL PRINCIPLES OF MANAGEMENT:

Fayol has given 14 principles of management. He has made distinction between


management principles and management elements. While management principles is a
fundamental truth and establishes cause effect relationship, elements of management
denotes the function performed by a manager.

While giving the management principles, Fayol has emphasized two things.
1. The list of management principles is not exhaustive but suggestive and has
discussed only those principles which he followed on most occasions.
2. Principles of management are not rigid but flexible

PRINCIPLES :

1. Division of work: It is helpful to take the advantage of specialization. Here, the


work is divided among the members of the group based on the employees skills and
talents. It can be applied at all levels of the organization.
2. Authority and Responsibility: Fayol finds authority as a continuation of official
and personal factors. Official authority is derived from the manager’s position and
personal authority is derived from personal qualities such as intelligence,
experience, moral worth, past services, etc., Responsibility arises out of assignment
of activity. In order to discharge the responsibility properly, there should be parity
between authority and responsibility.
3. Discipline: All the personal serving in an organization should be disciplined.
Discipline is obedience, application, behavior and outward mark of respect shown
by employees.
4. Unity of Command: Unity of command means that a person should get orders from
only one superior. Fayol has considered unity of command as an important aspect in
managing an organization. He says that “should it be violated, authority is
undermined, discipline is in jeopardy, order disturbed, and stability threatened.”
5. Unity of Direction: According to this principle, each group of activities with the
same objective must have one head and one plan. It is concerned with functioning of
the organization I respect of grouping of activities or planning. Unity of direction
provides better coordination among various activities to be undertaken by an
organization.
6. Subordination of individual interest to general interest: Individual interest must
be subordinate to general interest when there is conflict between the two. However
factors like ambition, laziness, weakness, etc., tend to reduce the importance of
general interest. Therefore, superiors should set an example in fairness and
goodness.
7. Remuneration to Personnel: Remuneration to employees should be fair and
provide maximum possible satisfaction to employees and employers. Fayol did not
favor profit sharing plan for workers but advocated it for managers. He was also in
favor of non-financial benefits.
8. Centralization: Everything which goes to increase the importance of subordinate’s
role is decentralization; everything which goes to reduce it is centralization. The
degree of centralization or decentralization is determined bythe needs of the
company.

9. Scalar Chain: There should be a scalar chain of authority and of communication


ranging from the highest to the lowest. It suggests that each communication going
up or coming down must flow through each position in the line of authority. It can
be short-circuited only in special circumstances. For this purpose, Fayol has
suggested ‘gang plank’

10. Order: This is a principle relating to the arrangement of things and people. In
material order, there should be a place for everything and everything should be in its
place. Similarly, in social order, there should be the right man in the right place.

11. Equity: Equity is the combination of justice and kindness. Equity in treatment and
behavior is liked by everyone and it brings loyalty in the organization. The
application of equity requires good sense, experience and good nature.

12. Stability of tenure: No employee should be removed within short time. There
should be reasonable security of jobs. Stability of tenure is essential to get an
employee accustomed to new work and succeeding in doing it well

13. Initiative: Within the limits of authority and discipline, managers should encourage
their employees for taking initiative. Initiative is concerned with thinking out and
execution of a plan. Initiative increases zeal and energy on the part of human beings.

14. Esprit de corps: It is the principle of ‘union is strength’ and extension of unity of
command for establishing team work. The manager should encourage esprit de corps
among his employees.

SOCIAL RESPONSIBILITIES OF MANAGEMENT :

A sense of responsibility to society and everything that accompanies it is social responsibility. In


other words, “social responsibility” means that management is responsible not only to its
shareholders but to the entire community. In general, social responsibility is a decisive feature of
capitalism. Individuals and customers trust that companies “do the right thing” and lead the
world to a better place.

SOCIAL RESPONSIBILITIES OF MANAGERS


Managers’ social responsibility is their obligation and commitment to safeguard and improve
society’s welfare while also protecting their interests. For the following reasons, managers have
social responsibility:
 Organizational Resources: A company’s resources include people, money,
competencies, and functional expertise. When an organization possesses these resources, it can
better work for societal objectives.
 Precautionary step: If a company waits too long to address social difficulties, it will end
up putting out social fires, leaving no time to achieve its purpose of creating goods and services.
It is more cost-effective to address social concerns before they evolve into disasters that consume
a significant amount of management time.
 Moral Obligation: It has been determined that accepting managers’ social duty is a
morally appropriate viewpoint. It is the organization’s moral responsibility to assist in resolving
or eliminating societal problems.
 Efficient and Effective Personnel: Recruiting employees has become easier for socially
responsible organizations. Employees are drawn to organizations that are more socially
responsible. Tobacco companies, for example, may have a difficult time finding individuals with
excellent skills and abilities.
 Better Organizational Environment: Organizations most sensitive to improving the
quality of life of society will benefit from a better society for doing business. It makes it easier to
hire employees and improves the quality of their employees. Employee volatility and
absenteeism are minimized. As a result of all social changes, crime rates are lower, which means
less money is spent on taxes and land safety. As a result, a better society will create a better
world.

SOCIAL AND ETHICAL RESPONSIBILITIES OF MANAGEMENT


Organizations need to be involved in the external environment to be truly productive. The
general or macro-environment and the specific task environment are two types of external
environments. Corporate efforts to improve society while enjoying profits are known as social
responsibility. Shareholders, employees, customers, creditors, suppliers, society and government
are the top six stakeholders for which a company is responsible. The ability of a company to
implement and engage in policies that benefit both society and the company is known as the
social response.
Contribution, quality of work, diversity policies, financing, direct business investment,
volunteering, recycling, customer care and pollution control are all evaluated when measuring
social response. Social audits were created in response to the need to monitor social reactions.
There are two types of social audits: government-mandated and voluntary audits. Social audits
are not required by law, but many companies include social information in their annual reports.
This shows that prominent companies are becoming more and more concerned about their social
responsibility. The code of ethics of the managers of an organization determines their ethical
behaviour. In the long run, moral management is beneficial to the organization.

IMPORTANCE OF SOCIAL RESPONSIBILITY OF MANAGEMENT


 Employee morale can be improved by social responsibility programmes, which leads to
increased productivity, which in turn affects the company’s profitability.
 Businesses that embrace social responsibility activities can improve customer retention
and loyalty.
 Employees with a sense of social responsibility can use the corporate resources at their
disposal to do good.
 Being a socially responsible business can help to improve a company’s image and
brand.
 Employee morale can be improved by social responsibility programmes, which leads to
increased productivity, which affects the company’s profitability.
 Companies that employ social responsibility activities can improve customer retention
and loyalty.
 Socially responsible companies have the opportunity to differentiate themselves from
their competitors as they build profitable brand awareness.

General
Local Public Environmen
Community t

Government
Social Shareholder
or it’s
Responsibilities s or
Administrati
of Management Investors
ve Bodies

Consumers
or Employees
Customers or Workers

Motivation
Definition : Motivation refers to a process of inducing and stimulating an individual to act in a
certain manner.In the context of an organization, motivation implies encouraging and urging the
employees to perform to the best of their capabilities so as to achieve the desired goals of the
organization.

MASLOW’S NEED HIERARCHY:


The behaviour of an individual at a particular movement is usually determined by his strongest
need. Psychologists claim that needs have a certain priority, as the more basic needs are satisfied,
an individual seeks to satisfy the higher needs. If his basic needs are not met, efforts to satisfy the
higher needs should be postponed.
Abraham Maslow, a famous social scientist, has given a framework that helps to explain the
strength of certain needs. According to him, there is hierarchy for need, which is presented in the
following way.
Maslow’s Need Hierarchy
 Physiological needs
 Safety/Security needs
 Social needs
 Self-actualization needs
 Esteem needs

Physiological needs: The Physiological needs are at the top of hierarchy because they tend to
have the highest strength until they are reasonably satisfied. Until these needs are satisfied to the
degree needed for the efficient operation of the body, the majority of a person’s activities will
probably at this level, and the other level will provide him with little motivation.
A famous saying ‘man can live on bread alone if there is no bread’ suggests that man first try to
acquire necessities for their survival.
Safety/Security Needs: Once physiological needs are satisfied to a reasonable level, the next
level in the hierarchy is safety. Safety means being free of physical danger or self- preservation.
In the industrial society, employee can be motivated through either positive action like pension
plan, insurance plan etc... Or negative actions like laid off or demotions.
Social (Acceptance or Affiliation) Needs: After the first two needs are satisfied, social needs
become important in the need hierarchy. Since man is a social being, he has a need to belong and
to be accepted by various groups. In the organization, workers form informal group environment
to support unfulfilled social needs such as affiliation.

Esteem Needs: These needs are concerned with self respect, self confidence, a feeling of
personal worth, feeling of being unique and recognition. Satisfaction of these needs produces
feelings of self confidence, prestige, power and control. These needs are satisfied through
adaptive behavior, matured behavior or with irresponsible actions.
Self-actualization Needs: It is the need to maximize ones potential, whatever it may be. It is
related with the development of intrinsic capabilities which lead people to seek situations that
can utilize their potential. This includes competence which implies control over environmental
factors both physical and social and achievement.
Conclusion: Maslow suggests that the various levels are interdependent and overlapping, each
higher level need emerging before the lower level need has been completely satisfied. Since one
need does not disappear when another emerges, all needs tend to be partially satisfied in each
area.

Maslow’s Hierarchy of Needs

SA
Esteem

Social

Safety and Security

Physiological

HERZBERG’S MOTIVATION–HYGIENE THEORY:

Frederick Hertzberg conducted a structured interview programme to analyse the experience and
feelings of 200 engineers and accountants in nine different companies in Pittsburg area, U.S.A
during the structured interview, they were asked to describe a few previous job experiences in
which they felt ‘exceptionally good’ or exceptionally bad about jobs.
In his analysis, he found that there are some job conditions which operate primarily to dissatisfy
employees when the conditions are absent, however their presence does not motivate them in a
strong way. Another set of job conditions operates primarily to build strong motivation and high
job satisfaction, but their absence rarely proves strongly dissatisfying.
The first set of job conditions has been referred to as maintenance or hygiene factors and second
set of job conditions as motivational factors.
Hygiene Factors:
According to Hertzberg, there are 10 maintenance factors. These are company policy and
administration, technical supervision, salary, job security, personal life, status, working
conditions, interpersonal relationship with superiors, interpersonal relationship with peers and
interpersonal relationship with subordinates.
These maintenance factors are necessary to maintain at a reasonable level of satisfaction in
employees. Any increase beyond this level will not produce any satisfaction to the employees:
however, any cut below this level will dissatisfy them.

Motivational Factors:
These factors are capable of having a positive effect on job satisfaction often resulting in an
increase in ones total output. Hertzberg includes six factors that motivate employees. These are
achievement, recognition, advancement; work itself, possibility of growth and responsibility.
Most of the above factors are related with job contents. An increase in these factors will satisfy
the employees: however, any decrease in these factors will not affect their level of satisfaction.
Since, these increased level of satisfaction in the employees, can be used in motivating them for
higher output.

MC GREGOR’S THEORY X AND THEORY Y

The idea that a manager’s attitude has an impact on employee motivation was originally
proposed by Douglas McGregor, a management professor at the Massachusetts Institute of
Technology during the 1950s and 1960s. In his 1960 book, The Human Side of Enterprise,
McGregor proposed two theories by which managers perceive and address employee motivation.
He referred to these opposing motivational methods as Theory X and Theory Y management.
Each assumes that the manager’s role is to organize resources, including people, to best benefit
the company. However, beyond this commonality, the attitudes and assumptions they embody
are quite different.
Theory X
According to McGregor, Theory X management assumes the following:
 Work is inherently distasteful to most people, and they will attempt to avoid work
whenever possible.
 Most people are not ambitious, have little desire for responsibility, and prefer to be
directed.
 Most people have little aptitude for creativity in solving organizational problems.
 Motivation occurs only at the physiological and security levels of Maslow’s hierarchy of
needs.
 Most people are self-centered. As a result, they must be closely controlled and often
coerced to achieve organizational objectives.
 Most people resist change.
 Most people are gullible and unintelligent.
Essentially, Theory X assumes that the primary source of employee motivation is monetary, with
security as a strong second. Under Theory X, one can take a hard or soft approach to getting
results.
The hard approach to motivation relies on coercion, implicit threats, micromanagement, and tight
controls— essentially an environment of command and control. The soft approach, however, is
to be permissive and seek harmony in the hopes that, in return, employees will cooperate when
asked. However, neither of these extremes is optimal. The hard approach results in hostility,
purposely low output, and extreme union demands. The soft approach results in a growing desire
for greater reward in exchange for diminished work output.
It might seem that the optimal approach to human resource management would lie somewhere
between these extremes. However, McGregor asserts that neither approach is appropriate, since
the basic assumptions of Theory X are incorrect.
Drawing on Maslow’s hierarchy of needs, McGregor argues that a need, once satisfied, no longer
motivates. The company uses monetary rewards and benefits to satisfy employees’ lower-level
needs. Once those needs have been satisfied, the motivation disappears. Theory X management
hinders the satisfaction of higher-level needs because it doesn’t acknowledge that those needs are
relevant in the workplace. As a result, the only way that employees can attempt to meet higher-
level needs at work is to seek more compensation, so, predictably, they focus on monetary
rewards. While money may not be the most effective way to self-fulfillment, it may be the only
way available. People will use work to satisfy their lower needs and seek to satisfy their higher
needs during their leisure time. However, employees can be most productive when their work
goals align with their higher-level needs.
McGregor makes the point that a command-and-control environment is not effective because it
relies on lower needs for motivation, but in modern society those needs are mostly satisfied and
thus are no longer motivating. In this situation, one would expect employees to dislike their
work, avoid responsibility, have no interest in organizational goals, resist change, etc.—creating,
in effect, a self-fulfilling prophecy. To McGregor, a steady supply of motivation seemed more
likely to occur under Theory Y management.
Theory Y
The higher-level needs of esteem and self-actualization are ongoing needs that, for most people,
are never completely satisfied. As such, it is these higher-level needs through which employees
can best be motivated.
In strong contrast to Theory X, Theory Y management makes the following assumptions:
 Work can be as natural as play if the conditions are favorable.
 People will be self-directed and creative to meet their work and organizational objectives
if they are committed to them.
 People will be committed to their quality and productivity objectives if rewards are in
place that addresses higher needs such as self-fulfillment.
 The capacity for creativity spreads throughout organizations.
 Most people can handle responsibility because creativity and ingenuity are common in
the population.
 Under these conditions, people will seek responsibility.
Under these assumptions, there is an opportunity to align personal goals with organizational
goals by using the employee’s own need for fulfillment as the motivator. McGregor stressed that
Theory Y management does not imply a soft approach.
McGregor recognized that some people may not have reached the level of maturity assumed by
Theory Y and may initially need tighter controls that can be relaxed as the employee develops.
If Theory Y holds true, an organization can apply the following principles of scientific
management to improve employee motivation:
 Decentralization and delegation: If firms decentralize control and reduce the number of
levels of management, managers will have more subordinates and consequently need to
delegate some responsibility and decision making to them.
 Job enlargement: Broadening the scope of an employee’s job adds variety and
opportunities to satisfy ego needs.
 Participative management: Consulting employees in the decision-making process taps
their creative capacity and provides them with some control over their work environment.
 Performance appraisals: Having the employee set objectives and participate in the
process of self-evaluation increases engagement and dedication.
If properly implemented, such an environment can increase and continually fuel motivation as
employees work to satisfy their higher-level personal needs through their jobs.

LEADERSHIP
Definition/ Concept
• According to Livingston – ‘Leadership is the ability to awaken the desire to
follow a common objective’.
• According to C.I. Bernard – ‘Leadership is the quality of behaviour of the
individuals whereby they guide people or their activities in organised
efforts’.
• According to Bernard Keys and Thomas – ‘Leadership is the process of
influencing and supporting others to work enthusiastically towards achieving
objectives’.
• Leadership is essentially a continuous process of influencing behaviour. It
may be considered in context of mutual relations between a leader and his
followers. The leader tries to influence the behaviour of individuals or group
of individuals around him to achieve desired goals.
• Keith Davis, “Leadership is the process of encouraging and helping others to
work enthusiastically towards their objectives. Leadership must extract
cooperation and willingness of the individuals and groups to attain the
organisational objectives.”
• Leadership is the lifting of a man's vision to higher sights, the raising of a
man's performance to a higher standard, the building of a man's personality
beyond its normal limitations- Peter.F.Drucker

LEADERSHIP STYLES :

leadership style helps you provide adequate guidance and feedback to employees, and better
understand your thoughts, how you make decisions and strategies you can consider
implementing when making business decisions. It can also help you understand how your direct
reports see you and why they may give you specific feedback. For example, if employees feel
stifled at work and don’t have many opportunities to speak their minds, they may be telling you
that you’re an autocratic leader who can benefit from changing their style. Knowing your
leadership styles may help you improve with limited feedback. Each leadership style has its
pitfalls, allowing you to proactively address areas of improvement. This is critical because some
employees might hesitate to speak up, even in an anonymous survey. Ready to find out your
leadership styles? Check out the most common styles below.
Different styles of leadership can lead to very different team cultures and experiences. How
would you describe your leadership style? Leadership styles in management can vary based on
industry, local customs, and personality.
In mentoring relationships, it is important for both the mentor and mentee to practice their
leadership skills. In fact, 71% of mentors on MicroMentor say that mentoring has helped them
improve their leadership skills.
There are many different styles of leadership, but we will focus on 7 of the most common here.
1. Transactional leadership
2. Transformational leadership
3. Servant leadership
4. Democratic leadership
5. Autocratic leadership
6. Bureaucratic leadership
7. Laissez-Faire leadership
8. Strategic Leadership
9. Coach-Style leadership
10. Charismatic Leadership
While there may not be one “best choice”, different styles of leadership may work best in
specific situations.
Transactional leadership :
This leadership style helps to establish roles and responsibilities by using incentivization to
motivate employees. For example, a transactional leader might motivate their team with a
scheduled bonus for generating a certain number of leads in a quarter. Transactional leadership
can be effective, but can also encourage employees to do the bare minimum to meet goals and
nothing more. It is much more effective to use this leadership style in conjunction with
transformational leadership.

Transformational leadership:
Transformational leadership is a popular style among growth-oriented companies as it
encourages employees to see what they are capable of. This type of leader will constantly push
their team outside of their comfort zones. For example, a transformational leader might provide
their employees with a list of goals with deadlines. While they may seem straightforward at first,
the manager might start adding more challenging goals or pick up the pace of deadlines. Without
the right coaching to guide team members, this style of leadership risks leaving team members
with different learning curves behind. However, it can also motivate and build confidence among
employees.

Servant leadership :
The servant leadership style can be a very effective model for empowering teams and boosting
morale. Servant style leadership means prioritizing the needs of your team above all else. A
leader or manager using this style of leadership will focus their energy on elevating and
developing their teams. An example of this style could be a manager investing their time in a
project to helping a team member develop a specific skillset, regardless of how much this slows
down the process and takes up their own time. While it can be challenging for many of us, the
servant leadership style has long term benefits for teams and creates a culture of trust among
team members

Democratic leadership :
Democratic leadership is an extremely effective leadership style because it empowers team
members at all levels to feel empowered within the organization. In this leadership style, the
leader makes decisions taking into account the input of all team members, regardless of their
seniority or expertise. An example of democratic leadership in action is a meeting in which a
leader might provide the team with a few decision-related options. After an open discussion
about the options, the leader would take into account the team members’ thoughts and feedback
or open the decision up to a vote.

Autocratic leadership :
This leadership style is one of the least effective ways of practicing leadership. In this style, the
leader makes decisions without taking input from any stakeholders. Team members are expected
to adhere to the decision however the leader sees fit. An example of autocratic leadership could
be when a team manager decides to take on a new project without consulting anyone on the team
about capacity, strategic relevance, or practicality. Autocratic leadership disempowers team
members and results in decisions lacking the necessary input from stakeholders to be successful.

Bureaucratic leadership :
Another ineffective leadership style is the bureaucratic leadership style. Unlike autocratic
leadership, this style might consider the input of team members. However, if that input conflicts
with existing policy the leader will likely reject it. This style of leadership is commonly found in
larger and older organizations who have successful processes already in place. Bureaucratic
leadership is quick to shut down innovation and discourages new ways of thinking and achieving
ambitious goals.

Laissez-Faire leadership :
laissez-Faire leadership style is often found in younger start-ups. In this leadership style, leaders
put nearly all the decision making power in the hands of their employees. For example, a leader
might not set official policies around project deadlines or working hours for their employees.
While this style of leadership can empower employees to set their own goals and work in a way
that works best for them, it can also limit professional development and overlook strategic
growth opportunities.

Strategic Leadership :
We all know that a good strategy can be the key to success. Therefore, strategic leaders are always at the
intersection point of company work and growth opportunities. You maintain the upper-level
management but ensure that everyone else is not negatively affected by it. They ensure that working
conditions are best for everyone.

Coach-Style Leadership :
You should identify and nurture the strengths of each of the members. This results in better teamwork
and better strategy building. Also, you can find subtle hints of democratic and strategic leadership in this
type of leadership. The leader creates a team where all the team members contribute as per their
expertise and skills. Moreover, teams have better communication and cooperation spirit to get things
done in order.

Charismatic Leadership :
You might find it similar to transformational leadership but different. Motivating and inspiring your
team remains the primary goal of you as the leader. However, there is no transformation in this process.
As a leader, you are determined that you are always right even if people tell you about the wrongs. This
can lead to certain risks and damage to the team or organization at times.

PLANNING :
Definition: Planning is the fundamental management function, which involves deciding
beforehand, what is to be done, when is it to be done, how it is to be done and who is going to do
it. It is an intellectual process which lays down an organisation’s objectives and develops various
courses of action, by which the organisation can achieve those objectives. It chalks out exactly,
how to attain a specific goal. Planning is nothing but thinking before the action takes place. It
helps us to take a peep into the future and decide in advance the way to deal with the situations,
which we are going to encounter in future. It involves logical thinking and rational decision
making.

CHARACTERISTICS OF PLANNING :
1. Managerial function: Planning is a first and foremost managerial function provides the
base for other functions of the management, i.e. organising, staffing, directing and controlling, as
they are performed within the periphery of the plans made.
2. Goal oriented: It focuses on defining the goals of the organisation, identifying
alternative courses of action and deciding the appropriate action plan, which is to be undertaken
for reaching the goals.
3. Pervasive: It is pervasive in the sense that it is present in all the segments and is required
at all the levels of the organisation. Although the scope of planning varies at different levels and
departments.
4. Continuous Process: Plans are made for a specific term, say for a month, quarter, year
and so on. Once that period is over, new plans are drawn, considering the organisation’s present
and future requirements and conditions. Therefore, it is an ongoing process, as the plans are
framed, executed and followed by another plan.
5. Intellectual Process: It is a mental exercise at it involves the application of mind, to
think, forecast, imagine intelligently and innovate etc.
6. Futuristic: In the process of planning we take a sneak peek of the future. It encompasses
looking into the future, to analyse and predict it so that the organisation can face future
challenges effectively.
7. Decision making: Decisions are made regarding the choice of alternative courses of
action that can be undertaken to reach the goal. The alternative chosen should be best among all,
with the least number of the negative and highest number of positive outcomes.
Planning is concerned with setting objectives, targets, and formulating plan to accomplish
them. The activity helps managers analyse the present condition to identify the ways of
attaining the desired position in future. It is both, the need of the organisation and the
responsibility of managers.
IMPORTANCE OF PLANNING :
 It helps managers to improve future performance, by establishing objectives and
selecting a course of action, for the benefit of the organisation.
 It minimises risk and uncertainty, by looking ahead into the future.
 It facilitates the coordination of activities. Thus, reduces overlapping among activities
and eliminates unproductive work.
 It states in advance, what should be done in future, so it provides direction for action.
 It uncovers and identifies future opportunities and threats.
 It sets out standards for controlling. It compares actual performance with the standard
performance and efforts are made to correct the same.
Planning is present in all types of organisations, households, sectors, economies, etc. We need to
plan because the future is highly uncertain and no one can predict the future with 100%
accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any
organization for the survival, growth and success

4 TYPES OF PLANNING IN MANAGEMENT :


Now that you got a gist of its importance, here are the 4 types of planning in management.
1) Operational Planning
It is the kind of planning required for day-to-day activities. Organisations use such kind of
planning with extreme detail to clearly identifying the who, what, when, where and why of all
parties involved.
And, there are some variations within it. Operational planning can be of two types – either
single-use plans or ongoing plans.
Single Use Plans
As the name suggests, single-use plans can be used only until the objective is achieved, after
which they are of no purpose.
Example of single-use plan
You can think of single-use plan in the context of a marketing campaign. There is one specific
goal, and once it is achieved, the marketing department may start with a different plan for
another purpose.
Ongoing Plans
Ongoing plans are repetitive in nature and can be modified for evolving purposes in the future.
They are also characterised by short-term plans.
Example of an ongoing plan
An easy example of an ongoing plan is perhaps the planning that goes into the recruitment of
employees in an organisation. The HR department’s planning here is repetitive and short term.
Once the objective is achieved, the same process is followed in the future with little or no
modifications.
Related: Top recruitment courses
2) Contingency Planning
Also known as ‘special planning’, it is used for situations when changes cannot be foreseen. It is
that ‘what if’ scenario that a business manager needs to consider so that the company does not
face losses. That ‘what if’ scenario can be loss of data in a data security firm, failed product in
the market, etc.
Probably the recent damaging ‘what if’ scenario for many businesses was the pandemic. It was
unprecedented. Many organisations that did not have a solid contingency plan had to lay off their
employees, and most small businesses had to shut shop completely. The ones who did, shifted
their focus to growth prospects in the cloud or digital technologies.
3) Strategic Planning
Strategic planning is used in light of achieving big goals in the long term. It is more of a high-
level planning done by the top-level managers in the organisation. Such a kind of planning in
management is used for starting a business. A strategic plan includes the vision and mission of
the company. It also includes defining timelines, establishing KPIs (key performance indicators)
and tracking their progress.
Related: Free business strategy courses
Its use is also seen when there is a sudden change in the market trend, and the business has to
adapt to it within a specific timeline.
4) Tactical Planning
Tactical planning refers to task prioritisation for achieving short term goals. This is one of the
crucial types of planning in management that helps achieve those goals as prescribed in a
strategic plan. In an organisation, tactical planning is approached by mid-level management. The
goals to be achieved are set for one or two departments and then moving on to the next in a
tactical plan.

TYPES OF PLANS :
1. Standing Plans
1. Objectives
2. Strategies
3. Policies
4. Procedures
5. Rules
2. Single-use Plans
1. Programmes
2. Budgets

DECISION MAKING :

In simple terms, decision making is the process of making choices by recognizing the
problem, gathering information about feasible solutions, and finalizing the best alternative. This
process is carried out through an intuitive or logical process, or a combination of two. Intuition is
all about using your gut feeling to take a stand on the possible course of action. In contrast, a
logical process uses facts and figures to make scientifically sound decisions. Intuition is an
acceptable way of decision-making; nevertheless, it is often more suited when the decision is
easy, personal, or needs to be made quickly. More complex judgments typically need a more
formal, systematic approach that incorporates both intuition and logical reasoning. It is critical to
avoid rash reactions or intuitions in such scenarios, majorly in business decisions. You live in an
era of digitalization where new information is generated every second at a rapidly increasing
rate. And it circulates all around the globe, 24 by 7. This means the amount of historical records
you have in databases spread across the globe is huge. And not making use of it seems totally
delinquent. That is why organizations are increasingly relying on business and data analytics to
guide their decision-making.

CHARACTERISTICS OF DECISION MAKING :


Decision-making is a skill that comes from training and experience. Here are a few
characteristics of decision-making.
 Rational-thinking
Rational thinking involves fixing goals and objectives, systematically analyzing options, and
choosing the right path using logic and evidence. However, this also involves considering
emotions apart from cold logic.
 Process
Every efficient task needs a robust process to make it consistently successful. Decision-making is
also familiar with this fact. It also must have a process that starts at a stage, has specific steps,
and has an end. And this process must consider conscious, unconscious, and emotional factors.
 Selective
A management decision is highly selective, and you can only use the trial and error method if
that costs you money. You must ensure that each selection has clear evidence of a positive
impact on the organization.
 Purposive
The management decision has a purpose. For example, you decide to improve the state of the
organization; it could be improving profits or employee lifestyles. This characteristic comes into
play very early in the decision-making process as objectives.
 Positive
While making a management decision, you aim for positive outcomes. This characteristic differs
from a scientific decision; you don’t need a positive result. However, any negative impact due to
management decisions will cost the company capital and reputation.
 Commitment
Commitment is necessary for any success; however, managers need to have a strong
commitment because of the number of opposition they will face and the responsibility they
shoulder. To successfully make management decisions, you need to commit to defending them
and seeing through them.
 Evaluation
Management decision-making involves lots of evaluation; you must see all the angles. In
addition, you must have several backup plans when your first one fails, requiring meticulous
evidence evaluation while making a decision.
DECISION MAKING PROCESS :
The step-by-step decision-making process can lead to more deliberate and effective judgments.
1. Identify Your Goals
The first step in mastering the art of decision-making is to clarify your objectives. When it comes
to making a professional decision, you should have a rough idea about which direction you want
to follow. Once you've narrowed down your objectives, you'll be able to make more informed
judgments. Try to define the nature of judgement you want to make.
2. Make Use of the Elimination Process
Along with what you want to achieve with your judgment, evaluating what you don’t is also
critical. Making smart judgments might be difficult if you're still trying to determine what you
want to do. However, if you know what you want to avoid, the process of elimination might
make certain decisions easier.
3. Use SWOT Analysis Method
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. The
SWOT analysis is an excellent decision-making tool since it allows you to determine the pros
and cons of a certain decision readily. All you have to do is draw a rectangular shape, divide it
into four parts and label each section of the table with SWOT parameters. The image given
below portrays the sample SWOT metrics.
In the next step, you will fill all the positives and negatives of your initiative. Focus more on
what connects strengths and opportunities when you complete your selection. Anything that is
continually linking threats and vulnerabilities should preferably be avoided.
4. Simulate Feasible Outcomes
While simulating probable outcomes isn't a reliable approach to predicting what will happen
after you make a decision, there are certain ways to simulate what is more likely to happen
because of your decision. If you’re familiar with project management concepts, some of your
learnings can be applied here to visualize the outcome of your decision. Scientific methodologies
such as problem trees, SCQA (situation, complexity, question, answer), and MECE (mutually
exclusive, collectively exhaustive) can also help you add a touch of science to your decision
making.
5. Choose Best Alternative
After you've analyzed all of your options and created a solid visual picture of the repercussions
of each, you're ready to choose the one that appears to be the greatest fit for you. If you cannot
decide the course of action, ask for help from your colleagues, leadership team, and friends.
UNIT -2
ORGANIZATION :

Organisation refers to a collection of people who are working towards a common goal and
objective. In other words, it can be said that organisation is a place where people assemble
together and perform different sets of duties and responsibilities towards fulfilling the
organisational goals.
Louis Allen, “Organization is the process of identifying and grouping work to be
performed, defining and delegating responsibility and authority and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing objectives.”

PRINCIPLES OF ORGANISATION :
1. Principle of Objective
2. Principle of Specialisation
3. Principles of Co-ordination
5. Principle of Definition
6. Span of Control
7. Principle of Balance
8. Principle of Continuity
9. Principle of Uniformity
10. Principle of Unity of Command
11. Principle of Exception
12. Principle of Simplicity
13. Principle of Efficiency
14. Scalar Principle

TYPES OF ORGANISATIONAL STRUCTURES :

There are two broad categories of organisation, which are:


1. Formal Organisation
2. Informal Organisation
Formal Organisation: Formal organisation is that type of organisation structure where the
authority and responsibility are clearly defined. The organisation structure has a defined
delegation of authority and roles and responsibilities for the members.
The formal organisation has predefined policies, rules, schedules, procedures and programs. The
decision making activity in a formal organisation is mostly based on predefined policies.Formal
organisation structure is created by the management with the objective of attaining the
organisational goals.
There are several types of formal organisation based on their structure, which are discussed as
follows:
1. Line Organisation
2. Line and Staff Organisation
3. Functional Organisation
4. Project Organisation
5. Matrix Organisation

LINE ORGANISATION:
Line organisation is the simplest organisation structure and it also happens to be the oldest
organisation structure. It is also known as Scalar or military or departmental type of organisation.
In this type of organisational structure, the authority is well defined and it flows vertically from
the top to the hierarchy level to the managerial level and subordinates at the bottom and
continues further to the workers till the end. There is a clear division of accountability, authority
and responsibility in the line organizational structure.
Advantages of Line organization :
1. Simple structure and easy to run
2. Instructions and hierarchy clearly defined
3. Rapid decision making
4. Responsibility fixed at each level of the organisation.
Disadvantages of Line organization :
1. It is rigid in nature
2. It has a tendency to become dictatorial.
3. Each department will be busy with their work instead of focusing on the overall development
of the organisation.

LINE AND STAFF ORGANISATION:


Line and staff organisation is an improved version of the line organisation. In line and staff
organisation, the functional specialists are added in line. The staff is for assisting the line
members in achieving the target effectively.

Advantages of Line and Staff organisation


1. Easy decision making as work is divided.
2. Greater coordination between line and staff workers.
3. Provides workers the opportunity for growth.
Disadvantages of Line and Staff Organisation
1. Conflict may arise between line and staff members due to the improper distribution of
authority.
2. Staff members provide suggestions to the line members and decision is taken by line
members, it makes the staff members feel ignored.

FUNCTIONAL ORGANISATION:
Functional organisation structure is the type of organisation where the task of managing and
directing the employees is arranged as per the function they specialise. In a functional
organisation, there are three types of members, line members, staff members and functional
members.

Advantages of Functional organisation


1. Manager has to perform a limited number of tasks which improves the accuracy of the work.
2. Improvement in product quality due to involvement of specialists.
Disadvantages of Functional organisation
1. It is difficult to achieve coordination among workers as there is no one to manage them
directly.
2. Conflicts may arise due to the members having equal positions.

PROJECT ORGANISATION:
A project organisation is a temporary form of organisation structure that is formed to manage
projects for a specific period of time. This form of organisation has specialists from different
departments who are brought together for developing a new product.
Advantages of Project organisation
1. The presence of many specialists from different departments increases the coordination among
the members.
2. Each individual has a different set of responsibilities which improves control of the process.
Disadvantages of Project Organization
1. There can be a delay in completion of the project.
2. Project managers may find it difficult to judge the performance of different specialists.

MATRIX ORGANISATION:
Matrix organisation is the latest form of organisation that is a combination of functional and
project organisation. In such organisations there are two lines of authority, the functional part of
the organisation and project management part of the organisation and they have vertical and
horizontal flow of authority, respectively.

Advantages of Matrix Organisation


1. Since the matrix organisation is a combination of functional and project management teams,
there is an improved coordination between the vertical and horizontal functions.
2. Employees are motivated as everyone will be working towards one project.
Disadvantages of Matrix Organisation
1. Due to the presence of vertical and horizontal communication, there will be increased cost and
paperwork.
2.Having multiple supervisors for the workers leads to confusion and difficulty in control.

COMMITTEE ORGANIZATION :
A committee organization represents a group of people with various kinds of knowledge, which
is formally constituted to solve specific problems of the organization. A committee helps to
gather collective ideas and information, and properly analyze them which helps to make strong
managerial decisions and solve difficult problems. During the course of the operation committee
organizational structure, various problems may arise in the organization, to solve such problems,
the management constitutes committees by gathering the members from the concerned fields.
And, in accordance with the provided information and suggestions from the committee members,
the management takes decisions and solves problems. This helps to minimize the workload of
top-level management.

EXECUTIVE COUNCIL VICE CHANCELLOR ACADEMIC SENATE

FINANCE COMMITTEE RECTOR BOARD OF STUDIES

REGISTRAR

SELECTION PURCHASES CONVOCATION


COMMITTEE COMMITTEE COMMITTEE

Advantages of Committee Organizational Structure


1. Quality of Decision
Quality of decision is one of the major advantages of committee organization. Here,
members have knowledge from various fields, and experiences are gathered. Through gathering
collective ideas and analyzing them they come to the right decision for solving the complex
problems.
2. Setting Objectives, Plans, and Policies
Every organization is formed with definite objectives, to achieve them, and it is necessary
to formulate plans and policies. Committee provides the framework for setting organizational
objectives. It also provides suggestions and information for making plans and policies to achieve
defined objectives.
3. Participative Management
Committee organization ensures the participation of competent members in management. Here,
all the members have the right to put their ideas and views into the decision-making process. The
democratic process is taken into consideration in the decision-making.
4. Reduce Bias and Conflicts
The committee facilitates the development of relations among members and their relation with
the line management. They help in maintaining close communication and transformation of
information among authorities. Thus, there is less probability of bias or decision-making
mistakes. In a similar way, the development of mutual relationships helps to resolve conflicts
among members.
5. Dealing with Complex Problems
Committee organization facilitates dealing with complex and difficult types of problems. In
some situations, during operation, many complex or critical problems may arise in an
organization. It is more difficult to solve such problems by line authority and even by the top
management. In such cases, committees are formed by pooling experts from the concerned field
so that it becomes easy to resolve such problems in a systematic manner.
6. Commitment to Implement
A committee is formed to resolve complex and difficult problems. Members of the committee
are experienced experts in their own fields. Besides, expert representatives from top-level
management are also involved in committees. They come to a conclusion after a detailed
discussion and evaluation of the impact of alternative decisions.
7. Pooling Authorities
In the process of investigation and research, some authority of the top management is also shared
among the committee members. The committee embers can perform their work independently by
remaining within the defined area.

All the members have equal authority in the committee. Thus, executive levels come to a
conclusion with the help and mutual consent of all the committee members.
Disadvantages of Committee Organizational Structure
1. Creating Conflict

Conflict is common in committees because of more heads. In some situations, committee


organization creates confusion or conflicts in the decision-making process. Ideas or views of a
member may be in conflict with the views of other members.

2. Delay in Decision
The committee members take more time to discuss the various factors of a problem. The
valuable time the committee members spent on the discussion. The delay in the decision may
result in an extra financial burden to the management.

3. Probability of Diversion
In some cases, committee discussion may be diverted to other subject matter. In such a situation,
committee members can not come to a conclusion within the given time frame. They have to
meet many times to come to a suitable outcome.

4. Tendency of Shifting
It is common to shift the tendency of decisions to committees. When the executives feel difficult
to take a decision on important problems, they often shift it to the committee. This attitude of
line authorities minimizes their initiative and creativity, which provides a negative impact on
organizational performance.

5. Lack of Secrecy
Maintaining secrecy of internal matters is difficult in committee organization. All the members
of the committee discuss the problems in detail and in the process they get knowledge about
internal matters of the organization. Thus, there is more probability of leakage of internal plans
and strategies of the organization.

6. Distribution of Responsibility
In committee organizations, most of the members are concerned about the decision-making
process. In some situations, the committee may take the wrong decision and in such a case no
members individually take responsibility for the wrong decision on behalf of all the members.
Everyone wants to shift the responsibility to other members of the committee.
7. Splits Accountability
In a committee organization, nobody is held accountable for a decision made by a committee. A
committee’s decision is known as nobody’s decision just because it is everybody’s decision.
Problems in the organization may arise when any mistake is made in the decision-making
process. And, nobody wants to take full responsibility for the mistake on behalf of all members
of the committee.

TEAM ORGANISATIONAL STRUCTURE :


A team organizational structure is a structure in which different work teams are created to
achieve common organizational goals. This structure emphasizes the creation of work teams
instead of departments.
The concept of team structure breaks down departmental barriers and decentralizes the decision-
making authority to the level of the work teams. The teams are created at the operating levels to
improve productivity and enhance employee performance.
Team-based organizational structure is one of the modern organizational structures that has
greater flexibility and effectively aligns with modern business settings. It is not like traditional
structures which were less flexible and more permanent.
In this team structure, the top manager formulates plans, and team members decide how to
accomplish them. They are given the necessary authority to make decisions at team levels. This
enables managers to give more focus on other strategic activities however the manager should
review or supervise the performance of different work teams.
VIRTUAL ORGANISATION STRUCTURE :
A virtual organization is an alliance of separate individuals, business units or companies, all with
different core competencies, working together to bring a project to market faster. These projects
are usually initiated to serve a particular market opportunity.

CELLULAR ORGANIZATIONAL STRUCTURE :


Cellular organizational structure (also known as a cellular organization, cellular
system, nodal organization, nodal structure, et cetera) is set up in such a way that it mimics
how natural systems within biology work, with individual 'cells' or 'nodes' working somewhat
independently to establish goals and tasks, administer those things, and troubleshoot difficulties."
These cells exist in a broader network in which they frequently communicate with each other,
exchanging information, in a more or less even organizational playing field. Numerous examples
have existed both in economic terms as well as for groups working towards other pursuits.

BOUNDARYLESS ORGANIZATION :
A Boundaryless Organization is a contemporary approach in organizational design. In a
boundaryless organization, the boundaries that divide employees such as hierarchy, job function,
and geography as well as those that distance companies from suppliers and customers are
broken down. A boundaryless organization seeks to remove vertical, horizontal, and external
barriers so that employees, managers, customers, and suppliers can work together, share ideas,
and identify the best ideas for the organization. Boundaryless organizations share many of the
characteristics of flat organizations. Some believe that the boundaryless organization is the
perfect organizational structure for the 21st century.[1]
The concept was pioneered by well-known management thinker and former General Electric
chairman Jack Welch, who wanted to break down existing barriers between different parts.
While traditional organizational structures have defined vertical and horizontal borders and
hierarchies, boundaryless organisations are defined specifically by a lack of structures and an
approach to business that is based on the free flow of information and ideas to drive innovation,
efficiency and growth in a world that’s constantly changing. Adaptability and flexibility are
important criteria of boundaryless organisations. Boundaryless organizations will often make use
of the latest technology and tools to facilitate the breaking down of traditional borders, such as
virtual collaboration and flexible working. With regard to employees, they may have more
responsibility for their own projects and targets and be more able to achieve results in a way
that’s appropriate for the project at hand. Because many boundaryless organizations are
dispersed across geographic borders, employees may be from different cultures and countries but
must work together. Because of this, boundaryless organizations require a strong set of core
values and a strong vision.

INVERTED PYRAMID :
A reverse hierarchy (or inverted pyramid) is a conceptual organizational structure that
attempts to "invert" or otherwise "reverse" the classical pyramid of hierarchical organizations.
In the proposed structure, key decisions are made by the employees in direct contact with
customers, while progressively senior management positions provide support and help to the
customer-facing employees.
The term "invert the pyramid" is attributed to Jan Carlzon, who transformed SAS airlines by
giving front line employees authority to make decisions on the spot. [2] The creation of the reverse
hierarchy has been attributed to the Nordstrom retail organization.[1] Other notable adopters of
this structure include the United Parcel Service and Canadian Imperial Bank of Commerce.

FLAT ORGANIZATIONS :
Which have relatively few or even one level of management. Flat is also known as wider span of
control

TALL ORGANIZATIONS :
Tall organizations have many levels of management. Tall organization involves narrow span of
management.
LEAN ORGANIZATIONAL STRUCTURE :
A lean organizational structure refers to a structure that creates maximum value for the
customer while using fewer resources. An organization with such a structure encourages its
employees to focus on value streams and find ways to eliminate waste than an organization with
a traditional structure. An organization with a lean organizational structure also allows its
employees flexibility, while a traditional structure makes its members focus more on their
respective jobs. Hence a traditional structure has more job classifications compared to a lean
structure. Accordingly, employees in a traditional structure do not interact more with people
from other departments, as in the case of a lean organization.
Importance of Value Stream
All members in an organization with a lean structure focus on the value stream used to deliver
goods and services to customers. Value stream refers to the series of activities required in
designing, producing, and providing goods and services from a customer's perspective. It should
be viewed as the value derived from a company's goods and services as seen by a customer.
When employees in a lean organization focus on how they can put effort into impacting the value
stream, they develop ways to improve processes and avoid waste.
UNIT – 3
ORGANIZATIONAL BEHAVIOR

MEANING & DEFINITION :

Organizational Behavior is concerned with the understanding, prediction and control of human
behavior in organizations. It focuses on the individuals, the groups and the organization and also
on their interaction relationships. It is the study and application of knowledge about how people
act with organizations. It is a human tool for human benefit. It applies broadly to the behavior of
people in all types of organizations. Wherever organizations are, there is a need to understand
organizational behavior.
According to Fred Luthans, “Organizational behavior is directly concerned with the
understanding, production and control of human behavior in organizations.”

NATURE :

The nature/ characteristics of OB are as given below:


1. OB is a part of general management and not the whole of management. It represents
behavioral approach to management.
2. OB contains a body of theory, research and application associated with a growing concern for
people at the work place. It helps in understanding human behavior in work organizations.
3. OB is a human tool for human benefit. It helps in predicting the behavior of individuals.
4. OB is inter-disciplinary field of study. It tries to synthesize knowledge drawn from various
behavioral and social sciences such as Psychology, Sociology, Anthropology, Political-science,
Economics, etc. In fact, OB is an applied behavioral sciences.
5. OB involves three levels of analysis of behavior-individual behavior, group behavior and
behavior of the organization itself.
6. OB is an action-oriented and goal-directed discipline. It provides a rational thinking about
people and their behavior
7. OB is both a science and an art. The systematic knowledge about human behavior is a science.
The application of behavioral knowledge and skills clearly leans towards being an art.
8. OB seeks to fulfil both employees’ needs and organizational objectives.
SCOPE OF OB
“OB is a field of study that investigates the impact, that individuals, groups, and structure have
on behavior within organizations, for the purpose of applying such knowledge towards
improving an organization’s effectiveness”.
The scope of OB involves three levels of behavior in organizations: individuals, groups and
structure.
1. Individual Behavior
(i) Personality
(ii) Perception
(iii) Values and Attitudes
(iv) Learning
(v) Motivation
2. Group Behavior
(i) Work groups and group dynamics
(ii) Dynamics of conflict
(iii) Communication
(iv) Leadership
(v) Morale
3. Organization: Structure, Process and Application
(i) Organizational Climate
(ii) Organizational Culture
(iii) Organizational Change
(iv) Organizational Effectiveness
(v) Organizational Development

IMPORTANCE OF ORGANIZATION BEHAVIOR/ WHY TO STUDY OB :

1. It builds better relationship by achieving, people, organizational, and social objectives.


2. It covers a wide array of human resource like Behavior, training and development, change
management, leadership, teams etc.
3. It brings coordination which is the essence of management.
4. It improves goodwill of the organization.
5. It helps to achieve objectives quickly.
6. It makes optimum utilization of resources.
7. It facilitates motivation.
8. It leads to higher efficiency.
9. It improves relations in the organization.
10. It is multidisciplinary in the sense that applies different techniques, methods, and theories to
evaluate the performances.

ORGANIZATIONAL BEHAVIOUR: CONCEPT AND SIGNIFICANCE :

“Organizational behavior is directly concerned with the understanding, prediction, and


control of human behavior in organizations.” Fred Luthans.
“Organizational behavior studies the impact that individuals, groups and structure have on
behavior within organization for the purpose applying such knowledge towards improving
Organizational effectiveness.” Stephen P. Robbins.
Keith Davis said that, “Organizational Behavior is the study and application of knowledge about
how people act within organization.”
Raman J. Aldag states, “Organizational Behavior is a branch of the Social Sciences that seeks
to build theories that can be applied to predicting, understanding and controlling behavior in
work organizations”. “Organizational Behavior is a subset of management activities concerned
with understanding, predicting and influencing individual behavior in Organizational setting.”
Callahan, Fleenor and Kudson.
Organizational behavior is basically a study of human behavior in both, group as well as
an individual in an organization. As we know that certain types of behavior of a person is linked
to certain types of roles and responsibilities. So, generalizations were made based on their
behaviors that help us predict what people do and should do so.And the accurateness of these
generalizations is depending upon the accurate observations. An accurate generalization helps in
taking strategic decisions in managing and controlling workforce in an organization. While
observing and understanding the behavior, one should follow a systematic approach because a
structured approach to conduct study may boost the explanatory and predictive capacities of a
person.

Significance of Organizational Behavior

(OB) is a study involving the analysis of an organization's persons, community and


structure or actions, and this analysis has significant significance in an organization's successful
working. It is a kind of study pertaining to “what people do within an organization” and “how
their behavior affects the performance of an organization”. Organizational conduct relates
primarily to job-related concerns such as jobs, work, leaves, turnover, efficiency, human
resources, and management. Organizational behavior study provides a comprehensive set of
concepts and theories dealing with commonly accepted 'facts' about a person's behavior and
organizations acquired over the years, e.g. "You can teach new tricks to an old dog", “Two heads
are better than one." Study of “organization behavior does offer challenges and opportunities for
managers since it focuses on ways and means to improve productivity, minimize absenteeism,
increase employee job satisfaction, etc”. A Study of Organization Behavior provides a basis for
managers to develop and create an ethical culture and climate of work. Also, good prediction of
human and Organizational behavior is helpful.

RELATIONSHIP TO OTHER FIELDS

Organizational behavior is a multidisciplinary subject because it has borrowed concepts and


theories from other fields like Psychology, Sociology, Political science, Anthropology,
Economics, Technology, Environmental science, and science. Organizational behavior is
basically an applied behavioral science.
Psychology:
The term 'psychology' originates from the Greek language 'Psyche' meaning 'soul' or 'heart' and
Organizational behavior is a scientific field that explores human behavior mainly concerned
with the psychology of the individuals. Industrial psychology can be defined as “Industrial
Psychology is a scientific study of employees, workplaces, organizations and Organizational
behavior. Industrial psychology is also known as work psychology. Organizational psychology
helps in improving the workplaces, satisfaction and motivation levels of the employees, and
helping the overall productivity of the organization.”

Sociology:
According to Dictionary of the social sciences, sociology is “the study of society, patterns of
social relationships, social interaction, and culture that surrounds everyday life.” From the
definition it is very much clear that sociology also has a major impact on the study of
Organizational behavior. Max Weber defines sociology as, “a science which attempts the
interpretive understanding of social action in order thereby to arrive at a causal explanation of its
course and effects.”
Anthropology:
It is “the science of humanity, which studies human beings in aspects ranging from the biology
and evolutionary history of Homosapiens to the features of society and culture that decisively
distinguish humans from other animal species.”
Therefore, Anthropology deals with the relationships between people and their environment
and anthropology contributes to understanding the cultural impact on Organizational
behaviour, the impact of value structures, expectations, emotions, unity and interaction.
Also, University of Florida defines, “Anthropology is the study of humankind. Of all the
disciplines that examine aspects of human existence and accomplishments, only Anthropology
explores the entire panorama of the human experience from human origins to contemporary
forms of culture and social life.” Eric Wolf said, “’Anthropology’ is less a subject matter than a
bond between subject matters. It is part history, part literature; in part natural science, part
social science; it strives to study men both from within and without; it represents both a manner
of looking at men and vision of men – the most scientific of the humanities, the most humanist
of sciences.”

PoliticalScience
Political science has some fascinating implications in researching Organizational behavior as it
helps in understanding how and why people gain control, political actions, decision-making,
conflict, interest group activity and creation of coalitions. And the same is also true of major
areas of Organizational behaviour.
It has been stated many times that political parties and government are actively active in many
of the activities of the ORGANIZATION.

Economics
Lionel Robbins stated the term economics as,“the science which studies human behavior as a
relationship between ends and scares means which have alternative uses”. Economics tackles
the problem of fear resources and limitless uses or restricted resources and infinite desires. In
addition to this, it studies the growth, distribution, and consumption of goods and services. And
studying different economic subfields helps to illustrate the Organizational actions in a very
useful way, such as understanding the dynamics of the labor market, efficiency, human
resource planning and forecasting, and cost benefit analysis.

Science:
Scientific approaches are the foundation of organization's actions. Organizational behavior is
based on the systematized analysis of data, actions, their relationships and predictions. New
research methods help to learn modern analytical tools and techniques and to apply them.

Technology:
Technological progress often impacts employee behaviour. Because we live in an era of
information technology in which technology plays a very important role, to understand the
Organizational actions, the study of technological development becomes important because
people are affected by technological growth. Technology influences consumer behaviour,
manufacturing practices, and storage and distribution activities. To match the pace people
need to be educated and/or technically qualified about technological development.

Engineering:
Engineering too plays significant role in the study of Organizational behavior. Certain topics
are very common in both engineering as well as Organizational behavior.

Medicine:
Medicine has a link to researching human behavior in the workplace, as stress has become a
very common issue in organizations as well as in people employed in organizations. To
control the causes and consequences of stress, since it is important for the well-being of both
the individual and the organizations. Medicine helps with treating emotional disorders as well
as emotional related problems.
Finally, it can be inferred that the Organizational conduct is given a multidisciplinary focus.
MODELS OF ORGANISATIONAL BEHAVIOUR

Every organization develops a particular type of culture or value system or a model according
to which people of an organization are supposed to behave. And the system is developed by
taking into account the assumptions of the management regarding people, mission and
management vision. The assumptions on which an organization's culture is based vary greatly
from one organization to another, and so do the ORGANIZATIONAL BEHAVIOUR
MODELS.
In the starting of civilized human society, there were two forms of strategies for the people in
action, one says "trust anyone unless there is proof to the contrary" and an additional says
"trust no one unless there is evidence to the contrary." Obviously, in such organizations the
interactions between people take place differently according to these two approaches.
"McGregor" specified "theories X and Y and each theory makes assumptions which are quite
contrary to each other"; Argyris specified "theconcept of immaturity and maturity of people
which also provides two opposite views about the people". Ergo, Models of Organizational
behavior built on the basis of different decisions or assumptions represent Beat variations. O
B models that are in practice, however, show some sort of continuum between these two
opposite poles, although they tend to lean towards a specific pole. "Davis" has described four
OB models which are as follows:
1. Autocratic
2. Custodial
3. Supportive
4. Collegial.

AutocraticModel
In the autocratic model there is managerial orientation toward power. Managers see power as
the only way to get the job done, and employees are forced to obey orders which lead to high
boss dependence.The Organizational mechanism is largely formalized; power is delegated by
the right of command to the individuals to whom it refers. The model is largely based on the
“Theory of X assumptions of Mc Gregor where the human beings are taken inherently
distasteful to work and try to avoid responsibility”. In this model employees are closely and
strictly supervised inorder to attain desired performance. Employees are supposed to obey the
order of the managers and there is no place for employee's suggestion in this model which
sometimes results in minimal performance.
Custodial Model
Under this model, the key goal relating to management is to use money or resources to
support workers. Employee works towards security attainment and in return organization uses
the organization's economic resources to benefit the organization's employees which lead to
high employee dependence on organization.
Employee Organizational reliance reduces personal dependence on boss. Employees in this
model feel satisfied when working and their performance level is a little higher than the
autocratic Organizational model but overall performance is not that good.
This model Is similar to the more satisfying and dissatisfying Herzberg theory.
Employees get sufficient respect and Organizational protection according to this model, they
feel satisfied but they are not given any kind of authority to determine what benefits or
incentives they will receive. This model is quite common in many Indian business
Organizations.
Supportive Model
In this supportive model mangers are very supportive towards employees. Here Managerial
leadership is the key criterion of Organizational behavior, rather than using money or
influence or authority. The main goal is to assist employees in achieving results with the aid
of employee involvement and participation in managerial decision making process.
The model is based on "Likert's supporting partnership values, which is the fundamental
component of his program 4(participatory)." "Likert" notes that full manager-employee
interactions will occur. The job of the manager is to support and inspire the subordinates to
carry out their mission, rather than closely supervise them. In this model, employee output is
much higher than the autocratic and custodial model, because employees have a sense of
belonging due to managers' positive attitude towards them.

Collegial Model
This model is an extension of the positive model. Within this model all employees work for a
common target. Collegial meaning implies a community of shared-intentioned individuals.
Therefore, the collegial model, suggests the concept of a partnership in which a high degree
of understanding is established between the two in order to accomplish common objectives.
This model requires less guidance and control from the side of management. And the
organization's environment is so favorable that Regulation is essentially carried out by team
members by self-discipline. Collegial model is more useful where there is flexibility in
behaviour, an intellectual environment and considerable freedom of employment.
These OB models are based on the individual characteristics and how they could perform
better. One model cannot be adapted in all situations and at all stages and managers cannot
assume that a particular model is best suited for all purposes and all situations.

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