Mgmt.

theory

Comprehensive Summary: Nature and

Significance of Management
1. Introduction to Management
Management is essential in all organizations, whether business-oriented, social, or non-profit.
It ensures resources are effectively utilized to achieve organizational goals.

Real-Life Example:

Tata Group's success, founded by Jamsetji Tata, is a testament to strong management

principles. Their focus on employee well-being, innovation, and strategic growth highlights
how management drives business success.

2. Definitions of Management
 Harold Koontz & Heinz Weihrich: Management is the process of designing and
maintaining an environment in which individuals work together efficiently to achieve
selected aims.
 Robert L. Trewelly & M. Gene Newport: It involves planning, organizing,
actuating, and controlling an organization's operations to coordinate human and
material resources.
 Kreitner: It is about working with and through others to effectively achieve
organizational objectives using limited resources in a dynamic environment.

3. Characteristics of Management
1. Goal-Oriented Process – Focused on achieving specific objectives.
2. All-Pervasive – Applicable across industries and functions.
3. Multidimensional – Involves managing work, people, and operations.
4. Continuous Process – Ongoing activity requiring adaptation.
5. Group Activity – Aims for team coordination and collaboration.
6. Dynamic Function – Adapts to changes in business environments.
7. Intangible Force – Felt through efficiency and smooth operations rather than being
physically seen.

Real-Life Example:

McDonald's adapted its menu to Indian preferences, demonstrating management's dynamic

nature by introducing vegetarian options like McAloo Tikki Burger.
4. Effectiveness vs. Efficiency
 Effectiveness: Achieving organizational goals (e.g., completing a project on time).
 Efficiency: Achieving goals with minimal resources (e.g., reducing costs while
maintaining quality).

Example:

A factory producing 5000 units by operating double shifts achieves effectiveness but not
efficiency due to higher production costs.

5. Objectives of Management
1. Organizational Objectives:
o Survival: Ensuring long-term sustainability.
o Profitability: Generating sufficient revenue.
o Growth: Expanding markets, workforce, and product lines.
2. Social Objectives:
o Contributing to society through ethical business practices.
o Example: ITC’s E-Choupal initiative helps Indian farmers connect directly to
markets.
3. Personal Objectives:
o Ensuring employee satisfaction, development, and career growth.

6. Nature of Management
Management as an Art

 Requires creativity, experience, and application of knowledge.

 Example: Steve Jobs' ability to merge technology with design in Apple products.

Management as a Science

 Based on systematic knowledge, principles, and experimentation.

 Example: Henry Ford's assembly line production used scientific principles to improve
efficiency.

Management as a Profession

 Requires specialized knowledge and training.

 Professional bodies like AIMA (All India Management Association) regulate industry
standards.
 However, unlike medicine or law, management is not strictly licensed.

7. Levels of Management
1. Top-Level Management – CEOs, Board of Directors (Strategy & Policy Making).
 2. Middle-Level Management – Department Heads (Executing Plans & Supervision).
3. Supervisory-Level Management – Foremen & Supervisors (Day-to-Day
Operations).

Example:

 Top-Level: Tim Cook (CEO, Apple) sets company vision.

 Middle-Level: HR and Marketing Heads execute Apple’s hiring and branding
strategies.
 Supervisory-Level: Apple Store Managers ensure daily operations run smoothly.

8. Functions of Management
1. Planning: Setting objectives and deciding the best course of action.
2. Organizing: Allocating resources and defining roles.
3. Staffing: Hiring, training, and retaining employees.
4. Directing: Motivating employees to achieve goals.
5. Controlling: Monitoring performance and taking corrective actions.

Example:

Infosys uses extensive staffing strategies to hire top software engineers, ensuring business
growth.

9. Coordination: The Essence of Management

Coordination integrates different management functions, ensuring smooth workflows and
avoiding conflicts.

Real-Life Example:

 Mumbai Dabbawalas: Their efficient food delivery system relies on coordination

among multiple teams, despite minimal technology use.

10. Importance of Coordination

1. Integrates Group Efforts – Aligns various departments.
2. Ensures Unity of Action – Avoids duplication and inefficiencies.
3. Continuous Process – Adapts throughout management functions.
4. Enhances Efficiency – Minimizes wastage and optimizes resources.

Example:

Tata Motors ensures coordination between R&D, manufacturing, and marketing to launch
new car models successfully.

11. Management in the 21st Century

  Globalization: Managers need cross-cultural skills to work internationally.
 Technology Adaptation: Companies like Amazon use AI and automation to improve
efficiency.
 Sustainability: Businesses focus on eco-friendly practices (e.g., Tesla’s electric
vehicles).

Comprehensive Summary of Principles of

Management
1. Introduction to Principles of Management
Management principles serve as guidelines for decision-making and behavior in
organizations. They are developed through observation, experience, and research. Unlike
scientific principles, management principles are flexible and can be adapted to different
situations.

Example: Toyota follows well-defined business principles such as respecting

local cultures, creating innovative technologies, and maintaining high ethical
standards.

2. Evolution of Management Thought

Early Perspectives:

 The Egyptian pyramids (2900 B.C.) showcase early management in large-scale

construction.
 Industrial Revolution led to structured management practices.

Classical Management Theory:

 F.W. Taylor emphasized scientific management to improve efficiency.

 Henri Fayol focused on administrative principles for effective management.
 Max Weber introduced bureaucratic management to eliminate inconsistency.

Neo-Classical Theory (Human Relations Approach):

 Emphasized employee motivation beyond economic factors.

 Example: The Hawthorne Studies showed that workers perform better when they feel
valued.

Behavioral Science Approach:

  Used psychology and sociology to improve management.
 Example: Abraham Maslow's Hierarchy of Needs in employee motivation.

Modern Management:

 Integrates advanced technology and contingency planning.

 Example: Google’s use of data analytics for decision-making.

3. F.W. Taylor’s Scientific Management

Principles:

1. Science, Not Rule of Thumb: Standardized methods replace trial and error.
2. Harmony, Not Discord: Cooperation between workers and management.
3. Cooperation, Not Individualism: Encourages teamwork over competition.
4. Development of Workers: Training employees for efficiency.

Techniques:

 Functional Foremanship: Eight specialists supervise different tasks.

 Standardization and Simplification: Uniform work methods increase efficiency.
 Method Study: Finding the best way to perform a task.
 Motion Study: Reducing unnecessary movements.
 Time Study: Determining optimal work time.
 Fatigue Study: Scheduling breaks for productivity.
 Differential Piece Wage System: Incentivizing efficient workers.

Example: Ford’s assembly line improved production efficiency by reducing

unnecessary movements and using standardized methods.

4. Henri Fayol’s Administrative Principles

14 Principles of Management:

1. Division of Work: Specialization improves efficiency.

2. Authority and Responsibility: Balance between power and accountability.
3. Discipline: Adherence to rules ensures smooth operations.
4. Unity of Command: Employees receive orders from only one superior.
5. Unity of Direction: A common goal unites teams.
6. Subordination of Individual Interest: Organizational goals take precedence.
7. Remuneration: Fair compensation motivates employees.
8. Centralization and Decentralization: Balance of decision-making power.
9. Scalar Chain: Hierarchical communication structure.
10. Order: Right placement of resources and personnel.
 11. Equity: Fair treatment of employees.
12. Stability of Personnel: Reducing turnover ensures stability.
13. Initiative: Encouraging proactive contributions.
14. Esprit de Corps: Promoting teamwork and unity.

Example: Infosys follows these principles by maintaining a strong hierarchy

while encouraging initiative among employees.

5. Significance of Management Principles

1. Provides Insights into Reality: Helps managers make informed decisions.
2. Optimum Utilization of Resources: Reduces waste and increases efficiency.
3. Scientific Decision-Making: Encourages logic over intuition.
4. Meeting Changing Environment: Adapting principles for flexibility.
5. Fulfilling Social Responsibility: Encourages ethical business practices.
6. Training and Research: Forms the foundation for business education (MBA, BBA).

Example: BHEL and Lijjat Papad successfully applied management

principles to ensure business growth and social responsibility.

6. Application of Scientific Management in Modern

Business
1. Just-In-Time (JIT) Manufacturing: Reduces inventory costs.
o Example: Toyota’s lean manufacturing.
2. Lean Manufacturing: Eliminates waste to improve efficiency.
o Example: Tesla’s optimized production lines.
3. Kaizen (Continuous Improvement): Small, daily improvements enhance
productivity.
o Example: Japanese companies like Sony encourage employee feedback.
4. Six Sigma: Reduces defects in production.
o Example: General Electric’s quality improvement process.

Comprehensive Summary: Business

Environment
1. Meaning of Business Environment
The business environment refers to the total external forces—individuals, institutions, and
organizations—that affect a business’s operations but are beyond its control. These forces
include economic conditions, government policies, technological advancements, social
trends, and competition.

Example:

The introduction of GST in India impacted businesses by simplifying tax structures but
required firms to adapt to new compliance rules.

2. Features of Business Environment

1. Totality of External Forces – Encompasses all external factors affecting a business.
2. Specific and General Forces – Specific forces (e.g., customers, suppliers) directly
affect firms, while general forces (e.g., economic and political conditions) impact all
businesses.
3. Inter-relatedness – Changes in one factor influence others (e.g., economic growth
increases consumer spending, boosting demand for goods).
4. Dynamic Nature – Business environments constantly evolve (e.g., technological
innovations disrupt markets).
5. Uncertainty – Future trends are unpredictable, requiring adaptability.
6. Complexity – Multiple interdependent factors make decision-making challenging.
7. Relativity – Business environments differ by country and region.

Example:

When the COVID-19 pandemic hit, businesses had to quickly shift to remote work and e-
commerce, showcasing the dynamic and uncertain nature of the environment.

3. Importance of Business Environment

1. Identifies Opportunities & First-Mover Advantage – Understanding market trends
helps firms capitalize on opportunities (e.g., Tesla leading the electric vehicle
industry).
2. Identifies Threats & Early Warning Signals – Helps businesses prepare for
potential challenges (e.g., Indian IT firms adjusting to U.S. visa policy changes).
3. Tapping Useful Resources – Businesses source capital, labor, and raw materials
effectively by understanding their environment.
4. Coping with Rapid Changes – Adapting to technological advancements and market
shifts (e.g., Netflix transitioning from DVDs to streaming services).
5. Aids Planning & Policy Formulation – Helps businesses make informed strategic
decisions.
6. Improves Performance – Companies that monitor and adapt to environmental
changes tend to perform better.
4. Dimensions of Business Environment
1. Economic Environment – Factors like GDP growth, inflation, interest rates, and
consumer spending influence business performance.
o Example: A rise in disposable income increases demand for luxury goods.
2. Social Environment – Societal values, lifestyles, demographics, and cultural trends
impact business operations.
o Example: Growing health consciousness has boosted demand for organic
foods and fitness products.
3. Technological Environment – Innovations in production, communication, and
marketing redefine industries.
o Example: E-commerce platforms like Amazon and Flipkart disrupted
traditional retail businesses.
4. Political Environment – Government stability, policies, taxation, and trade
regulations shape business decisions.
o Example: The Make in India initiative encouraged domestic manufacturing
through policy support.
5. Legal Environment – Laws and regulations (e.g., labor laws, consumer protection)
dictate how businesses operate.
o Example: The Consumer Protection Act safeguards buyers against unfair
trade practices.

5. Economic Environment in India

The Indian economic environment has evolved significantly since independence, with major
policy shifts:

 Pre-1991 Era: Centralized planning, heavy government control, and a focus on

public sector enterprises.
 Post-1991 Liberalization: Economic reforms opened markets, allowing private and
foreign investments to flourish.

Example:

The IT boom in India post-1991 was driven by economic liberalization, leading to the rise of
companies like Infosys and TCS.

6. Liberalization, Privatization, and Globalization (LPG

Policy)
Liberalization
  Reducing government restrictions on businesses.
 Encouraging private sector participation.
 Example: The abolition of industrial licensing allowed companies to expand freely.

Privatization

 Transfer of ownership from the public to the private sector.

 Example: The privatization of Air India improved operational efficiency.

Globalization

 Integration of national economies with the global market.

 Example: India allowing 100% FDI in various sectors boosted international trade.

7. Impact of Government Policy Changes on Business and

Industry
1. Increased Competition – Foreign companies entering Indian markets raised
competition levels (e.g., Walmart and Amazon competing with local retailers).
2. More Demanding Customers – Globalization gave consumers access to better
choices, raising expectations.
3. Rapid Technological Changes – Companies had to invest in digitalization to remain
competitive.
4. Need for Change Management – Businesses had to continuously adapt to survive
market shifts.
5. Development of Human Resources – Emphasis on skills training and professional
development grew.
6. Market Orientation – Customer-centric approaches became essential for success.
7. Reduced Government Support to Public Sector – Loss of subsidies forced public
enterprises to be more competitive.

8. Demonetization in India (2016)

Demonetization aimed to curb corruption, counterfeit currency, and black money.

Impact:

 Increase in Digital Transactions – Growth of UPI payments (e.g., Paytm, Google

Pay).
 Rise in Tax Compliance – More businesses formalized transactions.
 Short-Term Economic Disruption – Cash shortages affected small businesses.
 Drop in Real Estate Prices – Reduced liquidity impacted high-cash industries.
Comprehensive Summary: Business
Environment & Planning
1. Meaning of Business Environment
The business environment refers to the total external forces—individuals, institutions, and
organizations—that affect a business’s operations but are beyond its control. These forces
include economic conditions, government policies, technological advancements, social
trends, and competition.

Example:

The introduction of GST in India impacted businesses by simplifying tax structures but
required firms to adapt to new compliance rules.

2. Features of Business Environment

1. Totality of External Forces – Encompasses all external factors affecting a business.
2. Specific and General Forces – Specific forces (e.g., customers, suppliers) directly
affect firms, while general forces (e.g., economic and political conditions) impact all
businesses.
3. Inter-relatedness – Changes in one factor influence others (e.g., economic growth
increases consumer spending, boosting demand for goods).
4. Dynamic Nature – Business environments constantly evolve (e.g., technological
innovations disrupt markets).
5. Uncertainty – Future trends are unpredictable, requiring adaptability.
6. Complexity – Multiple interdependent factors make decision-making challenging.
7. Relativity – Business environments differ by country and region.

Example:

When the COVID-19 pandemic hit, businesses had to quickly shift to remote work and e-
commerce, showcasing the dynamic and uncertain nature of the environment.

3. Importance of Business Environment

1. Identifies Opportunities & First-Mover Advantage – Understanding market trends
helps firms capitalize on opportunities (e.g., Tesla leading the electric vehicle
industry).
2. Identifies Threats & Early Warning Signals – Helps businesses prepare for
potential challenges (e.g., Indian IT firms adjusting to U.S. visa policy changes).
 3. Tapping Useful Resources – Businesses source capital, labor, and raw materials
effectively by understanding their environment.
4. Coping with Rapid Changes – Adapting to technological advancements and market
shifts (e.g., Netflix transitioning from DVDs to streaming services).
5. Aids Planning & Policy Formulation – Helps businesses make informed strategic
decisions.
6. Improves Performance – Companies that monitor and adapt to environmental
changes tend to perform better.

4. Planning: Meaning & Concept

Planning is deciding in advance what to do and how to do it. It involves setting objectives and
determining the best course of action to achieve them. Planning is fundamental to
management, ensuring goals are met efficiently.

Example:

Indian Oil Corporation (IOCL) planned a massive expansion into international markets,
securing a pipeline deal with Bangladesh and opening new facilities in Nepal and Bhutan.

5. Features of Planning
1. Goal-Oriented: Focuses on achieving specific objectives.
2. Primary Function of Management: Planning sets the foundation for all other
managerial functions.
3. Pervasive: Required at all levels and in all departments.
4. Continuous: Planning is an ongoing process that requires regular updates.
5. Futuristic: Planning involves forecasting future conditions and preparing
accordingly.
6. Decision-Making Activity: Managers evaluate multiple alternatives before selecting
the best course of action.
7. Mental Exercise: Planning requires analytical thinking, creativity, and problem-
solving skills.

Example:

Amazon’s expansion strategy involves detailed planning for logistics, warehouse locations,
and market entry strategies.

6. Importance of Planning
1. Provides Direction: Helps employees focus on set objectives.
 2. Reduces Uncertainty: Helps anticipate and prepare for future challenges.
3. Avoids Overlapping and Wasteful Activities: Ensures coordination across
departments.
4. Encourages Innovation: Planning requires creative problem-solving.
5. Facilitates Decision-Making: Enables managers to choose the best course of action.
6. Establishes Control Standards: Provides benchmarks for performance evaluation.

Example:

Netflix planned its shift from DVDs to streaming, anticipating the rise of digital media and
avoiding losses.

7. Limitations of Planning
1. Leads to Rigidity: Strict adherence to plans may limit flexibility.
2. Does Not Work in Dynamic Environments: External changes (e.g., regulatory
shifts) can render plans obsolete.
3. Reduces Creativity: Employees may feel restricted by predefined plans.
4. Involves High Costs: Planning requires time and financial resources.
5. Time-Consuming: Extensive research and forecasting delay implementation.
6. Does Not Guarantee Success: Plans must be executed effectively to yield results.

Example:

Nokia’s failure to adapt its business plan to the smartphone revolution led to a decline in its
market share.

8. Planning Process
1. Setting Objectives: Defining measurable goals.
2. Developing Premises: Identifying assumptions about future conditions.
3. Identifying Alternative Courses of Action: Listing possible strategies.
4. Evaluating Alternatives: Weighing pros and cons of each alternative.
5. Selecting the Best Alternative: Choosing the most feasible plan.
6. Implementing the Plan: Executing the chosen strategy.
7. Follow-Up Action: Monitoring progress and making necessary adjustments.

Example:

Apple follows a meticulous planning process before launching new products, ensuring
innovation and market readiness.
9. Types of Plans
1. Objectives: Define the desired future state of the company (e.g., Tata Motors setting
a goal for 30% EV sales by 2030).
2. Strategy: Comprehensive long-term business approach (e.g., Reliance Jio’s
aggressive pricing strategy to dominate telecom markets).
3. Policy: General guidelines for decision-making (e.g., Infosys’ employee-friendly HR
policies).
4. Procedure: Step-by-step methods for tasks (e.g., McDonald’s standardized food
preparation process).
5. Rule: Strict directives to ensure compliance (e.g., Google’s cybersecurity protocols).
6. Programme: Detailed implementation plans for projects (e.g., ISRO’s Gaganyaan
mission planning).
7. Budget: Financial planning for revenue and expenditures (e.g., Tesla’s budget
allocation for R&D and Gigafactories).

3. Organising: Meaning & Concept

Organising is the process of defining and grouping activities, assigning roles, and
establishing authority relationships to achieve business objectives. It ensures efficient
coordination of resources and execution of plans.

Example:

Wipro restructured its organisation by dividing it into independent units like

telecommunications, financial services, and engineering, allowing better efficiency and focus.

4. Steps in the Process of Organising

1. Identification & Division of Work – The total workload is broken down into
smaller, manageable tasks to avoid duplication and ensure clarity.
2. Departmentalisation – Similar tasks are grouped into departments based on function,
geography, or product type.
3. Assignment of Duties – Specific job roles are assigned to employees based on their
skills and experience.
4. Establishing Authority & Reporting Relationships – A clear hierarchy is defined
so that everyone knows their reporting structure and responsibilities.

Example:

In a school fete, committees are created for food, decorations, and ticketing, each with a team
leader responsible for execution.
5. Importance of Organising
1. Efficient Specialisation – Employees focus on specific tasks, improving expertise
and efficiency.
2. Clarity in Working Relationships – Defines authority and responsibility, reducing
confusion.
3. Optimum Resource Utilisation – Ensures the best use of manpower, materials, and
finances.
4. Facilitates Adaptability to Change – A flexible structure allows businesses to
respond to market changes.
5. Effective Administration – Smooth execution of work through clear roles and
accountability.
6. Development of Personnel – Employees gain experience and managerial skills
through structured responsibilities.
7. Supports Business Expansion – A strong organisational structure enables businesses
to scale operations.

Example:

Amazon’s well-structured logistics and distribution system allow it to efficiently deliver

millions of products globally.

6. Types of Organisational Structures

(a) Functional Structure

Grouping of jobs based on functions such as production, marketing, HR, finance, etc.

Advantages:

 Encourages specialisation and expertise.

 Reduces duplication of work.
 Increases operational efficiency.

Disadvantages:

 Leads to interdepartmental conflicts.

 Coordination between functions can be difficult.

Example:

A manufacturing company divides its structure into production, sales, and finance, each
focusing on their tasks.

(b) Divisional Structure

Grouping of activities based on product lines, geographic locations, or customer segments.

Advantages:

 Greater flexibility and autonomy.

 Clear accountability for performance.
 Faster decision-making.

Disadvantages:

 Duplication of resources increases costs.

 Coordination between divisions can be challenging.

Example:

Tata Group operates different divisions for automobiles, steel, and software, each managed
separately.

7. Formal & Informal Organisation

(a) Formal Organisation

A structured system where roles and responsibilities are predefined.

Advantages:

 Clear authority and responsibility.

 Enhances efficiency and control.

Disadvantages:

 Can be rigid and slow in adapting to changes.

 Employees may feel restricted by excessive rules.

(b) Informal Organisation

Spontaneous relationships and networks formed among employees.

Advantages:

 Encourages faster communication and cooperation.

 Provides a social support system for employees.

Disadvantages:

 Can spread rumors and misinformation.

 May create resistance to formal decisions.
Example:

A team of employees forming a sports club within the company is part of an informal
organisation.

8. Delegation & Decentralisation

(a) Delegation

The process of assigning authority and responsibility to subordinates.

Elements of Delegation:

1. Authority – Right to make decisions and command subordinates.

2. Responsibility – Obligation to complete assigned tasks.
3. Accountability – Answerability for the outcomes of tasks assigned.

Importance:

 Reduces workload of top management.

 Enhances employee motivation and development.
 Improves efficiency by distributing decision-making.

Example:

A marketing manager delegates social media strategy to a team lead but remains accountable
for overall brand performance.

(b) Decentralisation

Systematic delegation of authority throughout all levels of an organisation.

Advantages:

 Promotes faster decision-making at lower levels.

 Encourages innovation and responsibility.
 Reduces workload of top management.

Disadvantages:

 Can lead to inconsistency in decision-making.

 May reduce central control over strategic objectives.

Example:

McDonald's allows regional managers to adapt menus to local tastes, such as the McAloo
Tikki burger in India.
Staffing: Meaning & Concept
Staffing refers to the process of hiring, training, and retaining the right people for the right
jobs in an organisation. It involves workforce planning, recruitment, selection, training,
development, compensation, and performance appraisal to ensure business efficiency.

Example:

Infosys includes human resources on its balance sheet, emphasizing that employees are key
assets who contribute significantly to business success.

5. Importance of Staffing
1. Ensures Competent Personnel – Helps in hiring skilled employees for various jobs.
2. Improves Performance – Assigning the right person to the right job increases
efficiency.
3. Facilitates Growth – Ensures business continuity through succession planning.
4. Reduces Wastage – Avoids overstaffing and understaffing, optimizing resource
utilization.
5. Enhances Job Satisfaction – Motivated employees contribute better to organisational
success.

Example:

Google offers extensive training programs to enhance employee skill sets, ensuring they
remain innovative and productive.

6. Steps in the Staffing Process

1. Estimating Manpower Requirements – Assessing the number and type of
employees required.
2. Recruitment – Searching for potential candidates.
3. Selection – Choosing the most suitable candidates through tests and interviews.
4. Placement & Orientation – Introducing employees to the organisation and assigning
them roles.
5. Training & Development – Enhancing employee skills for better performance.
6. Performance Appraisal – Evaluating employees' work and providing feedback.
7. Compensation & Career Planning – Establishing fair wages and growth
opportunities.

Example:
TCS follows a rigorous hiring and training process to ensure fresh graduates adapt to the
company’s work culture.

7. Recruitment: Meaning & Sources

Recruitment is the process of attracting potential employees for job openings. It can be done
through internal (promotions, transfers) or external (campus recruitment, job portals)
sources.

Example:

Lenovo India uses an employee referral system to attract qualified talent, reducing hiring time
and improving retention.

8. Selection Process
1. Preliminary Screening – Shortlisting candidates based on resumes and applications.
2. Selection Tests – Assessing aptitude, intelligence, personality, and trade skills.
3. Employment Interview – Face-to-face evaluation of skills and attitude.
4. Reference & Background Checks – Verifying past records and experiences.
5. Medical Examination – Ensuring candidates are physically fit for the job.
6. Job Offer & Employment Contract – Providing an official employment letter with
terms of work.

Example:

Companies like Deloitte conduct multiple rounds of interviews and case studies to ensure
they hire the best talent.

9. Training & Development

Training enhances employee performance by improving their knowledge and skills. It is
broadly categorized into on-the-job training (learning while working) and off-the-job
training (formal classroom training).

Types of Training Methods:

1. On-the-Job Training: Apprenticeship, job rotation, coaching, and mentorship.

2. Off-the-Job Training: Classroom lectures, case studies, simulation exercises, and
vestibule training.

Example:
Maruti Suzuki provides apprenticeship programs for engineers to gain hands-on experience in
automobile manufacturing.

10. Performance Appraisal & Compensation

Performance appraisal evaluates an employee’s contribution to the organisation, leading to
promotions or corrective measures. Compensation includes wages, salaries, incentives, and
benefits that motivate employees.

Example:

Reliance Industries offers annual performance bonuses to high-achieving employees,

encouraging productivity and retention.

Directing: Meaning & Concept

Directing refers to the managerial function of guiding, instructing, motivating, and leading
employees towards achieving organisational objectives. It is a continuous process that
ensures employees perform effectively.

Example:

Ford Motor Company implemented leadership training programs to develop proactive change
agents who drive innovation and efficiency.

6. Importance of Directing
1. Initiates Action – Directing translates planning into performance by guiding
employees.
2. Integrates Efforts – Ensures teamwork and alignment with organisational goals.
3. Enhances Motivation – Encourages employees to give their best effort.
4. Facilitates Change – Helps overcome resistance and adapt to new strategies.
5. Ensures Stability & Growth – Creates a cooperative and productive work
environment.

Example:

Tata Steel’s motivation programs increased employee participation and commitment, leading
to improved productivity.
7. Elements of Directing
1. Supervision – Monitoring employees’ work and providing guidance.
2. Motivation – Encouraging employees through incentives and recognition.
3. Leadership – Influencing employees towards achieving goals.
4. Communication – Ensuring smooth flow of information.

Example:

Maruti Suzuki supervisors provide hands-on training to improve worker efficiency.

8. Motivation & Maslow’s Hierarchy of Needs

Motivation is the internal drive that compels individuals to take action. Maslow’s hierarchy
explains how different levels of needs influence motivation:

1. Physiological Needs – Basic necessities like salary, food, and shelter.

2. Safety Needs – Job security and financial stability.
3. Social Needs – Relationships and teamwork.
4. Esteem Needs – Recognition and respect.
5. Self-Actualisation Needs – Personal growth and career advancement.

Example:

Google provides career development programs, fulfilling employees’ self-actualisation needs.

9. Leadership & Its Importance

Leadership is the process of influencing employees to willingly strive for organisational
objectives.

Types of Leadership Styles:

1. Autocratic Leadership – Centralised decision-making (e.g., military operations).

2. Democratic Leadership – Encourages employee participation (e.g., tech companies
like Google).
3. Laissez-Faire Leadership – Minimal supervision, high autonomy (e.g., research
institutions).

Example:

Infosys founder Narayana Murthy used democratic leadership to foster innovation and
collaboration.
10. Communication in Directing
Effective communication ensures that information flows smoothly between managers and
employees, eliminating misunderstandings and fostering efficiency.

Types of Communication:

1. Formal Communication – Official channels (e.g., company emails and reports).

2. Informal Communication (Grapevine) – Unofficial interactions (e.g., employee
discussions during lunch breaks).

Example:

Apple’s internal memos ensure that employees stay informed about new product
developments.

Controlling: Meaning & Concept

Controlling is the function of ensuring that actual activities conform to planned activities. It
involves monitoring performance, identifying deviations, and taking corrective action to
achieve organizational goals effectively.

Example:

Tata Motors uses real-time data tracking to monitor production efficiency and quality control,
allowing immediate corrections when deviations occur.

7. Importance of Controlling
1. Accomplishing Organisational Goals – Measures progress and ensures alignment
with objectives.
2. Judging Accuracy of Standards – Helps in evaluating the feasibility of pre-set
targets.
3. Making Efficient Use of Resources – Reduces wastage and enhances productivity.
4. Improving Employee Motivation – Provides clarity on performance expectations.
5. Ensuring Order & Discipline – Reduces fraud and misconduct by keeping track of
operations.
6. Facilitating Coordination in Action – Ensures synchronization between
departments.

Example:

FedEx employs a high-tech tracking system to monitor package deliveries and optimize
efficiency, reducing operational errors.
8. Relationship Between Planning & Controlling
 Planning without controlling is ineffective – Plans must be monitored to ensure
execution.
 Controlling without planning is meaningless – There must be a benchmark for
comparison.
 Forward and Backward Linkage – Planning sets the direction, while controlling
measures performance and provides feedback for future planning.

Example:

Apple’s strategic plan for product launches is constantly reviewed through performance
metrics, ensuring targets are met and lessons are incorporated into future plans.

9. Controlling Process
1. Setting Performance Standards – Establishing benchmarks for evaluation.
2. Measuring Actual Performance – Assessing work output through reports,
observation, or statistics.
3. Comparing Performance with Standards – Identifying deviations.
4. Analyzing Deviations – Determining the cause of performance gaps.
5. Taking Corrective Action – Implementing necessary measures to rectify deviations.

Example:

McDonald's evaluates customer service speed and food quality through periodic audits,
ensuring adherence to global standards.

10. Techniques of Controlling

Traditional Techniques:

1. Personal Observation – Managers physically inspect operations (e.g., factory

supervisors monitoring workers).
2. Statistical Reports – Data-driven insights on performance (e.g., quarterly financial
reports).
3. Break-Even Analysis – Determines profitability thresholds.
4. Budgetary Control – Monitoring income and expenditures.

Modern Techniques:

1. Return on Investment (ROI) – Measures profitability of investments.

 2. Ratio Analysis – Assesses financial health through liquidity and profitability ratios.
3. Responsibility Accounting – Assigns accountability for performance outcomes.
4. Management Audit – Evaluates the efficiency of management policies.
5. PERT & CPM – Project management tools for timeline and resource optimization.
6. Management Information System (MIS) – Uses data analytics for decision-making.

Example:

Amazon uses MIS to track customer preferences, logistics efficiency, and sales data, helping
managers make strategic decisions.