the complete notes of pom

8/22/2019 The Complete Notes of Pom

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UNIT-I

HISTORICAL DEVELOPMENT

The Definition of Management

1.The process of getting activities completed efficiently with and through other people;

2. The process of setting and achieving goals through the execution of five basic management

functions: planning, organizing, staffing, directing, and controlling; that utilize human, financial,

and material resources.

3.The process of planning, leading, organizing and controlling people within a group in order to

achieve goals; also used to mean the group of people who do this.

4.the process of achieving the objectives of the business organization by bringing together

human, physical, and financial resources in an optimum combination and making the best

decision for the organization while taking into consideration its operating environment.

Nature of Management

1. Universality: Management is an universal phenomenon in the sense that it is common and

essential element in all enterprises. Managers perform more or less the same functions

irrespective of their position or nature of the organization. The basic principles of management

can be applied in all managerial situations regardless of the size, nature and location of the

organization. Universality of managerial tasks and principles also implies that managerial skills

are transferable and managers can be trained and developed.

2. Purposeful: Management is always aimed at achieving organizational goals and purposes.

The success of management is measured by the extent to which the desired objectives are

attained. In both economic and non-economic enterprises, the tasks of management are directed

towards effectiveness (i.e., attainment of organizational goals) and efficiency (i.e., goal

attainment with economy of resource use).


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3. Social process: Management essentially involves managing people organized in work groups.

It includes retaining, Developing and motivating people at work, as well as taking care of their

satisfaction as social beings. All these interpersonal relations and interactions makes the

management as asocial process.

4. Coordinating force: Management coordinates the efforts of organization members through

orderly arrangement of inter-related activities so as to avoid duplication and overlapping.

Management reconciles the individual goals with the organizational goals and integrates human

and physical resources.

5. Intangible: Management is intangible. It is an unseen force. Its presence can be felt

everywhere by the results of its effort which comes in the form of orderliness, adequate work

output, satisfactory working climate, employees satisfaction etc.

6. Continuous process: Management is a dynamic and an on-going process. The cycle of

management continues to operate so long as there is organised action for the achievement of

group goals.

7. Composite process: Functions of management cannot be undertaken sequentially,

independent of each other. Management is a composite process made up of individual

ingredients. All the functions are performed by involving several ingredients. Therefore, the

whole process is integrative and performed in a network fashion.

8. Creative organ: Management creates energetics effect by producing results which are more

than the sum of individual efforts of the group members. It provides sequence to operations,

matches jobs to goals, connects work to physical and financial resources. It provides creative

ideas, new imaginations and visions to group efforts. It is not a passive force adopting to external

environment but a dynamic life giving element in every organization.


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Scope And Functions

Scope of Management Functions

Scope of Management functions and relationship with the controlling

Management is a term variously defined by different authors. For this reason, below we first

present some of its definition to be able to export them from links.

Thus, Donnelly, Gibson and Ivancevich Management define as the process as it is made by one

or more persons, and consists in coordinating the activities of other persons in order to achieve

the results that one person could not achieve alone.

Weihrich and Koontz in addition define it as the process of shaping and maintaining an

environment in which individuals, working together in groups, efficiently achieve desired

outcomes.

James A. OBrien Management function describes as a leadership process that involves

managerial functions of planning, organizing, directing and controlling. In doing so, managers

plan organizational activities, organize the staff and activities, direct and control own

management activities by using feedback loops. Feedback has a duty to point out the

discrepancies and to direct towards the implementation of necessary modifications in order to

achieve business goals . Also the definition of management can be quoted with definition in the

lexicon of Economics, where was stated activity aimed at achieving specific, pre-set goals, but

with the efforts of other people. Management is the process of guiding the behavior of others

toward the execution of a task, it combines the factors of production to achieve certain goals and

deals with overcoming complexity. Basic functions of management scope are: planning,

organizing, setting up staff, leadership and control .

Looking at these definitions as basic scope of management functions (and others not listed here)

can be noticed that all emphasize that the scope of management is process, in which individuals

are joining forces with the aim of achieving a more efficient target. This goal can be expressed

quantitatively (profit contribution of cover, income) and qualitatively (environmentally friendly

production, high product quality, employee care, good post-sales service ofproducts). In general,

these goals are overlapping, so a high quality product delivers a positive image of a business
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entity, and that indirectly brings higher profits due to higher sales. To accomplish the desired

goals, that persons (hereinafter to be called managers) are responsible for managing and

performing certain functions, as already stated in the definition of the lexicon of Economics.

List of Management functions

Briefly, there are 5 core functions that constitute Scope of Management functions: Planning,

Organizing, Staffing, Leadership and Controlling.

Scope of Management

1. Planning

The first management function in scope of management functions that managers must perform is

PLANNING. Within this function plan is created to accomplish the mission and vision of the

business entity. Under the mission is considered the reason for the establishment, while under the

vision is considered where is business entity aiming. The plan must define the time component

and to plan necessaryresourcesto fulfill the plan. Here can also be shaped goal / s that want s to
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be achieved and strategy to be used at the same time. Accordingly plan of organization is

developed together with required personnel, method of leading people is defined and controlling

instruments for monitoring the realization of plans. The guiding idea in the making of mentioned

items is the realization of the objectives and fulfilling the mission and vision of the business

entity.

As is evident from the previous paragraph, each organization should make a good first step, a

good plan, because without it the organization takes a great risk of mistakes and thus

compromising their business.

2. Organizing

Organizing is the second function manager, where he had previously prepared plan, establish an

appropriate organizational structure in business organization. In part, it determines the ranges of

management, type of organizational structure, authority in the organization, types and ways of

delegating and developing lines of communication. The organization and its subsystems are

placed under the plan, which was created as part of functions, ie planning. In performing

construction and organization in particular must pay attention to formal and informal lines of

communication, because if these lines are not adequately monitored the possibility of collision

between them, resulting in delays and / or even failure to achieve the goal.

3. Staffing

Staffing, as the next function of management, consists of a selection of appropriate staff for the

organization to reach a goal / goals easier and more efficient. According to todays experience is

well known that it is difficult to financially evaluate, quality and efficient staff. Staff is one of the

more valuable, if not the most valuable resource in any successful organization. For this reason,

good planning of personnel policies, as a function of management, and corresponding execution

of that selection of high quality people is becoming increasingly important. The task of this


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management function is to set rules related to employment and personnel policies. Within rules

following items are determined:

policy of employment (whether the target organizations development of own staff to

develop within the organization or the staff mostly taken from other organizations),

required expertise and theoretical knowledge to perform certain tasks (identification of

necessary skills),

the policy of promotion ,

assessment of employees,

training of staff,

conflict resolution,

and other settings of personnel policies.

4. Leadership

Leadership as the penultimate function is the cornerstone of management. As part of this

function methods are determined of encouraging people (staff) to achieve their common goal / s

of a business entity. Entity (unit, division, department and etc.) on its head must have the person

who is ready to lead and to transfer to assistants and colleagues own enthusiasm for the goal /

goals. Briefly, this means to motivate them. Otherwise there is a great opportunity and

incentive to report a jump ball in the final achievement of results which lead to a miscarriage of

goals. There are many motivation theories, among them Maslows famous hierarchy of needs

and the Herzberg Two-Factor Theory. All of them aim to try to explain a way of encouraging

staff to perform tasks more efficiently, and to find factors that will give personnel satisfaction, to

motivate them. To perform this function, managers are often additionally educated in the field of

psychology because the motivation and motivators are very complex issue. The reason for this isthe individuality of each person, and therefore a combination of motivators for everyone else

affected.

For example, certain individuals may be motivated by the possibility of promotion (which is

closely related to personnel functions), while others may be motivated by a pleasant business


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environment (organizational function) and / or better bonuses (including organizational

function).

For defining leadership also should be stressed that there are different ways (styles) of leadership

that are still classified versatile by different authors. So, if we look at the styles of authority there

are three basic types: autocratic style of leadership, democratic or participative style and laissez

faire.

The Evolution Of Management Thought

Current management theory and practice did not just eventuate. It evolved over many years. The

evolution of the discipline of management has helped to develop a body of knowledge about the

practice of management. Within the field of management, eight schools of thought have

contributed significantly to the development of management.

The following table brings together the theories of management and the issues that they address.

You should be aware that the main features and theoretical perspectives of each school are not

necessarily mutually exclusive and in many cases a particular theory has built upon and refined

the work of researchers in other areas.

Theories of management and the problems they address

Theories of management skills

the human relations school the motivational problem

the organisation behaviour school improving the integration of people into organisations

the information and decision school the management decision-skills problem

Theories of management functions


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scientific management the human productivity problem

the quantitative school the application of objective functions to management

the strategic management school the organisation long-range planning problem

Theories of organisation systems

administrative management the organisation problem

the organisation theory school the organisation design problem

The following chapter of your textbook discusses the historical origins of management principles

and practices. Included are the diverse schools of management thought. The background for each

school, its effect on management and its main contributors are identified.

Conclusion

The role of the manager involves continually balancing the needs of the task and the needs of theindividual and the whole team. At the same time a manager must be able to focus on the

immediate specific issues that require attention.

A manager works with groups and individuals towards goals within the constraints of the

organisation and the external environment. Managers make decisions, allocate resources and

coordinate the activities of others to achieve goals. One common thread comes through in all of

the definitions and textbooks regarding functions to be performed and the skills required of a

manager - the importance of managing people.

Think about this - the challenge of management is to create an environment so that people want

to come to work in the morning. A positive attitude on your part will improve that relationships

with those you work.


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HENRY FAYOL PRINCIPLES

Henry Fayol suggested 14 principles of management as explained:

Division Of Work: Division of work means dividing the total work into small convenient

components and giving each component to one employee. This brings specialisation and enables

people to concentrate effectively on the assigned responsibility. This improves performance,

ability and accuracy in the work.

Authority and Responsibility: Authority should be equal to responsibility. These two terms are

integral aspects of the managerial process AND inter-related as responsibility is the corollary of

authority. Those who have authority to give orders must be willing to accept responsibility for

the results. Responsibility arises when the authority is used and hence authority and

responsibility cannot be separated.

Discipline: Discipline is the obedience and outward mark of respect shown by an employee.

Fayol considers that discipline is absolutely essential for smooth and orderly running of a

business unit. For proper discipline, attention needs to be given to good supervision,fair

agreements and judicious use of Penalty.

His 14 principles are:

Division of work- specialisation provides the individual to build up experience, continuous

improvement in skills, and thereby be more productive.

Authority - the right to issue commands, along with which must go the balanced responsibility

for its function

Discipline - which is two-sided, for employees only obey orders if management play their part

by providing good leadership.

Unity of Command - each worker should have only one boss with no other conflicting lines of

command.


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Unity of direction - people engaged in the same kind of activities must have the same objectives

in a single plan

Subordination of individual interest to general interest - management must see that the goals

of the firms are always paramount.

Remuneration - payment is an important motivator although by analysing a number of

possibilities, Fayol points out that there is no such thing as a perfect system

Centralisation or decentralisation - this is a matter of degree depending on the condition of the

business and the quality of its personnel

Scalar chain (line of Authority) - a hierarchy is necessary for unity of direction but lateral

communication is also fundamental as long as superiors know that such communication is taking

place.

Order- both material order and social order are necessary. The former minimises lost time and

useless handling of materials. The latter is achieved through organisation and selection.

Equity - in running a business a 'combination of kindliness and justice' is needed in treating

employees if equity is to be achieved.

Stability of tenure - this is essential due to the time and expense involved in training good

management.

Initiative - allowing all personnel to show their initiative in some way is a source of strength for

the organisation even though it may well involve a sacrifice of 'personal vanity' on the part of

many managers

Esprit de corps - management must foster the morale of its employees. He further suggests that,


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"real talent is needed to coordinate effort, encourage keenness, use each person's abilities, and

reward each one's merit without arousing possible jealousies and disturbing harmonious

relations." Harmony and pulling together among personnel.

UNIT - II

PLANNING

DEFENITION

A basic management function involving formulation of one or

more detailed plans to achieve optimum balance ofneeds ordemands withthe available resources.

The planning process

(1) identifies the goals orobjectives to be achieved, (2) formulates strategies to achieve them, (3)

arranges orcreates the means required, and (4)implements, directs, and monitors all steps in their

proper sequence.

2. The control ofdevelopmentby a local authority,

throughregulation and licensing forland use changes and building

Planning :- In simple words, planning is deciding in advance what is to be done, when wherei

how and by whom it is to be done. Thus, a plan is a determined course of action. It is an attempt

on the part of a manager to anticipate the future in order to achieve better performance.

Nature-of-Planning

:-

I think the planning has the following inherent characteristics:

1. Planning is an intellectual process :- Planning as an intellectual process, the conscious

determination of course of action. Thus, it is an intellectual stimulation. It possesses an element
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of day-dreaming. In the initial stage it may involve what might be called vision. It involves

foreseeing future development, making forecasts or predictions and then taking decisions. Thus,

it becomes an important mental exercise.

2. Planning contributes to the objective :- A plan starts with the setting of objectives and in

order to realize it develops policies, procedures, and strategies, etc. Obviously, without setting

the goals to be reached and lines of action to be followed, there is a continuous and never-ending

activity of a manager to keep the enterprise going.

3. Planning is a selecting process :- Planning is a selective process. It involves the study and a

careful analysis of various alternatives and then selecting the best one. It not only pertains to

defining a problem which immediately confronts the manager, but often it mentally searches the

possibilities for problems that might appear in the future.

IMPORTANCE OF PLANNING

The importance of the planning function should have be clear to you. We can outline the

importance of planning function as follows:

Provides Direction: Planning provides a clear sense of direction to the activities of the

organization and to the job behavior of managers and others. It strengthens their confidence in

understanding where the organization is heading and what for, how best to make the

organization move along the chosen path, and when should they take what measures to achieve

the goals of the organization.

Provides opportunity to analyze alternative courses of action: Another source of importance

of planning is that it permits managers to examine and analyze alternative course of action with a

better understanding of their likely consequences. If managers have an enhanced awareness of

the possible future effects of alternative courses of action, for making a decision or for taking

any action, they will be able to exercise judgment and proceed cautiously to choose the most

feasible and favorable course of action.


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Reduces uncertainties: Planning forces managers to shake off their inertia and insular outlook;

it induces them to look beyond those noses, beyond today and tomorrow, and beyond immediate

concerns. It encourages them to probe and cut through complexities and uncertainties of the

environment and to gain control over the elements of change.

Minimizes impulsive and arbitrary decisions: Planning tends to minimize the incidence of

impulsive and arbitrary decisions and ad hoc actions; it obviates exclusive dependence on the

mercies of luck and chance elements; it reduces the probability of major errors and failures in

managerial actions. It injects a measure of discipline in managerial thinking and organizational

action. It improves the capability of the organization to assume calculated risks. It increases the

freedom and flexibility of managers withing well-defined limits.

King-pin function: As stated earlier, planning is a prime managerial function which provides the

basis for the other managerial functions. The organizational structure of task and authority roles

is built around organizational plans. The functions of motivation, supervision, leadership and

communication are addressed to implementation of plans and achievement of organizational

objectives. Managerial control is meaningless without managerial planning. Thus, planning is

the king-pin function around which other functions are designed.

Resource Allocation: Planning is means of judicious allocation of strategic and scarce resources

of the organization in the best possible manner for achieving strategic goals of the organization.

The strategic resources include funds, highly competent executives, technological talent, good

contacts with government, exclusive dealer network and so on. If the organization enjoys a

distinct advantage in possession of such resources, a careful planning is essential to allocate them

into those lines which would strengthen the overall competitive position of the organization.

Resource use efficiency: For an ongoing organization, planning contributes towards a more

efficient functioning of the various work units. There is better utilization of the organization's

existing assets, resources and capabilities. It prompts managers to close gaps, to plug loopholes,

to rectify deficiencies, to reduce wastage and leakages of funds, materials, human efforts and

skills so as to bring about an overall improvement in resource use efficiency.


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Adaptive responses: Planning tends to improve the ability of the organization to effectively

adapt and adjust its activities and directions in response to the changes taking place in the

external environment. An adaptive behavior on the part of the organization is essential for its

survival as an independent entity. For a business organization, for example, adaptive behavior is

critical in technology, markets, products and so on.

Anticipative action: While adaptation is a behavior in reaction and response to some changes in

the outside world, it is not enough in some situations. In recognition of this fact, planning

stimulates management to act, to take hold initiatives, to anticipate crises and threats and to ward

them off, to perceive and seize opportunities ahead of other competitions, and to gain a

competitive lead over others. For the purpose, some enterprises establish environmental

scanning mechanism as part of their planning systems. Thereby such enterprises are able to

direct and control change, instead of being directed and controlled by the pervasive external

forces of change.

Integration: Planning is an important process to bring about effective integration of the diverse

decisions and activities of the managers not only at a point of time but also over a period of

time. It is by reference to the framework provided by planning that managers make major

decisions on organizational activities, in an internally consistent manner.

STEPS IN PLANNING

There are eight applicable steps in planning which should be followed by managers in

connection with major programs and in any other through planning.

1. AWARENESS OF OPPERTUNITIES

An awareness of opportunities in the external environment as well as within the organization is

the real starting point for planning. All managers should take look at future opportunities and see

them clearly and completely. They should know where they stand in light of their strengths and

weakness, understand what problems they wish to solve and why, and know what they expect to

gain. Setting realistic objectives depends on this awareness.


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(i) About market (ii) About expected competition (ii) What customers wants (iv) Awareness

about their qualities and weakness

2. SETTING OBJECTIVES

The second step in planning is to establish or set objectives for the entire enterprise and then for

each subordinate work unit. Objectives specify the expected results and indicate the end points of

(i) What is to be done (ii) Where the primary emphasis is to be placed (iii) What is to be

accomplished by the network of strategies, policies, procedures, rules, budgets and programs

3. DEVELOPING PREMISES

The third logical step in planning is to establish planning premises. Such as forecasts, applicable

basic policies and existing company plan. The are assumptions about the environment in which

the plan is to be the carried out. It is important for all the managers involved in planning to agree

on the premises.Forecasting is important in premising: What kind of markets will be there? What

volume of sales? What prices? What products? What technical developments? What cost? Etc

4. INDENTIFYING ALTERNATIVE COURSES OF ACTION

The forth step in planning is to search and examined alternative courses of actions. The planner

must usually make preliminary examination alternative courses to accomplish the goal.

5. EVALUATING ALTERNATIVE COURSES

After determining alternative courses and examining their strong and weak points, the next stepis to evaluate the alternatives. That which alternative will give the best of meeting goals at the

lowest cost and highest profit in a given period.

6. SELECTING A COURSE


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Selecting an alternative is the real point of decision making. This is the point at which the plan is

adopted. After identifying and evaluating alternative the manager has to decide one best

alternative or several alternative courses of action.

7. FORMULATING DERIVATIVE PLANS

The seventh step in planning is formulating derivative plans. When a decision is made next step

is to formulate a supporting plan, such as to buy equipment, materials, hire and train workers and

develop a new product.

8. NUBERISING PLANS BY MAKING BUDGETS

After decision making and formulating plans the final step in planning is to numberise decision

and plan by converting them into budgets. The overall budgets of an enterprise represent the sum

total of income and expenses with resulting profit. Budgets are important thing in planning

process.

TYPES OF PLANNING

The failure of some managers is inability to recognize the several types of plans. This makes

difficulty in making planning effective. Plans are classified as:-

1. PURPOSE AND MISSIONS & OBJECTIVES

This mission identifies the basic functions or tasks of an enterprise. However, an objective is the

end toward which an activity is aimed. Objectives in other words. Are ends toward which

organizational and individual activities or directed. Objectives are the end point toward which all

managerial functions, (Planning, Organizing, Leading, Staffing, and Controlling) are aimed.

Objectives form a hierarchy ranging from individual objectives to broad aims.

2. STRATEGIES & POLICIES

Strategies and policies are the basis of operational plans and framework for plans. Both gives

direction and are closely related. The word strategy is derived from a Greek word

STRATEGOS meaning General. Strategies is the determination of the basic long term


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objectives of an enterprise and the adoption of courses of action and allocation of resources

necessary to achieve these goals policies are general statements or understandings that guide

managers thinking and decision making.

3. PROCEDURE & RULES

Procedures are plans that establish a required method of handling future activities. Briefly,

procedures guide actions. Rules are those required actions or non-actions allowing no discretion.

Rules are simply called simple plans.

4. PROGRAMMS

Programs are a complex of goals, policies, procedures, rules, tasks and steps to be taken,

resources to be employed and other elements necessary to carryout a given course of action and

normally supported by capital and operating budgets.

5. BUDGET

A budget is a numerized program. It is a statement of plans and expected results expressed in

numerical terms or forms. The budget of an enterprise represents the sum total of income and

expenses with profit or surplus.

1. THE CONTRIBUTION OF PLANNING TO PURPOSE AND

OBJECTIVE:

Every plan and all its supporting plans should contribute accomplishment of the purpose and

objectives of the enterprise. This concept an use in organized enterprise which try to

accomplishment of group purpose through deliberate cooperation.

2. THE PRAMACY OF PLANNING:

Since managerial functions like organizing, Staffing, Leading and controlling support to the

accomplishment of enterprise objectives, planning logically precedes or help the accomplishment

of all other managerial functions. Because Manager must plan on order to know what kinds f

organization relationship and personal qualifications are needed, which method should be fild by


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subordinates and what kind of control is to applied. All the other Managerial functions must be

planned if they are to be effective.

3. THE PERVASIVENESS OF PLANNING:

Planning is the function of all Managers, although the character and breadth of planning will

vary with each Managers authority and with nature of polices and plans outlined by superiors. If

Managers are not allowed a certain degree of discretion and planning responsibility they are not

truly Managers.

If we recognize the pervasiveness of planning, we can more easily understand why some people

distinguish between the manager and the administrator or supervisor one manager,

because of his or her authority or position in the organization, may do more important planning

than another, or the planning of one may be more basic than that of another and applicable to a

large portion of the enterprise. However, all managers from presidents to first level supervisors

plan. Even the head of a road gang or a factory crew plans in a limited area under fairly

Objectives : Meaning and Definition

Objectives may be defined as the future results or a desired state of affairs which the

organization seeks and strives to achieve. Objectives provide the organization with a purpose that

keeps its attention and efforts focused in a particular direction so that it is capable of steering a

steady course towards their accomplishment, taking corrective action when necessary to avoid

obstacles.

MANAGEMENT BY OBJECT (MBO)

Management by objectives (MBO) is now practiced all over the world. Yet, despite its wide

applications, it is not always clear what is meant by MBO. Some says that it is an appraisal tool;

other sees it is a motivational technique; still others consider MBO a planning and control

device. In other words, definitions and applications of MBO differ widely. MBO process consists

of setting goals at the highest level of the organization, clarifying the rules of responsible persons

for achieving the goals. Some still define MBO in a very narrow, limited way.


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BENEFITS OF MBO

There are four benefits of MBO.

1. MBO IMPRVOES MANAGEMENT:

All the objectives of management by objective can be summarized by saying that it results in

greatly improved Management. objective can not be establish without planning.MBO force

Managers to think about planning for results.MBO also requires that Managers think about the

way from which they will accomplish results. They will think about need of assistance to achieve

the objectives.

2. MBO CLASSIFY ORGANIZATION

MBO classify the organizational roles and structure. It force managers to delegate authority

according to the results they expect.

3. MBO INCOURAGE PERSONAL COMMITMENTS;

One of the great advantages of management by objective is that it encourages people to commit

themselves to their goals. Because of MBO people can understand their area of discretion, there

authority, the part in setting their objectives.

4. MBO DEVLOPES EFFECTVE CONTROL

MBO help people to develop effective control. As MBO guides in setting result oriented

planning. It is also guides people to develop effective control towards the accomplishment of the

goals.

WEAKNESSES OF MANAGEMENT BY OBJECTIVES

With all its advantages, MBO has a number of weaknesses. There are several weakness of MBO.

1. MBO FALIURE TO EXPLIAN PHILOSPHY MBO

As MBO emphasis self-control and self direction therefore sometimes managers fail to explain

the philosophy of MBO to their subordinates. Managers often fail to explain about MBO that it


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is? How it works? Why it is being done? What part in performance appraisal? How participants

can benefits

2. MBO FAILURE TO GIVE GUIDE LINES FOR GOAL SETTING

One of the weaknesses of MBO is that it fails to give guide line for goal setting to managers.

Managers need planning premises and knowledge of major company polices. People must have

some assumptions about future. They should have some understanding about objectives affecting

their areas of operations. They should know about objectives and programes.MBO fails to give

guideline to Managers.

3. DIFFICULTY OF SETING GOALS

Truly verifiable are difficult to set. MBO difficult and verifiable goals.

4. EMPHASIS ON SHORT TIMES GOALS

In most MBO programs, managers set goals for the short term for yearly or quarterly. Emphasis

on short term goals lead to danger more expensiveness as of the longer range.

5. DANGER OF INFLAXIBILITY

In MBO program managers often hesitate to change objectives. Change in objective can affect

results. So in MBO managers often hesitate to know flexibility.

OTHER WEAKNESSES

There are some other dangers and difficulties in MBO.

1- There may be a danger of overuse of quantitative goals or low gradation of important goals.

2- Difficulty in applying goal oriented planning.

3- Difficulty of converting broad objective into subordinate objectives.

4- Difficulty in measuring performance.

5- Difficulty in providing feedback.

6- Difficulty in setting long-range objectives and planning.

7- Difficulty in adjusting to the fast changing environment


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DECISSION MAKING

Decision making is defined as the selection of course of action from among alternative. It is the

core of planning. A plan cannot be said to exist unless a decision has been made.

Managers sometimes see decision making as their central job because they must constantly

choose what is to be done, who is to do it and when, where and how it will be done. Decision

making is the part of planning and everyones daily living.

RATIONAL DECISION MAKING;

It is the rational decision making that goals cannot be attain without

action.

People acting or deciding rationally are attempting to reach some goal that cannot be attained

without action. They must have a clear understanding of alternatives. Thy must have ability and

information to analyze and evaluate alternatives in order to achieve goals. Finally they must have

desire to come the best solution by selecting alternative.

STEPS IN DECISION MAKING

There are three steps in decision making.

1- THE SEARCH FOR ALTERNATIVES.

The first steps of decision making are to develop alternatives. There are almost always

alternatives to any course of action. If we think of only one course of action, clearly we have not

thought hard enough.

The ability to develop alternatives is often as important as being able to select correctly from

among them. One of the other hand ingenuity research and common sense will often unearth so


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many choices that all of them cannot be evaluated. The manager needs help in this situation, and

this help can be solved by decision making.

2- EVALUATION OF ALTERNATIVES.

When an appropriate alternative has been found, the next steps in planning one best alternative

to achieve the goals. There are three ways of evaluated decision making.

1- QUANTITIVE AND QUALITIVE FACTOR

Quantitative factor can be measured in numerical terms. This factor is vary important but the

success of the venture would be endangered qualitative factors were ignored. Qualitative factor

are those that are difficult to measure numerically such as the quality of labor relations, the risk

of technological change etc.

2- MANAGERIAL ANALYSIS

In evaluating alternatives managerial analysis is very important. Marginal analysis can be used in

comparing factors other then costs and revenue. For example to find the best output of a

machine, inputs could be varied against outputs until the additional input equals the additional

output.

3- COST EFFECTIVENESS ANALYSIS

Cost effectiveness analysis seeks the best ratio of benefits and costs. For example finding the

least costly way of reaching objectiveness is a technique for choosing the best plan.

SELECTING AN ALTERNATIVE

During the selection among the alternatives, managers can use three basic approaches

(1) Experience (2) Experimentations (3) research and analysis.

Experimentation

Reliance on past How to select from Choice made

among alternatives.

Research and

analysis

Bases for selecting from among alternatives


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EXPERIENCE

Reliance on past experience plays a larger part in decision making to some extent, experience is

the best teacher. The very fact that managers have reached there position appears to justify their

past decisions. Moreover, the process of thinking problems through making decisions and seeing

programs succeed or fail.

EXPERIMENTATION

One way of deciding among alternatives is to try one of them and see what happens.

Experimentation is often used in scientific theory. The experimental technique can be most

expensive, especially if a program requires heavy expenditures firm cannot afford to attempt

several alternatives.

RESEARCH AND ANALYSIS

One of the most effective techniques for selecting from alternatives is research and analysis of

decisions. This approach means solving problems by first comparing it. It is pencil and paper

approach to decision making

POLICY

A policy is typically described as a principle or rule to guide decisions and achieve rational

outcome(s). The term is not normally used to denote what is actually done, this is normally

referred to as either procedure[1]

or protocol. Whereas a policy will contain the 'what' and the

'why', procedures or protocols contain the 'what', the 'how', the 'where', and the 'when'. Policies

are generally adopted by the Board of or senior governance body within an organization where

as procedures or protocols would be developed and adopted by senior executive officers.
http://en.wikipedia.org/wiki/Policy#cite_note-0http://en.wikipedia.org/wiki/Policy#cite_note-0http://en.wikipedia.org/wiki/Policy#cite_note-0http://en.wikipedia.org/wiki/Policy#cite_note-0


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A Policy can be considered as a "Statement of Intent" or a "Commitment". For that reason at

least, we can be held accountable for our "Policy"

The term may apply to government, private sector organizations and groups, and

individuals. Presidential executive orders, corporate privacy policies, and parliamentary rules of

orderare all examples of policy. Policy differs from rules orlaw. While law can compel or

prohibit behaviors (e.g. a law requiring the payment of taxes on income), policy merely guides

actions toward those that are most likely to achieve a desired outcome.

Policy orpolicy study may also refer to the process of making important organizational

decisions, including the identification of different alternatives such as programs or spending

priorities, and choosing among them on the basis of the impact they will have. Policies can be

understood as political, management, financial, and administrative mechanisms arranged to reach

explicit goals.

Distributive policies

Distributive policies extend goods and services to members of an organization, as well as

distributing the costs of the goods/services amongst the members of the organization. Examples

include government policies that impact spending forwelfare, public education,highways, and

public safety, or a professional organization's benefits plan.

Regulatory policies

Regulatory policies, or mandates, limit the discretion of individuals and agencies, or otherwise

compel certain types of behavior. These policies are generally thought to be best applied when

good behavior can be easily defined and bad behavior can be easily regulated and punished

through fines or sanctions. An example of a fairly successful public regulatory policy is that of a

speed limit.
http://en.wikipedia.org/wiki/Executive_order_(United_States)http://en.wikipedia.org/wiki/Privacy_policyhttp://en.wikipedia.org/wiki/Rules_of_orderhttp://en.wikipedia.org/wiki/Rules_of_orderhttp://en.wikipedia.org/wiki/Lawhttp://en.wikipedia.org/wiki/Policy_studyhttp://en.wikipedia.org/wiki/Welfare_(financial_aid)http://en.wikipedia.org/wiki/Public_educationhttp://en.wikipedia.org/wiki/Highwayshttp://en.wikipedia.org/wiki/Highwayshttp://en.wikipedia.org/wiki/Public_educationhttp://en.wikipedia.org/wiki/Welfare_(financial_aid)http://en.wikipedia.org/wiki/Policy_studyhttp://en.wikipedia.org/wiki/Lawhttp://en.wikipedia.org/wiki/Rules_of_orderhttp://en.wikipedia.org/wiki/Rules_of_orderhttp://en.wikipedia.org/wiki/Privacy_policyhttp://en.wikipedia.org/wiki/Executive_order_(United_States)


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Constituent policies

Constituent policies create executive power entities, or deal with laws. Constituent policies also

deal with Fiscal Policy in some circumstances.[citation needed]

Miscellaneous policies

Policies are dynamic; they are not just static lists of goals or laws. Policy blueprints have to be

implemented, often with unexpected results. Social policies are what happens 'on the ground'

when they are implemented, as well as what happens at the decision making or legislative stage.

When the term policy is used, it may also refer to:

Official government policy (legislation or guidelines that govern how laws should be put

into operation)

Broad ideas and goals in political manifestos and pamphlets

A company or organization's policy on a particular topic. For example, the equal

opportunity policy of a company shows that the company aims to treat all its staff

equally.

The actions the organization actually takes may often vary significantly from stated policy. This

difference is sometimes caused by political compromise over policy, while in other situations it

is caused by lack of policy implementation and enforcement. Implementing policy may have

unexpected results, stemming from a policy whose reach extends further than the problem it was

originally crafted to address. Additionally, unpredictable results may arise from selective or

idiosyncratic enforcement of policy.[citation needed]
http://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_neededhttp://en.wikipedia.org/wiki/Wikipedia:Citation_needed


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Types ofpolicy analysis include:

Causal (resp. non-causal)

Deterministic (resp. stochastic, randomized and sometimes non-deterministic)

Index

Memoryless (e.g. non-stationary)

Opportunistic (resp. non-opportunistic)

Stationary (resp. non-stationary)

These qualifiers can be combined, so for example you could have a stationary-memoryless-index

policy.

Types

Company Policy

Communications and Information Policy

Human resource policies

Privacy policy

Public policy

Defense policy

Domestic policy

Economic policy

Education policy
http://en.wikipedia.org/wiki/Policy_analysishttp://en.wikipedia.org/w/index.php?title=Company_Policy&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Communications_and_Information_Policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Human_resource_policieshttp://en.wikipedia.org/wiki/Privacy_policyhttp://en.wikipedia.org/wiki/Public_policyhttp://en.wikipedia.org/wiki/Defense_policyhttp://en.wikipedia.org/wiki/Domestic_policyhttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Education_policyhttp://en.wikipedia.org/wiki/Education_policyhttp://en.wikipedia.org/wiki/Economic_policyhttp://en.wikipedia.org/wiki/Domestic_policyhttp://en.wikipedia.org/wiki/Defense_policyhttp://en.wikipedia.org/wiki/Public_policyhttp://en.wikipedia.org/wiki/Privacy_policyhttp://en.wikipedia.org/wiki/Human_resource_policieshttp://en.wikipedia.org/w/index.php?title=Communications_and_Information_Policy&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Company_Policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Policy_analysis


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Energy policy

Environmental Policy

Foreign policy

Health policy

Housing policy

Information policy

Macroeconomic policy

Monetary policy

Population policy

Public policy in law

Science policy

Social policy

Transportation policy

Urban policy

Water policy

STRATEGY:

"Strategy is the direction and scope of an organisation over the long-term: which

achieves advantage for the organisation through its configuration of resources within a

challenging environment, to meet the needs ofmarkets and to fulfil stakeholder expectations".
http://en.wikipedia.org/wiki/Energy_policyhttp://en.wikipedia.org/wiki/Environmental_Policyhttp://en.wikipedia.org/wiki/Foreign_policyhttp://en.wikipedia.org/wiki/Health_policyhttp://en.wikipedia.org/wiki/Housing_policyhttp://en.wikipedia.org/w/index.php?title=Information_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Macroeconomic_policyhttp://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/w/index.php?title=Population_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Public_policy_(law)http://en.wikipedia.org/wiki/Science_policyhttp://en.wikipedia.org/wiki/Social_policyhttp://en.wikipedia.org/w/index.php?title=Transportation_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Urban_planninghttp://en.wikipedia.org/w/index.php?title=Water_policy&action=edit&redlink=1http://en.wikipedia.org/w/index.php?title=Water_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Urban_planninghttp://en.wikipedia.org/w/index.php?title=Transportation_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Social_policyhttp://en.wikipedia.org/wiki/Science_policyhttp://en.wikipedia.org/wiki/Public_policy_(law)http://en.wikipedia.org/w/index.php?title=Population_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Monetary_policyhttp://en.wikipedia.org/wiki/Macroeconomic_policyhttp://en.wikipedia.org/w/index.php?title=Information_policy&action=edit&redlink=1http://en.wikipedia.org/wiki/Housing_policyhttp://en.wikipedia.org/wiki/Health_policyhttp://en.wikipedia.org/wiki/Foreign_policyhttp://en.wikipedia.org/wiki/Environmental_Policyhttp://en.wikipedia.org/wiki/Energy_policy


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Strategy at Different Levels of a Business

Strategies exist at several levels in any organisation - ranging from the overall business

(or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to

meet stakeholder expectations. This is a crucial level since it is heavily influenced by investors in

the business and acts to guide strategic decision-making throughout the business. Corporate

strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes successfully in

a particular market. It concerns strategic decisions about choice of products, meeting needs of

customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

Operational Strategy - is concerned with how each part of the business is organised to

deliver the corporate and business-unit level strategic direction. Operational strategy therefore

focuses on issues of resources, processes, people etc.

How Strategy is Managed - Strategic Management

In its broadest sense, strategic management is about taking "strategic decisions" -

decisions that answer the questions above.

In practice, a thorough strategic management process has three main components, shown

in the figure below:


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Strategic Analysis

This is all about the analysing the strength of businesses' position and understanding the

important external factors that may influence that position. The process of Strategic Analysis can

be assisted by a number of tools, including

UNIT - III

ORGANISING

ACCORDING TO SHELDON

"Organization is the process of so combining the work which individuals or groups have to

perform with facilities necessary for its execution, that the duties so performed provide the best

channels for efficient, systematic, positive and coordinated application of available effort."

In the words of Chester I Bernard, "Organization is a system of co-operative activities of two or

more persons."


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MC FERLAND HAS DEFINED

Organisation as, "an identifiable group of people contributing their efforts towards the attainment

of goals".

ACCORDING TO LOUIS A ALLEN,

"Organisation is the process of identifying and grouping the 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.

ACCORDING TO NORTH WHITEHEAD

Organisation is the adjustment of diverse elements, so that their mutual relationship may exhibit

more pre-determined quality.

IN THE WORDS OF THEO HAIMANN

Organizing is the process of defining and grouping the activities of the enterprise and

establishing the authority relationships among them. In performing the organizing function, the

manager defines, departmentalizes and assigns activities so that they can be most effectively

executed.

IN THE WORDS OF MOONEY AND RAILEY,

"Organisation is the form of every human association for the attainment of a common purpose.

THE NATURE AND PURPOSE OF ORGANIZING

It is often said that good people can make any organization pattern work. Some even assert that

vagueness in organization is a good thing in that it forces teamwork, since people know that they

must cooperate to get anything done. However, there can be no doubt that good people and those


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who want to cooperate will work together most effectively if they know the roles they are to play

in any team operation and the way their roles relate to one another. This is as true in business or

government as it is in football or in a symphony orchestra. Designing and maintaining these

systems of roles is basically the managerial function of organizing.

For an organizational role to exist and be meaningful to people, it must incorporate

(1) Verifiable objectives, which, as indicated in part, are a major part of planning;

(2) a clear idea of the major duties or activities involved, and

(3) An understood area of discretion or authority so that the person filling the role knows what he

or she can do to accomplish goals.

In addition, to make a role work out effectively, provision should be made for supplying needed

information and other tools necessary for performance in that role.

It is in this sense that we think of organizing as (1) the identification and classification of

required activities, (2) the grouping of activities necessary to attain objectives, (3) the assignment

of each grouping to a manager with the authority (delegation) necessary to supervise it, and (4)

the provision for coordination horizontally (on the same or similar organizational level) and

vertically (e.g. corporate headquarters, division, and department) in the organization structure.

An organization structure should be designed to clarify who is to do what tasks and who is

responsible for what results, to remove obstacles to performance caused by confusion and

uncertainty of assignment, and to furnish decision-making and communication networks

reflecting and supporting enterprise objectives.

Organization is a word many people use loosely. Some would say it includes all the behavior of

all participants. Others would equate it with the total system of social and cultural relationships.


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Still others refer to an enterprise, such as the United States Steel Corporation or the Department

of Defense, as an organization. But for most practicing managers, the term organization implies a

formalized intentional structure of roles or positions. In this article the term is generally used in

reference to a formalized structure of roles, although it is sometimes used to denote an enterprise.

What does intentional structure of roles mean? In the first place, as already implied in defining

the nature and content of organizational roles, people working together must fill certain roles. In

the second place, the roles people are asked to fill should be intentionally designed to ensure that

required activities are done and that activities fit together so that people can work smoothly,

effectively, and efficiently in groups. Certainly most managers believe they are organizing when

they establish such an intentional structure.

ORGANIZATIONAL THEORIES

There are several theories which explain the organization and its structure Classical

organization theory includes the scientific management approach, Weber's bureaucratic

approach, and administrative theory.

The scientific management approach is based on the concept of planning of work to achieveefficiency, standardization, specialization and simplification. The approach to increased

productivity is through mutual trust between management and workers. Taylor (1947) proposed

four principles of scientific management:

science, not rule-of-thumb; scientific selection of the worker;

management and labour cooperation rather than conflict; and

scientific training of workers.

Classical organization theory

Classical organization theories (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the formal

organization and concepts to increase management efficiency. Taylor presented scientific

management concepts, Weber gave the bureaucratic approach, and Fayol developed the

administrative theory of the organization. They all contributed significantly to the developmentof classical organization theory.


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Taylor's scientific management approach

The scientific management approach developed by Taylor is based on the concept of planning ofwork to achieve efficiency, standardization, specialization and simplification. Acknowledging

that the approach to increased productivity was through mutual trust between management and

workers, Taylor suggested that, to increase this level of trust,

the advantages of productivity improvement should go to workers,

physical stress and anxiety should be eliminated as much as possible,

capabilities of workers should be developed through training, and

the traditional 'boss' concept should be eliminated.

Taylor developed the following four principles of scientific management for improvingproductivity:

Science, not rule-of-thumb Old rules-of-thumb should be supplanted by a scientific approach to

each element of a person's work.

Scientific selection of the worker Organizational members should be selected based on someanalysis, and then trained, taught and developed.

Management and labour cooperation rather than conflict Management should collaborate with

all organizational members so that all work can be done in conformity with the scientificprinciples developed.

Scientific training of the worker Workers should be trained by experts, using scientific

methods.

Weber's bureaucratic approach

Considering the organization as a segment of broader society, Weber (1947) based the concept of

the formal organization on the following principles:

Structure In the organization, positions should be arranged in a hierarchy, each with a

particular, established amount of responsibility and authority.

Specialization Tasks should be distinguished on a functional basis, and then separated

according to specialization, each having a separate chain of command.

Predictability and stability The organization should operate according to a system of procedures

consisting of formal rules and regulations.

Rationality Recruitment and selection of personnel should be impartial.


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Democracy Responsibility and authority should be recognized by designations and not by

persons.

Weber's theory is infirm on account of dysfunctions (Hicks and Gullett, 1975) such as rigidity,

impersonality, displacement of objectives, limitation of categorization, self-perpetuation and

empire building, cost of controls, and anxiety to improve status.

Administrative theory

The elements of administrative theory (Fayol, 1949) relate to accomplishment of tasks, andinclude principles of management, the concept of line and staff, committees and functions ofmanagement.

Division of work or specialization This increases productivity in both technical and managerial

work.

Authority and responsibility These are imperative for an organizational member to accomplishthe organizational objectives.

Discipline Members of the organization should honour the objectives of the organization. Theyshould also comply with the rules and regulations of the organization.

Unity of command This means taking orders from and being responsible to only one superior.

Unity of direction Members of the organization should jointly work toward the same goals.

Subordination of individual interest to general interest The interest of the organization should

not become subservient to individual interests or the interest of a group of employees.

Remuneration of personnel This can be based on diverse factors such as time, job, piece rates,

bonuses, profit-sharing or non-financial rewards.

Centralization Management should use an appropriate blend of both centralization and de-

centralization of authority and decision making.

Scalar chain If two members who are on the same level of hierarchy have to work together to

accomplish a project, they need not follow the hierarchy level, but can interact with each otheron a 'gang plank' if acceptable to the higher officials.

Order The organization has a place for everything and everyone who ought to be so engaged.

Equity Fairness, justice and equity should prevail in the organization.

Stability of tenure of personnel Job security improves performance. An employee requires

some time to get used to new work and do it well.


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Initiative This should be encouraged and stimulated.

Esprit de corps Pride, allegiance and a sense of belonging are essential for good performance.Union is strength.

The concept of line and staff The concept of line and staff is relevant in organizations which arelarge and require specialization of skill to achieve organizational goals. Line personnel are those

who work directly to achieve organizational goals. Staff personnel include those whose basic

function is to support and help line personnel.

Committees Committees are part of the organization. Members from the same or differenthierarchical levels from different departments can form committees around a common goal.

They can be given different functions, such as managerial, decision making, recommending or

policy formulation. Committees can take diverse forms, such as boards, commissions, task

groups or ad hoc committees. Committees can be further divided according to their functions. Inagricultural research organizations, committees are formed for research, staff evaluation or even

allocation of land for experiments.

Functions of management Fayol (1949) considered management as a set of planning,

organizing, training, commanding and coordinating functions. Gulick and Urwick (1937) also

considered organization in terms of management functions such as planning, organizing, staffing,directing, coordinating, reporting and budgeting.

Neoclassical theory

Neoclassical theorists recognized the importance of individual or group behaviour and

emphasized human relations. Based on the Hawthorne experiments, the neoclassical approach

emphasized social or human relationships among the operators, researchers and supervisors(Roethlisberger and Dickson, 1943). It was argued that these considerations were more

consequential in determining productivity than mere changes in working conditions. Productivityincreases were achieved as a result of high morale, which was influenced by the amount of

individual, personal and intimate attention workers received.

Principles of the neoclassical approach

The classical approach stressed the formal organization. It was mechanistic and ignored majoraspects of human nature. In contrast, the neoclassical approach introduced an informal

organization structure and emphasized the following principles:

The individual An individual is not a mechanical tool but a distinct social being, with

aspirations beyond mere fulfilment of a few economic and security works. Individuals differ

from each other in pursuing these desires. Thus, an individual should be recognized as

interacting with social and economic factors.


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The work group The neoclassical approach highlighted the social facets of work groups orinformal organizations that operate within a formal organization. The concept of 'group' and its

synergistic benefits were considered important.

Participative management Participative management or decision making permits workers to

participate in the decision making process. This was a new form of management to ensureincreases in productivity.

Note the difference between Taylor's 'scientific management' - which focuses on work - and theneoclassical approach - which focuses on workers.

Modern theories

Modern theories tend to be based on the concept that the organization is a system which has to

adapt to changes in its environment. In modern theory, an organization is defined as a designedand structured process in which individuals interact for objectives (Hicks and Gullet, 1975). The

contemporary approach to the organization is multidisciplinary, as many scientists from differentfields have contributed to its development, emphasizing the dynamic nature of communicationand importance of integration of individual and organizational interests. These were

subsequently re-emphasized by Bernard (1938) who gave the first modern and comprehensive

view of management. Subsequently, conclusions on systems control gave insight into applicationof cybernetics. The operation research approach was suggested in 1940. It utilized thecontributions of several disciplines in problem solving. Von Bertalanffy (1951) made a

significant contribution by suggesting a component of general systems theory which is accepted

as a basic premise of modern theory.

Some of the notable characteristics of the modern approaches to the organization are:

a systems viewpoint,

a dynamic process of interaction,

multilevelled and multidimensional,

multimotivated,

probabilistic,

multidisciplinary,

descriptive,

multivariable, and

adaptive.

Modern understandings of the organization can be broadly classified into:

the systems approach,

socio-technical theory, and

a contingency or situational approach.


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The systems approach

The systems approach views organization as a system composed of interconnected - and thusmutually dependent - sub-systems. These sub-systems can have their own sub-sub-systems. A

system can be perceived as composed of some components, functions and processes (Albrecht,

1983). Thus, the organization consists of the following three basic elements (Bakke, 1959):

(i) Components There are five basic, interdependent parts of the organizing system, namely:

the individual,

the formal and informal organization,

patterns of behaviour emerging from role demands of the organization,

role comprehension of the individual, and

the physical environment in which individuals work.

(ii) Linking processes The different components of an organization are required to operate in anorganized and correlated manner. The interaction between them is contingent upon the linking

processes, which consist of communication, balance and decision making.

Communication is a means for eliciting action, exerting control and effecting coordination to

link decision centres in the system in a composite form.

Balance is the equilibrium between different parts of the system so that they keep aharmoniously structured relationship with one another.

Decision analysis is also considered to be a linking process in the systems approach. Decisions

may be to produce or participate in the system. Decision to produce depends upon the attitude ofthe individual and the demands of the organization. Decision to participate refers to the

individual's decisions to engross themselves in the organization process. That depends on what

they get and what they are expected to do in participative decision making.

(iii) Goals of organization The goals of an organization may be growth, stability and interaction.Interaction implies how best the members of an organization can interact with one another to

their mutual advantage.

Socio-technical approach

It is not just job enlargement and enrichment which is important, but also transformingtechnology into a meaningful tool in the hands of the users. The socio-technical systems

approach is based on the premise that every organization consists of the people, the technical

system and the environment (Pasmore, 1988). People (the social system) use tools, techniquesand knowledge (the technical system) to produce goods or services valued by consumers or users

(who are part of the organization's external environment). Therefore, an equilibrium among thesocial system, the technical system and the environment is necessary to make the organization

more effective.


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ORGANIZATION STRUCTURE

president

Manager Purchases Manager Finance Manager Production Manager

Sales

Dept by process Heat treatment welding section Assembling section finishing

section

ADVANTAGES

1- It simplifies training.

2- Achieve economic advantage.

3- Uses specialized technology.

DISADVANTAGES

1- Coordination of departments is difficult.

2- Responsibility for profit is at the top.

7- DEPARTMENTATION BY PRODUCT

This type of departmentation used in organization where more than one product is producing. In

this department all the sources and authority are placed under the control of one

manager.Departmentlization by product assembles all functions needed to make and market a

particular product are placed under one executive. For instance, major department stores are

structured around product groups such as home accessories, appliances womans clothing, mens

clothing and children clothing.


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SPAN OF CONTROL

(1)Span of control refers to the number of immediate subordinate who report a manager.

(2)Different level of organization level is also called span of control.

FACTORS DETERMINING AN EFFECTIVE SPAN

There are several factors which influence the span of management.

1- TRAINING OF SUBORDINATES

The better training of subordinates increases the necessary superior subordinates relationship.

Well trained subordinates require less time of their managers also they have less contact with

their managers. Training programs increase in new and more complex industries.

2-CLARITY OF DELEGATION OF AUTHORITY

Although training enables managers to reduce the frequency of time consuming contact but

delegation of authority should be clear. If a manager clearly delegates authority to task with a

minimum of the managers time and attention. But if a manager delegates authority unclearly

than subordinate give his maximum.

3-CLARITY OF PLANS

If plans are well defined if they are workable, if the delegation of authority toward plan is clear,

if the subordinate understands what expected than little of a supervisor time will be required on

the other hand if plan cannot be drawn accurately and subordinates do much of their own

planning, they may require considerable guidance.

4- USE OF OBJECTIVE STANDARD

A manager must find out, either by personal observation or through the use of objective

standards, whether subordinates are following plans. Obviously, good objective standards enable

managers to avoid many time consuming contact.

5- RATE OF CHANGE


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Certain enter rises change much more rapidly than others. The rate of change is very important in

formulating and maintaining policies. It may explain the organization structure of companys

railroad, banking and public utility companies.

6- COMMUNICATION TECNIQUES

Communication techniques also influence the span of management. If every plan, instruction,

order or direction has to be communicated by personal contact than managers time will be

heavily burdened. An ability to communicate plans and instructions clearly and concisely also

tends to increase a managers span.

7- AMOUNT OF PERSONAL CONTACT NEEDED

Many instances, face to face meetings are necessary. Many situations cannot be completely

policy statements planning documents or other communications that do not involves personal

contact. An executive may and valuable informations by meeting to subordinates and by discuss

problems with them. Some problems can be handled only in face to face meeting so the best way

of communicating problems, instructor, and subordinates is to spend time in personal contact.

8- VARIATION BY ORGANIZATION LEVEL

Several research projects have found that the size of the most effective span differs by

organizational level. For example, it was studied that when a greater number of specialties were

supervised, effective spans were narrower at lower and middle levels of organization but were

increased at upper levels.

9- COMPETENCY OF MANAGERS

A manager who is competent and well trained can effectively supervise more people than who is

not.

10- MATURITY AND MOTIVATION OF SUBORDINATES

The more mature subordinates may delegate more authority, thus widening the span.


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TABLE: - FACTORS INFLUCING THE SPAN OF CONTROL

NARRO SPAN RELATED TO: WIDE SPAN RELATED TO:

1-little or no training. 1-through training of subordinate.

2-unclear authority, delegation. 2-Clear delegation of authority.

3-nonverefiyable objectives & standard. 3-Will define plans.

4-fast changes in external and internal

environment. 4-Slow changes in external and eternal

5-use of communication techniques. Environment

6-ineffectiv interrogation of superior and subordinate.5-use of appropriate techniques

such as written,7-greater number of specialization at

lower and oral communication.

Middle level.

6effetive interaction between superior &

superiors.8-Infactive meetings. 7-Number of specialist at upper levels.9-Incompletent & untrained managers. 8-Effective meetings.

10-Complex task. 9-Competent & train managers.11-Imature subordinate. 10-Simple task.

11-mature subordinates.

LINE & STAFF CONCEPT

LINE AUTHORITY

Line authority gives a superior a line of authority over subordinates. It exists in all organizations.

Line authority can also be defined as the superiorsubordinate authority relationship where by a

superior makes decision and tells them to a subordinate who is turn makes decision and tells to his

subordinates and on from a line from top to low level of organization structure. This line of authority

is known as line of authority. It is directly from superior to his subordinate.

LINE AUTHORITY CHAIN OF COMMAND

President

Voice President

Supervisor

Employee


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STAFF CONCEPT

The nature of the staff relationship is advisory. The function of people in pure staff

capacity is to investigate research and give advice to line managers. In other

words, staff functions are those that help the line persons work more effectively in

accomplishing the objectives.

PRESIDENT

Voice Director Director Director Voice Presidentpresident research Production public relation

Manager Manager Manager Manager Manager Manager Manager ManaAccountin Cash

PurchasinFactory domestic foreig

g control Personnel sales Advertisig sale

Supervisor Supervisor Parts Chief Assembling Chief

Production Production maintenanceControl

LINE & STAFF ORGANIZATION OF A TYPICAL

NATURE OF LINE & STAFF CONCEPT

Line authority gives a superior a line of a authority over a subordinate. Line

authority is that relationship in which superior exercises direct supervision over a

subordinate. On the other hand the nature of the staff relationship is advisory. The

function of a person in staff capacity is to investigate research and give advice to

line manager.


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BENEFITS OF STAFF

Provide highly specialized knowledge indifferent areas, i-e- economics, technical,

legal etc.

2. Specialist staff avails lines to analysis collected data and make advice for managers.

3. Staff analysis and advices help in resolving problems arrised during process

WEAKNESSES OF STAFF

1. Danger of understanding line authority.

2. Lake of staff responsibility.

Thinking in a vacuum

1. Managerial problems

DELEGATION OF AUTHORITY

Delegation is necessary for an organization to exist. Authority is delegated when a superior

gives a subordinate discretion to make decision. Clearly , supervisors cannot delegate authority

they do not have ,whether they are board members, Presidents, Voice Presidents or superiors.

The process of delegation involves.

1. Determining the results expected from a position.

2. Assigning tasks to the positions.

3. Delegating authority to accomplishment of the tasks.

4. Holding the persons in that position responsible for the accomplishing meat of the tasks.

5. Authority is delegate from higher level to lower level.

STEPS IN DELEGATING

SPLINTERERD AUTHORITY

Splintered authority exits whenever a problem cannot solve. In day to day operations of any

company. There are many cases of splintered authority. Many Managerial Conferences are heldbecause of the necessity of splintered authority to make decisions.

RECOVERY OF DELEATED AUTHORITY

A manager who delegates authority does not permanently dispose of it , delegated authority can

always be regained. Re organization involves reorganization, rights are recovered by the


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responsible head of the firm or a departments, to head of a new department may receive authority

formally held by other Managers.

THE ART OF DELEGATIONOF AUTHORITY

The most failure in effective delegation occurs not because Manager does not understand the

nature and principles of delegation because they are unable to apply them. There are many

reasons for poor delegation.

PERSONAL ATTITUDE TOWARD DELEGATION

There are many kinds of personal attitudes which cause poor delegation of authority so Managers

should fallow these steps.

1- RESPECTIVENESS

Decision making always involves some discretion and a subordinates decision is not likely to

be exactly the one superior would have made the manager who known how to delegate must

be able to help other and to compliment on their ingenuity.

2- WILLINGNESS TO LET GO

A manager who will effectively delegate authority must be willing to release the right to make

decisions to subordinates. A major fault of some managers is that they want to continue to make

decisions for the positions they have left. Corporate president and vice presidents who insist on

confirming every purchase do not realize that doing so takes their time and attention away from

more important decisions.

3- WILLINGNESS TO LET OTHER MAKE MISTAKES

Since every one makes mistakes, a subordinate must be allowed to make some, and their cost

must be considered an investment in personal development serious or repeated mistakes can be

largely avoided without multifying delegation.

4- WILLINGNESS TO TRUST SUBORDINATES

Superiors have no alternative to trusting their subordinates; for delegation implies a trustful

attitude among them. A superior may put off delegation will the thought that subordinates have

not yet experienced enough, they cannot handle people, they have not developed Judgment etc.

Sometimes these considerations are true but then a superior or should either train subordinates or

else select others who are prepared to assume the responsibility.


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5- WILLINGNESS TO ESTABLISH AND USE BROAD CONTROLS

Superiors should not delegate authority unless they are willing to find means of getting feed

back. Obviously, controls cannot goals, policies and plans are used as basic standard for judging

the activities of subordinates.

GUIDES FOR O

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