Management Fundamentals PDF

Management Fundamentals Reference Books I. Principles and Practice of Management, LM Prasad,Vikash Publications, Ed. Latest. II. Management, Stephen Robins, Prentice Hall Inc., Ed. Latest. III. Essentials of Management, Koontz & Weirich; Tata Mc Graw Hill, 2008. IV. Business Org...

Management Fundamentals Reference Books I. Principles and Practice of Management, LM Prasad,Vikash Publications, Ed. Latest. II. Management, Stephen Robins, Prentice Hall Inc., Ed. Latest. III. Essentials of Management, Koontz & Weirich; Tata Mc Graw Hill, 2008. IV. Business Organization and Management, P.C. Tulsian; Prentice Hall, Ed. Latest. Management Fundamentals Management Unit -1 Management Fundamentals Definitions Management is the process involving planning, organizing, staffing, directing and controlling human efforts to achieve stated objectives in an organization. Management is the force which leads guides and directs an organization in the accomplishment of a pre-determined Object. J.N. Schulze Management is the "art of getting things done through people". Mary Parker Follett Management Fundamentals Definitions Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way. – F. W. Taylor Management is to manage is to forecast and to plan, to organize, to command, to coordinate and to control. – Henry Fayol  Management Fundamentals Characteristics or Nature of Management 1. It is a group effort. 2. It is a goal oriented process. 3. It as an Intangible process. 4. It is a process. 5. It is a universal activity. 6. It is multi disciplinary. 7. It is a social science. 8. It is a system. 9. It is a dynamic system 10. It involves social responsibility. 11. It is a profession. 12. It is both Science and Art. Management Fundamentals Purpose of Management 1. Achieving Pre-determined objectives. 2. Ensuring Maximum utilization of resources of Production. 3. Overcoming Competition 4. Ensuring Integration with Changing Environment. 5. Ensuring Smooth Running of Business. 6. Maintaining a Sound Organizational Structure. 7. Establishing Good Labour-Owner Relationship. 8. Giving Importance to Research and Investigation. 9. Fulfilling the Social Responsibility. 10. Aiming at Increased Profit. Management Fundamentals Scope of Management The following activities are covered under the scope of management: (i) Planning, (ii) Organization (iii) Staffing. (iv) Directing, (v) Coordinating, and (vi) Controlling. Management Fundamentals Scope of Management The operational aspects of business management, called the branches of management, are as follows: 1. Production Management 2. Marketing Management 3. Financial Management. 4. Personnel Management and 5. Office Management. FOM\Scope of Management  Management Fundamentals Management as an Art Art is bringing about of a desired result through application of skill. 1. Personal Skill 2. Practical Knowledge. 3. Concrete Result Oriented Approach 4. Development through practice. 5. Creative Power. Management as Science Science is a systematized body of knowledge which establishes relationship between cause and effect. 6. Systemized body of knowledge. 7. Based on collection of facts, analysis and experiments. 8. Universal Application. 9. Cause and Effect Relationship. 10. Verification of validity and prediction of results possible  Levels of Management Top level , Middle level and Lower level Management.  Functions of Top level Management 1. Determining Objectives 2. Determining Policies 3. Determining Activities 4. Assembling Resources 5. Controlling the work performances. 6. Approving Budgets.  Functions of Middle level Management 1. Interpretating Policies 2. Preparing Organizational Set-up 3. Issuing Instructions 4. Motivating Employees 5. Creating Cooperation   Functions of Lower Level or Operational Management 1. Submitting workers Grievances 2. Ensuring Proper working environment. 3. Ensuring Safety of workers 4. Helping Middle level Management 5. Creating better human relations. Management Fundamentals Difference Among Vision, Mission, Goal and Objectives. Manager, Entrepreneur and Leader.  Management Fundamentals Managerial Roles A. Interpersonal Role Role of a Figurehead Role of a Leader Role of a Liaison Officer B. Informational Role Role of a Monitor Role of a Disseminator Role of a Spokesman C. Decisional Role Role of an Entrepreneur Role of Disturbance Handler Role of Resource Allocator Role of a Negotiator.  Management Fundamentals Management Skills. 1. Conceptual Skills- which deals with Ideas. 2. Human Skills- which deals with People. 3. Technical Skills- which deals with Things. Management Fundamentals Guidelines for Managerial Success 1. Ability to communicate 2. Quick decision making power 3. Integrity 4. Full of courage 5. Self confidence 6. Flexibility of mind 7. Ability to understands the feelings of others 8. Dense of responsibility 9. Tolerance 10. Technical ability 11. Human Ability 12. Physical and Mental Fitness. Management Fundamentals Ethics describes a generally accepted set of moral principles. Morals describes the goodness or badness or right or wrong of actions. Values describes individual or personal standards of what is valuable or important. Management Fundamentals The social responsibility of business means various obligations or responsibilities or duties that a business- organization has towards the society within which it exists and operates from. Management Fundamentals  Management Fundamentals Social responsibility is defined as the obligation and commitment of managers to take steps for protecting and improving society’s welfare along with protecting their own interest. The managers must have social responsibility because of the following reasons: 1. Organizational Resources - An organization has a diverse pool of resources in form of men, money, competencies and functional expertise. When an organization has these resources in hand, it is in better position to work for societal goals. 2. Precautionary measure - if an organization lingers on dealing with the social issues now, it would land up putting out social fires so that no time is left for realizing its goal of producing goods and services. Practically, it is more cost-efficient to deal with the social issues before they turn into disaster consuming a large part of managements time. 3. Moral Obligation - It is the moral responsibility of the organization to assist solving or removing the social problems 4. Efficient and Effective Employees - Recruiting employees becomes easier for socially responsible organization. For instance - Tobacco companies have difficulty recruiting employees with best skills and competencies. 5. Better Organizational Environment - Employee hiring would be easier and employee would of a superior quality. There would be low rate of employee turnover and absenteeism. Thus, an improved society will create a better business environment. Management Fundamentals Corporate Social Responsibility (also known as CSR, corporate conscience, and corporate citizenship) is the integration of socially beneficial programs and practices into a corporation's business model and culture.  Obligation of the business organizations to take actions to protect or enhance the welfare of different constituents of the society as a whole along with its own interest.  Businesses should consider the social implications of their decisions  Business cannot be isolated  The establishment and development of the business is dependent on the contributions made by society.  Management Fundamentals Corporate Social Responsibility Should organizations be socially involved  Arguments for social responsibility  Arguments against social responsibility  Management Fundamentals Corporate Social Responsibility Responsibility of the business towards different interest groups  Responsibilities towards owner, Investors/creditors  Responsibilities towards employees  Responsibility towards customers  Responsibility towards Suppliers  Responsibility towards competitors  Responsibility towards govt.  Responsibility towards Society Management Fundamentals ‘Management Ethics’ is related to social responsiveness of a firm. It is “the discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation. It is a standard of behaviour that guides individual managers in their works”. “It is the set of moral principles that governs the actions of an individual or a group.” Business ethics is application of ethical principles to business relationships and activities. When managers assume social responsibility, it is believed they will do it ethically, that is, they know what is right and wrong  Management Fundamentals Need for Business Ethics: Business ethics is important for the following reasons: 1. Business organisations are economic and social institutions that serve customers’ needs by supplying them right goods at the right place, time and price. 2. Business ethics help in long-run survival of the firms. 3. Business houses operate in the social environment and use resources provided by the society. They are, therefore, morally and socially committed to look after the interests of society by adopting ethical business practices. 4. Ethical business activities improve company’s image and give it edge over competitors to promote sales and profits. 5. Legal framework of a country also enforces ethical practices. Under Consumer Protection Act, for example, consumers can complain against unethical business practices. Management Fundamentals Barriers to Management Ethics 1. Chain of command: If employees know that superiors are not following ethical behaviour, they hesitate in reporting the matter up the hierarchy for the fear of being misunderstood and penalized. The chain of command is, thus, a barrier to reporting unethical activities of superiors. 2. Group membership: Informal groups lead to group code of ethics. Group members are strongly bonded by their loyalty and respect for each other and unethical behaviour of any member of the group is generally ignored by the rest. 3. Ambiguous priorities: When policies are unclear and ambiguous, employees’ behaviour cannot be guided in a unified direction. It is difficult to understand what is ethical and what is unethical.  Management Fundamentals Solutions to Barriers: The following measures can improve the climate for ethical behaviour: 1. Organisational objectives and policies should be clear so that every member works towards these goals ethically. 2. The behaviour of top managers is followed by others in the organisation. Ethical actions of top managers promote ethical behaviour throughout the organisation. 3. Imposing penalties and threats for not conforming to ethical behaviour can reduce unethical activities in the organisation. Formal procedures of lodging complaints help subordinates report unethical behaviour of superiors to the concerned committees. 4. Educational institutions also offer courses and training in business ethics to develop conscientious managers who observe ethical behaviour. Management Fundamentals Management Fundamentals  Management Fundamentals 14 Principles of Henri Fayol - “ General and Industrial Management ” 1. Division of work 2. Authority and Responsibility 3. Discipline 4. Unity of Command 5. Unity of Direction 6. Sub ordination of Individual to general interest 7. Remuneration to employee 8. Centralization and Decentralization 9. Scalar Chain 10. Order 11. Equity 12. Stability of Personnel 13. Initiative 14. Espirit de Corps.- a feeling of pride and mutual loyalty shared by the members of a group. Management Fundamentals Scientific management is concerned with knowing exactly what you want men to do and then see in that they do it in the best and cheapest way F.W Taylor – Father of Scientific Management Principles- 1.Separation of Planning and doing 2. Functional Foremanship - Specialization 3. Job Analysis 4. Standardization 5. Scientific Selection and Training of Workers Management Fundamentals F.W Taylor – Father of Scientific Management Principles- 6. Financial Incentives 7. Time and Motion Study 8. Industrial Harmony. Management Fundamentals Management Fundamentals Management Fundamentals Management Fundamentals  Fundamentals of Management and Organization Behaviour Elton Mayo and Hawthrone Experiment- ‘ Father of Human Relation Movement’ 1. Illumination Experiment 2. Relay Assembly Test Room Experiment 3. Interview Phase 4. Bank Wiring Observation Room Experiments Contributions- Understand the behaviour on the job. Appreciate peoples attitude Social Man Workplace Culture Informal Groups Management Fundamentals Management Fundamentals Planning Unit-2 Management Fundamentals Functions of Management POSDCORB - Luther Gullick P- Planning O – Organizing S- Staffing D- Direction CO- Coordination R- Reporting B-Budgeting Management Fundamentals Planning Planning is deciding in advance what to do , how to do, when to do it, and who is to do it. Nature or Characteristics of Planning 1. Planning focus on achieving objectives 2. Planning is the primary function of management 3. Planning is continuous 4. Planning is futuristic 5. Planning involves decision making 6. Planning is a mental Exercise. The roles of planning and controlling in the management process Management Fundamentals Planning is the first step of management process concerned with the establishment of objectives and analysis of present limitations for attaining such goals Requires decisions on ….. What should be done ? How it should be done ? Who will be responsible ? Where the action is to be taken ? Why is it done ?  Management Fundamentals Advantages of Planning 1. Increases the organization’s ability to adopt future eventualities 2. Helps the company remain more competitive in its industry 3. Reduces mistakes and oversights 4. Ensures a more productive use of resources 5. Makes control easier 6. Increases effectiveness of a manager Management Fundamentals Limitations of Planning 1. Effectiveness depends upon correctness of assumptions 2. Planning is expensive 3. Planning delays actions 4. Encourages a false sense of security  Management Fundamentals Guidelines for effective planning 1. Involve top management only at key points in the planning process 2. Do not look for the perfect answer 3. Planning should provide realistic targets & alternatives ways to achieve them 4. Plans should start on a small scale and expanded only when the execs have learned the technique & have become convinced of their usefulness Management Fundamentals Types of plan According to time dimension: Short term: Upto one year Medium Term: >1 yr but 5yrs Management Fundamentals Types of Plan 1. Objectives/goals 2. Strategies & tactics 3. Standards 4. Budgets 5. Policies 6. Procedures 7. Programmes 8. Rules 9. Methods Management Fundamentals Types of Plan Goals and Objectives 1. End results to be achieved 2. They give direction to activities 3. Require creative thinking and foresight Management Fundamentals Types of Plan Strategies and Tactics 1. Strategies are aimed at counteracting the actions of the opponents 2. Tactics are immediate decisions based on the executive’s judgment and experience whilst facing an actual situation  Management Fundamentals Types of Plan Standards 1. Measure of level of achievement 2. Very helpful in evaluating deviations from the plan Management Fundamentals Types of Plan Budgets 1. Used as both- planning and control device 2. May be expressed in units of product, finance etc Management Fundamentals Types of Plan Policies General statements aimed at guiding thinking whilst making decisions Eg: “promotions should be from within the company or the existing staff” Management Fundamentals Types of Plan Procedures Involves a selection and establishment of a logical series of tasks within the framework of predetermined policies and objectives Management Fundamentals Types of Plan Programmes Programme integrates policies, procedures etc required for effecting a certain course of action Management Fundamentals Types of Plan Rules Rules are related to procedures as they guide action but there Is no time sequence involved Eg: Procedure for handling mail may require a rule “all letters received should be replied to on the same day” Management Fundamentals Types of Plan Method 1. Prescribes specifically and in detail how a task is to be done 2. Constitutes the best method of performing a task Management Fundamentals Strategic plans — set broad, comprehensive, and longer- term action directions for the entire organization Vision – clarifies purpose of the organization and what it hopes to be in the future Management Fundamentals Tactical plan – helps to implement all or parts of the strategic plan Functional plans – indicate how different operations within the organization will help accomplish the overall strategy  Production plans  Financial plans  Facilities plans  Logistics plans  Marketing plans  Human resource plan Management Fundamentals Operationalplans — identify short- term activities to implement strategic plans ◦ Policies are standing plans the communicate guidelines for decisions ◦ Procedures are rules that describe actions to be taken in specific situations ◦ Budgets are plans the commit resources to projects or activities  Zero based budgets allocate resources as if each budget were brand new Management Fundamentals Planning Process 1. Setting objectives 2. Developing premises- A manager is required to make certain assumption about the future and these are known as premises. 3. Identifying alternative courses of action 4. Evaluating alternative courses 5. Selecting an alternative 6. Implementing the plan 7. Follow up of action Management Fundamentals Planning Tools and Techniques 1. Forecasting 2. Contingency planning 3. Scenario planning 4. Benchmarking 5. Use of staff planners Management Fundamentals Planning Tools and Techniques Forecasting ◦ Attempts to predict the future ◦ Qualitative forecasting uses expert opinions ◦ Quantitative forecasting uses mathematical models and statistical analysis of historical data and surveys Management Fundamentals Planning Tools and Techniques Contingency planning ◦ Identifying alternative courses of action to take when things go wrong ◦ Contingency plans anticipate changing conditions Management Fundamentals Planning Tools and Techniques Scenario planning ◦ A long-term version of contingency planning ◦ Identifying alternative future scenarios ◦ Plans made for each future scenario ◦ Increases organization’s flexibility and preparation for future shocks Management Fundamentals Planning Tools and Techniques Benchmarking ◦ Use of external and internal comparisons to plan for future improvements ◦ Adopting best practices: things people and organizations do that lead to superior performance ◦ Staff planners assist in all steps of the planning process Management Fundamentals Planning Tools and Techniques Use of staff planners ◦ Coordinating the planning function for the total organization or one of its major components. ◦ Possible communication gaps between staff planners and line management.  Management Fundamentals Management By Objectives (MBO) ◦ A comprehensive managerial system that integrates many key managerial activities in a systematic manner that is consciously directed towards the effective and efficient achievement of organizational and individual goals. Management Fundamentals Management By Objectives (MBO) ◦ Specific performance goals are jointly determined by employees and managers. ◦ Progress toward accomplishing goals is periodically reviewed. ◦ Rewards are allocated on the basis of progress towards the goals. Management Fundamentals Key elements of MBO 1. Goal specificity 2. participative decision making 3. Performance Review/ feedback 4. Rewards based on performance 5. Self appraisal 6. Effective communication network Management Fundamentals Does MBO Work? Reason for MBO Success ◦ Top management commitment and involvement ◦ Employee involvement and integration of activities ◦ Links objectives to the performance Potential Problems with MBO Programs ◦ Not as effective in dynamic environments that require constant resetting of goals. ◦ Overemphasis on individual accomplishment may create problems with teamwork. ◦ Allowing the MBO program to become an annual paperwork shuffle. SMART  Specific: Clearly defined and detailed, avoiding vague or ambiguous language.  Measurable: Quantifiable with specific metrics or benchmarks.  Achievable: Realistic and attainable within the given timeframe and resources.  Relevant: Aligned with the organization's overall goals and objectives.  Time-bound: Assigned a specific deadline or timeframe for completion. Management Fundamentals Decision making is the process of identifying and selecting a course of action to solve a specific problem. James Stoner Decision making involves the selection of a course of action from among two or more possible alternatives in order to arrive at a solution for a given problem. Trewartha and Newport Decision making means to select a course of action from two or more alternatives. It is done to achieve a specific objective or to solve a specific problem.  Management Fundamentals Characteristics of Decision making 1. Decision making implies choice 2. Continuous activity/process 3. Mental/intellectual activity 4. Based on reliable information/feedback: 5. Goal oriented process 6. Means and not the end 7. Relates to specific problem 8. Time-consuming activity 9. Needs effective communication Management Fundamentals  Management Fundamentals Steps in Decision making Process 1. Defining / Identifying the managerial problem, 2. Analyzing the problem, 3. Developing alternative solutions, 4. Selecting the best solution out of the available alternatives, 5. Converting the decision into action, and 6. Ensuring feedback for follow-up. Management Fundamentals Advantages of Decision Making 1.Decision making is the primary function of management. 2.Decision-making facilitates the entire management process. 3.Decision-making is a continuous managerial function. 4. Decision-making is essential to face new problems and challenges. 5. Decision-making is a delicate and responsible job. Management Fundamentals Types of Managerial Decision 1. Organizational and Personal Decision 2. Routine and Strategic Decision 3. Programmed and Non-Programmed Decision 4. Policy and Operative Decision 5. Individual and Group Decision Management Fundamentals Organizational and Personal Decision When a person takes a decision in the organization as an executive, it will be an organizational decision. This decision will have its impact on the working at the organization. The power to take organizational decision can be delegate from the superior to subordinate. An executive can also take the decisions about himself. Such decisions are known as personal decisions. These generally affect the personal life of the decision makers. The power to fable such decision cannot be delegated to anybody else. Management Fundamentals Routine and Strategic Decision  Routine decisions are repetitively following certain established rules, policies, etc. These are taken in the content of the day to day.  Strategic decisions are very important and are taken at top level management. They relate to policy matters and need the development and analysis of alternatives. Strategic decision influence organizational structure, objective, working conditions, finance etc. These decisions are long term effects. Management Fundamentals Programmed and Non-Programmed Decision Programmed decisions are of a routine nature and taken within the specified procedure. These decisions are short terms effects are taken relatively at lower level of management. The decisions to grant, make routine purchases, allow trade discount etc. are programmed decisions. Non-Programmed decisions are non-repetitive decisions. The need for such decision arises due to specific circumstances. These decisions are at the top level management. The openings of the branch, introducing a new product, purchase of new machinery are some examples of the non-programmed decisions. Management Fundamentals Policy and Operative Decision  Policy decisions determine the basic policies of the organization are taken at top level management. These policies are decided at the top level management and they become the basic for operative decisions. Now decision can beyond the policy frame work of the organization. These are important in nature and have long term impact.  Operative decisions on the hand are less important and related with day to day operation of the business. These decisions are taken in the light of policies decided by the management. Middle and lower level management take these decisions since those involve actual execution and supervision. Management Fundamentals Individual and Group Decision This classification is based on the number of person involved in the decision making. If the decision is taken by one person it is known as individual decision. In small concern only the owner takes all the important decisions. Even in big concern too one person can be allowed to take a decision about a particular matter. Group decisions are taken by the group persons. The decisions based on the directors of committees come under this category. These are generally important decision and relate to policy matters. The decisions are taken after a though discussion among the persons who are assigned this work. The problem delay in taking group decision may create difficulties but otherwise these are well discussed decisions. Management Fundamentals Organizing Unit -3  Management Fundamentals Organization Organization involves for grouping of activities necessary to accomplish goals and plans, the assignments of these activities to appropriate departments and provision of the authority delegation and coordination. Koontz and O’Donnell Management Fundamentals Organization Organization is an identified group of people contributing their efforts towards the attainment of common goals. D. E. Farland Organization is the combination of necessary beings, materials, tools, equipments, working space and apparatuses, brought together in a systematic and effective manner to accomplish some desired objects. J. N. Schulze Management Fundamentals Nature of Organization 1. Organization Show a Structure of Relationship / Structure of Relationship 2. Managerial Functions / Organization is a Basic Function of Management 3. Ongoing Process / it is a Process 4. Goal-Oriented / Organizing is Always Related to Objectives 5. Encourages Teamwork 6. Foundation of Management 7. Adaptive to Change Management Fundamentals Importance of Organization Facilitates Administration Growth and Diversification Establish Accountability Optimum use of Technology Facilitates Communication Facilitates Creativity Improves Inter-Personal Relationships Facilitates Coordination Facilitates Direction Facilitates Teamwork Facilitates Control Increase in Output Optimum Allocation of Resources  Management Fundamentals Organizing Organizing is the process of defining and grouping the activities of the enterprise and establishing the authority relationship among them. Nature or Characteristics of Organizing 1. Division of work 2. Coordination 3. Common objectives 4. Well defined authority and Responsibility 5. Structure relationship 6. Universal Process 7. Dynamic Process  Management Fundamentals Organizing Process 1. Knowing the objectives of the Enterprise 2. Determining Various activities. 3. Grouping and Departmentalization of activities. 4. Determining Key Activities 5. Assigning Responsibilities 6. Delegating Authorities 7. Defining Inter relationship 8. Providing Right Environment  Management Fundamentals Advantages of Organizing 1. Increase in Managerial Efficiency. 2. Proper Utilization of resources 3. Sound Communication possible 4. Facilitates Coordination 5. Increase in Specialization 6. Helpful in expansion 7. Check on Corrupt Practices 8. Decreases Employees Turnover 9. Better Human Relations 10. Training and Development of Personnel 11. Development of new ideas 12. Facilitates Promotions  Management Fundamentals Organization Structure  Management Fundamentals Organization Structure An organization structure shows the authority and responsibility relationships between various position in the organization. And also clarifies who reports whom. It is a set of planned relationships between groups of related functions and between physical factors and personnel required for the achievement of organizational goals.  Management Fundamentals Importance of Organization Structure 1. Organization structure allocates authority and responsibility. It specifies who is to direct whom and who is to report to whom. 2. Organization structure lay down the pattern of the communication and coordination in the enterprises. 3. Organization structure determines the location of centers of decision making in the enterprises. 4. A sound organization structure facilitates growth of the enterprises. 5. A sound organization structure which is adoptable to change can make the best possible use of the latest technology.  Management Fundamentals Types of Organization Structure 1. Line Organization 2. Functional Organization 3. Line and staff Organization Others 4. Project Organization 5. Matrix Organization  Management Fundamentals Line organization represents direct vertical relationship in the organization. This is the simplest and oldest form of internal organization. This organization is also known as scalar organization. The authority flows from the top to lower level. Management Fundamentals Line Line refers to those positions and elements of the organization which have the responsibility and authority and are accountable for accomplishment of primary objectives. Management Fundamentals Staff Staff refers to those elements which have responsibility and authority for providing advice and service to line for attainment of objectives. Management Fundamentals Functional Organization Functional authority occupies a mid-way position between line and line staff authority. It is means of putting the specialists in the top positions throughout the enterprises. It confers upon the holders of a functional position a limited power of the command over the people of various departments concerning his function.  Management Fundamentals Functional Organization Management Fundamentals Advantages Advantages of functional organization are as follows: 1. Specialization: Functional organization helps in achieving the benefits of specialization of work. Every functional in-charge is his areas and can help the subordinates in the better performance in his area. 2. Executive Development: A functional manager is required to have expertise in one function only. This makes it easy to develop executives with specialization in distant area of business. 3. Reduction of Workload: Functional organization Functional organization reduces the work load on the top executives. There is a joint supervision in the organization. Every functional in-charge looks after his functional area only. 4. Scope of Expansion: Functional organization offers a greater scope for expansion as compared to line organization. It does not face the problems of limited capabilities of few line managers.  Management Fundamentals Disadvantages of Functional Organization Functional organization suffers from the following drawbacks: 1. The operation of the functional is too complicated to be easily understood by the workers. Workers are accountable to a number of bosses. This creates confusion in the organization. 2. Functional organization develops specialists rather than generalists. This may create problem in the succession of top executive position when the present functional expert retire or leave the organization. 3. There is generally lack of position among the functional executives and delay in the decision making when a decision problem requires the involvement of more than one specialist.  Management Fundamentals Line and Staff organization Management Fundamentals Line and Staff Organization 1. Line elements provide decision making authority and a central means for the flow of communication through the scalar chain of authority. Staff elements facilitate decision process by bringing in expert and specialized. 2. Line and Staff organization provides for the services of specialists to the line executives. Thus, it is an improvement of over the line organization.  Management Fundamentals Advantages of line and staff organization are follows as: 1. Specialist Knowledge: Line managers get the benefits of the specialized staff, specialists at various levels. 2. Better decision: A staff specialist helps the line executives in the taking better decision by providing them with adequate information of right type moment and expert advice. 3. Flexibility: Line and staff organization is more flexible as compared to the line organization. General staff can be employed to help line managers at various levels. 4. Handling of Problems: Many problems that are ignored or poorly handed in the line organization can be properly handled in the line and staff organization by the use of staff advice.  Management Fundamentals Disadvantages of Line and staff organization 1. Difficulty in Coordination: The allocation of duties between the lines and staff executives is generally not clear. This may hamper coordination in the organization. 2. Lack of the Accountability of Staff Officials: Since staffs are not accountable for the results, they may not be performing their duties well. 3. Conflicts: There is generally a conflict among the line and staff executives. There is a danger that the men may encroach on the line authority. Line managers feel that staff. Management Fundamentals Project Organization Organization units who have to complete of a long duration are termed as project organization. 1. The core concept of project organization is to gather a team of specialists to work on and complete a particular project. The projects staff is separate from an independent functional department. 2. Projects organization is employed in aero space, construction, aircraft manufacturing and professional areas like: management, consultancy etc.  Management Fundamentals Matrix Organization 1. Matrix organization is a hybrid structure combing two complementary structure functional and project department. Functional structure is a permanent feature of the matrix organization and remains authority for overall operation of the functional units. 2. Projects departments are created whenever specific projects required a high degree of technical skill and resources for a temporary period. A functional department creates a vertical chain of the command while the project team for the horizontal lines, thereby forming matrix. Management Fundamentals Departmentation Departmentation means division of work into smaller units and their re-grouping into bigger units (departments) on the basis of similarity of features. Management Fundamentals Advantages of Departmentation Organisation structure Flexibility Specialization Sharing of resources Co-ordination Control Efficiency Scope for growth and diversification Responsibility Development of managers Management Fundamentals The six different basis of Departmentation in an organisation. The basis are: 1. Departmentation by Function 2. Departmentation by Products 3. Departmentation by Territory/Geographic Departmentation 4. Departmentation by Customers 5. Departmentation by Process 6. Combined Base. Management Fundamentals 1 Departmentation by Function Similar activities of a business are grouped into major departments or divisions under an executive who reports to the chief executive. Merits 1. It suits well the small enterprises for creating major departments. 2. It promotes specialization. 3. It economizes operations and makes possible the adoption of logical and comprehensible structure. 4. It facilitates inter-departmental co-ordination. Management Fundamentals Departmentation by Function Demerits 1. It may lead to excessive centralization. 2. Decision making process is delayed. 3. Poor inter-departmental co-ordination. 4. It is rather difficult to set up specific accountability and profit centres within functional departments so the performance is not accurately measured. 5. It hinders human development in all the areas.  Management Fundamentals Departmentation by Function Management Fundamentals 2. Departmentation by Product: In a multiproduct organisation the Departmentation by product most suits. Here the activities are grouped on the basis of produce or product lines. All functions related to particular product are bought together under the umbrella of product manager. Management Fundamentals Departmentation by Product Management Fundamentals Merits of Departmentation by Product 1. Each product division can be taken as a viable profit centre for accountability purposes. The performance of individual products can be easily accessed to distinguish between profitable and unprofitable products. 2. Marketing strategy becomes more pragmatic. 3. Top management is relieved of operating task responsibility and can concentrate on such centralized activities as finance, research etc. 4. It facilitates decentralization. 5. Attention is given to product lines, which is good for further diversification and expansion. Management Fundamentals Demerits of Departmentation by Product 1. It increases management cost. Service functions are duplicated both at the top and at the operating levels of management. 2. High cost of operation prevents the small & medium sized concerns from adopting this basis of classification, particularly for creating major units. 3. There are problems at the top of co-ordination. Management Fundamentals 3. Departmentation by Territory: It is suitable for organisations having wide geographical market such as pharmaceuticals, banking, consumer goods, insurance, railways etc. Here, the market is broken up into sales territories and a responsible executive is put in charge of each territory. The territory may be known as district, division or region.  Management Fundamentals Departmentation by Territory Management Fundamentals Merits of Departmentation by Territory: 1. It helps in achieving the benefits of local operations such as local supply of materials & labour, local markets etc. 2. Full attention can be paid to local customer groups. 3. A regional division achieves a better co-ordination and supervision of activities in a particular area. 4. It helps in reducing transportation and distribution costs. 5. It facilitates the expansion of business to different regions. 6. It provides an opportunity to a regional manager to gain broad experience as he looks after the complete operation in a particular territory Management Fundamentals Demerits of Departmentation by Territory: 1. It creates the problem of communication and co-ordination between various regional offices. 2. It may be uneconomical due to costly duplication of personnel & physical facilities. 3. It may be difficult to provide efficient centralized services to various departments located in different areas. 4. Various regional units may become so engrossed in short term competition among themselves that the overall long term interests of the organisation as a whole may be overlooked. 5. The problem of top management control becomes difficult. Management Fundamentals 4. Departmentation by Customers: 1. This type of classification is adopted by enterprises offering specialized services. To give the attention to heterogeneous groups of buyers in the market, marketing activities are often split into various several parts. 2. Such groups are suitable to organisations serving several segments like a pharmaceutical company supplying to institutional buyers such as hospitals and government and non-institutional buyers as wholesalers and retail chemists.  Management Fundamentals Departmentation by Customers: Management Fundamentals Merits of Departmentation by Customers: 1. The main advantage of following this type of departmentation is that particular needs of the particular- customers can be solved. 2. Benefits of specialization can be obtained. Demerits of Departmentation by Customers: 1. There may be duplication and underutilization of facilities and resources. 2. It may be difficult to maintain co-ordination among the different customer departments. Thus, customers’ departmentation is useful for those enterprises which have to cater to the special and varied needs of different classes of customers. Management Fundamentals 5. Departmentation by Process The production function may be further subdivided on the basis of the process of production when the production process has distinct activity groups, they are taken as the basis of departmentation. Process departmentation is suitable when the machines or equipment’s used are costly and required special skill for operating. It is useful for organisations which are engaged in the manufacture of products which involves several processes.  Management Fundamentals Departmentation by Process Management Fundamentals Merits of Departmentation by Process: 1. It provides economy of operation 2. The benefits of specialization are available. 3. Efficient maintenance of equipment’s is possible. 4. It simplifies supervision and plant layout. Demerits of Departmentation by Process: 1. There may be difficulties in coordinating the activities of different departments 2. Due to specialized activity, the employee mobility is reduced. 3. Extreme specialization may reduce flexibility of operations. 4. This type of departmentation may not provide opportunity for the all-round development of managerial talent. 5. Conflicts may arise among managers of different processes, particularly when they loose sight of the overall company goals.  Management Fundamentals Departmentation-Combined Base 1. Sometimes, several bases of departmentation may be used simultaneously. First the organisation is divided on the basis of functions. The marketing department is further divided on the basis of product lines i.e., refrigeration and chemical division. 2. The refrigeration division is further divided on the basis of territory and the territory is further divided on the basis of customers i.e., retail and wholesale. Management Fundamentals Management Fundamentals Span of Control The number of people the manager supervises. ◦ The greater the number, the greater the span of control Recommended – 6 employees Management Fundamentals Difference Between Power and Authority Management Fundamentals Difference Between Authority and Responsibility Management Fundamentals Difference between Responsibility and Accountability Management Fundamentals Difference between Centralization and Decentralization Management Fundamentals Difference between Management and Administration Management Fundamentals Power It is the ability to influence people: to change their minds, their attitudes or their behaviour. Types 1. Legitimate power Legitimate power is traditional power – it is the type of power a manager, executive, or other leading official in a company has due to the status of their position. 2. Information power One gains information power when they know something other people want to know. This information could be anything from gossip to intricate knowledge about a person or company. Management Fundamentals Types of Power 3. Expert power People who have more knowledge or experience than other members of their team exhibit expert power. For example, an executive with 20 years of experience in their field has expert power over a recent college graduate who is just starting their career. 4. Reward power A leader who has the ability to reward an employee or team member (with money, praise, etc.) has reward power. 5. Coercive power Coercive power is the opposite of reward power; a leader who can punish an employee or team member has coercive power. Because the threat of punishment can persuade an employee to act a certain way, this type of leadership power is called “coercive power.”  Management Fundamentals Types of Power 6. Referent power Referent power is all about “who you know.” A leader with lots of referent power may have many connections or a large social network they can use to their advantage. Someone with referent power may also be close to an executive with legitimate power. 7. Charismatic power Similarly, a leader with charismatic power has the ability to influence others. While they may or may not have an established network of contacts, they usually have a natural ability to persuade or inspire others. 8. Moral power A leader who has moral power over his or her employees has been placed on a pedestal, so to speak, due to their beliefs and actions. A leader’s good qualities can lead to them having moral power over an employee, because the employee may be inspired to replicate the leader’s actions.  Management Fundamentals Authority 1. Authority is the right to give orders & power to exact obedience. 2. Denotes certain rights granted to a position in an institution 3. It is a willing & unconditional compliance of people, resting upon their belief that it is legitimate for superior to impose his will on them. Management Fundamentals Delegation of Authority Giving another person the authority and responsibility to carry out a task. Since the supervisor cannot accomplish all of the department’s work, others must be assigned duties with the authority and responsibility to accomplish the task. Management Fundamentals Delegation means the granting authority to subordinate to operate within the prescribed limits. Delegation of authority involves granting of authority to subordinate with a view to make them perform the assigned duties.  Management Fundamentals Advantages of Delegation of Authority 1. Reduction of Workload: Delegation lightness the burden of then top executives. It enables them to assign the routine matters to the subordinates. They can concentrate on the vital aspects of the management. 2. Quick Decision Making: The subordinates have sufficient authority to the quick decision. They need not to go their superior again and again for taking decision concerning the routine matters. 3. Business Growth: Delegation of authority prepares executives for the future. This helps in the organization to face future challenges effectively. The business can afford to implement growth plans as managerial talent is available. 4. Healthy Relations: Delegations helps in maintaining healthy relations in the organization. The authority and responsibility of the subordinates are clearly defined. As a result conflicts are avoided. 5. Technique of Training: Delegation of authority allows the subordinates to take decision independently. Thus, it is a technique for developing matters for the future. Management Fundamentals Disadvantages of Delegation of Authority On the part of Organization: The difficulties on the part of the organization include:- 1. Lack of effective control mechanism. 2. Defective organization structure and non-clarity of authority responsibility relationships. 3. Violation of unity of command principle. On the part of the superior: Failures in delegations arises of the following reasons: 4. Lack of ability of direct. 5. Lack of willingness to test subordinates. 6. Lack of willingness to give subordinates a chance. 7. Lack of setting control standards for subordinates. Management Fundamentals Disadvantages of Delegation of Authority On the part of Subordinates: Subordinates may be reluctant accept of delegation of authority due to the following reasons: 1. Lack of self-confidence. 2. Derive to play safe by depending upon the superior for all decisions. 3. Subordinates performance to depend on the superior rather than to take decisions themselves. 4. Lack of information and resources to use the authority and achieve desired results. Management Fundamentals Factors determining Delegation of Authority 1. Willingness of Subordinates Manager’s Attitude 2. Desire to Dominate 3. Quantum of Work 4. Confidence in Subordinates Management Fundamentals Management Fundamentals Process/Steps in Delegation of Authority 1. Assignment of Duties to Subordinates: Before the actual delegation of authority, the delegator must decide on the duties which he wants the subordinate or the group of subordinates to perform. Here, the manager lists the activities to be performed along with the targets to be achieved, and the same is spelled out to the subordinates. Thus, in the first stage, the duties are assigned to the subordinates as per their job roles. 2. Transfer of Authority to perform the duty: At this stage, an adequate authority is delegated to the subordinate which is essential to perform the duty assigned to him. A manager must make sure; that authority is strictly delegated just to perform the responsibility, as more authority may lead to its misuse by the subordinate. 3. Acceptance of the Assignment: At this stage, the subordinate either accepts or rejects the tasks assigned to him by his superior. If the subordinate or the delegate, refuses to accept the duty and the authority to perform it, then the manager looks for the other person who is capable of and is willing to undertake the assignment. Once the assignment gets accepted by the subordinate, the delegation process reaches its last stage. 4. Accountability: The process of delegation of authority ends at the creation of an obligation on the part of the subordinate to perform his responsibility within the powers assigned to him. Once the assignment is accepted by the subordinate, then he becomes responsible for the completion of the duty and is accountable to the superior for his performance. Management Fundamentals Responsibility is the obligations of an individual to carry out assigned activities to the best of his or her ability. Accountability is the obligations to carry out responsibility and exercised authority in terms of performance standards established. Management Fundamentals Staffing Unit-4  Management Fundamentals Staffing The staffing function pertains to the recruitment, selection, development, training and compensation of subordinate managers. or The managerial function of staffing involves the filling and keeping filled, position in the government structure. Scope of staffing or Steps involved in Staffing 1. Determining the requirement of manpower 2. Recruitment 3. Selection 9. Transfer 4. Placement and Orientation, 10. Separation 5. Retention 6. Training 7. Performance Appraisal 8. Promotion  Management Fundamentals Staffing Characteristics or Nature of Staffing 1. Related to human beings 2. A separate Managerial function 3. Essential at all the managerial levels 4. Related to social responsibility 5. Effect of internal and external environment  Management Fundamentals Importance of Staffing 1. It makes possible the effective Utilization of other resources. 2. It makes possible the execution of other Managerial functions. 3. It provide the right job to the right man. 4. It is helpful in the development of employees 5. It helps to prevent Over manning 6. It helps in discovering talented and competent employees. 7. It helps in continuous survival and growth of the enterprise Management Fundamentals Recruitment is the process of discovering competent employee out of available candidates in the market who are suitable to job and according to organisation requirements. OR Recruitment is the process of attracting prospective employees and stimulating them for applying job in an organization  Management Fundamentals Basic contents of Recruitment notification It contains brief about an organization which is recruiting.  Contains number of posts/jobs lying vacant in an organization.  Contains number of jobs in reserved category. (especially in government organization jobs are allotted to reserved category).  Contains information about gender needed for the jobs. (For example: Male or female)  Contains information about educational qualification needed to qualify for applying to job.  Contains information about work experience needed. (points from 2 to 6 are nothing but called as Job specifications, it is a statement that describes about specifications needed by a candidate to have qualified for a applying said job)  It contains most important information that is, Job description, which is the statement of information about duties and responsibilities of the job.  Contains information about salary particulars, employee benefits and other allowances to be provided.  Selection tests which must be passed by candidates so as to have job.  Terms and conditions if any. Management Fundamentals Management Fundamentals Management Fundamentals  Management Fundamentals Effective Recruitment program include 1. A Well defined recruitment policy 2. A proper Organization structure 3. A well laid down procedure for locating potential job seekers 4. A suitable methods and technique for trapping and utilizing these candidates. 5. A continuous assessment of effectiveness of recruitment programme and incorporation of suitable modification s from time to time to improve the effectiveness of the programme. 6. An ethical sound and full proof practice telling an applicant all about the job and its position, the firm to enable the candidate judiciously decide whether or no to apply and join the firm, if selected.  Management Fundamentals Recruitment Process 1. Planning 2. Strategy Development 3. Searching 4. Screening 5. Evaluation and Control Management Fundamentals Management Fundamentals Management Fundamentals “E-Recruitment”. Also known as “Online recruitment”, it is the use of technology or the web based tools to assist the recruitment processes. The tool can be either a job website like naukri.com, the organisation’s corporate web site or its own intranet. Many big and small organizations are using Internet as a source of recruitment. They advertise job vacancies through worldwide web. The job seekers send their applications or curriculum vitae (CV) through an e-mail using the Internet. Alternatively job seekers place their CV’s in worldwide web, which can be drawn by prospective employers depending upon their requirements. Management Fundamentals According to a study by NASSCOM – “Jobs is among the top reasons why new users will come on to the internet, besides e-mail.” There are more than 18 million resume’s floating online across the world. Management Fundamentals The two kinds of e-recruitment that an organisation can use Job Portals Resume Scanner Management Fundamentals Job portals – i.e. posting the position with the job description and the job specification on the job portal and also searching for the suitable resumes posted on the site corresponding to the opening in the organisation. Creating a complete online recruitment/application section in the companies own website. - Companies have added an application system to its website, where the ‘passive’ job seekers can submit their resumes into the database of the organisation for consideration in future, as and when the roles become available.  Management Fundamentals Resume Scanners: Resume scanner is one major benefit provided by the job portals to the organisations. It enables the employers to screen and filter the resumes through pre-defined criteria’s and requirements (skills, qualifications, experience, payroll etc.) of the job. Job sites provide a 24*7 access to the database of the resumes to the employees facilitating the just-in-time hiring by the organisations. Also, the jobs can be posted on the site almost immediately and is also cheaper than advertising in the employment newspapers. Sometimes companies can get valuable references through the “passers-by” applicants. Online recruitment helps the organisations to automate the recruitment process, save their time and costs on recruitments.  Management Fundamentals Advantages of E- Recruitment 1. Lower costs to the organisation. Also, posting jobs online is cheaper than advertising in the newspapers. 2. No intermediaries. 3. Reduction in the time for recruitment (over 65 percent of the hiring time). 4. Facilitates the recruitment of right type of people with the required skills. 5. Improved efficiency of recruitment process. 6. Gives a 24*7 access to an online collection of resumes. 7. Online recruitment helps the organisations to weed out the unqualified candidates in an automated way. 8. Recruitment websites also provide valuable data and information regarding the compensation offered by the competitors etc. which helps the HR managers to take various HR decisions like promotions, salary trends in industry etc. Management Fundamentals Disadvantages of E- Recruitment 1. Screening and checking the skill mapping and authenticity of million of resumes is a problem and time consuming exercise for organisations. 2. There is low Internet penetration and no access and lack of awareness of internet in many locations across India. 3. Organisations cannot be dependant solely and totally on the online recruitment methods. 4. In India, the employers and the employees still prefer a face-to-face interaction rather than sending e-mails. Management Fundamentals Internal factors affecting Recruitment ◦ Recruitment policy ◦ HR planning ◦ Size of the firm ◦ Cost of recruitment ◦ Growth and expansion Management Fundamentals External factors affecting Recruitment ◦ Supply and demand ◦ Labour market ◦ Image/goodwill ◦ Political-social-legal environment ◦ Unemployment rates ◦ Competitors Management Fundamentals Selection Management Fundamentals Employee Selection is the process of putting right men on right job. It is a procedure of matching organizational requirements with the skills and qualifications of people. Management Fundamentals Recruitment Vs Selection  Management Fundamentals Selection Process 1. Application Form 2. Written Examination 3. Preliminary Interview 4. Group Discussion 5. Tests 6. Final Interview 7. Medical Examination 8. Reference Checks 9. Line Manager Decision  Management Fundamentals Aptitude Test Intelligence Test Clerical Test Achievement Test Job knowledge Test Work Sample Test Situational Test Group Discussion Interest Test Personality Test Objective Test Projective TEST Management Fundamentals Coordination is the process of integrating the objectives and activities of the separate units (departments and functional areas) of an organization in order to achieve organizational goals efficiency. Coordination is an integration of activities of individuals and units into a concerted effort that works towards a common aims. Pearce and Robinson  Management Fundamentals Features of Coordination 1. Group Efforts 2. Common Goal 3. Continuous Process 4. Unity of Action 5. Managerial responsibility 6. Essence of Management 7. Necessary Obligations  Management Fundamentals Elements of Coordination 1. Groups Efforts: Coordination integrates individual efforts of each unit so that the unit works as a group for promoting their individual and organizational goals. 2. Unity of Action: Coordination ensures that activities of each individual, group and department are headed towards the common goals. They must be carried out within the framework of policies, procedures etc. 3. Common Purpose: Coordination strives to maintain balance amongst individual departmental and organizational goals. It ensures that resources and tasks are assigned to individuals and departments in a manner that working in one department promotes the working of the other departments. All the individual, groups and departments should have a common purpose that is achieve organizational goals. Management Fundamentals Types of Coordination Internal and External Coordination Vertical and Horizontal Coordination Management Fundamentals Types of Coordination Internal and External Coordination: Coordination between the activities of departments and people working within the organization is known as internal coordination. Coordination between activities of the organization with units the organization (Government, customers, suppliers, competitors, etc.) is known as external coordination. Management Fundamentals Types of Coordination Vertical and Horizontal Coordination: Both these types of coordination are the forms of internal coordination. Vertical coordination is achieved amongst activities of people working at different levels. It coordinates the activities of top managers with those of middle and lower level managers. It is “the linking of activities at the top of the organization with those at the middle and lower levels in the order to achieve organizational goals.” “Vertical coordination can be achieved through span of management, centralization, decentralization and delegation. Horizontal coordination is the coordination amongst the activities of the people of different department working at the same level. It is “the linking of activities across the departments at similar levels. It links the activities of four primary departments – production, finance, personnel and sales.  Management Fundamentals Need of Coordination 1. Non-Routine Jobs 2. Dynamic Activities 3. Standards of performance 4. Interdependence of Activities 5. Specialization 6. Growing Organization 7. Promoting Group Effects 8. Unity of Action  Management Fundamentals 1. Techniques of Effective Coordination Scalar Chain Rules and Procedure Plans and Goals Information system Lateral Information Cooperation Committees Managerial Integrator Management Fundamentals Communication The term of the “communication is derived from the Latin word communis” this means common that means if a person communicate with another. Communication is an exchange of facts, ideas, opinion or emotions by two or more persons. - Newman, Summer and Warren Communication is the process of passing information and understanding one person to another. -Theo Haimann  Management Fundamentals Characteristics of Communication 1. Communication involves at least two persons – one who send the message and second who receive the message. 2. Communication is the two way traffic. The process of communication is not completed until the message has been understood by receiver. 3. The basic purpose of communication is to create an understanding in the in mind of the receiver of information. 4. Communication may takes several form of examples order, instructions, report, suggestions, grievance, observation etc. The message may be conveyed by the words spoken or written or gestures. Management Fundamentals Management Fundamentals The process of communication consists of the following elements: Communicators The persons who conveyed the message is known as communicators or sender. Message It is a subject matter of any communication. It may involve any facts, opinion and information. It must exist in the mind of the communicator, if communication takes place. Communication Symbols The sender of information organizes his ideas into a series of symbols (words, sign, etc) which feels will communicate to intended receiver. Communication Channel The communicator has to choose the channel for sending the information. Communication channel is the media through which the message passes. Receiver The persons who receives the messages is called receiver. The communication process is incomplete without existence of receiver of the message. Management Fundamentals Advantages of Communication Basic of Decision Making Facilitates Coordination Sound Industrial Relations Smooth and Effective Operations Industrial Democracy Employees Motivation and Morale Management Fundamentals Communication may be classified on the following bases: On the basis of organizational relationship Formal communication Informal communication On the basis of direction Downwards communication Upward communication Horizontal communication On the basis of the channel or methods of expression Oral communication Written communication Gestural communication  Management Fundamentals Channels of Communication (a) Formal Communication It refers to the official communication which follows the chain of command. The path of communication which are institutionally determined by the organization are called formal channel of communication. Merits 1. The formal communication has the following advantages: 2. It means orderly of information throughout the enterprise. 3. The source of formal communication is known. There is no fear of rumor. 4. Responsibility for action can be fixed. 5. It follows the official chain of command. It provides support to the authority of superior over the subordinate. 6. It facilitates control by the supervisor. Management Fundamentals (b) Informal Communication Informal communication represents communication among people through informal contacts. Informal communication co-exists with the formal communication system in the organization. Managers also use of informal communication when they find it difficult to collect information from the workers. Informal communication is known as grapevine. Merits 1. The informal communication has the following advantages: 2. It helps in achieving better human relations in the organization. 3. It links even those people who do not fall in official chain of command. 4. Its speed is very fast as it is free from all the barriers  Management Fundamentals Directions of Communications (a) Downwards Communication: It represents the flow of information from a higher to lower level of the organization. The purpose of the downwards communication is to communicate policies, procedure, programmes and objectives and to issue orders and instructions to the subordinates. (b) Upwards Communication: It signifies the flow of communication from lower level to higher level of the organization. The purpose of the upwards communication are to keep the superior informed about the progress of work and difficulties faced in executing order and suggest. (c) Horizontal Communication: It refers to the transmission of information among persons of the same level and status. It is also known as lateral or sideward communication. It is generally takes place among departmental heads, which are responsible for different functional areas of the business. Management Fundamentals Methods of Expression in Communication (a) Oral Communication: It involves exchanges of message with help of spoken words. Oral communication is generally informal in nature. (b) Written Communication: This communication is expressed in writing. It is generally formal in nature. Writing message is verified from the records. (c) Gestural Communication: Communication through gestures is often used as a means to supplement verbal communication. If there is face-to-face conservation between two persons, they can better understand the feeling, attitude and emotions of the each other. Management Fundamentals Barriers in Effective Communication The main barriers in effective communication are as follows: 1. Semantic Barriers 2. Physical Barriers 3. Organizational Barriers 4. Psychologies Barriers Management Fundamentals Management Fundamentals Leading Unit 5  Management Fundamentals Attitudes Attitude is a state of mind of an individual towards something , It may be defined as a tendency to feel and behave in a particular way towards objects, people or events. Personality describes the whole person and attitude determines the personality  Management Fundamentals Characteristics of Attitudes 1. The attitudes of an individual generally remain unchanged for a prolonged period of time unless he is influenced by external forces. 2. Attitudes are evaluative that can either be favourable or unfavourable. 3. Attitudes refers to feelings and beliefs held by an individual towards an object ( or event or person) Components of Attitudes 4. Cognitive 2. Affective and 3. Behavioural Cognitive- Cognitive components indicates the opinions , values or belief of an individual about something. Affective – Affective components represents the feeling of a person towards something. Behavioural – Behavioural component of a person indicates the intention of a person to behave in a particular way. Sources of Attitudes Attitudes are acquired from parents, teachers and members of the peer group.  Management Fundamentals Types of Attitudes 2. Job Involvement It refers to the extent to which a person identifies himself psychologically with his job , actively participates in it, and consider that his performance in the job contributes to his self –worth. Research has shown that high levels of job involvement lead to lower absenteeism and employee turnover levels. 3. Organization Commitment Organization commitment refers to an employee’s satisfaction with a particular organization and its goals.  Management Fundamentals Functions of Attitudes The adjustment function The ego-defensive function The value –expressive function The knowledge function Cognitive Dissonance Theory- Leon Festinger 1950s explain the relationship between attitudes and behaviour. Cognitive dissonance refers to the incompatibility that an individual may perceive between two or more of his attitudes, or between his behaviour and attitudes. Emotional Dissonance- Emotional dissonance refers to the conflict between the emotions an individual experiences and the emotions he needs to express to conform to organizational norms. Management Fundamentals Five Important attitude for workplace Respect for Others Enthusiasm Commitment to the Job Innovative Ideas Helpfulness  Management Fundamentals Importance of positive attitude at workplace 1. Creates a positive environment 2. Helps to Achieve Goals and Career success 3. Stress reduction and management 4. Better health 5. Less sick days 6. Increases productivity levels 7. Produces more energy 8. Improves customer relations 9. Makes for better leadership skills 10. Improves teamwork 11. Improves decision-making 12. Overcomes Challenges 13. Improves motivation for yourself and others 14. Improves Interpersonal Relations 15. Improves the attitude of other employees 16. Increases self-esteem and confidence in yourself and others 17. Reduces the number of obstacles and difficulties you will encounter Management Fundamentals List of positive attitude Management Fundamentals List of negative attitude Management Fundamentals Attitude Vs Behaviour Management Fundamentals Attitude Vs Behaviour Management Fundamentals Employee engagement Employee engagement is the extent to which employees feel passionate about their jobs, are committed to the organization, and put discretionary effort into their work. Or Employee engagement illustrates the commitment and energy that employees bring to work and is a key indicator of their involvement and dedication to the organization. Management Fundamentals Elements of Employee Engagement Organization Behaviour and Human Capital Management Characteristics of Engaged Workforce Organization Behaviour and Human Capital Management Methods of Employee Engagement 1. Individual well-being is important. This brings enjoyment in the work that they do physical strength and financial knowledge and work life balance is important. 2. Work satisfaction is also important. When the employees have the satisfaction in what they do, they will willingly come to work and give more than 100% to their job. 3. Growth opportunity should be immense and there should not be any bias treatment when it comes to giving promotion. 4. Office culture also affects a lot in employee engagement. The office culture should be friendly, warm, should promote job enrichment and boost promotion. 5. Employee performance should be recognized and rewarded appropriately and in a timely manner. 6. Effective tools should be used to increase employee engagement at work place.  Management Fundamentals Impact of Employee Engagement on productivity Management Fundamentals Factors affecting Employee Engagement Management Fundamentals Management Fundamentals Engaged Employees perform with passion, drive innovation and move their organization forward through their performance. Not Engaged Employees These kind of employees care only about their work not any other things like goals, objectives and development of the organization. They do not have energy and enthusiasm in their work (Reilly, 2014). These categories of employees do not have cooperative relationship with their colleagues as well as the employers also. Their contribution is little in the success and development of the organization.  Management Fundamentals Actively Disengaged Actively disengaged employees do not perform their work in a proper manner and do not complete their work timely. Their contribution is almost negligible in the success and development of the organization. They are unhappy at work and look after the work of the other member of the organization. Such kind of employee carry the organization in the negative direction and organization suffers in achieving its goals and objectives (Vazirani, 2007). Management Fundamentals Advantages of Employee Engagement 1. Motivates the individual 2. Expected output is good 3. Creative work is delivered 4. Sense of superiority 5. Decision making becomes effective  Management Fundamentals Motivation Motivation is a predisposition to behave in a purposive manner to achieve specific, unmet needs. Buford, Bedeian, and Lindner (1995) The psychological process that gives behavior purpose and direction. Kreitner (1995) Motivation refers to the way in which urges, drives, desires, aspirations, and strivings or needs direct, control or explain the behaviour of human beings. Dalton E. McFarland (1974) Management Fundamentals Motivation is the word derived from the word ’motive’ which means needs, desires, wants or drives within the individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context the psychological factors stimulating the people’s behaviour can be -  desire for money  success  recognition  job-satisfaction  team work, etc Management Fundamentals Morale  Morale is a mental condition of groups and individuals which determines their attitude. - Davis  In short, morale is a fusion of employees’ attitudes, behaviours, manifestation of views and opinions - all taken together in their work scenarios, exhibiting the employees’ feelings towards work, working terms and relation with their employers.  Morale includes employees’ attitudes on and specific reaction to their job. Management Fundamentals Difference between Motivation and Morale Management Fundamentals Management Fundamentals Abraham Maslow Need Hierarchy Theory 1943 Management Fundamentals Abraham Maslow Need Hierarchy Theory 1943  Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other words, physiological needs are the needs for basic amenities of life.  Safety needs- Safety needs include physical, environmental and emotional safety and protection. For instance- Job security, financial security, protection from animals, family security, health security, etc.  Social needs- Social needs include the need for love, affection, care, belongingness, and friendship.  Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence, competence, achievement and freedom) and external esteem needs (recognition, power, status, attention and admiration).  Self-actualization need- This include the urge to become what you are capable of becoming / what you have the potential to become. It includes the need for growth and self-contentment. It also includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The self- actualization needs are never fully satiable. As an individual grows psychologically, opportunities keep cropping up to continue growing. Management Fundamentals Higher-order needs and Lower-order needs According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly satisfied, it drives and forces the next need to emerge. Maslow grouped the five needs into two categories - Higher-order needs and Lower-order needs. The physiological and the safety needs constituted the lower- order needs. These lower-order needs are mainly satisfied externally. The social, esteem, and self-actualization needs constituted the higher-order needs. These higher-order needs are generally satisfied internally, i.e., within an individual. Thus, we can conclude that during boom period, the employees lower-order needs are significantly met. Management Fundamentals Implications of Maslow’s Hierarchy of Needs Theory for Managers  As far as the physiological needs are concerned, the managers should give employees appropriate salaries to purchase the basic necessities of life. Breaks and eating opportunities should be given to employees.  As far as the safety needs are concerned, the managers should provide the employees job security, safe and hygienic work environment, and retirement benefits so as to retain them.  As far as social needs are concerned, the management should encourage teamwork and organize social events.  As far as esteem needs are concerned, the managers can appreciate and reward employees on accomplishing and exceeding their targets. The management can give the deserved employee higher job rank / position in the organization.  As far as self-actualization needs are concerned, the managers can give the employees challenging jobs in which the employees’ skills and competencies are fully utilized. Moreover, growth opportunities can be given to them so that they can reach the peak.The managers must identify the Management Fundamentals Limitations of Maslow’s Theory  It is essential to note that not all employees are governed by same set of needs. Different individuals may be driven by different needs at same point of time. It is always the most powerful unsatisfied need that motivates an individual.  The theory is not empirically supported.  The theory is not applicable in case of starving artist as even if the artist’s basic needs are not satisfied, he will still strive for recognition and achievement. Management Fundamentals Management Fundamentals Theory X presents a pessimistic view of employees’ nature and behaviour at work, while Theory Y presents an optimistic view of the employees’ nature and behaviour at work. Theory X – Traditional Approach Theory Y – Modern Approach Management Fundamentals Management Fundamentals Management Fundamentals Implications of Theory X and Theory Y Quite a few organizations use Theory X today. Theory X encourages use of tight control and supervision. It implies that employees are reluctant to organizational changes. Thus, it does not encourage innovation. Many organizations are using Theory Y techniques. Theory Y implies that the managers should create and encourage a work environment which provides opportunities to employees to take initiative and self- direction. Employees should be given opportunities to contribute to organizational well-being. Theory Y encourages decentralization of authority, teamwork and participative decision making in an organization. Theory Y searches and discovers the ways in which an employee can make significant contributions in an organization. It harmonizes and matches employees’ needs and aspirations with organizational needs and aspirations. Management Fundamentals Herzberg's motivation-hygiene theory The two-factor theory (also known as Herzberg's motivation- hygiene theory and dual-factor theory) states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction. It was developed by psychologist Frederick Herzberg, who theorized that job satisfaction and job dissatisfaction act independently of each other  Management Fundamentals Herzberg's motivation-hygiene theory Two-factor theory distinguishes between:  Motivators (e.g. challenging work, recognition for one's achievement, responsibility, opportunity to do something meaningful, involvement in decision making, sense of importance to an organization) that give positive satisfaction, arising from intrinsic conditions of the job itself, such as recognition, achievement, or personal growth, and  Hygiene factors (e.g. status, job security, salary, fringe benefits, work conditions, good pay, paid insurance, vacations) that do not give positive satisfaction or lead to higher motivation, though dissatisfaction results from their absence. The term "hygiene" is used in the sense that these are maintenance factors. These are extrinsic to the work itself, and include aspects such as company policies, supervisory practices, or wages/salary. Management Fundamentals Management Fundamentals Implications of Two-Factor Theory The Two-Factor theory implies that the managers must stress upon guaranteeing the adequacy of the hygiene factors to avoid employee dissatisfaction. Also, the managers must make sure that the work is stimulating and rewarding so that the employees are motivated to work and perform harder and better. This theory emphasize upon job-enrichment so as to motivate the employees. The job must utilize the employee’s skills and competencies to the maximum. Focusing on the motivational factors can improve work-quality.  Management Fundamentals Limitations of Two-Factor Theory  The two factor theory is not free from limitations: The two-factor theory overlooks situational variables.  Herzberg assumed a correlation between satisfaction and productivity. But the research conducted by Herzberg stressed upon satisfaction and ignored productivity.  The theory’s reliability is uncertain. Analysis has to be made by the raters. The raters may spoil the findings by analyzing same response in different manner.  No comprehensive measure of satisfaction was used. An employee may find his job acceptable despite the fact that he may hate/object part of his job.  The two factor theory is not free from bias as it is based on the natural reaction of employees when they are enquired the sources of satisfaction and dissatisfaction at work. They will blame dissatisfaction on the external factors such as salary structure, company policies and peer relationship. Also, the employees will give credit to themselves for the satisfaction factor at work.  The theory ignores blue-collar workers. Despite these limitations, Herzberg’s Two- Factor theory is acceptable broadly. Management Fundamentals Leadership is the quality of behavior of individuals whereby they guide people or their activities in the organization efforts. -Chester Barnard A leader is one who guides and directs others people. A leader gives the efforts of his followers a direction and purpose by influencing their behavior. -L. A. Allen Leadership is the ability of influencing people to strive willingly for mutual objectives. - Terry Management Fundamentals Management Fundamentals  Management Fundamentals Qualities of a Leader 1. Ability to inspire 2. Vision 3. Confidence 4. Positive Attitude 5. Good communication skills 6. Open minded 7. Enthusiastic Qualities of a Manager 8. Discipline 9. Committed to work 10. Confidence 11. Effective Decision-Making 12. Competence 13. Patience 14. Etiquette  Management Fundamentals Leaders Role Leadership is the ability of managers to motivate subordinates to work with confidence. 1. Determination of Objectives: A leader performs the creative function of laying down goals and policies for the subordinates. He act as a guide in interpreting the goals and policies. 2. Achieving coordination: A leader integrates the goals of the individual with organizational goals and creates a community interests. He keeps himself informed about the working of the group. He shares information with the group for the coordination of its efforts. 3. Representation of Workers: A leader is the representative of his group. He takes initiative steps in all matters of interest to group. 4. Providing Guidance: A leader guides the subordinates towards the achievement of organizational goals or objectives. He is available for advice whenever the subordinate faces any problems. 5. Inspiring Employees: A good leader inspires the subordinates for better performance. Motivation is necessary for getting the desired work from the subordinates. The leader motivates the employees by providing them economic and non-economic rewards. Management Fundamentals Basic Leadership Style Autocratic Democratic Free Rein Style Management Fundamentals Autocratic Style: The autocratic leaders assumes full responsibility for deciding on the groups projects by assigning tasks to members and permitting no participation in decision making process. He centralizes the authority and decision making in him and exercises fully fledged control in subordinates. He gives order to subordinates who are expected to obey them. Communication trends to be one way i.e., downwards. Democratic Style: It is widely known as participative or employees oriented leadership style. In this style, the leader consults the subordinates before arriving at decision. Participative leadership styles are taken into consideration and suggestion of the subordinates as well as those of the leader. All members of the groups are seen an important contribute to the final decision. Free Rein Style: It goes steps further of democratic style and turn an entire problems or projects over the subordinates. Subordinates may be asked to set their own goals and to develop plans for achieving them. Thus, in this type of leadership style, a manager avoids power and relinquishes leadership position.  Management by exception (MBE) is a management strategy in which managers will only step in when there are significant deviations from planned outcomes. These can be either operational or financial outcomes.  Manage by exception. Only require reporting when there is a deviation from the plan.Brian Tracy  Management by exception consists of four steps:  Setting the objectives and defining what the norm should be  Assessing performance to see whether performance is on track  Analyzing work or records to determine where performance deviates from objectives  Investigating and solving the exceptions to the norm  Management Fundamentals Controlling Control is the process of taking steps to bring actual results and desired results closer together. Or Control is the process of bringing about conformity of performance with planned action. Nature or Characteristics of Controlling 1. Controlling is fundamental Management function. 2. Controlling is a continuous Activity. 3. Controlling is related to Results 4. Action is the essence of Controlling. 5. Key to controlling lies in delegation 6. Information is the guide to controlling 7. Controlling function has both Emotional and Motivational Implications 8. Controlling is Efficiency Improvement Concept  Management Fundamentals Controlling Process 1. Setting Performance Standards 2. Measurement of actual performance 3. Comparison of actual performance with standards 4. Analyzing deviations 5. Taking corrective actions. Principles or Essentials of Good controlling System 6. Principle of standard 7. Principle of efficiency of control 8. Principle of flexibility 9. Principle of assurance of objectives 10. Principle of reflection of plans. 11. Principle of responsibility of control 12. Principle of future control  Management Fundamentals Limitations or Difficulties of Controlling 1. Difficulty in setting quantitative standards 2. No control over external factors 3. Resistance from employees 4. Costly affairs 5. Human problems 6. Difficulty in fixing individual responsibility 7. Lack of knowledge in controllers  Management Fundamentals Relationship Between Planning and Controlling 1. Inter-dependence between planning and control- a. Planning is meaningless without controlling. B. Controlling is blind without planning. 2. Difference between Planning and Control- a. Planning is looking ahead whereas controlling is looking back b. Planning is the first function and controlling is the last function of managerial process. C. Controlling moves from downward to upward whereas planning moves from upward to downward.  Management Fundamentals Traditional Control Techniques 1. Budgetary Control 2. Break Even Point Analysis 3. Statistical Data 4. Operation Audit. 5. Personal Observation. Modern Control Techniques 6. Zero Based Budgeting 7. Responsibility Accounting 8. Managerial Audit 9. Managerial Information System 10. Program Network Analysis : PERT and CPM  Management Fundamentals Zero Based Budgeting It refers to that control tool which requires managers to justify their entire budget request as fresh rather than simply referring to budget amounts established in previous year. Management Information System It refers to that controlling technique which is used to provide management with needed information on a regular basis. PERT- Program Evaluation and Review Technique It refers to a method of scheduling new large and complex projects. CPM – Critical Path Analysis It refers to a controlling technique which is used to check the costs in works/ projects conducted repeatedly.  Management Fundamentals Difference between PERT and CPM 1. PERT is used in completely new projects like manufacturing a new car, while CPM is used in projects where there is some experience in this field. 2. The chief difference between the two systems is the time estimates. Since PERT is used in the entirely new projects, time in respect of different activities is uncertain. However, CPM is used in respect of activities done repeatedly which makes the time in respect of these activities generally certain. 3. PERT lays more stress on time element, CPM an effort is made to make the optimum use of resources at the minimum costs. 4. PERT lays more stress on events, While the CPM lays more stress on activities.  Management Fundamentals Similarities between PERT and CPM 1. Both the methods are used in planning and controlling large projects. 2. Both the methods give equal importance to critical path. 3. A program network is prepared under both the systems. 4. Events and activities in both the systems are arranged in a definite sequence.