Business Organization and Management (B.Com) PDF

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Department of Distance and Continuing Education University of Delhi nwjLFk ,oa lrr~ f'k{kk foHkkx fnYyh fo'ofo|ky; B.Com. (Programme) Semester-I Course Credit - 4 DSC-1 BUSINESS ORGANIZATION AND MANAGEMENT (Department of Commerce) As per the UGCF 2022 and National Education Policy 2020 Business Organization and Management Editorial Board Dr. Sneh Chawla, Dr. Virender Kaushal, Ms. Ritika Sharma Content Writers Ms. Amanpreet Kaur, Dr. Virender Kaushal Academic Coordinator Deekshant Awasthi © Department of Distance and Continuing Education ISBN : 978-93-95774-44-4 1st edition: 2022 E-mail: [email protected] [email protected] Published by: Department of Distance and Continuing Education under the aegis of Campus of Open Learning/School of Open Learning, University of Delhi, Delhi-110 007 Printed by: School of Open Learning, University of Delhi © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Lesson 1, 9 and 10 are written a fresh rest of the chapters are edited versions of study material prepared for the courses under Annual & CBCS Mode. Corrections/Modifications/Suggestions proposed by Statutory Body, DU/Stakeholder/s in the Self Learning Material (SLM) will be incorporated in the next edition. However, these corrections/modifications/suggestions will be upl oaded on the website https://sol.du.ac.in. Any feedback or suggestions can be sent to the email- [email protected] © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi Business Organization and Management TABLE OF CONTENTS UNIT I : Lesson 1 – Management: An Overview Dr. Virender Kaushal Lesson 2 – Organizations UNIT II : Lesson 3 – Business Environment Lesson 4 – Entrepreneurship UNIT III : Lesson 5 – Planning Lesson 6 – Organizing UNIT IV : Lesson 7 – Motivation Lesson 8 – Leadership, Communication and Control UNIT V : Lesson 9 – Indian Ethos in Management Lesson 10 – Business Organization and Management: Recent Developments Dr. Virender Kaushal Lesson 11 – Business Organization and Dr. Virender Kaushal Management: Emerging Concepts © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management UNIT I LESSON 1 MANAGEMENT: AN OVERVIEW Dr. Virender Kaushal STRUCTURE 1.1 Learning Objectives 1.2 Introduction 1.3 Evolution of Management 1.3.1 Using Theories to Trace Management Evolution 1.3.1.1 Classical Theory of Management 1.3.1.2 Management Theory based on Neoclassicism 1.3.1.3 Management Theory in the Modern Era 1.4 Principles of Management 1.5 Nature of Management 1.6 Characteristics of Management 1.7 Levels of Management 1.8 Purpose of Management 1.9 Significance of Management 1.10 Functions of Management 1.11 Saint Kabir’s Model of Managerial Competencies 1.12 Summary 1.13 Glossary 1.14 Answers to In-Text Questions 1.15 Self-Assessment Questions 1.16 References 1.17 Suggested Readings 1|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 1.1 LEARNING OBJECTIVES After studying this chapter students may able to understand: - The basic concepts of management necessary to run a business organisation. An overview related to management To create the awareness about the principles of management. The significance and functions of management important for the modern day business persons. 1.2 INTRODUCTION Management is a worldwide phenomenon. It is a well-known and widely used phrase. Management is involved in all organisations, whether business, political, cultural, or social, because management aids and directs various efforts toward a common goal. "Management is an art of getting things done through and with people in formally organised groups," writes Harold Koontz. It is the art of creating an environment in which people can perform as individuals and collaborate to achieve group goals." "Management is an art of knowing what to do, when to do it, and seeing that it is done in the best and cheapest way," says F.W. Taylor. Management is a goal-oriented activity. It is something that directs group efforts toward achieving predetermined goals. "Management" is the process of working with and through others to effectively achieve the organization's goals while using limited resources efficiently in a changing world. Of course, these objectives will differ from one business to the next. For example, one enterprise may be launching new products through market research, while another may be profit maximisation through cost reduction. Management entails creating an internal environment because it employs the various production factors. As a result, it is the responsibility of management to create conditions that encourage maximum effort so that people can perform their tasks efficiently and effectively. It is the duty of management to ensure the availability of raw materials, determining wages and salaries, developing rules and regulations, and so on. As a result, we can say that good management entails both effectiveness and efficiency. 2|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management 1.3 EVOLUTION OF MANAGEMENT Teamwork and leadership serve as catalysts for business success in any organisation. The way someone manages their team or entire workforce has a direct impact on the growth and profitability of the organisation. Different management theories emerged at different points in time can be used to study the evolution of management. Different management theories emerged, evolved, and are still used in a variety of business settings today. Understanding the evolution of management thought is critical because it helps you determine which management principles and practices are best for your team and workplace. We need to go back in time to understand this. Industrial Revolution gave birth to management theories and concepts that evolved over time and remain relevant today. Management theorists studied the operations and workforce present on factory floors because factories were the primary source of employment. There were times when demand was high, but workplaces were hampered by a lack of productivity and efficiency. 1.3.1 Using Theories to Trace Management Evolution: In business, management theories are used to examine how a business works or operates by studying the impact of internal and external business environments. Management theories are classified into three types: classical theories, neoclassical theories, and modern management theories. These theories provide a lens to address critical questions about how businesses work or operate. Let's take a closer look at the individual theories:- 1.3.1.1 Classical Theory of Management: The following theories emerged during the classical evolution of management thought: a) Scientific Administration: In business, management theories are used to examine how a business works or operates by studying the impact of internal and external business environments. Management theories are classified into three types: classical, neoclassical theories, and modern management theories. These theories provide a lens to address critical questions about how businesses work or operate. Federick W. Taylor was the first to promote scientific management, commonly known as Taylorism in the management community. According to Taylor's scientific management theory, it is the responsibility of workplace managers to create the ideal production system in order to achieve economic efficiency. Although the words "Taylorism" and "scientific management" are sometimes used interchangeably, it would be more accurate to argue that Taylorism was the first type of scientific management. 3|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) i) Scientific Management Principles The following four scientific management concepts were created by Frederick Taylor, and they are still applicable today: i) Choose techniques based on science rather than "rule of thumb." Instead of giving each employee the option to accomplish a task using their own "rule of thumb" approach, you should apply the scientific method to identify the "one optimal way." ii) Assign jobs to employees depending on their skills. Assess which employees are most qualified for each given job and provide them with the training they need to perform at their best, as opposed to arbitrarily allocating them to available positions. iii) Keep tabs on employee performance. To make sure your employees are producing work, evaluate their efficiency and offer more training as needed. iv) Equitably distribute the task across managers and employees. Workers should put what they have been taught into practise, with managers planning and providing training. ii) Objectives of Scientific Management: The main objective of scientific management is to boost productivity. When Taylor started his scientific management trials, he concentrated on boosting productivity by cutting down on the time needed to complete activities. Although cutting down on work time was a solid start, efficiency improvement involves much more. Since Taylor's time, other creative thinkers have discovered other ways to boost productivity, such using automation tools. Profit maximisation is another goal of scientific management theory. They should be able to generate enormous quantities of high-quality goods if everyone works as effectively as they can. Increased sales and profit margins result from this. iii) Application of Scientific Management Almost any sector may benefit from using scientific management theory. There are some chores that must be completed on a regular basis whether you are developing software or marketing real estate. Finding such duties and making them more effective is a fantastic approach to implement Taylorism at work. Here is one instance. Consider a mailing list for your company's newsletter. A request to be added 4|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management to the mailing list is sent by email each time a new individual wishes to be included. Then, they are manually added to the list by an employee. Adding email subscribers in this way requires many steps and is inefficient. Inputting names into a mailing list is probably not your employee's source of job happiness. Additionally, the time required to manually add names might be used on initiatives that are more urgent. You would advise creating a system that automatically adds individuals to the mailing list as soon as they make a request. The employee now has more time to focus on critical duties while the subscribers have quicker access to the newsletter. iv) Time Studies and Motion Studies Frederick Taylor was employed by the American steel producer Bethlehem Steel when he was motivated to develop his views. He saw in that steel industry that the supervisors had very little knowledge of how particular jobs were actually carried out. He started creating workplace experiments that would shape his well-known management philosophies. In one experiment, the effectiveness of shovelling was increased by creating new shovels that were tailored for various materials. Another well-known instance was devising a more efficient way for employees to load pig iron onto train carriages using a stopwatch and biomechanical study. The employees were able to move nearly three times as much pig iron on the first day they used his new technique. Taylor's theory of management was based on these and other time and motion investigations. Frederick Taylor originally named his approach "shop management," while being recognised as the founder of scientific management. After it was made famous in a court dispute by future Supreme Court judge Louis Brandeis with the aid of mechanical engineer Henry L. Gantt, he ultimately adopted the phrase "scientific management" in 1911. The business efficiency techniques of time studies and motion studies were created in the late nineteenth and early twentieth century to enhance mass manufacturing. While industrial and efficiency specialists Frank and Lillian Gilbreth concentrated on motion research, mechanical engineer Frederick Winslow Taylor spent the majority of his time studying time. The Gilbreths' work improved processes by minimising the number of movements required, whereas Taylor's work primarily focused on lowering process time. Here is a closer examination of each research type: Time Studies: According to Taylor, the main strategy for raising worker productivity is to shorten the time it takes to accomplish a task. He promoted doing time studies, in 5|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) which he would break work into discrete tasks, time each component with a stopwatch, and then rearrange the components in the tasks in order to achieve the best results. Maximizing profit was a focus of Taylor's time studies. Motion Studies: The Gilbreths recommended utilising a 35mm hand-crank camera to film employees rather of just timing them with a timer in order to get a visual representation of how a task was carried out. By doing so, they were able to monitor the amount of time it took to complete the activity and identify areas for improvement. The movies may also be given to employees so they could observe firsthand how their methods could be improved. Compared to Taylor's ideas, the Gilbreth's motion studies gave worker welfare a considerably greater priority. This crucial difference ultimately led to several arguments between the Gilbreths and other Taylorist philosophers after Taylor's passing. b) Administrative Management: Fayolism is a management theory developed by Henry Fayol, a French mining engineer. It outlines five functions and 14 management principles that managers are free to use however they see fit. This paved the way for the administrative management school (AMS) in London. Henri Fayol (1841–1925), via his work and writings, such as Fayol's 14 Principles of Management (1888) and Administration Industrielle et Generale, was the first to extend the Administrative Theory of Management (1916). French mining engineer Fayol documented his business practises. In the end, he developed into a management theorist, maybe having the largest impact of all previous management theorists. Administrative management theory, often known as process theory or structural theory, is credited to Fayol as its originator. In contrast to Taylor, who concentrated on worker efficiency, Fayol's work was distinct since it was a part of the classical theory movement. Fayol put more of an emphasis on the structure and organisation of job duties. He focused on how management and employees are set up within a company to enable job accomplishment. He suggested setting up functional departments and work groups where various tasks are carried out. These actions assist in completing larger tasks that advance business goals. Fayol's strategy for maximising organisational effectiveness was top-down. He thought that the efficiency of management would eventually affect the output of workers at the operational level. The scientific management theory, which proposed that worker efficiency, would increase managerial efficiency, contrasts with administrative management theory. 6|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management i) Important figures in the development of administrative theory of management: Our contemporary view of organisations and management practise still includes a significant amount of the administrative theory of management. Administrative Management Theory has been influenced by a wide range of thinkers. These thinkers created a variety of process-based methodologies that classified management tasks as collections of separate functions. Regardless of the sector or the nature of the manager's responsibilities, these activities occur at all organisational levels. Several notable administrative theories are: Maximilian Weber (1864–1920) Bureaucracy Theory is ascribed to Weber for its creation. This notion predated administrative management theory and was contemporaneous with scientific theory. As a result, we talk about Weber's work as part of management theory. James D. Mooney (1884–1957): Through the publication of his book Onward Industry! (1931), subsequently reissued as The Principles of Organization, Mooney made a significant contribution to the philosophy of administrative administration. He used organisational situations both domestically and abroad to apply administrative management theory to organisations in his work. Luther H. Gulick, a physician, administrator, and health educator, lived from 1892 until 1993. He used the concepts of administrative management theory in both public and commercial institutions. George Terry, who died in 1979, wrote the first book on management, titled Principles of Management. He embraced the structure of Fayol's Functions. He actualized by combining commanding and managing. He described a principle as a fundamental assertion that offers guidance for action that may be implemented using scientific techniques. Harold Koontz, who lived from 1909 to 1984, addressed management theory from the perspective of interpersonal relationships inside the workplace. He promoted using a diplomatic management style while dealing with staff. He and Cyril J. O'Donnell wrote the book Principles of Management together. Cyril O'Donnell (1900–1976): As a thinker, educator, and consultant, he wrote a book with Harold Koontz that defined management as a collection of tasks. The management functions model developed by Fayol was elaborated upon by scholar and consultant Ralph Davis (1894–1960). A rational-planning 7|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) approach was added to the Fayol’s model in a work he released in 1951 titled The Fundamentals of Top Management. So, management strategy was where he made the most of his influence. Henri Mintzberg, a theorist of the contemporary age, has criticised Fayol's theory as being unfinished and unworkable (1939–present). By emphasising the functions that managers do inside the company, he developed the P-O-L-C structure. His work has had a significant influence, and Classical Management Theory contains a section dedicated to discussing it. Robert L. Katz, who lived from 1933 to 2010, added to the definition of a manager's duties by discussing the personal qualities that managers at different organisational levels must have. This study included both scientific and administrative theory, which is covered separately in the classical management theory part. 1.3.1.2 Management Theory based on Neoclassicism: The following theories emerged as a result of the neoclassical evolution of management practices: - a) Management of Human Relations: The Human Relations Theory of Management was developed by Elton Mayo, a psychologist, after a series of experiments known as Hawthorne Studies or Hawthorne Experiments. This theory arose in response to criticism levelled at classical management theories, which failed to recognise the importance of social factors such as human behaviour and attitudes. b) Management of Behaviour: According to the theory, human relations and behaviour are critical in driving team efficiency and successfully managing the workforce. Abraham Maslow, an American psychologist, proposed the hierarchy of needs, which prioritized employee needs and expectations. 1.3.1.3 Management Theory in the Modern Era: The following theories have emerged as a result of the modern evolution of management requirements: - a) Systemic Approach: Organizational Systems Theory has its roots in biology and systems science. This concept moved away from traditional management theory, which saw organisations as machines and toward a more holistic view of organisations as networks of people, procedures, and activities. Understanding the connections between various parts of the organisation and how they interact with one another is made possible by Systems Theory. 8|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management b) Contingency Approach: The emphasis has shifted from structure and authority to the people behind the scenes. Many of these principles are still applicable in modern workplaces, even as society evolves. Putting the principles of various management theories into practise will not only lead to organisational success, but will also improve relationships with the team. 1.4 PRINCIPLES OF MANAGEMENT Henry Fayol is known as the "Father of Modern Management Theory". He developed a theory that can be applied to all levels of management and departments. Managers use the Fayol theory to organise and regulate an organization's internal activities. Henri Fayol's fourteen management principles are described as under: - i. Division of Work: Henri believed that separating work in the workforce among workers would improve product quality. Similarly, he concluded that work division improves worker productivity, efficiency, accuracy, and speed. This principle is applicable to both managerial and technical work levels. Authority and Responsibility: These are the two most important aspects of management. Authority allows management to work more efficiently, while responsibility holds them accountable for the work done under their supervision or leadership. Discipline: Nothing can be accomplished without discipline. It is the foundation of any project or management. Good performance and sensible interdependence make management's job easier and more comprehensive. Employees' good behaviour also aids in the smooth development and advancement of their professional careers. Unity of Command: This means that an employee should have only one boss and obey his orders. When an employee is required to report to more than one boss, a conflict of interest arises, which can lead to confusion. Unity of Direction: Everyone involved in the same activity should have a common goal. This means that everyone in a company should have the same goal and motivation, which will make the work easier and allow them to easily achieve the set goal. Subordination of Individual Interest: This indicates that a company should work together for the benefit of the company rather than for personal gain. Be 9|Page © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) subordinate to an organization's goals. This refers to a company's entire chain of command. Remuneration: This is very important in motivating a company's employees. Payment can be monetary or non-monetary. However, it should be determined by an individual's efforts. Centralization: Any company's management or any authority in charge of decision-making should be objective. This, however, is dependent on the size of the organisation. Henri Fayol emphasised the importance of maintaining a balance between hierarchy and power division. Scalar Chain: On this principle, Fayol emphasises that the hierarchy steps should be from top to bottom. This is necessary so that every employee knows who their immediate supervisor is and can contact them if necessary. Order: To have a positive work culture, a company should maintain a well- defined work order. Positive workplace atmosphere will increase positive productivity. Equity: All employees should be treated fairly and with respect. A manager is responsible for ensuring that no employees face discrimination. Stability: Employees perform best when they are confident in their position. It is the responsibility of management to provide job security to their employees. Initiative: In an organisation, management should support and encourage employees to take initiative. It will assist them in increasing their interest and increasing their worth. Esprit de-Corps: It is the responsibility of management to motivate and support their employees on a regular basis. Building trust and mutual understanding will result in a successful outcome and work environment. These management principles have been used to manage an organisation and are useful for prediction, planning, decision-making, organisational and process management, control, and coordination. 10 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi Business Organization and Management ACTIVITY Organise a class seminar on the topic, “Need of Studying and Analysing the Evolution of Management and Management Theories to understand the present day competitive scenario.” During the seminar discuss and note down the contribution of different management thinkers and prepare an assignment on the same and submit it with the class teacher. IN-TEXT QUESTIONS 1. Which of the following statements about management principles is correct? a) Management principles are in a constant state of evolution. b) Management principles have evolved. c) Management principles have not evolved. d) None of the preceding 2. The Principles of Management are useful in understanding the relationship between human and material resources in achieving organisational goals. Which of the following Management Principles is described in the statement? a) Relationships between causes and effects b) Behavioural c) Administration and resource utilisation d) All of the Above 3. The Management Principles emphasise logical decision making and the avoidance of bias or prejudice at all costs. The preceding statement indicates that knowledge of these principles aids in____________. 11 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 4. Which Scientific Management Principle states that employees should be rewarded when they make suggestions that result in cost savings for the company? a) Collaboration rather than individualism b) Not discord, but harmony c) Science, not a generalisation d) None of the Above 5. ‘The Practices of Management’ book was written by. a) Peter F. Drucker. b) Terry. c) Allan, Louis d) Fayol, Henry 6. Who said that, “a manager's job is to manage?” a) Drucker, Peter F. c) Terry b) Louis Allan d) All of the Above 7. The definition, “Management is the art of getting things done through and with an informally organised” is given by___________. 8. Management functions have been classified as __________ by Luther Gullik. a) POSDCORB. b) POSTCARD. c) POSDCORB. d) POSDORBC. 9. Human Relations pioneer is ______ a) Parkett, Mary b) Gilbert, Lillian c) Fayol, Henry d) Mayo, Elton 10. Henry Fayol established_______________. a) 12 guiding principles b) 13 guiding principles c) 15 guiding principles d) 14 guiding principles 12 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management 1.5 NATURE OF MANAGEMENT The nature of management is described as under: - a) Management as a Process: It is the process by which creates, operates, and directs a specific organisation using systematic, coordinated, and collaborative human efforts. Management is a distinct process consisting of planning, organising, actuating, and controlling. It determines and accomplishes stated objectives by the use of human beings and other resources. Management as a process has three components:- Social Process: Because the human factor is the most important among the other factors, management is concerned with developing interpersonal relationships. It is the responsibility of management to make human interaction productive and useful for achieving organisational goals. Integrating Process: Management is responsible for bringing together human, physical, and financial resources in order to achieve the organisational goal. As a result, is an important function for bringing various factors into harmony? Never-Ending Process: It is a never-ending process of continuous improvement. It is concerned with identifying problems and resolving them by taking appropriate steps. It is a continuous process. b) Management as an Activity: Management, like many other human activities such as writing, playing, eating, and cooking, is an activity because a manager is someone who achieves goals by directing the efforts of others. "Management is what a manager does," says Koontz. Management as an activity entails the following: - Informational: In order for a business to function, the manager must constantly receive and give information, either orally or in writing. A communication link must be maintained with both subordinates and superiors for an enterprise to function properly. Decisional: Managers are constantly involved in various types of decisions because the decision made by one manager becomes the basis for action to be taken by other managers. For example, the Sales Manager decides on the medium and content of advertising or the size and scope of a marketing campaign. 13 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) Interpersonal: It entails achieving goals through the use of people. As a result, managers must interact with both superiors and subordinates. They must maintain positive relationships with them. Interpersonal activities include interacting with subordinates and dealing with problems. For example, bonuses given for subordinates. c) Management as Discipline: As a discipline it refers to the body of knowledge associated with the study of basic administration principles and practices. It specifies a code of conduct for managers and suggests various methods of managing a business. A person can obtain employment as a manager after completing a prescribed course or by obtaining a degree or diploma in management. Discipline is defined as any branch of knowledge that meets the following two criteria: - Scholars and thinkers must communicate relevant knowledge through research and publications. Education and training programmes should formally impart knowledge. Management qualifies as a discipline because it solves both of these problems. Though it is a relatively new discipline, it is expanding at a rapid pace. d) Management As a Group: Management as a group refers to all of the people who are in charge of running a business. When we say that YASHASAVI & Co.'s management is good, we are referring to a group of people who manage. Technically, management will include all managers, from the chief executive to the front-line managers. However, in most cases, management only refers to top management, such as the Chief Executive. Management as a group can be approached in two ways:- All managers are grouped together. Only the highest levels of management The meaning of these terms is determined by the context in which they are used. In general, there are three types of managers: - Patrimonial/Family: Those who have become managers because they are owners or relatives of the company's owners. Professional: Those appointed due to their specialised knowledge and degree. Political/Civil Servants: Those in charge of public-sector projects. Managers have joined the elite group of society because they enjoy a higher standard of living. 14 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management e) Management as a Science: A scientific body of knowledge is a systematic body of information that contains general facts that explain a phenomenon. It establishes a cause-and-effect relationship between two or more variables and emphasises the principles that govern their interaction. These principles are created through scientific observation and verification through testing. The following characteristics define science: - Universally Applicable Principles: A scientific body of knowledge is a systematic body of information that contains general facts that explain a phenomenon. It establishes a cause-and-effect relationship between two or more variables and emphasises the principles that govern their interaction. These principles are created through scientific observation and verification through testing. Experimentation and Observation: Scientific principles are derived from scientific investigation and research, i.e. they are logical. For example, the principle that the earth revolves around the sun has been scientifically proven. Management principles are founded on scientific inquiry and observation, not just Henry Fayol's opinion. Cause and Effect Relationship: A lack of parity (balance) between authority and responsibility will result in ineffectiveness. If employees are given bonuses and fair wages, they will work hard; but if they are not treated fairly and justly, their productivity suffers. The same is true for management as it is for other human activities. Validity and Predictability Tests: Using scientific principles, future events can be predicted with reasonable accuracy. For example, performance is determined by one's abilities, opportunities, and motivations. The absence of any one factor has a direct impact on an individual's performance. Management principles can also be tested for validity. Management has a systematic body of knowledge, but it is not as precise as that of other physical sciences such as biology or physics. The main reason for management sciences imprecision is that it deals with humans and it is extremely difficult to accurately predict their behaviour. Because it is a social process, it belongs to the social sciences. f) Management as an Art: Art entails applying knowledge and skill to achieve desired results. An art can be defined as the personalised application of general theoretical 15 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) principles to achieve the best results possible. Art is made up of the following characters:- Knowledge: To become a good painter, for example, a person must understand not only different colours and brushes, but also different designs, dimensions, situations, and so on. A manager cannot be successful simply by obtaining a degree or diploma in management; he must also understand how to apply various principles in real-world situations. Skill: Every manager has his or her own style and approach to management. For example, there are several world renowned painters, but M.F. Hussain is known for his unique style of painting. Some managers are known as good managers as no one is as good as them. Innovation and Creativity: Every artist has a creative element in their work. That is why he aspires to create something that has never existed before. Management, like any other art form, is creative in nature. It effectively combines human and non-human resources to achieve the desired results. Practice: Practice makes a man perfect. Through consistent practise, every artist improves their skills. Similarly, managers learn through trial and error at first, but applying management principles over time makes them perfect at their job. Goal-Oriented: Every art is goal-oriented because it seeks to achieve concrete results. Managers promote an organization's growth by utilising various resources such as men, money, materials, machinery, and methods. Management is an art of the highest order because it deals with shaping the attitude and behaviour of people at work toward desired goals. g) Management Both as an Art or Science: Managing is an art as well as a science because managing requires certain skills that managers must have. Science provides knowledge, whereas art is concerned with the application of knowledge and skills. Management is thus a wise blend of science and art because it proves the principles and manner in which these principles are applied is a matter of art. Science teaches 'knowing,' while art teaches 'doing'. Managers are aptly described as the oldest of arts and the youngest of sciences. To summaries, science is the root, while art is the fruit. Science and art are not mutually exclusive, but rather complementary to one another. h) Management as Profession: Over the last few decades, factors such as increasing business unit size, separation of ownership from management, increased competition, and others have resulted in an increased demand for professionally qualified 16 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi Business Organization and Management managers. As a result of these developments, management has arrived at a point where everything must be handled professionally. The following are the essentials of a profession: - Specialized Knowledge: A profession requires a systematic body of knowledge that can be used for professional development. A manager must be dedicated and involved in order to gain expertise in the science of management. Factors such as increasing business unit size, separation of ownership from management, increased competition, and have resulted in an increased demand for professionally qualified managers. Education and Training: A profession requires a systematic body of knowledge that can be used for professional development. A manager must be dedicated and involved in order to gain expertise in the science of management. Factors such as increasing business unit size, separation of ownership from management, increased competition, and have resulted in an increased demand for managers. Social Responsibility: Although profession is a source of income, professionals are primarily motivated by a desire to serve society. Social norms and values influence their actions. Similarly, a manager is accountable not only to his or her owners, but also to society, and as such; he is expected to provide quality goods at reasonable prices to society. Rules and Regulations: A representative association enforces a code of conduct to ensure self-discipline among its members. Any member who violates the code may be punished and his membership may be revoked. The AIMA has established a code for managers, but it has no legal authority to prosecute any manager who violates it. Representative Association: The existence of a representative body is required for the regulation of professions. For example, the Institute of Chartered Accountants of India (AIMA) establishes and administers standards of competence for auditors, but the AIMA lacks legislative authority to regulate the activities of managers. Managers are accountable to a variety of stakeholders, including shareholders, employees, and society. They are judged on their performance rather than their degrees. As a result, Haymes is correct when he says, "The slogan for management is becoming - 'He who serves best, also profits most". 17 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 1.6 CHARACTERISTICS OF MANAGEEMNT Management is the activity of directing human and physical resources in order to achieve organisational goals. The following characteristics of management can be highlighted: - Goal-Oriented: An enterprise's goal may be to maximise consumer satisfaction by producing high-quality goods at reasonable prices. This can be achieved by hiring efficient workers and making better use of limited resources. Management is a deliberate activity that aids in the use of human and physical resources to achieve predetermined goals. Integration of 5 M’s: The Men, Money, Machine, Materials and Minute are an organisation's concept of working with non-human resources such as machines to achieve the objectives by management. It promotes balance among human, physical, and financial resources for the smooth functioning of an organisation. The men, money, machine, materials and minute are integrated so that they can reach their full potential. Ongoing Process: Management is concerned with identifying problems and taking the necessary steps to resolve them. For example, a company's goal is to maximise production, but this is not the end of the process. Marketing and advertising will also be carried out, and policies must be rewritten to reflect this. Pervasive Function: When more than one person is working toward a common goal, management is required. It is required everywhere, regardless of size or type of activity, whether it is a small business firm such confectionary shop engaged in trading or a large firm such as Tata Group. Team Work/Group Effort: Management is far less concerned with the efforts of individuals. It is more focused on groups. It entails the use of group effort to achieve a predetermined goal of management of Yashasavi & Co. is good refers to a group of people in charge of the business. 1.7 LEVELS OF MANAGEMENT The number of management levels in a company grows as the size of the business and workforce increases. Management levels can be divided into three categories:- 18 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Executive Coaching, Change Management, Top Level Leadership, Delegation and Empowerment and others Middle Level Problem Solving, Team Building, Talent and Performance Management and Others Lower Level Emotional Intelligence, Training, Mentoring etc. Fig 1.1: Levels of Management a) Highest Level/Top Level Management The board of directors is the ultimate source of authority for an enterprise. It devotes more time to function planning and coordination us managerial positions in a company. The chain of command, the amount of authority, and any managerial position are all determined by the level of management. Role: The top management's role can be as follows: Top management establishes the enterprise's goals and broad policies. It issues the necessary instructions for the preparation of department budgets, procedures, and schedules, among other things. It creates strategic plans and policies for the company. It appoints the executive for middle-level positions, such as departmental managers. It supervises and coordinates the activities of all departments. It is also in charge of keeping in touch with the outside world. It provides direction and guidance. The top management is also accountable to the shareholders for the enterprise's performance. b) Middle Level: There is only one layer of middle management in small organisations, but there may be two or more in large firms. Role: The role of middle level is as under: - They carry out the organization's plans in accordance with top management's policies and directives. 19 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) They make plans for the organization's sub-units. They are involved in the hiring and training of lower-level management. They interpret and explain policies from top management to lower level management. They are in charge of coordinating the activities of the division or department. It also sends important reports and data to top-level management. They assess junior managers' performance. They are also in charge of motivating lower-level managers to perform better. c) Ground/Bottom/Floor/Lower Level: Lower management is also known as supervisory / operational management. It is made up of supervisors, foremen, section officers, a superintendent, and so on. Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees. Activities: Assigning jobs and tasks to different workers. They direct and instruct employees in their daily activities. They are in charge of both the quantity and the quality of production. They are also tasked with maintaining positive relationships within the organisation. They communicate worker problems, suggestions, and recommendatory appeals, among other things, to higher level goals and objectives. They aid in the resolution of worker grievances. They supervise and direct their subordinates. They are in charge of providing workers with training. They organise the necessary materials, machines, and tools to complete the tasks. They prepare periodic reports on the workers' performance. They maintain enterprise discipline. They inspire employees. They are the enterprise's image builders because they have direct contact with the workers. 20 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management 1.8 PURPOSE OF MANAGEMENT The purposes of management are as under: - Cost Saving: A management is concerned with thinking about and utilising human, material, and financial resources in order to achieve the best possible combination. The primary goal of management is to obtain maximum outputs with minimal effort and resources. This combination results in cost savings across the board. Optimum Utilization of Resources: This reduces spoilage, wastage, and breakage of all kinds, which in turn leads to time, effort, and money savings. Long Term Survival: Management ensures that the enterprise runs smoothly and efficiently. This, in turn, contributes to providing maximum benefits to employees in the form of good working conditions, a suitable wage system, and incentive plans on the one hand, and higher profits to the employer on the other. Growth and Social Justice: Management is a tool for the upliftment and improvement of society. Management ensures a higher standard of living for society by increasing productivity and employment. It ensures justice through its consistent policies. 1.9 SIGNIFICANCE OF MANAGEMENT Managers organise dis-organised resources such as men, machines, and money into productive enterprise. These resources are coordinated, directed, and controlled in such a way that the enterprise works toward achieving its objectives. There would be no waste of time, money, or effort if the organization's objectives were clearly defined. The management is essential because of the following facts: - Optimal Resource Utilization: Management maximises the utilisation of scarce resources by selecting the best possible alternate use in industry. When employees and machines are working to their full potential, there is no underutilization of resources. It employs experts and professionals, and these services result in the use of their skills, knowledge, and proper utilisation. Cost Reduction: It achieves maximum results with minimal input by properly planning and using minimal input to achieve maximum output. Management allocates physical, human, and financial resources in the most efficient way possible. This contributes to cost savings. Sound Organisation Structure: There should be no overlapping efforts, smooth and coordinated functions, and effective authority and responsibility relationships. There 21 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) should be a sound organisational structure, i.e. who is accountable to whom, who can give instructions to whom and who are superiors and subordinates. Every job should be made available to everyone. Adaptability to Changes: The organisation is in charge of the organization's growth and survival. The initial coordination of the organisation must be changed as the external environment changes. As a result, it adapts the organisation to changing market demand/changing societal needs. Equilibrium is the state of mind that maintains contact with the changing environment. Societal Well-Being: A good manager makes a difficult task easier by preventing the waste of scarce resources. Efficient management leads to better economic production, which helps to increase people's well-being. Society will obtain maximum output at the lowest possible cost by creating employment opportunities that generate income in the hands. 1.10 FUNCTIONS OF MANAGEMENT Management has been defined as a social process involving responsibility for the economical and effective planning and regulation of an enterprise's operation. These activities are distinct from operational functions such as marketing, finance, and purchasing. Rather, these activities are shared by all managers, regardless of their level or status. The management functions described by KOONTZ and O'DONNEL are the most widely accepted, namely planning, organising, staffing, directing, and controlling. Luther Gulick has assigned the keyword 'POSDCORB,' where P stands for Planning, O stands for Organizing, S stands for Staffing, D stands for Directing, Co stands for Co-ordination, R stands for Reporting, and B stands for Budgeting. Fig. 1.2: Functions of Management Source: Aswathappa, K. & Reddy, G. S. (2012). Management and Organisational Behaviour. Himalaya Publishing House. 22 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management a) Planning: It is the fundamental function of management. It is concerned with planning a future course of action and determining the most appropriate course of action for achieving pre-determined goals. "Planning is deciding ahead of time what to do, when to do it, and how to do it," says KOONTZ. It bridges the gap between where we are and where we want to go." A plan is a set of actions for the future. It is a problem-solving and decision-making exercise. The determination of courses of action to achieve desired goals is known as planning. Thus, planning is the systematic consideration of methods and means for achieving pre-determined goals. Planning is required to ensure that human and non-human resources are used effectively. It is all- encompassing, it is an intellectual activity, and it also aids in the avoidance of confusion, uncertainties, risks, and waste, among other things. b) Staffing: It is the function of staffing and maintaining the organisational structure. Staffing has become more important in recent years as technology has advanced, business sizes have grown, and human behaviour has become more complex, and so on. The primary goal of staffing is to place the right person in the right job, i.e. square pegs in square holes and round pegs in round holes. "The managerial function of staffing involves manning the organisation structure through proper and effective selection, appraisal, and development of personnel to fill the roles designed in the structure," write Koontz and O’Donnell. Staffing entails:- Planning for Human Resources (estimating man power in terms of searching, choose the person and giving the right place). Selection, recruitment, and placement Development and training. Remuneration. Performance Evaluation. Transfers and promotions c) Organising: It is the process of gathering physical, financial, and human resources and fostering productive relationships among them in order to achieve organisational goals. According to Henry Fayol, "organising a business means providing it with everything necessary for its operation, such as raw materials, tools, capital, and personnel." Organizing a business entails identifying and allocating human and non- human resources to the organisational structure. Organizing as a process entails the following steps: - Activities must be identified. 23 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) Activity grouping classification. Duties are assigned. Delegation of authority and establishment of accountability Relationships of authority and responsibility must be coordinated. d) Directing: It is the part of the managerial function that causes organisational methods to work efficiently in order to achieve organisational goals. It is regarded as the enterprise's life-spark, causing people to act, because planning, organising, and staffing are merely preparations for doing the work. The inert-personnel aspect of management that deals directly with influencing, guiding, supervising, and motivating subordinates to achieve organisational goals is known as direction. The following elements comprise direction:- Supervision entails superiors overseeing the work of subordinates. It is the act of observing and directing work and workers. Motivation is defined as inspiring, stimulating, or encouraging subordinates to work hard. For this purpose, positive, negative, monetary, and non-monetary incentives may be used. Leadership is a process by which a manager guides and influences the work of subordinates in the desired direction. The process of passing information, experience, opinions, and so on from one person to another is known as communication. It is a bridge of comprehension. e) Controlling: It entails measuring accomplishments against standards and correcting deviations, if any, to ensure that organisational goals are met. The goal of controlling is to ensure that everything happens in accordance with the standards. An effective control system aids in the prediction of deviations before they occur. According to Theo Haimann, "controlling is the process of determining whether or not proper progress toward objectives and goals is being made and, if necessary, acting to correct any deviation." According to Koontz and O’Donnell, "controlling is the measurement and correction of subordinates' performance activities in order to ensure that the enterprise objectives and plans desired to achieve them are being accomplished." As a result, controlling consists of the following steps:- Standardization of performance. Actual performance evaluation. Actual performance is compared to standards, and any deviations are identified. Corrective action is required. 24 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management 1.11 SAINT KABIR’S MODEL OF MANAGEMENT COMPETENCIES According to Saint Kabir's Model developed by Dr. Virender Kaushal, Dr. Balbir Singh, Dr. Kuldeep Attri and Sunita Devi, the following competencies must be possessed by a manger to achieve the objectives of the organisation: - Action Oriented: “Kaal Kare so aaj kar, Aaj kare so ab, Pal mein parlay hoyegi, Bahuri karega kab,” says the narrator. I.e. it is critical to complete one's task rather than postponing it indefinitely. What if the world were to end tomorrow? Be prepared, and act now. Faith and Patience: “Dukh mein sumiran sab kare, sukh mein kare na koye, Jo sukh main sumiran kare, toh dukh kahe ko hoye,” says the poet. That is, if one maintains faith during times of peace, nothing bad will ever happen. Have faith that the manager will achieve the objectives. Communication: “Aisee vani boliye, Mann ka aapa khoye, Apna tan sheetal kare, Auran ko sukh hoye,” says the speaker. In other words, instead of being arrogant, be humble and courteous to others. What matters most is spreading joy through words. Will-Power: “Chinta aisee dakini, Kaat kaleja khaye, Vaid bichara kya kare, Kahan tak dawa lagaye,” says the poet. Worry, for example, is a disease that no doctor can cure with his medicines. After all, it is ultimately heartbreaking. Self-Analysis: “Bura jo dekhan main chala, buran aa milya koye, mann khoja aapna, toh mujhse buran aa koye, mann khoja aapna, toh mujhse buran aa koye, mann khoja aapna,” In other words, I couldn't find any flaws in others. But when I looked within, I couldn't find anyone who was as flawed as I was. Thus, before passing judgement on anyone, one must first examine oneself. Well-Wisher: “Kabira khara bazaar mein, Mange sabki khair, Na kahu se dosti, Na kahu se bair,” i.e. instead of seeking friends and enemies, Kabira seeks wisdom and well wishes while blessing others. Make yourself a well-wisher. Positive Attitude: “Jab tu aaya jagat mein, Log hanse tu roye, Aisi karni Na kari, Pache hanse sab koye,” i.e. Live your life so well that when you die, others will miss you. Selflessness: “Chaah miti, chinta miti, Manwa beparwah,' says the Buddha. Who Shahenshah, i.e. He who desires nothing, is the true king. There will be no room for worries when there are no desires. 25 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) Time Management: “Raat gawai soyeke, Diwas gawaya khaay,' says the timekeeper. Kodi badle jaye', Hira janam anmol tha.” That is, you were born to shine like a diamond. However, if the nights are spent sleeping and the days are spent eating, it will lead to worthlessness. Humbleness: “Uncha dekh aavas, Kabira garv na keejiye. Uper jamsi ghaas', Kaal pairon punyah letna.” i.e Never be proud of your wealth, because in the end, you will be buried beneath the earth, and all that will remain is the growing grass above you. Be modest and humble to all. ACTIVITY Discuss in the class that, “Whether Management is a Science or an Art or a Profession.” Also ask your subject teacher about the need, importance, features of management and discuss the competencies needed to be a good manager. IN-TEXT QUESTIONS 11. Management does not imply: - a) A scientific discipline b) A work of art. c) Both art and science. d) A practical science. 12. Management is a ___ directed process that aims to achieve specific objectives. a) In the future b) Goal c) On purpose d) Constantly 13. In a large corporation, the position of Managing Director is at the ____ level of management. a) Management at the middle level. b) Management at a lower level. c) Management at the middle and lower levels. d) Senior or Top management. 26 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi Business Organization and Management 14. Which of the following is not essential to management? a) Growing society. b) Disciplining Employees. c) Fostering creativity. d) Bringing together various interest groups. 15. Which of the following statements is false? a) Management is an ongoing process. b) Management is an ever-changing process. c) Management is a strict procedure. d) Management is a process that is goal-oriented. e) 16. Which category does management belong to? a) A semi-professional occupation. b) A new profession. c) A marginal occupation. d) A well-known profession. f) 17. The formulation of _____ is a priority for top management. a) Short-term objectives. b) Long-term objectives. c) Supervisory guidelines. d) Only finance related policies 18. Management's personal goal is to meet the social and financial needs of____________. 19. "They report to top management and are superior to first-line managers." The statement emphasises the ____________level of management. 20. Supervisors and foremen are included in the ___________level of management. 27 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 1.12 SUMMARY COMPETENCIES Management is the art of getting things done through and with people in formally organised groups. Management is involved in all organisations, whether business, political, cultural, or social, because it aids and directs efforts toward a common goal. It is an art of knowing what to do, when to do it, and seeing that it is done in the best and cheapest way. Management is the art of getting things done through and with people in formally organised groups. It is something that directs group efforts toward achieving predetermined goals. For example, one enterprise may be launching new products through market research, while another may be profit maximization through cost reduction. It is the responsibility of management to create conditions that encourage maximum effort so that people can perform their tasks efficiently and effectively. Art is a wise blend of science and art - it proves the principles and manner in which these principles are applied is a matter of art. The way someone manages their team or entire workforce has a direct impact on the growth and profitability of the organisation. Understanding the evolution of management can help you determine which management practices are best for your team and organisation. 1.13 GLOSSARY COMPETENCIES Controlling: It is the process of comparing actual performance to the standards established by the company to ensure that all activities are carried out as planned, and if any deviations are discovered, corrective action must be taken. The social and informal sources of influence that you use to motivate others to take action Managers who are effective leaders will inspire their subordinates to work hard to achieve organisational goals. Directing: A method or technique of instructing, guiding, inspiring, counselling, supervising, and leading people to achieve organisational goals. It is a continuous managerial process that occurs throughout the organization's lifespan. Management: It is the act of accomplishing things through others and having them do so willingly. Manager: A manager is someone who is in charge of supervising and motivating employees as well as directing an organization's progress. A manager is someone who is in charge of customer service, handles customer complaints, and oversees and supervises customer service representatives. 28 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Leading: Leading entails using social and informal sources of influence to motivate others to take action. Managers who are effective leaders will inspire their subordinates to work hard to achieve organisational goals. Organisation: It is a person, company, institution, or association that consists of one or more people and serves a specific purpose. Organising: Organizing is the process of dividing work into sections and departments, or the establishment of effective authority relationships among selected works, people, and work places in order for the group to work together efficiently. Planning: What steps you need to take to achieve the goal, what changes and obstacles to expect, and how to use human resources and opportunities to achieve the desired outcome. Staffing: The ongoing process of locating, selecting, evaluating, and developing working relationships with current or prospective employees 1.14 ANSWER TO IN-TEXT QUESTIONS 1. (a), Management principles are in a 11. (a), A Scientific Discipline constant state of evolution. 12. (b), Goal 2. (b), Behavioural 13. (d), Senior or Top Management 3. Marketing Scientific Decisions 14. (b), Disciplining Employees 4. (a), Collaboration rather than 15. (c), Management is a Strict Procedure individualism 16. (b), A New Profession 5. (a), Peter, F. Drucker 17. (b), Long-Term Objectives 6. (c), Louis Allan 18. Employees 7. Harold Koontz 19. Middle Level Management 8. (c), POSDCORB 20. Bottom Level Management 9. (d), Mayo, Elton 10. (d), 14 Guiding Principles 29 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 1.15 SELF-ASSESSMENT QUESTIONS 1. What do you understand by management? Discuss the evolution process of management theories. 2. How classical approach of management is different from neo-classical approach? Elaborate. 3. Henry Fayol is known as the father of management. Enumerate the principles of management given by him. State the benefit of these principles for the modern day organisations. 4. Define the term, ‘Management’. Discuss its characteristics, needs and role. 5. “In the absence of manager, it is not possible to manage the organisation.’ Is it true? Discuss. 6. Explain the meaning of following statement with the help of suitable example, “Can You Man a Man?” 7. What competencies should be possessed by a manager? Discuss 8. What are the managerial functions needed to run an organisation? Elaborate each one with the help of suitable examples. 1.16 REFERENCES Aswathappa, K. (2014). Organisational Behaviour. Himalaya Publishing House. Pp. 29-55 Aswathappa, K. & Reddy, G. S. (2012). Management and Organisational Behaviour. Himalaya Publishing House. Pp. 3-21. Ghuman, K. & Aswathappa, K. (2010). Management. Tata McGraw Hill, Pp. 103- 162. Gupta, C. B. Business Organisation and Management. Sultan Chand & Sons. 1-38 Griffin, R. W. (2009). Management. Cengage Learning. Pp. 1-12, 17-38. Kaushal, V., Attri, K.K., Singh, B, & Devi, S. (2022). Saint Kabir’s Amritwani for Folk Artist. Hill Quest: A National Journal. 8 (2): 1-12. 30 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Prasad, L. M. (2008). Principles and Practices of Management. Sultan Chand & Sons. Pp. 3-30. Prasad, L. M. (2008). Principles and Practices of Management. Sultan Chand & Sons. Pp. 43-72. Raju, R. S. & Parthasarathy, A. (2009). Management. Prentice Hall of India. Pp. 1-38. Robbins, Judge & Vohra (2013). Organisational Behavior. Pearson Education. Pp. 103-162 Singh, R. N. (2002). Management Thought and Thinkers. Sultan Chand & Sons. Pp. 1-25, 145-208. 1.17 SUGGESTED READINGS Aswathappa, K. & Reddy, G. S. (2012). Management and Organisational Behaviour. Himalaya Publishing House. Basu, C. (2017). Business Organisation and Management. McGraw Hill Education. Chhabra, T. N. (2021). Business Organisation and Management. Sun India Publications, New Delhi. Drucker, P. F. (1954). The Practice of Management. Newyork: Harper & Row. Ghuman, K. & Aswathappa, K. (2010). Management. Tata McGraw Hill. Griffin, R. W. (2009). Management. Cengage Learning. Kalra, S. & Singhal, N. (2020). Business Organisation and Management. Scholar Tech Press, Delhi. Kaul, V. K. (2012). Business Organisation and Management. Pearson Education. Kaushal, V., Attri, K.K., Singh, B, & Devi, S. (2022). Saint Kabir’s Amritwani for Folk Artist. Hill Quest: A National Journal. 8 (2): 1-12. Koontz, H. & Weihrich, H. (2012). Essentials of Management: An International and Leadership Perspective. McGraw Hill Education. Laasch, O. (2022). Principles of Management. Sage Publications. Prasad, L. M. (1998). Principles and Practices of Management. Sultan Chand & Sons. Raju, R. S. & Parthasarathy, A. (2009). Management. Prentice Hall of India. 31 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) Sherlekar, S. A. (2016). Modern Business Organisation and Management. Himalaya Publishing House. Singh, B. P. & Singh, A.K. (2002). Essentials of Management. Excel Books, New Delhi. Vasishth, N. & Rajput, N. (2013). Business Organisation & Management. Kitab Mahal, Delhi. 32 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management LESSON 2 ORGANISATIONS Written by: Ms. Amanpreet Kaur Revised by: Dr. Virender Kaushal STRUCTURE 2.1 Learning Objectives 2.2 Introduction: Organisation 2.3 Stakeholder’s Outlook about Organisation 2.3.1 Outlook of Entrepreneur about Organisation 2.3.2 Outlook of Employees about Organisation 2.3.3 Outlook of Community about Organisation 2.3.4 Outlook of Consumers about Organisation 2.4 Scope of Organisation 2.5 Forms of Organisation 2.6 Business Formats 2.6.1 Brick and Mortar Organisation 2.6.2 Brick and Click Organisation 2.6.3 Click Organisation 2.7 Difference between Brick & Mortar, Brick & Click and Click Organisation 2.8 E-Commerce 2.8.1 Types of E-Commerce 2.8.2 Benefits of E-Commerce 2.8.3 Drawbacks of E-Commerce 2.9 Franchising 2.9.1 Channels of Franchising 2.9.2 Levels of Franchising 2.9.3 Location of Franchising 2.9.4 Benefits of Franchising 33 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) 2.9.5 Drawbacks of Franchising 2.10 Outsourcing 2.10.1 Classification of Outsourcing 2.10.2 Benefits of Outsourcing 2.10.3 Disadvantages of Outsourcing 2.11 Difference between Organisation and Management 2.12 Summary 2.13 Glossary 2.14 Answers to In-Text Questions 2.15 Self-Assessment Questions 2.16 References 2.17 Suggested Readings 2.1 LEARNING OBJECTIVES After studying this lesson, the students able to understand the:- The concept, meaning and significance of organisations. The concept, meaning and significance of brick and mortar organisation, brick and click organization, click organisation. The concept, meaning and importance of e-commerce, franchising and outsourcing respectively. This chapter helps in easily identifying the benefits and drawbacks of such type of business formats and their contribution in the growth and development of economy. 2.2 INTRODUCTION: ORGANISATION Management can be defined as the executive process of getting things done in order to achieve a company's goals and objectives. It is the sum of all administrative, executive, and other smaller functions to achieve the desired result for the predetermined target for desired results. One of the main functions of management, in addition to planning, staffing, directing, and controlling, is organisation, which literally means organising the various tasks, responsibilities, duties, and authorities in a business to create a proper line of functions. This line of functions creates a functional structure, also known as organisation that governs how 34 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management various elements of an organisation interact. This organisational structure is critical for business productivity and success. As a result, organisation is only one component of a larger picture known as management. 2.3 STAKEHOLDERS’ OUTLOOK ABOUT ORGANISATION There are different perspectives on an organisation. Because an organisation is a model with a large number of constituents, multiple points of view are bound to emerge. An organisation is the sum of its constituents, which include entrepreneurs, customers, employees, and the community. These components offer a variety of perspectives on the existence and operation of organisations in their surroundings. The following are both positive and negative views on the organisation. 2.3.1 Outlook of Entrepreneur about Organisation: Entrepreneur's point of view see organisation as a tool for carrying out their innovative ideas and plans. Organizational structures assist them in securing resources and transforming them into entrepreneurial ideas. Thus, entrepreneurial laboratories exist. a) Positive Outlook of Entrepreneur: The following is a positive business outlook: Stability and Accountability: An organisational structure ensures enterprise stability without becoming rigid. The organisational structure dictates responsibility and accountability. As a result, organisation is extremely important in the eyes of an entrepreneur. Group Functioning: Entrepreneurship necessitates collaboration among members in order to reap the three benefits of additive efforts. The organisation provides the necessary mechanism and control to carry out teamwork. Skill Integration: the organisation provided a structure for placing people in positions of authority and their subordinates. A chain of command provides stability from experienced workers and working talent from newcomers, both of which are important for a business. Credibility: An organisational structure lends credibility to a business venture. When there are organised functioning, investors, stakeholders, and members of society gain confidence in entrepreneurial performance. Specialization: Organization, if not rigid, provides the necessary operational stability, which leads to specialised functioning. Entrepreneurs recognise the 35 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) value of specialisation in increasing operational scales, which increases efficiency and lowers costs. b) Negative Outlook of Entrepreneur: The entrepreneurs' negative perspective on organisation is as follows: Rigidity: Entrepreneurs see traditional organisations as rigid structures that limit talent to lines of authority. Talents, in their opinion, should be channelled in unrestricted directions free of organisational constraints. Repetitive: Entrepreneurs look forward to breaking through ideas in order to put their innovative thinking into action. This requires a courageous and empowered workforce that is not constrained by their job title or status. As a result, entrepreneurs perceive traditional organisations to be monotonous. Delayed Output- Organizations are hubs for the existence of red tape. Some characteristics of a typical organisation include defined rules and procedures, set lines of communication and authority, and unnecessary paperwork. An entrepreneur desires freedom of thought and quick decision making, both of which are restricted in an organisation. 2.3.2 Outlook of Employees about Organisation: Employees are an integral part of the organisation that allows it to function; an organisation without employees is a tree without roots. a) Positive Outlook of Employees: The following is a positive viewpoint: Socialization: Organizations are important places of socialization because they meet the social and esteem needs of a person's personal development and growth. As a result, organisations play an essential role in an employee's psychological needs. Utilization of Human Resources: The use of human resources and human talent in an organisational setting to develop leadership skills, mental abilities, and interpersonal relationships. Through delegation, an organisational structure instils responsibility and accountability. It promotes teamwork by allowing for group decision making. Employment Opportunities: Companies and organisations are job creators in society, employing educated, skilled, and semi-skilled workers. Workforce employment reduces an economy's liability and promotes economic development. 36 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Skill Development: Organizations assist in the development of leadership qualities in their workforce at all levels of management, thereby laying the groundwork for a strong political leadership of a society and a country. A model political arena that can provide political exposure is an organisation. b) Negative Outlook of Employees: The following is a negative viewpoint: - Worker Exploitation: Organizations are notorious for exploiting their workers by overburdening and pressuring them with exaggerated targets. This trend is having a negative impact on employees' personal lives and health. The restrictions on labour unions exacerbate the situation. Monotony and Lack of Innovation: repetitive tasks create specialisation but also limit an employee's skill and mental development. Employee talent deteriorates as a result. Unethical Behaviour: Organizations serve as breeding grounds for malpractices related to workplace politics and the presence of opportunists. Frustrated Employees: Obsolete or traditional organisational structures result in employee overburdening and frustration. 2.3.3 Outlook of Community about Organisation: Community is the environment in which an organisation functions, draws its supplies from, and provides its terminal products to, is an essential part of the overall picture. a) Positive Outlook of Community: The following are the benefits: - Economic advancement: Communities perceive organisations as job creators who engage people and resources in the best way possible, resulting in an income boost that leads to economic development. Resource utilization: Without organisations, the resources in our society and world remain idle and abundant. For the best value, these resources must be corrected in the right direction. Human skill development: For a community to function properly, courageous, initiators, and enlightened individuals are required. b) Negative Outlook of Community: The negative viewpoints are as under: - 37 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  B.Com. (Programme) Unethical Business: Organizations may become self-serving hubs. This quandary may be caused by a conflict of interest between the organisation and societal needs. Unethical Conduct: Organizations may become harmful and hurtful to society if their functions do not conform to societal cultures and ideas. 2.3.4 Outlook of Consumers about Organisation: Consumers are the final users of a company's offerings. a) Positive Perspectives of Consumers: The following are their positive perspectives on the organization's existence, as enumerated below: Resource Management: Consumers see organisations as a transformation mechanism for underutilized resources, reducing waste of valuable resources through resource management. Initiators: Organizations are viewed as risk takers who initiate the transformation process while also supervising, managing, and financing it. Satisfaction of Needs: Organizations meet the needs of customers by researching their wants and preferences. Organizations are essential for converting unused resources into products that meet the needs of consumers. Feedback: Consumer feedback is used to achieve competitiveness. Consumers provide valuable feedback to organisations, which leads to innovation. Economic Loss: Customers contribute to the reduction of deadweight loss by paying a premium for their needs. This, in turn, lowers economic costs and aids development. The deadweight loss is an economic and consumer loss that does not benefit consumers. b) Negative Perspective of Customers’: Customers' negative perspectives are listed below: Consumerism: With ever-changing trends offered by organisations, unconscious commerce and consumerism are becoming more prevalent by the day, resulting in the waste of scarce resources and an increased carbon footprint. 38 | P a g e © Department of Distance & Continuing Education, Campus of Open Learning, School of Open Learning, University of Delhi  Business Organization and Management Unethical Practices Followed by Corporate: Businesses may offer goods and services that do not meet societal preferences and needs. This could result in the waste of valuable and scarce resources. 2.4 SCOPE OF ORGANIZATION Several aspects of organisation and organisational behaviour emerge when studied from the perspective of a student or researcher. This persuades a researcher to investigate an organisation as a whole and perceive it in relation to its constituents. An organisational analysis reveals underlying subjects of study that are prevalent in all organisational functions. Organization is an interdisciplinary concept that exists alongside various fields of study. Organization takes inspiration from all of these fields and borrows concepts, theories, models, and practices from both physical and social sciences. This is due to the fact that an organisation is a complex body in which various elements of society mix. Psychology, sociology, political science, anthropology, economics, science, technology, and environmental sciences can all be studied in relation to the organisation. Finance: Finance and organisation go hand in hand, and each is inextricably linked. Finances cannot be studied without the presence of organisations, and the structure of business organisations derives finances from the economy in which they operate. The output in the form of finance is reinvested back into society for its development. Psychology: Because organisations are made up of people from all walks of life, the psychology of the people is a major concern. Psychology aids in the study of human behaviour in organisational settings in order to maximise resource utilisation. Psychology assesses, explains, and recommends appropriate human behaviour in organisations, which is influenced by perception, learning, and personality. It assesses people's job satisfaction, particularly under different working conditions, stress, conflicts, and other employee-related behaviour. Sociology: Organizations are social structures. Sociology is a major underlying subject in organisational studies. Sociology employs scientific methods to gain knowledge about group social behaviour, how groups are formed and how members move within such organisational groups, and group dyna