Principles of Management PDF

Principles of Management Professor: Vaishali Gupta BY Department of Commerce, St. Aloysius College Jabalpur Vaishali Gupta Dept of Commerce  Syllabus of Principles of Man...

Principles of Management Professor: Vaishali Gupta BY Department of Commerce, St. Aloysius College Jabalpur Vaishali Gupta Dept of Commerce  Syllabus of Principles of Management Units Topics Unit 1 Management: Concept/meaning -Definition, Nature Functions, Process, Scope, and Importance of Management. Role of Vedic Values and Ethics in Management, Difference between Management and Administration, Importance of Values and Ethics in Management Unit 2 Evolution of Management Thought Early contributions: Taylor and Scientific Management, Fayol's Administrative Management, Bureaucracy, Human Relations, and Modern Approach, Managerial Ethics, Qualities and Characteristics of Managers. Planning - Meaning, Nature, Scope, Objective, Functions, and Significance of Planning, Elements, and Steps of Planning, Strategies, and Policies. Unit 3 Organization - Meaning, Definition, Types, Scope, Principles, Line and Staff Relationship, Authority, Delegation, and Decentralization. Effective Organizing, Organizational Structures, and Staffing. Decision- Meaning, Definition, Types, Scope, Principles, decision making. Unit 4 Direction- Meaning and definition of direction, importance, and principles of direction, techniques of direction, meaning of supervision  UNIT 1 Management: Concept/meaning –Definition Nature of Management Functions of Management Process of Management Scope of Management Importance of Management Role of Vedic Values and Ethics in Management Difference between Management and Administration Importance of Values and Ethics in Management  Characteristics of Management 1. Management is Multidimensional Management of Work Management of People Management of Operations 2. Continuous Process 3. Dynamic Function 4. Goal –Oriented 5. Pervasive 6. Management is a System 7. Management is a factor of Production 8. Management is a Profession  Scope of Management Production Marketing Financial Personnel Office Management Management Management Management Management  Nature of Management Management is Management is Management is a Management is a Art Science Profession Universal Process Social Management is an Management is a Management is a Responsibility of inborn quality system process Management Management and Management is a Management is Management is ownership is group activity needed at all level invisible Force generally different Management as Art and Science Management as Management as a Art a Science Based on universal and Personal Skill generally accepted Principle Practical Knowledge Study cause and effect Result oriented Developed through scientific Approach enquiry and experiment Possibility of further Constructive skill research and development Planning Leading/Directing MANAGERIAL FUNCTIONS Organising Controlling  Planning Planning is an important managerial function that involves setting a goal and developing a Meaning strategy to achieve it. It is a process of deciding in advance what needs to be done and how it will be done. For example, when a manager sets a goal and develops a plan to achieve it, employees are motivated to put forth greater effort to accomplish the goal. The plan also provides direction and Examples encourages employees to focus their efforts on activities that help achieve the goal and avoid activities that don’t. There are several benefits of planning, including increased effort, persistence, direction, and the Importance development of task strategies It can sometimes impede change and slow needed adaptation. Companies may become too focused on following the goals and strategies outlined in their plans, without considering that their plans Drawback may not be working or that their goals may need to change. Planning can also create a false sense of certainty, as all plans are based on assumptions about the future.  Organising Organising can be defined as a process that initiates implementation of plans by clarifying jobs and working relationships Meaning and effectively deploying resources for attainment of identified and desired results (goals). Staffing is ‘putting people to jobs’. It begins with workforce planning and includes different other function like recruitment, Examples selection, training, development, promotion, compensation and performance appraisal of work force. The organising function leads to the creation of an organisational structure which includes the designing of roles to be filled by suitably skilled people and defining the inter relationship between these roles so that ambiguity in performance of duties Importance can be eliminated. Not only is this important for productive cooperation between the personnel but also for clarification of extent of authority, as well as responsibility for results and logical grouping of activities. designing organizations managing teams Concepts staffing and managing human resources managing individuals and a diverse work force  It is a process of Process of overseeing influencing people the work and toward group guiding the objectives employee to meet the target Transmitting Stimulating people information from to act toward achieving desired one person or place goal to another  Controlling Control is a regulatory process of establishing standards to achieve organizational goals, comparing actual performance against the standards, and taking corrective action when necessary to restore performance to those standards. Control is achieved when behavior and work procedures conform to standards and company goals are accomplished. Control is not just an after-the-fact process, however. Preventive measures are also a form of control. Importance of Management Accomplishment of Group Goal Optimum Utilisation of group Goals Optimum utilisation of resources Generation of Employment Opportunities Sound Organisation Structure Maximum Production at a minimum Cost Management help in increasing Competition Development of the nation Efficient Running of Business Beneficial to both business as well as society Management is required for economic Planning Importance of Value and ethic in Management  CASE STUDY ‘Terror at the Taj Bombay: Customer-Centric Leadership’ The study mainly focuses on "why did the Taj employees stay at their posts (during the attacks), jeopardising their safety in order to save hotel guests" and how can that level of loyalty and dedication be replicated elsewhere. A dozen Taj employees died trying to save the lives of the hotel guests during the attacks. "Not even the senior managers could explain the behavior of these employees," Deshpande is quoted as saying in HBS Working Knowledge, a forum on the faculty’s research and ideas. Deshpande said even though the employees "knew all the back exits" in the hotel and could have easily fled the building, some stayed back to help the guests. "The natural human instinct would be to flee. These are people who instinctively did the right thing. And in the process, some of them, unfortunately, gave their lives to save guests." A documentary-style account of events, the case includes video interviews with hotel staff and footage of the attack. It shows how leadership displayed by people in the bottom rank to the top levels in the organizational hierarchy helped in saving lives. Indian Ethics: A few case studies / 7 It also focuses on the hotel’s history, its approach to recruiting and training employees, the Indian culture’s "guest is God" philosophy and how the hotel would recover after the attacks. Another key concept of the study is that in India and the developing world, "there is a much more paternalistic equation between employer and employee that creates a kinship." Terming it as one of the "hardest cases" he has worked on, Mumbai-native Deshpande said it was hard to see people confront their trauma again. "We objectify it, keep emotion at a distance, but after 15 minutes of questions with a video camera in a darkened room, there are deeper, more personal reflections of what happened," he says in the HBS Working Knowledge. Deshpande said Taj employees felt a sense of loyalty to the hotel as well as a sense of responsibility to the guests. He cites the example of a general manager who insisted on staying put and help direct a response to the attack even after learning that his wife and sons had died in a fire on the hotel’s top floor. "Nothing in the employees' training could have prepared them for such an unprecedented situation," Deshpande said. Deshpande has taught the case in the School’s Owner/President Management Executive Education programme. It can also be taught as an example of managing the post-crisis recovery of a flagship corporate brand, he added. https://youtu.be/vQGz1YRqBPw https://www.youtube.com/watch?v=vQGz1YRqBPw&pp=ygU6UmVzcG9uc2UgYnkgVGFqIGVtcGxveWVlcyB 0byAyNi8xMSBhIGNhc2Ugc3R1ZHkgYXQgSGFydmFyZA%3D%3D  Role Vedic Values and Management The Hindu Vedas are a collection of sacred texts that date back over 5,000 years. They contain a wealth of wisdom and knowledge on various subjects, including management. Types of Veda Rigveda Atharvaveda Samaveda Yajurveda  The Rigveda is the oldest and most important of the four Vedas. It contains hymns and prayers Rigveda dedicated to various deities. One of the key lessons from the Rigveda for managers is the importance of leadership. In the Rigveda, leaders are referred to as "Rajans," which means "king" or "ruler." The Rajan was responsible for leading his people and ensuring their well-being The Yajurveda is the second of the four Vedas. It contains hymns and mantras used in Vedic rituals. One Yajurveda of the key lessons from the Yajurveda for managers is the importance of communication. In the Yajurveda, communication is considered essential for successful relationships and teamwork. The Samaveda is the third of the four Vedas. It contains hymns and melodies used in Vedic rituals. Samaveda One of the key lessons from the Samaveda for managers is the importance of teamwork. In the Samaveda, teamwork is considered essential for achieving goals and success. The Atharvaveda is the fourth of the four Vedas. It contains hymns and spells used for a variety of Atharvaveda purposes, including healing and protection. One of the key lessons from the Atharvaveda for managers is the importance of innovation. In the Atharvaveda, innovation is considered essential for solving problems and adapting to changing circumstances.  Examples An example of this lesson can be seen in the story of King Janaka, who was known for his wise leadership. Janaka was the ruler of Mithila, a prosperous kingdom in ancient India. He was respected by his people for his fairness and wisdom. Janaka Rigveda believed in leading by example and worked hard to ensure the prosperity of his kingdom. He was also known for his generosity and compassion towards his subjects. An example of this lesson can be seen in the story of Rama and Hanuman. Rama was the hero of the Hindu epic Ramayana, and Hanuman was his loyal servant. Hanuman was known for his ability to communicate effectively and played a crucial role in Yajurveda helping Rama rescue his wife Sita from the demon king Ravana. Hanuman's communication skills helped him build relationships with other characters in the story, such as the monkey army that helped Rama in his quest An example of this lesson can be seen in the story of the Pandavas, who were the heroes of the Hindu epic Mahabharata. The Pandavas were a group of five brothers who worked together to defeat their enemies and reclaim Samaveda their kingdom. Each brother had their strengths and weaknesses, but together they were a formidable team. They were able to achieve their goals because they worked together and supported each other. An example of this lesson can be seen in the story of Vishwamitra, who was a powerful sage in ancient India. Atharvaveda Vishwamitra was known for his ability to innovate and find solutions to difficult problems. In one story, he was challenged by a rival sage to create a new constellation in the sky. Vishwamitra rose to the challenge and used his knowledge and creativity to create a new constellation that impressed everyone.  Administration VS Management Aspect Administration Management Definition Involve decision making, goal Setting, and Focus on implementation the policies and decision made coordinating resource to achieve specific by management to ensure smooth day to day operation objective within an organisation Nature Future oriented , Strategic and concerned Present oriented, tactical and concerned with Maintaining with the long term vision and growth of the order and routine operations organisation Function Planning, Organising, Leading, and Implementing Policies, Procedure, and system to maintain controlling, Achieve goal and maximize the establishment order and execute the decision made by efficiency management Scope Broader in scope, encompassing all level of More specific in scope , primarily focusing on lower level the organisation from top level executive to operation and day to day tasks lower level supervisor Decision Involve making Strategic and high level Concerned with implementation the decision madeby Making decision that scape the organisation future management often involving routine or operational choices Quiz Based on Competitive Exam  UNIT 2 Evolution of Management thought early contribution Taylor and scientific management, Fayol Administration Management , Bureaucracy , Human Relation and Modern approach , Managerial ethic Qualities and characteristic of managers. Planning – Meaning, Nature, scope , Objective, Function and significance of planning, elements and Step of planning , strategies and policies. The main concern for classical management theorists was finding the best possible way for workers to perform and manage their tasks. Salient points of the Bureaucratic model are as under Weber in his model of bureaucracy stated that there are 3 types of authority in any organization 1.Rational-Legal authority indicating that a person holds authority based on legal position or a rank within the hierarchy. For example, a production manager in the industry or a battalion commander in the military organization. 2.Traditional authority, employees obey a person because he comes from a traditionally recognized power holding family or a person belonging to a royal family. 3.Charismatic authority, which indicates special power or an appeal that a leader possesses.  CASE STUDY Walmart is an American company, which has been a leading retailer in the United States and other parts of the world. The organization was founded by Sam Walton in 1962, who formed the basis of bureaucracy. In the beginning, Sam decided to sell products at a low price, hence minimizing the profit margin, nevertheless, he depended on a high volume of sales to gain profits (Ulrich and Lawler 2013). Since then, Walmart has developed to be a global retailer, currently owning more than 5,000 stores worldwide, with over 3,000 stores in the United States (Walmart 2018). The organization's objective is to save people money in order to improve their lives. This goal reflects the principles and approaches of the company's founder, Sam Walton. The bureaucratic approach enables the organization to control its production and gives the manager the power to delegate as well as establish administrative principles (Reich and Bearman 2018 p32). Besides, innovation has played a significant role as far as the success of Walmart is concerned. Walmart has been using busting bureaucratic approach to change the way of thinking for their top management. The approach is implemented by providing employees with more freedom to make decisions and enabling them to focus on the company's goals (Sobratee and Bodhanya 2018 p58). The point is to enhance employee satisfaction and development as well as customer satisfaction. While the regulations and rules are made by the top management, the decisions have to be made through all management levels in the organization. The leaders in this company are in a position to make tough decisions, although guided by the efforts of the respective workforce. This empowers employees to make decisions, without fear of the consequences, as the decision they make corresponds to what the leaders want (Jones et al. 2016 p96). As such, the lines of communication are open, giving the organization an opportunity to develop, and involving all the employees in the decision making process. The company comprises many workers who are responsible for diverse tasks. While one employee is guiding customers on how they can purchase some products, the other is working as a cashier. The idea of job specialization brings some benefits to the organization as it generates efficient, repetitive workflow (Jones et al. 2016 p105). Each department has particular powers, enabling the managers to monitor their employees more easily and ensuring that they stick to their tasks. In fact, the employees are well conversant of what is expected of them and what their powers are within the organization. Hierarchical authority is one of the key characteristics of bureaucracy as emphasized by Johnston (2015). In bureaucratic organizations, the managers are organized into hierarchical levels, where each level of management is in charge of its employees and overall performance. Nahavandi (2014 p59) points out that an employment to an office and the management of the various levels in the organization are based exclusively on the grounds of technical proficiency. Labolo (2013 p91) maintains the viewpoint that the positive effect of the hierarchy of authority is that the commands are classified. McDonald's was one of the first, if not the first, companies to recognize that work specialization was the best way to make and sell their food in the quickest way possible. They achieved this division of labor by having employees work on particular tasks. For example, instead of having every employee take a customer's order and collect their money, cook and put together their burger, cook and put their french fries in containers, and fill their drinks, they had different employees do each task. For example, they would have one person focus on taking an order, another person only makes the burgers, another person only cook the fries, and the fourth person only fills the drinks. In doing so, McDonald's was able to improve their efficiency and make each meal faster and, therefore, cheaper. Keeping this concept in mind, think of another business that uses division of labor as a way to operate more efficiently. Once you think of a company, answer the following questions: 1.What is the name of the company, and what is their product? 2.How does the company achieve a division of labor? Be specific about what tasks different employees do and don't do. 3.Why does the company do this division labor? If profits are the main motivation, be clear about how they can increase their profits by having employees specialize in certain tasks. The Scientific Management School, stimulated by F.W. Taylor and carried on by others through the years, suggested a totally revolutionary way of thinking about the problems of work and organizations. Taylor has defined the basic problem of managing as the art of “knowing exactly what you want men to do and then see in that they do it in the best and cheapest way”. He is generally accepted as the “Father of Scientific Management”. Taylor a practicing manager, engineer, consultant, and written researcher was the most influential management pioneer. Taylor conducted various experiments at workplaces to find out how human beings could be made more efficient by standardizing the work and finding better method of doing the work. The Scientific Management is also called Taylorism. Key concepts associated with the Scientific Management are: 1.One best way to do work: This concept is a key principle of scientific management and refers to the idea that there is a most efficient way to perform any task, and that this method should be determined and standardized through systematic study and analysis. 2. Soldiering: This term refers to the practice of working at a slow or inefficient pace, often in an attempt to conserve energy or avoid extra work. In the context of scientific management, soldiering was seen as a major obstacle to productivity and efficiency, and efforts were made to eliminate it through better training, incentives, and supervision. 3. Rate buster: A rate buster is a worker who consistently performs a task at a higher rate of speed or efficiency than what is considered normal. The concept of rate busters was used by Taylor and others to demonstrate the potential for increased productivity through scientific management methods. 4. Fair day's work: This concept refers to the idea that a worker should be paid a fair wage for a day's work, based on the amount and quality of work performed. Scientific management advocates believed that the establishment of fair day's work standards would encourage workers to improve their efficiency and productivity, as they would be rewarded for doing so. 5. Schmidt - high-priced man: This term was used by Taylor to refer to highly skilled workers who were capable of performing complex tasks at a faster pace and higher quality than the average worker. Taylor believed that by identifying and developing these high-priced workers, productivity and efficiency could be increased throughout an organization. Frank Bunker Gilbreth is known as the disciple of Taylor who concentrated his efforts on Motion Study and Fatigue Study which is an extension of scientific management as propounded by F. W. Taylor. His in depth analysis for the best method resulted in Therblig's which identified 17 basic elements in completion of a task. Gilbreth's published work included Motion Study (1911), Primer of Scientific Management (1912) and Fatigue Study (1916). Lillian Gilbreth assisted her husband, Frank Bunker Gilbreth in publishing his works. As a psychologist, she added psychological implications of management. Her works include The Psychology of Management (1914), The quest of the one best way (1918) and The Foreman and Manpower Management (1922). She is referred as First Lady of Management Henry Fayol is considered as the Father of Modern Management. His contribution is generally termed as process management and administrative management. Fayol looked at the problems from the top management point of view. He has used the term ‘administration’ instead of management, emphasizing that there is unity of science of administration. This administrative science can be applied equally well to public and private affairs. Therefore, management is a universal phenomenon.  Managerial qualities and training Administrative General principles of Theory management Elements of management  health, vigour and ability to effectively address the people understand and learn, judgment, mental vigour and adaptability energy, firmness, initiative, loyalty, tact and dignity General acquaintance with matter Particular to function being performed Arising out of work  Question 1: Rajeev is a middle lever manager. He keeps all his subordinates under a lot of discipline. His employees however complain of wastage of time and efforts as they feel that nothing is being assigned in a proper way and a proper place, also no proper schedule is made for working. Which principle of management is violated here? Question 2: Pakka employment is a company which takes care of the fact that the confidence of the employees should always be at its peak. For this reason they give surety to their employees for employment for a minimum fixed tenure of time. Which principle of management is followed here? Question 3 :A floor manager of a Mall is very capable as he utilises all the functions of management. He lays stress on developing mutual trust and spirit of cooperation amongst the employees. Under his guidance the employees admit that they learn a lot and are able to meet their targets. This has led to increase in their salaries. Identify the principle of Fayol followed by the floor manager in the above case. Question 4: The plant superintendent of a company is very sad. When he was on leave he was expecting his subordinates to take the remaining work to the finish. However he finds a new way of dealing with this problem. He develops a system of suggestion building from the side of workers. For this a suggestion/complain box is to be kept where the workers can drop their advice and hence take steps from their side. Which principle of management has been implemented here off late by the plant superintendent? 1)Order The principle is concerned with arrangement of things and placement of people. Arrangement of things— material order and arrangement of people—social order. The people should be assigned specific places of work and that they should be available there and things should be kept at allotted places. 2)Stability of tenure of personnel Employees should not be moved from their positions frequently. Period of service in a position should be fixed. The individual should not be transferred often as it takes time to settle down in the new appointment. It does not mean that when an employee is due for promotion and a vacancy exists at a new place, should not be transferred. Individual interests must have priority over the other aspects of the organization. 3)Esprit de corps It refers to team-spirit that is harmony in work group and mutual understanding among workers. Managers must take steps to develop a sense of belonging among the members of the work group. If there is team-spirit then everyone comes forward to help each other. It must be remembered that ‘union is strength’. Written explanation from erring member complicates matter and all issues should be resolved verbally. 4)Initiative Employees at all levels should be allowed to take initiative in work related matters. Initiative means eagerness to initiate action without being asked to do so. However it does not imply freedom to whatever people like to do. Initiative increases zeal and energy. In 1927, a research team from the Harvard Business School (led by Elton Mayo and F. J. Roethlisberger) was invited to join the studies after the illumination tests drew unanticipated results. Two additional series of tests, the relay-assembly tests and the bank-wiring tests, followed the illumination tests. The studies assumed the label Hawthorne experiments or studies from the location of the Western Electric plant. Concluded by 1932, the Hawthorne studies, with emphasis on a new interpretation of group behavior, were the basis for the “School of Human Relations”. Mayo's Major Works are: The Human Problems of an Industrial Civilization (1933) The Social Problems of an Industrial Civilization (1945) The Political Problem of Industrial Civilization (1947) (Incomplete at the time of his retirement). Roethlisberger's Major Works are: Management and the Worker (1939), written in collaboration with William J. Dickson Management and Morale (1941) Training for Human Relations (1954)  Illumination Studies (1924- Relay Assembly Test Room Plant-wide Interview 5. Bank Wiring Observation 1927) Experiments (1927-1929) Program (1928-1931) Group (1931-1932) The first phase of the An experimental group was From 1928 to 1931, more than The foreman of the bank-wiring established of five young 21,000 individuals were department resisted the intrusion of Hawthorne experiments observers into his work space and a was focused on studying women from the Relay interviewed to survey worker bank-wiring test room was set up. Assembly room of the plant. morale. The objective was to The test room housed nine wirers, the relationship between Hawthorne engineers led by identify areas where three solderers, and two inspectors. light intensity and worker George Pennock were the improvements might lead to All were male between the ages of 20 efficiency. The initial primary researchers for the greater job satisfaction and and 25. Their job was to wire findings showed that relay-assembly tests. The efficiency. The findings showed conductor banks, a repetitive and monotonous task. The purpose of the worker behavior was not experiments involved the that a complex battery of bank-wiring tests was to observe and only physiological but also manipulation of a number of attitudes influenced worker study social relationships and social psychological and there factors, to include pay attitudes and outside factors structures within a group, issues incentives, length of workday such as conditions at home or raised by two other significant was no consistent and workweek, and use of rest within the community and members of the research team, W. correlation between periods, to measure impact on one's social situation at work Lloyd Warner and William J. Dickson. lighting levels and Warner was on Mayo's Harvard team, productivity and fatigue. Again, played a role. The one trained as an anthropologist and productivity. This was a the relationship between pay, consistent conclusion was that primarily interested in Hawthorne break from the Scientific incentives, rest, and working employees felt more positive from an entirely different Management School that hours seemed to have little about the work environment perspective, that of an observer of effect on productivity, even when an interviewer showed the social behavior of a group. saw work productivity as Dickson was a Hawthorne employee. when the original, more interest. “mechanical”, and led to demanding conditions were re- The study findings confirmed the the decision to learn more complexity of group relations and implemented. They concluded stressed the expectations of the about worker behavior. factors such as lighting, hours of group over an individual's preference. work, rest periods, bonus The conclusion was to tie the incentives, and supervision importance of what workers felt affected workers, but the about one another to worker motivation. attitudes of the employees experiencing the factors were of greater significance. Behaviour Science Movement Modern Theories Modern theories tend to be based on the concept that the organization is a system which has to adapt to changes in its environment. In modern theory, an organization is defined as a designed and structured process in which individuals interact for objectives. Let us discuss important modern theories. Different approaches of modern management are 1.Systems Approach 2.Quantitative Approach 3.Contingency Approach 4.Socio-Technical Approach 5.Learning organization Key aspects of this approach included: 1.Employee motivation to enhance productivity. 2.The organization as a social system. 3.Leadership-studying managerial behavior. 4.Improved communication within the organization. 5.Employee development-enhancing employee and managerial skills Management by Objectives (MBO) is a management theory developed by Peter Drucker in the 1950s. It is a performance-oriented approach to management that involves setting specific, measurable, and attainable goals for individuals and organizations. The core principle of MBO is that individuals and organizations can be motivated to achieve their goals through a process of participation, mutual agreement, and continuous feedback. The MBO process starts with the identification of organizational goals, which are then broken down into specific, measurable, and attainable goals for each individual or department. These goals are then used to set performance standards, establish objectives, and evaluate performance. The process involves regular meetings between the manager and employee to review progress and make necessary adjustments.  Planning Planning is an important managerial function that involves setting a goal and developing a strategy to achieve it. It is a process of deciding in advance what needs to be done and how it will be done. There are several benefits of planning, including increased effort, persistence, direction, and the development of task strategies. For example, when a manager sets a goal and develops a plan to achieve it, employees are motivated to put forth greater effort to accomplish the goal. The plan also provides direction and encourages employees to focus their efforts on activities that help achieve the goal and avoid activities that don’t. However, planning is not without its drawbacks. It can sometimes impede change and slow needed adaptation. Companies may become too focused on following the goals and strategies outlined in their plans, without considering that their plans may not be working or that their goals may need to change. Planning can also create a false sense of certainty, as all plans are based on assumptions about the future.  Planning Hierarchy Planning works best when the goals and action plans at the bottom and middle of the organization support the goals and action plans at the top of the organization. In other words, planning works best when everybody pulls in the same direction. The Figure illustrates this planning continuity, beginning at the top with a clear definition of the company vision and ending at the bottom with the execution of operational plans. As, we can see top managers create the organizational vision and mission, middle managers develop tactical plans and use management by objectives to motivate employee efforts toward the overall vision and mission, and first-level managers use operational, single-use, and standing plans to implement the tactical plans Top Manager Middle Managers The Top managers have following responsibilities: The Middle Managers have following responsibilities: Responsible for overall direction of the organization. Responsible for setting objectives and implementing subunit Have to create a context for change. strategies. Must develop employees’ commitment to and ownership of the Have to plan and allocate resources. company’s performance. Have to coordinate and link different groups, departments, and Have to create a positive organizational culture through language divisions within a company. and action. Have to monitor and manage the performance of subunits and Must monitor their business environment, including customer individual managers who report to them. needs, competitors’ moves, and long-term business, economic, Have to implement changes generated by top managers. and social trends. Example: CEO, COO, Example: Plant manager, regional manager, divisional manager CFO, and CIO First-line Managers The First Line Managers have following responsibilities: Responsible for managing the performance of entry-level Team Leaders employees. Encourage, monitor, and reward employee performance. The Team Leaders have following responsibilities: Make schedules and operating plans based on intermediate plans Facilitate team performance. of middle management. Manage external relationships between teams, departments, and Example: Office manager, shift supervisor, department manager divisions. Manage internal team relationships. Example: New management job in self-managing teams structures. Strategy is simple  How to formulate Effective Strategy ? Create a visual business Model on how your business work Visualized your customer Customers relationship Key activities Key partners Key resources Cost structure Revenue structure Value Proposition Channel Identify Business Capabilities NARMADA JACKSON Customer satisfaction  Identify Goals Formulations of Goals Choosing best options Unit 3 Organization - Meaning, Definition, Types, Scope, Principles, Line and Staff Relationship, Authority, Delegation, and Decentralization. Effective Organizing, Organizational Structures, and Staffing. Decision- Meaning, Definition, Types, Scope, Principles, decision making. 1. Introduction 2. Process of Organizing 3. Principles of Organizing 4. Authority, Responsibility, Accountability and Delegation 5. Line, Staff and Functional Relationships 6. Organizational Structure 7. Structure and Strategy 8. Types of Organizational Structure Organization design and structure are fundamental pillars within an organization. They encompass how tasks are divided, resources are allocated, and information flows across different levels of management. Imagine an organization as a living entity, with each aspect carefully organized to ensure it operates cohesively and efficiently.For instance, think of a large technology company. To function seamlessly, it organizes its workforce into specialized departments—like engineering, marketing, and finance. Each department has its own responsibilities and authority structures. This allows engineers to focus on product development, marketers to strategize promotion, and finance teams to manage resources effectively. Moreover, the organization establishes clear reporting lines and communication channels. This clarity ensures that information travels swiftly between different levels of management. Just like a well-built network of roads facilitates smooth traffic flow, an organization's structure enables the seamless flow of information and resources to achieve its goals. The design and structure of an organization play a crucial role in its success. When carefully crafted, they foster an environment where employees can perform optimally, collaborate effectively, and make informed decisions, ultimately steering the organization toward achieving its objectives.  To what degree are To what degree are To whom do individuals Work specialization activities sub-divided activities sub-divided and groups report into separate jobs? into separate jobs? To what degree will there be rules and On what basis will jobs regulations to direct Span of control: be grouped together? Departmentalization: employees and managers? How many individuals can a manager Centralization and Where does decision efficiently and decentralization: making authority lie? Chain of command: effectively direct? Formalization:  To what degree are On what basis will jobs Work specialization activities sub-divided Departmentalization: be grouped together? into separate jobs? How many individuals To whom do individuals can a manager Chain of command: Span of control: and groups report efficiently and effectively direct? To what degree will there be rules and Centralization and Where does decision Formalization: regulations to direct decentralization: making authority lie? employees and managers?  Henry Ford, a pioneer in modern assembly line manufacturing, showcased the efficiency gained through work specialization. This concept, also known as the division of labor, delineates how tasks within an organization are divided into distinct jobs. Consider an automotive manufacturing plant. In such a setting, work specialization is evident in the assembly line. Each worker focuses on a specific task or component, such as installing tires, fitting engines, or attaching doors. This division allows workers to become highly skilled at their specialized task, improving precision and efficiency. For instance, a worker on the assembly line might specialize in installing car windshields. Instead of assembling an entire vehicle, they concentrate solely on fitting and securing windshields accurately. This specialization boosts proficiency and speed, contributing to the overall efficiency of the manufacturing process. Ford's innovative approach revolutionized industrial production by demonstrating that breaking down complex tasks into smaller, specialized steps significantly enhances productivity. Today, this principle of work specialization remains a cornerstone in various industries, optimizing workflows and bolstering efficiency by assigning specific tasks to individuals based on their expertise. https://youtu.be/NXhneZTTFeE?si=JCCQBbBBzsPz2hX2 Functional: Groups of employees based on work performed (e.g. engineering, accounting, information systems, human resources). Product: Groups of employees based on major product areas in the corporation (e.g. women’s footwear, men’s footwear, and apparel and accessories). Customer: Groups of employees based on customer’s problem and needs (e.g. wholesale, retail, government). Geographical: Groups of employees based on location served (e.g. North, South, Midwest, East). Process: Groups of employees based on the basis of work or customers flow (e.g. testing, payment).  Chain of command The chain of command is an important concept to build a robust organization structure. It is the unbroken line of authority that ultimately links each individual with the top organizational position through a managerial position at each successive layer in between. A chain of command is established so that everyone knows whom they should report to and what responsibilities are expected at their level. A chain of command enforces responsibility and accountability. It is based on the 2 principles of Unity of command and Scalar Principle a). Unity of Command: One subordinate should have one boss. People should receive orders from their immediate boss only. This brings discipline and order in the organisation. Receiving orders from two or more bosses can create confusion and indiscipline. If the unity of command is broken, an employee might have to cope with conflicting demands or priorities from several superiors, as is often the case in the weaker “dotted- line” reporting relationships in some organizations. b). Scalar Chain: Scalar chain is the line of authority running from top to lower levels. Authority flows from top to bottom in this chain and responsibilities flow from bottom to top. This chain promotes communication amongst people at different levels and facilitates decision making. Every person in the chain knows his superior and subordinate.  Formalization Formalization refers to the level of standardization of jobs within an organization. When a job is highly formalized, the worker has limited discretion in performing the task, and the process is standardized, resulting in consistent and uniform output. There are precise job descriptions, many organizational rules, and well-defined procedures for highly formalized jobs. On the other hand, low formalization allows for greater freedom in job performance, and employees have more discretion in their work. Behaviors in these jobs are less structured, and there is less emphasis on following specific procedures. In low formalization, employees are able to consider alternatives, whereas in high formalization, the possibility of alternative behaviors is eliminated. The degree of formalization can vary widely between organizations. Authority, Responsibility, Accountability and Delegation Authority, Responsibility, Accountability and Delegation Line, Staff and Functional Relationships  Staff employees, on the other hand, contribute indirectly Line employees are the ones who directly contribute to to the provision of goods or services to the customer. the production of goods or services to the customers. For They occupy advisory positions and support the line instance, in a car company, line employees include the employees with their specialized expertise. They work in production workers who assemble the car and the sales departments such as purchasing, human resources, staff who sell it. They are considered to be the primary information technology, and legal, which are considered functions of the organization and are depicted on an to be secondary functions in the organization. A firm can organization chart, which illustrates their positions and provide line managers with advice by establishing a relationships in the organization's structure. The line separate department headed by staff specialists, which is structure is the foundation of the organization and known as a line-and-staff structure. The staff departments provides channels for communication and coordination and employees perform their tasks through the line between employees and the source of authority. structure, not independently of it.  Structure and Strategy Alfred Chandler's pivotal work in the 1960s established a fundamental link between an organization's strategy and its structure. He extensively studied major American firms from 1909 to 1959, illustrating how these organizations evolved. His insights have significantly influenced subsequent studies on the relationship between strategy and structure, including frameworks like Peters and Waterman's examination of Organizational Excellence. Chandler's key premise was simple: When an organization shifts or develops a new strategy, its structure needs to adapt or be redesigned to effectively support that strategy. He highlighted that for a growing or changing enterprise to function efficiently, its structure must align with its strategy. In essence, he coined the phrase "structure follows strategy. 1. Hierarchy: The levels of management and their positions within the organization, from top-level executives to lower-level employees. 2. Reporting Lines: The lines of authority and communication, showing who reports to whom within the organization. 3. Departments or Units: The different departments, teams, or units within the organization and how they are interconnected. 4. Roles and Responsibilities: An overview of the roles and responsibilities of various positions or departments, clarifying their functions within the organization.  Types of Organizational Structure Simple Structure Functional Structure Divisional Structure Committee Organization Project Organization Matrix Organization Network Organization Virtual Organization Free Form Organization Boundaryless Organization Horizontal Organization and Vertical Organzation Most of the small or newly emerging organizations use, the simple structure. The simple structure is not elaborated and it is low in complexity, has less formalization and the authority is centralized in a single person, as shown in the figure. It is more organic than mechanistic in character. It is also called Entrepreneurial Organization The functional structure groups employees together based upon the functions of specific jobs within the organization. The functions might be manufacturing, HR, finance, R&D etc. Divisional organization is an extension of functional organization. Mostly the structure is based on either products, markets segments or geographies. Product structure groups employees together based upon specific products produced by the company. An example of this would be a company that produces three distinct products, "shampoo", "soap", and "washing powder". This company would have a separate division for each product. Market structure groups employees together based upon specific markets in which the company sells. A company might have different divisions for B2C and B2B customers. Geographic structure groups employees together based upon specific geographic location. This is often used by large companies that operate in many areas throughout the country. An example may be one division of a cosmetics company might cater north India and second division south India.  Committee Organisations The distinguishing feature of a committee organization is that there is a committee for a particular function or department. For example, instead of a marketing manager, there may be marketing committee for marketing activities, The Committee is also known by other names like commission, task force, quality circle, board etc. The Committee is always a group of people. Some examples of Committee can be purchase committee, promotion committee, ethics committee, finance committee, executive committee. An ad hoc committee for a specific purpose and time period is called task force. Project Organization is an improvement of the traditional functional organization. It may be temporary, if there is one or two projects. It may be permanent, when projects are to be executed on continuous basis. It is preferred, when a company has "small number of large projects". Matrix Organisation A matrix organization is a structure that groups employees by both function and product. This structure combines the strengths of separate structures into one complex organization. An example of a matrix structure is a company that produces two products, "product a" and "product b". In this structure, the company would organize functions within the company as follows: "product a" sales department, "product a" customer service department, "product a" accounting, "product b" sales department, "product b" customer service department, "product b" accounting department. The matrix structure is the most complex of the different organizational structures and is suitable for a large number of smaller projects, unlike the project organization which is better suited for a smaller number of large projects An example of a company with a cross-functional matrix management style is Google. Drawing on elements from flat organizational structures, employees work in teams. There’s a limited layer of middle management, and employees enjoy a high level of autonomy. While Google’s organizational structure has flat characteristics, it also incorporates traditional hierarchical elements; teams belong to functional departments, and employees have a clear chain of command. With team-based cross-functional collaboration, employee autonomy, and management through traditional chains of command, Google has leveraged the best of two worlds to build an efficient organizational structure. Google’s position as a leader in its field coupled with a high employee satisfaction score is evidence that the technology giant has succeeded in navigating the challenges that can arise when adopting a matrix-style organizational structure. NETWORK ORGANISATION Characteristics of Network organisation The company's operations are spread across different countries, indicating a decentralized approach. Each location Decentralization serves a specific purpose within the company's overall operations. of Operations Despite being geographically dispersed, the company ensures connectivity and collaboration among its different units. This Interconnected connectivity allows for seamless communication and coordination between offices in different parts of the world. Global Collaboration: The diverse locations represent specialized functions such as product development, call center operations, Units design, accounting, and assembly. This setup encourages collaboration among various specialized teams across different regions. Adaptability to By having specific functions in different countries, the company can leverage local expertise, resources, and market knowledge unique to each region. For instance, product development in China might benefit from local technological Local Expertise advancements, while the call center in India might utilize language skills and cultural understanding. To facilitate communication and coordination among its globally dispersed units, the company likely Technology-Enabled relies on advanced communication technology, digital platforms, and tools for seamless information Connectivity sharing. Virtual Organisation A virtual organization is a modern structural framework that heavily relies on technology to operate, often comprising a dispersed workforce across different locations. It's characterized by its use of digital tools to connect and coordinate individuals or teams who may not share a physical office space. Furthermore, a virtual organization is an innovative design that leverages technology to present a unified front to customers, allowing a network of separate companies to function as a single entity. These organizational models are prominent across various industries, notably in tech startups, freelancing, consulting, and other knowledge-driven sectors. They offer advantages such as increased flexibility for employees, reduced operational costs, and access to a wider talent pool. Nonetheless, they also pose challenges related to effective communication, maintaining team unity, and addressing potential isolation among remote workers, necessitating efficient management strategies. Free Form Organisation A free form organization is a special type of team-based organization without organizational hierarchy and boss-subordinate positions. This type of organization operates with a greater degree of flexibility, speed, and adaptability in a highly dynamic environment and is also known as a naturalistic, organic, and ad-hoc form of organization Boundaryless Organisation A boundaryless organization is a model that breaks down traditional barriers within an organization, including departmental divisions and hierarchical structures. It fosters a culture of openness, collaboration, and information sharing across various levels and functions. The primary aim is to enhance efficiency, innovation, and adaptability to change by encouraging seamless collaboration and communication throughout the organizati  Elimination of Chain of Command Breaking Feature of Limitless Geographical Boundaryless Spans of Barriers Organisation Control Empowered Teams over Departments  Horizontal organizations are modern forms of organizations that are customer-driven and have a reduced hierarchy. The key features of horizontal organizations include direct information sharing among participants, team-based work, openness in dealings, and flexibility in decision-making. These types of organizations are also referred to as "Flat Organizations". Vertical Organization is the traditional form of organization with clear hierarchy and lines of authority. It has a top-down approach with decision-making power concentrated at the higher levels of management. The employees at the lower levels follow the instructions from their superiors. Horizontal Organization and Vertical Organization Staffing Nature Process Importance Need Principle of staffing Meaning of recruitment Source of recruitment Selection Process of selection Orientation Recruitment VS Selection Training and development Career Development Performance Appraisal  STAFFING Staffing is concerned with finding the right person for the right position at the right time aiming to obtain, utilize, and maintain a satisfied workforce. According to Koontz and O’Donnell, “the managerial function of staffing involves manning the organizational structure through proper and effective selection, appraisal and development of personnel to fill the roles designed into the structure.” Nature of Staffing Staffing is Pervasive Activity Staffing is wider concept Staffing is continuous activity Staffing deal with maximum utilisation of resources Staffing is performed by all Managers PROCESS OF STAFFING Procurement ( Manpower Planning, Recruitment, Selection, and placement) Development Compensation Integration (sense of belonging) Maintenance (Physical and mental health)  Filling Job with competent Importance Personnel Of Better Performance Staffing Organisational Growth and survival Optimum utilisation of Human resources Improve morale and job satisfaction Need for Staffing Growing Organisational Size Development Cost of hiring of technology Human Need for relation skilled Movement Manpower Trade Union  Principle of Staffing Principle of Principle of Principle of Principle of Staffing staffing Job Definition HRP Objective Responsibility Principle of Principle of Principle of Managerial Recruitment training Appraisal Recruitment  Internal Job Postings Organizations often post job vacancies internally before seeking external candidates. This allows existing employees to apply for positions that align with their skills and career goals. Identifying high-performing employees and promoting them to higher-level positions is a Promotions common internal recruitment method. Promotions recognize and reward employees for their contributions while filling leadership or managerial roles. Internal transfers involve moving employees from one department or location to another within Transfers the organization. This can help meet staffing needs in different areas while providing employees with new challenges. Encouraging employees to refer candidates for job openings is another internal recruitment Employee Referrals strategy. Employees often recommend individuals they believe would be a good fit for the organization based on their skills and cultural fit. Organizations maintain talent pools or talent databases containing information about Internal Talent Pools employees' skills, experiences, and career aspirations. When a job opening occurs, recruiters can refer to these pools to identify potential internal candidates. Succession planning involves identifying and developing employees who have the potential to fill Succession Planning key leadership positions in the future. This internal recruitment strategy ensures a smooth transition for critical roles. Investing in training and development programs helps employees acquire new skills and Training and qualifications. Internal recruitment can then be based on the enhanced capabilities of Development Programs employees who have participated in these programs. Organizations may conduct internal job fairs or career expos to showcase job opportunities Internal Job Fairs within the company. This provides employees with a platform to explore different roles and express their interest.  Advertising Posting job advertisements on the organization's website, job boards, newspapers, industry publications, and social media platforms is a common way to attract external candidat Employing the services of recruitment agencies or headhunters can help organizations identify and attract candidates Recruitment Agencies with specific skills or experiences. These agencies actively search for suitable candidates on behalf of the hiring organization. Job Fair Participating in job fairs provides organizations with the opportunity to connect with a diverse range of potential candidates. These events are often industry-specific and attract job seekers looking for opportunities. Campus Recruitment Visiting educational institutions, such as colleges and universities, to recruit fresh graduates or individuals with specific qualifications is known as campus recruitment. This helps organizations tap into young talent. Building a network of professional contacts can lead to potential candidate referrals. Organizations may attend Networking industry events, conferences, and networking gatherings to connect with individuals who may be a good fit for open positions. Internship Programs Offering internship programs introduces students and recent graduates to the organization's culture and work environment. It serves as a talent pipeline for potential future hires Professional Associations Engaging with professional associations related to the industry or field can help organizations reach qualified candidates. Many industries have specific associations where professionals gather. Online Job Portals Posting job openings on online job portals and career websites allows organizations to reach a vast audience of job seekers actively looking for opportunities. Social Media Recruitment Leveraging social media platforms, such as LinkedIn, Facebook, and Twitter, for recruitment purposes helps organizations connect with passive candidates and those seeking new opportunities Partnerships with Establishing partnerships with educational institutions for recruitment initiatives, such as guest lectures, workshops, Educational Institutions or collaborative programs, can expose the organization to a pool of qualified candidates.  Outsourcing- Recruitment Outsourcing recruitment involves the delegation of at least the initial phases of the recruitment process to external agencies or consultants. Instead of handling the entire recruitment process in-house, organizations enlist the services of external experts to source suitable candidates or create a shortlist. While it incurs additional costs, outsourcing recruitment is adopted for its potential to save time, streamline the process, and alleviate the challenges associated with staffing. Benefits of Outsourcing Recruitment are listed below: Time Savings Expertise Access Cost-Efficiency Focus on Core Activities Scalability  Selection Introduction Selection is the process of systematically choosing individuals with the required qualifications, skills, and attributes to fill specific job positions within an organization. It involves a series of steps to identify and assess candidates, ultimately leading to the final decision of hiring the most suitable individuals for the job. ONBOARDING Career Development PERFORMANCE MANAGEMENT Directing Directing is an action-oriented function of Management, in which the superior communicates with and provides leadership to their subordinates about what to do and how to do it, while motivating them to give their best in the performance of the task, and observing them that they do it in the manner specified, so as to ensure quality in the achievement of organizational objectives.  OBJECTIVE OF DIRECTING Guide employees Provide clear Motivate toward goals and instructions. employees. objectives. Ensure Foster a positive Offer feedback coordination and work and coaching. teamwork. environment. 1.It is the function of the management which leads to actual working or execution of the tasks. And so, direction leads to action. 2.Directing is an all-pervasive function, which takes place at all levels of management. 3.It is an ongoing process, as it continues throughout the life of an organization. 4.The flow of direction is from top to bottom, i.e. it begins at the top level and moves to the lowest level, following the defined hierarchy. 5.In directing, a manager has to deal with a number of employees, whose nature, qualifications, abilities and efficiencies are different. So, it involves human-factor, wherein the manager has to get the work done from them, by giving the right set of instructions and tackling each employee in a suitable way.  Harmonization of objectives of the members of the organization is the basic principle of directing. The objectives of the Harmony of employees need to be synchronized with the objectives of the enterprise in order to ensure maximum gain for the employers and Objectives: the employees as well.A manager needs to stimulate the sense of belongingness in employees towards the organization and observe that the employees perceive themselves as a part of the organization. This principle of directing says that the subordinates should receive orders from and report to one superior, called as the immediate Unity of Command: boss. Dual subordination may lead to chaos, confusion and disorder, in them and so there must be a unified system of directions, orders, command and instructions. According to this principle, there should be a single plan for a range of activities, lead by only one head, to Unity of Direction attain the objectives. Hence, all those activities that are oriented towards a similar objective are to look after by one manager Direct Direct Supervision by managers when accompanied by personal touch especially in work-related areas, often boosts the employee’s morale and develops a sense of belongingness and active participation in them. This Supervision ultimately increases employee satisfaction and also helps in the effective functioning of the organization. Appropriate leadership is the process of leading or say influencing the followers to perform the designated tasks in an effective way. And to do so, appropriate leadership style is to be adopted by the manager to lead the employees. Further, the direction is said to be more effective, when the Leadership leader gives respect to the ideas and views of his followe rs and also attempts to include them in work-related or job-related matters. In this way, the managers can get a contribution from the employee’s side also, in the accomplishment of designated tasks. Direction is not just about issuing orders and instructions to the employees and getting Follow-up the work done by them, within the given time, rather taking follow-up of their work is also as important as assigning the tasks.  Techniques of Directing Consultative Direction Free-Rein Direction Autocratic Direction Supervision Motivation Under this technique, Under this technique, Superior commands the Supervision is the process of Merely issuing orders superior, though vested subordinates are subordinates to overseeing the subordinates and instructions may not at work. Supervisor gives a with powers to take empowered to take accomplish a set of precise, detailed and clear cut help to accomplish any decision independently, decisions independently. goals. He does not take instruction to subordinates. task effectively. does not take decision The superior limits into his decision-making The quality of supervision Motivation is the process without consulting with himself to issuing the views, opinions and depends on the strength of of stimulating such his subordinates. The guidelines. The execution suggestions of the subordinates working forces like desires, superior wins the of the entire task is left subordinates. The under him. The lesser the wishes and wants that strength of subordinates, the cooperation of all the to subordinates. The superior gives a clear more effective is supervision impel human beings to subordinates by taking subordinates are held direction and precise arid vice versa. achieve the desired their inputs into his accountable for the orders to his Supervision is undertaken action. Motivation may decisions. Thus results. This type of subordinates. across the levels of be monetary and non- subordinates feel direction can be management. Besides, monetary. The impact of committed and practiced only when supervisor should possess non-monetary motivated to carry out subordinates are highly certain qualities to exercise motivation is supposed effective supervision. such decisions made out educated, experienced, Similarly, there are certain to last longer than of their viewpoints. capable and competent. factors like skill, leadership, monetary motivation. It is self-direction by position, group cohesiveness, subordinates. cordiality or relations, etc., that enable the supervisor to exercise effective supervision.  Techniques of Directing Leadership Communication Delegation Orders Leadership is defined to be the Communication enables a group Delegation is the process of Orders are directives issued by ability of a manager to influence to think together, see together entrusting a part of work to be superiors to subordinates his subordinates to accomplish and act together. It becomes done by a superior to his directing the latter to act in a the goals. A leader is supposed to indispensable for passing on subordinate. Without delegation, certain manner possess certain qualities to decisions to those engaged in an organization cannot grow exercise effective leadership. A executing them. Where even an inch. In the absence of leader does many functions like communication is not delegation, superior is formulation of objectives, understandable to the receiver, overloaded with excessive work. representing the undertaking, direction becomes ineffectual. Besides, specialization concept initiating action, influencing Face to face communication and warrants delegation. It helps the followers, etc. feedback system is essential for executive to utilize their smooth operation of business. productive time optimally. The There are certain principles like subordinate to whom the clarity, preciseness, concreteness authority is delegated is etc., to be followed for effective responsible to the delegator. In communication. the same vein, the delegator is ultimately responsible for the work executed by the delegatee