Chapter 1

Concept of Management
Characteristics of Management
Function of Management

Management System
Function and Process

Evolution of Management Thought

1) Classical School “Managing Workers and Organization in Effective
Manner”
a) Scientific Management(1800s)
b) Administrative Management(1840s)
c) Bureaucratic Management (1820s)
2) Behavioral School “Understanding Human Behaviour”
a) Human Relation(1930s)
b) Behavioral Science(1950s)
3) Quantitative School “Use of Quantitative tools and Technique for
Quality managerial Decision”
a) Management Science(1940s)
b) Operation Management (1940s)
c) Management Information System(1950s)
4) System School (1950s)“Understanding Organization as System”
5) Contingency School(1960s) “Applying Management Principles in
different Situation”

Scientific Management Theory

Concepts:
Principles
Contribution
Limitation

Administrative Management Theory

Concepts: Attempt to develop a rational way to design the
organization as a whole
Industrial Activities
Principles
Contribution
Limitation

Difference Between Scientific Management and Administrative

Management
Focus of Employee
Applicable
Basis for Development
Focus
Wages
Scope
Bureaucratic Theory
Concept: Structuring the organization into hierarchy and establish
the clearly defined roles.
Features
Principles
Contribution
Limitation

Human Relation Thoery

Concept
Experiments
Contribution
Limitation

Quantitative Approach
Tools of Quantitative Approach

Emerging Concepts
 Knowledge Management
 Participative Management
 Learning Organization
 Change Management
 Participative Management
 New public management, New public governance, New public
service, New public passion,
 Reinventing the government machinery.( Toward market
orientation, result orientation and client orientation )
 Situational / contingent management
 Management By objective Cascading down: Cascading
management is the top-down process of aligning organizational
strategy by translating high-level executive goals into specific,
actionable objectives for departments, teams, and individual
employees.
 Knowledge and Talent management
 Crisis management
 Agile management: Agile management is an iterative, flexible
approach to project management that emphasizes collaboration,
customer feedback, and rapid, incremental delivery of value.
 Self management
 Stress management
 Time management
 AI driven management
 Managing with cultural connectivity

Managerial Roles
Managerial Skills
Contemporary Challenges for the Managers
Productivity
Quality Control
 Redesigning the Organization
Social Accountability
Sustainability
Time Bounderies
Uncertain Market Scenario
Global Compettitiveness

Corporarte Social Responsibiltiy

Concept
Benefit of CSR
To Companty
Company Image
Society Acceptance/Survival
Risk Mitigation
Cost Saving
Sustainable Growth
Relationship with stakeholders
To Employee
Emphoyee Morale
Employee Motivation
Society
Social Goods
Customer
Improved Service
Investor
Investor Confidence
Government
Complience
Competitors
Competitive Edge

Drivers of CSR
Market Share
Innovativesness
Cost Saving
Stakeholder Relationship
Acess to Capital
Risk Management
Reputation
Employee Satisfaction
Environmental Concern
Economic Concern
Carrol’s Pyramids
Principles of CSR
Stakeholer Interest
Human Right
Ethical Behaviour
Rule of Law
International Norms and Behaviour
 Transparancy
Accountibility

Issues and Challenges

Governement: Provides only Regulation and law: Lack of
Guidance
Society: Lack of Participation, More Expectation form
Organization
Employee: Changing Prioirity from CSR to Benefits
Stakeholder: More Financial Disclosure required
Customer: changing Demands
Investor: Increased Pressure from Investors
Organization: Narrow Perception, Transparancy Issues

Good Governance

Contemporary Issues in Management in Nepal

Chapter 2

Strategic Planning

“Strategic Planning is a long term plan of an organization that

involves the review of critical market condition, customer need,
organization strength, weakness, socio-political, legal, economical,
technological advancement, organization resources that guides to
the opportunities and threat to business organization”

Features
Strategic Planning Process
Level of Organizational Strategy
Quality of Good Strategic Planning
Approach of Strategic Planning
Fourth Strategic Plan of NRB
Strategic planning Process
Issues and challenges
M – Monitoring & follow-up lacking
I – Ineffective training
S – Strategic & Annual plan deadline mismatch
A – Ambitious targets
L – Lead department issues (unclear/change in lead)
I – Interdepartmental coordination lacking
G – Governance issues (reward & punishment missing)
N – No departmental ownership
E – Environmental/context change
D – Departmental disinterest (top-down approach)

Environment Scanning
Technique or Method of Environmental Scanning
Type of Environmental Scanning
Process of Environmental Scanning
Importance of Environmental Scanning

SWOT Analysis
“SWOT Analysis is the process of identifying the key issues of an
organization environment that likely to impact the strategy
development. The main objective of SWOT Analysis is to identify the
extent to which the current plan of an organization and its strength
and weakness are relevant to deal with dynamic environment”
Components: with respect to NRB
Difference Between Strategic planning and operational Planning
a) Goal: Overall vs Specific
b) Resources: Huge vs Small
c) Time: 3-5 vs 1 or Quarter
d) Scope: Wider vs Small
e) Responsibility:
f) Change: Static vs time to time
Vision Concept
Features
a) Future oriented
b) Clear
c) Directional
d) Feasibile
e) Value Based
f) Inspiring
g) Challenging
h) Unique

Importance
a) Align with people and activity
b) brings the changes
c) Core value and belief
d) direct the resources
e) empower employees
f) focus on priority
g) guides orgn decision

Development of vision
Review of internal factors
Review of external market condition
participation of all member
review of literature
generate statement
merge statement
modification
prepare vision
communicate
Mission
concept
Features
Importance
Allocation of Resources
brings uniformity
Culture
Define Business
Enhance Employee ownership
 Operating Philiosophy
Reflect orgn responsibility
Difference between vision and mission
a) Definition
b) short vs long
c) where want to be vs how to get there
d) future oriented vs presetn to future
e) change

Objective
Features
Level of Objectives
Importance

Portfolio Analysis
Concept
WHy portfolio analysis
advantage

BCG Matrix
GE Nine cell Matrix
Impliction:
Long term Planning
Managerial Decision
New Investment Guide
Organization Resource
Portofolio Balance
Quality Investment
Resource Allocation
Strategic Direction

Blue Ocean
“Blue Ocean Strategy is a new strategic mindset generally refers to
creation of a new uncontested market space that make competitors
irrelevant and creates new consumer value often while decreasing
the cost.”
 All the industry not existing today
 New strategic Mindset
 Undefined Market Space
 High Profit and Growth opportunities
 Create the Demand
 Assets Capabilities are fluid

Red Ocean Strategy

“Red Ocean Strategy is a competitive strategic mindset generally
refers to cut throat competition between player of the particular
segment of the market who compete with each other in the same
market space within the limited boundaries of the same industry
based on the participle of competitive advantage.”
Strategy implementation
Process
1) Operatonalization
a) Development of Annual Obectives
b) Functional Planning
c) Management Information System
d) Management SYstem
e) Formulation of Program, Budget and Procedure
2) Managing the conflict
3) Matching the strategy with structure
4) Restructuring and Reorganizing
5) Linking Performance and pay with strategy
6) Managing resistant to change
7) Strategy Supportive Culutre
8) Evaluation and control

Strategic Change
Strategy evaluation and control
Types of control
Criteria for evaluating the strategy
Chapter 3 Organization Structure

“Orgnaization Structure is a system that outlines the flow of activity

(rules roles and responisbility) and information from level to level in
order to achieve the goal of organization.
Decisions flow from the top down in a centralized structure.
Decision-making power is distributed among various levels of the
organization in a decentralized structure.
Organizational structures are normally illustrated in some sort of
chart or diagram

Types(Forms) of organizational Design

a) Simple
b) Functional
c) Multidivision
d) SBU
e) Holding Company
f) Project based structure
g) Matrix structure
h) Network
i) Team Based

Matrix Structure
A matrix structure is a hybrid organizational model where
employees report to two or more managers—typically a functional
manager (for expertise/department) and a project manager (for
specific tasks). This dual-reporting system facilitates cross-
functional collaboration, increases resource sharing, and improves
flexibility for complex, project-driven, or fast-changing industries.
How do matrix organizations work?
Functional reporting: Team members report to their department
head (e.g., IT, marketing, finance) for day-to-day work and career
development.
Project reporting: Team members also report to a project manager
when assigned to cross-departmental initiatives.
Dimension of Organization Structure
1) Structural(Primary) Dimension
a) Formalization
b) Specialization
c) Centralization and Decentralization
d) Heirarchy and Authority
2) Contigency(Secondary) Dimension: that support primary
dimension
a) Culture
b) Technology
c) Resources
d) Goals and Objective
e) Size

Organizing
“Organizing is a process of defining the essential relationship
between people task and activities in such a way that organization
resources are directed, integrated and coordinated to achieve the
organization goal”
Organizing refers to grouping elements of an organization in the
most effective way. To accomplish an organization’s goals efficiently
and effectively, all its resources must be integrated and coordinated
to define the essential relationships between people, tasks, and
activities.

Importance
a. Enhances organizational efficiency
b. Specialization is facilitated
c. Optimal use of human and other resources
 d. Communication effectiveness
e. Diversification and growth
f. Employee development
g. Relationships of authority and responsibility are established
h. Enhances productivity and job satisfaction

Process of Organizing
a. Defining the objectives
b. Identifying and grouping activities Identification of activities
c. Responsibilities and duties are assigned
d. Authority delegation
e. Coordination of activities
f. Identifying positions and distinguishing them
g. Reorganizing and reviewing

Principles of Organizing

There are certain principles that govern organizing. The building

blocks of organization are these elements.

a) Specialization: It is the principle of specialization that all work in

an organization should be divided among employees according to
their qualifications, abilities, and skills. It is possible to achieve
specialization through the division of work.

b) Functional Definition: person’s duties, responsibilities, authority,

and relationships within the organization must be defined.

c) Span of Control/Supervision: A single manager can effectively

manage and control a given number of employees.

a) Wide span of control: The manager is able to supervise and

control a large number of subordinates at the same time.
b) Narrow span of control: Managers in this situation supervise and
control few subordinates under them.

d) Chain of Command and Unity: In an organization, the chain of

command defines who reports to whom and links all individuals. Two
principles underlie this: the unity of command and the scalar
principle.

a. Unity of command: According to this principle, each employee

should have only one direct supervisor. There should be no more
than one person reporting to an employee.
b. Scalar chain: In an organization, the principle of scalar chain
describes a clearly defined hierarchy.
e) Unity of Goals/Objectives: Every organizational activity is geared
toward achieving organizational goals that have been formulated for
each level of the organization (top, middle and low) and each
functional area.

f) Responsibilities and authority are delegated: There must be a

balance between authority and responsibility.

g) Flexibility: There is a competitive, complex, and volatile

environment in which modern organizations operate. It is crucial
that they address the environmental impacts in order to succeed.
Therefore, they should be flexible or situational. As environmental
factors change, organizations must adjust their plans, policies, and
structures.

h) Exception: Various activities should be performed by managers

according to policies, procedures and rules of the organization.
When dealing with complex situations or unusual circumstances,
they may be exceptional. I

i) Personal Ability: The organization should always strive to improve

the efficiency of workers at all levels according to this principle.
Training and development programs can help achieve this goal. As a
result, employee commitment and productivity are further
enhanced.

j) Coordination and balance: An organization should have a good

balance between its parts. It is important for an organization to
develop its structure in a balanced way in order to maximize
coordination. The centralization and decentralization of power must
be balanced.

k) Efficiency: Efficiency is the basis of an organization’s operation. In

order to achieve this, the organization must be operated in a cost-
effective and efficient manner. In order to keep costs low, the
quality of the product is not compromised. Through an effective
organizational structure, human and other resources can be utilized
effectively.

l) Simplicity : An organization’s structure should be simple in

accordance with this principle. The simplicity of a structure makes it
easy for all employees to understand. The duties and responsibilities
of each person became clear to them. There should be less
hierarchy and a clear line of communication in the structure.

Approach of Organizing

a) Classical Approach
According to the classical approach to organizing, there is one best
way to manage an organization. This approach is also known as the
universal approach. The scientific management, administrative
management, and bureaucratic theories can highlight this approach
to organizing.

To minimize production costs and increase profits, scientific

management theory advocates effective planning and controlling,
modern machines and tools, and optimum utilization of resources.
By utilizing modern tools and machines and paying workers
properly, this theory aims to maximize workers’ efficiency.
Employee development is achieved through training and
development that maximizes the degree of cooperation between
employers and employees.

Organizations are designed rationally according to administrative

management theory. Power and authority are delegated to
administrators through a formalized administrative structure.
Providing a comprehensive framework for the study and
development of management, this theory defines management as a
series of functions including planning, organizing, staffing, directing,
and controlling. Organizations that follow the bureaucratic theory
must be structured into hierarchies and follow clearly defined rules
and procedures.

In bureaucracies, there are several aspects that promote decision-

making, resource control, worker protection, and organizational
success. The theory suggests that the organization should have a
high degree of specialization, a clearly defined chain of command,
and the principle of rationality, objectively and consistently. Each
member of the organization should have a formal relationship based
on their positions and governed by well-defined rules and
regulations.

b) Behavioral Approach

The behavioral approach emphasizes the importance of behavioral

and human factors in organizing. Maslow’s needs hierarchy theory,
McGregor’s Theory X and Y, and Herzberg’s two-factor theory fall
under this category. Using a five-step model depicted as hierarchical
levels within a pyramid, Maslow’s need priority theory is based on
human needs. It is necessary to address the needs lower down in
the hierarchy before attending to those higher up. When organizing,
he stressed the importance of these human needs. Theory X and
theory Y were developed by Douglas McGregor. Management
philosophy is based on Theory X. People want to avoid work as
much as possible, which means they don’t want to take
responsibility. Through financial incentives, people are motivated.
In order to keep them under control, rewards and punishments are
the best method. The theory Y presumes that people are
intrinsically happy at work, as opposed to theory X. The objectives
motivate them to pursue them. Reward and punishment systems
are unnecessary. People want to use their creativity to solve
problems and are prepared to take responsibility for everything they
do.

According to Herzberg’s two-factor theory, certain job factors lead to

satisfaction while others lead to dissatisfaction. In order to describe
job satisfaction, Herzberg used the term ‘hygiene and motivators’.
In terms of hygiene factors, they include compensatory elements,
job security, career development, the organization’s politics,
working conditions, leadership quality, and relationships between
supervisors and subordinates. A person’s intrinsic motivation
includes a sense of responsibility, job satisfaction, recognition,
achievement, and the opportunity to grow and advance.

c) Contingency Approach

Organizational contingencies state that management is situational.

According to this theory, there is no perfect management style as
management principles are not universal. By focusing on the
multivariate nature of organizations, it enables them to cope with a
variety of environmental conditions. According to the environmental
conditions, it provides a framework for solving problems.
Organizations must adapt to both internal and external
environments, as well as fit between the two.

i. Size of the organization: It is likely that larger

organizations will have more hierarchies and units due to their
size.
ii. Task and technology: It is also important to consider how
much technology is used in organizing. Communicating
patterns, job functions, employee relationships, and authority-
responsibility relationships are governed by it.
iii. Environmental uncertainty: It is also important to consider
how much uncertainty there is in the environment when
organizing. A flexible structure is preferred when the
organizational environment is volatile. Organizations that
operate in relatively stable environments may be organized in
a formalized manner.
iv. Individual differences: Organizational structure is also
determined by individual differences in leadership. The
authority of an authoritative leader tends to be centralized at
the top.

Subdivision
“Subdivision is the process of dividing the large and functional
organization into smaller Flexible administrative Unit”

Importance

 Functional Specialization
 Adaptability
 Efficient
 Adminitrative Control
 Autonomy
 Fixed Responsibility
 Expertise
 Development

Types of Subdivision

a) On the baisis of function

b) On the basis of Product
c) On the basis of Customer
d) On the baisis of Location
e) On the basis process
f) on the basis of time

Power

Power is an ability to control the behaviour of other. It depends upon

various factors such as: Knowledge, expertise, Personality,
Experience.

Forms of Power

a) Rational and legal power

b) Reward Power
c) Coersive Power
d) Referent Power
e) Charismatic Power
f) Expert Power

Source of Power

a) Power through control of Resources

b) Power thorugh exepreritse
c) Personal Quality
d) Professionlism
e) Position Power

Difference between Power and authority

a) Concept
Authority is the formal, legitimate right to make decisions and give
orders based on one's position in an organization's hierarchy.

b) Power is the personal ability, capacity, or influence to control

others' behavior and actions, which may not be formally recognized.
Authority flows downward; power can be wielded by anyone,
regardless of position.

c) Source: Authority comes from a job title (formal),

power comes from knowledge, expertise, or personal characteristics
(informal).

d) Legitimacy: Authority is legitimate and sanctioned by the

organization;
power may be exercised without formal legitimacy.

e) Hierarchy: Authority is hierarchical (downward).

Power is not inherently hierarchical and can flow laterally, upward,
or downward.

f) Duration: Authority is generally stable until the position changes.

Power is dynamic and can fluctuate quickly based on credibility or
influence.

g) Nature: Authority dictates behavior,

whereas power controls behavior.

Centralization
Centralization is an organizational structure where decision-making
authority is concentrated at the top levels of management or
government. In this system, lower levels rely on the top executives
for direction, guidance, and policy implementation. Centralization
ensures uniformity in decision-making, efficiency in control, and
streamlined operations. It is commonly used in government bodies,
military organizations, and large corporations where strict
coordination is required.

Key Characteristics of Centralization:

1. Authority at the Top – Decision-making is handled by senior
management or the central authority.
2. Limited Delegation – Subordinates have minimal power to make
independent decisions.
3. Uniformity in Policies – Ensures consistency in rules and
regulations across the organization.
4. Strict Supervision & Control – Higher levels of management
monitor and regulate all operations.
5. Centralized Communication – Information flows from top to
bottom, reducing confusion.
Advantages of Centralization
1. Uniform Decision-Making – Policies and procedures remain
consistent, reducing conflicts and confusion.
2. Better Coordination & Control – Centralized authority ensures
strict supervision and efficient operations.
3. Efficient Resource Utilization – Helps in avoiding duplication of
work, leading to cost savings.
4. Strong Leadership – Enhances the role of top executives in
maintaining a unified vision.
5. Quick Response in Emergencies – Centralized decision-making is
beneficial during crises, such as national security issues

Disadvantages of Centralization
1) Delays in Decision-Making – Since all decisions are taken at the
top, lower levels have to wait for approvals, causing inefficiencies.
2) Lack of Flexibility – Employees at lower levels have limited
autonomy, making it difficult to respond to unique or local
challenges.
3) Overburdening of Top Management – Since all decisions rest with
senior executives, they may become overwhelmed, leading to slow
progress.
4) Decreased Innovation and Motivation – Employees at lower levels
may feel demotivated due to lack of participation in decision-
making.
5) Unsuitability for Large Organizations – In large-scale
organizations, centralization can become ineffective due to the
complexity of operations.

Decentralization
Decentralization is an organizational structure where decision-
making authority is distributed across various levels of management
or government. Unlike centralization, where power is concentrated
at the top, decentralization allows lower levels to make independent
decisions. This approach is widely used in democratic governance,
large organizations, and multinational corporations to ensure
efficiency, flexibility, and responsiveness to local needs.

Modern Concepts of Organizing

 Team Structure
 Virtual Organization
 Boudary less Organization
 Organization Downsizing
 Process Reengineering
 Lean, thin, clean and green structure
 Agile organization structure i.e adaptability, collaboration, and
rapid responses to changes
 Holacracy: i.e replaces traditional hierarchies with a system of
self-managing teams and roles.
Chapter 4: Decision Making
“Decision Making the process of selecting best alternative out of
available alternative after thoroughly evaluating information, goals,
and prospective results. It is the cognitive process of assessing
situations, interpreting data, weighing risks and advantages, and
selecting the best decision. “

1. Identify the Problem or Opportunity: The first step is

recognizing the need for a decision. This could arise from a problem
that needs solving or an opportunity that needs to be capitalized on.
Clearly defining the issue is crucial to ensure that the decision-
making process is focused and relevant.
2. Gather Relevant Information: Collect all necessary
information related to the problem or opportunity. This could include
data, facts, figures, and insights. Effective decision making requires
a comprehensive understanding of the context to evaluate
alternatives accurately.
3. Identify Alternatives: Generate a range of possible solutions or
courses of action. It’s important to consider a variety of options to
ensure that the best possible choice is made. Creativity and
brainstorming can play a role in this step.
4. Evaluate Alternatives: This step involves assessing each
alternative’s potential outcomes, advantages, and disadvantages.
Consider the implications of each choice in terms of feasibility,
potential risks, costs, benefits, and alignment with objectives.
5. Select the Best Alternative: After evaluating the alternatives,
choose the option that aligns most closely with the goals,
constraints, and preferences. This decision should be based on a
thorough analysis of the information gathered.
6. Implement the Chosen Alternative: Putting the chosen
alternative into action is a critical step. This involves allocating
resources, assigning responsibilities, and creating a detailed plan for
execution. Effective implementation ensures that the decision
translates into tangible results.
7. Evaluate the Decision and its Outcomes: After
implementation, evaluate the results of the decision. Assess
whether the chosen alternative has achieved the intended
outcomes. If the decision has been successful, identify factors that
contributed to its success. If the outcome is not as expected,
analyze the reasons and learn from the experience to make better
decisions in the future.

Problem Solving
Problem Solving is a critical mental or cognitive process that allows
individuals to address obstacles, overcome difficulties, and achieve
desired outcomes.
Process of Problem Solving
Some tips that can help you in Problem Solving effectively:
1) Problem identification: As a first step towards Problem
Solving, effectively carry out tasks. Also,
recognise and define the issue or challenge that needs to be
addressed.
2) Data gathering: Gathering relevant information and data
related to the problem is essential for
understanding its root causes and implications. This helps you
become a good problem solver.
3) Analysis and diagnosis: Analyse the gathered information to
identify the underlying causes of the
problem. This helps you in devising targeted solutions.
4) Solution generation: Brainstorming and generating multiple
potential solutions is crucial for you when
you are exploring diverse approaches to resolve the problem.
5) Evaluation of alternatives: Carefully evaluate the pros and
cons of each solution. This helps you in
selecting the most feasible and effective one.
6) Implementation: After choosing a solution, you have to put the
chosen solution into action. This
requires planning, coordination, and effective execution.
7) Creative thinking: Employing creative thinking approaches can
lead you to have innovative solutions to
complex problems.
8) Root Cause Analysis: Identifying and addressing the root cause
of a problem ensures that you have a
more sustainable and lasting solution.

Difference between decision making and problem solving

Aspect Decision Making Problem Solving
Concept Selecting from available alternatives to Identifying and
achieve a specific goal or outcome. resolving an issue or
challenge to reach a
desired state.
Objective Making a choice among options. Finding a solution to a
problem
Focus Choosing the best course of action. Understanding the
problem and
generating potential
solutions
Process Evaluating alternatives, considering Identifying the problem,
risks and rewards. gathering data,
analysing, and
implementing solutions.
Rationali Often involves a logical and systematic Requires critical
ty approach. thinking and creativity.
Input Involves available information and past Data and insights
experiences. related to the problem
at hand.
Outcome Leads to a final decision. Results in a resolved
problem or
improved situation.
Interrelat Decision Making may follow effective Effective Problem
ion Problem Solving. Solving often leads to
better Decision Making.
Context Applicable to a wide range of Often applied to
situations. challenges or obstacles
in various domains.

Types of Decision-Making
1) Programmed Decision
A programmed decision is repetitive in nature and usually
follows the established procedures of the organization.
While making such programmed decisions managers do not
have to give their in-depth knowledge to come to a conclusion
since they have already available rules, regulations, and
procedures to execute them.
Usually, programmed decisions are taken by the lower level
management for regular
activities like purchasing raw materials, keeping records,
disputes settlement, etc.
2) Non-Programmed Decision
 The non-programmed decision is the opposite of the
programmed decision where managers do not take
decisions regularly. These decisions are specific in
nature and are taken by the more authoritative or executive
body of the firm. Similarly, non-programmed decisions have
no such established procedures to follow, and when the time
comes executives have to collect and analyze the data to
come to a decision.
3) Routine or Tactical Decision
The routine decision is related to the day-to-day activities
of the organization. Routine decisions are made to solve
repetitive problems that may arise in the regular activities
of the company to bring smoothness to regular activities.
Routine decisions are also called tactical decisions. These
decisions are normally taken by the lower level or
departmental level managers for their respective working
areas.
4) Basic Decision or Strategic Decisio
Strategic decisions are those that are made at the highest
levels of management with the long term in mind.
Basic decisions are another name for strategic
decisions. Such choices are crucial for the organization’s
long-term survival and growth. Making such strategic
decisions are usually in the hand of top managers which
requires intuition, creativity, and an in-depth review of the
future impact of alternatives. Long-term goals, objectives, and
strategic plans are strategic decisions.
5) Organizational Decision
When you make decisions as manager on behalf of the
organization that affects the organization’s performance such
a decision is known as an organizational decision. The
organizational decision is formal in nature as such it is
also called a formal decision. These decisions are
delegated in nature and can be transferred to subordinate
employees when managers become absent or according to
time and situations.
6) Personal Decision
7) Group Decision
8) Policy Decision

Group Decision Making

Group Decision Making is a collaborative decision making, a
participatory process in which multiple individual work together to
analyze problem and find out the solutionof the available set of
alternatives.

There are several techniques that can be used to increase the

efficiency of group decision making. These are as follows:
1. Nominal Group technique
2. Delphi Technique
3. Brainstorming
4. Dialectic Decisions Method

A) Nominal Group Technique

The Nominal Group Technique is a form of brainstorming,
wherein a structured meeting is held among the group members
where they are required to find solutions to the problem identified
for the discussion. In other words, a systematic and an organized
group meeting held among the members to facilitate decision
making by properly identifying the problems and generating the
solutions thereof.

B) Delphi Technique
The Delphi Technique refers to the systematic forecasting
method used to gather opinions of the panel of experts on the
problem being encountered, through the questionnaires, often sent
through mail.
In other words, a set of opinions pertaining to a specific problem,
obtained in writing usually through questionnaires from several
experts in the specific field is called as a Delphi technique.

C) Brainstorming
The Brainstorming is a technique to stimulate creative ideas
and solutions through a group discussion. Simply, a process
wherein a group attempts to find a solution for the specific problem
by aggregating all the spontaneous opinions or suggestions given
by each group member individually is called as brainstorming.

D) Dialectic Decisions Method

The Dialectic Decisions Method is a technique used to
overcome the problem in the group-decision making, wherein
the group members quickly agree to one alternative proposal and
might overlook more
promising solutions than the chosen one. Thus, it ensures a full
consideration of alternatives

Advantages
a) Increase Acceptance
b) Increase Legitimacy
c) Provide Complete Information
d) Generate More alternative

Disadvantages
a) Time Consuming
b) Minority Dominance
c) Pressure to Confirm
d) Unclear Responsibility
 e) Social Loafing
f) Costly

The Johari Window is the psychological model developed by

Joseph Luft and Harrington Ingham, that talks about the
relationship and mutual understanding between the group
members.
In other words, a psychological tool that helps an individual to
understand his relationship with himself and with other group
members is called as a Johari Window.

The objective behind the creation of a Johari window is to enable

an individual to develop trust with others by disclosing
information about himself and also to know what others feels
about himself through feedback. The Johari Window model is made
up of four quadrants that explain the overall relationship of an
individual with himself and with other group members. These are as
follows:

a) Open Self: This quadrant shows the behavior, motives,

attitudes, knowledge skills of an individual that he is aware of
and is willing to share it with others. The open self is
characterized as a state wherein the individual is open and
straight forward to himself and others about what he is doing,
how is he doing and what are his intentions.
b) Blind Self: The blind self shows the state of an individual
known to others but not known to him. It usually happens,
when an individual or a subject copies the behavior of some
significant personalities unconsciously since his childhood.
c) Hidden Self: This quadrant of the Johari window shows the
state of an individual known to him but not known to the
others. This is generally seen in the individuals who are
introvert and do not like to share their private lives with
anyone. The individual keeps his feelings, ideas or thoughts to
himself and do not disclose it in front of the others.
d) Unknown Self: The unknown self is the mysterious state of
an individual neither known to him, nor others know about it.
Ofen the feelings, thoughts or ideas go so deep down the
individual that it becomes difficult for the individual as well for
the other people to understand it.

Decision Theory of Management

The decision theory of management holds the belief that a
manager should make rational decisions. A manager involved
in the decision-making process should make quality decisions that
have a significant impact on managerial effectiveness,
organizational efficiency, and productivity which are the basis of
organizational success.
Participative Decision Making
In the Participative Leadership Style, the leader encourages his
subordinates to contribute their ideas or opinion in the group
situations and share responsibility in them. There are four major
types of decision-making style that a leader adopts to get the
group goals accomplished. These
are:

a) Collective Decision Making: Under this leadership style, all

the group members take the decision collectively, and
the responsibility of such decision rests with the entire
group. This type of style is advantageous only when the clear
lines of authority and responsibility are defined among the
group members.

b) Democratic or Participative Decision Making: Here, the

leader collects all the ideas and opinions from the group
members and then takes the final decision by himself.
Once the leader has taken the decision, he communicates the
same to his subordinates and tries to resolve the objections if
any.
c) Autocratic Participative Decision Making: Under this
leadership style, the authority of final decision making
rests with the leader alone, who makes decisions on the
basis of the solutions obtained through the discussions with
group members. Here, the leader collects all the ideas and
opinions from the group members and then arrive at a final
conclusion.
d) Consensus Decision Making: Under this style, the leader
gives up his responsibility to take decisions on the group
members and arrive at the final conclusion through a majority
of the group.
Quantitative Techniques in Decision Making
Quantitative decision-making is the one which is based on numerical
and quantifiable data. The quantitative approach to decision-making
aims at solution finding through mathematical models. Such
decision-making techniques are applicable in case of structured
decisions.

1) Decision Matrix: Decision matrix method was invented by

Professor Stuart Pugh and is also called as Pugh method.
Decision matrix method is a quantitative technique used to rank the
multi-dimensional options available for an underlying problem. This
technique is primarily used when various alternatives are
available and many different parameters are to be considered for
making a selection.
Various areas of applicability of decision matrix are investment
options, vendor options, product options, etc.
The Decision Matrix is used by exercising a series of pair-wise
comparisons between alternatives against a number of criteria or
requirements. One of its key advantages over other decision-
making tools is that Decision Matrix is able to handle a large number
of decision criterion simultaneously.

2) Cost Benefit Analysis: Cost benefit analysis is a systematic

process for evaluating the feasibility of projects or proposals under
consideration. As the name indicates, this method aims at
comparing total benefits derived from a project with the total costs
incurred for the same.

Cost benefit analysis, as a decision-making technique, is

useful in situations where:
(a) Benefits and costs from a project can be numerically identified.
(b) Evaluating and selection of a project among many alternatives.
(c) Determining the feasibility of a capital purchase.

3) Payback Analysis: Payback analysis is a financial tool in the

hands of a decision-maker to determine the viability of the
project by calculating payback period for the projects.
Payback period may be defined as the period within which initial
investment of a project is recovered. In other words, it tells how long
a project will take to recover its initial
investment.
As a decision-making tool, on the basis of payback period, a
manager may decide which project to accept
and which to reject. A project with less payback period is preferred
over others as it is fastest in recovering
its investment.

4) Decision Tree Analysis: It is a schematic representation of

several decisions followed by different chances of the occurrence.
Simply, a tree-shaped graphical representation of decisions
related to the investments and the chance points that help to
investigate the possible outcomes is called as a decision
tree analysis. Decision tree analysis helps the decision maker to
take all the possible outcomes into the consideration before
reaching a final investment decision.

5) Simulation: Simulation may be defined as an imitation of a

real-life situation. As a decision-making technique, simulation is
used by creating a replica of real-life situation so as to know what
could be an outcome under real operating conditions.

The simulation method may be adopted in the following situations:

(a) In the study of projects involving huge investments before actual
implementation.
(b) For foreseeing the difficulties or problems that may arise due to
implementation of new machinery, process or system.
(c) For training employees without disturbing the actual operations.
(d) Situations where actual execution or performance is irreversible
such as – medical operations, layout of a building, wars, etc.

6) Network Analysis: It refers to use of network techniques for

solving large, complex problems comprising of many
interrelated activities to be performed in a particular order. For
example in metro construction, bridge construction, etc., network
analysis is applicable for successful completion of projects within
time.

Network is a graphical presentation of these interrelated activities in

the order of their occurrence connected through arrows and
depicted by nodes. Network analysis aims at developing a network
and then planning, scheduling and controlling of performance of
activities of a large complex project.

There are primarily two network techniques which are

widely applied. These are:
(a) Programme Evaluation Review Technique (PERT) – PERT is
a technique applicable for projects with non-repetitive activities.
PERT is a probabilistic approach where time of completion of each
activity is not certainly known.

(b) Critical Path Method (CPM) – CPM is a project evaluation

technique which aims at identification of total duration for the
project completion time along with the shortest path for its
completion. CPM is a deterministic networking technique where
activity completion time is known with certainty.

7) Operations Research: It may be defined as a scientific method

making use of various tools and techniques to quantitatively
provide solutions to the problems. As a quantitative decision-
making technique, operations research is very widely used to solve
a wide variety of problems.

Role of IT in Decision Making

a) Enhance Information Flow
b) Reduced Knowledge Transfer Cost
c) Enhanced Collaboration
d) Support for Centralized and Decentralized Decision
e) Leverage Big Data
f) Informed Decision Making
g) Increased Efficiency

Challanges
C Cost
R Resistance to change
S Security risks
D Data problems
Rapid technological
R
change
Overdependence on
O
technology
P Privacy & legal problems

Techniques for Stimulating Creativity in Decision Making

1) Mind Mapping

Conceptual thinking involves starting with a central idea and

developing new and related ideas from there. Complex problems
can be solved using this technique. It is easy to learn techniques,
but it is difficult to analyze oneself, what it is that prevents one from
being creative, and how to change one’s thinking style.
Techniques become easy if we succeed in doing that. For
entrepreneurs to stimulate creativity, they must change themselves
and create an environment that won’t inhibit innovation by
establishing control over their employees.

2) SCAMPER

Using SCAMPER, entrepreneurs can discover how to change an

existing product to create a new one. All words are defined as
follows:
 S= Substitute components, materials or people
  C= Combine with other products or services, integrate
 A= Adapt. change the function, use parts of another element
 M= Modify increase or decrease, change the format, change
the characteristics
 P= Put: set in a different use
 E= Eliminate: remove some items to lower the basic functions
 R= Reverse: turn upside down Brainstorming

3) Brainstorming

The technique of brainstorming is widely used to generate ideas.

Creating a good environment for employees to be free from
pressure and give ideas is one of its goals, even though some
people don’t directly relate to creativity. The quantity of ideas is
more important at the beginning, and the quality should come later.
Brainstorming has the ultimate goal of encouraging employees to
think unconventionally and not to limit their ideas by thinking that
they are good or not smart enough.

4) Image Streaming

You can unlock the power of your subconscious mind through Image
Streaming and achieve unmatched creative thinking excellence. As
a result of the thousands of people he has trained in his creativity
technique, image streaming has been demonstrated to be effective
for accessing higher mind insights and creative bolts from the blue. I
recommend getting the audio course The Einstein Factor if you are
interested in learning more about Image Streaming.
Nevertheless, here is a basic explanation of how image streaming
can enhance your IQ, make you more aware, and uncork all the
creative juice inside you that is waiting to be unleashed.

5) Dream Incubation
By using your dreams, you can come up with creative
breakthroughs through dream incubation. Your inner dreaming mind
does your creative thinking for you when you set the scene for it.
You can incubate dreams if you have the discipline to do the things
you need to do at the end of the day and first thing in the morning.

Crisis Management is the process by which an organization deals

with a sudden and unexpected event that threatens to harm the
organization, its employees, customers, or reputation.
It focuses on:
 Identifying possible crises
 Preparing in advance
 Responding quickly and effectively
 Recovering and learning from the event
Types of Crises
1. Natural Crisis – Earthquake, flood, pandemic
 2. Technological Crisis – System failure, cyberattack
3. Financial Crisis – Heavy losses, bankruptcy risk
4. Human Resource Crisis – Strikes, misconduct
5. Reputational Crisis – Negative media publicity

Steps of Crisis Management

1. Prevention
Identify risks and prepare plans.
2. Preparation
Create crisis management team and training.
3. Response
Take immediate action to control damage.
4. Recovery
Restore normal operations.
5. Learning
Review mistakes and improve future planning.

Leadership
Leadership is the process of influencing the behaviors and work of
others in group effort towards the realization of specified goals in a
given situation.

In other words, leadership is a function of three factors: (i) the

leader,
(ii) the led (follower), and
(iii) the situation.

From this it follows that managerial leadership is the process of

influencing a group of subordinates to attain organizational
objectives. It implies pursuit of common goals under the advice and
guidance of the leader in the interest of individuals and the group as
well as for the benefit of the organization. The interaction between
the leader and his followers is based on inter-personal relations.

Function of Leadership
The functions of a leader may be described as follows:
(i) Setting explaining Goals. goals A to leader
provides guidance to the group by setting and his
 subordinates. by setting the main He acts as a guide
of his followers goals of the group.
(ii) Organising. The leader creates and moulds the
organisation by assigning roles appropriate to
individual abilities. He shapes the character of the
group, shows the way and leads it towards the goals.
(iii) Motivation. A leader creates and sustains
enthusiasm among the followers. and zeal. He
inspires them to perform the allotted tasks with
confidence He establishes a motivational meet both
organisational system that enables people to and
personal goals.
(iv) Coordination. He resolves A leader reconciles
individual and common objectives. group. internal
conflicts and creates a community of interests in the
mutual His main task is to develop voluntary
cooperation and to foster understanding and
teamwork.
(v) Representation. A leader represents the group to
his superiors and peers. An effective leader is the
guardian of the interests of the subordinates. and He
is the personal embodiment of the impersonal
organisation, inside by outside the organisation. He
also defends the integrity of the group reconciling
different viewpoints of group members.
(vi) Control. The leader maintains order and discipline
and creates postine response on the part of members
of the group. Control also involves management of
internal conflict. In the words of Drucker, "the first.
test of a leader's competence is its ability to keep
people working with minimum of disruption and the
maximum of effectiveness.
Types of Leaders
1. Intellectual Leaders. As the term implies, intellectual leaders
are those who win the confidence of their followers by their
superior intellect or knowledge. Nearly in all big organization,
there are experts whose advice is sought on matters in which
they are experts. He may be a purchase specialist, a
production expert, a job analyst or an advertising specialist.
Regardless of his function, he is able to get results through
others because of his superior knowledge.
2. Autocratic Leaders. Such a leader dominates and drives his
group through coercion, command and the instilling of fear in
his followers. Such leaders prefer the use of power in
promoting their own ends.
3. Democratic Leaders. A democratic leader is one who acts
according to the wishes of his follower He does what the group
wants. He follows the majority opinion as expressed by his
group. He holds his leadership position because he is loyal to
 his group, is always concerned with their interests, is friendly
and helpful to them, and is always ready to defend them,
individually and collectively
4. Persuasive Leaders. The persuasive leader possesses
magnetic personality that enables him to influence his
followers to join him in doing things. He is the type who can
say, "Let's go, guys" and the whole group responds because
they love and respect him, have confidence in him.

Ethical Leadership
Ethical leadership can be defined as a leadership style that
prioritizes moral values and principles in decision-making and
behavior. It involves demonstrating integrity, fairness, transparency,
and accountability while guiding individuals or teams toward
achieving common goals. Ethical leaders serve as role models,
inspiring trust and confidence among their followers through their
ethical conduct and actions.

The core characteristics of an ethical leader are collectively referred

to as integrity. These are not traits a person is born with but are
learned predispositions developed over time until they become
second nature. According to the sources, the essential
characteristics include:

 Acting in the Best Interests of the Organisation: Ethical

leaders act in good faith, prioritizing the organization's
welfare over their personal careers or interests. This requires
the moral courage to admit when personal interests interfere
with decision-making and the proactive avoidance of
conflicts of interest.
 Honesty: This involves being honest with oneself regarding
values and mistakes, as well as maintaining open
communication with others. Ethical leaders must "walk the
talk," deliver on promises, and share relevant information with
those who may be affected by it.
 Fairness: Rather than treating everyone exactly the same,
fairness is about giving equal consideration to the needs,
interests, and expectations of all stakeholders. It involves
balancing what is good for the "self" (the organization) with
what is good for the "other" (stakeholders and society).
 Respect: This characteristic is rooted in recognizing the
human dignity and contribution of every individual. It
manifests practically through being on time for appointments,
respecting privacy, and listening to opinions that may differ
from one's own.
 Humaneness: Ethical leaders demonstrate empathy and
sensitivity toward how their words and actions affect others.
They take a personal interest in the well-being of their
colleagues, treating them as people rather than mere
"production units".
 Humility: Authentic leaders focus on "our ethics" rather
than boasting about their personal ethical achievements. They
recognize that building an ethical organization is a collective
effort and have the modesty to give credit to others for
successes.
 Courage: This is the willingness to act on convictions even
when it is inconvenient or self-serving to do so. Ethical
courage involves raising concerns about unacceptable
behavior or decisions, though it should be done with tact and
modesty to put an end to the practice rather than to humiliate
individuals.
The "4-V" Model of Ethical Leadership

Developed by Dr. Bill Grace, this framework explains how internal

beliefs transform into external action:

1. Values: Understanding one's core individual values.

2. Vision: The ability to frame actions—particularly in service to
others—within a real picture of what ought to be.
3. Voice: Articulating the vision to others in an authentic and
convincing way.
4. Virtue: The common good; understanding that we become
what we practice.

The Mathematical Impact of Ethics

While ethics is often viewed as qualitative, it has a quantitative

impact on business sustainability. If we consider trust as a variable
in organizational efficiency:

C+ R + I
E=
S
E= Efficiency
C=Credibility
R=Reliability
I=Intimacy
S=Self orientation

Ethical leaders minimize Self-Orientation (S) and maximize the

numerator, mathematically increasing the trust and efficiency within
the organization.
Group
A group is defined as two or more individuals, interacting and
interdependent, who have come together to achieve particular
objectives.
A group is the largest set of two or more individuals who are jointly
characterized by a network of relevant communications, a shared
sense of collective identity and one or more shared dispositions with
associated normative strength. – David H. Smith

Features/Characteristics of group
1. Two or More people
2. Common objectives
3. Collective identity
4. Mutual Interaction and Support
5. Group leader
6. Structure Basis

Types/ Classification of group

1. Formal Work Group
a) Command group
b) Task group
2. Informal Work Group
a) Interest group
b) Friendship group

Formal group
1. Predetermined objectives
2. Well defined responsibility-authority relationship
3. Formal relations are well planned and created deliberately
4. Formal chain of command
5. Usually stable and rigid organizational structure
6. Lack of consideration of human sentiments
7. Decentralized leadership

Command group
a) Collection of subordinates who report to the same supervisor.
b) Command groups are based on the basic reporting
relationships in organizations
 c) They are frequently represented on organizational charts.

Task Group
a) Collection of people who come together to accomplish a
specific goal.
b) Once the goal has been accomplished, the task force is
usually disbanded
c) Standing committee or task groups are task forces that may
be enduring (though members may change) or permanent in nature.

Informal group
a) No predetermined objectives
b) Run with personal and emotional relationship
c) informal relations are well planned and created knowingly
d) Does not have formal chain of command
e) Usually unstable and highly flexible organizational structure
f) Fully operated with human sentiments
g) Informal leaders are chosen from the group member.

Friendship group
Collection of organizational members who enjoy each other’s
company and socialize with each other (often both on and off the
job)
Members know each other very well and behave good.
Membership can be extended outside the organization.

Interest group
Collection of people having a common goal or objective (related to
their organizational membership).
Members involve in group to achieve organizational goals by uniting
their efforts.
Membership usually limit within the organization for particular
purpose.

Stages of Group Formation

 Forming Stage: In this initial phase, individuals who are

prepared to join the group introduce themselves. It is often
characterized by uncertainty, confusion, and many
queries because the group's purpose, structure, norms, and
leadership are not yet clearly understood. At this point,
members are still deciding if they will certainy join the group.
 Storming Stage: This stage is marked by a high degree of
conflict and confrontation. The group experiences shifts in
membership expectations and interpersonal styles, and
disagreements often arise regarding leadership, authority,
and control. This stage begins to resolve when members
start negotiating and accepting group norms and
values.
  Norming Stage: During this phase, members begin to
cooperate and develop harmonious relationships. The
group starts to think as "we" instead of "I," showing strong
group cohesiveness and identity. This stage is considered
complete once everyone accepts a common set of
expectations for how the group operates.
 Performing Stage: At this level, the group functions as a
mature, organized, and well-functioning unit. Members
devote their efforts toward group output and achieving goals,
leading to a sense of satisfaction. For permanent work
groups, this is the final stage of the process.
 Adjourning Stage: This is the final stage for temporary
groups. Members analyze their achievements, which can
result in feelings ranging from satisfaction to frustration. This
stage serves as a background for forming new groups
and ends with the formal dissolution of the current group.

Team
Team consists of a small number of people who possess
complementary skills and are committed to a common purpose,
specific performance goals, and an approach for which they hold
themselves mutually accountable.

Differenee Between Group and Team

The differences between a group and a team are defined by how

they are structured, how they work together, and how they are held
accountable. While a group consists of two or more interacting and
interdependent individuals working to achieve objectives, a team is
a cooperative unit where coordinated efforts result in positive
synergy.

Feature Group Work Team Work

Members have Members have both
Accountabi
individual individual and mutual
lity
accountability. accountability.
The purpose is the same The team delivers on specific
Purpose as the broader purposes that the team itself
organization mission. defines.
Leadership Requires a strong and Leadership roles are shared;
 they generally do not have
clear focused leader.
one clear leader.
Work Emphasizes individual Emphasizes collective work
Products work products. products.
Basic To interact to share
To perform collectively.
Purpose information.
Focused on being Focused on open-ended
formal and efficient; discussion and active
Meetings meetings are held to problem-solving; meetings
discuss, decide, and are held to discuss, decide,
delegate. and do real work.
Guided by Guided by specific team
Motivation
organizational goals. goals.
Based on a member-
Rewards Rewards are team-based.
based reward system.

types of Team

The sources identify five primary types of teams utilized within

organizations:

 Problem-solving Team: This type typically consists of 5 to

12 members from the same department who meet to discuss
improving quality, efficiency, and the work environment. While
they recommend solutions, they often lack the authority to
implement them. An example of this is a quality circle.
 Cross-functional Team: These teams are composed of
employees from the same hierarchical level but different
work areas or departments. They are effective for
coordinating complex projects, exchanging information, and
developing new ideas. Common examples include
committees and task forces.
 Virtual Team: Members of a virtual team are connected
through technology, such as video conferencing, email,
and WAN, allowing them to overcome time and space
constraints. While they offer flexibility and quick decision-
making, they lack face-to-face communication.
 Advisory Team: These teams are formed specifically to
recommend suggestions to decision-makers. They can
be temporary or permanent and often feature a frequent
rotation of members. Like problem-solving teams, they
generally lack the authority to implement their own
suggestions.
 Self-managed Team: These are autonomous units
empowered to solve problems and execute plans
independently. Members are often self-selected and are
responsible for setting their own performance standards,
evaluation systems, and measuring each other's performance.
The importance of teams in an organization stems from their ability
to produce positive synergy, where coordinated individual efforts
result in a level of performance that is greater than the sum of those
individual parts.

 Maximum Productivity: Teams focus on collective work

products and performing collectively, which helps maximize
the overall output of the organization.
 Problem Solving: Teams, especially specialized ones like
problem-solving teams and self-managed teams, are
specifically designed to discuss and implement ways to
improve quality, efficiency, and the work environment.
 Increased Accountability: While groups focus on individual
accountability, teams foster a sense of mutual
accountability where members hold themselves and each
other responsible for the team's purpose and goals.
 Learning Opportunities: Because teams are composed of
individuals with complementary skills, they provide a
platform for members to learn from one another, which is a
natural extension of knowledge management.
 Improved Communication and Relations: The
collaborative nature of a team—characterized by open-
ended discussion and active problem-solving—helps
improve communication and develop stronger professional
relationships among members.
 Goal Achievement: Teams are guided by specific team
goals that they define themselves, leading to a unified
commitment to achieve these objectives effectively.
 Innovation and Coordination: Cross-functional teams
are particularly important for coordinating complex projects,
exchanging information, and developing new ideas across
different departments.

Creating an effective team within an organization requires a

combination of clear structural elements and strong interpersonal
dynamics. Based on the sources, the following factors are essential
for building and maintaining an effective team:

Core Requirements for Effectiveness

 Clear Goals: Teams must have specific team purposes and

performance goals that the team itself helps define.
 Relevant Skills: Team members should possess
complementary skills and abilities that allow them to
perform collectively.
 Unified Commitment: Every member must be committed to
a common purpose and an approach for which they hold
themselves mutually accountable.
  Effective Communication: Encouraging open-ended
discussion and active problem-solving is vital for team
success.
 Appropriate Leadership: Unlike traditional groups that rely
on a single clear leader, effective teams often have shared
leadership roles.
 Negotiating Skills: Members must be able to negotiate
and resolve conflicts regarding goals, expectations, and
interpersonal styles.
 Internal and External Support: The team requires
adequate resources and backing from the broader
organization to function effectively.

Strategic Considerations

 Team-Based Reward Systems: To encourage collective

performance, organizations should move away from individual
member-based rewards and instead implement rewards
based on team achievement.
 Careful Member Selection: For specialized units like cross-
functional teams, effectiveness depends heavily on the
careful selection of members who can handle diversity and
complexity.
 Managing Conflict: Disagreements are natural in team
settings, but they must be managed through strategies such
as collaborating, compromising, or confrontation to
prevent them from hampering goal accomplishment.
 Autonomy: For self-managed teams, effectiveness is
driven by their ability to be autonomous, meaning they are
empowered to set their own performance standards, evaluate
one another, and execute their plans independently.
Conflict
Conflict may be defined as disagreement and incompatibility
between two or more parties in relation to resources, information,
task.

Causes of Conflict
1) Difference in Goal
2) Task Interdepedence
3) Resource Allocation
4) Information
5) Competitive reward System
6) Miscommunication
7) Individual Differences
8) Organization Environment

Intergroup Conflict Management

Intergroup conflict management involves addressing the

disagreements that arise between different groups, sections, or
departments within an organization. According to the sources,
effective management of these conflicts is crucial because while
uncontrolled conflict can lead to organizational demise, a managed
"minimum level" can stimulate creativity and innovation.

Strategies for Managing Intergroup Conflict

 Improving Communication: Establishing better and more

open communication channels between departments helps
restore group interactions and promotes growth.
 Joint Decision-Making: Involving multiple groups in the
decision-making process can prevent the breakdown of
standard mechanisms and reduce feelings of rivalry.
 Aligning Group Goals: Managers should work to remove
disparities between departmental goals (e.g., aligning
production quality with sales requirements) so all units work
toward the same organizational objectives.
 Demonstrating Mutual Respect: Displaying concern for
other groups' views and treating all members with respect
helps prevent a climate of distrust and suspicion.
 Structural Adjustments: Proper delegation of authority,
empowerment, and autonomy can help channel ideas properly
and reduce friction.
Modes of Conflict Resolution

When intergroup conflict reaches a manifest stage, it can be

resolved through five primary modes, depending on the desired
level of cooperation and assertiveness:

1. Collaborating (Win-Win): Both groups work together to find

an integrated solution that satisfies the concerns of all parties.
This is ideal when both sets of objectives are too important to
be compromised.
2. Compromising: Both parties make concessions to find an
expedient, mutually acceptable solution. While neither party is
fully satisfied, it avoids prolonged power struggles.
3. Competing (Win-Lose): One group uses its power base to
satisfy its concerns at the expense of the other. This is often
used in emergencies or when unpopular decisions must be
enforced.
4. Accommodating: One group sacrifices its own interests to
satisfy the other group. This is often done to maintain
harmony or build goodwill for the future.
5. Avoidance: One or both groups withdraw from or postpone
the conflict. This may be used for minor issues or to allow
emotions to cool down before addressing the problem.

The Goal: Maintaining a "Minimal Level"

Modern and behavioral views suggest that the goal is not to

eliminate intergroup conflict entirely but to manage it effectively.
Maintaining a minimal level of conflict is considered desirable
because it:

 Keeps groups vibrant, self-critical, and creative.

 Develops group identity and cohesiveness as members
unite to meet challenges.
 Serves as a power equalizer between parties, such as during
management-union negotiations.
 Challenges old policies and acts as a stimulus for analytical
thinking, leading to better organizational systems.

Functionl VS Dysfunctional Conflict

Functional Conflict

Functional conflict is a type of disagreement that supports

individual and group goals, ultimately leading to higher
performance. It is viewed as constructive because it:

 Develops Cohesiveness: It encourages team members to

prioritize group goals over individual interests.
  Stimulates Innovation: A competing spirit among groups
can foster creativity and lead to the development of new
ideas.
 Improves Systems: By challenging existing policies and
promoting analytical thinking, functional conflict leads to the
review and upgrade of organizational systems.
 Acts as a Power Equalizer: It can balance power between
parties, such as during management-union meetings, allowing
for more equitable discussions.
 Restores Communication: Expressing conflict can re-open
channels between groups that might have been closed,
promoting growth and organizational development.

Dysfunctional Conflict

Dysfunctional conflict is a disagreement that hinders individual or

group performance. It often takes a destructive form and is
particularly common in behavioral conflicts relating to personal
values, attitudes, and ego states. It is identified by the following
characteristics:

 Lack of Resolution: The conflict persists without leading to

any productive solution.
 Neglect of Goals: Basic organizational objectives are ignored
in favor of the conflict itself.
 Negative Climate: It creates an environment of distrust
and suspicion, where employees feel devalued, defeated, or
demeaned.
 Operational Issues: If left uncontrolled, it leads to increased
absenteeism and employee turnover.
 Organizational Demise: Extreme levels of dysfunctional
conflict can be so disastrous that they lead to the total failure
of an organization.

Transition of Conflict

The transition of conflict refers to the historical evolution of how

conflict is perceived and managed within organizations. The sources
outline four distinct stages in this transition:

1. Traditional View (1930s–1940s)

During this period, conflict was viewed entirely negatively. It was

considered harmful, unnecessary, and synonymous with
violence, destruction, and irrationality.
  Perceived Causes: It was believed to arise from poor
communication, a lack of trust, and the failure of managers to
respond to employee needs.
 Management Goal: The primary objective was to avoid
conflict at all costs. Managers focused on creating rigid
organizational structures with clearly laid-out rules and
policies to ensure no misunderstandings occurred.

2. Human Relations View (1940s–1970s)

This view shifted from trying to eliminate conflict to accepting it as a

natural and unavoidable occurrence.

 Key Philosophy: Since conflict is inherent to individual

behavior, organizations must accept it rather than try to
eliminate it.
 Management Goal: The focus was on building an
environment of trust, cooperation, and friendship. While
conflict was accepted as natural, managers still aimed to
avoid stress and strain through proper communication,
achievable goals, and fair resource allocation to ensure
organizational prosperity.

3. Behavioural View

Behavioural scientists began to encourage conflict on the grounds

that a completely harmonious group can become static, apathetic,
and non-responsive.

 Key Philosophy: Conflict is a natural outcome because

people differ in values, attitudes, and goals.
 Management Goal: To maintain a "minimal level of
conflict". This level of conflict is seen as helpful and
constructive because it:

o Increases competitiveness and productivity.

o Stimulates innovation and creativity.
o Prevents groups from becoming vibrant and self-
critical.

4. Modern View

The modern view holds that conflict is not just natural but
necessary for organizational effectiveness.
  Key Philosophy: Conflict is structural in nature and
endemic to the organizational milieu. It is considered an
integral part of the nature of change.
 Management Goal: Conflict should be welcomed and
managed effectively rather than suppressed. Some specific
positive outcomes of managing a minimum level of conflict
include:

o Power Equalizer: It can balance power between

parties, such as during management-union meetings.
o Analytical Thinking: It serves as a stimulus for
challenging old policies and systems, leading to better
decision-making.
o Group Cohesion: It helps group members set aside
personal problems to focus on a group identity and
meet external challenges.

Communication
Features
Importance
Process
Types
Barriers

Supervision
supervision is defined as the direction, guidance, and control of the
workforce with the authority to ensure that employees are working
according to established plans, policies, and time schedules, while
also providing them with the necessary assistance to accomplish
their assigned work

Technique of Supervision

1. Democratic or Consultative Technique

This approach is based on democratic principles of leadership and is

employee-centered.
  Worker Participation: The supervisor seeks the advice and
suggestions of workers on all important matters.
 Benefits: It encourages original thinking, awakens
enthusiasm, and makes employees feel that the supervisor is
invested in their professional development and progress.
 Impact: This style typically has a positive impact on
employee behavior and effort because it prioritizes their
needs and motives.

2. Autocratic Technique

In this model, all authority and decision-making rights are centered

in the supervisor.

 Strict Control: The supervisor's orders must be strictly

obeyed, and they maintain full control over their subordinates.
 Application: While generally less common today, this
technique is sometimes used when workers are perceived as
unfaithful or undisciplined. It is based on the traditional
"Theory X" of motivation.

3. Free-Rein (Laissez-faire) Technique

This technique is the opposite of the autocratic approach.

 Complete Freedom: The supervisor gives employees

complete freedom to perform their work.
 Developmental Focus: The supervisor observes the abilities
of the workers and seeks to develop them through autonomy.

Here’s a clear and useful overview of supervision techniques—

often used in education, social work, counseling, management,
nursing, and organizational leadership.

4. Individual (One-to-One) Supervision

A private meeting between supervisor and supervisee to discuss

performance, progress, challenges, and goals.

 Coaching – helping staff build skills through guidance and

feedback.
 Mentoring – long-term professional development support.
 Counseling – addressing personal or work-related issues
affecting performance.
 Direct instruction – teaching specific procedures or
competencies.
5. Group Supervision

A supervisor meets with several employees simultaneously.

 Team problem-solving
 Sharing experiences
 Discussing cases or tasks
 Setting collective goals

Advantages: encourages peer learning, improves communication,

saves time.

Factors Influencing the Choice of Technique

S – Supervisor’s Competence

Skills, experience, leadership style

Confidence in supervising others

T – Type of Work

Simple or complex work

Routine tasks vs. creative/technical tasks

O – Organizational Policies

Rules, procedures, structure

Level of hierarchy and control

P – People Being Supervised

Their experience, motivation, maturity

Whether they need close or loose supervision

S – Size of Group

Large groups → group supervision

Small groups → individual or close guidance

W – Working Conditions

Availability of resources

Time, tools, environment

R – Relationship & Communication

Trust between supervisor and supervisee

Openness, clarity, feedback style

Monitoring
Process
Tools of Monitoring

control System
PRocess
Types
Dimension of Controlling
Necessary Condition for Controlling
Information System for effective Control
Objectives and Importance

Chapter 7
Quality Control System
Dimension of Quality
Steps in Quality Control
Tools of Quality Control
Quality Management
Universal Process of Quality Management

Total Quality Management

Tools of TQM
Deming Management
Principles
Factor Affecting Quality
Role of Manager for Quality Control
Principles of TQM

Benchmarking
Technique of Benchmarking
Types of Benchmarking
Quality Assurance

Organizational Change
Lewins Change Management
Importance of Change
Cause of Resistance to Change
Overcoming Resistance to Change

Organizational Development
OD management Technique

Conflict Management
Types of Conflict
Cause of Conflict

Negotiation
Types of Negotiation

Knowledge management
Types
Tools
Advantages