Introduction to Management

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 Chapter One
Fundamentals of
Management
 Introduction
 Organizations posses human as well as non-human resources (plant,
equipment, land, money) that are put to use in the service of specific
goals.

 As we know resources are limited, so that, it is better to manage

effectively and efficiently to satisfy the unlimited need. Therefore,
Management is needed whenever people work together in an
organization
 Definitions of Management
There is no single, comprehensive and universally accepted
definition of management. Because:

 Management is a vast subject, It is impossible to put all essential

features of management in a single definition.

 Management is concerned with the human beings, who are

behaviorally highly unpredictable.

 It has many areas of applications. It is applied in profit, non profit,

private, government, social and business organizations.
 Management is the process of achieving goals and
objectives effectively and efficiently through and with
the people.

 “Management is a process of designing and

maintaining an environment in which individuals work
together to accomplish selected aims effectively and
efficiently” - Koontz and Weihrich.

 “Management is the organ of society specifically

charged with making resources productive” - Peter
Drucker.
 Management is the art of getting things done through people effectively
and efficiently - Mary Parker Follett.

 Effectiveness: is a way that produces a desired result.

 Efficiency: is being capable of achieving the desired result with the
minimum use of resources, time and effort.

 Management is a distinct process consisting of activities of planning,

organizing, actuating and controlling, performed to determine and
accomplish stated objectives with the use of human beings and other
resources - Terry and Franklin.
 Significance of Management
Encourages Initiative Improves Relations
Encourages Innovation Reduces Absenteeism & Turnover
Facilitates Growth & Expansion Encourages Team Work
Improves Life of Workers Optimum Use of Resources
Improves Corporate Image Reduces Wastage
Motivates Employees Increases Efficiency
 Overview of Managerial Functions
Management functions are the activities that managers are supposed to
perform as result of the position held in the organization.

Manager is any person who performs the function of management

for the accomplishment of predetermined goals.

Regardless of the type of firm, all managers have certain basic

functions-planning, organizing, staffing, leading and controlling.
 Cont’d
 They are become widely
accepted functions of
. management everywhere.

 The scope and nature of

these functions vary from one
management level to another
and from firm to firm
 Planning
 Planning is the process of determining objectives and selecting
future courses of actions

 Planning bridges the gap from where we are to where we want to

go
“If you fail to plan,
 It is deciding in advance you plan to fail”
o What to do, How to do, Why to do, Where to do and By whom
 Organizing
 Organizing is the arrangement of an organization’s resources (people,
materials, technology & finance) in order to achieve organizational goal

 It involves decisions about

o Division of work,
o Allocation of authority
o Allocation of responsibility
o Coordination of tasks
 Staffing
 Staffing is all about “Placing right person at the right position”
 It is an activity where people are recruited, selected, trained &
developed for the successful accomplishment of goals.

 It is a continuous and vital function of management which involves

filling and keeping filled positions in a given organizational
structure.
 Leading/ Directing

 It is the function of guiding and supervising the activities of the

subordinates.
 It involves directing, influencing and motivating employees
to perform essential tasks.
Leading encompasses three essential elements: motivation,
leadership and communication.
 Controlling
 Controlling is measuring and correcting activities. It
measures performance against goals and plans.
 Levels of Management
Top Level Management
• Making overall control of the organization
Lower Level Management
• Establishing broad objective & strategies.
• Plan day-to-day activities and assign
• Dealing with external parties (Gov & etc.)
operating employees to specific tasks
Middle Level Management • Sending reports & statements to
• Acting as bridge b/n top & low managers superiors
• Translating long term into mid term plans • Manage the work of nonmanagerial
• Manage the work of first line Management employees
 Managerial Skills
 Managerial skills are the ability of the individuals in a managerial
position to fulfill managerial activities.

 Types of managerial skills

 Technical skills
 Human skills or interpersonal skills
 Conceptual skills
 Technical skills:
 The ability to use specific knowledge, techniques, and resources in
performing works.

It is knowledge and proficiency in activities involving methods,

processes, and procedures. Thus, it involves working with tools and
specific machines.

These skills are more important for first line managers.

 Human skills
Involves the ability to work with other people both individually and in
groups.

It is also the ability to resolve conflict. Generally, human skill is the skill
to motivate and create enthusiasm in the minds of followers.

These skills are important to all level of managers.

 Conceptual skills

 The mental ability to analyze complex situations.

 To conceptualize requires imagination, broad
knowledge, and the mental capacity to conceive
abstract ideas

 Conceptual skills are important to top level of

managers.
 Managerial Roles

Definition Classification
A role is a set of behaviours associated
with a particular job 1. Interpersonal Role

Managers perform ten different but closely 2. Informational Role

related roles and that categorized into
three broad groups. 3. Decisional Role
 Interpersonal Role
Figurehead  Managers who are required to perform duties of
ceremonial and symbolic in nature. It is the most basic and
Role
the simplest of all managerial roles

Leadership  Managers who are responsibility for directing and

coordinating the activities of subordinates in order to
Role
accomplish objectives. Motivating and communicating
subordinate to meet the organization’s goals

Liaison role  The manager coordinate and support people who can
affect the organization’s success.
 Informational Role
Monitor Role  Receive wide variety of information as nerve
center of internal and external information of the
organization

Disseminator  Transmit information receive from outsiders or

from other employees to members of the
Role
organization

Spokesperson  Transmit information to outsider on organizational

plans, polices, actions and results
Role
 Decisional Role
Entrepreneurial Managers play this role when they initiate new projects,
Role
launch a survey, test a new market, or enter into new
business
Disturbance Responsible for corrective action during disputes or crises;
Handler Role
resolves conflicts among subordinates and adapt to
environmental crisis.
Resource Decides distribution of resources among various
Allocator Role
individuals and groups in the organization.
Negotiator Negotiates with subordinates, groups or organizations both
internal and external.
 Universality of Management
 Universality of management refers to the transferability of its
principles, techniques, functions and skills from one time, place
or job to the other.

All these management practices are equally practicable and

applicable everywhere in the world irrespective of the nature of
the job, differences in customs, habits and social laws.
 Is Management Science, Art or Profession?
Management as Science: Management as an art
Science teaches to ‘know’ and Art teaches to ‘do’ and
characterized by: characterized by:

 Systematic body of knowledge Use of knowledge

 Management is a social science
Creative art
 Management is inexact science
Personalized application
 Scientific Management
Constant practice
 Management a Science as well as an Art
 Management combines features of both science as well as art
 Like science it has systematic and well- organized body of
knowledge and like art it requires personal skill, creativity and
practice to apply it

 A manager to be successful in his profession must acquire the

knowledge of science & the art of applying it.

 Both science and art exist together in every function of management.

 Is Management is Profession?

Profession can be Management as Profession

defined as an occupation 1. Well-defined body of knowledge
backed by specialized 2. Formal education and training
knowledge and training, 3. Minimum Qualification
4. Representative body
in which entry is
5. Service above self
restricted.
6. Ethical code of conduct
Thanks
Decision Making
 Decision is choice made from available
alternatives.

 Decision making: is the process of selecting or

choosing the best course of action from numbers of
alternatives.

 Managers are continually confronted with

opportunities and threats from external
environment. They must constantly analyze the
effect of different decisions on their organizations.
 1. Identifying a Problem 2. Developing Alternatives
 The decision making process • This involves developing a list of
begins by determining a the alternative that may be viable
problem exists. in dealing with the stated
 Problem is a discrepancy problem.
(difference) between an • Involves defining the possible
existing and a desired state. It alternatives or choices that would
is unsatisfactory condition. resolve the problem.
 3. Analyzing Alternatives 4. Selecting an Alternative
 Alternatives are rated and
 Involves choosing the best
analyzed on the basis of the
criteria. alternative, based on the analysis
 The decision maker must that suit to the problem.
critically evaluate each and
identify the strong and weak
points.
5. Implementing Alternative 6. Follow up/ Evaluation
 Putting the decision into action.  Having implemented the decision,
The decision should be effective the manager should compare the
at proper time and in proper desire goal and criteria, if
way to make the action effective. necessary, take corrective action.
 This requires: Communication,  Managers should adjust, modify or
Getting acceptance of the take any other correctives if
decisions, and Getting support & necessary.
cooperation for converting the
decision in to effective action.
Types of decision making

 Several authors believe that there

are two types of decisions:

 Programmed &

 Non-programmed decisions.
 A. Programmed Decision Making
 It is "programmable" because of a specific procedure
can be worked out to resolve based on experience in
similar situations.

 A decision that is repetitive and routine. A definite

method for its solution can be established. Does not
have to be treated as new, each time its occurrence

 It involves an organization's every day operational and

administrative activities
 Cont’d
 They are primarily found at the middle and
lower levels of management
 Data used in making a programmed decision usually are
complete and well defined.

 Participants know the details and agree on how to resolve

the problem.

 Examples: pricing standard, customer orders,

determining billing dates, recording office supplies etc.
 B. Non-programmed Decision
 It is used to solve non-recurring problems. No well-

established procedure exists for handling them.

 A decision that is unique (novel or new) and ill-structured.

Managers do not have experience to draw upon.

 In contrast to programmed decisions, available data are

usually incomplete.

 Non programmable decisions are commonly found at the

middle and top levels of management

 Cont’d
 It is “tough” decisions that involve risk and uncertainty and
call for entrepreneurial abilities

 Such decisions draw heavily on the analytical abilities of the

manager

 It is often related to an organization's policy-making activities,

such as: Add a product to the existing product line,
Reorganize the company, or Acquire another firm.

 Examples: Moving into a new market, investing in a new

unproven technology, changing strategic direction
 Decision Making Environment
Decision under certainty;
 All required information are completed
 Future outcomes associated with each alternative are
clear
 Decision-making under certainty rarely occurs,
however, because external conditions are perfectly
unpredictable.
 Decision Under Risk;

 Information is available but it is not sufficient to

select the best alternative. It helps to assign
probability.
 At the time a decision is made, the probabilities of
several alternative outcomes are known
 Future outcomes associated with each alternative
are subject to chance
 Decision under uncertainty;

● Future outcome about alternatives is unknown

● Information about alternatives and future
events is incomplete and unavailable
● Managers may have to come up with creative
approaches to alternatives.
 Why Do Managers Make Poor Decisions?
 Lack of adequate time:

 Failure to define goals:

 Using unreliable sources of information:

 Fear of consequences:

 Focusing on symptoms rather than causes, and reliance on

Hunch and Intuition:
Planning
 Introduction
 The management functions are planning, organizing, staffing,
direction and controlling. These functions are essential to achieve
organizational objectives.

 If objectives are not set, there is nothing to organize, direct and

control. Planning is the first and foremost function of management.

 Planning is a critical management activity regardless of the type of

organization being managed.
 Definition of Planning
 “Planning is deciding in advance what to do, how to do it, when to do
it and who is to do it.
 It is an intellectual process in which creative mind and imagination
are essential.
 It bridges that fills the gap from where we are to where we want to go.
 Plan is a blueprint for action & prescribes activities necessary for an
organization to realize its goals.
 Cont’d
 Planning involves the selection of objectives, policies,
procedures and programs from among alternatives.

 In more formal terms, planning is the systematic development of

action programs aimed at reaching agreed-upon business objectives
by the process of: Analyzing, Evaluating, and Selecting among the
opportunities which are foreseen.
 Planning answers six basic questions;
 What to do: is the goal that we want to achieve.
 When to do: is the question of timing.
 Where to do: is the place at which the plan is put into practice.
 Who does it: is the individual to undertake specific tasks.
 How it is done: is the strategy/specific steps for achieving the
goal.
 How much is required to do: concerns of resources essential to
reach goals.
 Importance of planning
Planning has great importance in all types of organization whether:
 Business or non-business
 Private or public
 Small or large

Without planning, business decisions would become random, ad

hoc/unplanned choices.
 Planning is important because of the following reasons.

1. Primacy of planning 2. To minimize risk & uncertainty

Planning establishes the objectives • The organization continuously interacts
and strategies. All other functions are with the external dynamic environment

performed to achieve the objectives where there is great amount of risk and

set by the planning. uncertainty.

• Planning helps the manager to cope up

What is not planned, cannot be
with and prepare for changing
organized, staff, lead and controlled.
environment.
3. To focus attention on objectives; 5. To Facilitate Control
Planning focuses on organizational objectives and
 Planning sets the goals
direction of action for achieving these objectives.
and develops plans to
4. To increase organizational efficiency achieve them. These
and effectiveness goals and plans become
 The resources are put in a way which ensures the standards or
maximum contribution to the organizational benchmarks.
objectives.  Control ensures that the
 Effectiveness and Efficiency leads to success. activity confirm to plans.
 Types/ classification of plans
Based on Based on Time Based on
Based on Scope
retentiveness horizon Approach

• Standing • Long range • Strategic • Reactive

• Single used • Mid range • Tactical • Proactive
• Short range • Operational
Plans can be divided in two
Standing Plans
based on retentiveness
(frequency of use)
 Standing Plans is ongoing plans that

standing plan provide guidance for activities performed

single used plan repeatedly.

 By using standing plans management
handles repetitive problems.
 They can limit employees' flexibility & make
it difficult to respond to the needs of the
customers.
 Cont’d
Standing plans are plans that are used again & again;
followed each time; and designed to deal with organizational
issues or problems that reoccur frequently.

Standing plans include mission, goals/objectives, strategy,

policy, procedure, method and rule.
 A. Mission Or Purpose
• The mission or purpose identifies this basic function
or task of the organization, for example the purpose of
university is teaching & research.

• A mission statement links the organization activities to the needs of

the society and it is legitimates/ reasons for its existence.
 B. Goals Or Objectives
Goals are the outcomes you intend to achieve. Objective is the intended
goal which describes definite scope and suggests direction to the efforts of
a manager.

Every organization is established for the purpose of achieving some

objectives: An individual who starts a business has the objective of earning
profits.
 Characteristic of Objective
• Objectives are multiple in
numbers
• Objectives are tangible or
intangible
• Objectives have a priority
• Objective generally arranged
in hierarchy.
• Objectives some time clash
with each other
 C. Strategies
 A strategy is the direction and scope of an organization in the
long run.

 It helps an organization achieve an advantage over its

competitors through an efficient utilization of resources.

 It shows the path to achieve the defined vision.

 D. Policies E. Procedure
Guiding principles established by the • A procedure is a chronological

company to govern actions usually sequence of steps to be undertaken

to enforce/implement a policy and to
under repetitive conditions.
attain an objective.
Policies are general statements of
• A procedure provides a detailed set
understanding which guide or channel
of instructions for performing a
thinking in decision making of
sequence of actions
subordinates.
 F. Method
 A method is a prescribed/prearranged way in which one step of
procedure is to be performed. A method is thus a component part of
procedure.

 Medical examination is a part of recruitment and selection procedure, method

indicate the manner of conducting medical examination.

 Procedure shows a series of steps to be taken where as a method is only

concerned with a single operation.
 G. Rules
 Rules are the simplest and strictest type of standing plan found in
organizations. They provide detail & specific regulations for action.

 A procedure might be looked upon as of rules but a rule may or may not be a
part of procedure. Example “No smoking” is a rule unrelated to any
procedure.

 They are pre-decided actions by top level managers. Employees don't

have right to modify or change rules by themselves.
 Single-Use Plans
 A one-time plan specifically designed to meet the need
of a unique situation.

 They are not used again once the objective is

accomplished. Single-use plans are commonly three
types, namely
 Programs
 Projects and
 Budgets
 A. Programs
They are a relatively broad set of activities designed to accomplish a
particular set of goals.

They are complex and encompass goals, policies, procedures, rules,

task assignments, resources to be employed.

They are supported by budgets. Programs may be of various size &

duration
 B. Projects
• Projects are parts of a general program and direct the efforts of
individuals and group.

• It is typically less comprehensive & narrower in focus than programs.

• Project is a subset of a specific program or smaller portion of a program.

• Projects are connected with a major program but a project can be handled by
itself.
 C. Budgets
 Budget is the sum of finances allocated for a particular purpose and the
summary of intended expenditures along with proposals for how to meet
them.

 It is a fundamental planning instrument in companies that deals with the future

allocation of resources. Budget can be expressed in: Financial terms, Labor
units, Products/ unit of product and Machine hours and other
 Serves as a benchmark for controlling.
 Classification of plans based on time
• All planning deals with the future;
and the future are measured in
time.
• All the kinds of plans are
interrelated and one is the
derivative of the other.
Long – range Mid – range Short – range
planning planning: planning:
• The time usually ranges
• Are concerned with the • Practice at operational
between long & sort
future direction of the range planning.
plans
organization. • They are usually • The time length is
• The time usually ranges developed for 1-5 years. commonly taken < 1
from 5-10 years. years
 • It is a general plan outlining decisions of
Classification based
resources allocation, or steps necessary to
on Scope reach strategic goals.

• It is also developed by top level managers;

1. Strategic Plan
mostly long-range in its time horizon.

• It is a process of analyzing & deciding the

organization mission, objective, strategy
(major courses of action) and the major
resource allocations.
 2. Tactical Plan 3. Operational Plan
Tactical plan is a plan aimed at Operational plans focuses on carrying
achieving tactical goals and out technical plans to achieve
developed to implement specific operational goals. Concerned with
parts of strategic plan. day-today; week-to-week activities of

It is concerned with shorter time the organizations.

frame & narrower scopes than  Operational planning is mainly short

strategic planning. range, more specific & detailed.
 Contingency Plan

 Contingency planning is an approach that has become very popular

in today's rapidly changing business envelopment.

 Alternative courses of action has taken if the original plans are

become inappropriate due to the changing circumstances.

 It is proactive in nature & the management tries to anticipate changes

in the environment and prepares to cope with the future events.
 Classification of plans based on approach

Proactive planning: is occurs when  Reactive planning: occurs when

organizations responses come before organizations responses come after

the environmental changes. the environmental changes have

In this approach, organization do not taken place.

wait for the environment to change but In such situation the organizations

take action in advance. loses opportunities to that org which

adopt proactive approach.
 The Planning Process

Step 1: Understanding the existing situation

Step 2: Forecasting
Step 3: Establishing objectives
Step 4: Determining the alternative courses of action
Step 5: Evaluating alternative courses of action
Step 6: Selecting a course of action
Step 7: Formulating derivative plans
Step 8: Quantifying plans by budgeting
Step 9: Implementing the plan
Step 10: Controlling & evaluating the results
Thanks
Managerial Function

Organizing 76
 Introduction
 The term organization is come from ‘organism’ which means a structure
of interrelated and interdependent parts.

 The parts or components of organization consist of men, machines,

materials, methods, money, functions, authority and responsibility.

 The task of organization is integrate these components effectively for

the purpose of attaining the common goal.

 Organizing is the process of arranging and structuring work to

accomplish an organization’s goal. 77
 Cont’d
 In order to understand the meaning and characteristics of organization, we shall
study it under the following heads:
 Organization as a group of persons: Organization is viewed as a group of
people contributing their efforts towards common goal.
 Organization as a structure of relationship: is relationships among the
individuals or the members of the organization.
 Organization as a function of management: Like ‘planning’, organizing is
also applied in every aspect of management
 Organization as a process. is the process of establishing relationship
among the members of the organization. 78
 Purpose of Organizing
 To facilitate pattern of  Assign tasks & responsibilities
communication  Coordinates diverse organizational
 To allocate authority & tasks.
responsibility  Establish relationship among
 To create proper balance others
 To stimulate creativity  Allocates organizational resources.
 To encourage growth  Enhance development of personnel
 To make use of technological  Facilitate adaptation to change
improvements  To locate decision center 79
 Type of Organization
A. Formal organization B. Informal organization
 Formal organization is an  refers to people in-group
organization that is deliberately associations, but these associations are
and rationally designed. not specified in the structure of the
 It approved by management formal organization.
through organizing process to  They are not established deliberately
achieve organizational goals/ like formal organization and they
objectives. cannot be avoided.
 It is a system with well-defined  They are natural grouping of people
jobs, definite authority, in the work situation based on their
responsibility, and accountability. behavioral patterns, interests, beliefs,
objectives, etc.… 80
 Common characteristics of Common Characteristics of
formal organization informal organization
1. Formal organization are 1. Group norms:
purposefully established. 2. Group cohesiveness:
2. In a formal organization each 3. Someone who is most active
employee has delimited among the others as a leader
authority.
4. Grapevine Communication
3. Organizational chart is drawn. network:
4. Positions in an organization are 5. Short Lifespan and purpose:
not personal properties.
81
 Reasons for the Limitation of informal organizations
formation of informal  Resistance to change: There is often a
organization tendency to resist changes.

A. Mutual benefit  Role conflict: both formal and informal

organization roles may contradict each
B. Friendship
other.
C. The need to fulfill social
 Rumor: informal organizations disseminate
needs
distorted information.
D. Physical work condition
 Conformity: Some leaders of informal
Working in proximity.
organizations may have hidden agenda or
E. Administrative practice
promote destructive actions. 82
 Organization Process
 Consider plans and goals: Plans affect organizing and its results of the
organization.
 Determine the work activities: knowing all jobs that are going to be performed.
 Classifying and grouping activities: Grouping similar activities is based on
division of labor and specialization.
 Assign work and delegate authority: assigned to individuals by giving
appropriate authority.
 Design a hierarchy of relationships: it requires the determination of both
vertical and horizontal operating relationships
83
 The result of this step is to complete organizational structure. Organizational
structure is shown usually by an organization chart. And it tells us:

 The chain of command - who reports to whom

 Span of control - how many subordinates work for each manager

 Channel of communication

 How the company is structured –By function, customer or product

 The work being done in each job – the levels on the box

 The hierarchy of decision making – where the decision maker is located

 When the existing structure is formulated

 Types of authority and relationship – line, staff & functional authority

84
 Departmentation
 The horizontal differentiation of tasks or activities into discrete
segments is called as departmentalization or departmentation.

 Departmentation involves grouping of operating tasks into jobs,

combining of jobs into effective work group and combining of groups into
divisions often termed as ‘departments’.

 There are several ways of Departmentation, each of which is suitable for

particular corporate sizes, strategies and purposes.
85
 Types of Departmentalization
1) Functional departmentalization

2) Geographic departmentalization

3) Product departmentalization

4) Customer departmentalization

5) Process departmentalization

6) Multiple departmentalization
86
 1. Functional
Departmentation
 This is the simplest and most commonly used base form of departmentation.

 The common form where activities are grouped based on similarity in

function or content.

 It is grouping jobs according to the functions of an organization. It is common

for business firms.

 Within each department individuals perform specialized jobs. 87

 2. Geographic
Departmentation
 It is also called location departmentalization or departmentalization by
territory. It is grouping of jobs on the bases of geographic areas.

 It is established when a company has different branches that are

geographically dispersed.

 The operations are similar from region to region

88
 3. Product 4. Customer
Departmentation Departmentation
 It is grouping on the bases of  It is grouping of tasks based on the

products (goods/ services) type of customers served.

 Such forms of departmentalization are
 Such kind of departmentalization
more common in banking, book
is best to large and multiple
publishing and food industry.
product organizations.

89
 5. Process 6. Matrix
Departmentation Departmentation
It is appropriate when It is the combination of two or more
departmentalization by production is departments discussed above.
inflow. Activities are grouped on the
basis of various manufacturing process.

90
Major Concepts 1. AUTHORITY
 Authority represents legitimate

Of Organizing of power
structure.
in the organization

Organizational concepts:  It is the power derived from the

1. Authority rights that comes with position.
2. Power
 It is to influence others, or the
3. Delegation
right to do something.
4. Span of Control
 The source of authority is
5. Centralization Vs Decentralization
member of the organization. 91
 Source of Power

2. Power  Legitimate power: it generated from

position of the organization.

 Reward power: reward is a source of

Power is ability to
power to managers
influence others, or the
 Coercive Power: fear of punishment
ability to do something.
 Expert power: It is generate from
Power is the ability to get learning/profession

someone to do something  Referent (interpersonal) power: to

ability to influence others' behavior.
you want done. 92
 Delegation occurs for two
3. Delegation purposes:
 When managers are
 Every manager must delegate duties
absent from their job;
to subordinates.
Subordinates act on the
 Delegation is a two-side relationship;
behalf and exercise
i.e., the assigner and assignee.
authority.
 Effective managers normally delegate
 To develop subordinates
tasks to subordinates and concentrate
and facilitate decision
their efforts on managerial tasks.
making process.
93
 A single manager is managing few
4. Span of numbers of subordinates is called NSOC

Control  If span is small, the manager may tend

to supervise effectively include 2-3
 It is refers to the Nos of
numbers of subordinates.
subordinates are controlled or
managed by a single manager. A single manager is managing large
numbers of subordinates is called WSOC
 Organizations have a narrow
span of control at the top and If span is large, the manager may not
wider span at the lower levels. be able to supervise effectively (7-8)
Nos of subordinates.
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 Narrow span of management Wide span of management

 It is tall organization  It is Wide organization

 Number of subordinates are low  Large number of

 Tasks are very complex subordinates

 Co-ordination is difficult to be achieved.  Better communication

 Communication gaps can come  Better supervision

 Messages can be distorted/filter  Better co-ordination

 Specialization work can be achieved.  Suitable for repetitive jobs

95
5. Centralization Vs Decentralization
 Centralization is a systematic and  Decentralization is a systematic effort
to delegate all authority to the lowest
consistent reservation of authority at
levels.
central power.
 The essence of decentralization is the
 There is little delegation of authority. transfer of authority from a higher
Rules, power are concentrated at the level to the lower level.

top level. Control & decision making  Nowadays decentralization has

exist in at the top level of become a fundamental principle of

democratic management.
management 96
97
Managerial
Function

Staffing
 Introduction
 The success of any organization doesn’t depend upon the physical
and financial resources but it depends upon the utilization of these
resources by human resources.
 So, human resources are the most important asset of an
organization for its success.
Due to this fact organizations are said to be life less without human
resource.
 Staffing function is concerned with the bringing right and
efficient people in the organization.
 An Overview of Staffing
Staffing involves managing the organizational structure through
proper and effective selection, appraisal and development of
personnel to fill the roles designed into the structure.
Staffing involves the determination of manpower requirements of the
enterprise and providing it with adequate competent people at all
levels.
Organizations require people who have different knowledge, skills &
experiences to fill various positions to attain organizational
objectives.
 Nature of staffing function
 Staffing is an important managerial function
 Staffing is a universal activity

 Staffing is a continuous activity

 The basis of staffing function is efficient management of

personnel’s

 Staffing helps in placing right people at the right job

 Staffing is performed by all managers

 Importance of Staffing
 It helps in discovering & obtaining  It helps to improve employee

competent personnel for various jobs. satisfaction

 It helps in the optimum utilization of  It facilitates higher productive

the HR. performance of the organization

 It facilitates growth and
 It helps in developing professionals in
diversification activities in the
every field of organizational activity.
organization.
 It helps in developing competencies
 It provides for the development of
in the organization to face the
the employees and organization.
challenges.
 Staffing Process
[Link] resource [Link] and
planning development

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[Link] [Link] evaluation

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placement
 1. Human Resource Planning (HRP)
 HR planning is the starting point in the process of staff procurement; and refers
to the determination in advance the number & quality of people to be employed.
 It is a process that identifies the current and future HR needs for an
organization.
 It consists of putting
 Right number of people,
 Right kind of people
 At the right place,
 At right time,
 Doing the right things
 2. Recruitment
o It is a linking activity that brings together those
offering jobs and those seeking jobs.

o Recruitment is a positive process of searching for

prospective employees and stimulating them to
apply for the jobs in the organization.

o It is the process to attract maximum number of

applicants so as to have more options for the
selection.
 Sources of Recruitment
Internal source External source
 It is a recruitment which takes  The sources is outside the organization.
place within the organization.
 It saves time, money and efforts. It involves lot of time and money.
 Internal sources are The external sources of recruitment are:
 Transfers
 Employment at factory gate
 Promotions
 Advertisements
 Re-employment of ex-
 Employment agencies
employees
 Educational institutes

 Recommendations
 3. Selection
 It is the process of picking the best amongst the
application pool.

 The ultimate of objective of selection is to match the

requirement of the job and the qualification,
knowledge, skill & experience of the individual
applicant.

 It is a procedure of matching organizational

requirements with the skills and qualifications of
people.
 Employee Selection Process

 Employee selection process takes place in following order.

 Application blanks:

 Written tests:

 Employment interviews:

 Medical examination:

 Appointment letter:
 Difference Between Recruitment and Selection
Basis Recruitment Selection
Meaning It is an activity of establishing It is a process of picking up
contact between employers and more competent & suitable
applicants. employees.
Objective It encourages large No of It rejects unsuitable
Candidates candidates.
Process It is a simple process. It is a complicated process.
Approach It is a positive approach. It is a negative approach.
Sequence It precedes selection. It follows recruitment.
Economy It is an economical method. It is an expensive method.
Time Less time is required. More time is required.
Consuming
 4. Induction, Orientation and Placement
Induction: refers to the process of socializing a new employee with the
overall organizational environment through the providing of adequate
information in order to match with organizational interest.

Orientation: involves discussion between a manager & employee

regarding the job assignment including specific location, rules &
procedures of the work as well as the resource needed to do the job.

Placement: it takes place by putting right man on the right job.

 5. Training & Development
 Training are primarily Basic grounds of training
directed towards  New candidates who join an
maintaining and improving organization are given training.

current job performances  The existing employees are trained to

refresh, update & enhance their
 Development are primarily
knowledge.
intended to develop skills
 When promotion and career growth
for the future jobs.
become important.
 Methods of Training

Off The Job Training On The Job Training

 Off the job training: training is  On the job training methods: the
provided away from the actual working employees are trained in actual
condition. working scenario.

 The employees are trained in a separate  The motto of on the job training is
area (a hall, entrance, etc. Known as a “learning by doing.”
vestibule ). E.G. Job-rotation, coaching,
E.G. Workshops, seminars, conferences temporary promotions,
 6. Compensation
 People work to organizations for the purpose of
earning enough money to live comfortably & satisfy all
their needs.

 Employee compensation refers to the reward or

remuneration given to the employees for their work
performances.

 It provides basic attraction to an employee to

perform job efficiently and effectively.
 7. Performance Appraisal (PA)
 PA involves the formal Who does the appraisal?
In most cases the immediate supervisor
evaluation of an employee
does the appraisal.
performance.
But an organization can use different
It is evaluating employee’s
appraisers. Such as:
performance and used to  The immediate supervisor
determine the extent to which  Group appraisal

an employee is performing the  Peer appraisal &

 Self appraisal
job effectively.
 8. Separation, Promotion, and Transfer

Transfer Promotion

 Transfer is the Promotion is the advancement of an employee

movement of an to a better job.

employee from one Characteristics of ' better job' to

job to another on the Greater responsibilities,
same occupational More status
level of wage/ salary. Greater skill
Increased rate of salary
 Separation

 Separation refers to the terminating of the relation

between employee & the employer.

 Causes for separation mainly are retirement, layoff,

dismissal, permanent disability, quit & outplacement.

 Essentials of Good Staffing Policy

 It should take into account the interests of both employer and

employee
 It should be complete in every respect.
 It should be simple, precise, reasonable.
 It should be flexible.
 It should take into account variations in the capabilities, interests and
attitudes of employees.
 It should be uniformly applicable to all members of the organization.
Thank You
Managerial Function

Leading
 Leadership
 Leading is instructing, guiding and inspiring
human factor in the organization to achieve
objectives.

 It is the heart of managerial functions because it

is involves with initiating actions.

 A leader is the one in the charge, the person

who convinces other people to follow.
 Some define leadership as an integral part

of the group process. Others define it

primarily as an influence process.

 Still others see leadership as the initiation

of structure & the instrument of goal

achievement. Several even consider

leaders to be servants of their followers.

Despite the differences, the various definitions of
leadership share three common elements:

1. First, leadership is a group phenomenon;

there no leaders without followers.

2. Second, leadership is goal directed.

3. Third, the presence of leaders assumes

some form of hierarchy within a group;

formal & informal.

 According to Hersey and Blanchard, leadership is a

function of leader, followers & situation and depicted as:

L= f (L, F, S)
 Leadership At;
 Individual level involves mentoring,
coaching, inspiring and motivating.
 Group level, leaders build team,
create cohesion/unity & resolve
conflict.
 Organizational level, leaders build
culture, and create change.
 Leadership Styles
o It is considered as pattern of behavior a

leader uses to influence employees to

achieve organizational goals.

o It is the behavior exhibited by a leader

during influencing subordinates to

accomplish organizational objectives.

 Types of Leadership Styles
1. Autocratic Leadership Style

2. Democratic Leadership Style

3. Laissez-faire Leadership Style

4. Bureaucratic Leadership Style

5. Situational Leadership Style

 1. Autocratic Leadership Style
 “Look, I’m the boss around here. I’ll make the
decisions and I’ll tell you what I want you to do.
You’d better do your job because I’ll be watching
your every move.”

 It is practiced by the managers concentrating on

power and authority within themselves.
Communication tends to be primarily in one
direction from manager to follower.
 2. Democratic Leadership Style
 This style of leadership is also
known as participative leadership.
The entire group is involved in goal
setting & achieving it.

 A democratic leader follows the

majority opinion as expressed by his
group & shows concern for people’s
interest. Subordinates have freedom.
 3. Laissez-faire Leadership Style
o The leaders exercise absolutely no
control. He/ She only provides
information, materials and facilities
to his subordinates.

o This type of leadership is

employee centered and the
subordinates are free to establish
their own goals and chart out the
 4. Bureaucratic Leadership Style
 It is also known as manages “by the
book”. Everything done according to
procedure or policy.

 It has no space to explore new ways to

solve problems and is usually slow
paced to ensure adherence to the
ladders stated by the company.
 5. Situational Leadership Style
 Effectiveness of leadership depends on
the situation. The styles a manager
chooses may depend on the following
situations.

 Three factors that influence which

leadership style to use.

 Forces in the Leader

 Forces in Follower
Leadership Theories
 Every leader is different, and no
single theory works for all leaders.

 The most widespread theories are:

1. Great man theory

2. Trait theory

3. Behavioral theories

4. Contingency theories
 1. Great Man Theory
 The great man theory assumes, great

leaders are born with innate qualities – not

made, leaders are exceptional people lead.

 Most leaders were male and the thought of

a great woman was generally in areas other

than leadership.
 2. Trait Theory
 This theory focused on trying to  Personality traits; self-confident,
identify the traits that differentiated emotionally stable.
leaders from non-leaders. Those  Task-related characteristics;
traits accepting of responsibility, results-
 Physical traits; energetic, oriented.
handsome.

 Social background traits;

socially prominent.

 Social characteristics;
 3. Behavioral Leadership Theory
 Behavioral leadership theory is a big jump

from trait theory. It assumes that leadership

capability can be learned, rather than

being inherent.

 Training people to perform effective

leadership behaviors, not focus on

personality traits.
4. Contingency/ Situational
Theory
 They also propose that leaders choose the
best course of action based upon
situational variable.

 Leaders are products of a given situation;

what is effective in one situation may not be
effective in other situation.
 Qualities of Leadership
 Physical appearance and strength: A leader has to put hard work
physically. He should have a capacity to work for long hours than
others.

 Mental vigor: a leader has to be strong mentally.

 Emotional stability: a leader should not be moved by emotion or

sentiment.

 Sense of judgment: a leader should know human psychology.

 Motivation: a leader should know the motivation techniques.

 Cont’d
 Goodwill: she/he must win the goodwill of his followers.

 Communication skill: a leader should communicate information to

the workers, and also be effective speaker & writer.

 Guiding ability: a leader should act as a teacher

 Sociability: the leader should meet workers frequently.

 Technical knowledge: a leader should posses a thorough knowledge

of theory and practice of his job.

 Be honest, sincere and fair: a leader should also be honest, sincere

and fair to be accepted by all.
 Leaders Vs Managers
 Leaders essence is change  Managers essence is stability
 Leaders are lead people  Managers are managing work
 Leaders have followers  Managers have subordinate
 Leader seeks vision  Manager seeks objectives
 Leader facilitate for decisions
 Manager make decisions
 Leader is reactive
 Managers are proactive
 Leader take risk
 Manager minimize risk
 Leader uses conflict
 Manager avoids conflict
 Leader shows new road
 Leader gives credit  Manager shows existing road
 Leader doing right thing  Manager takes credit
 Manager doing things right
Thank You
 Introduction
• Controlling is the last management function and it
affects or is affected by the other four functions.
• Planning, organizing, staffing & directing must be
monitored to maintain their effectiveness &
efficiency.
• Mangers review performances of employees daily,
weekly, and monthly to determine actual
performances.

144
• Controlling is checking current performance against
predetermined standards contained in the plans, with
the view to ensuring adequate progress and
satisfactory performance.

• Controlling is determining what is being

accomplished, that is, evaluating the performance and
if necessary applying corrective measures so that the
performance takes place according to plans.

145
 Purpose of Controlling
 Management control is a systematic effort
 To design information feedback systems,
 To set performance standards
 To compare actual performances with standards,
 To determine whether there are any deviations &
 To take any action required to assure that all
organizational resources are being used in the most
effective & efficient way.

146
 Controlling Process
• Controlling has three basic steps, such as:
1. Establishing standards; Standards are

measuring devices qualitative or quantitative, designed to

help monitor the performance of people, capital goods, or

processes.

147
• Standards can be:
• Managerial standards; reports, regulations,

and performance evaluations.

• Technical standards; they specify the ‘what &

how’ production methods & processes;

materials, machinery, safety equipment's, parts

& supplies applied.

148
 2. Measuring Performance
• It is measuring the performance & determining if
the performance is in line with the set of
standards.

• It is comparison between ‘what is’ & ‘what should

be’. It is discovering the deviation.

149
3. Taking corrective action; Determining
precise action to be taken depends on three things.
 The standard, Accuracy of the measurements, and
The diagnosis of the person or device and causes of
deviation.
• Corrective action can be arranged by management in
advance through policies, procedure & practices. It is
sometimes automatic.

150
 Essentials of Controlling
The essentials of a sound control system are as follows

• Suitable: • Control by exceptions:

• Timely and forward • Prescriptive and
looking: operational:
• Objective and
• Acceptable to
comprehensible:
organization members:
• Flexible:
• Economical: • Motivation:
151
 Types of controls
There are three basic types of control.
1. Feed forward control/preventive; It is
established to prevent problems from occurring.
2. Concurrent control; the focus of control is on
the ongoing activities.
3. Feedback control; In feedback control the focus
is on the end results.
152
 Control Characteristics
• Control is an end function
• Control is a continuous process
• Control is mainly a forward-looking
• Control is a universal function
• Control is a normative and positive force
• Control guides behavior
• Control allows all organization to cope with
uncertainty

153
154