SUBJECT:

TECHNOLOGICAL INNOVATION AND

MANAGEMENT ENTREPRENEURSHIP
Subject Code: BEC501
SEM.:V
MODULE – 2
Organizing and Staffing:
Organization-Meaning, Characteristics, Process of Organizing,
Principles of Organizing, Span of Management (meaning and importance
only), Departmentalization, Centralization Vs Decentralization of
Authority and Responsibility; Committees– Meaning, Types of
Committees.
Staffing-Need and Importance, Recruitment and Selection Process.
(Selected topics from Chapters 7, 8 & 11,Text 1).
Directing and Controlling: Meaning and Requirements of Effective
Direction, Giving Orders; Motivation-Nature of Motivation, Motivation
Theories (Maslow’s Need-Hierarchy Theory and Herzberg’s Two Factor
Theory); Communication – Meaning, Importance and Purposes of
Communication; Leadership-Meaning, Characteristics, Behavioural
Approach of Leadership; Coordination-Meaning, Types, Techniques of
Coordination; Controlling – Meaning, Need for Control System, Benefits
of Control, Essentials of Effective Control System, Steps in Control
Process (Selected topics from Chapters 15 to 18 and 9, Text 1).

Dr Suresh D, Professor, RNSIT

Organization-Meaning:

• According to Amitai Etzioni an organization is a social unit or human grouping deliberately

structured for the purpose of attaining specific goals.
• Sehein defines an organization as the rational coordination of the activities of a number of
people for the achievement of some common explicit purpose or goal, through division of
labour and function, and through a hierarchy of authority and responsibility.
• Allen defines the term as the process of identifying and grouping of the work to be
performed, defining and delegating responsibility and authority and establishing
relationships for the purpose of enabling people to work most effectively together in
accomplishing their objectives.
• According to Pfiffner and Sherwood, an organization is the pattern of ways in which large
numbers of people, too many to have intimate face to face contact with all others, and engaged
in a complexity of tasks, relate themselves to each other in the conscious, systematic
establishment and accomplishment of mutually agreed purposes.
Organization – Characteristics:
Every organization has
1. A purpose, goal or goals are the task of planning.
2. A clear concept of major duties or activities required to achieve the purpose.
3. Classification of activities into jobs and
4. Establishment of relationships between these jobs in order to ensure coordination, and
achieved through division of labour and delegation of authority.
A group of organisations sharing a common profile of characteristics is called an organizational
configuration.
Process of organizing:
• Organizing means designing the organisation structure.
• During the function of organizing function, manager differentiates and integrates the
activities of the organization.
• Differentiation is meant the process of segmentation of activities on the basis of some
homogeneity.
• Integration is the process of achieving unity of effort among the various departments.
Process of differentiation and integration is explained in seven step procedure as given below.
Consideration of objectives:
• The first step in organizing is to know the objectives of the enterprise.
• Objectives determine the various activities and the type of organization.
• As per Alfred D Chandler, this phenomenon is “structure follows strategy”.
• Ex.: The structure required for army is different from the structure required for a business
enterprise.
Deciding Organisational boundaries:
• The next step is to decide what to do inside and what to do outside the boundaries of the
organization.

Dr Suresh D, Professor, RNSIT

 • This makes manufacture versus buy choices for different goods and services and choices
about strategic alliance with other firms.
• Choices also have to be made about the different parts of the organization interact directly
with the outside environment.
• Boundaries also defined based on the possibilities of customers interacting directly with
manufacturing plant or with the sales force.
Grouping of activities into Departments:
• Group all closely related and similar activities into departments and sections.
• Ex.: Activities of manufacturing concern may be grouped into such departments as
production, marketing, financing and personnel.
• Sometimes even diverse activities may be closely related and grouped in one department.
• Ex.: We find Intraplant transportation, warehousing and the entire traffic management
function placed with the production department because it makes most use of it.
• Similarly, closely related may be diverse and placed in different departments.
Deciding which departments will be key departments:
• Departments which are rendering key activities are Key departments. These activities
are essential for the fulfilment of goals.
• Other departments exist merely to serve them.
• Attention of top management is focused on the minor issues, if key departments are not
identified. This is known as decibel system of management. The key departments should
be placed under higher management.
• Ex.: When a company believes that advertising is a primary key to success will set up a
separate advertising department that directly reports to the president.
Determining levels at which various types of decisions are to be made:
• Levels at which various major and minor decisions are to be made must be determined.
• Each firm must decide for itself how much decentralization of authority and
responsibility it wants to have.
• Extreme decentralization may lead to loss of control and effective coordination due to
which it may fail to achieve the goal.
• Extreme centralization may lead to wrong decisions at wrong times and complete
breakdown of morale of employees.
Determining the span of management:
• In this stage step to be taken in designing a structure to determine the number of
subordinates who should report directly to each executive.
• The narrower the span, the taller would be the structure with several levels of management.
• This will complicate the communication and increase payroll.
• The span of management for each executive position must be tailored.
Setting up a Coordination Mechanism:
• Departmentalisation is the need to coordinate the independent activities of the members
of the organization.

Dr Suresh D, Professor, RNSIT

 • Effective integration is as important as careful differentiation.
• Coordinating mechanisms, enable the members of the organization to keep sight of the
organization’s goals and reduce inefficiency and conflicts.
• As departments carry out their specialized activities, overall goals of the organization may
become submerged or conflicts among organization members may develop.
Principles of Organising
• Certain principles need to be followed to have sound and efficient organization
structure.
• In the words of E.F.L Brech, there should be a body of accepted principles. These are as
follows.
Objectives: The objectives of the enterprise influence the organization structure and hence the
objectives of the enterprise should be clearly defined. Then the organization is able to achieve the
goal.
Specialisation: The activities of the enterprise should be grouped according to functions and
assigned to persons according to their specialization.
Span of Control: As there is a limit to the number of persons that can be supervised effectively,
the span of control should be minimum.
Management by exception principle: As the executives at the higher levels have limited time,
only exceptionally complex problem should be referred to them. Routine matters should be
dealt with by the subordinates at lower levels.
Scalar Principle: The line of authority from the chief executive at the top to the first line
supervisor at the bottom must be clearly defined, and it is called “chain of command”
Unity of command: Each subordinate should have only one superior whose command he has
to obey. Multiple subordination must be avoided to avoid uneasiness, disorder, indiscipline and
undermining authority.
Delegation: Proper authority should be delegated at the lower levels of organization also. The
authority delegated should be equal to responsibility.
Responsibility: The superior should be held responsible for the acts of his subordinates. Superior
is not allowed to avoid responsibility.
Authority: The authority is the tool by which a manager is able to accomplish the desired
objective. Hence, the authority of each manager must be clearly defined.
Efficiency: The organization structure should enable the enterprise to function efficiently and
accomplish the objectives with lowest possible cost.
Simplicity: The organization structure should be as simple as possible and the organization levels
should be minimum. Large number of levels of organization is causing difficulty in effective
communication and coordination.
Flexibility: The organization structure should be adaptable to changing circumstances and permit
corrections of demonstrated deficiencies in the existing structure.

Dr Suresh D, Professor, RNSIT

Balance: There should be reasonable balance in the size of various departments between
centralization and decentralization, between the principle of span of control and the short chain of
command, and among all types of factors such as human, technical and financial.
Unity of Direction: There should be one objective and one plan for a group of activities having
the same objective. Unity of direction facilitates unification and coordination of activities at all
levels.
Personal ability: As people constitute an organization, there is need for proper selection,
placement and training of staff. Organisation structure must ensure optimum use of human
resources and encourage management develop programmes.
Acceptability: The structure of the organization should be acceptable to the people who
constitute it.
Span of Management
• Span of Management is also referred to as
➢ Span of Control
➢ span of supervision
➢ Span of authority or span of responsibility.
• It indicates number of subordinates who report directly to a manager.
• Appropriate span of management is important for two reasons.
➢ First, span of management affects the efficient utilization of managers and the effective
performance of their subordinates.
➢ Second, there is a relationship between span of management and organization
structure. A narrow span of management results in a “tall” organization with many levels
of supervision. This creates more communication and cost problem.

Dr Suresh D, Professor, RNSIT

Departmentalization
• The aim of departmentalization is to take advantage of the division of labour and
specialization up to a certain limit.
• The horizontal differentiation of tasks or activities into discrete segments is called
departmentalization.
• Two categories are
➢ Process departmentalisation
➢ Purpose departmentalization
1. Process departmentalization
This is classified in to two categories as per the division of process of work as given below.
a. Business of organizational function:
• The most widely used base for departmentalization is business organizational function.
• Each major function of the enterprise is grouped into department.
Ex.: Production, finance and marketing departments in a manufacturing company.
Underwriting and claims departments in insurance company.
• Here sales manager is responsible for the sale of all products manufactured by the company.
• Claims manager is responsible for dealing with all claims from different areas.
• Similarly, managerial functions of planning, organizing and controlling can also be used as
base for departmentalisation.
Advantages:
1. It is a simple form of grouping activities for small organisations which manufacture
single or limited number of products. Employees understand his task and feels secure both
in work and relationships.
2. It promotes excellence in performance.
3. It promotes economies of scale. Producing all products in a single plant, and reduces
duplication and waste.
Drawbacks:
1. It is very difficult to understand the task of whole and relate his own work to it. Each
manager thinks only in terms of his own departmental goals and does not think in terms of
the company as a whole. Ex.: Manufacturing department may concentrate on meeting cost
standards and delivery dates, and neglect quality control.
2. It does not offer a good training ground for the overall development of a manager. The
manager gains expertise to do the work of his department only.
3. The design is less applicable in innovative work because one does not know where and
when a particular skill will be needed.
4. In this form customers gets an information from each department like a story of twelve
blind people and the elephant.
5. In this procedures are overly complicated, wasteful and time consuming.
6. Because of “common pot” accounting it is difficult to judge whether the activities of a
particular department are worth their cost.
b. Technology: Departmentalisation is done on the basis of several discrete stages in the
process or technologies involved in the manufacture of a product.
• Production of vegetable oil may have separate departments for crushing, refining and
finishing.
Advantages:

Dr Suresh D, Professor, RNSIT

 1. It facilitates the use heavy and costly equipment in an efficient manner. There is very little
chance for the equipment remain idle or under-utilized.
2. It follows the principle of specialization-each department is engaged in doing a special type
of work and increases the efficiency.
3. It is suitable for organisations which are engaged in a number of processes.
Drawbacks:
1. In technology departmentalization workers tend to feel less responsible for the whole event.
2. It does not provide good training ground and opportunity for the managerial talent.
3. When the technology is sequential, a breakdown in one department slows down the work
of all other departments.
4. It is difficult to compare the different technology-based departments.
5. Top management needs to devote extra attention to maintaining inter-departmental co-
operation.
2. Purpose departmentalization
The following five externally oriented ways in which work can be departmentalized by
purpose.
Product: Under this method, each major product is put under the charge of a manager who also
may be made responsible for making a profit.
• Within each department, all the needed manufacturing, engineering, marketing, manpower
and other facilities are assembled.
• Product departmentalization is the logical pattern to follow when each product requires raw
materials, manufacturing technology, and marketing methods that are significantly
different from those used by other products in the organization. Hindustan lever produces
detergents, chemicals and agro based products.
Advantages:
1. This method leads to continuous and undivided attention to the product.
2. Enables top management to compare the performances of different products and invest
more resources in profitable products.
3. Departmental head are better motivated for improving their performance.
4. Department work is more clearly evaluated.
Drawbacks:
1. There is a duplication of staff and facilities. Extra expenditure, large number of managerial
personnel required.
2. The department may drift away from overall organizational goal.
Customers:
• Enterprise s divided into number of departments based on the customers.
• Ex.: Electronics firm may have separate departments for military, industrial and customer
services.
• Big automobile servicing enterprise may have separate departments for servicing cars,
heavy vehicles and scooters.
Advantages: It ensures full attention to major customer groups.
Disadvantages: i) It may utilize under utilization of resources. ii) there may be duplication
of facilities.
Regions, Territory or Location:
• When several units of an organization are geographically dispersed in various locations,
departmentalization is done on a geographical basis.

Dr Suresh D, Professor, RNSIT

 • A hotel chain, might decide to establish geographical divisions and make one officer
responsible for all the hotels.
• Example of Indian railways with Northern, western, southern, eastern and central railways.
Advantages:
1. It motivates each regional head to achieve high performance.
2. Regional head is given a power to the work within the department.
3. It provides top management training to middle-level executives.
4. Advantages of locational factors, such as raw materials, labour, market, etc.
Drawbacks:
1. It gives rise to duplication of various activities. Routine work by head office becomes
economical.
2. Regional units may forget the overall interest of total organization.
Division:
• Large, multi-product companies segment themselves into several independent profit
centres on the basis of product, territory or customer, these units are called divisions.
• Each divisional head enjoys relatively free hand to operate his division.
• Since each division is small, it is manageable with reduced function.
• Divisions of L&T are infrastructure, metallurgical, heavy equipments, etc.
Time:
• In departmentalization by time, activities are grouped on the basis of timing of their
performance.
• Ex.: A small machine shop grows in size by having extra shifts or renting two more shops.
• Departmentalisation by time is found in the production function of the enterprise.

COMMITTEES
• A committee is a group of people who have been formally assigned some task or problem
for their decision and/or implementation.
• Committees are required in the following cases:
➢ New kind of work or unfamiliar problems involve decisions
➢ Responsibilities and powers beyond beyond the capabilities of of any one man or
department.
• In modern business enterprises committees are required in all area of management and
administration.
• Proposal in Likert’s new patterns of management is to replace one-to-one relationship
characteristic of hierarchical arrangements with a system of “interlocking groups”.
➢ In this proposal, each unit head and his subordinates would work as decision making
committee.
• Since each unit head would serve as a “chief” vis-à-vis the level below him and as a
subordinate vis-à-vis the level above , he would be performing a linking-pin function in a
system of interlocking groups comprising the whole hierarchy of the company.
• The linking pin function is shown by arrows in figure.
• This could enable sub-groups to integrate their activities and to reduce suboptimization.

Dr Suresh D, Professor, RNSIT

• Committees can be classified as
➢ Advisory committees and
➢ Executive committees
• Whenever committees are vested with staff authority are known as advisory committees.
It has only recommendatory role and cannot enforce implementation of their
recommendation.
• Advisory committees formed in business enterprise are:
➢ Works committees
➢ Sales committees
➢ Finance committees, etc.
• Whenever committees are vested with line authority, they are called executive committees
or plural executives.
• Executive committees not only take decisions but also enforce decisions and thus perform
a double role of taking a decisions and ordering its execution. Ex.: Board of Directors.
• The functions in the above committees are separated by time, place or title.
• Committees may also be classified as standing committees and ad hoc task forces.
• Standing or permanent committees are formed to deal with recurrent organizational
problems.
• Examples for standing committees are
➢ Finance committee in a company
➢ Loan approval committee in a bank
➢ Admission committee in a college
• These are committees are chosen because of their title or position, instead of individual
qualifications or skills.
• Ad hoc task forces are existing for very short duration. The members are chosen for their
skills and experience. They are dissolved after the task is over.

Dr Suresh D, Professor, RNSIT

CENTRALISATION VS DECENTRALISATION
Concept of Centralization and Decentralization: Organization authority is merely the degree of
discretion conferred on people to make it possible for them to use their judgment by giving them
power to use their own decisions and issue instructions, how much authority should be
concentrated or dispersed throughout the organization.
In a centralized setup, the decision authority is concentrated in a few hands at the top and
in a decentralized set up, it is delegated to the levels where the work is to be performed.
Decentralization is the tendency to disperse decision making authority in an organization
structure. It is a fundamental aspect of delegation, to the extent the authority is not delegated it is
centralized. There can be absolute centralization of authority in one person; this implies that no
subordinate managers, and therefore no structured organization.
Some decentralized authority exists in all organizations. On the other hand there cannot be
absolute decentralization, for if managers, should delegate all their authority, their status as
managers would cease, their position will be eliminated and again there would be no organization
structure. Centralization and decentralization are qualities with various degrees in practice.
When work of an executive increases so much in volume that he cannot hope to cope with
it, he has to divide it among his subordinates. In doing so he naturally expects that each subordinate
will do the job as he himself would have done. This process of dividing the job is referred to as
'delegation'.
Delegation is simply a matter of entrusting part of the work operations or management to
others. "It is the ability to get results through others" - "It is the dynamics of management". It is a
process a manager follows in dividing the work assigned to him so that he performs that part which
only he, because of his unique organizational placement, can perform effectively, so that he can
get others to help him with what remains. The primary purpose of delegation is to make
organization possible.
Just as no one person in an enterprise can do all the job necessary for accomplishing a
group purpose, so it is impossible as an enterprise grows for one person to exercise all the authority
for making decisions. There is a limit to the number of persons that a manager can effectively
supervise and for whom they can make decisions. Once this limit has been passed, authority must
be delegated to subordinates, who will make decisions within the area of their assigned duties.

RESPONSIBILITY
It is also called as Accountability or Answerability. It may be considered as the obligation of a
subordinate to his superior to do a work assigned to him. Each person who is given responsibility
must recognise that the executive above him will hold him responsible for the quality of his
performance.
Authority and responsibility exist together in a business organization. They represent the
two sides of the same coin while authority is right to command; responsibility is an obligation to
performance as someone with authority has directed. It accompanies the assignment of work to a
subordinate and becomes increasingly important at successive higher levels in the hierarchy. It is
not merely a desire to cooperate or to advance group objectives but is a recognition of the
obligation to perform managerial functions.
One major and important aspect of responsibility is that a manager can part with authority
but not with responsibility, which is an inherent property of his position in the organization.
The terms "responsibility"' and "accountability" are often used dischargeable Strictly
speaking accountability is used to denote a special kind of responsibility. As employed in military,

Dr Suresh D, Professor, RNSIT

an officer is said to be "accountable" for equipment, but responsible for the action of troops
reporting to him.

Staffing
• It is important to fill the jobs with right people apart from good organizational structure. It
includes several sub-functions.
1. Recruitment, or getting applicants for the jobs.
2. Selection of the best qualified from those who seek the jobs
3. Training those who need further instructions to perform their work effectively.
4. Performance appraisal for job change or promotion.
5. Administration of compensation plans for getting and holding qualified people.
Importance and need for proper staffing
• Labour costs constitute from from 25 percent of the production costs to 40 percent of the
selling costs in manufacturing process.
• Business can not be successful unless the right kind of people recruited.
• Advantages of having proper and efficient staffing are as follows.
1. It helps in identifying talented and competent workers and developing them move up the
corporate ladder.
2. It ensures greater production by putting the right man in the right job.
3. It helps to avoid sudden a disruption of the enterprise’s production due to shortage of
personnel.
4. It helps to prevent under-utilization of employees.
5. It provides information to management in the event of an unanticipated turnover.

Recruitment and Selection Process:

Recruitment Process
• Process of recruitment starts, once the manpower requirement is known.
• It is defined as the process of identifying the sources for prospective candidates and
stimulate them to apply for the jobs.
• In otherwords, recruitment is the generating of applicants for specific positions.
• According to Dalton E McFarland, it is the process of attracting potential employees to the
company.
• In Small concerns process of recruitment is simple and inexpensive, and in large concerns
process is complicated and expensive.
Sources of recruitment: This can be classified into two categories: internal and external.
Internal sources refer to the present working force of a company. External sources are as
given below.
1. Re-employing former employees: Former employees are given importance because they
may require less initial training than that needed by strangers to the enterprise.
2. Friends and relatives of present employees: Industries encourage employees with good
personnel relations to recommend their friends and relatives for appointment.
3. Applicants at the gate: Unemployed employees who call at the gates of the factories are
interviewed by the factory representative for the existing vacancies.

Dr Suresh D, Professor, RNSIT

4. College and Technical Institutions: Many big companies are in touch with the colleges
and technical institutions from where young and talented persons may be recruited.
5. Employment exchanges: An employment exchange is an office set up by the government
for bringing together for those who are in search of employment and those employers who
are looking for men.
6. Advertising the vacancy: Companies get the employees by advertising the vacancy
positions in the leading news papers.
7. Labour unions: In companies, persons are recommended for employment by their labour
unions.
Evaluation of alternate sources: Following are some of the measures which can be used
to assess how good or how poor various sources:
1. Time lag between requisition and placement.
2. Recruitment ratio, that is, the number of persons actually hired, per 100 applicants.
3. Employee attitude studies to discover the reactions of present employees to both external
an internal recruiting.
4. Correlation between different sources of recruitment and factors of success on the job.
5. Data on turnover, grievances, and disciplinary action, tabulated according to different
sources of recruitment.
Internal vs External Sources of Recruitment
• From the impact on motivation point of view, recruitment from external sources is not
desirable.
• It is desirable to follow the policy within the company to improve the prospects of
employees, it is because outsider lacks knowledge of products and processes of production.
• When the internal candidates are aged, management may choose outside persons for
employment. The need for originality and initiative may also determine this policy.
Advantages and Disadvantages of internal recruitment:
Advantages:
1. A sense of security develops among the employees.
2. Employees remain loyal to the organization.
3. People recruited within the organization do not need induction training.
4. Employees in the lower ranks are encouraged to rise higher position
5. Labour turnover is reduced.
6. People are motivated to become efficient.
Disadvantages:
1. It limits the choice of selection to the few candidates available within the enterprise.
2. It may encourage favouritism and nepotism.
3. Internal candidates may unsuitable for new positions.
Advantages and Disadvantages of external recruitment:
Advantages:
1. In this method, new blood brings with it a fresh outlook, originality and new ideas.
2. The field of chance becomes very wide. Hence there is the possibility of recruiting people
with rich and varied experience.
Disadvantages:
1. Its employees generally feel frustrated and their morale is adversely affected.
2. The present employees may loose their sense of security and may become disloyal to the
employee.

Dr Suresh D, Professor, RNSIT

 3. There is greater turnover of labour.
Selection Process
Importance of selection process:
• Under the selection procedure the manager compares candidates qualifications with the
requirements of a job and eliminates all those who do not stand up to this comparison.
• Candidates who get selected are best suited, they derive maximum job satisfaction and
maximum wages.
• Labour turnover is reduced and the overall efficiency of the organization is increased.
• A good relationship develops between the employer and the employees.
Steps in the selection procedure: Sequence of steps is as given below.
1. Application blank
2. Initial interview of the candidate
3. Employment tests
4. Checking references
5. Physical or medical examination
6. Final interview
1. Application blank:
• The first step is to file “application blank” by the candidate.
• In this form, the applicant gives relevant personal data such as his qualification,
specialization, experience, firms in which he has worked etc.
• The application blanks are carefully scrutinised to decide about calling the candidate for
the interview.
2. Initial Interview:
• Those who selected on the basis of “Application blank” are called for initial interview by
the company.
• This interview is the most important means of evaluating the poise or appearance of the
candidate.
• It is also used for the friendly relationship between the candidate and the company, and
also for obtaining additional information of the candidate.
3. Employment Tests: There are several types of tests that are as given below.
i. Aptitude test:
• This test measures the applicant’s capacity to learn the skill required for the job.
• It helps in finding out whether a candidate is suitable for a clerical or mechanical job.
ii) Interest test:
• This test is to find out the type of work in which candidate has an interest.
• Interest are generally used for vocational counselling.
iii) Intelligence test:
• This is used to find out the candidate’s intelligence.
• This is to judge candidate’s mental alertness, reasoning ability, power of understanding etc.
iv) Trade or performance or achievement or job-specific test:
• This is to measure the candidate’s level of knowledge and skill in the particular job in which
he will be appointed.
• It may be of three types:
• Performance work sample test
• Written work sample test
• In-basket test

Dr Suresh D, Professor, RNSIT

 In the performance work sample test, the candidate is asked to do a simple operation which
is part of, or similar to his job.
In the written work sample test, the candidate is required to give answers to various
questions in writing.
In-basket test is a type of simulation applicable to management performance.
v) Personality test: Personality test is used to measure those characteristics of a candidate
which constitute his personality, e.g. self confidence, temperament, initiative, judgement,
dominance, integrity, originality etc.
• Personality tests are important in the case of appointments to the posts of supervisors and
higher executives.
4. Checking references: If the candidate has been found satisfactory at the interview, the
employer would like to get some personal details about the candidate, such as his character,
past history, background, etc.
For this purpose, the employer may contact his friends and former employers of the
candidate.
5. Physical or medical examination: This is the another step in the selection procedure.
The objectives of this examination are i) to check the physical fitness of the applicant ii) to
protect the company against the unwarranted claims for compensation under Workmen’s
compensation act. and iii) to prevent communicable diseases entering the business concern.
6. Final interview: This interview is conducted for those who are ultimately selected for
employment.
• The selected candidates are given an idea about their future prospects within the
organization.

Directing – Meaning
• Planning, organizing and staffing are concerned only with the preparation for work
performance.
• It is the Direction which alone stimulates the organization and its staff to execute the
plans.
• Direction means issuance of orders and leading and motivating subordinates.
• Manager must stimulate action by giving direction to his subordinates through orders and
also supervise their work to ensure that the plans and policies achieve the desired actions and
results.
• According to Haimann, ‘Directing consists of the process and techniques utilized in issuing
instructions and making certain that operations are carried on as originally planned.
• According to Koonz and O’Donell, ‘direction is the interpersonal aspect of managing by
which subordinates are led to understand and contribute effectively and efficiently to the
attainment of enterprise objectives’.
• The direction has two major activities namely
• Giving orders to employees and
• Leading and motivating them to accomplish the goals.

REQUIREMNETS OF EFFECTIVE DIRECTION

Important principles of effective direction are as follows:

Dr Suresh D, Professor, RNSIT

Harmony of objectives:
• For an organization to function well, it the goals of company and goals of individuals are
in complete harmony.
• It is very uncommon for such a situation to exist in any organization.
• Individual goals may differ from the goals of the organization.
• The manager should coordinate the individual goals to be in harmony with the goals of the
organization.
• Ex.: Employees should be motivated to do the work effectively by offering bonus,
promotion etc.
Unit of command:
• This principle implies that an employee should receive orders and instructions only
from one supervisor or boss.
• Otherwise, there may be indiscipline and confusion leading to conflicting orders, divided
loyalties and reduced results.
Direct supervision:
• Every Superior must have direct face-to-face contact with the subordinates.
• Direct supervision
➢ boosts the morale of employees,
➢ increases their loyalty and
➢ provides them immediate feedback
Efficient communication:
• Efficient communication is an instrument of direction.
• Superior must clearly communicate the plans, goals, policies, responsibilities and the
duties to the subordinates.
• It is a two-way process.
➢ It enables the superior to know how his subordinates feel
➢ but also helps the subordinates to know how the company feels on a number of issues.
• In communication, comprehension is more important than the content. This can be ensured
only if the manager makes a provision for a feedback.
Follow-through:
• Direction should ensure the subordinates in doing the work in a desired way.
• Manager should follow through the whole performance of his subordinates, and
➢ to keep check on their activities, and
➢ to help them in their act,
➢ to show them their deficiency.
GIVING ORDERS
• The order is a devise employed by a line manager in directing his immediate subordinates
to start an activity, stop it and modify it.
• A staff executive does not issue orders. To some men giving orders and having them obeyed
seems a very simple affair but it is surrounded by many difficulties.

Dr Suresh D, Professor, RNSIT

 • Mary Parker Follett lays down the following principles which should be followed in
giving orders:
1. The attitude necessary for the carrying out of an order should be prepared in advance. People
will obey an order only if it appeals to their habit patterns. Therefore, before giving orders, it
should be considered how to form the habits which will ensure their execution.
2. Face-to-face suggestions are preferable to long distance orders.
3. An order should be depersonalized and made an integral part of a given situation so that the
question of someone giving and someone receiving does not come up. Thus the task of the manager
is to make the subordinates perceive the need of the hour so that the situation communicates its
own message to them.
Chester Barnard lays down four conditions which make an order acceptable. These are:
1. Order should be clear and complete;
2. Order should be compatible with the purpose of the organization;
3. Order should be compatible with the employee's personal interest; and
4. Order should be operationally feasible.
Orders may be communicated verbally or in writing. Written orders are appropriate when
1. the subject is important;
2. many details are involved; and
3. there is geographical distance between the order-giver and the recipient.
A manager may follow four types of methods to ensure compliance to his orders:
1. Force
2. Paternalism
3. Bargain, and
4. Harmony of objectives.
5. The formula followed in "force" is: "Do what I say or else ... ", meaning thereby that an
employee will be punished if he does not follow orders. The results are frustration,
restriction of output, sabotage, militant unionism, etc.
6. The formula followed in "paternalism" is: "Do what I say because I am good to you."
The result here is that the employees develop a feeling of gratitude and indebtedness toward
the manager which they do not like. Further, paternalism operates in violation of the law
of effect. Instead of increased rewards following increased compliance, the paternalistic
manager provides rewards first and expects the compliance to follow.
7. The formula followed in "bargain" is: 'You do as I say in certain respects and I do as
you say in certain other respects.' The result of this method is that the manager's control
is gradually reduced.
8. The formula followed in "harmony of objectives" is: "If we perform together each will
achieve his goal". This in fact is the best formula for ensuring compliance to order.
MOTIVATION
• Motivation, concerns those dynamic processes which produce a goal-directed behaviour.
• This process begins with the individual feeling certain needs. (drives or motives)

Dr Suresh D, Professor, RNSIT

 • These needs give an energizing thrust to the individual toward certain goals.
• Needs of an individual controls human behaviour and gives direction to attain goals.
• The goal which is external to the individual only provides him with the opportunity for
satisfying his internal goals.

NATURE OF MOTIVATION
Motivation is not an easily observed phenomenon. We observe an individual's actions and then
interpret his observed behavior in terms of underlying motivation. Our interpretation do not
necessarily reveal the individual's true motivation.
• The following points reveal the complexities involved in understanding true motivation:
1. Individuals differ in their motives.

• The viewpoint (called “monistic approach") that there is only one "economic drive" which
determines behavior is untenable. The goals to which individuals aspire differ and so do
their motives. It is illustrated as given below.
• There were three men cutting stones near a cathedral about three fourths completed.
➢ A stranger came along and said to the first man, "My friend, what are you doing?" The first
man replied, "Me, what am I doing? I am working for 10 shillings a day."
➢ He went to the next man and put to him the same question. The second man said, "Me,
what am I doing? 1 am squaring this stone, see. I have to make its edge absolutely straight."
➢ The stranger walked on to the third man and repeated the same question. The third man
replied. "Me, what am I doing? You see that cathedral up there. I am helping to build that.
Is not it great?"
➢ In this story the major source of satisfaction to the first man was the wages he earned. The
job itself contributed very little.
➢ But job itself was the outstanding source of satisfaction to the second man.
➢ The third man viewed the completion of his group goal—the building of the cathedral—
as his primary source of satisfaction.

Dr Suresh D, Professor, RNSIT

 This means that there is no single motive that determines how all workers will react to the
same job and,
➢ therefore, there can be no single strategy that will keep motivation and productivity high
for everyone everywhere. The manager has to deal with human diversity.
2. Sometimes the individual himself is unaware of his motive.
• Freud uncovered this phenomenon while analyzing his critical patients. He found that in
many ways man is like an iceberg. Only a small part is conscious and visible, the rest is
beneath the surface. The presence of this explains why man cannot always verbalize his
motive to attain certain goals or even tell what his goals are. An example can be drawn
from the famous Hawthorne experiments.
• One girl-worker complained to her counsellor about her foreman. Later on, it was found
that the reason why she disliked her foreman was that she had a step-father whom she
feared and whose physical appearance was very much like her foreman, with the result that
she had unconsciously transferred to her foreman the unfavorable characteristics of her
step-father.
3. Motives change:
• Hierarchy of motives of each individual called "structure" is not fixed. It changes from
time to time.
• An individual's primary motive today may not be primary tomorrow, even though he
may continue to behave in the same way.
• Example: A temporary worker may produce more in the beginning to become permanent.
When made permanent he may continue to produce more—this time to gain promotion,
and so on.
4. Motives are expressed differently.
• The ways in which motives are translated into actions also vary considerably between
one individual and another.
• One individual with a strong security motive may play it safe and avoid accepting
responsibility for fear of failing and being fired. Another individual with the same
security motive may seek out responsibility for fear of being fired for low performance.
• Even the same individual may express his motive differently at different times.
• Different expressions completely mislead a manager because he does not know what the
employee's true motivation is.
5. Motives are complex.
• It is difficult to explain and predict the behavior of workers. The introduction of an
apparently favorable motivational device may not necessarily achieve the desired ends if it
brings opposing motives into play.
• In a factory, when blue-green lighting was introduced to reduce eye strain, the output of
men workers increased but that of women workers decreased.
• On investigation it was found that the latter disliked the change in lighting because they
felt that the new type of lighting had made them look 'simply ghastly'.
6. Multiple motives make the choice of goals difficult for an individual

Dr Suresh D, Professor, RNSIT

 • Multiple motivations operate simultaneously to influence an individual's behavior. Some
of these motivations are incompatible with one another. This results in the following three
types of motivational conflicts which make the person's choice of goal difficult:
i. Approach-approach conflict where the person desires to do two things which he likes
equally well, but it is possible to do only one.
For example, there is the person who is remaining at his present place of posting with the present
salary, or in a new place with a hike in salary. In such situations, two different behaviors are aroused
in him which block each other
(ii) Avoidance-avoidance conflict where the person is forced to choose between two alternatives,
both of which are considered equally undesirable by him.
➢ For example, there is the person who, being dissatisfied with his present job, wants to
leave it but also wants to avoid unemployment.
(iii) Approach-avoidance conflict where the person is attracted to the positive characteristics of
his choice, but wants to avoid its negative characteristics.
➢ For example, a person may be motivated to work overtime for extra pay but may not like
to be scolded by his wife for reaching home late.
MOTIVATION THEORIES
These are classified under three broad heads as given below.
1. Content theories
2. Process theories
3. Reinforcement theory
The content theories tell us what motivates an individual. They throw light on the various needs
and incentives which cause behavior.
The process theories, on the other hand, answer the question how behavior is caused.
Reinforcement theory explains the ways in which behavior is learned, shaped or modified.
Content Theories:
1. Maslow's Need Hierarchy Theory
2. Alderfer’s ERG Theory
3. Herzberg’s Two-factor Theory
4. McClelland’s Achievement Theory
Process Theories:
1. Victor Vroom’s Expectancy Theory
2. Adam’s Equity Theory
Reinforcement Theory:
1. Skinner’s Behaviour Modification Theory

Maslow's Need Hierarchy Theory:

• At any given time, some of the variety of needs of people are satisfied and others are
unsatisfied.

Dr Suresh D, Professor, RNSIT

 • An unsatisfied need is the starting point in the motivation process, and it begins the chain
of events leading to behaviour.
• When a person has an unsatisfied need, he attempts to identify something that will be
satisfied the need. This is called a goal.
• Once a goal has been identified, the person takes action to reach that goal and thereby
satisfy the need.
• As per [Link], needs are arranged in a hierarchy or a ladder of five successive
categories as shown in figure 2.

• Physiological needs are at the lowest level, followed by security, social, esteem, and self-
fulfillment needs
Physiological Needs: These needs arise out of the basic physiology of life. Ex.: Food, water, air
etc. It must be at least partially satisfied for continued survival.
Security needs: These are the needs to feel both economically secure and physiologically
secure.
➢ The former include protection from arbitrary lay-off and dismissal, disaster, and avoidance
of the unexpected.
➢ The latter relates to the man’s confidence in dealing with the problem he might face in the
future.
Social needs: These needs are to associate with other people and be accepted by them. Here
the man desires to love and be loved; accept others and be accepted; show affection and be shown
affection and so on. These are variously referred to as “the hard instinct”, “gregariousness” and
the fact is man finds satisfaction in association with others and feels real deprivation when it
is not possible.

Dr Suresh D, Professor, RNSIT

Egoistic or esteem needs: These needs relate to respect and prestige. Dominance is considered
as egoistic needs. These are two types: self-esteem and esteem from others.
Self-esteem is an individual’s need to feel himself as he is worthy. He has also the need that others
think he is worthy.
Self-fulfillment needs are for realizing one’s potential. This is to realise one’s capabilities to the
fullest.
➢ For accomplishing what one is capable of accomplishing,
➢ For becoming what one is capable of becoming.
A musician must make music, an artist must paint, a write if he to be ultimately happy. This need
is also called self-realisation or self-actualization.
• According to Maslow, people attempt to satisfy their physical needs first.
• As long as these needs are unsatisfied, they dominate behaviour.
• As they become reasonably satisfied, they lose their motivational power and the next level
of needs, security needs, becomes the dominant motivational force.
• This process continues up the need hierarchy.
• As each level of needs becomes relatively satisfied, the next higher level becomes
dominant.
• This theory provides some insights about people and their behaviour.
Herzberg’s Two-factor Theory
• The Motivation-Hygiene theory or the Two-Factor theory was proposed by Frederick
Herzberg. (Theory of work motivation)
• He and his associates interviewed 200 engineers and accountants working in a few
industries in Pittsburgh, USA.
• They asked them to think of times when they felt especially good and times when they felt
especially bad about their jobs.
• Opinion from employees about their bad times were unfair company policies, poor
relationship with their boss and co-workers, and low pay.
• Good job experiences are recognition they had received for well-done job, or the
opportunity their jobs gave them for personal growth and development.
• Based on these findings, Herzberg developed the two-factor theory of work motivation.
• Absence of certain job factors make workers dissatisfied. However presence of these same
factors does not produce high levels of motivation.
➢ They help in avoiding dissatisfaction and creates the problem of absenteeism, turnover and
grievances.
• Herzberg called these factors maintenance or hygiene factors since they are necessary to
maintain a reasonable level of satisfaction to serve as take-off point for motivation.
• Ten maintenance factors are as follows
• Fair company policies and administration
• A supervisor who knows the work
• A good relationship with one’s supervisor

Dr Suresh D, Professor, RNSIT

 • A good relationship with one’s peers
• A good relationship with one’s subordinates
• A fair salary
• Job security
• Personal life
• Good working conditions
• Status
• To build high levels of motivation, a different set of factors is necessary. Herzberg called
these the motivators or satisfiers. These six types are as follows
1. Opportunity to accomplish something significant
2. Recognition for significant accomplishments
3. Chance for advancement
4. Opportunity to grow and develop on the job
5. Chance for increased responsibility
6. The job itself
Above list indicates, the motivators are job-centered; they relate directly to the content of job itself.
The maintenance factors relate more to the conditions and the environment in which work is done.
• As shown in figure 3 the maintenance factors mainly satisfy physiological, security, social
and some esteem needs.
• The motivators are directed at some part of esteem, and self- fulfillment needs.
According to Herzberg these factors helped in increasing job satisfaction. However a decrease in
these factors would lead to dissatisfaction. Motivators generally help attaining higher output by
the employees.

Dr Suresh D, Professor, RNSIT

COMMUNICATION

•According to Newman and summer, it is an exchange of facts, ideas, opinions or

emotions by two or more persons.
• Allen Louise defines it as the sum of all the things one person does when he wants to create
understanding in the minds of another.
• Simply stated, communication means the process of passing information and
understanding from one person to another.
➢ If the information is not understood by the receiver in the same meaning in which its sender
wants him to understand it, the purpose of communication is defeated. This may result in
confusion, chaos and organizational inefficiency, leading to non-fulfillment of business
goals.
• In short, communication is not merely transmission of information from one person to
another but also correct interpretation and understanding of the information.
• It is not to get something off the mind of the person transmitting it, but to get something
into the mind and actions of the person receiving it.
IMPORTANCE OF COMMUNICATION

• Every organization structure is a social system involving the

➢ interactions of people working at different levels and
➢ proper communication among them is necessary for achieving the goals of
organization.

Dr Suresh D, Professor, RNSIT

 • It is the basis to an organization’s existence from the birth of the organization on through
its continuing life.
• When communication stops, organized action comes to an end.
PURPOSES OF COMMUNICATION
Some important purposes which communication servers are as under:
1. Communication is needed in the recruitment process to persuade potential employees of the
merits of working for the enterprise. The recruits are told about the company's organization
structure, its policies and practices.
2. Communication is needed in the area of orientation to make people acquainted with peers,
superiors and with company's rules and regulations.
3. Communication is needed to enable employees to perform their functions effectively.
Employees need to know their job's relationship and importance to the overall operation. This
knowledge makes it easy for them to identify with the organizational mission. If a nurse in a
hospital knows why she is to follow certain procedures with a patient and how this relates to the
total therapy programme for him, it is much easier for her to develop an ideological commitment
to the hospital.
4. Communication is needed to acquaint the subordinates with the evaluation of their contribution
to enterprise activity. It is a matter of some motivational importance for the subordinates to know
from their superior how they stand and what the future may hold for them. This appraisal, if
intelligently carried out, boosts the subordinates' morale and helps them in building their career.
5. Communication is needed to teach employees about personal safety on the job. This is essential
to accidents, to lower compensation and legal costs and to decrease recruitment and training tor
replacements.
6. Communication is of vital importance in projecting the image of an enterprise in the society.
The amount of support which an enterprise receives from its social environment is affected by the
information which elite groups and the wider public have acquired about its goals, activities and
accomplishments. During the 1982 blowout at Bombay High, ONGC took care to keep the country
informed about the steps that were being taken to combat the crisis. Contrast this with Union
Carbide which did nothing to refurbish its image after the Bhopal Gas leak.
7. Communication helps the manager in his decision process. There is a spate of varied information
produced in an enterprise. The manager must make a choice of useful and essential information
which should reach him. The important question before him is 'what do I need to know?' It should
be remembered that no two successive managers of the same plant will give the same answer to
this question.
8. Communication helps in achieving coordination. In a large organization, working on the basis
of division o labour and specialization, there is need for coordination among its component parts.
This can be achieved only through communication. A good communication system is the basis of
all interdependent activities which we find being carried out in different departments of an
organization. By providing information to each unit about the relevant activities of others, a good
system of communication makes the interdependence of each unit acceptable to it. In the absence

Dr Suresh D, Professor, RNSIT

of communication, no unit would tolerate this interdependence. This will make coordination
difficult. In the words of March and Simon, "The greater the efficiency of communication within
the organization, the greater the tolerance of a unit for interdependence."
9. Communication promotes cooperation and industrial peace. Most of the disputes in an enterprise
take place because of either lack of communication or improper communication. Communication
helps the management to tell the subordinates about the objectives of the business and how they
can help in achieving them. Similarly, communication helps the subordinates in putting forth their
grievances, suggestions, etc. before the management. Thus communication helps in promoting
mutual understanding, cooperation and goodwill between the management and workers.
10. Communication increases managerial efficiency. It is said that the world of modem
management is the world of communication and the success of a manager in the performance of
his duties depends on his ability to communicate. Administrators in business and industry
reportedly spend between 75 and 95 per cent of their time communicating (either sending or
receiving messag-es.4) Naturally then, an effective system of communication is very essential for
the efficiency of a manager. Benjamin Balinsky has rightly remarked that, if there is any shortcut
to executive effectiveness, it is the mastery of the art of face to face communication.
In summary, it can be said that the purposes of communication are:
1. To provide the information and understanding necessary for group effort (i.e., the
skill to work); and
2. To provide the attitudes necessary for motivation, cooperation and job satisfaction
(i.e., the will to work).

Leadership
• The success of industrial enterprise is dependent upon the quality of its leadership.
• In a business enterprise, several tasks, such as
➢ determining the objectives of the enterprise,
➢ designing the methods to achieve them,
➢ directing and coordinating the activities of various departments, etc
can be successfully performed only if there is able leadership.
• "The will to do is triggered by leadership and lukewarm desires for achievements are
transformed into burning passion for successive accomplishment by the skilful use of
leadership" (George R Terry).
• "Leadership is the lifting of man's visions to higher sights, the raising of man's performance
to a higher standard, the building of man's personality be-yond its normal limitation".
(Peter Drucker)
• "Leadership is the ability to secure desirable actions from a group of followers voluntarily
without the use of coercion." (Alford and Beatty)
• "Leadership is the ability to persuade others to seek defined objectives enthusiastically. It
is the human factor which binds a group together and motivates it towards goals". (Keith
Davis)

Dr Suresh D, Professor, RNSIT

CHARACTERISTICS OF LEADERSHIP
1. Leadership implies the existence of followers We appraise the quality of a person's leadership
in practice by studying his followers. We ask:
➢ How many and what kind of followers does he have?
➢ How strong is their commitment as a result of his leadership?
➢ How long will their commitment last?
• From the answers of the above questions we get to know the quality of leadership, and the
leaders within organizations are also followers. The supervisor works for a branch head,
who works for a division manager, who works for the vice president of a department and
so on.
2. Leadership involves a community of interest between the leader and his followers In other
words, the objectives of both the leader and his men are one and the same.
• If the leader strives for one purpose and his team of workers for some other purpose, it is
no leadership.
• In the words of G.R. Terry, "Leadership is the activity of influencing people to strive
willingly for mutual objectives."
3. Leadership involves an unequal distribution of authority among leaders and group
members Leaders can direct some of the activities of group members; that is the group members
are compelled or are willing to obey most of the leader's directions.
• The group members cannot similarly direct the leader's activities.
4. Leadership implies that leaders can influence their followers or subordinates in addition
to being able to give their followers or subordinates legitimate directions In other words,
leaders not only tell their subordinates what to do by way of command but also influence by their
behaviour and conduct.
➢ The use of command by leaders succeeds only in bringing about a temporary
behavioural change in the followers.
➢ Permanent attitudinal change in followers comes through the use of influence only.
➢ According to Hersey and Blanchard leadership of the first type though successful is not
effective. The second type of leadership is both successful and effective.
Behavioral approach
• Under behavioural approach researchers have studied leadership behaviour from three
points of view: motivation, authority and supervision.
Motivation: From the motivational point of view, leadership behaviour can be either positive or
negative.
• In positive behaviour the leader’s emphasis is on reward to motivate the subordinates.
• In negative behaviour the leader’s emphasis is on penalties and punishments.
• The leader tries to frighten the subordinates into higher productivity.
Authority: From the authority point of view, leadership style can be autocratic, democratic or
free-rein. It is described as given below.

Dr Suresh D, Professor, RNSIT

Autocratic leadership: Here leader alone determines policies and makes plans. He tells others
what to do and how to do.
• He demands strict obedience and relies on power.
• An autocratic leader may be paternalistic or benevolent also who uses rewards for obtaining
obedience from his employees.
• Both the forms of autocratic leadership (authoritarian and benevolent) are disliked by
employees. In one form, the employee remains under constant fear. In other form he
remains under constant gratitude.
• In both the forms, the leader is the key person.
Merits:
• Increases efficiency, save time and get quick results in an emergency situation.
• The paternalistic form of this type of leadership works well with employees who have a
low tolerance for ambiguity, feel insecure with freedom and even minor decision-making
requirements and thrive under clear, detailed and achievable directives.
• Chain of command and division of work are clear and fully understood by all.
Demerits:
• The apparent efficiency of one-way communication often becomes false communication.
• The autocratic leader is alone in his decision making.
• Most people resent authoritarian rule which excludes them from involvement and reduces
them to machine like cogs without human dignity or importance.
Democratic leadership
• In this type of leadership (participative or person-oriented leadership) the entire group is
involved in and accepts responsibility for goal setting and achievement.
• Subordinates have considerable freedom of action.
• The leader shows greater concern for his people than for high production.
• A part of the leader’s task is to encourage and reinforce constructive interrelationships
among members to reduce intra-group conflict and tensions.
• He serves more as coordinator or agent for the group. Hence the group is not dependent on
him as an individual and can functions effectively in his absence.
Merits:
• When people participate in and help formulate a decision, they support it and work hard to
make it work, because it is their idea and, now, a part of their life and their ego.
• The leader consistently receives the benefit of the best information, ideas, suggestions, and
talent and operating experience of his people.
• Permits and encourages people to develop, grow and rise in the organization.
Demerits:
• The participative style can take enormous amounts of time and, may degenerate into a
complete loss of leader’s control. Subordinates may show greater absenteeism and
tardiness.
• Some leaders may use this style as a way of avoiding responsibility.

Dr Suresh D, Professor, RNSIT

CO-ORDINATION
Some definitions of the term 'co-ordination' would be:
Coordination is the management of interdependence in work situations. It is the orderly
synchronization of the interdependent efforts of individuals, in order attain a common goal.
Example: In a hospital, the activities of doctors, nurses, ward attendants, and lab technicians must
be properly synchronized if the patient is to receive good care.
"Co-ordination refers to the orderly arrangement of individual and group efforts to ensure unity of
action in the realization of common goals." - Mooney and Reiley
"To co-ordinate means, to unite and correlate all activities." - Henry Fayol
"Co-ordination means balancing and keeping the team together by ensuring a suitable allocation
of working activities to the various members, and seeing that these are performed with due
harmony among the members themselves" - E.F.L. Brech
Basic features of co-ordination:
1. Co-ordination implies deliberate actions on the part of managers to bring about harmony and
unity of actions.
2. Co-ordination applies to group efforts, and not to individual effort. It involves the orderly
arrangement of group efforts.
3. Co-ordination does not result in a one-shot action. It is continuous action.
4. Co-ordination is all-pervasive. It has to happen along all verticals and horizontals of an
organization.
5. Co-ordination is necessary not only within the organization but also of the organization with the
outside environment.
TYPES OF COORDINATION
Coordination may be variously classified as
• internal or external
• vertical or horizontal
• procedural or substantive
TYPES OF COORDINATION- Internal or external
• Coordination among the employees of the same department or section, among workers and
managers at different levels, among branch offices, plants, departments and sections is
called internal coordination.
• Coordination with customers, suppliers, government and outsiders with whom the
enterprise has business connections is called external coordination.
TYPES OF COORDINATION-vertical or horizontal
• Vertical coordination is what exists within a department where the departmental head is
called upon to coordinate the activities of all those placed below him.
• On the other hand, horizontal coordination takes place sideways. It exists between
different departments such as production, sales, purchasing, finance, personnel, etc.
TYPES OF COORDINATION - procedural or substantive

Dr Suresh D, Professor, RNSIT

By procedural coordination is meant the specification of the organization itself—that is, the
generalized description of the behaviors and relationships of the members of the organization.
Procedural coordination establishes the lines of authority, and outlines the sphere of activity and
authority of each member of the organization.
Substantive coordination is concerned with the content of the organization’s activities. In an
automobiles factory, an organization chart is an aspect of procedural coordination,
IMPORTANCE OF CO-ORDINATION
1. Co-ordination increases efficiency
2. Co-ordination improves human relations
3. Co-ordination resolves conflicts
4. Co-ordination makes all departments focus together
5. Co-ordination helps sharing of resources
6. Co-ordination retains and attracts talent
TECHNIQUES OF CO-ORDINATION
A. Basic Coordinating techniques
Rules, Procedures and Policies:
• The specification for Rules, Procedures and Policies is a very common device to coordinate
sub-units in the performance of their repetitive activities and also to cover all the possible
situations.
• This device leads to a “vicious cycle syndrome” in which the dysfunctional consequences
of this device lead to a still stronger reliance on it.
Planning:
• Planning ensures coordinated effort.
• Under planning, targets of each department dovetail with the targets of all other
departments.
• Strategic planning does the task of relating the organization to the environment so as to
reduce uncertainty and the need for strict coordination.
Hierarchy:
• The oldest as well as the simplest device for achieving coordination is hierarchy or chain
of command.
• By putting interdependent units under one boss, some coordination among their activities
is ensured.
B. Increasing coordination potential
Direct contact: In order to prevent top executives from becoming overloaded with
problems, as many problems as possible are resolved by the affected employees at lower
levels by informal contacts.
• Strong cross-functional links at multiple levels may be established for this purpose.
Task force:
• This is a temporary group made up of representatives from those departments which are
facing a problem.

Dr Suresh D, Professor, RNSIT

 • It exists only as long as the problem lasts. When a solution is reached each participant
returns to his normal tasks.
Induction:
• Inducting the new employees into the new social setting of his work is also a coordinating
mechanism.
• The device familiarizes the new employee with the organization’s rules and regulations, its
dominant norms of behaviour, values and beliefs and integrates his personal goals with the
organizational goals.
Indoctrination:
• Indoctrinating organizational members with the goals and mission of the organization. This
is used in religious and military organisations.
• According to Gulick, the leader should develop in the minds of his followers the desire and
will to work together for a purpose.
• According to Selznick, the major task of a leader is not only to make a policy but “to build
it into the organization’s social structure”.
• This is achieved when the leader succeeds in transforming, by indoctrination and other
means, the neurtral body of men into committed body.
Incentives:
• Providing independent units with an incentive to collaborate, such as profit sharing plan,
is another mechanism.
• Profit sharing claim promotes team spirit and better cooperation between employers and
workers, between superior and subordinates and between workers and workers. This
ensures better coordination.
Liaison Departments:
• For the large volume of contact between two departments, a liaison department evolves to
handle the transactions. This typically occurs between sales and production departments.
Workflow:
• A workflow is the sequence of steps by which the organization acquires inputs and
transforms them into outputs and exports these to the environment.
• It is largely shaped by technological, economic, and social considerations and helps in
coordination.
C. Reducing Need for coordination
• New forms of organization structures such as autonomous work teams and matrix
organisations reduce coordination needs.
CONTROLLING
Meaning
Some definitions of the term 'Control' with respect to an organization are:
• The main object of control is to bring to light the variations between the standards set and
performance and then to take necessary steps to prevent the occurrence of such variations
in future.

Dr Suresh D, Professor, RNSIT

 • "Control is checking current performance against predetermined standards contained in the
plans, in order to ensure adequate progress and satisfactory performance". - E.F.L. Brech.
• According to George R Terry, 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.
NEED FOR CONTROL SYSTEM
A control system is needed for four purposes:
1. to measure progress;
2. to uncover deviations;
3. to indicate corrective action; and
4. to transmit corrective action to the operation
To Measure Progress:
• There is a close link between planning and controlling the organization’s operations.
• The control process continually measures progress towards goals. As Fayol recognized, "In
an undertaking, control consists in verifying whether everything occurs in conformity with
the plan adopted, the instructions issued and principles established".
• The manager take readings to see where his enterprise or department is on the charted and
predetermined course.
To Uncover Deviations:
• Once a business organization is set into motion towards its specific objectives, events occur
that tend to pull it "off target".
• Major events which tend to pull an organization "off target" are as follows:
• Change: Change is due to markets shift, new products emerge, new materials are
discovered and new regulations are passed. The control function enables managers to detect
changes that are affecting their organization’s products or services. They can then cope
with the threats or opportunities that these changes represent.

• Complexity: Today's vast and complex organizations, with geographically separated

plants and decentralized operations make control a necessity. Diversified product lines
need to be watched closely to ensure that quality and profitability are being maintained.

• Mistakes: Managers and their subordinates very often commit mistakes. For example,
wrong parts are ordered, wrong pricing decisions are made, problems are diagnosed
incorrectly, and so on.

• Delegation: When managers delegate authority to subordinates, their responsibility to their

own superiors is not reduced. Managers can determine accomplishing the tasks of
subordinates by implementing a system of control. Managers are also able to check on their
subordinates' progress.

• To Indicate Corrective : Action Controls are needed to indicate corrective actions. They
may reveal, for example, that plans need to be redrawn or goals need to be modified or

Dr Suresh D, Professor, RNSIT

 there is need for reassignment or clarification of duties or for additional staffing or for
conforming to the way the work should be done.

• To Transmit Corrective Action to the Operation: Controls are needed to transmit

corrective action to the operation while it is progressing so that the transformation
subsystem modifies its inputs or its production plan to reduce any discrepancy or error and
keeps the output "on course". The thermostat is a classic example of this operating
principle. When the room temperature drops below a desired level, the control mechanism
in the transformation subsystem at once transmits this information (called "feed forward")
and the temperature begins to rise till it reaches the selected level.

•
The transformation subsystem thus takes the shape of a closed loop as shown in Fig. 1

BENEFITS OF CONTROL
A well-developed control system
• increases productivity
• reduces defects and mistakes,
• helps meet deadlines,
• facilitates communication,
• improves safety,
• lowers cost, and

Dr Suresh D, Professor, RNSIT

• gives the workers control over their environment.
ESSENTIALS OF EFFECTIVE CONTROL SYSTEM
Suitable
The control system should be appropriate to the nature and needs of the activity. Controls used in
the sales department will be different from those used in finance and personnel.
Timely and Forward Looking
Although an ideal control system, as in certain electric controls, should be able to detect deviations
before they occur, the same is not possible in personnel and marketing controls which always
include a time lag between the deviation and corrective action.
Objective and Comprehensible
The control system should be both objective and understandable. Objective controls specify the
expected results in clear and definite terms and leave little room for argument by the employees.

Flexible
The control system should be flexible so that it can be adjusted to suit the needs of any change in
the basic nature of the inputs and/or the sizes, varieties or types of the same product or service.
One way of introducing flexibility into a control system is to make the adjustments automatic.
Economical
Economy is another requirement of every control system. The benefit derived from a control
system should be more than the cost involved in implementing it. To spend a dollar to protect 99
cents is not control. It is waste.
Prescriptive and Operational
A control system in order to be effective and adequate must not only detect deviations from the
standards but should also provide for solutions to the problems that cause deviations.
Acceptable to Organization Members
The system should be acceptable to organization members. When standards are set unilaterally by
upper level managers, there is a danger that employees will regard those standards as unreasonable
or unrealistic. They may then refuse to meet them.
Reveal Exceptions at Strategic Points
A control system should be such as to reveal exceptions at strategic points. Small exceptions in
certain areas have greater significance than larger deviations in other areas.
Five per cent deviation from the standard in office labor cost is more important than 20 per cent
deviation from the standard in cost of postage stamps.
Motivate people to high performance
A control system is most effective when it motivates people to high performance. Since most
people respond to a challenge, successfully meeting a tough standard may well provide a greater
sense of accomplishment than meeting an easy standard.
Should not lead to less attention to other aspects

Dr Suresh D, Professor, RNSIT

Control over one phase of operations should not lead to less attention to other aspects. Ex.: If
controls put pressure on employees to increase output, the quality of work, care of equipment, and
prevention of waste should not be neglected.
Should be periodically reviewed and evaluated
Every control system should be periodically reviewed and evaluated in relation to its objectives to
see how effective and efficient the design proved to be or why it failed.
The general features of controlling functions are:
1. Controlling is a positive force.
2. Controlling is a dynamic and continuous process.
3. Controlling is goal-oriented.
4. Control is forward-looking
5. Control process is universal
6. Control is based on planning
7. Delegation is key to control.

STEPS IN CONTROL PROCESS

Step 1:
Setting of standards
The first step in the control process is to establish standards. Standards are the targets against which
actual performance will be compared. Standards are nothing but criteria of performance.
Control standards are broadly divided into two types.
(i) Quantitative standards:
These are standards which can be quantified.
Eg: Production level, rejection level, labor-hours, speed
of service, sales volume, profit, expenses etc.
(ii) Qualitative standards:
These are standards which cannot be quantified i.e.,
they are qualitative in nature.
Eg: Employee morale, brand image, company image,
goodwill, industrial relations etc.
Step 2:
Measurement of actual performance
The second step in the control process is to measure actual performances of various individuals,
teams and departments in the background of established standards. To make any measurement
process effective, the following three aspects have to keep in mind:
(i) Completion
The actual performance measurement has to be complete in all respects. In other words, all aspects
of the job should be measured and not just the ones that are more evident.
(ii) Objective

Dr Suresh D, Professor, RNSIT

Performances at work should be measured in an objective manner without fear, favorer bias. Only
then measurement can be effective.
(iii) Responsiveness:
The management of any performance should support the belief that effort and performance lead
to improvement, both from the personal and organizational point of view.
Step 3:
Comparison of actual performance with standards
The third step in the control process is to compare the actual performances with established
standards and ascertaining the causes of deviation. The causes of deviation may be machine-
dependent, process dependent, plan-dependent, manpower-dependent etc.
Step 4:
Taking corrective measures
The final step in the control process consists of taking remedial actions so that deviation may not
occur again in future. Corrective steps are initiated so that any defects in the actual performance
may be rectified.
Corrective actions may include the following activities.
1. Change in methods, rules, procedures strategies etc.
2. Introduce training programs
3. Job redesign
4. Replacement of personnel
5. Re-establishing budgets and standards
6. Better compensation packages to employees
7. Changing machinery and processes
8. Identifying recurring bottle necks and avoiding them
9. Trying to understand the competition better.
10. Looking at raw material resources and suppliers.

Dr Suresh D, Professor, RNSIT

•

Dr Suresh D, Professor, RNSIT