TECHNOLOGICAL INNOVATION MANAGEMENT

AND ENTREPRENEURSHIP
BEC501
V SEMESTER
MODULE 2 NOTES
 MODULE 2 CONTENTS
CHAPTER 1- ORGANIZING AND STAFFING

 Organization-Meaning
 Characteristics
 Process of Organizing
 Principles of Organizing
 Span of Management (meaning and importance only)
 Departmentalization-Process Departmentalization, Purpose Departmentalization
 Committees– Meaning, Types of Committees.
 Staffing-Need and Importance
 Recruitment and Selection Process

CHAPTER 2 - DIRECTING AND CONTROLLING

 Meaning of Directing
 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
(Text 1)
 Leadership -Meaning
 Characteristics
 Behavioral 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 (Text 1)
 CHAPTER 1
ORGANIZING AND STAFFING
1. MEANING OF ORGANIZATION
Q.: Define Organization. (1M)
• An organisation is a group of people who work together in an organised way to reach the specific goal.
• An organisation is the process of grouping work, assigning duties and authority, and establishing
relationships so people can work effectively.

2. CHARACTERSTICS OF AN ORGANIZATION
Some important characteristics of an organization has:
 Common Objective - A purpose, goal already indicated during planning.
 Well defined authority and responsibility - A clear concept of major duties or activities required to
achieve the purpose
 Division of Work - Classification of activities into jobs
 Co-ordination - Establishment of relationships between these jobs in order to ensure coordination.

3. PROCESS OF ORGANISING
Organizing means designing the organization structures. The manager differentiates and integrates the activities
in the organization. Process of organizing can describe this differentiation and integration in terms of a seven-
step procedure.
1. Consideration of objectives
 The first step in organizing is to know the objectives of the enterprise.
 Objectives determines the various activities.
 Example: The Structure of an Educational Institution is not the same as that for a Business Enterprise.
Therefore, Consideration of Objectives has the First & Foremost Role to play in the Process of
Organizing.
2. Deciding organizational boundaries
 After consideration of objectives, the next step is to decide what to do inside and outside the
boundaries of the organization.
 Making manufacture V/S buy choices for different goods and services.
 Making choice about strategic alliances with other firms.
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  Choices have to be made to extend to different of the organization interact directly with environment.
3. Grouping of activities into departments
 To group all closely related and similar activities into departments and sections.
 Sometime different activities may be observed closely and grouped in one department.
 In addition, the activities of each Department can be further classified & placed under different
sections of that Department.
 Example: In the clothing Shop, separate sections may be created for men, women, kids, etc.
4. Analyzing inter-department relations and deciding which departments will be key departments
 The contributions which each department makes downward, upward and sideways to decide its
relative status.
 It is necessary to know the key departments, which renders key operations for fulfilling of goals.
 The attention of top management is focused on the minor issues raised by vocal managers known as
“Decibel system”.
 Example: Company which thinks advertising is the major aspects, creates a separate advertising &
Department which report directly to the president of the organization.
5. Determining levels at which various types of decisions are to be made
 Relative importance of various departments the levels at which various major and minor decisions are
to made is determined.
 Frim must decide for itself as to how much decentralization of authority and responsibility it wants to
have.
 Extreme Decentralization may lead to loss of Control, on the other hand, Extreme Centralization may
lead to improper decisions, failure to take decisions at the right time, delays & complete breakdown
of the morale of the employees.
 Therefore, Top Management must very carefully decide the levels of the enterprise at which various
types of decisions can be taken in order to achieve overall Objectives of the enterprise most effectively
& efficiently.
6. Determining the span of management
 One has to decide on the Span of Management. i.e., 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 Communication & increase financial burden of Salaries.
 For these reasons, a Flat Structure is generally desirable. However, the Span of Management, of each
Executive Position must be tailored to meet the satisfactory working environment of the enterprise.
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7. Setting up a coordination mechanism

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  Proper Coordination among various departments and its individuals is very important for the
successful and smooth running of the enterprise.
 As departments and individuals carry out their specialized activities.
 Therefore, effective Coordination Mechanisms are required to enable members of the Organization to
keep sight of the Organization Goals and reduce inefficiencies and conflicts.

4. PRINCIPLES OF ORGANIZATION
1. Objectives: the objective of the enterprise influences the organization structure hence it should be clear
and well defined.
2. Specialization: the activities of the enterprise must be grouped according to the functions and assigned to
persons according to their specialization.
3. Span of control: The span of control should be the minimum. That means, a Manager should be asked to
supervise a reasonable number of subordinates.
4. Management by exception principle: As the managers at higher level has very less time only
exceptionally complex problems should be referred to them and day-to-day routine problems should be
handled by the subordinates at the lower levels.
5. Scalar Principle: This principle is known as “Chain of Command”. The line of authority from the top
management to first-line management must be clearly defined. The principle simply states that an
organization is a hierarchy.
6. Unity of command: Each subordinate should have only one superior whose command has to obeyed.
Multiple subordinates must be avoided.
7. Delegation: Proper authority should be delegated at the lower levels of organization also. The authority
delegation should be equal to responsibility. Each manager should have enough authority to accomplish
the task assigned.
8. Responsibility: The supervisor should be held responsible for the acts of his subordinates. No supervisor
should be allowed to avoid responsibility.
9. Authority: The authority is the tool by which manager is able to accomplish the desired objectives. Hence
authority of each manager should be clear.
10. Efficiency: The organization structure should enable the enterprise to function effectively and accomplish
its objectives with lowest possible cost.
11. Simplicity: The Organization Structure should be as simple as possible and the Organization levels should,
as far as possible, be minimum. A large number of levels of Organization means difficulty of effective
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communication and coordination.

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12. Flexibility: The Organization should be flexible, should be adaptable to changing circumstances and

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 permit expansion, replacement without dislocation and disruption of the basic structure.
13. Balance: There should be reasonable balance in the size of various departments between Centralization
and Decentralization, between the principle of span of control and short chain of command, and among all
types of factors such as Human, Technical and Financial.
14. Unity of Direction: There should be one Objective and one plan for a group of activities having the same
Objective. Unity of Direction facilitates coordination of activities at various levels.
15. Personal Ability: As people constitute an organization, there is a need for proper selection, placement and
training of staff. further, the organization structure must ensure optimum use of human resources and
encourage management development programs.
16. Acceptability: The structure of the organization should be acceptable to the people. 2 things generally
happen if people oppose the structure: It is modified gradually by people or it is used inefficiently.

5. SPAN OF MANAGEMENT OR MEANING AND IMPORTANCE

 Span of Management is also referred as Span of Control.
 This indicates the number of subordinates who report directly to a manager.
 This determines the effective utilization of the managers and also the effective performance of their
subordinates
 If the span is wider than the manager gets overstrained and the subordinates won’t get the proper guidance
 If the span is narrow, then the manager is underutilized and the subordinates will be over controlled.
 Example for span of management which explains, decreasing the span of management increases the
number of levels. Suppose a sales manager has 16 salesmen reporting directly to him, the span of
management is 16.
 To reduce the span, consider there are 4 sales Assistant Sales Manager under 1 Sales Manager and each
Assistant Sales Manager will supervise 4 salesmen, the span of management is 4.
 By adding levels of management, communication between sales manager and salesmen should pass
through 4 additional assistant sales manager.

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 Figure 1: Decreasing the span of management increases the number of levels

6. DEPARTMENTALISATION / DEPARTMENTATION
 Departmentalization refers to dividing people into group or department based of criterion.
 There are 2 categories in departmentalization: Process departmentalization, Purpose departmentalization.

PROCESS DEPARTMENTALISATION
There are 2 classifications for dividing work by process:
1. Departmentalization by Business or organisational Functions:
 Functional Departmentalization is done on the basis of organizing activities and is present in almost
every Enterprise at some level in the organization structure.
 Example: Each Major function of the enterprise is grouped into a Departments like production, sales,
finance and HR.
 Advantages:
1. It is simple form of grouping activities for small organization.
2. It promotes excellence in performance because of experts in the specific domain.
3. It promotes economies of scale, like producing all product in one plant.
 Disadvantages:
1. Many times it is not easy to make clear breaks between each department.
2. It sometimes combines dissimilar jobs in single department.
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3. Each manager thinks about his department goals and does not think in terms of company as a whole.

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 4. It does not provide good training ground for the overall development of a manager.
5. It is not suitable for the organization with larger size.
2. Departmentalization by Technology
 Technology Departmentalization is done on the basis of several discrete stages in the process or
technologies involved in the manufacture of a product.
 This process used when work that would be done in several different locations in an enterprise is done
in one place because of the usage of special equipment.
 Example: Production of vegetable oil have separate departments like: crushing, refining and finishing.
 Advantages:
1. It facilitates the use of heavy and costly equipment’s in an effective manner.
2. It follows the principles of specialization where each department follows the special type of works.
3. It is suitable for the organizations having number of processes in manufacturing the product.
 Disadvantages:
1. Workers tends to feel less responsible for the whole product.
2. It does not provide good training ground.
3. When technology is sequential, the breakdown of one department slowdowns the work of all the
other departments.
4. It is difficult to compare the performance of different technology based department.

PURPOSE DEPARTMENTALISATION
There are 5 external ways in which work can be departmentalized by purpose: Product, Customers, Regions,
Territory or Location, Division, and Time.
2. PRODUCT DEPARMENTALISATION
 Under this method for each major product, a separate department is created and separate manager will
handle each department.
 Product departmentalization is defined as “Grouping activities based on products or product lines”
which is suitable for large organizations.
 This is evident when an organization is diversified and each product need different raw materials,
technology, marketing methods.
 Within each department all the needed manufacturing, engineering, marketing, manpower and other
facilities are assembled.
 Example: Hindustan Lever manufactures detergents, soaps, chemicals and agro-based products.
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  ADVANTAGES
 Leads to continuous and undivided attention
 Helps top manager to compare performance of different products and act accordingly
 Product performance can be measured
 Department works with a clear goal
 DISADVANTAGES
 Duplication of staffs and facilities
 The department may divert from overall organizational goal

3. CUSTOMERS DEPARMENTALISATION
 An enterprise may be divided into number of departments on the basis of customer’s service.
 Ex: Educational Institutes to impart quality education: Day college (Full time), Evening college
(Employed students), Correspondence (Outstation students)
 ADVANTAGE
 It ensures full customers satisfaction
 DISADVANTAGE
 It results in under-utilization of resources in some department
 There may be duplication of facilities

4. REGIONS, TERRITORY OR LOCATION DEPARMENTALISATION

 It is most suitable for organizations which are dispersed over the globe in various locations.
 Many government organizations prefer this type as they can provide similar and adoptive services to
the regions
 Ex: Railways – Southern railways, Northern railways, Western railways, and Eastern railways.
 ADVANTAGES
 Places responsibility even at the lower level
 Emphasizes local markets and problems
 Can take locational advantages like availability of raw material
 It affords top management training
 Can invest in a region with better profit
 DISADVANTAGES
 Increases problem for top management to exercise control.
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 Unity of direction may be lost.

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5. DIVISION DEPARMENTALISATION
 Multi-product company segment themselves into several independent centers on the basis of product,
territory or customers, this is called as Divisions or Free-Form organizations.
 Each division is free to handle and operate their division within the framework of general company –
wide policies.
 Example: Samsung, Apple, Microsoft.

6. TIME DEPARMENTALISATION
 Activities are grouped on the basis of timing of their performance.
 Example: Small company expansion – owner or manager has 2 choices – extra shift or renting more
shops

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7. COMMITTEES
 COMMITTEE DEFINITION: It is a group of people who have been formally assigned some task or
some problem for their decision and implementation.
 Committees are setup for group participants when they have:
 Recurring problem arises in the same group or
 Major problem that can be resolved after series of discussion with the group
 The new pattern of management is proposed by Likert which replaced the one-to-one relationship
characteristics with “Inter-locking groups” approach.
 Under this approach, each unit head and his subordinates would work as a decision-making committee.
 Each unit head will serve as a “Chief” for the level below him and as a subordinate for the level above
him, he will be like a linking pin function as shown in figure 4.

 Committees are classified into 2 main categories: Advisory committee and Executive committee.
 Advisory committee is vested with only staff authority, they can only give advice and cannot enforce
the implementation. Examples are: Sales committee, finance committee.
 Executive committee is vested with line authority they not only take decisions but also enforce its
implementation. Examples are: Board of Directors, CEO.
 Committee can also be classified as Standing committee and ad hoc forces.
 Standing committee are permanent committee deals with recurrent organizational problem and
members are chosen because of their tittle or position, instead of individual qualifications or skills
Ex: finance committee in a company, loan approval company in a bank, admission company in a
college.
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 Ad hoc force are short term forces that dissolve after the task is over. The members are chosen for their
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skills and experience

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  ADVANTAGES
 Committees consist of all department heads as a member which promotes better understanding
between each other.
 Committee provides forum for sharing knowledge and experience to all.
 Committee provides opportunity for participants in decision-making.
 Committee promotes transmitting ideas, and information to the all.
 Committee decisions are based on facts and are unbiased.
 DISADVANATGES
 No members will be held responsible in the committee if any wrong decisions are passed.
 A huge amount is spent in setting meetings and allowance to members.
 Decisions are made though certain compromises among the members.
 Secrecy maintenance is difficult.

Centralisation and Decentralisation:

Centralization
 Centralization means authority and decision-making power are concentrated at the top level of
management.
 All planning and important decisions are exclusively taken by top management.
 Lower levels of management only implement the decisions made at the top.
 It refers to the concentration of powers at the apex level of the organisation.
Example:
 In Indian Railways, all major policies and decisions (routes, fares, new trains) are taken by the Central
Ministry.

Decentralization
 Decentralization means authority, responsibility, and accountability are distributed across all levels
of management.
 Top management shares its decision-making power with middle and lower management.
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 It involves delegation of authority so that decisions can be made closer to the point of action.
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 It encourages initiative, flexibility, and faster decision-making.

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Example:
 In McDonald’s, the global headquarters sets broad policies, but menus and marketing strategies are
adapted locally

Difference between centralization and decentralization:

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STAFFING
 It is the process of filling and keeping filled positions in an organization.
 It includes several sub-functions:
 Recruitment-getting applicants for the jobs as they open up.
 Selection of the best qualified from those who seek the jobs.
 Transfers and promotions.
 Training to improve the effectivity of the jobs.

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8. IMPORTANCE AND NEED FOR PROPER STAFFING
 It helps to search the talented and competent people.
 It ensures improved productivity by matching people with job.
 It helps to avoid disruption of work due to shortage of personnel.
 It helps to prevent under-utilization of personnel or overburdening of human resource.

9. RECRUITMENT
 It is the process of attracting candidates to fill the positions in the organization structure.
 Once the requirement of manpower is known, the recruitment process starts.

SOURCES OF RECRUITMENT

 The source of recruitment can be classified in 2 main categories: Internal and External.
 Internal sources refer to present working force in the company.
 External sources refer to vacancies to be filled by external people. Most commonly used external
sources are:
1. Re-employing former employees – Former employees who have been laid off or have left the
company for personal reason may be re-employed. These people may require less initial training.
2. Friends and relatives of present employees – Company with good personnel relation encourage their
employees to recommend their friends and relatives.
3. Applicants at the gate – Unemployed persons who calls at the gates of the company are interviewed
and those who found suitable for existing vacant position are selected.
4. College and technical institutions – Many big companies remain in touch with the colleges and
technical institutes from where young and talented persons may be recruited.
5. Employment exchange - Employment exchange is an office setup by the government for bringing
together those who are search of job and those employers who are looking for workers. Those who
found suitable for existing vacant position are selected.
6. Advertisements – Advertising the vacancy in leading papers may also helpful for searching workers.
7. Labour unions – In company with strong labour union, person is recommended for appointment by
their labour union.

INTERNAL VS EXTERNAL SORUCES OF RECRUITMENT

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 From the point of impact on motivation, external sources are not desirable, when there are adequate and

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 qualified person’s already inside the organization.
 If management wants his workers to improve prospects by participating effectively inside the
organization program, it is desirable to follow a policy of recruitment from within. Outside workers will
have lack of knowledge of products and cannot participate effectively.
 On the other hand, internal candidates are too advanced in age, it may become it may be difficult for
the management to recover outside sources of recruitment.

INTERNAL RECRUITMENT ADVANTAGES AND DISADVATAGES

 ADVANTAGES
 A sense of security develops among the employee.
 Employee remains loyal to the organization.
 People recruited within does not require induction program.
 Labour turnover is reduced.
 People are motivated and become efficient.
 DISADVANTAGES
 Limits the choice of selection to few candidates.
 It may encourage favoritism.

EXTERNAL RECRUITMENT ADVANTAGES AND DISADVATAGES

 ADVANTAGES
 New workers bring fresh ideas.
 Field of choice becomes wide.
 DISADVANTAGES
 Present employee may lose their sense of security and become disloyal.
 There will be loss in employee-employee relationship.

10. SELECTION PROCEDURE

 There are several Steps in selection procedure:
1. Application blank
 Filling the “application blank” by the candidates is the first step in the process of selection.
 In this the candidate gives details about his qualification, specialization, experience, etc.
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2. Initial interview of the candidate

 This is done to clarify the information already furnished in application blank and also to
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 create a friendly environment for the candidates.
 The interview must be properly planned and the interviews from different specialization must
make applicant feel ease.
3. Employment tests
 To test further abilities of the candidates, some tests are conducted in this step.
 These tests determine candidate’s particular traits, attitude, likes, dislikes, intelligence and
capacity to learn.
 There are several types of tests that can be listed as follows:
1. Aptitude tests – This test measures the applicant’s capacity to learn the skill required for
a job.
2. Interest tests – This is the test used to find out the type of work in which the candidates
have an interest. Ex: Sales job, Marketing job.
3. Intelligence test – This test is used to find out the candidate’s intelligence. By this test
candidate’s mental alertness, reasoning ability, power of understanding can be judged.
Ex: Reading and summarizing the paragraph in the allotted time, writing 10 to 15 words
that begins with the same letter.
4. Performance test – This is the test used to measure the candidate’s level of knowledge
and skill in the particular job in which appointed.
5. Personality test – It is used to measure those characteristics of the candidates which
constitutes his personality. Ex: Self-confidence, judgment, temperament, originality, etc.
4. Checking reference
 If the candidate is found satisfactory, then it is very important to get his personal background,
history, character, etc. For this the candidate’s friends, previous employer can be contacted.
 With the increase in the percentage of fake resumes, seeking help from the external screening
agencies which is used for verification of educational and professional qualifications, pre-
employment status and past criminal records of job applicant.
5. Physical or medical examination
 It is done to check the physical fitness of the candidates for the job.
 To prevent the unwarranted claims by the candidates.
 To prevent communicable diseases entering the company.
6. Final interview
 This is just an informal interview wherein the candidate will be intimated about his selection
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and briefed about his future prospects in the company.

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*****

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 QUESTION BANK
MODULE 2 CHAPTER 1

1. Explain span of management concepts and its importance. (5M – Feb 2023, 10M – Aug 2022, 6M
– Feb 2021) *****
2. Define committee. Explain different types of committees. (5M – Feb 2023)
3. What is recruitment? Explain steps in selection process. (10M – Feb 2023, 10M – Mar 2022) *****
4. Explain different sources of recruitment. (10M – Aug 2022, 10M – July 2023) *****
5. Define organization. Explain principles of organization. (10M – Feb 2021, 10M – Mar 2022) *****
6. List the characteristics of organization. (4M)
7. Explain 5 external ways in which work can be departmentalized by purpose. (Product, Customers,
Regions, Territory or Location, Division, and Time)
8. Explain the typical matrix organization or Grid or Lattice pattern organization. ***

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 CHAPTER 2
DIRECTING AND CONTROLLING

1. DIRECTION OR DIRECTING MEANING

 Direction means issuing of orders and subordinates as they execute the orders.
leading and motivating
 Haimann – “Directing consists of the process and techniques utilized in issuing instructions and making
certain that operations are carried on as originally planned”
 Koontz and O’Donnell – “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”.

2. REQUIREMENTS OF EFFECTIVE DIRECTION

1. Harmony of objectives
 An organization functions best when the goal of the organization is in complete harmony with the
goal of the members.

 In directing subordinates, manager should take advantage of individual motives to gain group goal.
 Ex: If the employee is told to work hard so that company profit may increase, they probably will
not. But if they are told they will receive bonus or promotions they are more likely to work hard.
2. Unity of command
 Subordinates should receive orders and instructions from the supervisor only.
 The violation of instructions may lead to conflicts between supervisor and subordinates.

 Boss is the only person who knows about the nature of his subordinates, responses to different
motivations and he is responsible for selecting best directing techniques to maximize productivity.
3. Direct supervision
 Every supervisor must maintain face-to-face direct contact with his subordinates.
 Direct supervision boosts morale of employees, increases loyalty and provides immediate feedback
about their work progress.
4. Efficient communication
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 Communication is the instrument of direction.

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 Supervisor communicates to his subordinates where he transfers information from one person to
another by transmitting ideas, facts, thoughts, feelings and values.

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  Efficient communication is a 2-way process.

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 5. Follow-through
 Direction is not only telling subordinates what they should do but also seeing that they do it in a
desired way.
 The manager should follow up the entire performance of the subordinates and keep a track of their
activities.

3. GIVING ORDERS
 The order is a device employed by a line manager in directing his immediate subordinates to start an
activity, stop it or to modify it.
 The orders should be clear and complete, compatible with the purpose of organization and with the
personal interest of the organization.
 Mary Parker Follett stated 3 principles followed for giving order:
1. Attitude – It is necessary for carrying out an order and should be prepared in advance.
2. Face-to-face suggestions – These are preferable for long distance orders.
3. Depersonalized – An order should be depersonalized and made an integral part of a given situation.
 Chester Barnard stated 4 conditions followed for giving order:
1. Order should be clear and complete
2. Order should be compatible with the purpose of organization
3. Order should be compatible with the employee’s interest
4. Orders should be operational
 Orders can be communicated verbally or in writing. There are 5 conditions for written orders:
1. Subject is important
2. Several individuals are affected
3. Details are involved
4. Distance exist between order-giver and recipient
5. Deadline missed
 Manager follows 4 methods for orders:
1. Force – “Do what is say, or else….” Meaning that employee will be punished if he does not follow
the order. The result is frustration and restriction to output.
2. Paternalism – “Do what I say because I am good to you” Meaning that the employee develops a
feeling of gratitude towards the manager.
3. Bargain – “You do what I say and later I will do what you say” The result of this effect is managers
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control is gradually reduced.

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 4. Harmony of objectives – “If we perform well together each will achieve his goal” This is the best
formula for ensuring compliance to orders.

4. MOTIVATION
 Motivation means Mover which means “To Move”.
 Motivation – It is an ability to move other people in the right direction to get work done.
Techniques of coordination.

NATURE OF MOTIVATION

1. Individuals differ in their motives: The individual goal differs so do their motives. One example is,
there are 2 men playing football, the first man play football with the focus of winning and the second
man play football for enjoyment. This means there is no single motive to same job, it differs from person
to person hence manager should deal with human diversity.
2. Sometimes the individual himself is unaware of his motive: Only the small part is conscious and
visible, the rest is beneath the surface. Below the surface concepts is unconscious motive.
3. Motives change: Each individual motives are not fixed. For example, a temporary worker may work
hard in the beginning to become permanent. When made permanent his motive will be gain promotion.
Hence each individuals motive changes from time to time.
4. Motives are expressed differently: The way in which motives are turned into actions also vary between
one individual and others. For example, the motive is “If I work hard, I will be successful”, one person
can work hard in the allotted hours to be successful and another will work hard even beyond the working
hours to be successful. Hence the same motives might be expressed differently from each individual.
5. Motives are complex: It is difficult to explain and predict the behavior of workers. For example, a
group of people plan for a trip with varieties of plans and on the day of trip only few people will turn
up. Upon this it is found that many people disagree with the location, time and dates, hence motives are
complex and hard to accept by all.
6. Multiple motives make the choice of goals difficult for an individual: Motives operates
simultaneously with each individuals. This results in 3 types of motivational conflicts:
 Approach-Approach Conflicts – Person has 2 motives which he likes equally, but it is possible to
have only one. Example: Person has choice of either remaining at his present place with same salary
or going to new place with salary hike. In this situation choosing tow work towards satisfaction of
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  Avoidance-Avoidance Conflict – Person is forced to choose between 2 motives, both are disliked
equally. Example: person is dissatisfied with his present job, wants to leave it but also wants to
avoid unemployment.
 Approach-Avoidance Conflict – Person is attracted to the positive characteristics of the motive, but
wants to avoid negative characteristics. Example: Person may be motivated to work overtime for
extra pay but may get scolding for reaching home late. One motive has both negative and positive
characteristic.

MOTIVATION THEORIES
 Motivational theories under each head are as follows:
1. Maslow’s Need Hierarchy Theory
2. Herzberg’s Two-factor Theory

1. MASLOW’S NEED-HIERARCHY THEORY

 All people have variety of needs, some needs are satisfied and some are not. An unsatisfied need is the
starting point in the motivation process.
 When a person has unsatisfied needs, they attempt to do something to satisfy the needs. This is called
as goal.
 According to A.H. Maslow, needs are arranged in a hierarchy with 5 categories as shown in figure 1.

 Physiological needs: These are the basic needs for sustaining human life, such as food, water, shelter
and sleep.
 Security needs: These are both economical and psychological secure related to man’s confidence that
he will be able to deal with the problem that might occur such as lay-off, disaster and dismissal.
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 Social needs: These are the needs associated with different people and accepted by them to love and to
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  Esteem needs: These are the needs related to respect and prestige. There are 2 types: Self-esteem – It
is an individual need to inside himself that he is worthy. Esteem from others - It is the others thinks that
he is worthy.
 Self-fulfilment needs: These are the needs for realizing one’s potential. These include the need for
realizing one’s capabilities to the fullest.

2. HERZBERG’S TWO-FACTOR THEORY

 According to Herzberg, absence of certain job factors tends to make workers dissatisfied.
 Presence of same factor in themselves does not produce high levels of motivation.
 Herzberg called these factors as maintenance or hygiene factors.
 The 10 maintenance factors are:
1. Fair company policies and administration
2. A supervisor who knows the work
3. A good relationship with one’s supervisor
4. A good relationship with one’s peers
5. A good relationship with one’s subordinates
6. A fair salary
7. Job security
8. Personal life
9. Good working condition
10. Status
 To build high level of motivation, different factors are necessary. These are called as Motivators or
satisfiers. There are 6 factors:

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 1. Opportunity to accomplish something significant
2. Recognition for significant accomplishments
3. Change of advancement
4. Opportunity to grow and develop on the job
5. Chance for increased responsibility
6. The job itself
 Maintenance factors has 2 groups known as Intrinsic rewards – They are internally generated by the
task itself and are not tangible which are visible to others and Extrinsic rewards – They are distributed
by other people and are tangible and visible to others.
 The 2 groups defined are unidirectional, which means the effect can be seen only in one direction.
 In the absence of maintenance factors, workers may feel dissatisfied, there might be more absence, and
more quits. In the presence of it, workers may fell motivated.

5. COMMUNICATION
 COMMUNICATION – “Communication means the process of passing information and understanding
from one person to another.”
 IMPORTANCE – Communication is necessary for achieving goals of the organization.

PURPOSES OF COMMUNICATION
There are10 different purposes under communication:
1. Communication is needed in Recruitment process to hire employees. The recruits are told about the
organization structure, policies and its practices.
2. Communication is needed in orientation to make people understand the rules and regulations in the
organization.
3. Communication is needed to enable employees to perform their function effectively. Employees need to
know their jobs relationship and importance to the overall operation.
4. Communication is needed for evaluation of work of the subordinates and their contribution towards the
organization.
5. Communication is needed to teach employee about the personal safety about the job. This is essential to
reduces accidents, this lowers compensation, legal cost and also decreases recruitment and training cots.
6. Communication is needed for projecting the organization in society.
7. Communication helps the manager in the decision process. The manager should make a choice of useful
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 8. Communication helps in achieving coordination. In a larger organization, work is carried out on the
basis of division of labors and specialization, there is a need of coordination among the several units.
9. Communication is the effective way to build support for change. This develops mutual understanding,
cooperation and goodwill between them and management.
10. Communication increases managerial efficiency. The success of the manager in the performance of his
duties depends on his ability to communicate. The effective communication is very essential for the
efficiency of a manager.

*****

QUESTION BANK
MODULE 2 CHAPTER 2

1. Explain Maslow’s need-hierarchy motivational theory with the help of neat block diagram. (10M
– Aug 2022) *****
2. Write about the requirements of effective direction. (8M – Feb 2023, 10M – July 2023) *****
3. Explain Maslow’s need-hierarchy motivational theory and Herzberg’s two factor theory as
applicable to an organization. (10M – Mar 2022) *****
4. Discuss the purpose of communication. (10M – Mar 2022) *****
5. Explain the concepts of giving orders suggested by Mary Follett and Chester Barnard along with the 4
methods involved in giving order. ***

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 LEADERSHIP
1. DEFINITION OF LEADERSHIP
 George R Terry - “The will to do is triggered by leadership and lukewarm desires for achievement are
transformed into burning passion for successful accomplishment by the skillful use of leadership”
 Peter Drucker - “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 beyond its normal limitations”
 Alford and Beatty - “Ability to secure desired actions from a group of followers voluntarily without the
use of forces”
 Peter Drucker - “Ability to prompt others to seek defined objectives enthusiastically”

2. CHARACTERSTICS OF LEADERSHIP
Some important characteristics of a leadership are as follows:
1. Leadership implies the existence of followers–The quality of person’s leadership can be determined
by studying his followers. Questions like: What kind of followers does he have? How strong is the
committee as a result of his leadership? By answering these questions nature and quality of leadership
can be measured. Leaders within the organization also have followers. The supervisor can have
several levels both in upward and downward like branch head, division manager, vice-president of
the department.
2. Leadership involves a community of interest between leader and his followers – The objective
of both leader and his men are one and the same. If the leader strives for one purpose and workers for
another purpose, then it is no leadership.
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 of members cannot direct the leader’s
activities, though they will obviously affect those activities in a number of ways.
4. Leadership implies that the leaders can influence their followers or subordinates in addition to
being able to give their followers or subordinates legitimate directions – Leaders not only tell
their subordinates what to do by way of command but also influence by their behavior and conduct.
The use of command by leaders succeeds only in bringing about the temporary behavioral change in
the followers. Permanent attitude changes come through the use of influence.

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3. TRADITIONAL APPROACHES TO LEADERSHIP –
BEHAVIOURALAPPROACH

 The behavioral approach is based on the assumption that the leaders are not born but they can be
trained.
 Under behavioral approach, leadership approach is categorized from 3 viewpoints:
1. Motivation
2. Authority
3. Supervision

MOTIVATION
 Motivation leadership behavior can have either positive or negative aspects.
 In Positive behavior aspect the leader’s emphasis on Rewards to motivate the subordinates.
 In Negative behavior aspect the leader’s emphasis on Punishments and penalties.

AUTHORITY
 From the view of authority, leadership styles can be described in 3 styles:
1. Autocratic Leadership
2. Democratic Leadership
3. Free Rein Leadership

1. AUTOCRATIC LEADERSHIP
 In this types of leadership, leader alone determines policies and makes plan. He tells what to do and
how to do.
 He demands strict and obedience way behavior from the employee. He might use rewards for obtaining
obedience from his employee.
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 Employees dislikes both these forms because in one form they have constant fear and in another form
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  MERITS
 Increase efficiency, save time and get quick result.
 Save time as the workers have to work with the plan defined by the leader.
 Produces quick result since there will be no deviation in the plan.
 Chain of command and division of work is clear
 DEMERITS
 It motivates people through Fear.
 Leader alone is involved in decision making.
 They express low morale, low productivity and massive resistance.

2. DEMOCRATIC LEADERSHIP
 In this type the leader thinks “with” rather than “for” the people. Leader along with team determines
policies and makes plan.
 The entire group is involved in and accepts responsibility for goal setting and achievements.
 Subordinates have considerable freedom of action.
 He serves as a coordinator for the team, and he shows greatest concern for his people rather than high
production.
 MERITS
 Team participates in making decisions.
 Improves quality of decision.
 Provides motivation.
 Encourages people to grow.
 DEMERITS
 Takes more time.
 Loss of leader control.
 Leaders might avoid responsibility.

3. FREE-REIN LEADERSHIP
 This type of leadership is also called as Laissez Faire Leadership. The leader has no control.
 He only provides information, materials and facilities for group objectives.
 Here the workers should handle Kind of freedom.
 MERITS
 Team takes all decisions.
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  DEMERITS
 More conflicts for decisions making.
 Loss of leader control.
 Figure 1 shows the spectrum of a wide variety of leadership styles moving from a very authority style
to democratic style.

SUPERVISOR
 Supervision is the act of overseeing work done by people.
 From supervisor point of view, leadership style can either be employee-oriented or production-oriented.
 Employee-oriented leader is a one who cares about welfare of his subordinates rather than production.
 Production-oriented leader is a one who cares about production welfare of his subordinates.
 The 2 important studies under this category are: Ohio State University study and Management Grid.

1. OHIO STATE UNIVERSITY MODEL

 The Ohio state model is as shown in figure 2. Which consist of Initiating structure and consideration.

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  The Initiating structure refers to leader’s behavior in structuring the job of the follower and establishing
well-defined patterns of organization and communication.
 Consideration is the leader’s behavior showing mutual respect, trust and friendship.
 These 2 types of leader’s behaviors are independent.
 Some leaders follow structure and give little consideration, others are considerate but provide little
structure. Many leaders do not fit into both categories. They use mix of structure and consideration.
 Thus there are 4 styles of leadership in Ohio state model:
1. Low consideration, High Initiating structure
2. High consideration, High Initiating structure
3. High consideration, Low Initiating structure
4. Low consideration, Low Initiating structure

2. MANAGERIAL GRID / MANAGERIAL STYLES

 Robert and Jane use a chart called Managerial Grid to describe five types of managerial styles. They use
a terms like “Concern for production” and “Concern for people”. These 2 dimensions are plotted on a 9-
point scale on two separate axes as shown in figure 3.

 Concern for people is shown in horizontal axis and Concern for productionis shown in vertical axis.
Thus there are 81 combinations of concerns represented in a grid.
 There are 5 major grids which are seen more often. They are:
1. Task Management: Here the management shows maximum concern for production and least
concern for people. Therefore, it is called “Authority-Obedience” approach.
2. Country-Club Management: This is reverse of Task Management. Here the management shows
maximum concern for people and least concern for production. Therefore, it is called “Love conquers
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 3. Impoverished Management: Here the management shows least concern for production as well as
for people. The manager wants just the things to be done, he ignores human relationship as well as
production. Therefore, it is called “Speak no evil, hear no evil, see no evil” approach.
4. Team Management: Here the management shows maximum concern for production as well as for
people. Maximum concern for production is based on decision arrived from the worker’s participation
and maximum concern for people is based on workers task related morale. Therefore, it is called “One
plus one can add up to three” approach.
5. Dampened pendulum or the middle of the road style: Here the management shows balanced
concern for production as well as for people. Neither too much production is expected nor too much
concern for people is expressed. The manger follows middle position. Therefore, it is called “Get
results but do not kill yourself” approach.

4. CO-ORDINATION
 MEANING: Some definitions of the term 'co-ordination' would be:
 “Coordination is the management of interdependence in work situation”
 "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

5. TYPES OF COORDINATION
 Coordination may be classified as Internal or External, Vertical or Horizontal and Procedural or
Substantive.
 Internal coordination - 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.
 External coordination - Coordination with customers, suppliers, government and outsiders with whom
the enterprise has business connections is called external coordination.
 Vertical coordination– It is what exists within a department where the departmental head is called upon
to coordinate the activities of all those placed below him.
 Horizontal coordination–It takes place sideways. It exists between different departments such as
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 production, sales, purchasing, finance, personnel, etc.
 Procedural coordination - It 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 - It is concerned with the content of the organization’s activities.
 In an automobiles factory, an organization chart is an aspect of procedural coordination, while
blueprints for the engine block of the car being manufactured are an aspect of substantive coordination.

6. TECHNIQUES OF COORDINATION/APPROACHES TO COORDINATION

1. Employing only basic coordinating techniques: This approach can serve the needs of organization
with required condonation requirements.
a. Rules, Procedures and Policies: The specification of rules, procedures and policies is a very
common device to coordinate sub-units for repetitive activities. It covers all possible situations for
example, if sales and credit department makes a great deal, the coordination between management
and sales and credit team may improve.
b. Planning: Planning ensures coordinated effort. Under planning target of each department joins
with the targets of all other department.
c. Hierarchy: The oldest and simplest way for achieving coordination is hierarchy or chain of
command. By putting interdependent units under one boss, some coordination activities is ensured.
Example: Purchase, stores, inspection, etc. may put in one executive department for purpose of
coordination.
2. Increasing coordination potential: The organization whose coordination is not fulfilled by basis
coordination techniques, needs additional coordinating mechanism such as:
a. Direct contact – To avoid overload of problems on top level executives, the problems with least
concern can be resolved in the lower level by informal contacts.
b. Task force–This is temporary group formed for those departments which are facing a problem. It
exists till the problem exist later it will be resolved.
c. Committees – The periodic decision committee which are permanent is called as committee. This
will ease the hierarchical structure, promotes effective communication, and make their
implementation more effective.
d. Induction–Inducting new employee into new social setting of his work is also a coordinating
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 policies.
e. Indoctrination – Indoctrinating organizational members with the goals and mission of the
organization, a device used commonly in religious and military organizations is coordinating
device. Here the leader should be capable to develop in minds of workers to create desire and will
to work together for the purpose.
f. Incentives – Providing incentives through profit-sharing plan, which promotes team spirit and
better cooperation between employees, superiors and subordinates.
g. Liaison departments–Liaison help to handle the contact and communication between two
departments, which typically occurs between sales and production unit.
h. Work flow – A workflow is the sequence of steps by which organization acquires input and
transforms them into output. Its uses technology, economic, ands social consideration and helps in
coordination.
3. Reducing need of coordination: This is used in those organization in which even expanded
coordinating mechanism fails. Some new forms of organization structure are used like autonomous work
teams and matrix organization which reduces coordination needs.

7. CONTROLLING DEFINATION / MEANING

 E F L Brech - “Control is checking current performance against predetermined standards contained in

the plans, with a view to ensuring adequate progress and satisfactory performance”
 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”.

8. NEED FOR CONTROL SYSTEM

A control system is need for 4 purposes:
1. Measuring progress: There is a close link between planning and controlling the organization’s
operations. The fundamental goals and objectives of the organization and the methods for attaining them
are established. The control process continually measures progress towards goals, control is used in
verifying whether everything happens according to the plan adopted, the instructions issued and
principles established. As the navigator manager continually takes readings to see where his department
is heading with the plan adopted.
2. Uncovering deviations: Once a business organization is set into motion toward sits specific objectives,
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events occur that tend to pull it "off target". Major events which tend to pull an
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 organization “off target" are as follows:
Change
Change is an integral part of any organization which occurs due to Markets shift, new products emerge,
new materials are discovered and new regulations are passed. The control function enables managers to
detect change that are affecting their organization’s products or services,
Complexity
Organizations are geographically have separated plants and decentralized operations make control
necessary. Diversified product lines need to be watched closely to ensure that quality and profitability
are being maintained; sales in different retail outlets need to be recorded accurately and analyzed.
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. A control system
enables managers to catch these mistakes before they become serious.
Delegation
When managers delegate authority to subordinates, their responsibility to their own superiors is not
reduced. The only way managers can determine if their subordinates are accomplishing the tasks that
have been delegated to them is by implementing a system of control.
3. Indicating corrective action: Controls are needed to indicate corrective actions. For example, the plans
need to be redrawn or goals need to be modified or there is need for reassignment or clarification of
duties or for additional staffing or for conforming to the way the work should be done.
4. Transmitting corrective action to the operation: Controls are needed to transmit corrective action to
the operation which reduces error and keeps the output "on course" with the modification of
transformation subsystem. The thermostat is a example, where the room temperature drops below a
desired level, the control mechanism in the transformation subsystem at once transmits this information
and the temperature begins to rise till it reaches the selected level.
The transformation subsystem takes the shape of a closed loop as shown in Figure 4. However, the
system is closed only in the short run. Human intervention is involved to adjust the system periodically.
Thus, the overall system is open, but we have closed loop control once the system is set.
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9. BENEFITS OF CONTROL
 Increases productivity
 Reduces defects and mistakes
 Helps meet deadlines
 Facilitates communication
 Improves safety
 Lowers cost
 Gives the workers control over their environment.

10. ESSENTIALS OF EFFECTIVE CONTROL SYSTEM

The essentials of an effective control system are as follows.
1. Suitable: The control system will differ between activities. Controls used in the sales department will
be different from those used in finance and personnel. Similarly, a machine-based method of production
requires a control system which is different from the system that is used in labor intensive methods of
production. Hence, every control system depends on specific needs.
2. 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. In any case, the
feedback system should be as short and quick as possible and the information should reach the superior
before it is too late to head off failures.
3. Objective and Comprehensible: The control system should be both objective and understandable.
Objective controls specify the expected results in clear and definite terms. Employees are not made to
go up and down the hierarchy to get the information. It provides employees with direct access to any
additional information which they may need to perform their task.
4. 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. Both flexible
budgets and standard costs, for example, provide a shifting standard for expenses, as the volume of work
goes up or down.
5. 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.
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6. Prescriptive and Operational: A control system in order to be effective and adequate must not only
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 detect deviations from the standards but should also provide for solutions to the problems that cause
deviations. In other words, the system should be prescriptive and operational. It must disclose where
failures are occurring, who is responsible for them, and what should be done about them. It must focus
more on action than on information.
7. Acceptable to Organization Members: The system should be acceptable to organization members.
When standards are set only 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. Individuals who have to
report deviations to someone they perceive as a lower level staff member may stop taking the control
system seriously.
8. 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. It should also to be noted here that a good controlling system is actually designed to keep
things from going wrong, and not just to correct them afterwards.
9. Motivate people to high performance: A control system is most effective when it motivates people to
high performance. Since most people respond to challenges meeting tough standards. If the target is so
tough, it is impossible to meet and more likely to discourage than to motivate efforts.
10. Should not lead to less attention to other aspects: Control of one aspect of operations should not lead
to less attention to other aspects. For example, if control put pressure on employee to increase output,
the quality of work, care of equipment, and prevention of waste should be neglected.
11. 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 is failed.

11. STEPS IN CONTROLLING

The various steps that are involved in the process of controlling are as follows:

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 Step 1: Establishing standards
The first step in the control process is to establish standards. Standards are the targets against which
actual performance will be compared. Since entire operations cannot be observed, each organization
must develop its own list of key areas for which standards need to be established. Some key areas are:
profit, production, market position, employee attitude and public.
Guidelines for setting pars/standards
1. They must be specifically determined in quantitative terms: Pars or standards expressed in general
terms such as “cost should be reduced” or “order should be executed quickly”.
2. They should be accepted by the individuals involved.
3. They need to be flexible in order to adapt to changing conditions.
4. They should emphasize the achievements of results more than rules and methods.
Step 2: Measuring and comparing actual results against standards
The second step in the control process is to measure actual performances of various individuals, teams
and departments in the background of established standards. Wherever quantitative measurement is
applicable, it is easy to measure, while qualitative standards are difficult to measure. Tests, surveys,
employee appraisals, exit interviews, media reports, open forums etc., are some of the ways employed
to measure qualitative standards.
Step 3: Taking corrective action
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

*****
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 QUESTION BANK
MODULE 3 CHAPTER 1

1. Explain 5 types of managerial styles using managerial grid chart. (Aug 2022, Jul
2023 -10M)*****
2. Discuss essentials of effective control system. (Jan 2021 -6M)*****
3. Discuss different leadership styles from authority view point. (Jan 2021 – 7M) or
discuss autocratic,democratic, and free rein leadership styles. (Feb 2023 – 8M)
*****
4. What is the meaning of control? Write the benefits of control. (Feb 20203 – 4M) ***
5. Explain the detail step in control process. ***
6. Discuss different leadership styles from supervisor view point. (Ohio state university model and
managerial grid / managerial styles) ***
7. Write a note on techniques of coordination/approaches to coordination.

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