Government Engineering College

Chamarajanagara
Department of Electronics & Communication Engineering

Technological Innovation
Management & Entrepreneurship

MODULE – 2
Organizing & Staffing
Organization
• Meaning
• Characteristics
• Process of Organizing
• Principles of Organizing
• Span of Management Departmentalization
• Committees
• Meaning
• Types of Committees
• Centralization Vs Decentralization of Authority and Responsibility
Organization
Meaning:
• Organization provides the structure, the frame on which the
management of the enterprise is based.
• An organization is a social unit or human grouping deliberately
structured for the purpose of attaining specific goals.
• An organization as the rational coordination of the activities of
a number of people for the achievement of some common goal.
• 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 efficiently together in accomplishing the
objectives.
Nature and Characteristics of Organization
• Organizing is the grouping of activates necessary to attain objectives.
• An organization should be designed to clarify who is to do what and who is
responsible for what results.
• Two types of organizations are:
• Formal Organization:
• It must be flexible and there should be room for discretion , for taking advantage of
creative talents.
• Informal Organization:
• It is any joint personal activity without conscious joint purpose, even though
possibly contributing to joint results.
Characteristics
• Every organization has a purpose, goals which are the task of
planning.
• A clear concept of the major duties or activities required to achieve
the purpose.
• Classification of activities into jobs.
• Establishment of relationships between these jobs in order to ensure
coordination. This is achieved through division of labour and
delegation of authority.
PROCESS OF ORGANISING
• Organizing means designing the organization structure. The manager differentiates
and integrates the activities of the organization.
• Differentiation is meant the process of departmentalization or segmentation of
activities on the basis of some homogeneity.
• Integration is the process of achieving unity of effort among the various
departments.
• The stages or steps in the process of organization are explained below:
Consideration of objectives: Objectives determine the various activities which
need to be performed and the type of organization which need to be build for this
purpose.
 Deciding Organizational Boundaries: To decide what to do inside and what
outside the boundaries of the organization
Grouping of Activities into Departments: To identify the activities
necessary to achieve them and to group the closely related and similar
activities into departments and sections.
 Deciding which Departments will be Key Departments: the departmental
activates essential for the fulfillment of goals.
 Determining levels at which various types of Decisions are to be made:
The levels at which various major and minor decisions are to be made must
be determined.
 Determining the span of management: Designing the structure is to
determine the number of subordinates who should report directly to each
executive.
 Setting up a Coordination mechanism: As individuals and departments
carry out their specialized activates, the overall goals of the organization
may become submerged or conflicts among organization members may
develop so need to be checked. The activities, decision and relations
analysis need to be done.
PRINCIPLES OF ORGANISING
• The principals are:
• Objectives: The objectives of enterprise influence the organization structure and
hence the objectives of the enterprise should first be clearly defined.
• Specialization: The activities of the enterprise should be divided 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 by one boss, the span of control should be as far as possible,
the minimum.
• Management by Exception principle: only complex problems should be referred
to higher level and other problems should be dealt by lower level.
• Scalar Principal (chain of command): The line of authority from the chief
executive at the top to the first-line supervisor at the bottom must be clearly
defined.
• Unity of Command: Each subordinate should have only one superior whose
command he has to obey.
• 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.
• Authority: Authority is the tool by which a manager is able to accomplish the
desired objectives.
• Efficiency: The organization structure should enable the enterprise to function
effectively and accomplish its objectives with the lowest possible cost.
• Simplicity: Organization structure should be as simple as possible and levels
should be as far as possible, be minimum.
• Flexibility: The organization should be adaptable to changing circumstances.
• Balance: A reasonable balance in the size of various departments, between
centralization and decentralization.
• Unity of Direction: One objective and one plan for a group of activities having the
same objectives.
• Personal Ability: There is need for proper selection, placement and training of
staff.
• Acceptability: The structure of the organization should be acceptable to the people
who constitute it.
SPAN OF MANAGEMENT
• The span of control indicates the number of subordinates who can be
successfully directed by a supervisor. Span of management is important because
of two reasons.
• First is span of management affects the efficient utilization of managers and the
effective performance of the subordinates.
• If the span is too wide, managers are overburdened and subordinates receive
little guidance.
• If the span of management is too narrow, the managers are under utilized and
subordinates are over controlled.
• The second reason is there is relationship between span of management and
organization structure.
• A narrow span results in tall organization with many levels of supervision
between top management and lowest organizational levels which creates more
communication and cost problems
• On the other hand, a wide span for the same number of employees results in flat
organization with fewer management levels between top and bottom.
• For ex: Suppose a sales manager has 12 salesmen reporting to him, his span of
management is 12. If he feels that he is not able to work closely enough with
each salesman and decides to reduce the span by adding three assistant
managers – each to supervise four salesmen
• Then his span of management is three In doing so, he has added a level of
management through which communication between him and salesmen must
pass and he has added the cost of three additional managers
DEPARTMENTALISATION
• Differentiation of tasks or activities into discrete segments is called as
departmentalization or departmentation.
• Departmentation involves grouping of operating tasks into jobs, combining of
jobs into effective work group.
• The important methods of grouping activities may be summarized as below:
Departmentalisation based on functions:
• Each major function of the enterprise is grouped into a department.
• For example there may be production, finance, marketing and personnel
department in an organization.
• All functions related to production are grouped together to form production
department, similarly other departments are formed on the basis of function.
• Advantages:
Simple form of grouping activities for small organizations which
manufacture only a limited number of products or render only a limited
number of services.
 It promotes excellence in performance.
It leads to improved planning and control of the key functions.
 It ensures economy, there is only one department related to one function
for the entire function.
 Drawbacks
 De-emphases overall company objectives.
 Leads to over specialization of people.
 Reduces coordination between functions.
 Slow adoption to changes in environment.
 Limits development of general managers.
 Departmentalisation based on product:
• This is more suitable for a large organization that manufactures a vast variety of
products.
• Under this separate groups or departments are created and each department is
controlled by a manager who will be responsible for all the activities of that sub
group.
• Each subgroup will have its own facilities required for manufacture, purchase,
marketing and accounting etc.
 Advantages:
Top management is relieved of operational task enabling them to concentrate more
on common goals.
Enables top management to compare the performances of different products and
invest more resources in profitable products.
Managers of individual products put better effort to improve his area compared to
others.
 Drawbacks:
This form results in duplication of staff and facilities.
 Extra expenditure is incurred in maintaining a sales force for each product
line.
 Employment of large number of managerial personnel is required.
May result in under utilization of facilities and equipments.
• Departmentalisation based on customers:
• An enterprise may be divided into a number of departments on the basis of
the customers that it services.
• The advantage is it ensures full attention to major customer groups which
have a very different set of criteria governing their decision to purchase.
• The disadvantages of this form are
It may result in under- utilization of resources and facilities.
May be duplication of facilities.
• Departmentalization based on time
• In departmentalization by time, activities are grouped on the basis of timing
of their performance.
• Advantages:
 Facilitates use of processes that cannot be stopped or interrupted.
 Expensive capital equipment can be better utilized.
 Higher and continuous production per day
• Drawbacks:
 Lacks good end efficient supervision during night shifts.
 Lack of effective coordination and communication from people of one shift
to next shift.
 Loss of product or service may increase owing to higher payment/ over
time payment during night shift.
• Departmentalization based on Territory and Geography
• When several production or marketing units of an organization are
geographically dispersed in various locations, it is logical to
departmentalize those units on geographical basis.
 Advantages:
 It motivates each regional head to achieve high performance.
 It provides each regional head an opportunity to adapt to his local situation.
 It affords valuable top-management training and experience to middle-level
executives.
 It enables Organization to compare Regional Performances & invest more
in Profitable Areas & withdraw Resources from Unprofitable Ones.
 Drawbacks:
 It gives rise to duplication of various activities.
 Various regional units may become so engrossed in short-run competition
and forget the overall interest of total organization.
 Departmentalization based on Process:
.
• Departmentalisation is done on the basis of several discrete process or technologies involved in the
manufacture of a product.
• For example, a vegetable oil company may have separate departments for crushing, refining and
finishing.
• A textile mill may have departments for ginning, spinning, weaving and dyeing.
• A work that would otherwise be done in several different locations in an enterprise is done in one
place because of special equipments used.
 Advantages:
 It facilitates the use of heavy and costly equipment in an efficient manner.
 It follows the principle of specialization.
 Drawbacks:
 Workers tend to feel less responsible for the whole product.
 It does not provide good training and opportunity for overall development of managerial talent.
 Top management needs to devote extra attention to maintaining inter-department co-operation.
• Departmentation based on simple numbers
• This was one of the most widely used ancient methods of
departmentalization. This is achieved by tolling of persons performing
the same job and grouping them together under one supervisor. This is
not in common use now.
COMMITTEES
• A committee is a group of people who have been “formally” assigned some
task for implementation or assigned some problem for taking decision.
• Committees are set up in the following situations:
• When a new kind of work or problem arrived which can’t be solved by a
single person.
• When decision involved is beyond responsibility /authority and capability
of one person.
 Advantages of Committees
 Committees provide a forum for the pooling of knowledge and experience
of many persons of different skills, ages and backgrounds.
 Committees are excellent means of transmitting information and ideas both
upward and downward
Committees are impersonal in action and hence their decisions are generally
unbiased and are based on facts.
 When departmental heads are members of committee, people get an
opportunity to understand each others problems and hence improve
coordination.
• Weaknesses of Committees
 In case a wrong decision is taken by committee, no one is held responsible
which may results in irresponsibility among members.
 Committees delay action
 Committees are expensive form of organization.
 Decisions are generally arrived at on the basis of compromise and hence
they are not best decision.
 As committee consists of large number of persons, it is difficult to maintain
secrecy.
Type of committees:
• Advisory committee: vested with staff authority
Have only recommendatory role.
Ex.. Works committee, sales committee.
• Executive committee: Vested with line authority
they take decisions and also enforce decisions.
Ex.. Board of directors.
These two committees may have same individuals as members. Their functions are separated by time,
place, and title.
• Standing committee
They are permanent committees. They are formed to deal with routine problems.
Ex.. Finance committee in a company, loan approval committee in a bank.
• Ad hoc task force
Formed to complete a task of short duration. They are dissolved after the task is over, the member are
chosen from experts in the area or due to their experience.
AUTHORITY, POWER AND RESPONSIBILITY
• Authority
• Authority is a legal or rightful power, a right to command or to act.
• “Authority is the right to order or command and is delegated from the
superior to the subordinate to discharge his responsibilities.
• If the subordinates does not obey, the superior has right to take disciplinary
action.
Power:
• Power may be defined as the capacity or ability to influence the behaviour
of other individuals.
• If a person has a power, it means that he is able to influence the behaviour
of others.
i.e.,The essence of power is control over the behavior of others.
• Responsibility:
• Responsibility is defined as the obligation of a subordinate, to whom a
duty has been assigned, to perform the duty.
• Responsibility cannot be delegated or transferred. The superior can
delegate to a subordinate the authority to perform and accomplish a
specific job. But he cannot delegate responsibility.
Centralization Vs Decentralization of Authority and
Responsibility
• Centralization:
• Centralization refers to systematic reservation of authority at central points
within the organization.
• Centralization means concentration of managerial authority in few key
managerial positions at the centre of an organization i.e., at the top level.
• Everything that goes to reduce the subordinate’s role in decision making is
centralization.
• Advantages of centralization:
• Co-ordination of activities of subordinates is better achieved.
• There is no duplication of efforts or resources.
• Decision takes into account the interest of the entire organization.
• Central leader ship is required in crisis.
Decentralization:
• Decentralization means dispersal of decision-making power to lower levels of the
organization.
• Ultimate authority to command and ultimate responsibility for the results is
localized as far down in the organization.
• Everything that goes to increase the importance of subordinates role is
decentralization.
Necessity of decentralizing
• No-one person can do all the tasks necessary for achieving organization
objectives.
• There is a limit to the number of persons a manager can effectively supervise and
make decisions.
• As organization grows big, authority must be delegated to subordinates.
• Decentralization is necessary for the organization to exist and grow.
Advantages of decentralization
• Reduces problem of communication .
• Permit quicker and better decision making .(the decisions are taken
by person close to work & all details are known to him. Hence
decisions are better)
• It leads to competitive climate within the organization.
Disadvantages of decentralization:
• It increases administrative expenses.
• It may create problems in bringing coordination among various units.
• It may bring about inconsistencies in the company, because uniform
procedures may not be followed for the same type of work in various
divisions.
 Staffing
The function of staffing is defined as:-
• “Filling and keeping filled various positions in the organization structure”.
• This includes “identifying work force requirements, inventorying the people
available, recruiting, selecting, placing, training, promoting, apprising etc…
Importance of staffing:-
• Staffing ensures higher productivity by placing the right man in the right job.
• It helps to avoid disruption of production schedule due to shortage of staff.
• It helps to prevent under utilization of personnel through over manning and
reduces cost of production.
• It identifies talented and competent people and places them in correct position.
• It trains the people and helps them to move up in the organizational structure.
Recruitment
• Recruitment can be defined as the process of identifying the sources
for prospective candidates and stimulate them to apply for the job.
i.e it is the process of attracting employees to the company.
Before the process of recruitment, the management should have
proper plan on :
• Number of employees to be recruited.
• The qualification of employees required.
• The time frame need to recruit.
• The process of recruitment and the cost involved in it depend on the
size of the enterprise and the type of persons to be recruited.
Sources of recruitment:-
The sources of recruitment can be broadly classified into two categories:
• Internal sources.
• External sources.
Internal sources:
• Internal sources involve transfer and promotion.
• Transfer involves the shifting of an employee from one job to another.
• Many companies follow the practice of filling higher jobs by promoting
employees who are considered fit for such positions.
• Filling higher positions by promotion motivates employees, boosts
employee’s morale.
External Sources
• Direct recruitment: An important source of recruitment is direct
recruitment by placing a notice on the notice board of the enterprise by
specifying the details of the jobs available. This is also known as
recruitment at factory gate.
• Unsolicited applications: Many qualified persons apply for employment to
reputed companies on their own initiative. Such applications are known as
unsolicited applications.
• Advertising: Large enterprises particularly when the vacancy is for higher
post or there are large number of applications use this source where
advertisements are made in local and national level newspapers.
• This helps in informing the candidates spread over different parts of the
country. The advertisement contains information about the company, job
description, and job specialization etc.
• Employment agencies: This is the good source of recruitment for unskilled and
semiskilled jobs.
• The employment exchanges bring job givers in contact with job seekers.
• Educational institutions: Many jobs in business and industries have become
increasingly varied and complex which need a degree in that particular area.
• So many big organizations maintain a close liaison with the colleges, vocational
institutes and management institutions for recruitment of various jobs.
• Labour contractor: Often unskilled and semi skilled workers are recruited
through labour contractors.
• Recommendations: Applicants introduced by friends, relatives and employees of
the organization may prove to be a good source of recruitment. Many employers
prefer to take such persons because something about their background is known.
Selection
• Selection refers to evaluation of the candidates with respect to their
qualifications and the job requirements and those who satisfy the
requirements are only selected.
• There is no standard selection procedure followed by all
organizations. However, the steps commonly followed are as under:
• Selection criteria: these are established usually on the basis of
current and some future job requirements. These criteria’s include
educational qualifications, knowledge, skills, experience etc..
• Application form: the candidates are required to complete an
application form. In this form applicant gives relevant personal data.(
qualification, specialization, experience, personal interests etc..) . The
applications are carefully scrutinized to decide the suitable applicants
to be called for next stage of selection.
• Screening interview: those who are selected on the basis of
application form are called for initial screening interview.
• This interview is the most important means of evaluating the poise or
appearance of the candidate. It is also used for obtaining informal
clarification given in the application form.

• Employment tests: for further assessment of a candidate’s nature and

abilities some tests are conducted. These tests include
• Intelligence test.
• Proficiency and aptitude test.
• Vocational test.
• Personality test.
• Group discussion: this test is conducted to assess the candidate’s
communication and presentation skills, interpersonal skill, leadership qualities
and ability to pull on in a team work.
• Checking references: if candidate is found satisfactory in the above tests,
employer may like to get some important personal details about the candidate,
such as his character, past history, background etc..
• Physical or medical examination: it is carried out to assess the physical fitness
of the candidate for the present job.
• Final interview: this interview is conducted for those who are ultimately
selected for employment. In this interview, the candidates are given an idea about
their future prospects within the organization.
• Appointment order: appointment orders are given to finally selected candidates,
giving the position offered, scale of pay and other benefits and terms and
conditions of employment.
 Government Engineering College
Chamarajanagara
Department of Electronics & Communication Engineering

Technological Innovation
Management & Entrepreneurship

MODULE – 2
Directing and Controlling
Directing and Controlling
• Meaning and Nature of directing
• Directing means issuing of orders, leading and motivating subordinates as they go
about executing orders.
• Direction is a function of management which is related with instructing, guiding
and inspiring human factor in the organization to achieve organizational mission
and objectives.
• There are three elements of direction, namely communication, leadership and
motivation.
• Directing is the interpersonal aspect of managing by which subordinates are led to
understand and contribute effectively to the attainment of enterprise objectives.
• Directing consists of the process and techniques utilized in issuing instructions
and making certain that operations carried on of originally planned.
Requirements of effective Direction/Principles of directing
While directing, a manager should understand the needs, motives and attitudes of his subordinates.
The following principles of directing may be useful to a manager.
• Harmony of objectives:. 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.
• Unity of direction or command: An employee should receive orders and instructions only from
one superior. If not so, there may be indiscipline and confusion among subordinates and disorder
will ensue.
• Direct supervision: Managers should have direct relationship with their sub-ordinates. Face to face
communication and personal touch with the sub-ordinates will ensure successful direction.
• Effective communication: The superior must ensure that plans, policies, responsibilities and orders
are fully understood by the subordinates in the right direction.
• Follow through: Direction is a continuous process. Mere issuing orders or instructions are not an
end itself. Follow is necessary, so the management should watch whether subordinates follow the
orders and whether they face difficulties in carrying out the orders or instructions
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.
• 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.

[Link]-to-face suggestions are preferable to long- distance orders.

[Link] 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:
[Link] should be clear and complete;
[Link] should be compatible with the purpose of the organization;
[Link] should be compatible with the employee's personal interest; and
[Link] should be operationally feasible.
• Orders may be communicated verbally or in writing. Written orders are
appropriate when
[Link] subject is important;
[Link] details are involved; and
[Link] is geographical distance between the order- giver and the recipient.
• A manager may follow four types of methods to ensure compliance to his orders:
[Link]
[Link]
[Link], and
[Link] of objectives.
The formula followed in "force" is: "Do what I say or else ... ",
The formula followed in "paternalism" is: "Do what I say because I am good to you”
The formula followed in "bargain" is: “You do as I say in certain respects and I do
as you say in certain other respects.”
Motivation
• The success or failure of a business organization depends on the performance of
people working for it.
• Generally, performance is determined by three factors ability, knowledge and
motivation which are all related by a widely acknowledged formula:
Performance = (Ability + Knowledge) X Motivation
Among the three factors which affect performance, we can see the multiplying effect
motivation has on ability and knowledge in determining performance.
• Therefore motivation is a very important factor because it deals with human
behavior. Motivation is nothing but the task of making someone to act in the
desired manner.
Motivational Theories
• We can classify them under three broad- heads:
1. Content theories
2. Process theories
3. Reinforcement theory
• There are several theories of motivation based on different structures of human
needs and expectations. Some of them are
1. Maslow's Need-Hierarchy Theory
2. Herzberg's Two factor theory/Hygiene Theory
Maslow's Need-Hierarchy Theory
• At any given time some needs are satisfied and others are unsatisfied.
• An unsatisfied need is the starting point in the motivation process
• When a person has an unsatisfied need, he attempts to identify something that will
satisfy the need. This is called as goal. Once a goal has been identified, he takes
action to reach that goal and thereby satisfy the need.
• A.H. Maslow has identified five categories of need which are arranged in
hierarchy
• Physiological needs: These are the basic needs for sustaining human life itself,
such as food, water, shelter and sleep. Maslow took the position that until these
needs are satisfied to the reasonable degree necessary to maintain life, other needs
will not motivate people.
• Security or safety needs: People want to be free of physical danger and of the fear
of losing job, property or shelter.
• Social needs: Since people are social being, they need to belong, to be accepted
by others.
• Esteem needs: Once people begin to satisfy their need to belonging, they tend to
want to be held in esteem both by themselves and by others. This kind of need
produces such satisfaction as power, prestige and status.
• Self-actualization needs: It is desire to become what one is capable of becoming-
to maximize one’s potential and to accomplish something.
Herzberg's Two factor theory/Hygiene Theory
• The Motivation-Hygiene theory or the Two-Factor theory was
proposed by Frederick Herzberg in the year 1959. He carried out a
survey on the experiences and feelings of a group of 200 engineers and
accountants working in a few industries in Pittsburgh, USA.
• He concluded that people had two categories of needs which are
independent of each other and affect behaviour in different ways.
• He said that satisfaction or dissatisfaction in work arise from these
two different sets of factors. They are
• i. Hygiene factors
• ii. Motivators.
• Hygiene-Factors
• He found that certain factors did not motivate the employee when present
on the job but their absence caused dissatisfaction. These factors were
called Hygiene factors because they primarily prevented dissatisfaction just
like hygiene conditions prevent sickness. These factors are:
1. Company policy and administration
2. Supervision
3. Working conditions
4. Salary and status
5. Security in job and personal life
6. Interpersonal relationship with superiors, peers and sub-ordinates.
• Herzberg said that the opposite of satisfaction was not dissatisfaction but
'No satisfaction' and likewise the opposite of dissatisfaction was not
satisfaction but it was No dissatisfaction'. Hygiene factors are also known as
maintenance factors or Dissatisfiers and are necessary to sustain a
reasonable level of 'No dissatisfaction' among employees
• Motivators
• According to Herzberg, Motivational factors are essential to provide job
satisfaction and to maintain high job performance.
• Motivators act as stimuli to make people work hard voluntarily and be happy in
the organization.
• Motivators or `Satisfiers' include the following factors :
1. Challenging work
2. Responsibility
3. Recognition
4. Promotion opportunities
5. Achievement
6. Job content.
• Herzberg said that these factors helped in increasing job satisfaction. However a
decrease in these factors would lead to No satisfaction' and not dissatisfaction.
Motivators generally help attaining higher output by the employees.
Communication
• Communication is an exchange of facts, ideas, opinions or emotions by two
or more persons.
• Importance of Communication
Communication is fundamental to accomplish work
• In any organization, a manager spends most of his time communicating i.e.,
reading, writing' Speaking or listening.
• Communication is the means by which he persuades, informs, motivates
and leads his employees towards organizational goals through
communication that there is a transmission of information among employ. It
is without communication no work can get accomplished.
Communication facilities planning
• Planning, the most important function of management requires extensive
communication among the rank and file of the organization. Planning is
done after inputs from key executives and other personnel.
Communication helps in decision-making
• Managers rely heavily on the quality and quantity of information that
is available in order to take decisions. It is communications which
provides the right type of information to a manager and enables him to
consider the pros and cons thoroughly before taking a decision.
Communication is the basis of co-ordination
• If all the departments and divisions of an organization have to co-
ordinate their efforts to achieve the common goals, communication is
highly essential.
Communication improves relationships between employees.
• Communication builds bridges of relationships between employees. It
binds individuals to a common purpose. A good communication
system helps exchange of facts., ideas, feelings and sentiments among
the employees.
Communication improves morale and motivation:
• When manager listens carefully to employees grievances and take
necessary action, it improves morale and motivation of the workers.
Good communication skills are a must for modern-day managers.
• The growth success or the growth of a manager largely depends on his
communication skills.
Purposes of Communication
Some important purposes which communication servers are as under:
• 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.
• Communication is needed in the area of orientation to make people
acquainted with peers, superiors and with company's rules and regulations.
• 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.
• Communication is needed to acquaint the subordinates with the evaluation
of their contribution to enterprise activity.
• 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.
• Communication is of vital importance in projecting the image of an
enterprise in the society.
• 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.
• Communication helps in achieving coordination. In a large organization,
working on the basis of division of labour and specialization, there is need
for coordination among its component parts.
• 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 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.
Leadership
• A leader is one who guides and directs other people. "Leadership is the
ability to secure desirable actions from a group or followers
voluntarily without the use of coercion”.
• Characteristics of Leadership:
• Some important characteristics of leadership are as follows.
Leadership implies the existence of followers
We appraise the quality of a person's leadership in practice by studying his
followers. 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. Thus, in formal organizations of several levels, a leader
has to be able to wear both hats gracefully, to be able to relate himself both upward
and downward.
Leadership involves a community of interest between the leader and his followers
• Objectives of both the leader and his men are one and the same. Leadership is the
activity of influencing people to strive willingly for mutual objectives.
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, though they will
obviously affect those activities in a number of ways.
Leadership implies that leaders can influence their followers or subordinates in
addition to being able to give their followers or subordinates legitimate directions.
Behavioural approach
• The theories based on leadership behavior style are
 Leadership based on the use of authority
 Likert’s four systems of managing
 The managerial grid
 Leadership involving a variety of styles and level of use of power and influence.
• Leadership styles are also broadly classified based on: Motivation, Authority and
supervision.
• On the basis of motivation leadership style can be positive or negative style.
• In positive style a leader motivates his followers to work hard by offering them
rewards, for example, higher bonus.
• In negative styles, a leader forces his followers to work hard and punishes them
for lower productivity.
• On the basis of Authority, leadership styles are divided into autocratic,
democratic and Free rein
Autocratic leadership:
• An autocratic leader is one who dominates and drives his subordinates
through coercion, command and the instilling of fear in his followers.
• An autocratic leader alone determines policies, plans and makes decisions.
He demands strict obedience.
• Such leaders love power and love to use it for promoting their own ends.
• They never like to delegate their power for, they fear that they may loose
their authority.
• The merits of this type of leadership is that, it can increase efficiency, save
time, and get quick results under emergency conditions.
• The demerits are people are treated machine-like cogs without human
dignity, one way communication without feedback and the leader
receives little or no input from his sub-ordinates for his decision-
making which is dangerous in the current dynamic environment.
Democratic leadership:
• This style of leadership is also known as participative leadership. As the name
itself indicates, in this style, the entire group is involved in goal setting and
achieving it.
• A democratic leader follows the majority opinion as expressed by his group.
Subordinates have considerable freedom of action. The leader shows greater
concern for his people’s interest, is friendly and helpful to them. He is always
ready to defend their subordinates individually and collectively.
• Merits: This type of leadership encourages people to develop and grow, receives
information and ideas from his subordinates to make decisions, and boosts the
morale of employees
• Demerits of this type of leadership are (1) Some leaders may use this style as a
way of avoiding responsibility, (2) Can take enormous amount of time for making
decisions.
Free Rein leadership (Laissez fair leadership) :
Free-rein leader who uses his power very little and gives a high degree of
independence to his subordinates to carry out their work. Such leaders depend
largely on subordinates to set their own goals and the means to achieve.
Coordination
• Co-ordination refers to the orderly arrangement of individual and group
efforts to ensure unity of action in the realization of common goals.
• Coordination deals with the task of blending efforts in order to ensure
successful attainment of an objective. It is accomplished by means of
planning, organizing directing and controlling
• Types of Coordination:
• Coordination may be variously classified as internal or external, vertical or
horizontal and procedural or substantive.
• 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.
• 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.
• Horizontal coordination takes place sideways. It exists between different
departments such as production, sales, purchasing, finance, personnel, etc
• 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, while blueprints for the engine block of the car being manufactured
are an aspect of substantive coordination
Techniques of Co-ordination
• A variety of techniques are used by managers to achieve co-ordination. The
important ones are:
Co-ordination by plans and procedures:If plans and procedures are highly
structured and in place, co-ordination becomes somewhat automatic. Apart from
these, if the other types of plans such as schedules, rules, budgets, policies etc., are
stated in precise terms so as to avoid confusion, it results in better co-ordination.
Co-ordination by sound and simple organization:If the structure of an
organization is sound and simple, it leads to better co-ordination. If the authority,
responsibility and accountability are established in a clear-cut manner, it improves
co-ordination.
Co-ordination by chain of command: If it is very clear as to who should report to
whom in an organization, it helps co-ordination. Establishing a clear chain of
command or a superior-subordinate relationship goes a long way in ensuring co-
ordination.
Co-ordination by effective communication: Effective communication
plays a vital role in achieving co-ordination. Communication facilitates
proper understanding between individuals and groups among whom co-
ordination is to be achieved.

Co-ordination by committees: Formation of committees to co-ordinate is

a sound management technique. Committees are made up of
Knowledgeable, experienced and responsible persons entrusted with
discharging some functions collectively as a group. Creation of teams, task
forces and interdepartmental committees are some of the ways of achieving
co-ordination.
Co-ordination by conference: In large business organizations conferences
are organized at regular intervals to provide a platform for discussion to the
various units which could be geographically widespread. In such
conferences top management and executives at lower levels exchange
views, identify problems and resolve it through discussion.
Co-ordination by special co-ordinators: If a manager in an
organization has very less time to address issues of co-ordination, he
may hire an assistant or a 'Special coordinator' to do the job for him.
This man's job is to collect information regarding problems, analyze
them, list various alternatives available, and suggests steps to be taken
to the manager.
Co-ordination through sound leadership: Sound leadership of top
management is the surest means of achieving co-ordination. Good
leaders may persuade and convince their subordinates to place
company interests above their personal interests. They may even
inspire self-coordination within a group.
Controlling
• Meaning:“Control is checking current performance against
predetermined standards contained in the plans, with the view to
ensuring adequate progress and satisfactory performance”
• The primary object of control is to bring to light the mistakes or
variations as soon as they appear between performance and standard
laid down and then to take steps to prevent such variations in future.
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.
1. To Measure Progress:
The control process continually measures progress towards goals.
2. 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 an integral part of almost any organization’s
environment. 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 move to 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;
sales in different retail outlets need to be recorded accurately and
analysed; the organisation's various markets—foreign and domestic—
require close monitoring.
• 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. Without such a system, managers will not be able to check on
their subordinates' progress, and so not be able to take corrective
action until after a failure has occurred.
[Link] 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 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. 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.
Benefits of Control
• A well-developed control system
• increases productivity
• reduces defects and mistakes,
• helps meet deadlines,
• facilitates communication,
• improves safety,
• lowers cost, and
• gives the workers control over their environment.
Essentials of Effective Control System
• The essentials of an effective control system are as follows.
• 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. 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 concern
should evolve such a control system as would serve its specific needs.
• Timely and forward looking: The control system should be directed
towards future. It should report all the deviations from the standards quickly
in order to safeguard the future. The feedback system should be as short and
as quick as possible. If the control reports are not directed at future, they are
of no use as they will not be able to suggest the types of measures to be
taken to rectify the past deviations.
• 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 the
argument by the employees.
• Flexible: Control system should be flexible so that it can be adjusted
to suit the needs of any change in the environment. It should be
adoptable to new developments including the failure of the control
system itself.
• Economical: Another requirement of a good control system is
economy. The benefits derived from the control system should be
more than the cost involved in implementing it.
• Prescriptive and operational: A control system in order to be effective
and adequate, must not only detect deviations, but should also provide
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 of 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
• Should Not Lead to Less Attention to Other Aspects
• Should be Periodically Reviewed and Evaluated
Steps in a Control Process
• There are three basic steps in a control process
1. Establishment 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. They serve as benchmarks as they specify acceptable levels of
performance. Control standards are broadly divided into two types.
• Quantitative standards: These are standards which can be quantified.
Eg: Production level, rejection level, labor-hours, speed of service,
sales volume, profit, expenses etc.
• 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.
2. Measuring and comparing actual results against standards: The
second step in the control process is measuring the actual performance
of individuals, group or units and comparing it with the standards. The
quantitative measurement should be done in cases where standards have
been set in numerical terms. In all other cases, the performance should
be measured in terms of qualitative factors . In general, measurement of
performance can be done by personal observation or by a study of
various summaries of figures, reports, charts and statements. Once the
performance is measured, it should be compared with the standards to
detect deviations. The measurement and comparison are to be made at
various stages in the total process
• [Link] 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.
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