Technological Innovation Management & Entrepreneurship

Technological Innovation
Management & Entrepreneurship
[Subject code: BEC501]

MODULE - 2

a. Organizing and Staffing

b. Directing and Controlling

Savitha R, Asst. Prof, ECE, SKIT Page 1

Technological Innovation Management & Entrepreneurship
Module -2a
Organizing

Meaning of Organization

Organization is a process which integrates different type of activities to achieve organizational

goals and objectives, to achieve these goals there must be competent management providing
them all those factors to perform their job efficiently and effectively. Organization is nothing but
is a process of integrating and coordinating the efforts of men and material for the
accomplishment of set objectives.

Every thinker is of the opinion that an organization is a process. They further have added that
this process leads identification of work to be performed which for convenience sake should be
objectively grouped and defined. Then the work should be assigned to individuals according to
their aptitude, technical knowledge, skill and efficiency. For satisfactory working the
individuals should be given some right and authority. A mutual relationship between jobs
(what to be done) duties (to be performed) and authority (to be exercised) should be
established.

Organization is just like a tool in the hands of management. Net results will be perfect if the tool
is well designed and handed properly.

Meaning of Staffing:

Staffing is the traditional management function of attraction and selection of the best people and
putting them on job where their talents and skills can be best utilized, and retention of these
people through incentives, job training and job enrichment programmes, in order to achieve both
individual and organizational objectives. This emphasizes managing human and not material or
financial resources.

Staffing is the function of human relationship in the organizational structure with competent
staff. Staffing in that part of the management function which is concerned with people at work
and with their relationship within the organization.

Characteristics of Organization

Robbins defines Organization as ' a consciously coordinated social unit, composed of two or
more people that functions as a relatively continuous basis to achieve common goals of set of
goals.

Agrawal defines organization as a goal oriented open system composed of people, structure and
technology.

Savitha R, Asst. Prof, ECE, SKIT Page 2

Technological Innovation Management & Entrepreneurship
From the above definitions, an organization has thefollowing characteristics-
1. It is an open system.
2. It is a goal oriented.
3. It is a collection of people.
4. Organization consists of people.
5. Organization consists of technology, and
6. It has continuity.

Organization is an open system: An open system means open to environment. Organization

exists and functions in environment. Environment compels the organization to acquire right
type of people, technology and structure so that the goals to serve the environment can be
attained. The organization is thus greatly influence the environment.

Usually the demands or wants of the people determines the strategies and goals of an
organization. What are the needs in the market and how an organization can bring new and
needy products to the market create an interaction between the organization and the
environment. Without interaction, organization cannot fulfill required products or services to the
users groups. This way, an organization is an open system, without which it cannot survive.

Organization is goal oriented: Without goal or set of goals, organization is useless. There is
nothing for the organization to do. Therefore, the major characteristic of any organization is its
goal. Type of people or technology is adopted so that the set goal can be achieved. The goal
gives line of action; acquire required type of people and uses type of technology so that the goal
is achieved in an anticipated time point. Without goal, organization cannot be formed.

Organization is a collection of people: People are the main performers in any organization. In
other world, all the elements of any organization are the same except the people. Even with the
same age, qualification, experience and facilities, the output of the people may vary, simply
because the needs and wants of all people are not the same. What makes them work by heart
and head is the one that differentiate organizations from one to others.

Organization consists of technology: Technology is the means of doing works. There are
various kinds of doing works. As an organization consists of more people, its performance
procedure should be of a fixed type so that each individual in the organization can exercise them
well. This is how technology initiates. Technology eases the work and shortens the time.
Technology originates a certain policy necessary to keep organizational beliefs in doings of the
various people at different structural level. This saves the integrity of the people in achieving
goals.

Organization has continuity: As the organization involves people, and the people generate
different needs, they can leave the organization or some may die too. This does not affect the
organization to stop or decrease in size. Hence, it is said that every organization has its own
continuity. A good manager can leave but other better man can take over the charge of the
organization.

Savitha R, Asst. Prof, ECE, SKIT Page 3

Technological Innovation Management & Entrepreneurship
The Organizational Process

Organizing, like planning, must be a carefully worked out and applied process. This process
involves determining what work is needed to accomplish the goal, assigning those tasks to
individuals, and arranging those individuals in a decision‐making framework (organizational
structure). The end result of the organizing process is an organization a whole consisting of
unified parts acting in harmony to execute tasks to achieve goals, both effectively and
efficiently.

A properly implemented organizing process should result in a work environment where all team
members are aware of their responsibilities. If the organizing process is not conducted well, the
results may yield confusion, frustration, loss of efficiency, and limited effectiveness

The stages or steps in the process of organization areexplained below:

1. Fixing the objectives of the organization

At the top level, administrative management first fixes the common objectives of organization.
At the middle level, executive management fixes the departmental objectives.
Lastly, at the lower level, supervisory management fixes the day-to-day objectives. All the
objectives of the organization must be specific and realistic

2. Finding activities must for achieving objectives

After fixing the objectives, the top-level management prepares a list of different activities (or
works) which are required to be carried out for achieving these objectives.
This list is prepared at random without following any sequence or order. This is a very
important step because it helps to avoid duplication, overlapping and wastage of efforts.

3. Grouping the similar activities

All similar or related activities having a common purpose are grouped together to make
departments. For e.g. all activities or works which are directly or indirectly connected with
purchasing are grouped together to make the Purchase Department. So various departments
such as Purchase, Production, Marketing, Finance, etc. are made. The grouping of similar
activities leads to division of labour and specialization.

4. Defining responsibilities of each employee

The responsibilities (duties) of each employee are clearly defined. This will result in the
selection of a right person for the right post / job. He / she will know exactly what to do and
what not to do. Therefore, it will result in efficiency.

Savitha R, Asst. Prof, ECE, SKIT Page 4

Technological Innovation Management & Entrepreneurship
5. Delegating authority to employees

Each employee is delegated (surrender or given) authority. Without authority, the employees
cannot carry out their responsibilities. Authority is the right to give orders and the power to get
obedience. The authority given to an employee should be equal to the responsibility given to
him.

6. Defining authority relationship

When two or more persons work together for a common goal, it becomes necessary to clearly
define the authority relationship between them. Each person should know who is his superior,
from whom he should take orders, and to whom he will be answerable. Similarly, each superior
should know what authority he has over his subordinates.

7. Providing employees all required resources

After defining the authority relationships, the employees are provided with all the material and
financial resources, which are required for achieving the objectives of the organization. So in
this step, the employees actually start working for a common goal.

8. Coordinating efforts of all to achieve goals

This is the last stage or step in the process of organization. Here, the efforts of all the
individuals, groups, departments, etc. are brought together and co- coordinated towards the
common objectives of the organization.

Principles o f Organization

The success of a business organization can be ensured if the following basic principles are
used. In order to develop a sound and efficient organization structure, there is need to follow
certain principles. In the words of E.F.L. Brech, "If there is to be a systematic approach to the
formulation of organization structure, there ought to be a body of accepted principles". They
are as follows:
(1) Objectives: The objectives of the enterprise influence the organization structure and
hence the objectives of the enterprise should first be clearly defined. Then every part of
the organization should be geared to the achievement of these objectives.
(2) Specialization: Effective organization must promote specialisation. The activities of the
enterprise should be divided according to functions and assigned to persons according to
their specialization.
(3) 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 minimum as far as possible, the
minimum, that means an executive should be asked to supervise a reasonable number of
subordinates only, say six.
(4) Exception: As the executives at the higher level have limited time, only exceptionally

Savitha R, Asst. Prof, ECE, SKIT Page 5

Technological Innovation Management & Entrepreneurship
complex problems should be referred to them and routine matters should be dealt with
by the lower levels. This will enable the executives at higher level to devote time to
more important and crucial issues.
(5) Scalar principle: This principle is sometimes known as the "chain of command". The
line of authority from the chief executive at the top to the front - line supervisor at the
bottom, must be clearly defined.
(6) Unity of Command: Each subordinate should have only one supervisor whose
command he has to obey. Dual subordination must be avoided, for it causes uneasiness,
disorder, indiscipline and undermining of authority.
(7) Delegation: Proper authority should be delegated at the lower level of organization also
to carry out the work effectively.
(8) Responsibility: The superior should be responsible for the acts of his subordinates.
(9) Authority: Authority is a tool by which a manager accomplishes the desired objectives,
which should be clearly defined.
(10) Efficiency: The organization structure should help enterprise to function efficiently to
accomplish the objectives at lowest cost.
(11) Simplicity: The organization structure should be simple and the levels should be as
minimum as possible.
(12) Flexibility: Should be flexible, adaptable to changing circumstances, permit expansion,
replacement, without dislocation and disruption of the basic design.
(13) Balance: There should be a 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: Should be one objective and one plan for a group of activities
having same objectives. Unity of direction facilities unification and coordination of
activities at various levels.
(15) Personal Ability: As people constitute an organization, there is need for proper
selection, placement and training of staff. Organization structure must ensure optimum
use of human resources and encourage management development programme.

Savitha R, Asst. Prof, ECE, SKIT Page 6

Technological Innovation Management & Entrepreneurship

Span of Management

Definition: The Span of Management refers to the number of subordinates who can be
managed efficiently by a superior. Simply, the manager having the group of subordinates who
report him directly is called as the span of management.

Span of management is Span of control -the number of subordinates a supervisor has is used as
a means of ensuring proper coordination and a sense of accountability among employees. It
determines the number of levels of management an organization has as well as the number of
employees a manager can efficiently and effectively manage. In the execution of a task,
hierarchical organizations usually have different levels of task processes. Workers at various
levels send reports on their progress to the next levels until the work is completed.
In the past it was not uncommon to see average spans of one to four (one manager supervising
four employees).
With the development of inexpensive information technology in the 1980s, corporate leaders
flattened many organizational structures and caused average spans to move closer to one to ten.
As this technology developed further and eased many middle-managerial tasks (such as
collecting, manipulating, and presenting operational information), upper management found
they could save money by hiring fewer middle managers.

Departmentalization

Departmentalization is the process of grouping individuals into departments and grouping

departments into total organizations.
Horizontal differentiation of tasks or activities into discrete segments is called
departmentalization. There are several bases for departmentalization depending upon the
nature and size of organization, goals, strategies and environment.

1. Departmentalization based on Products

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. This
type is advantageous where variety of products are manufactured for example (i) Godrej, that
manufactures soaps, cosmetics, refrigerators, machines, furniture etc., (ii) HMT that
manufactures machines, watches, tractors, bearings etc. (iii) TATAs that make trucks, cars,
steel, machines etc.

 Advantages
o Top management is relieved of operational task enabling them to
concentrate more on commongoals.
o Performance of different product groups can be easily compared enabling
the top management to invest more and more in profitable product groups
and exercise better control on non performers.

Savitha R, Asst. Prof, ECE, SKIT Page 7

Technological Innovation Management & Entrepreneurship
o Managers of individual products put better effort toimprove his area
compared to others.

 Disadvantages
o This calls for duplication of staff and facilities.
o Separate work force is required in sales, marketing and finance,
resulting in extra expenditure.
o More managers are required.
o May result in under utilization of facilities andequipment.

1. Departmentalization based on functions

The departmentalization is based on each major function of the organization. Depending on the
nature of organization the various functions are as follows: Marketing, Engineering,
Production, Finance, Personnel, and Purchase etc. Functional departmentalization is most
widely employed basis of organizing activities - and is present in almost every organization at
some level in its structure.

Advantages
o It is logical reflection of functions.
o Maintains power and prestige of major functions.
o Follows principle of occupational specifications and thereby
facilitates efficient utilization of people.
o Simplifies training.
o Provides means of right control at top.

Disadvantages
o De-emphases overall company objectives
o Leads to over specialization of people.
o Reduces coordination between functions.
o Slow adoption to changes in environment
o Limits development of general managers.

2. Departmentalization based on time

One of the oldest forms of generally used departmentalization at lower levels of an
organization is grouping of activities on the basis of time. The use of shifts is common in some
organizations due to economic or technological reasons. For service organizations like
hospitals, fire department, security, steel mills, chemical plants, round the clock work is
essential. All these call for 3 shift working of organization. Then under such circumstance, the
departmentalization is made on the basis of shifts as first shift, second shift etc.

Advantages
o Service can be rendered, that goes beyond the normal8 hours shift/day.
o Facilitates use of processes that cannot be stopped orinterrupted.

Savitha R, Asst. Prof, ECE, SKIT Page 8

Technological Innovation Management & Entrepreneurship

o Expensive capital equipment can be better utilized.

o Provides part time jobs for people who are otherwise busy during day time (students
going for part time jobetc.)
o Higher and continuous production per day.

Disadvantages
o Lacks good and efficient supervision during night shifts.
o Inconvenient for people to work in night shifts andmore difficult during shift
changes from day to night.
o Lack of effective coordination and communicationfrom people of one shift to
next shift.
o Loss of product or service may increase owing to higher payment/ over time payment
during nightshift.

4. Departmentalization based on Territory andGeography

Departmentalization by Territory is common in organizations that operate over a wide
geographical area. The activities of an enterprise are divided into territories like, western
region, northern region, eastern region, southern region etc. They may be further divided into
sub regions in main regions like Karnataka region, Kerala region, Andhra Region, Tamil Nadu
region within southern region etc.
Territorial is especially attractive to large-scale firms or other enterprises whose activities are
physically or geographically spread over a large area. Banks, Railways and big manufacturing
companies like petroleum companies (HP, Indian Oil etc.), cosmetic companies are some of
the examples of this.
Advantages
o Places responsibility at lower level.
o Places emphasis on local problems and markets.
o Ensures a better coordination within a region.
o Facilitates direct communication within a region.
o Better involvement of people to achieve highertargets.
o Provides a region-wise comparison of performance.
o Takes advantage of economics of local operations.

Disadvantages
o Requires more persons with General Manager abilities.
o Requires maintaining similar functional people at allregions.
o Difficult to control from top management.

Savitha R, Asst. Prof, ECE, SKIT Page 9

Technological Innovation Management & Entrepreneurship
5. Departmentalization 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

Committee can be defined as a group of organizational members who discuss and develop
solutions to problems. It can be either line or staff and can be established on a standing
(permanent) or an adhoc basis. In business enterprises, the board of directors constitutes the
committee at the highest level. The purpose of such committees is to discuss various problems
and recommend solutions to the management. It is generally found to co-exist with line and
staff type of organization.

The Board of Directors of a company is an example of a committee organization. This form of

organization is suitable for taking decisions on policy matters or laying down broad objective
for the enterprise.

Types of Committees

Ad-Hoc committee – what is an ad-hoc committee? The word ad-hoc is derived from the Latin
language, which means ‘for a specific purpose’. An ad hoc committee is therefore a committee
that is set up for the main purpose of performing a specific task or dealing with a specific
situation. Having completed the specific task and submitted its report, the ad hoc committee is
then dissolved. Majority of committees in business organizations and other places are ad hoc
types.

For example, an ad hoc committee could be formed by the management of an organization to

investigate into the causes of a particular problem bedeviling the organization. After the
completion of the task and submitting a report, the ad hoc committee is dissolved.

Executive committee – as the name suggests, this type of committee is made up of people
occupying top positions in an organization who have the powers to administer the day to day
affairs of the organization. Executive committees are mainly made up of senior management
personnel, and just like any other committee in a business organization, the executive
committee is given the mandate to perform special assignments or tasks.

Sub-committee – a sub-committee as the name implies, is basically a subsidiary committee.

This means that it is connected with a larger committee that is more powerful and important
than it. A sub-committee is said to be a child of a parent committee. A large committee can
appoint one or more of its members to form another committee under it in the name of a sub-
committee. The large committee underneath which the sub-committee is formed is the parent
committee.

Savitha R, Asst. Prof, ECE, SKIT Page 10

Technological Innovation Management & Entrepreneurship
Coordinating or Joint committee – this is a type of committee that acts as a link between two
committees and joins or coordinates their actions together. Such a committee would normally
be composed of representatives from the other committees whose activities it is coordinating.

Committees are very important in business organizations since they help in resolving problems
and also promote the exchange of opinions among members for the betterment of the
organization.

Advantages:

1. Pooling of Opinions:

The members of committees come from different background and areas of expertise and have
different viewpoints and values. When persons with varied abilities sit together and discuss a
problem, various aspects of the case are highlighted and pros and cons are assessed. The pooled
opinion will help in taking a realistic view of the problem.

2. Better Co-Ordination:

Committee form of organization brings more co-ordination among different segments of the
organization when representatives of different departments sit together they understand and
appreciate the difficulties faced by others. This type of frank discussions help on fixing the
targets of different departments and better co-ordination is achieved through this type of
decision making.

3. Balancing of Views:

This type of organization helps in balancing the views expressed by different persons. There is
a tendency to over emphasize the aspects of one’s own department by ignoring the inter
dependent character of problems of different departments. A committee helps to bring out an
agreed view of the problem by taking into account divergent views expressed in such meetings.

4. Motivation:

The committees consist of managers as well as subordinates. The views of subordinates are
given recognition and importance. It gives them encouragement and makes them feel as an
integral part of decision making process. Such committees boost the morale of subordinates
and motivate them to improve their performance.
5. Dispersion of Power:

The concentration of power in few persons may lead to misuse of authority and wrong
decisions. By spreading powers among committee members this problem can be solved.

6. Better Acceptance of Decisions:

The decisions taken by committees are better accepted by subordinates. The decisions of an
individual may be autocratic whereas committees decide in wider perspective of organization.
Since various shades of people are represented in committees, these decisions are better
Savitha R, Asst. Prof, ECE, SKIT Page 11
Technological Innovation Management & Entrepreneurship
accepted.

7. Better Communication:

It is a better forum for discussing matters of mutual interest and reaching certain conclusions.
These decisions can be properly communicated to subordinates through committee members.
The members will transmit correct and authentic information and also convey the background
of taking those decisions.

8. Executive Training:

Committees provide a good forum for training executives. They learn the value of interaction,
group dynamics and human relations. They are exposed to various view points and learn the art
of reaching decisions and solving organizational problems.

Weakness of Committee Form of Organization:

This form of organization suffers from the following weaknesses:

1. Delay:
The main drawback of committee form of organization is delay in taking decisions. A number
of persons express their view points in meetings and a lot of time is taken on reaching a
decision. The fixing of committee meetings is also time consuming. An agenda is issued and a
convenience date is fixed for the meeting. The decision making process is very slow and many
business opportunities may be lost due to delayed decisions.

2. Compromise:
Generally, efforts are made to reach consensus decisions. The view point of the majority is
taken as a unanimous decision of the committee. The thinking of the minority may be valid but
it may not be pursued for singled out.

They may accept less than an optimal solution, because of a fear that if their solution proves
wrong then they will be blamed for it.

3. No Accountability:
No individual accountability to be fixed if these decisions are bad. Every member of the
committee tries to defend himself by saying that he solves a different solution. If
accountability is not fixed then it is the weakness of the organization.

4. Domination by Some Members:

Some members try to dominate in the committee meetings. They try to thrust their view
point on others. The aggressiveness of some members helps them to take majority with them
and minority view is ignored. This type of decision making is not in the interest to the
organization.

Savitha R, Asst. Prof, ECE, SKIT Page 12

Technological Innovation Management & Entrepreneurship
5. Strained Relations:
Sometimes relations among committee members or with others become strained. If some
members take divergent stands on certain issues, some may feel offended. In case some issue
concerning other persons is discussed in a committee and members taking stand not liked by
those persons may offend them. The discussions in the meetings are generally leaked to
other employees. Some unpleasant decisions may not be liked by those who are adversely
affected. It affects relations of employees not only on the job but at personal level also.

6. Lack of Effectiveness:
The role of committees is not effective in all areas. The committees may be useful where
grievance redressed or inter personal departmental matters are concerned.
Committees may not be effective where policies are to be framed and quick decisions are
required. Individual initiative will be more effective in these cases. So committees have a
limited role to play.

Guidelines for Committee Members:

In order to make the working of committees effective,the members should follow these
guidelines:

1. The members should ensure that the atmosphere at themeetings is cordial and informal.

2. The members should express their views clearly andlogically and listen to the reactions
calmly.

3. Disagreement should not be ignored. They should not compromise just for the sake of
harmony. Criticism shouldbe directed on the issues and not on persons.

4. It should be ensured that chairman does not excessively dominate. His views should also be
treated insame way as that of others. His views should not be takenas final.

5. The disagreement in meeting should not be taken in personal level. The spirit of
competition should be avoidedand co-operation should be enhanced.

All these guidelines will not only smoothen the working committees but will also make
them an effective instrument of the organization.

Savitha R, Asst. Prof, ECE, SKIT Page 13

Technological Innovation Management & Entrepreneurship

AUTHORITY

It is the formal right given to an individual to command (the action of others). According to
Koontz, it is the tool by which a manager is able to exercise discretion and to create an
environment for individual performance.

An authority may be defined as the "right to act". It may also be referred to as the power to
take necessary steps or decisions in order to achieve organization's goals.

An enterprise may have the best of plans, sound organization structure and efficient
management, yet nothing happens or is achieved. As nothing is done i.e., the 'act' is missing
and it is the act that influences in the body structure. Thus, "Authority is the right to act" the
most appropriate definition given to it.

Enterprise and types of authority

An enterprise can be of various types. For each of that types there are different types of
authority.

Enterprise Authority
1. Public Organization Share holders, Board of All the members
who areDirector / Directors, M.D.
2. Partnership firm Proprietor of the firm.
3. Private Ltd. Committees, Council, Board
4. Proprietor ship
5. Government /
Organization

Responsibility

It is also called as Accountability or Answerability. It may be considered as the obligation of

a subordinate to his superior to do a work assigned to him. Each person who is given
responsibility must recognize that the executive above him will hold him responsible for the
quality of his performance.

Authority and responsibility exist together in a business organization. They represent the two
sides of the same coin while authority is right to command; responsibility is an obligation to
performance as someone with authority has directed. It accompanies the assignment of work
to a subordinate and becomes increasingly important at successive higher levels in the
hierarchy. It is not merely a desire to cooperate or to advance group objectives but is a
recognition of the obligation to perform managerial functions.

Savitha R, Asst. Prof, ECE, SKIT Page 14

Technological Innovation Management & Entrepreneurship
One major and important aspect of responsibility is that a manager can part with authority
but not with responsibility, which is an inherent property of his position in the organization.

The terms "responsibility" and "accountability" are often used dischargeable. Strictly
speaking accountability is used to denote a special kind of responsibility. As employed in
military, an officer is said to be "accountable" for equipment, but responsible for the action
of troops reporting to him.

CENTRALISATION VS DECENTRALISATION

Concept of Centralization and Decentralization

Organization authority is merely the degree of discretion conferred on people to make it

possible for them to use their judgment by giving them power to use their own decisions and
issue instructions, how much authority should be concentrated or dispersed throughout the
organization.

Decentralization is the tendency to disperse decision, making, authority in an organization

structure. It is a fundamental aspect of delegation, to the extent the authority is not delegated
it is centralized. There can be absolute centralization of authority in one person; this implies
that no subordinate managers, and therefore no structured organization.

Some decentralized authority exists in all organizations.

On the other hand there cannot be absolute decentralization, for if managers should delegate
all their authority, their status as managers would cease, their position will be eliminated and
again there would be no organization structure. Centralization and decentralization are
qualities with various degrees in practice.

When work of an executive increases so much in volume that he cannot hope to cope with it,
he has to divide it among his subordinates. In doing so he naturally expects that each
subordinate will do the job as he himself would have done. This process of dividing the job
is referred to as 'delegation'. Delegation is simply a matter of entrusting part of the work
operations or management to others. "It is the ability to get results through others" - "It is the
dynamics of management". It is a process a manager follows in dividing the work assigned
to him so that he performs that part which only he, because of his unique organizational
placement, can perform effectively, so that he can get others to help him with what remains.
The primary purpose of delegation is to make organization possible.

Just as no one person in an enterprise can do all the job necessary for accomplishing a group
purpose, so it is impossible as an enterprise grows for one person to exercise all the authority
for making decisions. There is a limit to the number of persons that a manager can
effectively supervise and for whom they can make decisions. Once this limit has been

Savitha R, Asst. Prof, ECE, SKIT Page 15

Technological Innovation Management & Entrepreneurship
passed, authority must be delegated to subordinates, who will make decisions within the area
of their assigned duties.

The process of Delegation

 Authority is delegated when superior gives a subordinate, discretion to make decisions.

The entireprocess of delegation involves:
 Determination of results expected (MBO)

 Assignment of tasks.
 Delegation of authority for accomplishing these tasks.
 Holding of people responsible for accomplishment oftasks.

In practice it is impossible to split this process, since expecting a person to accomplish goals
without the authority to achieve them is meaningless, as the delegation of authority without
knowing for what results it will be used.

Clarity of Delegation

Delegation of authority can be specific or general, written or unwritten. If the delegation is

unclear, a manager may not understand the nature of the duties or the results expected.
Specific written delegations of authority are extremely helpful both to the manager who
receives them and to the person who delegates.

Sometimes, especially, in the upper levels of management, it is too difficult to make

authority delegation specific and the subordinate, robbed of flexibility, will be unable to
develop in the best way.

Recovery of Delegated Authority

A manager, who delegates authority, does not permanently dispose it off; delegated authority
can always be regained.

A shuffle in an organization means that rights are recovered by the responsible head of the
firm to a department and then re-delegated to new managers to modified departments, so that
head of a new department may receive the authority held by other managers.

Difficulties in delegation

Although delegation is apparently a simple process, but in practice certain difficulties do

generally crop up, hampering the process. They are as follows:
(i) On the part of the boss
o I can do it better myself feeling.

Savitha R, Asst. Prof, ECE, SKIT Page 16

Technological Innovation Management & Entrepreneurship
o Lack of ability to direct.
o Lack of confidence and trust in subordinates.
o Absence of control that warns of coming troubles.
o Conservative and canvas temperament.

(ii) On part of the subordinates

o Over dependence on boss for decisions.
o Fear of criticism.
o Lack of information and resources to do a particular job effectively.
o Lack of self confidence.
o In adequate positive incentives.

Principles of Delegation

1. Receptiveness: An underlying attribute of managers who will delegate authority is a

willingness to give other people's idea a choice.

2. Willingness to let go: A manager who will effectively delegate authority, mustbe willing to
release the right to make decisions to subordinates.

3. Willingness to let others make mistakes: As everyone makes mistakes, a subordinate

must be allowed to make them, and they must be considered uponinvestment in personal
development.

4. Willingness to trust subordinates Trust is the basis of all coordination.

5. Willingness to establish and use broad controls: To ensure them that the authority is
being used tosupport enterprise or department goals and plans.

Savitha R, Asst. Prof, ECE, SKIT Page 17

Technological Innovation Management & Entrepreneurship
Staffing

Staffing is defined as "filling and keeping filled, positions in the organization structure". It is
also known as "human resource management". This includes identifying the requirement of
work-force, taking inventory of people available, recruiting, selecting, placing, promoting,
appraising, planning the employee's careers, training them to suit the job, developing the staff to
carry out the definedjob effectively and efficiently.

Nature and Importance of staffing

A business cannot be successfully run without the right kind of people. It is very important
to fill the jobs with suitable people who will carry out the job effectively. The staffing is very
important because of following reasons.
 It helps in discovering talented and competent workers and developing them to move
the organization ladder.
 Staffing is important to put the right person at right job which results in increased
production.
 It avoids sudden disruption of the production due to shortage of workers, since it plans
and fills the positions.
 It maintains harmony and creates healthy atmosphere in any organization by planning the
promotions, training needs and additional skills required.
 It plans the requirement of man power at various time and levels of a project and cater
to it.

Elements of staffing:

While carrying out the staffing function, the management should ensure that right people
are engaged for a job. The jobs cannot be changed to suit the people.
The main elements involved in staffing are:
 Proper placement of people.
 Rational recruitment and selection.
 Proper positioning and fixation of salaries.
 Providing necessary training for the people tocarry out the job.
 Good promotional policies and retirement scheme.

Savitha R, Asst. Prof, ECE, SKIT Page 18

Technological Innovation Management & Entrepreneurship
Functions of staffing:

Staffing plays a vital role in organization. It has key roles to play for the well being of any
organization. The following are some of the functions of staffing.

1. Man power planning: The first function of staffing is to plan the requirement of man power in
various levels of organization to achieve the objectives of the organization. Man power planning
involves short term and long term. Short term is the immediate requirement of man power to
reach the targets where as long term planning involves the requirement of people for future
proposed projects.

2. Development: Development means preparing the people of an organization to develop required

skills to perform their tasks. This involves training of people.

3. Fixing employment standards: The staffing defines and fixes the responsibilities of
people. The specification and qualifications of people to be put on a particular job are
prepared.

4. Sources of selection: The staffing identifies and specifies sources of selection like internal
or external sources. A position may be filled by people from internal source available within
the organization either by transfer or promotion. External sources may be considered for
filling a position from outside organizations.

5. Selection: After having identified the sources of selection, next function is selection process.
People are selected as per specifications and qualifications set earlier and recruited. The
selected people are placed on the job.

6. Training: If required, the selected people are given necessary training to carry out the
specific job.

7. Routine functions: In addition to the above functions, the staffing also involves in
promotion, transfer, punishment, motivation, welfare, coordination, retirement etc.

Selection
Selection of process for the organization is one of the most important managerial
responsibilities. According to the requisition, a primary selection is done for the suitable
candidates, to be called for the interview.
The final selection is done by the executives in the case of higher posts and for lower posts
recruitment, the personnel officer is present in all selections and keeps an eye on the recruitment
activities with an aim:
 To find out whether the candidate can be suitable employee. For this, the candidate
should be clearly told about the nature of the job, terms and conditions.
Savitha R, Asst. Prof, ECE, SKIT Page 19
Technological Innovation Management & Entrepreneurship
 To know the suitability for the particular jobs, he can be cross questioned and thus the
suitability can be judged.
 If the selection of the worker, admitted to the firm is not working skillfully then the
result will be, either there will be a poor level of work or there will be a high rate of
labour turnover. Both will be harmful to the firm in the long run. Therefore every effort
shouldbe made to make proper selection.
Techniques of selection
 Application Banks
 Preliminary or Initial Interview
 Interview
 Group discussion
 Employment tests.
1. Application Bank
It is invariably used as one of the selection tools and can be helpful at the interview stage. It
provides actual information needed for evaluating the candidate's suitably. It is also used as a
basic record of his personnel data is about educational qualifications, training, experience etc.
Many large companies use such application forms which determine, whether the candidate
possesses the basic minimum requirement about the Qualifications, Knowledge and Skills or not.
Generally they seek information in the following areas:
 Personnel data such as age, sex, marital status.
 Family background, such as father's and mother's occupation and earnings.
 Educational background including training.
 Employment record including details about previous employment if any and
present employment.
 Name and address of few persons usually other than relation to whom references
can be made.
 Membership of professional organization.
 Reason for seeking job in the organization.

2. Preliminary or Initial interview

This interview is usually of short duration and is aimed at obtaining certain basic
information with a view of identifying the knowledge and other information not present in
application.
The candidate is asked about his educational skill, knowledge, job experience, minimum
salary acceptable etc. Sometimes he is also asked that why he is applying for job in that
particular organization. If the candidate seems to be possessing the basic minimum requirement
for efficient performance, he is given an application form to fill in.

Savitha R, Asst. Prof, ECE, SKIT Page 20

Technological Innovation Management & Entrepreneurship
3. Interview
It is one of the least reliable and valid selection techniques. It relies upon a considerable
extent in accepting or rejecting a candidate. The interview is left with the inevitable personality
variables and for this he has nothing to depend upon except his subjective judgment.
The interview may follow a structural pattern or an unstructured pattern.
a. In structural pattern or directive pattern: In structural pattern of Interviewing, a list
of questions based on job specification is prepared in advance. The interview may be
occasionally separated from the prepared list of questions and put other questions.
The candidate is supposed only to answer the questions and the interviewer can learn a
lot about the candidate's ability and knowledge, but this technique imposes serious
limitation in drawing out his personality. It is not very effective.
b. Unstructural or non-directive or un-patterned: It is one of the most effective
interviewing techniques. The interviewer, instead of asking too many questions initiates
the candidate to create a kind of permissive atmosphere in which the candidates talks
usually quite revealingly about his experiences, aspirations, fear, weakness etc. This
kind of interview requires a high degree of interviewing skill and it can therefore be
conducted by only trained interviewers.
In some large organizations, the candidate has to go through a review of two or three panel
interviewers. After each panel interviewer some candidates are eliminated and only those
candidates, who succeed in the first interview, are sent on to the second interviewing panel and
so on.
4. Group Discussion
In this technique candidates are brought together in group of 6 or 8 persons for informal
discussion and the selectors observe them and evaluate them. There are two kinds of group
discussions, one where a problem is given to a group to discuss and the individual member is
free to choose his own approach. In the second type, each individual is given an initial position
and supplied with supporting information to defend his own position.

5. Employment tests
Most of the large companies use one or other kind of employment tests. Before a company
use employment test it should take following points into ac- count.
a. Since the tests are aimed at predicting future success in a job situation, they
should be selected or designated on the basis of a sound job analysis
programme.
b. In deciding upon the test to be used as a selectiontool, its specialty should be
taken into considerations.
c. Tests should be valid. Before a test is selected for use as an employment, its
validity should be determined in relation to the specific job.
Tests are only one of the techniques of selection.
They are not full proof and therefore instead of using single test, often a batch of tests is
used. A variety off test is used as selection tools.

Savitha R, Asst. Prof, ECE, SKIT Page 21

Technological Innovation Management & Entrepreneurship
The object of these scientific methods of selection is to ensure that a person selected
possesses those physical and mental qualities in required degrees which are essential if he is to
become an efficient and successful worker.
o Intelligence Test: It is a measure of an individual's capacity of reasoning and
verbal comprehension. It is used in the selection and classification of workers
for almost every kind of job from the unskilled to the highly skilled,
administrative and professional jobs.
o Vocations Aptitude Test: Physical strength and general intelligence are not
enough to enable a person to perform a task efficiently. Besides, he must
possess the ability for the performance of that job. In fact from the point of
view of future achievements, a person of high natural ability is likely to prove
more successful than one who through training and experience has gained
more knowledge but possesses less natural ability. If this is correct, then it
makes it necessary to find out whether the applicant possesses the necessary
vocational aptitude or not.
o Analytical Test: In this method, a job is analyzed in terms of key qualities or
abilities as speed and quality of observations, ability to keep one's head and
not get confused when a quick decision is called for. A test or a combination
of tests is then taken which measure the degree to which these abilities are
present or lacking in the candidate.
o Synthetic Test: In case of jobs which are complex and for which the
analytical tests can't be performed, synthetic tests may be adopted. It presents
the candidate a complex situation more or less similar to the one normally
present in actual task and his success or failure in the test is accepted as the
possession or absence of the required vocational aptitude.

Recruitment
It is an important step in the employment of labour. Haphazard recruitment of labour brings in a
measure of chances and uncertainty in an industry and may result in inefficiency and loss of
production. This means that systematic steps should be taken to ensure that right type of persons
are available to the concern in right number.

The numbers of workers required by a concern depends on

o The scale of production.
o The degree of mechanization.
Following are the various sources from where the personnel may be recruited
 Applications introduced by friends and relatives
 Consulting agencies

Savitha R, Asst. Prof, ECE, SKIT Page 22

Technological Innovation Management & Entrepreneurship

 Campus recruitment
 Casual callers
 Through advertisement
 Field trip and college recruitment
 Employment exchange
 Labour contractors

 Applications Introduced by friends and relatives: Often the employees introduce their
relative's application to find a good job for them. Many companies prefer to take such
candidates because their background can be known. In this way a good worker can bring a
good worker. However this may lead to nepotism and favoritism.

 Consulting agencies: A consulting agency is commonly utilized to find specialized

executive personnel. It either helps the personnel department by supplementing its efforts
or work on its behalf. In such a situation, the agency must understand and estimate
correctly the client's past experiences, history and future projections.

 Campus recruitment: As a large numbers of management institutes like IIM, XLRI,

IIT etc., are engaged in giving the professional training, many companies find it easier to
pick up the best talent straight from the institute to fill its managerial position. In fact
these professional institutes have provided recruitment source to firms.

 Casual callers: Sometimes on his own initiative, the applicant sends his application for
the job. The personnel office keeps the record of applications and the suitable candidates
can be selected from the callers.

 Through advertisements: Companies advertise in the newspaper for their vacancies.

Generally the senior posts are filled by this method when they can't be filled by
promotions. The advertisement gives a wide range of choice. It also depends upon the
employer’s fame. If the name is not reputed one some of the good personnel do not apply.
 Field trips and college recruitment: This method is being used for private industrial
firms. These firms send their selecting teams to respective colleges and universities,
interview the candidates who are nearing completion of their studies and make selection.
This is no doubt very expensive and time consuming but has the advantage of choosing
the cream from the lot.
 Employment exchange: The recruitment is also done through the employment exchange
of the persons who are enrolled in the exchange.

Savitha R, Asst. Prof, ECE, SKIT Page 23

Technological Innovation Management & Entrepreneurship

The main functions of the exchange are:

 To supply information about persons in need of jobsand about jobs that is available.
 To direct persons to factories where suitable jobsexist.
 To develop job specification.
 To procure information about current wage rate.
 To introduce selected employees with personnel department and policies of the
company.
 To follow up the new recruits for initial adjustments.
 To look-after the employee canceling and operatingthe system seriously.
 To keep records of employees, hired, resigned,discharged and transferred.

Labour Contractors: The casual vacancies may be filled up by the company through labour
contractors. Usually unskilled candidates are appointed in this manner.

Savitha R, Asst. Prof, ECE, SKIT Page 24

Technological Innovation Management & Entrepreneurship
Module2b
Directing and controlling

Directing
Meaning and Nature of directing

Direction means issuing of orders, leading and motivating subordinates as they go about
executing orders. It is also defined as the process and techniques used for issuing instructions to
carry out a job and making sure that the operations are carried out as per the plan. Directing is
the interpersonal aspect of managing by which subordinates are led to understand and
contribute effectively and efficiently to the attainment of enterprise objectives. The direction
has two major activities namely

1. Giving orders to employees and

2. Leading and motivating them to accomplishthe goals.
Definition of direction:
"Directing is the interpersonal aspect of managing by which subordinates are led to understand
and contribute effectively to the attainment of enterprise objectives. (Harold D Koontz
&O’Donnell)

"Directing consists of the processes and techniques utilized in issuing instructions and making
certain that operations are carried on as originally planned". (Haimann)

"Direction is telling people what to do and seeing that they do it to the best of their ability. It
includes making assignments, corresponding procedures, seeing that mistakes are corrected,
providing on-the-job instruction and issuing orders". (Ernest Dole)

"Directing is the guidance, the inspiration, the leadership of those men and women that
constitute the real core of the responsibilities of the management". (Urwick and Breach)

Requirements of direction:
The role of a manager is to understand the needs, motives and attitudes of his subordinates. He
should use appreciate strategies according to the people and situations. The following are some
of the principles of effective direction:
(i) Harmony of objectives:

For an organization to function well, it the goals of company and goals of individuals are in
complete harmony. It is very uncommon for such a situation to exist in any organization.
Individual goals may differ from the goals of the organization. The manager should
coordinate the individual goals to be in harmony with the goals of the organization
Savitha R, Asst. Prof, ECE, SKIT Page 25
Technological Innovation Management & Entrepreneurship
(ii) Unit direction of command:

This principle implies that an employee should receive orders and instructions only from one
supervisor or boss. Otherwise, there may be indiscipline and confusion leading to conflicting
orders, divided loyalties and reduced results.
(iii) Efficiency:

If the superior consults with the subordinates in decision-making, then there would be a
sense of commitment. This makes the direction easy and improves the efficiency of
subordinates.
(iv) Direct supervision:

Managers should have direct face-to-face contact with the subordinates. Personal touch with
subordinates will ensure successful direction.
(v) Effective communication:

The supervisor must have good communication skills. He must clearly communicate the
plans, goals, policies, responsibilities and the duties to the subordinates. In communication,
comprehension is more important than the content.
(vi) Effective control:

The management should monitor the behavior and performance of subordinates to exercise
effective control over subordinates.
(vii) Follow-through:

Direction is a continuous process. Having given the directions may not ensure carrying out
them. Hence a manager should follow-through the performance of his subordinates. Follow
up is very important function of direction.

Giving orders

The order is a devise employed by a line manager in directing his immediate subordinates
to start an activity, stop it and modify it. A staff executive does not issue orders. To some
men the matter of giving orders and having them obeyed seems a very simple affair but the
fact is that it is surrounded by many difficulties. 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.

Savitha R, Asst. Prof, ECE, SKIT Page 26

Technological Innovation Management & Entrepreneurship
2. Face-to-face suggestions are preferable to long- distance orders.

3. An order should be depersonalized and made an integral part of a given situation so

that the question of someone giving and someone receiving does not come up. Thus the
task of the manager is to make the subordinates perceive the need of the hour so that
the situation communicates its own message to them.

Chester Barnard lays down four conditions which make an order acceptable. These are:
a. Order should be clear and complete;
b. Order should be compatible with the purpose of theorganization;
c. Order should be compatible with the employee'spersonal interest;
d. Order should be operationally feasible.

Orders may be communicated verbally or in writing. Written orders are appropriate when
• the subject is important;
• many details are involved;
• There is geographical distance between the order-giver and the
recipient.

A manager may follow four types of methods to ensure compliance to his orders:
1. Force
2. Paternalism
3. Bargain, and
4. Harmony of objectives.

The formula followed in "force" is: "Do what I say or else ... ", meaning thereby that an
employee will be punished if he does not follow orders. The results are frustration,
restriction of output, sabotage, militant unionism, etc.

The formula followed in "paternalism" is: "Do what I say because I am good to you." The
result here is that the employees develop a feeling of gratitude and indebtedness toward the
manager which they do not like. Further, paternalism operates in violation of the law of
effect. Instead of increased rewards following increased compliance, the paternalistic
manager provides rewards first and expects the compliance to follow.

The formula followed in "bargain" is: 'You do as I say in certain respects and I do as you
say in certain other respects.' The result of this method is that the manager's control is
gradually reduced. The formula followed in "harmony of objectives" is: "If we perform
together each will achieve his goal". This in fact is the best formula for ensuring
compliance to order.

Savitha R, Asst. Prof, ECE, SKIT Page 27

Technological Innovation Management & Entrepreneurship
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.
Some definitions of motivation
 Motivation is a general term applying to the entire classof drives, desires, needs, wishes
and similar forces that induces an individual or a group of people to work. - Koontz and
O'Donnell

 Motivation is the process of attempting to influence others to do your work through the
possibility of gain or reward. - Edwin B. Flippo

 Motivation means a processof stimulating people to action to accomplish desired goals -

Scott

Savitha R, Asst. Prof, ECE, SKIT Page 28

Technological Innovation Management & Entrepreneurship

Motivation Process
Nature of motivation
Motivation is not an easily observed phenomenon. We observe an individual's actions and
then interpret his observed behavior in terms of underlying motivation. This sometimes leaves a
wide margin of error. Our interpretation does not necessarily reveal the individual's true
motivation.

The following points reveal the complexities involved in understanding true motivation:

1. Individuals differ in their motives.

The viewpoint (called -monistic approach") that there is only one "economic drive"
which determines behavior is untenable. The goals to which individuals aspire differ and
so do their motives. This is well illustrated by an oft quoted story. There were three men
cutting stones near a cathedral about three- fourths completed. A stranger came along
and said to the first man, "My friend, what are you doing?" The first man replied, "Me,
what am I doing? I am working for 10 shillings a day." He went to the next man and put
to him the same question. The second man said, "Me, what am I doing? 1 am squaring
this stone, see.I have to make its edge absolutely straight." The stranger walked on to the
third man and repeated the same question. The third man replied. "Me, what am I doing?
You see that cathedral up there. I am helping to build that. Is not it great?" In this story
the major source of satisfaction to the first man was the wages he earned. The job itself
contributed very little. But job itself was the outstanding source of satisfaction to the
second man. The third man viewed the completion of his group goal—the building of
the cathedral—as his primary source of satisfaction. This means that there is no single
motive that determines how all workers will react to the same job and, therefore, there
can be no single strategy that will keep motivation and productivity high for everyone
everywhere. The manager has to deal with human diversity.

2. Sometimes the individual himself is unaware ofhis motive.

Freud uncovered this phenomenon while analyzing his critical patients. He found that in
many ways man is like an iceberg. Only a small part is conscious and visible, the rest is
beneath the surface. This below- the-surface concept is unconscious motive. The
presence of this explains why man cannot always verbalize his motive to attain certain
goals or even tell what his goals are. An example can be drawn from the famous
Hawthorne experiments. One girl-worker complained to her counselor about her
foreman.
Later on, it was found that the reason why she disliked her foreman was that she had a
step-father whom she feared and whose physical appearance was very much like her
foreman, with the result that she had unconsciously transferred to her foreman the
unfavorable characteristics of her step-father.

Savitha R, Asst. Prof, ECE, SKIT Page 29

Technological Innovation Management & Entrepreneurship
3. Motives change:
Hierarchy of motives of each individual called "structure" is not fixed. It changes from
time to time. An individual's primary motive today may not be primary tomorrow, even
though he may continue to behave in the same way. For example, a temporary worker
may produce more in the beginning to becomepermanent. When made permanent he may
continue to produce more—this time to gain promotion, and so on.

4. Motives are expressed differently:

The ways in which motives are eventually translated into actions also vary considerably
between one individual and another. One individual with a strong security motive may
play' it safe and avoid accepting responsibility for fear of failing and being fired.
Another individual with the same security motive may seek out responsibility for fear of
being fired for low performance. Even the same individual may express his motive
differently at different times. Thus, an employee who in the beginning works hard to get
promotion may, when frustrated, indulge in anti- management union activities for the
same purpose. Different expressions completely mislead a manager because he does not
know what the employee's true motivation is.

5. Motives are complex:

It is difficult to explain and predict the behavior of workers. The introduction of an
apparently favorable motivational device may not necessarily achieve the desired ends if
it brings opposing motives into play. In a factory, when blue-green lighting was
introduced to reduce eye strain, the output of men workers increased but that of women
workers decreased. On investigation it was found that the latter disliked the change in
lighting because they felt that the new type of lighting had made them look 'simply
ghastly'.

6. Multiple motives make the choice of goals difficultfor an individual

We have been referring to examples of motivations as if they exist one at a time. This is
hardly the case. The fact is that multiple motivations operate simultaneously to influence
an individual's behavior.
Furthermore, some of these motivations are incompatible with one another. This results
in the following three types of motivational conflicts which make the person's choice of
goal difficult:

a. Approach- approach conflict-where the person desires to do two things which

he likes equally well, but it is possible to do only one. For example, there is the
person who has the choice of either remaining at his present place of posting
with the present salary, or going to a new place with a hike in salary. In such
situations, two differentbehaviors are aroused in him who blocks eachother.

Savitha R, Asst. Prof, ECE, SKIT Page 30

Technological Innovation Management & Entrepreneurship

b. Avoidance-avoidance conflict-where the person is forced to choose between

two alternatives, both of which are considered equally undesirable by him. For
example, there is the person who, being dissatisfied with his present job, wants
to leave it but also wants to avoid unemployment.

c. Approach-avoidance conflict - where the person is attracted to the positive

characteristics of his choice, but wants to avoid its negative characteristics. For
example, a person may be motivated to work overtime for extra pay but may not
like to be scolded by his wife for reaching home late.

Motivation theories
There is no shortage of motivation theories. We canclassify them under three broad heads:
1. Content theories
2. Process theories
3. Reinforcement theory
The content theories tell us what motivates an individual. They throw light on the various
needs and incentives which cause behavior. The processtheories, on the other hand, answer the
question how behavior is caused. Reinforcement theory explains the ways in which behavior
is learned, shaped or modified.

Theories of Human Motivation

There are several theories of motivation based on different structures of human needs and
expectations. Some of them are

1. Maslow's Hierarchy of Needs Theory

2. Herzberg's Motivation - Hygiene Theory

Maslow's Hierarchy of needs theory

Abraham Maslow's Need-Hierarchy theory, published in 1943, is one of the most popular
theories of motivation. According to him, the behavior of an individual is determined by his
strongest need at a particular moment. Needs that are not satisfied influence his behavior. But the
needs once satisfied do not serve as a motivator.
According to Maslow, all human needs can be arranged in an order of priority. In other words,
human needs have a hierarchy and they have to be satisfied from the lowest level moving in the
ascending order.
Figure 4.2 Shows Maslow's hierarchy of needs as five ascending levels.

Savitha R, Asst. Prof, ECE, SKIT Page 31

 Technological Innovation Management & Entrepreneurship

1. Physiological Needs:
Includes food, shelter, clothing, water, sleep and other bodily needs. The physiological needs
are the basic needs in life. These are essential for everybody to remain alive. These needs
motivate the person to work and earnsufficient amount of money to fulfill them.
2. Safety Needs:
Includes security and protection from physical, emotional and economical harm. Once the
physiological needs are satisfied, the safety needs or security needs become predominant.
Physical safety may be protection from fire and accidents. Economical security may be in
terms of job security, health and insurance programme, retirement plan etc., Emotional needs
may be the necessity to be happy and be free from mental disturbances.
3. Social Needs:
Includes affection, belongingness, acceptance and friendship. Social needs come into the
picture when the primary needs are taken care. Since man is a social animal, he has to interact
with the society, and live with respect in society. He desires to love and be loved; accept others
and be accepted; show affection and be shown affection and so on. Social needs make his
work enjoyable.
4. Esteem Needs:
Includes self-respect, autonomy, status, recognition, responsibility, attention, achievement,
prestige, etc., Esteem needs represent an individual's concern for feeling important and be
respected by others. These needs are primarily satisfied by the individuals themselves.
However, the management may create a proper climate to help individuals to fulfill these
needs.
5. Self-Actualization Needs:
Includes Self-advancement, self-fulfillment, self- development, self-realization etc., Self-
actualization is the highest level need in Maslow's hierarchy. It is the desire to become what is
one is capable of becoming. It is the desire to realize one's own potential. In an organization, a
person attempting to satisfy these needs seeks challenging work and looks for opportunities for
personal growth.

Savitha R, Asst. Prof, ECE, SKIT Page 32

Technological Innovation Management & Entrepreneurship
According to Maslow, if a lower level need is satisfied, a higher level need emerges. This
goes on till the highest level needs are satisfied. This theory of human motivation by Maslow
has been a landmark is the field of Management. However, it has been also criticized on the
following grounds:
 Needs of every person may not follow Maslow'shierarchy.
 Most of the human needs are recurring and arenever satisfied fully indeed.
 Most of the needs co-exist and there is no suchhierarchy whatsoever.
 Boundaries between different levels of needs maybe hazy and overlapping.
 Although behavior depends on need, or the lack ofit, it may not be fully dependent.
 The concept of self-actualization is theoretical and academic. No person can ever know
his maximumor best potentials.

Herzberg's Motivation-Hygiene Theory or The two-factor 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 behavior in
different ways. He said that satisfaction or dissatisfaction in work arise from these two different
sets of factors. They were

1. Hygiene factors
2. Motivators.

1. 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 are necessary to sustain a reasonable
level of 'No dissatisfaction' among employees.

Savitha R, Asst. Prof, ECE, SKIT Page 33

Technological Innovation Management & Entrepreneurship
2. 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:
a. Challenging work
b. Responsibility
c. Recognition
d. Promotion opportunities
e. Achievement
f. Job content.
Herzberg said that these factors helped in increasing job satisfaction. However a decrease in
these factors would lead to satisfaction and not dissatisfaction. Motivators generally help
attaining higher output by the employees.
Herzberg's Theory in a nut shell can be:
1. Hygiene Factors: When absent - increase dissatisfaction. When present - prevent
dissatisfaction.

2. Motivators: When absent - prevent satisfaction. When present - increases satisfaction.

Criticisms of Herzberg's theory

a. People may not be accurate in reporting their satisfying or dissatisfying

experiences.
b. A factor that causes dissatisfaction is one personmay bring satisfaction to another.
c. People are biased and they tend to credit themselves for successful events while
blamingoutside events for their failures.
d. The theory does not measure the levels of satisfaction and dissatisfaction.
e. Over simplification

Savitha R, Asst. Prof, ECE, SKIT Page 34

Technological Innovation Management & Entrepreneurship
Comparison of Theories of Maslow and Herzberg

Both theories concentrate on the factors which motivate employee's behavior to achieve higher
output. Which Maslow formulated the theory in terms of needs, Herzberg in terms of goals?
While Maslow gave a hierarchy to his needs, Herzberg divided them into two groups but
without hierarchy. While Maslow said that all needs are motivators, Herzberg said only higher
order needs are motivators. Actually the first three ascending levels of needs according to
Maslow correspond to the Hygiene factors of Herzberg and the last two higher levels of needsof
Maslow correspond to Motivators as per Herzberg (fig 4.3)

Savitha R, Asst. Prof, ECE, SKIT Page 35

Technological Innovation Management & Entrepreneurship
Communication
Meaning
Communication has been variously defined by a number of writers.

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

two or more persons.

Allen Louise defines it as the sum of all the things one person does when he wants to create
understanding in the minds of another.

Simply stated, communication means the process of passing information and understanding
from one person to another. A proper understanding of information is one very important aspect
of communication. If the information is not understood by the receiver in the same meaning in
which its sender wants him to understand it, the purpose of communication is defeated. This
may result in confusion, chaos and organizational inefficiency, leading to non-fulfillment of
business goals.

In short, communication is not merely transmission of information from one person to another
but also correct interpretation and understanding of the information. It is not to get something
off the mind of the person transmitting it, but to get something into the mind and actions of the
person receiving it.

Importance of Communication

The importance of communication can be elaborated as under:

1. 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.
2. 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.
3. 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

Savitha R, Asst. Prof, ECE, SKIT Page 36

Technological Innovation Management & Entrepreneurship
and enables him to consider the pros and cons thoroughly before taking a decision.
4. 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. A good communication system
is the basis of all inter-dependent activities. It is the foundation of all group activity. It is only
through communication that people can attain a common view point and therefore co-operate
with each other to achieve organizational objectives. According to Hick, “When
communication stops, organized action comes to an end.
5. Communication improves relationships betweenemployees

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. Apart from work-related information, this results in a better
understanding among the employees which is what an organization exactly wants.
6. Communication improves morale and motivation

When manager listens carefully to employee’s grievances and take necessary action, it
improves morale and motivation of the workers. Without communication, it is impossible to
understand others and make them understand. Good communication helps in addressing
workers problems and therefore keeps their morale and motivation high.
7. Communication is key to managerial-efficiency

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:

1. Communication is needed in the recruitment process to persuade potential employees of the

merits of working for the enterprise. The recruits are told about the company's organization
structure, its policies and practices.

2. Communication is needed in the area of orientation to make people acquainted with peers,
superiors and with company's rules and regulations.

3. Communication is needed to enable employees to perform their functions effectively.

Employees need to know their job's relationship and importance to the overalloperation. This
knowledge makes it easy for them to identify with the organizational mission.

Savitha R, Asst. Prof, ECE, SKIT Page 37

Technological Innovation Management & Entrepreneurship
4. Communication is needed to acquaint the subordinates with the evaluation of their
contribution to enterprise activity. It is a matter of some motivational importance for the
subordinates to know from their superior how they stand and what the future may hold for
them. This appraisal, if intelligently carried out, boosts the subordinates morale and helps
them in building their career.

5. Communication is needed to teach employees about personal safety on the job. This is
essential to accidents, to lower compensation and legal costs and to decrease recruitment and
training tor replacements.

6. Communication is of vital importance in projecting the image of an enterprise in the society.

The amount of support which an enterprise receives from its social environment is affected
by the information which elite groups and the wider public have acquired about its goals,
activities and accomplishments. During the 1982 blowout at Bombay High, ONGC took care
to keep the country informed about the steps that were being taken to combat the crisis.
Contrast this with Union Carbide which did nothing to refurbish its image after the Bhopal
Gas leak.

7. Communication helps the manager in his decision process. There is a spate of varied
information produced in an enterprise. The manager must make a choice of useful and
essential information which should reach him. The important question before him is 'what do
I need to know?' It should be remembered that no two successive managers of the same plant
will give the same answer tothis question.

8. 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. This can be achieved only through communication. A good communication
system isthe basis of all interdependent activities which we find being carried out in different
departments of an organization. By providing information to each unit about the relevant
activities of others, a good system of communication makes the interdependence of each unit
acceptable to it. In the absence of communication, no unit would tolerate this
interdependence. This will make coordination difficult. In the words of March and Simon,
"The greater the efficiency of communication within the organization, the greater the
tolerance of a unit for interdependence."

9. Communication promotes cooperation and industrial peace. Most of the disputes in an

enterprise take place because of either lack of communication or improper communication.
Communication helps the management to tell the subordinates about the objectives of the
business and how they can help in achieving them. Similarly, communication helps the
subordinates in putting forth their grievances, suggestions, etc. before the management. Thus
communication helps in promoting mutual understanding, cooperation and goodwill between
the management and workers.

Savitha R, Asst. Prof, ECE, SKIT Page 38

Technological Innovation Management & Entrepreneurship
10. Communication increases managerial efficiency. It is said that the world of modem
management is the world of communication and the success of a manager in the performance
of his duties depends on his ability to communicate. Administrators in business and industry
reportedly spend between 75 and 95 per cent of their time communicating (either sending or
receiving messages). Naturally then, an effective system of communication is very essential
for the efficiency of a manager. Benjamin Balinsky has rightly remarked that, if there is any
shortcut to executive effectiveness, it is the mastery of the art of face to face communication.
In summary, it can be said that the purposes ofcommunication are:

• To provide the information and understanding necessary for group effort (i.e., the
skill to work).

• To provide the attitudes necessary for motivation, cooperation and job

satisfaction (i.e., the will to work).

Savitha R, Asst. Prof, ECE, SKIT Page 39

Technological Innovation Management & Entrepreneurship
Leadership
Meaning
Leadership is an important aspect of managing. Leadership is defined as "Influence, that is, the
art or process of influencing people so that they will strive willingly and enthusiastically
towards the achievement of group goals". (Koontz and Weihrich) In other words, people should
be encouraged to develop not only willingness to work but also willingness to work with zeal
and confidence.
"The will to do is triggered by leadership and lukewarm desires for achievements are
transformed into burning passion for successive accomplishment by the skilful use of
leadership" (George R Terry). "Leadership is the lifting of man's visions to higher sights, the
raising of man's performance to a higher standard, the building of man's personality be-yond its
normal limitation". (Peter Drucker) "Leadership is the ability to secure desirable actions from a
group of followers voluntarily without the use of coercion." (Alford and Beatty) "Leadership is
the ability to persuade others to seek defined objectives enthusiastically. It is the human factor
which binds a grouptogether and motivates it towards goals". (Keith Davis)

Trait is basically a character and early notions about leadership dealt with personal abilities. It
was believed that some people have leadership qualities by birth or god's gift. The traits that
associate with leadership are identified as: mental and physical energy, emotional stability,
knowledge of human relations, empathy, objectivity, personal motivation, communication skills,
teaching ability, social skills, technical competence, friendliness and affection, integrity and faith,
intelligence etc. This approach has several drawbacks: It failed to identify right traits required
for effective leadership. It is difficult to associate the traits with jobs to be carried out. A leader
who is successful in one area may be a failure in different area.

Since these are subjective, it is difficult to measure their effectiveness quantitatively. This
approach implies that leadership is in-built quality and no training can make a person leader.

Difference Between A Leader and A Manager

1. A person emerges as a leader. The question whether he will or will not emerge as leader
always depends on a number of situational factors. A manager, on the other hand, is
always put into his position by appointment.

2. A leader always has some personal power (i.e., ability to influence) that enables him to
lead. He may or may not have positional power (i.e., the right to command). A manager,
on the other hand, always has some positional power He may or may not have personal
power. If he has also personal power, then he will be that much more effective as a
manager.

Savitha R, Asst. Prof, ECE, SKIT Page 40

Technological Innovation Management & Entrepreneurship
3. A leader focuses on people and generally seeks those very objectives which are the
objectives of his followers. Thus there is mutuality of objectives between the leader and
his followers. A manager, on the other hand, focuses on systems and structures and seeks
those objectives which his subordinates do not regard as their own. Thus there is clash of
objectives.

4. A leader generally looks at the horizon and not just the bottom line. He is innovative,
challenges the status quo and believes in doing right things. A manager, on the other
hand, is generally bureaucratic, accepts the status quo and believes in doing things right,
according to the rules, to cope with complexity.

5. It should be noted that in today's changing business environment, notwithstanding the

above difference, even managers are in leadership roles. Therefore, in this chapter, the
terms 'leaders' and managers' are used interchangeably.

Characteristics of Leadership

Some important characteristics of leadership are as follows.

1. Leadership implies the existence of followers
We appraise the quality of a person's leadership in practice by studying his followers. We
ask: How many and what kind of followers does he have? How strong is their
commitment as a result of his leadership? How long will their commitment last? By
answering questions of this nature we get to know the quality of leadership. We must not,
however, forget that 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 him both upward
and downward.
2. Leadership involves a community of interestbetween the leader and his followers
In other words, the objectives of both the leader and his men are one and the same. If the
leader strives for one purpose and his team of workers for some other purpose, it is no
leadership. In the words of G.R. Terry, "Leadership is the activity of influencing people
to strive willingly for mutual objectives."
3. Leadership involves an unequal distribution ofauthority 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.

Savitha R, Asst. Prof, ECE, SKIT Page 41

Technological Innovation Management & Entrepreneurship
4. Leadership implies that leaders can influence theirfollowers or subordinates in
addition to being able togive their followers or subordinates legitimate directions
In other words, leaders not only tell their subordinates what to do by way of command
but also influence by their behavior and conduct. The use of command by leaders
succeeds only in bringing about a temporary behavioral change in the followers.
Permanent attitudinal change in followers comes through the use of influence only.

According to Hersey and Blanchard6 leadership of the first type though successful is not
effective. The second type of leadership is both successful and effective.

Behavioral approach
Several studies have been made did not agree as to which traits are leadership traits or their
relationship to actual instances of leadership. It is found that most of these so called traits are
really pattern of behavior. There are several theories based on leadership behavior and styles.
Some of them are:

1. Leadership based on the use of authority.

2. Liker’s four systems of managing.
3. The managerial grid
4. Leadership involving a variety of styles and levelof use of power and
influence.

Style based on authority: Based on how the authority is used, the leaders are styled into 3
groups.

1. The first is "autocratic leader" who commands and expects compliance, is dogmatic
and positive, and leads by the ability to withhold or give rewards and punishment.
2. The second is "democratic or participative leader" who consults with subordinates on
proposed actions and decisions and encourages participation from them. This type of
leaders include the person who does not take action without the concurrence of
subordinates and who makes decisions but consults with subordinates before doing so.
3. The third type is "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.

Savitha R, Asst. Prof, ECE, SKIT Page 42

Technological Innovation Management & Entrepreneurship
Figure below shows the flow of influence in the threesituations of leadership.

Savitha R, Asst. Prof, ECE, SKIT Page 43

Technological Innovation Management & Entrepreneurship
Co-ordination

Meaning

Some definitions of the term 'co-ordination' would be:

"Co-ordination refers to the orderly arrangement of individual and group efforts to ensure unity
of action in therealization of common goals." - Mooney and Reiley

"To co-ordinate means, to unite and correlate allactivities." - 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

"Co-ordination in an organization by a manager is similar to directing an Orchestra by the

conductor. Just like a conductor directs his musicians to produce harmony and melody in
music, a manager co-ordinates the activities of a group to achieve harmonious and united
actions". -IGNOU Manual

All the above definitions give a combined good meaningco-ordination. On the basis of these
definitions, we can state the basic features of co-ordination, which are as under:

 Co-ordination implies deliberate actions on the part of managers to bring about

harmony and unity of actions.
 Co-ordination applies to group efforts, and not to individual effort. It involves the
orderly arrangement ofgroup efforts.
 Co-ordination does not result in a one-shot action. It iscontinuous action.
 Co-ordination is all-pervasive. It has to happen along all verticals and horizontals of an
organization.
 Co-ordination is necessary not only within the organization but also of the organization
with the outsideenvironment.

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.

Savitha R, Asst. Prof, ECE, SKIT Page 44

Technological Innovation Management & Entrepreneurship
Vertical coordination is what exists within a department where the departmental head is called
upon to coordinate the activities of all those placed below him. On the other hand, horizontal
coordination takes place sideways. It exists between different departments such as production,
sales, purchasing, finance, personnel, etc.
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.

Importance of co-ordination
The importance of co-ordination can be understood though the following points:

1. Co-ordination increases efficiency

Co-ordination helps minimizing wastages, overlapping and duplication of work,
misuse of resources etc., and the thus increases efficiency and economy in the
organization. Co-ordination enables an organization to use all its resources in an
optimum way.
2. Co-ordination improves human relations
Co-ordination improves and maintains harmonious relationship between individuals
between individuals and the organization. With co-ordination, members begin to
work, understand and adjust with each, develop mutual trust and co-operation and
probably move closer to each other. All these help improve human relations.
3. Co-ordination resolves conflicts
Conflicts in organizations arise usually because of differences between
organizational goals and individual goals. An individual’s perception of an
organizational goal could be different to that of another, which again leads to
conflicts. Co- ordination is the only means by which such conflicts can be avoided.

4. Co-ordination makes all departments focustogether

Different departments in organizations such as production, R & D, finance,
marketing, accounts etc., have to jointly focus in order to achieve but results.
Without co-ordination, each department tends to look only at its needs and
necessities, without caring for other departments. Co-ordination is the only way of
m2king them look for common cause.
5. Co-ordination helps sharing of resources
In any organization, there is always a shortage of resources such as manpower,
Savitha R, Asst. Prof, ECE, SKIT Page 45
Technological Innovation Management & Entrepreneurship
finance, space, transportation etc. Co-ordination is the only way to ensure the best
distribution of resources among all individuals and departments of the organization.

6. Co-ordination retains and attracts talent

Good all-around co-ordination improves not only harmonious relationships but also
increases profit to an organization and to its employees. Naturally talented
youngsters are attracted to join such organizations. There are lists of best employers
in every country where people would love to work, and this does not necessarily
depend on pay packets alone. Co-ordination plays a great role if a company comes to
be known as a good employer.

Techniques of Co-ordination

A variety of techniques are used by managers to achieve co-ordination. The important ones
are:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Savitha R, Asst. Prof, ECE, SKIT Page 46

Technological Innovation Management & Entrepreneurship
6. 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. Some
companies have Open forums' where any question raised by any employee should be
answered by the appropriate man-in- charge. Such discussion forums and platforms
pave the way for better co-ordination throughout the organization.

7. Co-ordination by special coordinators

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.
8. 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.

Savitha R, Asst. Prof, ECE, SKIT Page 47

Technological Innovation Management & Entrepreneurship
CONTROLLING

Meaning
 Some definitions of the term 'Control' with respect to an organization are:

 "Control is checking current performance against pre- determined standards contained in

the plans, in order to ensure adequate progress and satisfactory performance". - E.F.L.
Brech

 "Control consists in verifying whether everything occurs in conformity with the plans,
instructions and principles established" - Henry Fayol "Control is the process of
regulating organizational activities so that actual performance conforms to expected
organizational standards and goals." - NewMan

From the above definitions, we can follow that controlling functions involves-
 developing appropriate standards
 Compare on-going performance against thosestandards.
 Take steps to ensure that corrective actions aretaken when necessary.

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. It is more about "prevention is better
than cure" than about "Crying over spilt milk"! It’s about `preventive maintenance' rather than
'breakdown maintenance'.

The general features of controlling functions are:

1. Controlling is a positive force.
2. Controlling is a dynamic and continuous process.
3. Controlling is goal-oriented.
4. Control is forward-looking
5. Control process is universal
6. Control is based on planning
7. Delegation is key to control.

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
4. to transmit corrective action to the operation

Savitha R, Asst. Prof, ECE, SKIT Page 48

Technological Innovation Management & Entrepreneurship
1. To Measure Progress

There is a close link between planning and controlling the organization’s operations. The
control process continually measures progress towards goals. As Fayol so clearly recognized
decades ago, "In an undertaking, control consists in verifying whether everything occurs in
conformity with the plan adopted, the instructions issued and principles established". As the
navigator continually takes readings to ascertain where he is relative to a planned course, so
does the manager take readings to see where his enterprise or department is on the charted and
predetermined course.

2. To Uncover Deviations

Once a business organization is set into motion towards its specific objectives, events occur
that tend to pull it "offtarget". Major events which tend to pull an organization "off target" are
as follows:
a. 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.

b. 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.
c. 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.
d. 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.
Savitha R, Asst. Prof, ECE, SKIT Page 49
Technological Innovation Management & Entrepreneurship
3. To Indicate Corrective Action

Controls are needed to indicate corrective actions. They may reveal, for example, that plans
need to be redrawn or goals need to be modified or 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. When the room temperature drops below a desired level, the control mechanism in the
transformation subsystem at once transmits this information (called "feed forward") and the
temperature begins to rise till it reaches the selected level. Control- related information flows in
most of our modern organizations also follow the above-mentioned thermostat operating principle.
They make available to the transformation subsystem at all times the information about operating
results in various forms, such as electronic impulses, written or spoken words, reports, [Link] serve
as the basic input for comparison with the standards and for automatic decision-making. The
transformation subsystem thus takes the shape of a closed loop as shown in Fig. 18.1. However,
the system is closed only in the short run. Human intervention is involved to adjust the system
periodically, according to a subjective impression of the environment. Thus, the overall system is
open, but we have closed loop control once the system is set.

Savitha R, Asst. Prof, ECE, SKIT Page 50

 Technological Innovation Management & Entrepreneurship
Benefits of Control

A well-developed control system

o increases productivity
o reduces defects and mistakes,
o helps meet deadlines,
o facilitates communication,
o improves safety,
o lowers cost, and
o Gives the workers control over their environment.

Essentials of Effective Control System

The essentials of an effective control system are as follows.

1. 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.

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 and leave little room for argument by the employees.
They avoid red tape and provide employees with direct access to any additional information
which they may need to perform their task.

Employees are not made to go up and down the hierarchy to get the information. When the
precise purposes, for which the control system exists, are not understood it is difficult, if not
impossible, to establish criteria for its evaluation and review.

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,

Savitha R, Asst. Prof, ECE, SKIT Page 51

 Technological Innovation Management & Entrepreneurship
as the volume of work goes up or down. A similar type of adjustment is in effect when the sales
quotas are tied to general business activity. In all such plans, the basis for shifting the control
standard is built right into the system.

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. Eighty years ago this was clearly understood by the men who
built Sears, Roebuck—the world's biggest retail store. In the early days of the mail-order
business, the money in incoming orders was not counted. The orders were weighed, unopened.
(These were, of course, the days when currency was still metallic.) Sears, Roebuck had run
enough tests to know what average weights correspond to overall amounts of money—and this
was sufficient control.

6. Prescriptive and Operational

A control system in order to be effective and adequate must not only detect deviations from
the standards but should also provide for solutions to the problems that cause deviations. 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 onaction than on information.

7. Acceptable to Organization Members

The system should be acceptable to organization members. When standards are set
unilaterally by upper level managers, there is a danger that employees will regard those
standards as unreasonable or unrealistic. They may then refuse to meet them. Status
differences between individuals also have to be recognized.

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. 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. That we can quantify something is no reason
for measuring it. The question is "Is this what a manager's attention should be focused on?"

Take steps to ensure that corrective actions are taken when necessary 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. It is more about -prevention is better than
cure" than about "Crying over spilt milk"! It’s about 'preventive maintenance' rather than
'breakdown maintenance'.

Savitha R, Asst. Prof, ECE, SKIT Page 52

Technological Innovation Management & Entrepreneurship
Steps in Controlling
The various steps that are involved in the process of controlling are as follows:
Step 1: Setting of standards

The first step in the control process is to establish standards. Standards are the targets
against which actual performance will be compared. Standards are nothing but criteria of
performance. They serve as benchmarks as they specify acceptable levels of performance.
Control standards are broadly divided into two types.
1. Quantitative standards: These are standards which can be quantified.
Eg: Production level, rejection level, labor-hours, speedof service, sales
volume, profit, expenses etc.
2. Qualitative standards: These are standards which cannot be quantified i.e.,they are
qualitative in nature.
Eg: Employee morale, brand image, company image, goodwill,
industrial relations etc.

Step 2: Measurement of actual performance

The second step in the control process is to measure actual performances of various
individuals, teams and departments in the background of established standards. 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.

To make any measurement process effective, the following three aspects have to keep in
mind:
1. Completion

The actual performance measurement has to be complete in all respects. In other words,
all aspects ofthe job should be measured and not just the ones thatare more evident.

2. Objective

Performances at work should be measured in an objective manner without fear, favorer

bias. Only then measurement can be effective.

3. Responsiveness

The management of any performance should support the belief that effort and
performance lead to improvement, both from the personal and organizational point of
view.

Savitha R, Asst. Prof, ECE, SKIT Page 53

Technological Innovation Management & Entrepreneurship
Step 3: Comparison of actual performance with standards

The third step in the control process is to compare the actual performances with established
standards and ascertaining the causes of deviation. The causes of deviation may be machine-
dependent, process- dependent, plan-dependent, manpower-dependent etc. Whatever may
the reason, deviation are thoroughly analyzed and properly presented. Statistical methods
are usually adopted to look at deviation from a broader perspective.
Step 4: Taking corrective measures

The final step in the control process consists of taking remedial actions so that deviation
may not occur again in future. Corrective steps are initiated so that any defects in the actual
performance may be rectified.

Corrective actions may include the following activities.

1. Change in methods, rules, procedures strategies etc.

2. Introduce training programs
3. Job redesign
4. Replacement of personnel
5. Re-establishing budgets and standards
6. Better compensation packages to employees
7. Changing machinery and processes
8. Identifying recurring bottle necks and avoiding them
9. Trying to understand the competition better.
10. Looking at raw material resources and suppliers.

********************

Savitha R, Asst. Prof, ECE, SKIT Page 54

Technological Innovation Management & Entrepreneurship Module-2