Question: Describe the participative theory of decision making and also brief the process of MBO?

Answer : Participative management also known as employee involvement or participative decision making that encourages the involvement of employees at all levels of an organization in the analysis of problems, development of strategies, and implementation of solutions. Employees are invited to share in the decision-making process of the firm by participating in activities such as setting goals, determining work schedules, and making suggestions. In traditional managerial techniques, decisions are taken at top level of management and these are intimated to lower levels for implementation. Other forms of participative management include increasing the responsibility of employees (job enrichment); forming self-managed teams, quality circles and soliciting survey feedback. Participative management involves more than allowing employees to take part in making decisions. It also involves management treating the ideas and suggestions of employees with consideration and respect. The most extensive form of participative management is direct employee ownership of a company.

Process / Steps
The four processes include: 1. Information sharing:It is concerned with keeping employees informed about the economic status of the company. 2. Training:It involves raising the skill levels of employees and offering development opportunities that allow them to apply new skills to make effective decisions regarding the organization as a whole. 3. Employee decision making:It can take many forms, from determining work schedules to deciding on budgets or processes. 4. Rewards:Employees should be tied to suggestions and ideas as well as performance.

Benefits
A participative management style offers various benefits at all levels of the organization. 1. Sense of Ownership:-

By creating a sense of ownership in the company, participative management instils a sense of pride and motivates employees to increase productivity in order to achieve their goals. 2. Helps in Motivating:Employees who participate in the decisions of the company feel like they are a part of a team with a common goal, and find their sense of self-esteem and creative fulfilment heightened. 3. Receptive to Change:Managers who use a participative style find that employees are more receptive to change than in situations in which they have no voice. Changes are implemented more effectively when employees have input and make contributions to decisions. Participation keeps employees informed of upcoming events so they will be aware of potential changes. The organization can then place itself in a proactive mode instead of a reactive one, as managers are able to quickly identify areas of concern and turn to employees for solutions. 4. Increases Skill Development:Participation helps employees gain a wider view of the organization. Through training, development opportunities, and information sharing, employees can acquire the conceptual skills needed to become effective managers or top executives. It also increases the commitment of employees to the organization and the decisions they make. 5. Creativity & Innovation:Creativity and innovation are two important benefits of participative management. By allowing a diverse group of employees to have input into decisions, the organization benefits from the synergy that comes from a wider choice of options. When all employees, instead of just managers or executives, are given the opportunity to participate, the chances are increased that a valid and unique idea will be suggested.

Requirements
A common misconception by managers is that participative management involves simply asking employees to participate or make suggestions. Effective programs involve more than just a

suggestion box. In order for participative management to work, several issues must be resolved and several requirements must be met. First, managers must be willing to relinquish some control to their workers; managers must feel secure in their position in order for participation to be successful. Often managers do not realize that employees' respect for them will increase instead of decrease when they implement a participative management style. The success of participative management depends on careful planning and a slow, phased approach. Long-term employees may resist changes, not believing they will last. In order for participation to be effective, managers must be genuine and honest in implementing the program. Before expecting employees to make valuable contributions, managers should provide them with the criteria that their input must meet. This will aid in discarding ideas or suggestions that cannot be implemented, are not feasible, or are too expensive. Managers should also give employees time to think about ideas or alternative decisions. Employees often do not do their most creative thinking on the spot. Another important element for implementing a successful participative management style is the visible integration of employees' suggestions into the final decision or implementation. Employees need to know that they have made a contribution. Offering employees a choice in the final decision is important because it increases their commitment, motivation, and job satisfaction. From the above discussion we get the following conclusion :Participative management is not a magic cure for all that ails an organization. Managers should carefully weigh the pros and the cons before implementing this style of management. Managers must realize that changes will not take effect overnight and will require consistency and patience before employees will begin to see that management is serious about employee involvement. Participative management is probably the most difficult style of management to practice. It is challenging not only for managers but for employees as well.