Professional Documents
Culture Documents
Unit - Iii Directing & Controlling Directing: Is Said To Be A Process in Which The Managers Instruct, Guide and Oversee The
Unit - Iii Directing & Controlling Directing: Is Said To Be A Process in Which The Managers Instruct, Guide and Oversee The
Unit - Iii Directing & Controlling Directing: Is Said To Be A Process in Which The Managers Instruct, Guide and Oversee The
Directing: is said to be a process in which the managers instruct, guide and oversee the
performance of the workers to achieve predetermined goals. Directing is said to be the heart of
management process. Planning, organizing, staffing has got no importance if direction function
does not take place.
Meaning:
Features/Nature of Coordination:
1. Group effort: Coordination integrates the efforts of individuals and departments to make them
work as a group. The group works to maximize group goals as well as organizational goals. It
ensures that individuals work as a group to promote their individual and organizational goals.
2. Unity of action: Every individual and department has his own perspective or way of achieving
the organizational goals. Coordination ensures unity of action amongst individual and
departmental activities. It ensures that activities of each individual, group and department are
headed towards the common goal. All activities should be performed within the framework of
policies, procedures etc.
3. Common goal: Each individual and department strives to maximize its goal. Maximization of
departmental goals at the cost of organizational goals can be harmful for the organisation.
Coordination maintains balance amongst individual, departmental and organizational goals. It
ensures that resources and tasks are assigned to individuals and departments in a manner that
working of one department promotes the working of other departments.
4. Continuous process: Coordination is not a one-time attempt to integrate the individual goals.
It is a continuous process that keeps going as long as the organisation survives.
5. Managerial responsibility: Co-ordination is the responsibility of every manager at every level
for every operative function (production, finance, personnel and sales). All managers
continuously coordinate the efforts of people of their respective departments.
6. Essence of management: Coordination is not a separate function of management. It is
required for every managerial function. Managers coordinate human and non-human resources,
internal and external organizational environment, while carrying out the managerial functions of
planning, organizing, staffing, directing and controlling. Coordination is, thus, the ‘essence of
management.’
7. Synthesis of efforts: Coordination integrates and synthesizes the efforts of people of all
departments at all levels towards common organizational goals. It also synthesizes the
organizational resources (physical, human and financial) to collectively contribute to
organizational goals.
8. Necessary obligation: Coordination is not something that managers may or may not strive for.
All managers (also non-managers) must direct their efforts towards a common goal, considering
this as their necessary obligation. It is an inevitable area of management.
Types of Coordination:
1. Internal and External Coordination: Coordination between the activities of departments and
people working within the organization is known as internal coordination. Coordination between
activities of the organization with units outside the organization (Government, customers,
suppliers, competitors etc.) is known as external coordination. Organizations are open system
which continuously interacts with the environment through the input-output conversion process.
They receive inputs from the environment, process them and give them back to the environment
in the form of outputs. This cycle is repeated after receiving feedback from the environment
about the acceptability of their products. This requires complete coordination between what
environment expects from the organization and what organization expects from the environment,
failing which, organizational survival can be in danger.
2. Vertical and Horizontal Coordination: Both these types of coordination are the forms of
internal coordination. Vertical coordination is achieved amongst activities of people working at
different levels. It coordinates the activities of top managers with those of middle and lower level
managers. It is “the linking of activities at the top of the organization with those at the middle
and lower levels in order to achieve organizational goals.” Vertical coordination can be achieved
through span of management, centralization, decentralization and delegation. Horizontal
coordination is achieved amongst activities of different departments working at the same level. It
is “the linking of activities across departments at similar levels. It links the activities of four
primary departments — production, finance, personnel and sales”. The need for horizontal
coordination arises when departments depend upon each other for information or products.
Principles of Coordination:
1. Unity of command: Unity of command means one boss for one subordinate. It will be difficult
to achieve coordination if one individual has to report to more than one boss. Unity of command
helps in coordinating the activities of individuals and departments.
2. Early beginning: It follows the principle of earlier the better. Managers should initiate efforts
to coordinate organizational activities right from the planning stage. If plans are implemented
without coordination in mind, it will become difficult to coordinate the organizational activities
at later stages.
3. Scalar chain: It refers to chain or link between top managers and lower managers. It is the
hierarchy of levels where information and instructions flow from top to bottom and suggestions
and complaints flow from bottom to top. This chain facilitates coordination as top managers pass
orders and instructions down the chain, necessary for subordinates to work efficiently.
4. Continuity: Coordination is a continuous process. It must be continuously carried out at all
levels in every department. It starts the moment an organisation comes into existence and
continues till the organisation exists. Coordination is not an option. It is the inevitable force that
binds organizational members and resources together and, thus, is the backbone of organizational
success.
5. Span of management: It refers to the number of subordinates that a manager can manage
effectively. It is important to place only as many subordinates under the direction of one manager
as can be effectively managed by him. It affects the manager’s ability to coordinate the activities
of subordinates working under him. Large number of subordinates under one manager can make
coordination difficult.
6. Direct contact: Direct or personal contact between managers and subordinates can achieve
better coordination than indirect or impersonal contact. Face-to-face interaction amongst people
of different levels or same level in different departments promotes understanding of information
and thoughts. This facilitates effective communication and mutual understanding and through it,
effective coordination.
7. Reciprocity: It refers to interdependence of activities. Production and sales department, for
example, are inter-dependent. The more one sells, the more one needs to produce. The more one
produces, the more one attempts to sell what is produced.
8. Dynamism: There are no fixed and rigid rules for coordination. Changes in organizational
environment necessitate changes in the techniques of coordination. It is, thus, a dynamic and not
a static concept.
Significance of coordination:
The need and importance of coordination can be judged from these points:
LEADERSHIP
A leader is someone who has the authority to tell a group of people what to do. In the simplest
sense, a leader is somebody whom people follow. A group with no leader is called leaderless. A
leader is one who gets others to take action towards a common goal. One job of a leader is to
govern the actions of followers.
Characteristics of a leader:
Flexible: Not everything goes as planned. Competitors change tactics, governments force
new regulations on business, strikes stop the flow of products, and, occasionally, natural
disasters occur. And at times like these, leaders have to be able to change course; that is,
first make sure their businesses will survive, and then find a new way to reach their goals.
Communicate: Some leaders are great orators, but speaking well isn’t all that’s required
of a leader. As we all know, there are lots of people who talk a great game but deliver
nothing. Leaders who communicate well are those who not only share their thoughts with
employees, but also let their strength and personal character show through in their
communication, and empower those who work for them by defining the company’s goal
and showing how to get there.
Courage and patience: Having the courage to stand alone, the tenacity to not succumb to
pressure, and the patience to keep fighting until you win the day–and sometimes being
able to do all three at the same time–is something you will have to develop if you want to
be a true and successful leader.
Humility and presence: Acting aloof, or above your employees, does not make a leader.
Leaders have to be able to talk and listen to their employees on all levels of the company.
At the same time, they must have the respect of their employees, the kind of respect that’s
earned by being honest, having integrity, and being tough but fair.
Responsible: A business owner has to realize that, as the saying goes, “A skunk stinks
from the head down,” and a business does too. This means when there is blame to be
accepted, the owner must be the first one to accept it. But it also means that when
accolades are appropriate, they should be spread out among the employees. And when
this happens, a leader is born.
Leadership qualities:
1. Be confident: More than half of human communication comes from non-verbal cues. Know
how to set the right tone as a leader by letting your confidence show. Confident leaders win over
their followers because everyone else wants to embody confidence too. Practice strong non-
verbal communication by standing tall, making eye contact and learning to control your
fidgeting.
2. Focus: Amazing leaders keep their eyes on the prize. They are very organized and plan well
ahead while still remaining spontaneous enough to handle unexpected challenges. Like a grand
master in a chess game, a leader thinks out each strategy and understands how each of his or her
actions will affect the rest of any given scenario. Don’t lose sight of your end game by
cultivating your ability to focus.
3. Be honest: Many people believe that successful business and political leaders are inherently
dishonest, but the strongest leaders treat others just as they expect to be treated. The truth is that
every single one of your followers looks to your own honesty and code of ethics to set his or her
own bar. Make sure each member of your team or household knows what your culture and core
expectations are, and show them how much you value honesty in your everyday interactions with
others.
4. Positivity: Leaders have abundant positivity that energizes everyone around them. Choose
positive beliefs that will propel you forward, not negative thinking that will weigh you down.
When you practice positive thinking it becomes your powerful cognitive habit and allows you to
reassure and motivate those around you.
5. Be decisive: Every single person in a leadership role of any kind has to make difficult
decisions. The ability to be decisive can mean the difference between getting through tough
times and folding under pressure. Making these kinds of calls doesn’t always make you will be
well-loved, but when you use good judgment to make decisions, it will earn you the respect of
others.
6. Inspire: One of the secrets to wild success is honing your leadership vision and
communicating it to others. Inspiration is what pushes people to plow through difficult times —
and to work on achieving their goals even when times are simple and undemanding. You define
yourself with your identity, or in business, your brand. Refocus and sharpen your identity often
so you will inspire those on your team.
Leadership style can be defined as the technique and approach of providing direction,
implementing plans, and method of motivating people. It is an acquired attribute that begins in
early childhood and may evolve over time. An effective leader is not just aware that there are
different leadership styles but also mixes and matches them to influence followers in a desired
manner to achieve desired results.
Example: This leadership style is usually employed by military commanders. North Korean
dictator Kim Jong-un exemplifies this leadership style.
Bureaucratic Leadership: Bureaucratic leaders work upon official rules fixed as duties by
higher authorities and go strictly by the book to apply rules for management and taking
decisions. Such leaders work rigorously to ensure that the procedures are being followed
precisely by those under them. This leadership style helps fortify operational policies and
work processes of the organization. A serious drawback of bureaucratic leadership is that it
has no scope for creativity and flexibility.
Example: This leadership style is mostly noticed in organizations where employees are
involved in high-risk routine tasks such as in a manufacturing plant. Bureaucratic leadership
is also employed at various levels in government agencies. In India, civil servants are a good
example of bureaucratic leaders.
Charismatic Leadership: Charismatic leaders create a self-image so powerful that people
are naturally drawn to them. Such leaders influence others by projecting the strengths of their
personality. They are energetic, full of passion and believe in motivating others to move
forward. Can be useful in boosting the organizations standing in the marketplace and in
raising the morale of the team members at organizations. One major drawback of charismatic
leaders is that they are more focused on themselves than their team. Can create the
impression that a project would fail or an organization would collapse if the leader abandons
the team.
Example: The Indian Prime Minister, Narendra Modi, is often regarded as one of India’s most
charismatic leaders. His party fought the Uttar Pradesh Assembly elections in 2017 under his tutelage
- highlighting his personal appeal to voters and recorded the greatest win for any party ever.
Laissez- Faire Leadership: Laissez- faire leadership is based on trust. The leader is
available to provide guidance and furnish the necessary resources only if the need arises. The
leaders delegate the responsibility to take decisions to group members. Allows people to
work at their own pace and provides maximum scope for innovation and flexibility. Most
effective with self- motivated employees. People who prefer supervision, careful monitoring,
and clear instructions are often not comfortable working under the laissez- faire leadership
style.
Example: Mahatma Gandhi was a laissez- faire leader. Gandhi believed that people should
lead by example and be the change that they wish to see in the world so that others can
follow.
Example: Carlos Ghosn, the chairman, and CEO of Renault believes that change in
the organization’s culture should not be forced by the top management but should come
from the bottom level. He believes in empowering employees to take decisions and is quite
reasonable when dealing with the subordinates.
Relationship- oriented Leadership: Such leadership is focused on skilled interaction with
people. Relationship oriented leaders inspire and motivate subordinates to achieve the
team’s or organization’s targets. Leaders assist subordinates in feeling positive about their
career prospects and in navigating career opportunities through the quality of their work.
They are approachable, friendly, understand the needs of the employees and try to fulfill
their expectations. People usually like working under such leadership and their productivity
is also higher, as these leaders make the people want to be a part of the team. Sometimes
relationship oriented leaders may get carried away and put too much emphasis on the
development of their team members than the project itself. These leaders are dependent on
the subordinates and seek their loyalty.
Servant Leadership: Servant leaders lead by example and work behind the stage. Servant
leadership is best suited for people who provide their services to non- governmental
charity organizations or community development programmes.
Positives Negatives
This type of leadership style
they are generous, have high integrity and work
is considered unfit for
hard to fulfill all the requirements of their team
competitive tournaments.
they also involve the whole team in the decision- servant leaders hesitate to
making process and give equal credits to all team take credits and recognition
members for goals that are successfully achieved for their work
servant leaders are said to have strong ethics and
values
Example: Mother Teresa is the perfect example of a servant leader. She invested her entire
life to the service of people and her motives behind her desire to help others are
unquestionable. She acquired mass- scale popularity over time, but she never strived to
achieve personal recognition.
Transformational Leadership: It is usually considered the best leadership style to be used
in business scenarios. They employ empathy and rapport to engage followers.
Positives Negatives
may lack managerial skills at the
these leaders not only expect the best from
practical level and require
their teams but also work hard to be the best
assistance from the staff.
at everything that they do
Example: Steve Jobs is widely regarded as an iconic transformational leader. He worked hard
and always challenged his employees to think bigger and better and inspired them to create
extraordinarily successful products.
Example: Lenin, the Russian political leader and ideological figurehead behind Marxism-
Leninism is viewed by supporters as a task- oriented leader who championed socialism and
the working class.
Example: Bill Gates is a transactional leader who aims at inspiring positive changes in his
followers. He is dedicated to his work, has a remarkable business vision. He expects the best
from his subordinates and incorporates the reward- punishment motivation strategy.
Cross Cultural Leadership involves leader that have knowledge of not only the leadership
skills required in such cases but are also aware of the cultural differences of different countries.
Cross Cultural Leadership style is more complex and trying since leadership has to prove equally
effective as the traditional or face to face leadership style. Cross cultural is very close to E-
leadership as in both cases help of technology is needed where the presence of leader cannot be
insured physically. Each Leadership style comes with its own share of advantages so is the case
with Cross Cultural Leadership style.
Advantages of Cross Cultural Leadership
1.Cross Cultural Leadership opens up the avenues to understand and work with people from
different cultures, this can help in enhancing the knowledge of the leader at various
levels.
2.Staff members working in different cultures can come up with effective ideas and strategies
that might be existing in their culture and if incorporated can result in tremendous success
in Cross Cultural Leadership style of management.
3.Cross Cultural Leadership also helps to shake the leaders out from their comfort zones and
predictable style of leadership. Effective leaders always want to add to their learning
curves and highly appreciate these challenges which allow them to try and implement
new strategies and enhance their planning skills.
4.Challenges in the Cross Cultural Leadership maintain the newness in the job and every day
planning and making a diverse team work towards a common goal keeps not only the
team members motivated but also the leader to deliver the best.
5.Cross Cultural Leadership also helps in optimum utilization of the leadership team and
their skills which proves crucial especially in the companies that find it difficult to find
skilled staff to fulfill the requirements of the company or the organization.
6.Cross Cultural Leadership not only utilizes the leadership skills of the leader but also
personal skills that can be used to create a bond with team members or connect with them
so that they share their ideas with the leader fearlessly.
CONTROLLING
Controlling consists of verifying whether everything occurs in conformities with the plans
adopted, instructions issued and principles established. Controlling ensures that there is effective
and efficient utilization of organizational resources so as to achieve the planned goals.
Controlling measures the deviation of actual performance from the standard performance,
discovers the causes of such deviations and helps in taking corrective actions
Nature of Controlling:
1. Control is a Function of Management: Actually control is a follow-up action to the other
functions of management performed by managers to control the activities assigned to them in the
organization.
2. Control is Based on Planning: Control is designed to evaluate actual performance against
predetermined standards set-up in the organization. Plans serve as the standards of desired
performance. Planning sets the course in the organization and control ensures action according to
the chosen course of action in the organization.
3. Control is a Dynamic Process: It involves continuous review of standards of performance
and results in corrective action, which may lead to changes in other functions of management.
4. Information is the Guide to Control: Control depends upon the information regarding actual
performance. Accurate and timely availability of feedback is essential for effective control
action. An efficient system of reporting is required for a sound control system. This requires
continuing monitoring and review of operations.
5. The Essence of Control is Action: The performance of control is achieved only when
corrective action is taken on the basis of feedback information. It is only action, which adjust
performance to predetermined standards whenever deviations occur. Good system of control
facilities timely action so that there is minimum waste of time and energy.
6. It is a Continuous Activity: Control is not a one-step process but a continuous process. It
involves constant revision and analysis of standards resulting from the deviations between actual
and planned performance.
7. Delegation is the key to Control: An executive can take corrective action only when he has
been delegated necessary authority for it. A person has authority to control these functions for
which he is directly accountable. Moreover, control becomes necessary when authority is
delegated because the delegator remains responsible for the duty. Control standards help a
manger expand his span of management.
8. Control Aims at Future: Control involves the comparison between actual and standards. So
the corrective action is designed to improve performance in future.
9. Control is a Universal Function of Management: Control is a basic or primary function of
management. Every manager has to exercise control over the subordinates’ performance, no
manager can get things done without the process of controlling. Once a plan becomes
operational, follow-up action is required to measure progress, to uncover deficiencies and to take
corrective actions.
Importance of controlling:
CONTROLLING PROCESS
1. Establishment of standards- Standards are the plans or the targets which have to be
achieved in the course of business function. They can also be called as the criterions for
judging the performance. Standards generally are classified into two-
a. Measurable or tangible - Those standards which can be measured and expressed
are called as measurable standards. They can be in form of cost, output,
expenditure, time, profit, etc.
b. Non-measurable or intangible- There are standards which cannot be measured
monetarily. For example- performance of a manager, deviation of workers, their
attitudes towards a concern. These are called as intangible standards.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly
reports.
3. Comparison of actual and standard performance- Comparison of actual performance with
the planned targets is very important. Deviation can be defined as the gap between actual
performance and the planned targets. The manager has to find out two things here- extent of
deviation and cause of deviation. Extent of deviation means that the manager has to find out
whether the deviation is positive or negative or whether the actual performance is in
conformity with the planned performance. The managers have to exercise control by
exception. He has to find out those deviations which are critical and important for business.
Minor deviations have to be ignored. Major deviations like replacement of machinery,
appointment of workers, quality of raw material, rate of profits, etc. should be looked upon
consciously. Therefore it is said, “ If a manager controls everything, he ends up controlling
nothing.” For example, if stationery charges increase by a minor 5 to 10%, it can be called as
a minor deviation. On the other hand, if monthly production decreases continuously, it is
called as major deviation.
Once the deviation is identified, a manager has to think about various cause which has led to
deviation. The causes can be-
Erroneous planning,
Co-ordination loosens,
Implementation of plans is defective, and
Supervision and communication is ineffective, etc.
4. Taking remedial actions- Once the causes and extent of deviations are known, the manager
has to detect those errors and take remedial measures for it. There are two alternatives here-
Internal Controls are to be an integral part of any organization's financial and business
policies and procedures. Internal controls consists of all the measures taken by the organization
for the purpose of; (1) protecting its resources against waste, fraud, and inefficiency; (2) ensuring
accuracy and reliability in accounting and operating data; (3) securing compliance with the
policies of the organization; and (4) evaluating the level of performance in all organizational
units of the organization. Internal controls are simply good business practices.
a. Personal Observation: This is the most traditional technique of control. It helps a manager to
collect first hand information about the performance of the employees. It also creates
psychological pressure on the employees to improve their performance as they are aware that
they are being observed personally by the manager. However, this technique is not to be
effectively used in all kinds of jobs as it is very time consuming.
b. Statistical Reports: Statistical analysis in the form of percentages, ratios, averages etc. in
different areas provides useful information regarding performance of an organization to its
managers. When such information is presented in the form of tables, graphs, charts etc., it
facilitates comparison of performance with the standards laid and with previous years’
performance.
c. Breakeven Analysis: The technique used by managers to study the relationship between sales
volume, costs and profit is known as Breakeven Analysis. This technique helps the managers in
estimating profits at different levels of activities. The following figure shows breakeven chart of
a firm. The point at which the total revenue and total cost curves intersect is breakeven point.
The figure shows that the firm will have the breakeven point at 60,000 units of output. At this
point, there is neither profit nor loss. The firm starts earning profit beyond this point.
d. Budgetary Control: Under this technique, different budgets are prepared for different
operations in an organisation in advance. These budgets act as standards for comparing them
with actual performance and taking necessary actions for attaining organizational goals. A
budget can be defined as a quantitative statement of expected result, prepared for a future period
of time. The budget should be flexible so that necessary changes, if need be, can be easily made
later according to the requirements of the prevailing environment.
2. MODERN TECHNIQUES:
Modem techniques are those techniques which are very new in management world. These
techniques provide various new aspects for controlling the activities of an organization.
(a) Return on Investment: Return on investment is very useful technique for determining
whether the capital invested in the business has been effectively used or not for generating
reasonable amount of return. Return on Investment= (Net Income / Total Investment) X 100 Net
Income before or after tax can be used for calculating ROI. Total investment includes investment
in fixed Assets as well as working capital.
(b) Ratio Analysis: Ratio Analysis is a technique of analyzing the financial statements of a
business firm by computing different ratios.
The most commonly used ratios have been grouped under following categories:
(i) Liquidity Ratios: Liquidity ratios are calculated to know short term financial position
of business and its ability to pay short term liabilities. It includes current ratio and quick
ratio.
Profitability ratios like gross profit ratio, net profit ratio, operating ratio, etc. help to
analyze the profitability position of a business.
The various turnover ratios like Inventory turnover ratio, debtors turnover ratio, fixed
assets turnover ratio etc. help in knowing whether the resources are effectively used for
increasing the efficiency of operations of business or not. Higher turnover indicates better
utilization of resources.
(c) Responsibility Accounting: Under this system of accounting, various sections, departments
or divisions of an organisation are set up as ‘ Responsibility Centers’. Each centre has a head
who is responsible for attaining the target of his centre. Cost Centre, Revenue Centre, Profit
Centre, Investment Centre
(d) Management Audit: Management Audit is a process of judging the overall performance of
the management of an organisation. It aims at reviewing the efficiency and effectiveness of
management and improving its future performance. Its basic purpose is to identify the
deficiencies in the performance of management functions. It also ensures updating of existing
managerial policies.
(e) PERT and CPM: PERT (Programme Evaluation and Review Technique) and CPM (Critical
Path Method) are two important techniques used in both planning and controlling. These
techniques are used to compute the total expected time needed to complete a project & it can
identify the bottleneck activities that have a critical effect on the project completion date. Such
techniques are mainly used in areas like construction projects, aircraft manufacture, ship building
etc.