INDEX

 Various definitions of Management

 Importance of Management in modern business organization
 Different levels of Management
 Nature and Characteristics of Management
 Main elements of Scientific Management
 Various techniques of Scientific Management
 Basic Philosophy of Scientific Management
 System Approach to Management
 Administrative theory of Management
 Principles of Management
 Nature of Management Principles
 Characteristics of Management Principles
 Human relations approach to Management
 Behavioural approach to Management
 Human relations & Behavioural approaches
 Management science approache to Management
 Evolution of Management
 Production Management
 Nature & Importance of Production Management
 Advantages of Production Planning & Control
 Basic Functions of Marketing
 Stages or Steps in Marketing Research Process
 Management by Objectives
 Benefits of Management by Objectives
 Limitation of Management by Objectives
 Steps for improving the prospects of Management by Objectives
 Decision Making
 Different Theories of Decision Making
 Policy
 Characteristics of Policy
 Classification of Policies
 Process of policy formulation
 Leadership
 Various theories of leadership
 Different styles of leadership
 Planning
 Various Steps of Planning
 Various elements of good planning
 Environment
 Internal Environment
 Span of Management

1
 Modern view of Span of Management
 Control
 Characteristics of control
 Importance of control
 Effective control system
 Motivation
 Characteristics Or Features of Motivation
 Maslow’s theory of motivation
 Salient features of Maslow’s Needs Model
 Communication and its elements
 Objectives of Communication
 Advantages and Disadvantages of Communication
 Various types of Communication
 Group
 Group Cohesiveness
 Organisation
 Importance of Organisation
 Organisation Charts
 Decentralization of Authority
 Staffing
 Importance of Staffing
 Principles of Staffing
 Selection Process
 Types of Interviews

`
2
Various definitions of Management
Q.1. Describe the various definitions of Management? Definition of Management
It is very difficult to give a precise definition of the term management. Different management authors have viewed management
from their own angles moreover, during the evolutionary process of management different thinkers laid emphasis on different
expects. For example, F.W. Taylor emphasized engineering aspects, Elton Mayo laid emphasis on human relations aspects, E.F.L,
Brech, George R. Terry emphasis on, decision making aspect, Ralph Davis stresses leadership aspect and some other like Barry
Richman etc. emphasized integration or coordination aspect.
Some Important Definition of Management
1. Harold Koontz
Management is the art of getting things done through and with people in formally organized groups.
2. George R. Terry
Management is a disconnect process consisting of planning organizing activating and controlling performed to determine and
accomplish the objectives by the use of people and resources.
3. Donald J. Cough
Management is the art and science of decision making and leadership.
4. Mary Cushing Nile
Good Management, or scientific management, achieves a social objective with the best use of human and material energy and time,
and with satisfaction for the participants and the public.
5. Henry Fayol
To manage is to forecast, to plan, to organize, to command, to coordinate, and to control.
6. Theo Haimann and William Scott
Management is a social and technical process which utilizes, resources, influences, human action and facilitates changes in order to
accomplish organizatinal goals.
Thus, the above definitions bring out that

 Management us a social and technical process

 It consists of planning, organizing staffing, leading decision making coordinating and controlling.
 It is concerned with getting done i.e. accomplished pre-determined objective by the use of people and resources.
 It helps in the creation, direction, maintenance and operation of organization.
 It secures maximum benefits for the employer, the employees, and the community.
Management
Management simply means a specific process of planning, organizing, staffing directing and controlling the efforts of the people
who are engaged in activities in business organization in order to attain predetermined objective of such organizations.

Importance of Management in modern business organization

Q.2. What is Management? Discuss the importance of Management in modern business organization. OR
“Management is the art of setting things done through and with the people in formally organized groups”
Explain this statement.

Introduction
Modern age is an era of management resolution. There was a time when economic development depended mainly on scientific and
mechanical inventions. However, in the modern world good management is necessary for efficient and effective working of
organization, along with technological advancements.
Meaning of Management
Management is a wide term carrying several meanings, depending in the context in which it is used. Usually, the term management
assumes three meanings, when it is used in three different senses as follows:
1. Management as a Noun
When used as a noun, management refers to managerial personnel, i.e. all those persons are concerned with getting things alone,
through other people. Such persons are charged with some responsibility and are given some authority – responsibility of executing
the policies and programmes of an organization, and authority in order to discharge their responsibilities. In this sense,
management include the Board of Directions, Chairman and Managing Director, Functional Directors like Marketing Director and
Finance Director, General Managers, and First Line Supervisors. The task of such business management is executory and
supervisory in nature.
2. Management as a Process
When used as a process, management refers to what the management body or management committee or management council or
managers do, or what a manager does. In other words, in this sense, management means the set of functions performed by the
managers. These managerial functions broadly include – Planning organizing staffing, directing and controlling. Such functions are
performed in order to get things done, through and with other people in an effective and efficient manner. This is why that

3
management has been said to be the ordering and coordinating of functions and of the men fulfilling these functions in order to
achieve a given purpose. Henry L. Sisk has also said.
Management is the coordination of all resources through the process of planning, organizing, directing and controlling in order
to attain stated objectives.
3. Management as a Discipline (i.e. Subject)
When used in the sense of a discipline or subject, it refers to a branch or body of knowledge and practice is other words, here
management means the set of principles, concepts theories and practices as a subject of study for those who intend to be good
managers in various areas. Here, the management also denotes a code of conduct for managers and does prescribe the techniques
and methods of managing things.
It may be noted that management has also been analyses as an economic resource, a factor of production, a system of authority, a
technique of leadership and a means of coordination or decision making.
Simply stated management means getting things done through and with the individuals and groups by effective and efficient use of
available resources.

Different levels of Management

Q.3. What are the different levels of management? Also describe the functions of managers at different
levels. Levels of Management
A level of management means the positions of managers in the organizational hierarchy. The number of level is question, which is
related to several important elements, such as costs, status, working styles, etc. It depends on such factors as organization’s size,
technology and degree of diversity in its work activities.
Three levels have been generally recognized in organizational hierarchy as follows:
1. Top Management
It includes the top managers or management committees, such as board of directors, management council, chairman, general
managers etc.
2. Middle Management
It includes departmental heads and sectional heads, which are below top managers, out above lower managers.
3. Supervisory Management
It is also known as lower management and includes managers, such as foreman, salesman, assistants, head clerk and supervisors.
Functions of Managers at Different Levels
At different levels in the management hierarchy, the managers perform different functions as follows.
1. Top Management
Top managers functions relate mainly to designing of plans, policies and organization structure. They deal with environmental
process and provide leadership to the organization.
2. Middle Management
In many cases the job of the middle manager is that of intermediary between top management and supervisory or operating
management. They coordinate inputs production and outputs. They are responsible for executing the plans and policies framed by
the top managers.
3. Supervisory Management
At this level, managers get down to the most specific and detailed aspects of the organizational task. They are responsible for getting
the technical guidance, help and solve the obstacles, doubts and inconveniences of the workers and remove their dissatisfaction.
They make recommendations for providing proper working conditions etc.
Managerial Skills and Levels of Management
These are four types of managerial skills, which are required in different degrees of importance at various managerial levels as
follows:
1. Technical Skill
It is the ability to use tools, procedures or techniques of a specialized field. It is relatively more important and required at
supervisory level then its importance goes on reducing at middle and top levels. For example, a supervisor must have full knowledge
as to how the plastic molding machine works. However, the President of a company does not need to know much of the technical
details of drilling for oil or how to refine the oil.
2. Human Skill
It is the ability to work with understand and motivate other people. This skill is essential at every level of management because all
managers whether at high or at low level have to deal with their subordinates.
3. Conceptual Unit
It is the mental ability to coordinate the organization’s interests and activities and to see the organization in its enlarged form as one
whole system. This type of skill is primarily required at the top level and then at the middle and lower levels, its importance keeps
on diminishing.
4. Design of Problem Solving Skill
It is the ability to see a problem and then also to workout a solution to it. This skill is required at all levels because every manager
without reference to this level makes decision strategic, or routine ones. However, its significance lies more at higher levels.

4
Nature and Characteristics of Management
Q.4. Discuss the nature and characteristics of management. Is management a science, an art or a
production? Nature or Characteristics of Management
Management has a dynamic nature. It means that management is an organizing and unceasing element or concept. Management
does not occur by rigid formula or fixed pattern. It is ever-present reality of organizational life. Management does not carry out the
work himself, but the managers get the work done through other people by pioneering, leading, motivating and controlling their
activities, efforts and behaviour. The following important characteristics of features of management clearly indicate toward its
nature.
1. Management is a Complex and Continuous Social Process
Management deals with human phenomenon about which too little is known. The structure and behaviour of groups of people are
very complex. It is a process because its comprises a series of actions that lead to achievement of objectives. It is a social process
because these actions are primarily concerned with relations between people. It is a continuous process because new problems crop
up as the old ones are solved.
2. Management is an Independent Skill
Management has emerged as an essential, a distinct and a leading independent institution, which is a central event in the social
history. It is a new basic and dominant institution or social group.
3. Management is a Science
Science is a systemized knowledge about a phenomenon ascertained by observation and experiment. It means that under science,
general truths are discovered and critically tested, and then underlying principles are established. As science, management has
developed and provides a body of principles, theories, laws, techniques and practices, which are capable of universal application. It
has developed certain generalizations, which are applicable to any group activity.
Management is growing as science due to the following reasons:
(a) Quantitative Tools under the name and style of Operations Research have been introduced in the field of managerial
decision-making.
(b) Researches have been conducted which have provided better insight into the nature and behaviour of man.
(c) Certain Principles theories and practices have been identified to the name and style of International Management or
Contemporary Management or Global Management.
(d) Different Case Studies undertaken in various countries unfold the correct and the same results. Thus, the degree of
predictability is being properly identified and ascertained.
4. Management is an Art
Art is the answer to the query how it tells about the way to accomplish the desired results. It is behavioral knowledge. Art is the
applied science i.e. application of knowledge for the solution of organizational problems. The meaning of art is the bringing about of
a desired result through the application of skill. Management, in this sense is an art. It provides to the enterprise the ability to
compromise with the least of undesired consequences – which is the essence of art. Management leads, motivates and influences
the people to be on the right, desired track by effecting various kinds of adjustments and how compromises through artful handling
of conflicts and dissentions. It tells as to how to solve various problems in the field of production marketing, finances, personal
technology, research and development, human resource development, competition etc.
5. Management is a System of Authority
Management is the system of authority which is represented by vertical and horizontal dispersal of authority positions resulting in
what is properly known as management hierarchy or chain of command. Under the authority system well defined lines of command
and delegation of suitable positional powers along with specified responsibilities at all levels, are established. System of authority
creates discipline and order and avoids chaos.
6. Management is Universal
Managers perform the same functions regardless of their place in the organization, structure of the type of enterprise in which they
are engaged. Acting in their managerial capacity, presidents / chairmen, directors, department heads, supervisors/foremen, college
principles, bishops and heads of governmental agencies all do the same thing i.e. perform the same functions. They are all engaged
in setting things done through and with people. As managers each must at one time or another perform all the duties.
Characteristics of managers irrespective of their level in the organization or their place or ratio of working, this is the principle of
universality of managerial functions or management.
7. Managerial knowledge and experience are transferable
By implication of the principle of universality of management, managerial knowledge and experience are transferable from
department to department, from enterprise to enterprise, and from nation to nation. Executives can employ their skill as well in one
occupation as in another, to the extent that their tasks are managerial and not technical, and with the proper motivation and
orientation to environment of managing.
8. Management is a Profession
Profession is defined in many ways. Any occupation by which a person earns livelihood is called profession. It is also in restricted
sense, and then it includes certain specified occupation only. All occupations are not included in professions. Thus, clear definition
of profession is not possible.
9. Management is an Integrating Force
Management is a force that is well recognized the integrating human and physical resources through its proper direction, designing
of organization structure, job positions, delegation and decentralization of authority and responsibility, consultative and
participative processes and influencing. It establishes congruence (i.e., balance) between organizational interests and goals on one
5
hand and the individual interest and goals on the other hand.
10. Management is Intangible
Managements intangible in that

 The process of management cannot be seen, and

 The principles, theories, techniques, concepts and practices of management are also invisible. Management is said to be
good or bad on the basis of results. However, when management is referred to manageerial personnel, it can be seen.
11. Management Utilities Multi-Disciplinary Approach
Management relies for its vast body of knowledge on various other fields, such as economics, anthropology, sociology, psychology,
mathematics, engineering etc.

Main elements of Scientific Management

Q.1. What is Scientific Management? Discuss the main elements of Scientific Management. OR
Discuss the contribution of Frederick W. Taylor to the theory of Management.
Definition of Scientific Management
Frederick Taylor
Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way.
Kimball and Kimball
An attitude that aims to replace (I think with I know). It points out the method of intelligently directing the construction and
arrangement of factory buildings, the character of methods and processes, the organizations of departments, the elimination of
wastes and increase of efficiency in all phases of industrial administration where experience and date are applicable.
Peter F. Drucker
The operational study of work, the analysis of work into its simplest elements and the systematic improvement of worker’s
performance of each element.
In a nutshell, scientific management represents a body of knowledge that is concerned primarily with the discovery of casual
relationships (i.e. cause and effect relationships) i.e. cause and effect relationship between the efforts expended for a given objective,
and the results of these efforts, with special emphasis on the discovery of the best method in the light of the available man-power,
materials, and technology.
Frederick W. Taylor
Taylor started his career as an apprentice (labourer) in a small machine shop in Philadelphia in 1876. Owing to his sincerity of
purpose and devotion to duty, he joined the Midvale Steel Works in 1878 as a machinist and then became a foreman and later rose
to the position of the chief engineer. He wrote five books and four papers Shop Management is his important book. In the later part
of his career, he worked as management consultant of a steel company.
Principles of Scientific Management
Taylor’s concept of scientific management consisted especially of a scientific approach to management. Its primary objective was to
replace methods based on trail and error and rule of thumb (i.e., practical sense and experience rather than exact rules or
calculations). The principles of scientific management may be listed as follows.
1. Development of a true science for each element of a man’s job to replace the old rule of thumb method.
2. The scientific selection, education, training and development of workers for every job.
3. An almost equal distribution or work and responsibility between management and workmen, management entrusted with the
planning of work and workmen to look after the execution of plans.
4. Intimate, friendly cooperation between management and workers to ensure that work is done in accordance with the principles of
the science which have been developed in accordance with the planned jobs and tasks.
The aims of concepts of scientific management may be summed up as follows:

 Science, not rule of thumb (i.e., not methods based no practical sense and experience rather than exact rulers or
calculations).
 Harmony, not discord.
 Cooperation, not individualism.
 Maximum output in place of restricted output.
 Development of each individual to his greatest efficiency and prosperity.

Various techniques of Scientific Management

Q.2. Describe the various techniques or elements of scientific management? Techniques or Elements of Scientific
Management
In addition to the above principles and concepts. Taylor developed several techniques or elements, which provide the mechanism
for implementing his principles. Some important of these techniques or elements may be listed as follows:
1. Time Study
Time study or work measurement is designed to establish the standard time required to carry out a job under specified conditions.

6
It involves analysis of a job into its constituent elements and recording the time in performing each element. Taylor suggested the
use of time study to lay down a fair day’s work so as to avoid guesswork and uncertainty in the effort and productivity expected of
each worker.
2. Motion Study
It is systematic and critical study of the movements of both the worker and the machine so as to identify and eliminate unnecessary
and wasteful movements, and decide on the best way of doing the job.
3. Standardization and Simplification
Under scientific management the third element of technique is to lay down the predetermined standards regarding the task,
materials, equipments, method, time, quality and cost and working conditions standardization helps to simply work, ensure
interchangeability to parts to ensure uniformity of operations and facilitate comparisons of efficiency.
4. Scientific Task Planning
It is the technique of forecasting and designing ahead or in advance every step in a long series of separate operations. Each step is to
be taken in the right place of the right degree and at the right time. Each operation is to be performed at the optimum efficiency.
Scientific task planning provides answer to the questions like what work is to be done, how is to be done, where it is to be done and
when it is to be done. More efficient routing systems and works scheduling were developed for effective planning of work.
5. Functional Foremanship
According to Taylor one supervisor cannot be an expert in all aspects of work supervision. He suggested the system of functional
foremanship in which eight supervisors supervise a worker’s job. Four of them i.e., route clerk, instruction card clerk, time and cost
clerk and shop disciplinarian, are concerned with the planning of work in the factory office. And the other four, i.e., gang boss, speed
boss, repair boss and inspector are involved in the execution of work at the shop flour.
6. Incentive, Wage Plan with Differential Piece Rate System
Taylor emphasized the need for scientific determination of remuneration for workers. For this purpose, he suggested that a direct
link should be created between remuneration and productivity for motivating workers. In this connection, he developed the
differential piece rate system of wage payment. Under this system, two piece rates are laid down – one, low rate for those who fail to
achieve the standard output and the second higher rate for those who achieve or exceed the standard output.
7. Adoption of Exception Principle
Taylor recommended adoption of exception principles which means that the management reports should be condensed into
comparative summaries giving in detail only the exception to the past standards or average – both the especially good and the
especially had exceptions

Basic Philosophy of Scientific Management

Q.3. Describe the basic philosophy of scientific management? Basic Philosophy of Scientific Management –
Mental Revolution
Taylor testifies that in order for the principles of scientific management to succeed, a complete mental revolution on the part of the
management and workers was required.
The basic philosophy of Taylor’s scientific management lies in the need for a fundamental change of attitudes on the part of both
managers themselves as partners in the joint endeavor rather than adversaries. Rather than quarrel over profits, they should try to
increase production. He believed that the management and labour had a common interest in increasing productivity – which he
called mutuality of interest.
Taylor pleaded for double mental revolution. He writes that in its essence, scientific management involves a complete mental
revolution on the part of the workingmen engaged in any particular establishment or industry. Such a revolution should be brought
about concerning their duties towards their work, toward their fellowmen and toward their employers.
He pleaded for equal mental revolution on the part of management – the owner of the business and the board of directors. Such a
revolution should be brought about concerning their duties toward their fellow workers in the management toward their workmen
and toward all of their daily probelems.
Taylor believes that without this complete mental revolution on both sides scientific management does not exist. Scientific
management exist when the management cares for the interest and goals of the workers and on the other hand, the workers trust
the managers and cares for the interests and goals of the organisation.
Taylor says that the great revolution that takes place in the mental attitude of the two parties under scientific management is that
both sides take their eyes off i.e., away from the division of the surplus as the all-important matter and they together turn their
attention towards increasing the size of the surplus.
Critical Evaluation
Taylor’s scientific management may be critically examined as follows:
(a) Contribution to Management Thought
Taylor was the first person to develop a systematic and scientific study of management. Hence he is known as the father of scientific
management. He presented his ideas as a systematic body of thought. His main contribution to management practices included the
following aspects.

 To emphasize the importance of applying scientific methods of enquiry, observation, experimentation and inferences to the
problems of the management. He exhorted against the use of trial and error approach to industrial problems.

7
 Stressing the separation of planning of work from its execution so as to enable workers to perform at his best and
earn accordingly.
 Emphasizing the aim of management to the maximum prosperity of the employer along with the maximum welfare
of each employee.
 Laying emphasis on the necessity of a complete mental revolution on the part of the both workmen and
management in order to derive the benefits of scientific management through harmony and cooperation rather then individualism
and discord.
The primary benefit of scientific management was criticized and proper use of energy ounce of energy. Moreover, specialization and
division of labour or work have bought about the second industrial revolution. It has also facilitated professionalisation of
management.
(b) Criticism Or Limiatation
Inspite of its great contributions, the scientific management approach has been criticized for its various limitations as follows:
1. It is mechanistic approach ignoring human element in the organisation – it is concerned with the efficiency of workers in the
technical sense emphasizing production only and attaching no importance to the social and psychological need of the workers. In
this context it has called unfair and undemocratic.
2. Trade unions have opposed scientific management on the ground that it leads to autocratic management and also raises the
workload of workers with a corresponding adverse impact on employment of men.
3. It assumes that workers are inherently lazy and they require strict supervision and exercise of authority by management. It is also
its wrong assumption that workers are motivated by material gains, i.e. money only.
4. It has been called by some critics as narrow, impracticable and titled toward exploitation of workers.
5. It is said that this approach is primarily concerned with problems at operating level only and it hardly emphasizes the managerial
organization and processes.
6 Some say that there is no one best way of doing a job as pleaded by Taylor, because what is the best way, it shall depend on
different circumstances of each case.
Conclusion
Despite all criticism of Taylor’s scientific management, his techniques continue in the name of work study in India and elsewhere.

System Approach to Management

Q.1. Write an explanatory note on systems approach to Management. OR
What is systems approach to Management? Explain salient characteristics of the system.
OR
Explain the systems approach to Management. Discuss with example how does it provide feedback mechanism
to continue the whole cycle.
Systems Approach to Management
Classical and neo-classical theories of management considered only partial aspects of an organisation for paying special attention on
the individual aspect or part. Classical theorists emphasized work and technical aspects, whereas neo-classical theorists laid stress
on worker aspect or human element in the organisation. In this sense, these theories were incomplete or insufficient for managers
to guide them in the management of organisation. Hence there was felt a need for some more exact and comprehensive theory of
management.
Defining Systems
In simple words, a system may be defined as a set a interrelated and interdependent parts forming an organized unit or entity.
These parts are known as sub-systems which interact with each other and are subject to change. They are interrelated as well as
interdependent. Hence, changes in any sub-system lead to changes in others.
Any working organisation may be said to have three sub-systems as follows:
1. Technical Sub-System
It represents the formal relationships among the members of an organisation.
2. Social Sub-System
It provides social satisfaction to members through informal group relations.
3. Power Sub-System
It reflects the exercise of power or influence by individuals and groups.
The whole or total system emerges as a result of interaction between and among the various sub-systems. It is important to note
that the system and its sub-systems also interact with the environment, which may influence or be influenced by the system or sub-
systems. (Environment is the sun total of the factors and forces outside an organisation, such as customers, competitors, suppliers,
investors, regulatory government agencies etc)
Features or Concepts of Systems Approach
Ludwig Van Bertalanffy and Kenneth E. Boulding has been the pioneer of systems approach. Katz and Kahn, Stafford Beer,
Foresster, Hertz, Norbert Wiener, McCloskey and Morse, etc have also contributed to this story.
Drawing on the work from many fields including biology, the systems approach analysis the functions of the total enterprises in
terms of systems – inputs, processing, and outputs – with a view to improving their operations.
The significant features or concepts of systems approach may be outlined as follows:
1. Sub-Systems
8
They are the parts that make up the whole. Each system may also be a sub-system of still larger whole. For example an electronic
goods company is a system, but it becomes a sub-system of the electronic goods industry, which is a larger whole.
2. Interrelatedness of Sub Systems
It is probably the distinguishing characteristics of a system, which means that a manager cannot change on sub-system without
affecting the rest because the sub-systems interact with each other and therefore are dependent on each other. For example, the
solution to a problem of the Production Department (a subsystem) will have an impact on other departments (subsystems) such as
Marketing and Finance – say, if it is decided to increase the production by 50% of the present output, then marketing efforts will
have to be further geared to sell the enhanced production and more finances will have to be arranged for additional production.
3. Synergy
It means that the whole is greater than the sum of its part. In other words, systems approach results in synergic effect which means
that 2 + 2 – More than 4.
4. Open System
Open system means that which interacts which its environment and closed system is that which does not interact with its
environment being self-sustained. The emphasis of systems approach is an open system. It believes that most of the organizations
are open systems because they depend for their inputs (i.e., money, materials, men, information etc.) on the society. In addition, the
organisation sells their outputs (i.e. goods and services) to the customers in the society. Thus, if an organisation wishes to survive, it
must respond to its environment – customers and suppliers.
5. System Boundary
Each system has its boundary that separates it from the environment.
6. Environment
All systems operate, within an environment, which, for an organisation, might include customers or clients, competitors, suppliers,
investors, government and regulatory government agencies, unions etc. Environment includes things that are significant to the
organisation, but are largely beyond its control.
7. Flows
A system has flows of information, methods and energy including human energy. These enter the system as inputs, undergo
transformation process and exit as outputs.
8. Feedback
It is the assessment of work done, identification of deviations and taking of corrective action.
9. Central Functions or Purpose
There is always a central function or purpose of a system against which the efforts of the organisation and its subsystem can be
evaluated or measured.
In a nutshell, systems approach attempts to view organisation as a unified, purposeful system composed of interrelated parts. It
gives manager a way of looking at the organization as a whole and as a part of the larger, external environment. The organizations
are viewed as procuring and transforming inputs into outputs. The organizations are also viewed as extremely complex entities
subject to changes from within and outside. In order to meet the various needs of such as organizations, a balanced and integrated
approach to management is required.
At the heart of the system approach lays the following:

 Management information system (MIS)

 Communicating network for collection, analysis and flow of information and quantitative data so as to facilitate planning
and control.
 Decision making system as the primary means of balancing the different parts of the organization.
 Integration of activities and departments with a view to making the best use of scare resources.
 Sub-System of management – the managers should try to adapt and cope with environmental changes.
Critical Evaluation
The systems approach may be critically evaluation as follows:
(A) Contributions (Advantages)
Systems theory has made the following contributions.
1. It provides a manager a way of thinking about the job of managing and unfolds an opportunity to him for looking it the
organization as a whole and for achieving overall effectiveness.
2. It provides a unified focus to organizational efforts – a direction towards which people should strive.
3. It draws attention of managers to an important factor and that is the environment in which an organization works. The
interaction with the environment is dynamic.
4. It includes within it focus both micro and macro aspects of the organizations. Hence it serves a multi-level and multi-dimensional
approach.
5. It implies that the modern manager should have analytical orientation should be expert in motivating to achieve goals and open
mandate to receive and respect new ideas, i.e. creativity and innovation.
6. It also implies that management education must seek to develop the ability to work with and motivate others.
7. The feed back mechanism provides and opportunity to rearrange organizations part according to the change in the environment.
(B) Limitations

9
The system theories have been criticized on the following grounds.
1. Systems theory is not a complete explanation of the whole organizational system. It does not explain how the sub-system of the
specific organization is uniquely related in a given environment.
2. The conceptional framework for understanding organization provided by system theory is too abstract.
3. It does not really offer any new thing. Managers do understand interrelationship between different parts and the influence of
environment on organization and it sub-systems. What is necessary for a manager to know as to how the sub-system of a specific
organization are uniquely related in a given environment and thus how best to deal with a particular problem? This is not answered
by the system approach.
Conclusion
Though facing several criticisms, the system theory provides a framework for integrating much, if not all, of knowledge of
management thought. It provides a unified focus to the organizational efforts. Its major contribution results from its strong
emphasis on the interrelatedness are mutuality of the part of an organization. It has really opened new vistas for managers of
today’s world.

Administrative theory of Management

Q.1. Describe in brief the administrative theory of Management? OR
Briefly explain the Fayol’s general principles of Management.
OR
To arrange is to forecast and plan, to organize, to command, to coordinate and to control, Discuss
OR
Discuss the contribution of Fayol to the science of Management.
Henri Fayol – Father of Mangement
Fayol was a French mining engineer in his early thirties, but after that he switched over to general management ans was Managing
Director from 1888 to 1918. He wrote his book General and Industrial Management in 1916 in French, which was translated
in English in 1949, only when American Management writers came to know about his ideas.
Fayol is known as the father of management or the founder of the classical management. Not because he was first to
investigate managerial behaviour, but because he was the first to systematize it. He was contemporary to Taylor. Taylor was
basically concerned with organizational fucntions, whereas Fayol was interested in the total organization. It may be noted that
Taylor is known as the father of scientific management, i.e. supervisory or lower management, while Fayol is recognized as
the father of management, i.e. the higher management or the general management.
Division of Business Activities
According to Fayol, business activities in any organization consist of six interdependent operations as follows:
1. Technical – activities concerning production.
2. Commercial – activities concerning buying, selling and exchange.
3. Financial - activities concerning optimum use of capital.
4. Security – activities concerning protection of property.
5. Accounting – activities concerning final accounts, costs and statistics. And
6. Managerial – activities concerning planning, organizing, commanding, coordinating and controlling.
According to him, the first five activities were well known and as such to devoted his attention to the description and explanation of
the managerial activities. Also he analyzed the nature of such activities and skill requirements, which were so far given little
scattered attention by thinkers.
Universality of Management: (Elements of Management)
Fayol considered the process of management to be of universal application and distinguished between five elements of the process.
He regarded these elements of management as the function of management, which were being performed by all managers
universally and at all the levels of organization. He divided management functions into five parts as follows:

 Forecasting and planning

 Organizing
 Command
 Coordination
 Control
Thus, according to Fayol, management means to forecast and plan, to organize, to command, to co-ordinate and to control. The
management was defined as the process of performing these functions. It may be noted that the present pattern of management
functions follows broadly the lines set by Fayol.
Fayol emphasized that management involved the application of certain skills, which could be acquired by persons on the basis of
systematic instructions and training. Once acquired the skills could be applied to all kinds of institutions including church, schools,
political as well as industrial organization.

10
Principles of Management
Q.2. Describe the basic principles of management? Principles of Management
Fayol made a distinction between “elements of management” and “general principles of management”. Besides a systematic analysis
of the management process and management functions, Fayol formulated a set of fourteen principles as guidelines for
implementing the process of management.
These principles may be listed as follows:
1. Division of Work
In any organized situation, work should be divided into compact jobs to be assigned to individuals. This applies to managerial work
and non-managerial work. Division of labour facilities specialization and improves efficiency, if it is done within reasonable limits.
2. Authorities and Responsibility
The authority is the official right to a manager to manage people and things. Authority of a manager goes hand in hand with the
responsibility for effective results. In other words, there should be parity or balance between authority and responsibiliy vested in a
managerial position.
3. Discipline
Discipline is defined as observance of diligence and respect for seniors and rules and regulations. Managers as leaders of their work
groups should enforce discipline throughout the organization. Fayol declares that discipline requires good superiors at all levels. He
emphasized the need of discipline among the personnel for the smooth running of organization. He advocated penalties to prevent
in violation.
4. Unity of Command
It means that a subordinate in an organization should be under direct supervision of a single from whom he should get instructions
and to whom be should be accountable. In other words, every employee should have only one boss. If a subordinate has more than
one boss, to that case conflict and condition in authority and instructions of general bosses would result.
5. Unity of Direction
Fayol advocates one head, one plan for a group of activities having same objective. In other words, a set of activities having the same
objective should be under the direction of a single manager. Similarly, there should be one plan of action for such a set of activities
because the objective is the same. This principle promotes smooth coordination of activities, efforts and resources.
6. Subordination of Individual Interest to Group Interest
The collective good and common interest of the organization should prevail over the narrow, sectional and self-interest of its
members of an organization for the welfare of both the organization and the members.
7. Remuneration of Personnel
Remuneration as well the methods of payment in an organization should be fair so as to afford maximum satisfaction both to the
organization and its employees.
8. Centralization
According to Fayol, every thing which reduces the importance of subordinates role is centralization and that which increases it, is
decentralization. In his opinion, the question of centralization and optimum degree in particular case. There should be a proper
combination and decentralization in an organization based on a consideration of several internal and external factors.
9. Scalar Chain
Fayol defines the scalar chain as the chain of superiors ranging from the ultimate authority (i.e. top authority) to the lowest ranks. It
is also known as hierarchy of management. Every communication should follow the prescribed route, i.e. the proper channel.
Authority relationships are said to be scalar when subordinates report to their immediate superiors and when their superiors, in
turn, directly report as subordinates, to their superiors.
10. Order
Order relates to both persons and things. It means a systematic arrangement of materials and systematic placement of people in the
organization. In material order, everything should be in its proper place and there should be a place for everthing. For social order
there should be a place assigned to each employee, and each employee should be in the place assigned. The right man in the right
place is the ideal here.
11. Equity
Equity means combination of fairness, kindliness and justice. Equity motivates the workers to perform their duties. Besides, it
promotes a friendly atmosphere between superiors and subordinates.
12. Stability of Tenure of Personnel
Management should strive to minimize employee turnover (i.e. changes in staff). In other words efforts should be made to achieve
relative stability and continuity of tenure of the personnel. This could be achieved by attractive remuneration and honourable
treatment of personnel. Stability and continuity of personnel promote teamwork, loyalty and economy.
13. Initiative
It refers to the freedom to propose a plan and execute it. Management should encourage subordinates to take desirable initiative in
thinking out plans and executing them. Entending opportunities and freedom to contribute their best could do this.
14. Esprit de corps
Esprit de corps means the spirit of loyalty and devotion, which unites the members of a group or society. It is a sense of respect and
belongingness to one’s organisation. This principle stresses the need for team spirit, cordial relations, and co-operations among the
personnel.
It is to be noted that Fayol made is clear that he had no intention to close the list of principles or make them inflexible.
Critical Evaluation
11
Fayol’s administrative or process or functional theory of management may be evaluated as follows:
(A) Contribution of Fayol’s Work
Fayol’s major contribution was to identify management as a separate set of skill or functions performed by managers in the
organizations. The skills and abilities required for effective management were stated to be dependent on the manager’s positions at
different levels of organization. Fayol pointed out that administrative or managerial skills were more essential for higher-level
manager, whereas technical skills and abilities were required more of the lower levels.
Fayol was the first thinker who emphasized, for the first time the necessity of formal education and training in management. He was
the person who provided a set of means (i.e. planning, organizing, commanding, coordinating and controlling) for
understanding the management process.) He also provided principles for implementing this process.
He provided conceptual framework for analyzing the management process and emphasized that management was a separate,
distinct activity.
Management as a body of knowledge gained immediately from Fayol’s analysis of management skills of universal relevance and the
analysis of the principles of general management.
(B) Limitations or Weaknesses
Fayol’s administrative theory of management is criticized on the following grounds.
1. It is too formal as Fayol divides “business activities” into six categories, and their management into five functions and the
implementation of these functions with the help of fourteen principles.
2. Some critics call this theory as inconsistent, vague and inadequate.
3. It does not pay adequate attention to workers. It has pro-management bias.
4. Jernert Simon calls Fayol’s principles as proverbs, comparable to folklore and folk wisdom.
Conclusion
Inspite of several criticisms of Fayol’s work, his theory of managerial functions still exerts considerable influence on the practice of
management as well as the teaching of this subject world over.
It may be also noted that when combined together the scientific management approach and the functional approach are called
classical school or classical theory of management or classical approach to management.

Nature of Management Principles

Q.3. What are Management Principles? Explain the nature of Management Principles. OR
Why Management Principles are needed? What are their limitations?
Meaning of Management Principles
Management principles may be defined as fundamental truths of general validity. They are helpful in predicting and understanding
the results of managerial actions. The principles have been derived from the experience of managers in different fields of activity.
Primarily members of the classical management school have developed them.
Management principles are intended to improve the practice of management by providing guidelines for managerial actions in the
management process. They become the basis of scientific process of management.
Flexibility of Management Principles (Nature)
As indicated above, management principles are not rigid, absolute truths like rules and laws. In fact, they are flexible guides to
managerial actions. Hence, while applying these principles, due attention must be given to varied and changing, circumstances
because human beings who are subject of such principles are different and changeable and moreover other concerned factors are
also not stable. At times it has been found in practice that the same principles is seldom applied twice in exactly the same way.
Like other social sciences, management science is also not very exact and rigid. Certain kind of flexibility is always necessary to
accommodate new thinking, new demands and newly emerging circumstance. Hence the management principles are flexible and
can should be adopted to meet the speciality of every situation. However as a precaution management principles should be guarded
against unnecessary frequent modifications and alterations based on pure whims and frezies of individual user so that they are not
distorted unwarrantedly.
In sum, it may be said that the nature of the principles of management suggests that they should be applied with fair judgement and
interpretation of the available facts in a given situation.

Characteristics of Management Principles

Q.4. Describe the characteristics of management principles also explain it needs & importance? Characteristics
of Management Principles
The characteristics of management principles may be examined as follows:
1. Management principles are derived from analysis of management functions and processes.
2. There are two types of principles:
Descriptive which attempt to explain and predict the behaviour of organizational members and managerial decisions and their
relationships.
Normative which attempts to prescribe and evaluate the bahaviour of organizational members including the managers. They
prescribed what ought to be, what is good, right and desireable.
3. The principles known today have their origin in the works of classical writers and thinkers like Taylor, Fayol and Mooney and
Reiley.
4. They are universal in the sense that they are valid for most organizational under most circumstances.

12
5. They are flexible in nature and change with the changes in the environment in which an organization exists. It is to be noted that
nothing is permanent is the landslide of management, because of the complex and unpredictable nature of human behaviour.
Need and Importance of Management Principles
Proper use of management principles will probably improve organizational performance. According to George R. Terry, Principles
of management are to a manager as a table of strengths of materials is to a civil engineer. The value of the principles lies in the
foundation they provide for efficient conduct of management practice. By means of principles, a manager can avoid fundamental
mistakes in his job and foretell the results of his actions with confidence.
Principles help in several ways – increasing the managerial efficiency, increasing the productivity of workers, enhancing managerial
knowledge and thinking, improving research in management, serving as aid to training enhancing social welfare by helping in
improving the quality of life of people and community resources to best advantage of organizational members, etc.
The main purpose of management principles is to make available useful elements of a systematic theory of management, so as to
improve the management practice. They provide a means of organizing knowledge and experience in management.
The above discussion clearly brings out that it is due to all the above facts that management principles have become a permanent
need in today’s management world.
Various Management Principles
A number of management thinkers have formulated various management principles. Taylor and Fayol has enunciated the most
important principles.

Human relations approach to Management

Q.1. What is human relations approach to Management? Critically evaluate its contribution to Management
theory. OR
Discuss the impact of Hawthorne Experiments on Management thought.
Human Relations Approach Historical Perspective
Scientific management remained concerned tithe the efficiency and productivity of workmen at the shop floor. Fayol’s functional
approach to management aimed as improving the managerial activities and performance at top level in the organization. Between
1925, opinion of many experts was directed towards the human element or aspect of the organization. They drew their attention
from “work” emphasis to “worker” emphasis. It was clearly felt that earlier approaches to management were incomplete and
insufficient in that there was little recognition of the importance of workers as human beings, their attitudes, feelings, needs and
requirements. In fact, the technical approach to work methods in scientific management did not produce durable and desirable
results in all cases. Individual and group relationships in the work place often prevented maximum benefits to be derived from
planning and standardization of work or monetary rewards offered for efficiency. Elton Mayo is the founder of this theory.
Hawthorne Experiments
The human relations approach to management developed as a result of a series of experiences (in all four) conducted by Elton Mayo
and his associates F.J. Reothlisherger and W.J. Dickson at the Hawthrone plant of the Western Electric Company at Chicago in
United States. The Hawthrone studies were aimed at finding out what factors really influenced the productivity and work
performance of workers. These experiments were made with respect to – different levels of illumination in the work place changing
in working conditions like hours of work, lunches, test periods and how group norms affect group effort and output.
Human Relations Concepts: Findings of Hawthorne Studies
The main findings of Hawthrone studies were as follows:
1. Physical environment at work place (i.e., working conditions) do not have any material effect on the efficiency of work.
2. Social or human relationship influenced productivity more directly than changes in working conditions.
3. Favourable attitudes of workers and work-teams towards their work were more important factors determining efficiency.
4. Fulfillment of workers social and psychological needs have a beneficial effect on the morale and efficiency of workers.
5. Employee groups formed on the basis of social interactions and common interest exercised a strong influence on workers,
performance. In other words, informal organization controlled the norms established by the groups in respect of each member’s
output.
6. Workers cannot be motivated solely by economic reward. More important motivators are job security, recognition by superiors
and freedom to take initiative and to express their individual opinions as matters of their own concern.

Behavioural approach to Management

Q.2. Write a comprehensive note on Behavioural approach to management. OR
Explain the significance of the Behavioural approach in management. What are its main features? Discuss.
Behavioural Or Social Science Approach
Historical Perspective
The Behavioral or social science approach developed as a corollary to the human relations approach.
Social scientists and organization theorists are of the opinion that best results can be obtained by building theories of management
and organization based on findings of the Behavioural sciences, such as psychology, sociology, psychiatry, economics, cultural
anthropology and philosophy.
Behavioural approach reflects the findings of intensive carried out by Behavioural scientists like Chester I Bernard, Douglas
McGregor, Chris Argyris, A.H. Maslow, Herzberg, Rensis Likert etc. many of the conclusions of the Hawthorne studies have been
reaffirmed by subsequent research studies. Moreover, certain ideas have been refined, extended and these behaviour scientists have

13
highlighted other important ideas. These scientists have tried to eliminate the exaggeration of the importance of informal relations.
The focal point of management action is the behaviour of human being in the organization – management as a technical process
only, was given up.
Behavioural scientists conduct research to answer the question.
“Why a person or a group of persons behaves or acts in a particular manner? They try in answer in any problems faced by the
managers by explaining the behaviour of the people”.
Elements Or Concepts or Features Of Behavioural Approach
The Behavioural approach concerns itself with the social and psychological aspects of human behaviour in organization. The
behaviour of members of an organization clearly affects both its structure and its functioning as well as the principles on which it
can be managed. Behavioural researches have provided sufficient evidence that human element is the key factor in the success are
failure of an organization. In several experiments, it has been observed that people prefer to be consulted rather than receive order
or information. Less reliance on the use of authority is preferred.
Some of the more important elements or concepts of Behavioural approach may be outlined as follows:
1. Individual Behaviour
Individual behaviour is closely linked with the behaviour of the group to which he belongs. The group dictates changes in his
behaviour. Individuals observe those work standards which are prescribed by the group.
2. Informal Leadership
Informal leadership, rather than formal authority of managers is more important for setting and enforcing group standards of
performance. A a leader, a manager may be more effective and acceptable to subordinates, if he adopts the democratic style of
leadership.
3. Participation
If the subordinates are encouraged and allowed to participate in establishing goals, there will be positive effect on their attitude
towards work. If employees are involved in planning, designing the jobs and decision-making, there will be least resistance to
changes effected in technology and work methods.
4. Motivation by Self-Control and Self-Development
Behavioural scientists maintain that by nature most people enjoy work and are motivated by self-control and self-development.
Managers should try to identity and provide necessary conditions conducive to the proper and sufficient use of human potential.
The managers attitude towards human behaviour should positive. They should know that average man is not lazy by nature. But he
is ambition. Every man likes to work and prefers to assume responsibilities. MacGregor maintains that employees favour self-
direction and self-control. Behaviouralists believe that in place of the concept of social man the concept of self-actualizing man
would be more appropriate to explain human motivations.
Chester I Bernard pointed out that material reward is of crucial signification only upto a definite point. The incentives of status,
power, good physical conditions opportunities of participation and good social (i.e., cultural interrelationships) are very important.
5. Informal Organization
Behaviouralists particularly Bernard, consider informer organization as an essential part of the formal organization. Informer
organization must always be taken into account while determining managerial behaviour.
6. General Supervision Not Close One
As regards supervision of subordinates, Behaviouralists particularly Likert, are not in favour of close supervision. They advocate
general supervision, which tends to be associated with high productivity.
Basic Assumptions (Are Propositions) Of Behavioural Scientists
The Behavioural science approach is based on certain assumptions about man and organization, which my be looked upon as their
prepositions (statements of opinion or judgement) also. Those may be outlined as follows
1. Organization is socio-technical system involving people and technology as their primary components.
2. The behaviour of the members of an organization clearly affect both its structure and its functioning, as well as the principles on
which it can be managed.
3. Individual’s behaviour is closely linked with a greatly influenced by the behaviour of the group to which he belongs.
4. A wide range of factors influences work and interpersonal behaviour of people in the organization.
5. Congruence (agreement) between organizational goals and individual goals organizations members would be established.
6. Several individual differences in perceptions, aspirations, needs, feelings, abilities and values of people excite in the organization,
such difference along with their changing nature over periods of time have to be recognized.
7. Informal leadership rather than the formal authority of supervisors is more important for increase in employee performance.
8. Democratic leadership style and participative managerial style encourage positive attitude of employee towards work and faster’s
high moral and initiative among them.
9. By nature most people enjoy work and are motivated by self-direction, self-control and self-development.
10. Conflict in organization may to some extent to inevitable and at times even desirable for development, innovation and creativity
in certain cases. Conflicts and cooperation coexist in organizations. Conflicts are not to be suppressed, but are to be resolved and
that too not always. Coordinated in vital for achievement of organizational goals.
The above preposition are important elements of Behavioural science thinking. Thus the Behavioural approach represents a
significant advance over the human relations approach.
The major areas of research and analysis by the Behavioural scientists are interaction between organizational structure, work
performance and employees behaviour, consequences of traditional, coercive controls on humans, influence of technological
advances and changes on group behaviour, human needs and aspirations, theories of motivation and leadership, developmental

14
aspects of human resources, organizational behaviour aspects, group dynamics, patterns of communication and their importance in
the organization, managerial styles and their impact on employee behaviour, organizational climate, culture and politics,
organizational development, change and conflict, organizational rules and status, and so on.

Human relations & Behavioural approaches

Q.3. Distinguish between Human Relations and Behavioural approaches? Distinction Between Human
Relations and Behavioural Approaches
As indicated earlier, Behavioural science approach is an improvement over the human relations thinking. This may be explained in
the following ways.
1. Areas of Study
The human relations movement kept it limited to the study of psychological needs of people, supervision styles, working conditions,
interpersonal relations, communication etc. On the other hand Behavioural scientists have gone very far and wide in the study of
organizational and managerial aspects covering the areas as mentioned in the previous paragraph.
2. Human Nature Assumptions
Human relation theorists have made some general, unverifiable assumption about human nature holding “social man” view. In
contrast, Behavioural scientists have understood the factual nature of individuals and of their behaviour-holding “self-actualizing
man” model.
3. Human Needs
Human relations thinkers presume that people have only social needs, whereas the Behavioural scientists regard individuals as
different from one another and dynamic with respect to their needs and attitudes and emphasize both social and psychological
needs.
4. Organization Nature
Human relations approach believes organizations to be purely social systems, while Behavioural science approach views
organizations as socio-technical systems which are required to accomplish a set of individual, social and corporate (economic) goals.
5. Employee Satisfaction
Human relations theorists advocate that employees satisfaction is achieve through economic and other incentives and then it
automatically leads to higher employee productivity. On the other hand, Behavioural scientists assert that employee satisfaction is a
matter of a set of factors including fulfillment of social and self-actualization needs and high morale is also necessary for achieving
higher employee productivity, which is a composite thing made by different factors including participative management.
6. Conflict Treatment
Human relation thinkers proposed that conflict, competition and disagreement is to be avoided or should always be resolved,
whereas Behavioural scientists concede that conflict is not always bad, it may be constructive too, it is inevitable and may not always
be resolved.
7. Manager’s Role
Under human relations model, manager’s traditional role of controller is modified to include responsibility for maintenance of the
human system. On the other hand, under the behavioural science model, the manager’s basic role is rather dramatically redefined
and he is no longer viewed as a controller but rather as a developer and facilitator of the performance of the socio-technical system
to which he is assigned.
8. Nature of Approaches
Human relations approach is criticized for being unscientific (i.e. vague and simplistic and for patting forth broad conclusions
having personal bias. On the other hand, behavioural scientists have made their propositions based on extensive researches and its
sub discipline organizational behaviour also has a strong research orientation.
Contribution
The contribution of behavioural science to management thought and practice consists primarily of creating new insights rather than
new techniques. It has developed a useful way of thinking about the role of a manager, the nature of organizations and the
behaviour of individuals with organziations.

Management science approache to Management

Q.4. What is management science approach to management? Critically examine it. OR
Define management science approach and explain the characteristics of the situation in which management
science applications are usually made.
Management Science Or Operations Research Or Approach
Quantitative Approach
A quantitative approach to management thought is known as management science or operations approach.
“C.West Churchman. Russell Adoff and E.Leonard Arnoff” define the management science or operations research OR approach as
an application of the scientific method to problems arising in the operation of a system and a solving of these problems by the
solving of mathematical equations representing the system. (Introduction to Operations Research. New York Willey. 1957).
The management science approach suggests that managers can best improve their organisation by using the scientific method and
mathematical techniques to solve operational problems.
The Beginning of the Management Science Approach
During the World War II, in Great Britain and in America, some mathematicians, physicists and other scientists were called to help

15
solve complex, operational problems that existing in the military. They were able to achieve significant technological and tactical
breakthroughs. The scientists were organized into teams that eventually became known as operations research or groups. When the
war was over the applicability of or to problems industry gradually became apparent, particularly in the wake of new industrial
technologies being put into use or specialists were called to help managers come up with answers to the new problems. With the
invention of electronic computer system or procedures were formalized into what is now called “management science school” or
“quantitative school”.
The early or groups typically included physicists and other “hard” scientists, who used the problem solving method known as
scientific method which involves.
(i) Observing the problem system.
(ii) Constructing a model, i.e. a generalized framework from which consequences of changing the system can be predicted.
(iii) Deducting (inferring) from the model how the system will behave it changes were made in existing conditions.
(iv) Testing the model by performing an experiment on the actual system to see whether the effects of changes predicted using the
model, actually occur when the changes are made.
The Operations Research groups were very successful in using the scientific method to solve their operational problems.
Now, the management science approach is being used in many companies in India and other countries and applied to many diverse
management problems, such as production scheduling, plant location product packaging etc.
Characteristics of Management Science Applications
Four primary characteristics are usually present in situations in which management science techniques are applied. These are as
follows:
1. Large Number of Variables
The management problems studied is so complicated that managers need help in analyzing a large number of variables.
2. Use of Mathematical Model
The use of mathematical models the investigate the decision situation in typical in management science applications. Models are
constructed to represent reality and then used to determine how the real world situation might be improved.
3. Use of a Computer
A management science application makes use of computers. There are two factors that make computers extremely valuable to the
management science analyst.
Today, managers are using such management science tools as inventory control methods, network models and probability models
as aid in decision making process. Since management science thought is still evolving, more and more sophisticated analytical
techniques can be expected.
Critical Evaluation of Management Science Approach
Management science team presents management with an objective basis for making a decision. Management science techniques
increase the effectiveness of the managers decision making. They are best suited analyzing quantifiable factors, such as expenses,
sales and units of production. They are used in such activities as capital budgeting management, cash flow management, production
scheduling, development of product strategies, planning for human resource development programmes, maintenance of optional
inventory levels and aircraft scheduling.
However, is special widespread use for many problems, management science of today has not developed to a point where it can
effectively deal with an important aspect of the organization, that is the human side of an enterprise. But no doubt that it has
marvelously contributed to the solving of planning and control problems and to the progress in the areas of organizing, staffing and
the leading the organisation. Anyhow some managers complain about the complicated nature of the concepts, language and
techniques of management science, which are not readily understandable and not easily implemental. Some other managers
indicate about the drawback of management science in that if fails to address to the psychological and Behavioural components of
workplace activities because the managers are not sufficiently involved with management scientists at the initial level of developing
decision making techniques and as a result the later implementation of these techniques remain often unsuccessful. There exits a
lack of awareness among the management scientist regarding the problems and constraints actually faced by the managers in
orgnanization, particularly because of their remoteness from the actual some of the workplace activities.

Evolution of Management
Q.1. Briefly describe the evolution of management thought from early days to moder times. OR
Examine the evolution of management thought from the early pioneers to modern thinkers.
OR
Describe briefly various schools or management thought prevalent from time to time.
Growth and Development of Management Thought
The management thought has grown and developed gradually in the following stages:
1. Early Era
The is known as pre-scientific management era. During this era the management finally came into being as a separate field of study
and research.
2. Scientific Management Era
During this era some principles of scientific management were developed. This era saw great advances in management practice by
application of empirical studies to determine faster and better methods of production.
3. Processes or Functional or Administrative Era
During this era, a clear distinction was made between technical activities and managerial activities. Planning, organizing, command,
16
coordination and control were recognized as managerial activities. The organisation was recognized as a rational-legal structure.
4. Human Relations Era
During this era, special emphasis was laid on “worker” aspect of the organisation. It was pleaded that workers should be cared as
human assets of the enterprise.
5. Behavioural Or Social Sciences Era
During this era, the individual, the work groups and the participative management aspects were emphasized.
6. Management Science Or Quantitative Era
This era saw the scholars to lay emphasis on rational decision-making and use of mathematical techniques for managing the
organisations.
7. Modern Era
During this era, emphasis is being laid on treating the organisation as a system composed of interrelated and interdependent parts,
working in its specific environment. Moreover, it has been experienced and advocated that there is no one best way of dealing with a
situation. The manager has to find a best way in each specific situation depending on the different circumstances of the individual
case.

Production Management
Q.1. Define Production Management. Explain production planning and control. Discuss briefly the various
techniques of production control. OR
What is Production Management? Discuss the functions of production, planning and control.
OR
Define Production, Planning and Control. What are its main steps or elements? Discuss in brief.
OR
What are Production, Planning and Control? What are its objects and advantages? Outline the requirement of
effective production control system.
Definition of Production Management
In modern competitive world, if an enterprise and master its production and marketing, it will be able to acquire and maintain a
considerable market share.
Production may be define as the conversation of the raw material into finished goods are services through transforming process for
purposes of supplying them into the market. Thus, it is process of creation of goods and services. The terms “production and
manufacturing” are generally used as synonyms. Production activities are vital for the survival, growth and development of every
enterprise.
Production to be successful has to be managed. Hence production management assumed great importance in every organisation.
Some important definition of production management may be given as follows:
Elwood Buffa
Production management deals with decision-making related to production process so that the resulting goods and services are
produced according to the specifications in the amounts and by the schedule demanded and at minimum cost.
A.W.Field
Production management is the process of planning and regulating the operations of that part of enterprise which is responsible for
actual transformation of materials into finished products.
Major Activities of Production Management
Production management deals with manpower and physical resources and facilities for transforming inputs into outputs.
Production Management involves three major activities or fucntions:
1. Planning of Production Inputs
It includes determining of necessary inputs including raw materials, labour, electrical power, machines and equipments, facilities
etc., required for production work.
2. Installation of the Necessary Inputs
It includes taking decisions with regard to designing of the plant, choice of the best machines and arrangement of other necessary
facilities so that the production work can be started.
3. Co-Ordination and Control of the Production Process
An effective production system involves co-ordination among the various activities and affairs within the production department
itself and also integration of its activities and decisions with other departments of the enterprise, such as finance, marketing,
purchases, personnel, according and research and development. It also includes determining the necessary sequence of operations,
preparing work schedules and assigning work to specific employees, so as to ensure smooth production operations. Control includes
ensuring that the actual production performance meets the predetermined production plans and goals and also providing for proper
feedback for taking corrective action.

Nature & Importance of Production Management

Q.2. Describe the nature & importance of production management? Nature and Importance of Production
Management
Production management has become an important now a day that it is treated to be a separate, independent functional area of
management.

17
Production management has assumed its importance because of the following reason:
1. It is the foundation for earning profits – by producing goods or services and selling them into the market.
2. It ensures that produced goods or services are of desired quality, in required quantity and according to time-schedules.
3. It facilitates optimum inventory level.
4. It ensures proper co-ordination and necessary control, which are required for adequate, time and cost-conscious production.
5. It ensures coping with the changes in demands in the market and maintains stability in the production department.
Production Planning and Control
Production Planning, Planning is deciding in advance what to do, how to do it, when to do it, who is to do it. Then, production
planning involves decision making in various production aspects, such as designing of production plans, programmes and goals,
selection of production process, plant layout, provision of physical facilities (like material, tools, machines, equipments etc.) and
preparation of time-schedules.
“Lawrence Bethel Observes” Production planning takes a given product or line of products and organizes in advance the manpower
materials, machines and money required for a predetermined output in a given period of time. It starts with a product concept
capable of being manufactured, a general idea of the process by which it can be made and a sales forecast for the descernible future.
Production Control
Control means ensuring that actual performance meets the predetermined standards. Then, “production control” refers to a set of
steps for verifying whether production operations occur in conformity with the production plan adopted. It guides and directs the
flow of production so that the goods of desired quality are manufactured at the right time and it maximum possible economic
manner. It may be noted that “production control” is frequently used synonymously with “production planning and control” with
planning being implied.
Spriegel and Lansburgh define production control as
the process of planning production in advance of operations, establishing the exact route of each individual item, part or assembly,
setting, starting and finishing dates for each important item, assembly, and the finished products and releasing the necessary orders
as well as initiating the required follow-up to effective the smooth functioning of the enterprise.
James Lundy says
Basically, the production control function involves the co-ordination and integration of the factors of production for optimum
efficiency. The principal objective of production control is to facilitate the task of manufacturing and see that everything is being
done strictly in accordance with the plan. It co-ordinates and integrates the factors of production for optimism and directs and
checks the course and progress of work.

Advantages of Production Planning & Control

Q.3. Describe the advantages of production planning & control? Advantages of Production Planning and Control
Production planning and control yields the following main advantages,
1. Avoidance of Rush Orders
Production is well planned and its time aspects are well controlled. Therefore, production control reduces the number of risk-orders
and overtime work on plant.
2. Avoidance of Bottlenecks
The incomplete work does not get accumulated because production control maintains an even flow of work.
3. Cost Reduction
Production control programmes minimizes the idleness of men and machines, keeps in process inventories at a satisfactory level,
leads to a better control of raw materials inventory, reduces costs of storage and materials handling, helps in maintaining quality
and containing rejection and thus reduces unit cost of production.
4. Effective Utilization of Resources
It reduces the loss of time by the workers waiting for materials and makes most effective use of equipments.
5. Co-Ordination
It serves to co-ordinate the activities of plant and results in a concerted effort by workmen.
6. Benefits to Workers
Adequate wages, stable employment, job Security, improved working conditions, increased personal satisfaction, high morale.
7. Efficient Service to Customers
It ensures better service to the customers by enabling production to be conducted in accordance with the time schedules and
therefore deliveries are made on promised dates.

Basic Functions of Marketing

Q.4. What are the Basic functions of Marketing? Basic Functions of Marketing
The marketing process performs certain activities as the goods or services move from producer to consumer. Every firm does not
perform all these activities or jobs. However, any company that wants to operate its marketing system successfully must carry them
out. The following marketing tasks have been recognized for a long time.
1. Selling
It is core of marketing. It is concerned with the persuasion of prospective buyers to actually complete the purchase of an article.
Setting pays an important part in realizing the ultimate aim of earning profit. Selling is enhanced by means of personal selling,
advertising, publicity and sales promotion.

18
2. Buying
It involves what to buy, what quality, how much, from whom, when and at, what price. People in business buy to increase sales or to
decrease costs. Purchasing agents are much influenced by quality, service and price. The products that the retailers buy for resale
are determined by the need and preferences of their customers.
3. Transportation
Transport is the physical means whereby goods are moved from the places where they are produced to those they are needed for
consumption. Transportation is essential from the procurement of raw materials to the delivery of finished products to the
customers places. Marketing relies mainly on railroads, tracks, waterways, pipelines and air transport. The type of transportation is
chosen on several consideration such as suitability, speed and cost.
4. Storage
It involves the holding of goods in proper condition from the time they are produced until they are needed by consumers (in case of
finished products) or by the production department (in case of raw materials and stores). Storing protects the goods from
deterioration and helps in carrying over surplus for feature consumption or use in production. Goods may be stored in various
warehouses situated at different places. Storing assumes greater importance when production is seasonal or consumption may be
seasonal. Retail firms are called “stores”.
5. Standardization and Grading
The other activities that facilitate marketing are standardization and grading. Standardization means establishment of certain
standards or specifications for products based on intrinsic physical qualities of any commodity. This may involved quantity (weight
or size) or it may involve quality (colour, shape, appearance, material, taste, sweetness etc). Government may also set some
standards e.g., in case of agricultural products. A standard conveys a uniformity of the products.
“Grading means classification of standardized products into certain well-defined classes or groups.” It involves the division of
products into clauses made up of unit processing similar characteristics of size and quality. Grading is very important for “raw
material” (such as fruits and cerials), mining products” (such as coal, iron-ore and mangenese) and “forest products” (such as
timber). Branded consumer products may bear grade levels, – A B C.
6. Financing
It involves the use of capital to meet financial requirements of the agencies dealing with various activities of marketing. The services
of providing the credit and money needed to meet the cost of getting merchandise into the hands of the final user is commonly
referred to as finance, function in marketing. In marketing, finances are needed for working capital and fixed capital, which may be
secured from three sources – onward capital, bank loans and advances, and trade credit (provided by the manufactures to
wholesaler and by the wholesaler to the retailers).
7. Risk Taking
Risk means lose due to some unforeseen circumstances in future. Risk-bearing in marketing refers to the financial risk inherent in
the ownership of goods held for an anticipated demand, including the possible losses due to a fall in price and the losses from
spoilage, depreciation, obsolescence, fire and floods or any other loss that may occur with the passage of time. From production of
goods to its selling stage, many risks are involved due to changes in marker conditions, natural causes and human factors. Changes
in fashions or interventions also cause risks. Legislative measures of the government may also cause risks.
8. Market Information
The only sound foundation, on which marketing decisions may be based, is correct and timely market information. Right facts and
information reduce the aforesaid risks and thereby result in cost reduction. Business firms collect, analyze and interpret facts and
information from internal sources, such as records, sales people and findings of the market research department. They also seek
facts and information from external sources, such as business publications, government reports and commercial research firms.
Retailers need to know about sources of supply and also about customers buying motives and buying habits. Manufacturers need to
know about retailers and about advertising media. Firms in both these groups need information about competitors activities and
about their markets. Even ultimate consumers need market information about availability of products, their quality standards, their
prices, and also about the after-sale service facility Common sources for consumers are sales people, media advertisements,
colleagues etc.
It may be noted that in addition to the mentioned jobs, the marketing manager is also involved in product planning, pricing of
products, selection of distribution channels, framing of marketing objectives, environmental scanning, target market selection,
market programming and developing marketing strategy.

Stages or Steps in Marketing Research Process

Q.4. Describe the various stages or steps in marketing research process. Stages or Steps in Marketing Research
Process
Marketing research exercise may take many forms but systematic enquiry is a feature common to all such forms. Being a systematic
process. Though it is not necessary that all research processes would invariably follow a given sequence, yet marketing research
aften follows a generalized pattern, which can be broken down and studied as sequential stages stages. The various stages or steps in
the marketing research process may be discussed as follows:
1. Identification and Defining of the Problem
The market research process begins with the identification of a problem faced by the company. The clear cut statement of problem
may not be possible at the very outset of research process because often only the symptoms of the problems are apparent at that
stage. Then, after some explanatory research, clear definition of the problem is of crucial importance in marketing research because
such research is a costly process involving time, energy and money. Clear definition of the problem helps the researcher in all
19
subsequent research efforts including setting of proper research objectives, the determination of the techniques to be used and the
extent of information to be collected. It may be noted that the methods of explanatory research popularly in use are : survey of
secondary data, experience survey or pilot studies i.e. studies of a small initial sample. All this is also known as preliminary
investigation.
2. Statement of Research Objectives
After identifying and defining the problem with or without explanatory research, the researcher must make a formal statement of
researcher objectives. Such objectives may be stated in qualitative or quantitative terms and expressed as research questions,
statement or hypothesis. For example, the research objective. “To find out the extent to which sales promotion schemes affected the
sales volume” is a research objective expressed as a statement. On the other hand, a hypothesis is a statement that can be refuted or
supported by empirical findings. The same research objective could be stated, “To test the proposition that sales are positively
affected by the sales promotion schemes undertaken this winter.” Example of another hypothesis may be. “The new packaging
pattern has resulted in increase in sales and profit.” Once the objective or the hypothesis are developed, the researcher is ready to
choose the research design.
3. Planning the Research Design or Designing the Research Study
After defining the research problem and deciding the objectives, the research design must be developed. A research design is a
master plan specifying the procedure for collecting and analyzing the needed information. It represents a framework for the
research plan of action. The objectives of the study are included in the research design to ensure that data collected are relevant to
the objectives. At this stage, the researcher should also determine the type of sources of information needed, the data collection
method (e.g. survey or interview), the sampling methodology and the timing and possible costs of research.
4. Planning the Sample
Sampling involves procedures that use a small number of items or parts of the population (total items) to take conclusion regarding
the population. Important questions in this regard are; who is to be sampled as a rightly representative lot? Which is the target –
population? What should be the sample size – how large or how small? How to select the various units to make up the sample?
5. Data Collection
The collection of data relates to the gathering of facts to be used in solving the problem. Hence, methods of marketing research are
essentially methods of data collection. Data can be secondary, i.e. collected from concerned reports, magazines and other
periodicals, especially written articles, government publications, company publications, books etc. Data can be primary i.e. collected
from the original base through empirical research by means of various tools. There can be broadly two types of sources – (i) Internal
sources – existing within the firm itself, such as accounting data, salesmen’s reports etc. (ii) External sources – outside the firm.
6. Data Processing and Analysis
Once data have been collected these have to be converted into a format that will suggest answer to the initially identified and
defined problem. Data processing begins with the editing of data and its coding. Editing involves inspecting the data collection –
forms for omission, legibility and consistency in classification. Before tabulation, responses need to be classified into meaningful
categories. The rules for categorizing, recording and transferring the data to “date storage media” are called codes. This coding
process facilities the manual or computer tabulation. If computer analysis is being used the data can be key-product and verified.
7. Formulating Conclusions, Preparing and Processing the Report
The final stage in the marketing research process is that of interpreting the information and drawing conclusion for use in
managerial decision. The research report should clearly and effectively communicate the research findings and need not include
complicated statement about the technical aspect of the study and research methods. Often the management is not interested in
details of research design and statistical analysis but instead in the concrete findings of the research. If need to the researcher may
bring out his appropriate recommendation or suggestions in the matter. Researchers must make the presentation technically
accurate, understandable and useful.

Management by Objectives
Q.1. What do you mean by Management by Objectives? Explain the goal-setting process through Management
by Objectives?
OR
Discuss the strengths and weakness of Management by Objectives. What are the minimum requirements of a
Management by Objectives programme?
OR
Define Management by Objectives. Explain the Management by Objectives Cycle.
Meaning and Definition of Management by Objectives (MBO)
Management by Objectives (MBO) has become a widely used slogan. It is a basic mentality that a high-performance manager brings
to the job of managing. Peter Drucker coined the term “Management by Objectives” in 1954. He profounded Management by
Objectives concept and emphasized it and than it developed as a management philosophy. Some authors has used the term
“management by results” interchangeable with Management by Objectives.
Management by Objectives is an overall philosophy of management that concentrates on goals and end results. Management by
Objectives is based on the presumption that people perform better when they know what is expected of them and can relate their
personal goals to organisation goals. It also assumes that people are interested in the goal setting process and in evaluating their
performances against the target.
Some important definitions of Management by Objectives may be given as follows:
George S. Odiorne
20
The system of management by objectives can be described as a process whereby the superior and subordinate managers of an
organisation jointly identify its common goals, define each individual’s major ares of responsibility in terms of the results expected
of him and use these measures as guides for operating the unit and assessing the contribution of each of its members.
Peter Drucker
He says that management by objectives and self-control is a philosophy of management, resting on a concept of human action,
human behaviour and human motivation. Management by objectives applies to every manager at any level and to all business
enterprises whether large or small. He says the Management by Objectives “ensures performance by converting objective needs into
personal goals”
Heinz Weihrich and Harold Koontz
“Management by objectives is a comprehensive managerial system that integrates many key managerial activities in a systematic
manner and that is consciously directed toward the effective and efficient achievement of organizational and individual objectives.”
Essential Characteristics of Features of Management by Objectives
A careful study of the above definitions bring out the following features of Management by Objectives:
1. Management by Objectives is a philosophy or a system and not merely a technique.
2. It emphasizes participative goal setting.
3.It clearly defines each individual’s responsibilities in terms of results.
4. It focuses attention on what must be accomplished (goals), rather than on how it is to be accomplished (methods).
5. It converts objectives needs into personal goals at every level in the organisation.
6. It establishes standards or yardsticks (goals) as operating guides and also as basis of performance evaluation.
7. It is a system intentionally directed toward effective and efficient attainment of organizational and personal goals.
Management by Objectives Process
There are four important and essential steps or elements in the Management by Objectives process as follows:
1. Setting Objectives
Goal setting or objective-setting is a multistage process. It starts with the examining of the current state of affairs, level of efficiency,
threats and opportunities. Then the key result areas are identified, such as product markets, improved services, lowered costs, work
simplification, employee motivation, profitability, innovation and social responsibility. The performance of these areas is critical for
organisation in the sense that failure in these areas my result in failure of the organisation and this is why they are known as “key”
results areas. Peter Drucker says, “Objectives are important in every area where performance and results directly affect the survival
and prosperity of business.”
Therefore interacting or joint goal setting takes place. Subordinates are actively involved in formulating goals at every level is the
organisation. Such goals are finished with reference to the overall objectives of the organisation. Care is to taken establish goals that
are measurable and contribute to the accomplishment of corporate objectives. Proper attention is given to “time” element also. Such
goals may be long-range, medium-range or short-range. Further, resources availability also becomes an important consideration in
goal setting. There is always need to decided priorities among the different objectives keeping in view the environment which
business operates as well s possible future changes in it.
2. Developing Action Plans
Set objectives must be translated into action plans. It requires assignment of specific responsibilities to different departments,
divisions and individuals. It also requires allocation of necessary resources needed to perform the assigned responsibilities. Time
dimensions are also to be decided in order that targets are reached without any unwarranted delays.
3. Periodic Review Or Monitoring the Progress
After setting objectives and developing action plans, it is necessary to establish a proper monitoring system with a view to regularly
keeping the activities and efforts on a prescribed path leading to the ultimate objectives. The progress is monitored without day-to-
day interference in subordinates functioning. At agreed intervals, results are measured in terms of quantity, quality, time and cost
against the set objectives. It is ensured that the deviations found, if any are thoroughly discussed and immediate corrective actions
are taken to set them right on the course. Such a regular monitoring and periodic review not only provide feedback, which is
essential for completion of work in time, but also motivates the managers accountable for performance. Periodic review and
monitoring are done at departmental levels generally.
4. Performance Appraisal
This is the last phase of Management by Objectives programme that evaluates performance annually. The annual review or
appraisal is comprehensive and is done at the organizational level. The actual annual results are evaluated against the set objectives.
Such assessment is also used for determining targets for next year for modification in standards (goals) if needed and for taking
corrective actions in order to avoid deviations from predetermined objectives.
Management by Objectives Cycle and Recycling Objectives
When all the four steps or phases in the Management by Objectives as mentioned above are completed then one Management by
Objectives cycle is said to be over. The last phase or the fourth step in the Management by Objectives cycle is used as an input for
recycling objectives and other actions. Objectives are changed or modified in the light of the environmental changes and the
experiences gained over the year. Then, revised action plans are developed as per needs, periodic review is done. And performance
is gain evaluated. Thus goes on the recycling.

Benefits of Management by Objectives

Q.2. Describe the benefits of Management by Objectives Benefits of Management by Objectives
1. Balanced Stress on Objectives
21
Management by Objectives forces managers to set objectives with balanced stress on key result areas. Thus, crisis conditions are
avoided to take place in the organisation.
2. Better Managing
Management by Objectives forces managers to think about planning for results, rather than merely planning activities or work.
Managers are required to ensure that the targets are realistic and needed resources are made available to subordinates to achieve
the targets. Clearly set objectives for the subordinates serve as evaluation standards as well as motivators for them. Thus,
Management by Objectives results in improvement in managing.
3. Better Organizing
The positions in the enterprise can be built around the key result areas. Managers are required clarifying organizational roles and
structures. Hence better organizing.
4. Greater Employee Involvement and Commitment
If Management by Objectives programme is installed in an organization, people are not just doing work, following instructions and
waiting for guidance and decisions from “above” and the superiors do not dictate things. They are now individuals with clearly
defined goals, which have been formalized through their own participation in the process. Moreover, they fully well understand the
areas of their discretion – their authority. They are also confident of getting needed help from their superiors. There is clarity of
roles. These elements together make for a feeling of greater personal commitment on the part of the subordinates. They become
more enthusiastic in attaining the targets. There is high motivation; there is high morale too.
5. Orderly Growth of Organization
Management by Objectives provides for the maintenance and orderly growth organization by means of predetermined set of
objectives for everyone involved. It is also provides in measurement of what is actually achieved. The progress and even the tenure
of all responsible managers are dependent upon their producing the results. Management by Objectives emphasizes the ability, skill
and achievement of managers rather than their personality. Thus, the orderly growth and development of the organisation is
ensured.
6. Development of Effective Controls
Management by Objectives not only sharpens the planning, but also develops effective controls. It specifically provides for periodic
reviews and annual performance appraisals serving as the needed feedback for further streamlining the objectives or targets. It
makes possible for a manager to control his own performance, high degree of self-control resulting in stronger motivation. Control
from “above” is substituted by control from “self” Management by Objectives facilitates coordinated effort and teamwork.
7. Generating of an Ideal Atmosphere
Douglas McGregor says. “The motivation, the potential for development, the capacity for assuming responsibility, the readiness to
direct behaviour toward organisation goals are all present in people. Management does not put them there. The essential task of
management is to arrange organizational conditions and methods of operations so that people can achieve their own goals best by
directing their own efforts towards organizational objectives.” This is an ideal atmosphere suitable for better industrial relations and
ensured success of the enterprise.
8. Objective Appraisal
Management by Objectives provides a scientific basis for evaluating a subordinate’s performance, because goals (standards) are
jointly set by the superior and the subordinates.

Limitation of Management by Objectives

Q.3. Describe the limiatation of Management by Objectives. Limitations of Management by Objectives
In spite of its many advantages, the Management by Objectives has some weaknesses as follows:
1. Unfavourable Attitude of Managers
Some managers have an attitude that the regular attention required of them by Management by Objectives system, draws heavily on
their busy time-schedule and is not consistent with their roles. They feel that it is not so effective a way as some other approaches.
Some managers view their roles as principally involving policy-making, budget formulation etc.
2. Excessive Paper Work
Management by Objectives programme involves a huge amount of newsletters, instruction booklets, training manuals,
questionnaires, performance date, review and appraisal reports to be prepared by the superiors and subordinates. Thus,
Management by Objectives is said to have created one more “paper mill” in the organisation added to the already existing large
amount of paper work.
3. Problems about Goal Setting
Management by Objectives requires issuance of proper, exhaustive guidelines to goal-setters. However, managers responsible for
practicing Management by Objectives do not themselves understand and appreciate a good deal about it, expecially about the
concept of self-control and self-direction which is basic to Management by Objectives. Similarly, there are several other difficulties
in goal setting:

 Positive and active participation from subordinates is not easily forthcoming.

 Truly verifiable goals are not easy to formalize.
 Empahasis is put on short-range goals, where as long-range goals are avoided, though long-range goals are vital for growth
and development of the organisation.

22
 Goals remain inflexible and rigid. For example, changes desirable in annual budgets are not easily accepted in the middle
of the year.
 Over-use of quantitative goals jeopardizes the qualitative aspect which may even more important the quantification is
some case.
 Goals tend to take precedence or priority over the people who uses them. Any action is acceptable if it serves in the
attainment of goals, without caring of its impact on people. Thus, all these difficulties come in the way of making management by
objectives operational in an organisation. Further, managing involves more than goal setting.
4. Time-Consuming Nature of Management by Objectives
Management by Objectives system is time-consuming especially in the early phases of its introduction when employees are
unfamiliar with its process. Since managers also have to learn the necessary skills it is commonly estimated that it takes 2 years to
take an management by objectives programme working smoothly. A few management by objectives programme working smoothly.
A few management by objectives programmes have failed because managers could not spare adequate time needed for its various
phases.
5. Difficulties in Making Organizational Changes
Management by Objectives system requires to be integrated with other systems in the organisation, such as budgeting, forecasting,
communication, control etc. Sometimes current practices may have to be changed. Thus, greater decentralization may become a
necessity. Moreover, some systems may required to be changed, for example, control system, data processing system etc. Managers
feel such changes as time-consuming, distributing there “status quo” (or as it is) facilities and difficult in different other ways.
6. Failure to Teach Management by Objectives Philosophy
Management by Objectives as a concept is simple but it is deceptively so. It is much easier to explain this principle than to introduce
it to an organsation, especially in a very dynamic and changing environment. Moreover, management by objectives is still building
toward achieving a fully institutionalized system of management to be used by the entire key manager. Sometimes managers fail to
use objectives as a constructive force, even with the full participation and assistance of their superiors. In order to understand the
philosophy of management by objectives, managers have to make themselves professionals.

Steps for improving the prospects of Management by Objectives

Q.4. Describe the steps for improving the prospects or effectiveness of Management by Objectives. Steps for
Improving the Prospects Or Effectiveness of Management by Objectives Application
1. Top Management Support and Commitment
Management by Objectives should be used by a strong power and authority structure, i.e. by the top management, so that “planning
for work” may be rightly shifted to “planning for goals or results”. David Hampton says, “If you want to make Management by
Objectives work, you must integrate it into the real systems of work and influence.” Management by Objectives must be considered
a way of managing and not to an addition to the managerial job. Harold Koontz points out. “An effective programme of managing by
objectives must be woven into an entire pattern and style of managing. It cannot work as a separate technique standing alone.” In
this whole content, top management support and commitment to management by objectives programme is essential and vital.
2. Other Important Steps

 Managers should be given adequate training in management by objectives philosophy and procedures before installing the
system. For this purpose, adequate time and resources are required and therefore be arranged.
 Necessary mechanism for making management by objectives programme a success should devised and for this purpose the
administrators of management by objectives programme must be endowed with sufficient authority to punish and reward at their
own levels.
 Feedback should be made effective the more specific timely the feedback the more positive the effect.
 Employee Participation should be made real and committed by properly motivating them.
 Management by Objectives must be carried all the way down to the first line or supervisory level.
 It should be seen that conflicting objectives are not set at any level and important non-quantifiable objectives are not
brushed aside.
 During the course of implementation of management by objectives the required redistribution of powers and status should
be seriously considered so as to avoid all kinds of unnecessary infighting and negative conflicts.
Most of the limitations or weaknesses of management by objectives are not of formidable (uncontrollable) nature. Some minor
adjustments in attitudes, initiative and determination on the part of the managers may overcome all the difficulties and pitfalls,
which come in the way of management by objectives programme. It appears from the widespread discussions and adoption of
management of objectives concept in private and public enterprises that it has come to stay in the field of management.

Different Theories of Decision Making

Q.2. Discuss in brief different theories of Decision-Making. OR
What are the principles of Decision-Making? How and why the employee participation in Decision-Making
process should be introduced?
23
OR
Make out a case for employees participation in Decision-Making
Theories of Decision Making
The most common bases upon which decisions are made are, fact experience, intuition and authority. The decision itself is
concerned with the achievement of an objective. Bridging the gap between the basis for the decision and the decision itself is the
theory (or technique) used to arrive at the decision. Theories of decision making stem from the manner in which decisions are
made.
Ernest Dale has suggested a comprehensive list of theories of decision making as follows
1. Traditional Economic Theory
2. Psychological Theory
3. Mathematical Theory.
1. Traditional Economic Theory Or Marginal Theory
The simplest theory of business decision making is that the decision makers try to maximize profits and that key consider all courses
of action open to them in attempting to do. This is the theory held by traditional economists. Although it may be partially true that
the decision makers generally have the effect of profits on mind, they may not always attempt to maximize profits. Marginal theory
is based on the law of diminishing return. According to this law, with the additional units of inputs (labour and capital), the
marginal contribution of each unit is at a decreasing rate. There comes a stage when the marginal return is zero. This is marginal
point. A number of decisions in the area of production, sales, marketing, advertising, recruitment, etc are taken by the management
on the basis of marginal theory.
2. Psychological Theory
This theory is designed to identify what actually goes on in the decision maker’s mind when he makes a decision. Several factors
leave an impact on the mind of the decision maker, such as nature, size and purpose of the organisation, manager’s aspiration,
attitude, habits, personally temperament, political learning’s, social and organizational status, technological skill, domestic life,
education, experience, level of satisfaction and so on Psychology of a manager has an important bearing on the quality of decisions
he makes. As decision making is an intellectual process, these psychological factors cannot be avoided altogether.
One of the best-known psychological theories is Herbert Simon’s theory, which explain that the decision maker attempts to satisfies
rather maximize. In other words, a manager finds an answer that is good enough. What consequences the manager considers good
enough, will depend on what has been achieved in the past.
3. Mathematical Decision Theory
It is not designed to show how decisions are actually made. Rather, it is designed to help the decision maker who is interested in
maximizing profits in a given situation, to lay out the alternatives in such a way that he sees the risks and the consequences more
clearly. With the development of operations research and computers for handling complex mathematical models, this approach is
commonly used by large organizations where decision making problem is very complex. The linear programming, venture analysis,
game theory, queuing theory, probability theory, etc are some of the examples of widely used Operations Research technique.
Although these techniques provide a good deal of analysis, yet the rational and psychological aspects of decision making cannot be
ignored totally. The attitude, intelligence and wisdom of the decision maker shall always have an important impact on the quality of
decisions made by him.

Policy
Q.3. Policies are guide-posts for managerial action. Discuss this statement and give at least two examples of
policies in any area of business management.
OR
What is Policy? What characteristics do policies have? Also discusses various classifications of an industrial
policy.
OR
What is Policy and What are the essentials of a sound policy?
Meaning and Definition of Policy
A policy is a general statement that guides thinking, action and decision making of managers for the successful achievement or
organizational objectives Policies define the limits within which decisions are to be made. This ensures consistent and unified
performance and exercise of discretion by managers.
The top managers generally frame the policies. However, a manager at any other level may low down policies within the limits of his
authority and also within boundaries set by policies of his seniors.
A policy is not static and may be modified or reviewed in the light of changes in the environment. A policy may be verbal, written or
implied.
A well defined policy help the manager to delegate authority without undue fear, because the policy lays down the limits for
decisions by the subordinates. Moreover, policies operationalise objectives, speed up decision making, ensure coordination, help in
training and orienting employees and ensure proper administrative control.
Different scholars have defined the term policy as follows:
Heinz Weihrich and Harold Kountz
Policies are plans in that they are general statement or understanding that guide or channel thinking in decision making. Not all
policies are statements they are often merely implied from the actions of managers.
F.T. Hanker
24
A policy is a statement, verbal, written or implied of those principles and rules but are set by managerial leadership as guidelines
and constraints for the organisation’s thought and action.
E.F.I Brech
Policy is a patter of direction for the guidance of those who carry responsibility for the management of the activities of the
enterprise.
Dalton McFarland
Policies are planned expressions of the company’s official attitudes towards the range of behaviour within which it will permit or
desire its employees to act.
George Terry
Policy is a verbal, written or implied overall guide setting up boundaries that supply the general limits and direction in which
managerial action will take place.

Characteristics of Policy
Q.4. Describe the characteristics or features of Policy. Characteristics Or Features of Policy
Policy has the following important features:
1. A policy is a standing, repeat-use plan for answering the recurring problem of the similar nature.
2. It is a guide thinking in decision making. It is not an exact order in which things are done. It provides the framework within which
decisions should be taken. It unfolds the broad guidelines for achieving organizational objectives.
3. It allows some amount of judgement or discretion on the part of the executives.
4. It prescribes the course of action selected to guide and determine present and future decisions.
5. It lays down the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of
discretion on the part of the executives.
6. Policies are generally framed by top-level management, however, managers at other levels also can frame necessary policies to
deal with recurring problems of similar nature, such as departmental policies, divisional policies – formulated at the level of
department or division.
7. Departmental or divisional policies are formulated within the limits of the authority of hte respective in charge and also within
the limits set by the organizational policies.
8. A policy is not static. Policies are reviewed and modified from time to time as per requirements or demands of the changing
environment.

Classification of Policies
Q.5. Describe the Various types / Classification of Policies. Classification of Policies
A number of policies are used in an enterprise in order to attain the organizational objectives. Policies may be classified as follows:
(A) On the Basis of Source
According to their source, origin or emergence, policies may be of the following kinds:
1. Originated Policy
It is also known as formulated policy. It is a policy deliberately formulated by top management to guide decision-making at lower
levels, board of directors, the chief executive, the executive committee of the board or heads of the major departments or divisions.
Such policies are broad in scope and affect usually the whole organisation or its major segments. These policies are often written
ones, typically in the form of a policy manual of the organisation and flow down.
2. Appealed Policy
It is a policy formulated on the appeal or request of subordinates for filling the gaps left by originated policies. In other words, when
a subordinates refers an exceptional problem of recurring nature not covered by existing policies, to his superior and appeals for a
policy decision. When the superior makes decision in such a case, it becomes a precedent (policy) for future action. Such policies
may be formulated at any level and are in the nature of flowing upward policies.
3. Imposed Policy
It is a policy, which an organisation is compelled to adopt due to some outside forces, such as the government and its regulatory
agencies, trade association, trade unions.
(B) On the Basis of Functions
Policies are needed in all areas of business of an enterprise. These may be classified on the basis of different managerial functions as
follows:
1. Production Policy
Raw material, purchase policy, repairs and maintenance policy, technology adoption and development policy, quality control policy,
inventory policy and research and development policy are some examples in the category. Indent for the purchase of raw materials
should be made at least a week in advance is an example of Raw Materials Purchase Policy.
2. Human Resource Policy
Examples in this category are recruitment policy, training policy, employee career development policy, wages and salary policy,
placement policy, promotion policy and transfer policy, employee participation policy. Any vacancy shall be filled first by promotion
from within the organisation and then, if need be, from outside sources Is an example of Recruitment Policy.
3. Marketing Policy
Capital structure policy, packaging policy, distribution policy, advertising policy, customer service policy, credit policy, market

25
research policy and important examples in this category. Customer’s complaint must be responded within the next day is an
example of Customer Service Policy.
4. Finance Policy
Capital structure policy, fixed capital policy, working capital policy, investment policy, research policy, divident policy are some
examples in this category. Excess capital, if any should be invested for short term only, preferably in limited company shares
registered in stock exchange is an example of Investment Policy.
5. Accounting Policy
Inventory valuation policy, depreciation policy, provisions policy (for bad debts etc) deferred revenue expenditure policy etc. are
examples in this category. Deferred revenue expenditure (e.g., a huge amount spent on advertisment) should be spread over the
years of its benefit generation and written off every year accordingly, is an example of Deferred Revenue Expenditure Policy

Process of policy formulation

Q.6. Describe the process of policy formulation. Process of Policy Formulation
Policy formation is a creative and analytical phase of planning. It is based on the underlying objectives of the organisation. Policy
formulation process involves various steps or activities and their analysis in order arrive at a decision. The important steps involved
in policy formulation may be briefly described as follows:
1. Understanding of Corporate Objectives
Organizational objectives are the starting point for policy formulation. They are ultimate results, which an organisation tries to
achieve. They provide the foundation for policy formulation.
2. Analysis of the Environment
The basic purpose of policies is to integrate the organisation with its environment; hence the policy makers must know the nature
and other feature of the organisation environment. This requires a comprehensive analysis of the environment – its opportunities
and threats.
3. Internal Analysis
The policy makers should be fully conversant with the strengths and weaknesses of the organisation. They should clearly identify the
factors which are critical for the success of the organisation.
4. Definition of Policy Area
Policy makers should then specify clearly the areas, which require policies to be made.
5. Choice Or Selection of Policy
After evaluation of different policy alternatives, the most appropriate or suitable policy alternative is selected. This is the stage
where the manager arrives at the right policy in the concerned area.
6. Communication and Implementation of Policy
The selected policy is communicated in clear words to those who are supposed to implement it. Implementation of policy is the
operative aspect of policy whereby it is put into action. The concerned people apply the policy when problematic situations arise or
when they normally do their jobs.
7. Review and Modification of Policy
The correctness of a policy is perceived when it is put into practice. On the basis of feedback from the executors of the policy, a
periodical review is carried out and wherever necessary, desired modification are made in the policy from time to time. Sometimes
outdated or obsolete policies are reconstituted or reframed.

Various theories of leadership

Q.2. Briefly describe various theories of leadership. OR
Discuss different approaches to leadership.
OR
Explain the main theories of leadership.
OR
Differentiate between tratist and situationalist theories. Which of the two is near to the modern thinking?
OR
Enumerate the qualities of leadership.
Theories of Leadership
Leadership styles focus on the behaviour pattern exhibited by a leader during supervision of the subordinates. On the other hand,
who will emerge an effective leader? Or how effective a leadership style will be? such questions are answered by leadership theories.
Simply stated, theories focus on various approaches to successful leadership.
The theories of leadership may be classified into three categories, Trait theories, Behavioural theories and situational theories.
1. Tratist Leadership Theory
In its early stage, this theory was called great man theory of leadership, which says that leaders are born and not made. Ancient
people thought that certain natural qualities of leadership exist in a person. Ultimately, the great man theory gave way to a more
real theory the Trait approach.
Trait theory views leadership as a conglomerate (or a large set) of different traits or qualities. The great man theory believed that
traits were inherited. Whereas, trait theory holds that traits are not always inborn but can be acquired through education, training
and experience. Trait theory holds that leadership is largely a matter of personality, a function of specific traits. It suggests that

26
there are certain unique qualities or traits clearly identifiable in leaders. The greater the degree of such traits possessed by a person
the better and more successful will be proved as a leader. It further suggests that leaders differ from followers with respect to certain
key traits and these traits remain unchanged across time. The trait theory attempts to isolate the attributes of successful and
unsuccessful leader and using such a list of traits, it predicts the success of failure of persons as leaders. It is to be noted that these
traits are not measurable.
Various thinkers have differed on the package of traits. Many studies of traits have been made. Ralph Stogdill found (1974) that
various researchers have identified specific traits related to leadership ability as follows:
a. Physical Traits
Five in all, such as energy, appearance and height.
b. Intelligence and Ability Traits
Four in all, such as high level of intelligence and judgement.
c. Personality Traits
Sixteen in all, such adaptability, agressiveness, enthusiasm and self-confidence.
d. Task-Related Characteristics
Six in all, such as achievement drive, persistence and initiative
e. Social Characteristics
Nine in all, such as cooperativeness, interpersonal skills and administrative ability.
It may be noted that the discussion of the importance of traits still goes on. More recently (1991). Shelly Kirkpatrick and Edwin
Locke have identified the following key leadership traits.
i. Drive
Including achievement, motivation, energy, ambition, initiative and tenacity (i.e. firmness).
ii. Leadership Motivation
The aspiration to lead but not to seek power as such.
iii. Self-Confidence
Including motional stability.
iv. Cognitive Ability
The ability of knowing, including consciousness of things and judgement about them.
v. An Understanding of the Business
According to them, less clear is the impact of creativity, flexibility and charisma (i.e. strong personal charm to attract and influence)
on the leadership effectiveness.
In general the study of leaders traits has not been a very fruitful approach to explaining effectiveness of leadership. Not all leaders
possess all the traits and many followers (non-leaders) may possess most or all of them. Further, the trait theory does not indicate
as to how much of any trait a person should have to be an effective leader. Also, most of these so-called traits are really patterns of
behaviour. Furthermore, the list of traits is not uniform. Effective leadership is not a function of some traits only, situation also
plays an important role in making someone a successful leader.
2. Behavioural Theories of Leadership
Dissatisfaction with the results of the trait approach has caused a significant change in the emphasis of leadership research and the
focus shifted in the actual behaviour and actions of leaders from the traits or characteristics of leaders. Thus, Behavioural theories
attempt to describe leadership in terms of what leaders do rather than what they are. According to Behavioural approach, leadership
is the result of effective role behaviour. This approach hold that an effective leader is one who performs these acts which help the
group to attain its goals.
The most popular models of leadership based on the behavioural appraoch may briefly be discussed as follows:
Likert’s for systems of management. Rensis Likert has studied the patterns and styles of leaders and manager for three decades
(1961). He has developed a continuum of our systems of management or leadership styles as follows:
a. System 1 Management
It is described as exploitative authoraitative. Its managers are higher autocratic have little trust in subordinates and motivate people
through fear and punishment and only occasionally reward. They engage in downward communication and limit decision making to
themselves.
b. System 2 Management
It is called benevolent – authoritative. Its managers have a patronizing confidence and trust in subordinates. They motivate with
rewards and some fear and punishment. They permit some upward communication and solicit some ideas and opinions from
subordinates. They allow some delegation of decision making but with close policy control.
c. System 3 Management
It is referred to as Consultative. Its managers have substantial but not complete confidence and trust in subordinates. They usually
try to make use of subordinates ideas and opinions. They use reward for motivation with occasional punishment and some
participation.

Different styles of leadership

Q.3. Briefly discuss various leadership styles and also refer to their advantages, disadvantages and conditions
of use. Which is the best style in your opinion? Leadership Styles
Simply stated, the term Leadership style refers to the pattern of behaviour, which a leader adopts in directing behaviour of the
followers towards the attainment of organizational goals. From another viewpoint, leadership style is the position that a leader
27
usually takes with regard to how much decision making freedom he allows to his followers to have. Similarly, the behaviour
exhibited by a leader during supervision of his followers is known as leadership style. The nature and form of leadership style is
affected by the following factors, existing circumstances, time period, personality of the leader, his experience, attitude and
orientation, nature of followers, external environmental and so on. Most of the managers use several styles at one or the other point
of time, but in which category a manager falls, is decided by the style that is mostly used by him. Basically and broadly, there are
three important leadership styles as follows:
1. Autocratic Or Authoritarian Style
It is also known as directive style. It is basically treated as a traditional method of leadership. An autocratic leader centralize power
and decision making in him and exercise complete control over the subordinates. He dominates and drives his group through
coercion and command. He uses both positive and negative motivations, for example, reward, praise, fear of criticism or
punishment. When he uses positive motivations that is called benevolent autocratic style and when he uses negative motivations
that is known as dictatorial or oppressive autocratic style. The autocratic leader likes, Theory X-undemocratic thinking, he
emphasizes work only.
The autocratic leder himself decides all policies. He gives orders to the subordinates and expects them to follow such orders
completely without any grudge or question. Under this style, subordinate are thought to be inexperienced and wisdom less and
therefore they are given no freedom – the autocratic leader decides the technicalities and modalities of the work and the course of
action. Hence any one except the leader does not know the future action.
Autocratic style permits quick decision making provides strong motivation and satisfaction to the leader centralize power and
dictates terms, yields positive results when great speed is required and needs less competent subordinates at lower levels. Its major
disadvantages are, It leads to frustration, low morale and conflict among subordinates are induced to avoid responsibility, initiative
and innovative behaviour. Full potential of subordinates and their creative ideas are not utilized. In the absence of the leader,
organizational continuity is threatened because subordinate gets no opportunity for development.
This style may be appropriately used where subordinates are uneducated, unskilled, unwise, inexperienced, where the company
endorses fear and punishment as accepted disciplinary techniques and where the leader prefers to be active and dominate to
decision making.
2. Democratic Or Participative Styles
The democratic leader decentralizes power. He involves subordinates in the decision making. Decision are made in consultation and
participation with the subordinates. The style emphasizes group-discussion and group decision making. The democratic leader like
Theory Y-fairness, equity and human relation. He emphasizes both work and worker. The subordinates are encouraged to utilize
their full talent potential and capacities and assume greater responsibilities. The democratic leader shares power with subordinates,
delegate adequate authority to them, keeps them well informed about matters of their interest and concern and allow adequate
freedom for thinking, discussing, expressing and making suggestions. He has faith in the subordinates and their wisdom, skills and
capacities. He holds objective approach. Communication pattern is multi-dimensional.
The major advantages of this style are, It improves job satisfaction and moral, develops positive attitude, reduces resistance to
change, generates self-motivation due to participative decision making and freedom of thought and impression, increases
productivity and develops better subordinates.
The major disadvantages of this style are, It is time consuming and causes delays in decision making; may fail when the
communication pattern and skill are not strong enough is not workable where subordinates do not want to take extra responsibility
of sharing in decision making and becoming part of every decision decreases productivity in some cases especially when decisions
are diluted to appease or please everybody.
Democratic style is more appropriate where subordinates are educated, skilled, wise, creative and enthusiastic, where the company
endorses self-direction and self-control and rewards and involvement as prime means of motivation and control and where leader
desires to hear subordinates before making decisions and to develop a strong and capable force of followers.
3. Free Rein Or Laissez-Faire Or Permissive Style
There are several forms of this style. For example, in some cases the subordinates are given a goal to achieve in their own way,
whereas in some other cases they themselves decide their group goals. Infact, there is almost complete delegation of authority and
the path leading to the goals is decided by the subordinates themselves. The leader behaves primarily as a member of the group and
plays the role of a member only. He give his opinion or suggestion only when it is demanded from him. Under this style, the group
members are educated and motivated by themselves, the leader is not required to educate but he acts, as a link primarily for
arranging adequate resources needed for attaining the goals, for establishing contact between employees and the outside world, for
collecting necessary information from external sources and for establishing coordination. The concept of management by exception
promotes this type of style. Subordinates themselves plan, control, evaluate and decide.
The major advantages of this style are, It increases subordinates, freedom, develops their expression, compels them to work as
group members, increases job satisfaction and moral, utilities subordinates potential to the maximum possible extent and promotes
creativity or innovation.
The free-reign style is appropriate where subordinates themselves are well trained and highly knowledge about their tasks and
unheisitatingly ready to assume extra responsibility, where the company has a wide and effective communication network
acceptable to the subordinates and it endorses complete freedom and full involvement as means of motivation and control and
where the leader is ready to compromise with the status in the group and is interested in delegating the whole authority to the
subordinates. It is mostly used in circumstances where the leader feels him in a position to leave the alternative or selection fully on
the group’s choice.
Choosing a Leadership Style

28
Which leadership style is best or which to choose? Different scholar makes different suggestions in this regard. However, widely
known for their effective management practices the Japanese favour participative leadership style. In actual practice it is difficult to
hold my one style, is the best leadership style. As discussed above, each style has got its merits and demerits. Hence the choice of a
style will depend upon several factors, such as suggested by Tannenbaum and Schmidt.
1. Forces in the Manager
Manager’s value system, confidence in subordinates, own leadership inclination and feeling of security in an uncertain situation.
2. Forces in the Subordinates
Their need for independence, readiness to assume responsibility for decision making, tolerance, for ambiguity (or strangeness),
interest in problem at hand, understanding and identification with the goals of the organisation, knowledge and experience to deal
with the problem and learned expectatio of sharing in decision making process.
3. Forces in Situation
The type of organisation, group effectiveness, the complexity of the problem itself, pressure of time on the situation etc.
Effective manager should be expert enough to adapt or modify their leadership style as per the need of the moment. Sticking to one
best considered style at all times in all situations with all people may not work well to be a good leader. Most suitable leadership
style is that which fits with the situation the followers and the leader.

Planning
Q.1. Define Planning and discuss its main characteristics. OR
Discuss the advantages, limitation and principles of Planning.
OR
What is planning? Outline the steps in planning process.
OR
What is the concept of planning as an element of Management process? Discuss its nature and role in a modern
business organisation.
Meaning and Definition of Planning
Planning is thinking in advance or before doing something. All kinds of organisation do planning. Planning helps us in looking into
the future. Planning establishes goals or objectives and identifies the ways to achieve them. A plan is a predetermined course of
action to be taken in future.
George Steiner
Planning is a process that begins with objectives, defines strategies, policies and detailed plans to achieve them.
Peter Drucker
Planning is the continuous process of making present entrepreneurial (risk taking) decisions systematically and with best possible
knowledge of their futurity.
Nature of Characteristics of Planning
There are a number of features or characteristics of planning that indicate towards its nature. These may be outlined as follows:
1. Goal-Oriented
Planning is goal-oriented in the sense that plans are prepared and implemented to achieve certain objectives.
2. Basic to all Managerial Functions
Planning is a function that is the foundation of management process. Planning logically precedes all other function of management,
such as organizing, staffing etc because without plan there is nothing to organize nothing to control. Every managerial action has to
be properly planned.
3. Pervasive
Planning is a function of all managers, although the nature and extent of planning will vary with their authority and level in the
organisation hierarchy. Managers at higher levels spend more time and effort on planning than do lower level managers.
4. Interdependent Process
Planning affects and is affected by the programmes of different departments in so far as these programmes constitute an integrated
effort.
5. Future Oriented
Planning is forward looking and it prepares an enterprise for future.
6. Forecasting Integral to Planning
These essence of planning is forecasting. Plans are synthesis of various forecasts. Thus, planning is inextricably (inseparably bound
up with planning).
7. Continuous Process
Planning is an ongoing process. Old plans have to be revised and new plans have to be prepared in case the environment undergoes
a change. It shows the dynamic nature of planning.
8. Intellectual Process
Planning is a mental or conceptual exercise. It therefore involves rational decision making, requires imagination, foresight and
sound judgement and involves thinking before doing thinking on the basis of facts and information.
9. Integrating Process
Planning is essential for the enterprise as a whole. Newman and others have drawn our attention towards this feature of planning,
without planning, an enterprise will soon disintegrate the pattern of its actions would be as random as that made by leaves
scampering (running quickly in short steps) before an autumn wind and its employees would be as confused as ants in an upturned
29
anthill. If there are no plans action will be a random activity in the organisation instead there will be chaos.
10. Planning and Control are Inseparable
Unplanned action cannot be controlled, without controlled, planned actions cannot be executed. Plans furnish standards of control,
In fact Planning is meaningful without control and control is aimless without planning. Planning is measuring rod of efficiency.
11. Choice among Alternative Courses of Action
The need for planning arises due to several ways available for an action. If there is only one way-out left, there is no need for
planning.
12. Flexible Process
The principle of navigational change (i.e. change according to changes in environment) applies to planning. In other words, effective
planning requires continual checking on events and forecasts and the redrawing of plans to maintain a course towards desired goals.
Thus, plans have to be adaptable to changing circumstances.

Various Steps of Planning

Q.2. Describe in detail the various steps of Planning. Planning Process
The process of planning involves the following steps:
1. Analyzing Environment
At the outset, the internal and external environment is analyzed in order to identify company’s strengths and weaknesses (in
internal environment) and opportunities and threats (existing int the external environment). This is also known as SWOT
(strengths, weaknesses, opportunities and threats) analysis.
2. Establishing Objectives Or Goals
In the light of the environmental scanning (study), clear or probable opportunities that can be availed are identified. In order to
avail them, objectives or goals are clearly defined in specific term along with priorities in all the key areas of operations. Major
problems associated with such objectives are also identified and defines, so that there may be special emphasis on their planned
solutions.
3. Seeking Necessary Information
All relevant facts and data are collected from internal and external sources. For example, availability of supplies, physical and
human resources of the company, finances at disposal, relevant government policy, general economic conditions and relevant
specific market situation. Then such investigated and collected information and factors are analyzed. Such information analysis is
used in two ways – first, to make necessary modifications in objectives or goals and secondly to take help from them in premising
(considering) assumptions.
4. Premising Or Establishing the Planning Premises
In order to develop consistent and coordinated plans, it is necessary that planning is based upon carefully considered assumptions
and predictions. Such assumptions and predictions are known as planning premises. The assumptions under which plans are
supposed to operate should be clearly brought out. Such presumptions and forecasts are prepared for various areas, such as sales,
prices, wages, taxes, changes in fashions and habits, purchasing power, standards of living, population competitors and so on.
5. Identifying and Developing Alternative Courses of Action
After establishing objectives or goals and taking other related steps, feasible alternative programmes or courses of action are
seached out. Impossible or highly difficult propositions are left out.
6. Evaluating the Alternatives
Probable consequences of each alternative course of action in terms of its pros and cons (e.g. costs, benefits, risks, etc) are assessed
and than relative importance of each of them is found out by looking at their overall individual strengths and limitations especially
in the light of the present objectives and the environment of the company.
7. Choosing the Most Appropriate Alternative Or Course of Action
After weighing the pros and cons of each of the alternative courses of action and realizing their individual relative importance, the
most appropriate alternative in the light of the overall consideration is selected to be followed. In other words, the alternative which
appears to be most feasible and conducive to the accomplishment of company’s predetermined objectives, is chosen as a final plan
of action – as strategy.
8. Preparing the Derivative Plans
Derivative plans involve short range, operating plans that are useful in day-to-day operation and provide a working basis for such
operations. Such plants are developed in the form of schedules, budgets, programmes, procedures, methods, rules, policies etc. The
derivative plans are prepared in different departments and their timing and sequence are also specified. Such plans are prepared in
concrete terms showing specific results to be attained within specified time limit and by utilizing the allocated resources. An
integrative mechanism has also to be provided for effecting coordination between and among different derivative plans being
executed by different departments.

Various elements of good planning

Q.3. Discuss the various elements of good planning. OR
Discuss briefly the various types of plans.
Elements of Good Planning
Managerial planning comprises various types of plans, which are also known as elements of good planning. Some of the important
types of plans may be discussed as follows, which must be included in a sound planning system.

30
1. Objectives
Objectives may be defined as the targets people seek to achieve over different time periods. Objectives gives direction to human
behaviour and effort. Hence, an essential task of management it to formulate, classify and communicate organizational objectives.
Managers are required to set both general and specific objectives. Survival, growth and development are general objectives of a
business enterprise. The specific objectives include the goals set for various departments, divisions, groups and individuals. The
general objectives are long term in nature, where as the specific objectives are short range, though the short range objectives are and
should be a part of long term objectives. Departmental objectives must be consistent with the conductive to the overall, corporate
objectives.
2. Policies
A policy is a general statement that guides thinking, action and decision making of managers for the successful achievement of
organizational objectives. Policies define the limits within which decision are to be made. This ensures consistent and unified
performance and exercise of discretion by managers. Top management generally frames the policies. However, a manager at any
other level may lay down policies within the limits of his authority and also within boundaries set by policies of his seniors. A policy
is not static and may be modified or reviewed in the light of changes the environment. A policy may be verbal, written or implied. A
well defined policy helps the manager to delegate authority without undue fear, because the policy lays down the limits for decisions
by the subordinates.
3. Procedures
A procedure prescribes the sequence of steps that must be completed in order to achieve a specific purpose. A procedure is a guide
to action rather than to thinking. It details the exact manner in which a certain activity must be accomplished. Its essence is
chronological sequence of required actions or steps. A procedure is generally established for repetitive activity so that same steps are
followed each time when that activity is performed. The procedures do not allow much latitude in managerial decision making
because they lay down a definite way of doing certain things.
Procedures are designed to execute policies and achieve objectives. Procedures are used in all major functional areas. Purchase
procedure, materials issue procedure, costumer’s order executing procedure, accounting procedure, grievance handling procedure,
etc, are some of the examples of usual procedures.
4. Rules
Like a procedure, a rule is a guide to action. But it does not lay down any sequence of steps as in the case of a procedure. A role tells
us whether a definite action will be taken or will not be taken in case of a given situation. Examples of rules are: (i) Customer’s
complaint must be replied within one day (under customer satisfaction policy), (ii) No smoking in the factory (under safety policy).
Thus, a rule is prescribed course of action or conduct that must be followed. As such, a rule does not leave any scope for discretion
on the part of the subordinates. Rules are definite and rigid because there must be no deviation from the stated action, except in
very exceptional cases.
5. Strategy
Strategy is a pattern or plan that involves matching organisation competences (i.e. internal resources and skills) with the
opportunities and risks created by environmental change, in ways that will be both effective and efficient over the time such
resources will be deployed. Effective formal strategies contain three elements: (i) the most important goals, (ii) the most significant
policies, (iii) the major programmes. Strategy deals with unpredictable and unknowable. It is developed around a few key concepts
and thrusts. A well-formulated strategy helps to marshal and allocate and organisation’s resources into a unique and viable posture
in relation to the strengths and weaknesses of the organisation, the anticipated changes in the environment and the contingent
moves of the opponents. Generally when we walk of organizational strategy, it refers organisation’s top level strategy. However,
strategies exist at other levels also.
6. Programmes
A programme lays down the principal steps for accomplishing a mission and sets an approximate time for carrying out each step.
George Terry says, A programme can be defined as a comprehensive plan that includes future use of different resources in an
integrated pattern and establishes a sequence of required actions and time schedules for each in order to achieve stated objectives.
Programmes outline the actions to be taken by whom and where. A programme is made up of objectives, policies, procedures, task
assignment, budgets, schedules etc. Examples of programmes are, building programme, expansion programme, moral improvement
programme, acquisition of the new line of business programme, training programme, development of a new product programme,
advertising programme and so on. Programmes may be measure or minor, primary or derivative and long-term, medium term or
short term.
7. Projects
Often a single step in a programme is set up as a project. In fact a project is simply a cluster of activities that is relatively separate
and clear cut. Thus, projects have some features of a programme but are usually parts of some programmes. Building a hospital,
designing a new package, building a new plant, are some examples of projects. The chief virtue of a project lies in identifying a nice,
neat work package within a bewildering array of objectives, alternatives and activities.
8. Budgets
A budget is a statement or a plan of expected results expressed in numerical terms, such as man hours, units of production, machine
hours, amount of expenditure or any other quantitatively measurable term. Then it may be expressed in time, money, materials or
other quantitative units. Budget is prepared prior to a definite period of time of the policy to be pursued during that period for a
purpose of a given objective. It introduces the idea of definiteness in planning. A budget is an important control device also because
it provides standards against which actual performance may be measured. Examples of budgets are, production budget, sales
budget, material budget, cash budget, capital expenditure budget, expenses budget and so on.

31
9. Schedules
A schedule is an operational plan, timetable of work that specified time-periods (with beginning and completion time points) within
which activity or activities are to be accomplished. In order to keep the schedule realistic and flexible, minimum and maximum
time-periods may be specified. Three main elements are involved in planning a schedules, (i) identification of activities or tasks, (ii)
determination of their sequence, (iii) specification of starting and finishing dates for each activity as well as for teh sequence as a
whole. Scheduling is the process of establishing a time sequence for the work to be done. Schedules translate programmes into
actions. Scheduling is necessary in all organisations with a view to providing for an even flow of operations and to ensure
completing of each task at the right time. While planning schedule, the avialability of resources, processing time and the delivery
commitments should be kept in view. Due allowance should be made for delays created by factors beyond the control of
management as well as for non-productive time.
10. Forecasts
Planning presupposes forecasting as the former is defined as deciding what is to be done in future. Henri Fayol has described a plan
as the synthesis of various forecasts – annual, long-term, short-term, special etc. The targets cannot be fixed with any degree of
precision unless forecasts are made. Forecasts are estimates of future events, providing parameters to planning. Forecasts do not
involve any kind of commitment of organizational resources. Planning without forecasts is not possible. In fact, forecasts are
predictions or estimates of the changes in the environment, which may effect the business plans. A manager has to make forecasts
keeping in view the planning premises. There are various types of forecasts, such as economic, technological, political, social and so
on. However, sales forecast is the basis of most planning.

Environment
Q.4. What is environment? What is environment analysis and diagnosis? Explain the importance of
environment analysis and diagnosis. OR
Explain the term “environment” and discuss why environment analysis and diagnosis is necessary in strategic
management.
Environment
Organisations are not island in themselves they function neither in isolation nor in vacuum. They are part of a society and exist in
association with their environment, i.e., certain facts surrounding various situations. Organisation’s profitability is not determined
by what the products look like, nor whether it embodies high or low technology; it is rather determined by the environment within
which it operates. Thus, organisations are affected by environment. If an organisation is to remain successful and prosperous, it
must regularly adapt to its environment, which is uncertain and changing. Failure adequately adapt to the environment may be a
mojor cause of organisation’s failure. However, organisations also affect the environment.
Although William Starbuck has identified some 20 different uses of the work environment in order to perform an efficient and
effective environmental analysis the environment of an organisation is generally divided into two distinct levels; external or general
and internal or specific environment.
External or general environment is a set of those factor that affect and organisation from outside is boundaries. The external
environment contains elements that have broad and long-term implications for managing the organisation. Such environment has
both direct action and indirect action elements. Direct action element of external environment include various stakeholders lie
shareholders, customer, suppliers, competitors, employees, community (or society), special interest groups, government and
international issues. They are also designated as economic environment or task environment. Indirect action elements of external
environment include political-legal socio-cultural and technological components.
Internal or specific or organizational environment is a set of those factors that affect an organisation from inside its boundaries. It
contains elements that exist within the organisation and normally have immediate and specific implications for managing
organisation. Broadly speaking, internal environment includes organizational objectives, organizational resources, organizational
structures, processes and techniques. Organizational resources include, financial and physical or material resources and human
technological capabilities. Organisation structures, processes and techniques include; marketing, production, finance and
accounting. From a more specifically management viewpoint, internal environment includes planning, organizing, staffing,
directing and controlling.
Environment Analysis
Organisations are open system of management that constantly interacts with their environment. Environmental analysis is the
study of organizational environment to identify and indicate those environmental factors that can significantly influence
organizational operations and managers strategic decision making. It is thinking about the unthinkable, and it is seeing new insights
rather than extrapolation. Environmental analysis is the discerning (seeing and understanding well) of those aspects of the
environment, which shall have the greatest influence on the organisation’s ability to achieve its objectives. Such a discerning is made
within and with the help of a framework provided by the knowledge of the organisation’s goals and the existing strategy of the
organisation.
Environment Diagnosis
Environment diagnosis is an exercise attempted to identify the factors of causes in the environment that affect the function of an
organisation and use such identification as a base for developing plans or strategic to improve or maximize the dynamism and
effectiveness of the organisation. Environment analysis is a tool of environmental diagnosis.
Environmental Diagnosis Analysis and Diagnosis
32
The purpose of environment analysis and diagnosis is to identify the ways in which changes in various organizational factors may
directly and indirectly influence the organisation and management. Managers commonly perform environment analysis in order to
understand different activities and happenings inside and outside their organisation and thereby increase the chances of framing
sound and effective organisations and managerial strategies by coping with the probable demands of the environment.
Environmental analysis is required due to its needs and importance for the following reasons:
1. Environmental factors are primary impact makers on corporate strategy of organisations.
2. Such analysis helps in anticipating opportunities and to plan alternative responses to those opportunities.
3. It helps in determining threats and developing an early warning system to prevent threats to the organisation or to determine the
risks that may be faced by organisation in its future operations.
4. It helps to identify those adjustments or adaptations, which are required for greater accomplishment of organizational objectives.
5. It is sort of SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis which helps in deciding about the rights course of
action for managerial to successfully negotiate with the prevalent circumstances around the organisation in order to ensure its
survival, growth and development.
6. Environmental information strengthens the planning process and strategy formulation.
Environmental analysis is well accepted and recognized as an essential ingredients of strategic management. It may, however be
noted that the behaviour of the environment may be predictable, partially predictable or unpredictable. Further, the predictable or
partially predictable behaviour may be controllable, partially controllable or uncontrollable. Moreover the environment may be
homogeneous or diversified and stable or changing.
Environmental Influences on Organisation and Management
Environmental factors affect an organisation in two ways (i) they set the limits or constraints over its functioning, (ii) they provide
opportunity and challenges. The factors themselves act as limits, which are sometimes visisble and at other moments, invisible. The
environment provides opportunities by way of markets for new products, etc and challenges in the form of competitors etc. We daily
find in newspaper headlines about government’s new regulations, competitors, new schemes, consumer revolts, anti pollution
activities of the community, trade union, strikes and so on. To deal with these groups is an integral part of all manager’s job. Such a
job becomes more important the higher a manager rises in managerial hierarchy.

Internal Environment
Q.5. What is internal environment? How managers can match this internal environment with the external
environment of their organisation? OR
Explain the important techniques by means of which proper organizational strategy may be systematically
developed to match the internal environment with the external environment.
OR
Explain the meaning of internal environment. What are the tools available to managers for matching the
internal environment with the external environment?
The Internal Environment
The part or level of an organisation’s total environment that exists inside the organisation and usually has immediate and specific
implications for managing the organisation is called the internal environment. It consists of those factors inside an organisation that
affect the management of the organisation. In broad terms, the aspects included in the internal environment are, objectives,
resources and facilities (human and physical), informal organisation (or group), other divisions or units of the organisation, unions,
marketing and accounting. It may be notes that employees and unions of an organisation have such a nature as they are to be
included both in external and in internal environment. From a more specifically management viewpoint, internal environment
includes the state of planning, organizing, staffing, directing and controlling with the organisation.
Matching the Internal Environment with the External Environment
It is clear from the above discussion that on organisation (internal environment) must be suited to its external environment. The
management develops its organizational strategies through an environment analysis. On the basis of the results of such
environmental analysis, proper organisational strategy may be systematically developed by means of the following special tools and
techniques.
1. Critical Questions Analysis (CQA)
Several contemporary management writers suggest that an appropriate organizational strategy is a process of answering some
critical or basic question as follows:
(a) What are the purposes and objectives or goals of the organisation?’
The answer to this question unfolds the desination where the organisation wants to go. Appropriate strategy must reflect
organizational purpose and objectives in order to minimize inconsistencies in strategy.
(b) Where is the organisation currently heading?
The answer to this question tell about the state of achievement of organizational goals and also whether the level of present progress
is satisfactory or not. Managers come to now the gaps in their performance. In fact, this question focuses on where the organisation
is actually going – whether on desired path or in wrong direction.
(c) What is the present environment in which the organisation exists and what changes are expected in it in relevant future?
The answer to this question brings out the special features of the current environment and its future trends. However, it may be
noted that this question focuses on factors both inside and outside the organisation. For example, lack of technically qualified
personnel in the organisation and a sudden arrival of latest computerized technology in the market are the factors that exist
respectively in the internal and the external environment.
33
(d) What steps are essential to better accomplish the objective in future?
In fact, the answer to this question focuses on the requirements of the actual strategy of the organisation in order to remove all
inconsistencies and gaps in the currently adopted strategy. However, it may be noted that correct answer to this question depends
on the opportunity provided to the managers to reflect on he previous three questions.
Thus, managers can have appropriate strategy to match internal environment with external environment only if they have a clear
understanding of three things, (i) Where the organisation intends to go, (ii) Where the organisation is currently going, (iii) What is
the environment in which it exists and is expected to exist.
2. SWOT analysis
Strategic thinking tends to focus on analysis of the strengths and weaknesses of the firm and opportunities and threats of the
external environment. Only after completing a comprehensive appraisal of the internal and external situations (strengths,
weaknesses, opportunities and threats) of the firm, managers could consider the viable strategic options. Such options could only be
broadly classified as, for instance, growth (to increase the amount of business), diversification (to reallocate resources to new
attractive products in order to exploit new market segments), harvest (to maximize the short term cash flow from the business),
retrenchment (to strengthen or protect the amount of business being currently generated) and divestiture (to eliminate an
organisation segment, commonly known as Strategic Business Unit (SBU), that is not generating a satisfactory amount of business
and that has little hope of doing so in the near future). Good strategic option (selected out of the aforesaid strategic options) should
build on strengths and exploit opportunities.
The logic of this analysis indicates that as each firm will be facing a differnet set of opportunities and threats (Os and Ts), and each
will have differing strength and weaknesses (Ss and Ws), the strategies that result will be unique to the firm. However, a precaution
has to be taken in selecting the managers who conduct the SWOT analysis, because if it is given to inexperienced hands, then it may
tend to generate long lists of points and the longer the list, the cloudier will be the emerging strategic picture.
It may be noted that they may be two ways to superior performance of the organisation (i) either the organisation should become
the lowest-cost producer in its industry, (ii) it should differentiate its products or services in such respects as are valued by the
customers so high that they will pay a premium price to get and enjoy such edging benefits. Thus, organizations can choose to apply
either of these two general strategies.
3. Business Portfolio Analysis
Under this type of analysis, sound and unsound business activities are separately identified in relation to market share of business
and the growth of markets in which business exists. Sound activities are then continued, supported and emphasized, while unsound
activities are discarded, discontinued and de-emphasized.
4. Competitor Analysis
Managers should know quite a lot about their competitors because it is essential to stay in competition in order to capture a lion’s
share of the market. Organisations should devote the time and effort required to gain a deep understanding of their competitors. If
they know their enemy, it will help them to anticipate the strategic moves that the rivals might make. For purposes of making a
systematic examination of the competitors and their strategies the following steps are required to be taken:
(i). To examine the existing and potential (future) competitors by close scrutiny of the needs that organisation’s products or services
are satisfying.
(ii). To examine the competitor’s current activities, capabilities, drives, expected moves and vulnerabilities (weaknesses).
(iii). To concentrate on four main areas with a view to establishing a comprehensive profile of the competitors their future goals,
assumptions, current strategy and capabilites.

Span of Management
Q.1. What do you understand by Span of Management? Explain the factors that determine the Span of
Management. What is the impact on Organization? OR
The Span of Management is the corner stone concept in traditional Management theory. Do you agree?
Meaning of Span of Management
The term Span of Management is also known as Span of Control or Span of Authority or Span of Supervision. Simply stated Span of
Management means the number of subordinates that a manager can effectively manage. This concept implies that the number of
subordinates directly reporting to a superior should be limited so as to make supervision and control effective, because executives
have limited time and ability. It is an accepted proposition that the larger the number of subordinates reporting directly to a
manager, the more difficult it will be for him to supervise and coordinate their activities effectively.
What is an Ideal Span?
It is sometimes suggested that the span of management should neither be too wide nor too narrow. Then, the question arises as to
how many persons a supervisor can manager effectively. Some experts tell that the ideal span is 4 at higher levels and 8 to 12 at
lower levels. But the number of subordinates cannot be easily determined because the nature of jobs and capacity of individuals vary
from organization to organization.
Classical View of Span of Management
The first person to draw attention to the principle of span of management was a British General, Sir Iaan Hamilton (1920) who said
that the average human brain can be effective in handling from 3 to 6 other brains. After a lengthy study of military organisations,
he concluded that the span should be smaller at the top of the organisation, where thought processes were more complicated and
that it should set progressively larger toward the lower levels, where thought processes were less complicated and more routine.
V.A. Graicunas (1933) suggested that as the number of subordinates increases arithetically, the number of potential relationships,
between the superior and subordinates increases geometrically. For example, Graicunas indicates that if a superior manages 2
34
subordinates, there are actively 6 different relationships. Thus, he pointed out that an increase in the number of subordinates causes
almost an explosive growth in the number of possible relationships. Hence, only number of bodies in a span should not be counted,
but the multifarious relationships generated by the numbers must also be recognized while deciding for the span of individual
manager.
Classical writers advocated a span of control ranging from 3 to 7 or 8 persons at the higher levels and a span of 20 to 30 persons at
the lowest level.

Modern view of Span of Management

Q.2. Describe the modern view of Span of Management. Modern View of Span of Management
Contingency Or Situational Approach (Factors Determining Span of Management
The evidences indicate that spans of control cannot be stated in absolute terms as done by the classical scholars. There is no correct
span for all situations. The predominant current view is to look for the causes of limited span in individual situations, rather than to
assume that there is a given numerical limit generally applicable to all. Pragmatically speaking, a really proper span of control is one
that is not improper.
Modern Approach has shifted away from trying to find out a universal formula of span of management. Instead of emphasizing
absolute spans (specific numbers), the current view is that span is more flexible thing, and there is no one correct span for all
situations. The appropriate number of span of control for a particular manager is contingent on several factors that may be
discussed as follows:
1. The Capacity and Ability of the Superior
The personal abilities and influence of the superior (manager) play an important role in determining the number of subordinates
that can be effectively supervised by him. If the superior possesses qualities of leadership, decision-making ability, communication
skill, motivating strength and time management expertise, in greater degree, that the span of control may be wider. In other words,
if the superior (executive) can comprehend problems quickly, can get along well with people and can command loyalty and respect
from the subordinates, then he can supervise a large number of subordinates effectively.
2. The Capacity and Skill of Subordinate
In case the subordinates are competent, well trained, experienced and have good judgement, initiative and a sense of obligation,
then they seek less guidance from their superior and therefore the superior manager will be in a position to supervise a large
number of subordinates. On the other hand, if the manager has no confidence in the capacity and caliber of his subordinates, then
the span will be restricted to be narrow.’
3. Nature and Importance of Work Supervised
If the work is simple and repetitive, the span of management may be wider, because it does not require much attention and time on
the part of the superior. On the other hand where the subordinate’s job is complex requiring close supervision by the superior, then
the number of persons under him should be narrow or small. Such characteristics generally indicate whether jobs are easy or
complicated, dissimilarity of jobs assigned the number of new problems that may be encountered, the need for frequent
consultations and communication, the physical dispersal of jobs, geographically location of members, nature of decision making by
the subordinates and so on. The more a subordinate’s job involves unpredictability, variety, discretion and responsibility, the
smaller span is likely to be.
4. Clarity of Plans and Responsibility
If the plans and policies are clear and easily understandable and if the functions and responsibilities are laid down in as definite
terms as possible, the the task of supervision is easier and the span of management can be wider because the subordinates need not
go to superior frequently for orders, instructions and guidance.
5. Degree of Decentralization
If there is proper delegation and decentralization of authority, then the superior can successfully supervise a large number of
subordinates, because in that case he has not to take any decisions himself and merely provides encouragement and occasional
direction. In case of centralization of authority, the span will be narrow.
6. Staff Assistants
When staff assistants (experts) are employed to advise and serve the superiors and the subordinates, then contract between the
superior and the subordinates may be reduced and the span be broadened.
The Impact of the Span of Organisation
The actual span of supervision affects the organisation in different ways. The structure of organisation produced by the narrower
span is called tall organisation, and the wider span produce what is known as flat organisation. The narrow span requires multiple
levels of supervision and hence longer time for communication. Tall organisation is more expensive and complicates the process of
communication and integration. A narrow span results in harassed subordinates and frustrated superiors. However, a narrow span
enables managers to exercise close supervision and control and wherever these are needed, the narrow span is better suited.
Conversely, a wider span results in fewer levels of supervision. The flat organisation facilitates better communication and
coordination, but it permits only general supervision due to the limited availability of time. The wide span results in harassed
superiors and frustrated subordinates.
Robert House and John Miner (1969) have summarized the entire question of span of management as follows:
1. Under most circumstances the optional span is likely to be in the range of 5 to 10.
2. The larger spans (say 8 to 10) are most often appropriate at the highest policy making levels of an organisations.
3. The number of effective spans of first-line supervisors is contingent upon the technology of organisation.

35
4. Appropriate span for specific situations depends on a set of local factors (for example, task, interdependencies and leadership
skills).

Control
Q.1. Define Control. Discuss the importance of Control in organizational system also explain the elements of
control. Meaning and Definitions of Control
Control is necessary function to make all other managerial functions effective. Its ensures that the corporate goals are achieved
effectively and efficiently. Controlling is the process that the corporate goals are achieved effectively and efficiently. Controlling is
the process by which management regulates that work activities according to designed plans, policies, procedures and programmes
so as to ensure the accomplishment of the organizational resources and people in a direction leading to organizational goals.
some important definitions of control may be given as follows:
Henri Fayol
Control consists in verifying whether everything occurs in confirmatory with the plan adopted, the instruction issued and principles
established. It has for object to point our weaknesses and errors in order to rectify them and prevent recurrence. It operates on
everything, things, people, action.
Theo Haimann and William Scott
Controlling is the process which check the performance against standards. It makes sure that organisation goals and objectives are
being met.
Robert Anthony
Management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the
accomplishment of an organisation’s objective.
Weihrich and Koontz
Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans
devised to attain them are being accomplished.

Characteristics of control
Q.2. Describe the characteristics, nature and feature of control. Characteristic Or Features of Control
Controlling has the following important features, which clearly bring out its nature:
1. Control is a Continuous Process
Control is not a single step activity. Rather, it is a dynamic process that involves constant analysis of actual and planned
performance and the resultant deviations as well as the revision of objectives, plans, policies, procedures, positions, incentives etc in
the light of such deviations.
2. Purpose of Control is Positive
George Terry says, the function of controlling is positive – it is to make things happen, i.e. to achieve the goal within stated
constraints, or by means of the planned activities. Controlling should never be viewed as being negative in character – as a hurdle in
getting objectives won. Controlling is a managerial necessity and a help, not an impediment or a hindrance.
3. Controlling is a exercise at all levels in the Management Hierarchy
Control is a function of every manager, from Chairman and Managing Director to a supervisor, though it may vary in scope among
managers. For example the top managers are concerned with administrative control, which is exercised through broad policies,
plans and other directives. The middle level managers are concerned with the executor control for the purpose of getting the plans,
policies, and programmes executed. At the lower level, supervisors exercise operational control to ensure successful performing of
actual operations or production activities by their close monitoring.
4. Control Guides Behaviour of People and use of Resources and Facilities
Control guides the action and the behaviour of the people who are responsible for carrying out different activities or operation, and
also guide the use by them of different organizational resources and facilities in order to effectively and efficient, contribute toward
accomplishment objectives.
5. Control is mainly Forwarding Looking
Control mainly aims at the future because future is a head and past in gone. However, the experience about the criterion for future
standards, but it may be noted that control may also be past control and current control. Thus it is not full correct to say that control
is looking back.
6. Control Measures and Evaluate Performances
Controlling involves measurements of the actual results in order to facilitate other evaluation or comparison against the planned
results. It also suggests guidelines for future course of action.
7. Control Facilities Coping with Environment
Effective controlling system foresees the likely changes in consumer preferences and demands and therefore guides the members of
the organisation to modify the products or services to meet the anticipated needs and requirements of the consumers in the future
market.
8. Control Closely Related to Planning
Planning is the basis of controlling. Control implies the existence of certain standards or yardsticks against which actual results are
to be evaluated. Planning provides such standards, if there is no plan; it means that there is no basis for control. Planning sets the
course of action and controlling monitors the operation or activities to follow such course of action. In fact, planning initiate the

36
process of management and control completes this process. Without a plan control is blind because it does not know where to go
and weather it is going on a right path or not. Control looks active in the company of a plan because then it seeks to compel events to
confirm to the plan. Without a plan is handicapped. H.G. Licks comments, Planning is clearly a pre-requisite for controlling, it is
utterly foolish to think that controlling could be accomplished without planning. Without planning there is no predetermined
understanding of the desired performance. In fact planning without corresponding control is likely to be a hollow hope.
On the other hand, planning without control is not a reality. In the absence of a control system, best designed plans may go astray
and thus will fail to reach their destination. Control ensures to the organizational activities and the functions on the right track and
aligned with plans and goals. Standards for evaluation of performance are the beginning point of the control process. Controlling
indicates the need for revision of plans in case the standards are not achievable or if the environment has changed. The information
collected by the control system is also useful for planning in future. Without control planning will be a futile exercise remaining on
the papers only. Control makes plans meaningful and effective, similarly controlling is effective only when it is specially tailored to
plans.
Thus, it is correct to comment that planning is manning less without control and control is aimless without planning. Weihrich and
Kortz comments, Planning and controlling may be viewed as the blades of a pair of scissors, the scissors cannot work unless there
are two blades. Without plans and objectives, control is not possible because performance has to be measured against some
established criteria. Similarly, without control, realization of plans is not possible be guided on the right path leading to the
accomplishment of plans. This is why that Weihrich and Koontz has commented as follows. Planning and controlling are
inseparable the Siamese twins of management. Any attempt to control without plans is meaningless, since there is no way for people
to tell whether they are going where they want to go (the result of the tusk of control) unless they first know where they want to go
(part of the task of planning). Plans thus furnish the standards of control. Thus, there is complete interdependence between
planning and controlling.

Importance of control
Q.3. Describe the Importance of Control. Importance of Control
The major benefits of a good control system may enlisted as follow:
1. Stimulates Action
A good control system stimulates action by spotting the significant deviations from the original plan and by highlighting them for
the people who set thing right i.e., who can take corrective action. Thus, it guides and keeps the organization’s operations on the
right back.
2. Facilities Decentralization and Coordination
Control encourages top management to delegate authority to subordinates throughout the organisation without completely losing
their grip over it. In the context of predetermined goals, control keeps all activities and efforts within their specified limits and
makes the operations to move towards organizational goals through coordinated efforts.
3. Facilities other Managerial Functions
Control and planning are closely related to each other. Control points out the deficiencies in plans and policies by verifying their
quality and correctness. It helps to review, revise and update the plans and policies in order to cope with changes in the
environment. By doing so, control also indicates the limitations and drawbacks of organizing staffing, motivation, leadership and
decision-making.
4. Enhances Employee Morale
Control is vital to the strength and moral of company employees because it prevents the individuals form going astray from plans
and thus prevents anarchy to develop. Employees do not like a situation that goes out control because in that case they may become
victims to any within and cannot predict what will happen to them. Thus without control their morale may be lowered. The
tremendous complexity of modern organisation and certain psychological dependencies of the employees on order and stability,
make the control system a necessity.
5. Creates Psychological Pressure to Work
If there exists a sound control system in an organisation, employees have psychological pressure to work hard and perform well.
Efficient control system provides order and discipline in activities and helps to minimize dishonest behaviour on the part of
employees. Employees remain alert in their efforts.
6. Other Benefits
Several other benefits from good control system may be as follow:

 Control is necessary for the optimum use of organisation’s scarce resources.

 It helps in organisation’s growth and change
 It helps in forecasting and thus provides basis for future action.
 Control techniques like rules, procedures, budgets etc stand as effective guides to managers.
 In the absence of control, the plans will remain but mere pipedreams.
 Control helps in judging the accuracy of standards.
 In the area of their responsibility, if managers do not control events, they will be at the mercy of the events.

37
Effective control system
Q.4. Discuss the requirements of an effective control system. Requirements of Effective Control System
A control system is a deliberate creation, not an automatic phenomenon. Through different organisations may design their control
systems according to their unique and special characteristics or conditions, yet in designing a good and effective control system the
following basic requirements must be kept in mind:
1. Focus on Objectives and Needs
The effective control system should emphasis attainment of organizational objectives and therefore it should be designed in
accordance with practical needs of the enterprise. For example, the marketing department may use pre-controls for introduction of
new products into the market, and current control for specific advertisements. Similarly, more sophisticated and broad ranging
controls may be developed for production managers than for a shop floor supervisor. Thus, controls should be tailored to plans and
positions.
2. Prompt Indicator
An ideal control system could detect and report significant deviation as promptly as possible so that necessary corrective action may
be taken adequately in time. This needs an efficient system of appraisal and flow of information. Rapid reporting of variations of the
core of control.
3. Forward Looking
Control should be future-oriented, marketing valuable forecasts to the managers so that they become aware of the problems likely to
confront them in the future.
4. Understandable and Economical
Control tools and techniques adopted should be such as are clearly understandable by the managers. They must know all the details
and critical points in the control device as well as its usefulness. If developed and complex statistical and mathematical techniques
are adopted, then proper training should be imparted to the persons who are supposed to execute such control system. Besides the
control system should be worth its costs. Expensive and elaborate control system will not suit, for example to small enterprise.
5. Control by Functions and Factor
Control should emphasis function, such as production, marketing, finance, human resources, etc it should also focus on four factors,
quality, quantity, time use and costs. Not one but multiple controls should be adopted.
6. Strategic Points Control
Every detail or thing is not be controlled in order to save time, cost and effort. Certain strategic or vital points in the functioning of
an enterprise must be identified and appropriate control devices should be designed and imposed at those stages. Thus, only
critical, major deviations should be attended to and control should concentrate on exceptional problems only. Control should be
selective and concentrate on key result areas of the company.
7. Flexible
It means that the control system should be able to accommodate such modifications or revisions as are made necessary in the wake
of rapidly changing and complex organizational environment. Control must not become ends in themselves. They must be suited to
the environment in which an organisation finds itself. Flexibility in control system is generally achieved by the use of alternative
plans or flexible budgets.
8. Objective
To the maximum possible extent, controls, i.e., standards of performance should be objective (unbiased) and specific. For this
purpose control measures should be verifiable or quantified. Standards should be determined based on facts and participation.
9. Indicative as well as Suggestive
Controls should not only be able to point to the deviations, but they should also suggest corrective action that is supposed to check
the recurrence of variations or problems in future.
10. Correct Action at Correct Time
A significant test of the effectiveness of a control system is whether correct action is taken at correct time.
11. Attention to Human Factor or Emphasis on Self-Control Aspect
It is said that excess control causes corruption. Control system should be designed is such a way, as it does not arouse negative
reactions among organizational people. Good controls are designed to develop positive feelings in the members by focusing on work
and not on worker. It facilities creative action within properly laid down limits. The aim of control should be to create self-control
among members. For this purpose, the tendency over the years has been toward such techniques as participative budgeting and
human resources accounting.

Motivation
Q.1. How would you define motivation? Set out the importance of motivation in an organisation. OR
What is motivation? Explain the term motivation. What does motivate people in an organisation?
Meaning and Definition of Motivation
Success at work is not a matter of only technical expertise but also dependent on the interest of the worker. Creating interest in
people to give their best to the work and the workplace is the key to motivation. For this purpose, the managers should know why
people act as they do and what will make them to give their best on their jobs.
Some important definitions of motivation may be given as follows:
Carroll Strartle
Motivation is a reported urge or tension to move in a given direction or to achieve a certain goal.

38
Micheal Jucius
Motivation is the art of stimulating someone or oneself to set a desired course of action or push the right button to get the desired
action.
E.F.I. Brech
Motivation is a general inspirational process which gets the members of the team to pull their weight effectively, to give their loyalty
to the group, to carry out properly the tasks that they have accepted and generally to play an effective to play an effective part in the
job that the group has undertaken.
Weihrich and Koontz
Motivation is a general term applying to the entire class of drives, desires, needs, wishes and similar forces. To say that managers
motivate their subordinates is to say that they do those things which key hope will satisfy these drives and desires and induce the
subordinates to act in a desired manner.
In sum, motivation is a psychological process which is related to human side and through which the desires, needs or tensions of the
employees are understood and they are inspired in such a way that they proceed in a desired direction, provide maximum help in
the achievement of specified goals, keep on the drive to work, continue to cooperate with each other, develop and maintain the sense
of belongingness towards the enterprise, feel satisfied and their morale remains high. Thus, motivations are the process of steering a
person’s inner drives and actions towards certain goals and committing his energies to achieve these goals.

Characteristics Or Features of Motivation

Q.2. Describe the characteristics, nature and features of motivation. Characteristics Or Features of Motivation
Some important features of motivation may be brought out as follows:
1. Personal and Internal Feeling
Motivation is a psychological phenomenon, which is generated within an individual in the form of an energetic force that drives him
to behave or not to behave in certain ways. These are some environmental and other forces that trigger these drives.
2. Art of Stimulating Someone Or Oneself
A manager can use motivation to inspire not only his subordinates, but to motivate himself also. For self-motivation, he has to take
following steps

 He should set a goal for himself and should not close sight of it.
 He should supplement his long term objectives with short-term goals.
 He should learn a challenging task every year.
 He should make his job a different one with a view to improving objectives for his position and increasing his productivity.
 He should develop an area of expertise by building on his strengths and developing his weaknesses into strengths.
 He should give himself the feedback and reward himself by celebrating his accomplishment.
3. Produces Goal – Directed Behaviour
Motivation is closely intertwined with behaviour. As a Behavioural concept, it directs human behaviour toward certain goals.
4. Motivation can be either Positive or Negative
Positive motivation is also known as Carrot Approach and includes use of additional pays, incentives, praise possibility of becoming
a permanent employee etc. Negative motivation is also called Stick Approach and implies punishment, such as reprimands, threat of
demotion, threat of termination, etc.
5. The Central Problem of Motivation is HOW
Motivation is necessary for successful achievement of goals. However, it is a complex process because different employees have
different needs, their motives are varied and needs and motivates change from time to time. Moreover, motivation is partly logical
and partly emotional. Further, people satisfy their needs in many different ways. Hence, the central problem of motivation is how to
inspire such a typical group of individuals towards attainment of goals in a concerned manner.
6. Motivation is System Oriented
Motivation is the result of interplay among three sets of different factors:
 Influences operating within an individual, for example, his needs, tensions, motives, values, goals etc.
 Influences operating within the organisation for example, its structure, technology, physical facilities, various processes,
the nature of job, advancement avenues etc.
 Forces operating in the external environment, for example, society is culture, norms, values, customs, government policy
regarding the business of the enterprise etc.
7. Motivation is a Sort of Bargaining
Inducements from the side of the enterprise and contributions from the side of the employees.
8. Motivation is different from Satisfaction
Motivation refers to the drive and effort to satisfy a want or goal. Satisfaction refers to the contentment experienced when a want is
fulfilled. In other words, motivation implies a drive toward an outcome and satisfaction is the outcome already experienced.

39
Maslow’s theory of motivation
Q.3. Describe the Maslow’s theory of Motivation. Theories of Motivation
Different management scholars to explain how behaviour is energized, gets started, sustained, directed or stopped have propounded
several theories.
Maslow’s Needs Hierarchy Theory
Maslow’s need priority model is one of the most widely referred to theories of motivation. Abraham Maslow, a clinical psychologist,
thought (1943) that a person’s motivational needs could be arranged in a hierarchical manner, starting in an ascending order from
the lowest to the highest needs and concluded that once a given level of needs (set of needs) was satisfied, if ceased to be a
motivator. The next higher level of need to be motivated in order to motivate the individual. Although the hierarchical aspects of
Maslow’s theory are subject to question and often not accepted, his identification of basic needs has been fairly popular.
The five categories of needs may be described as follows:
1. Physiological Needs
These are the basic needs for sustaining human life itself: needs for food, drink, shelter, clothing, sleep, sex etc. Man can live on
bread alone, if there is no bread. But once these basic needs are satisfied, they no longer motivate.
2. Safety Needs
Safety or securing needs are concerned with freedom from physical or psychological (mental) harm, danger, deprivation or threat,
such as loss of jobs, property, food, clothing or shelter.
3. Social Or Affiliation Or Acceptance Needs
These are belongingness needs emanating from human instinct of affiliation or association with others. These include owners, love
and affection, needs of mutual relations, identification with some group etc. These are the needs more of mind and spirit than of
physique.
4. Esteem Needs
This set of needs represents higher level needs. These needs represent needs for self-respect, respect of others a general feeling of
being worthwhile, competence, achievement, knowledge, independence, reputation, status and recognition.
5. Self-Actualization Needs
This set of higher order needs concerns with reaching one’s potential as a total human being. It is the desire to become what one is
capable of becoming, i.e. to maximum one’s capacity and abilities in order to accomplish something appreciable and self-fulfilling. It
is a need for being creative or innovative, for transforming self into reality

Salient features of Maslow’s Needs Model

Q.4. Describe the salient features of Maslow’s needs model. Salient features of Maslow’s Needs Model
1. The urge to fulfill needs is a prime factor in motivation of people at work. Human beings strive to fulfill a wide range of needs.
Human needs are multiple, complex and interrelated.
2. Human needs form a particular hierarchy or priority structure in order of importance.
3. Lower-live needs must be at least partially satisfied before higher-level need emergy. In other words, a higher-level need does not
become an active motivating force until the preceding lower-order needs are satisfied. All needs are not felt at the same time.
4. As soon as one need is satisfied, the individual discovers another need which is still unfulfilled.
5. A satisfied need ceases to be a motivator, i.e., does not influence human behaviour. Unsatisfied needs are motivators, i.e., they
influence human behaviour.
6. Various need levels are independent and overlapping. Each higher-level need emerges before the lower-level need is completely
satisfied.
7. All people to a greater or lesser extent; have the identified needs.
Critical Evaluation of Maslow’s Model
1. Human needs cannot be classified into clear and only specified categories, i.e. their hierarchy cannot be definitely specified. The
determination of higher and lower levels is dependent on people’s cultural values, personalities and desires. For example, the
higher-level need of an Indian worker may be the lower-level need of an American worker.
2. It is not necessary that a time only one need be satisfied. In other words, needs of more than one levels may be fulfilled jointly, for
example: physical and esteem needs, Maslow’s model does not explain this multi-motivation fact.
3. Some of the assumptions of Maslow’s theory are not always found in practice.
4. It has been found by some scholars like Lawler and Suttle that physical and safety needs may be probably satisfied, but high-level
needs do not appear to be rather satisfiable.
Though Maslow may not be the final answer in motivation, yet his model does make a significant contribution in terms of making
management aware of the diverse needs of human beings at work, their diverse motives. Needs may not be the only determinants of
human behaviour but they are definitely important for understanding such behaviour.

Communication and its elements

Q.1. Define Communication & its elements. Communication Defined
The term communication has been derived from the Latin work communis which means commons. It refers to the serial of contact
process. Communication is a continuous process of telling, ordering, commanding, listening, questioning and answering.
Communication is one of the Fundamental Functions of Management
Communication is the conveying of information from one person to another. It is two-way exchange of ideas and information that
40
leads to a common understanding. In other words, communication means perfect identity of mind. Though the communication
underlies all functions of management, it assumes greater importance in the function of directing. For the successful leadership and
manager ship, communication is a must. Communication means and includes every device that may be used to convey meaning
from one person to another. A few definitions of communications are given below.
Allen
Communication is the sum of all things one person does when he wants to create understanding in the mind of another. It involves a
systematic and continuous process of telling, listening and understanding.
Haimann
Communication means the process of passing information from one person to another. It is the process of importing ideas and
making oneself understood by others.
Newman and Summer
An exchange of facts, ideas, opinion or emotions by two or more persons.
To sum up, communication is the process of passing and understanding information from one person to another.
Elements of Communication
A communication passes through the following five processes:
1. Preparing the message, i.e., any fact, idea, order, complaint, etc.
2. Sending the message by the sender.
3. Receiving the message by the receiver.
4. Channelizing the communication.
5. Symbolising the communication or encoding.
Communication is an all-pervading field of human contact, exchange of views. It can well be summed up through these lines.
Communication is generally understood as spoken or written words. But in reality, it is more than that, it is the sum total of feelings,
actions, gestures and tones. Even silence is an effective form of communication. A twist in the face is often a more expressive
disapproval than hundreds of words put together.

Objectives of Communication
Q.2. Define the Objectives of Communication. Objectives of Communication
1. Information Sharing
The main purpose of communication is to transmit information form a source to target individuals or groups. Various types of
information’s are transmitted in the organisation-policies and rules and changes and development in the organisation etc.
2. Feedback
There is a need to give good feedback to the employees on their achievements, to the departments on their performance and to the
higher management of the fulfillment of goals and difficulties encountered.
3. Control
The management information system is well known as a control mechanism. Information is transmitted to ensure that the plans are
being carried out according to the original design. Communication helps in ensuring such control, a monitoring mechanism.
4. Influence
Information is power and one purpose of communication is to influence people. The manager communicates to create a good
climate, right attitude and congenial working relationship.
5. Problem Solving
In many cases, communication aims at solving problems. Communication between management and the union on some issues
(negotiation) is aimed at finding a solution. Many group meetings are held to discuss alternative solutions for a problem and to
evolve a solution.
6. Decision Making
For arriving at a decision several kinds of communication are needed, e.g., exchange of information, views available, alternatives,
favorable points to each alternative, Communication helps a great deal in decision making.
7. Facilitating Change
The effectiveness of a change introduced in an organisation depends to a large extent on the clarity and spontaneity of the
communication. Communication between the consultants and the managers between the managers and the employees and amongst
the employees help in knowing the difficulties in the planned change and in taking corrective action.
8. Group Building
Communication helps to build linkages of the organisation with the outside world. The organisation can use its environment to
increase its effectiveness. It can also influence the environment itself the government, client system, the resource system etc.
Communication plays a critical role in this respect.

Advantages and Disadvantages of Communication

Q.3. Discuss the Advantages and Disadvantages of Verbal and Written Communication.

Verbal Communication

41
When a message is communicated verbally and not is writing by exchanging the words in face communication or through telephone
or through the other visual aids, etc., it is called Verbal Communication. It may take place at meetings, interviews, etc.

Advantages of Verbal Communication

Verbal Communication has the following advantages:

1. Saving of Time

The greatest advantages of verbal communication, is saving of time. Under this system of communication the messages are
communicated immediately without consuming any time. Verbal communication is the only way out during urgent condition and
when immediate action is necessary.

2. Saving of Money

As there is no formal method of communicating the message, no help of any particular media of communication is taken, this type
of communication saves a lot of money.

3. More Effective

As there is direct touch of the sender of message with the receiver of message these messages prove to be more effective. The sender
of message can also exercise his personal influence over the receiver of message.

4. Knowledge of Reaction of Message

An important advantage of verbal communication is that under this method of communication, the sender of message can judge the
reaction of the message on its receiver. He comes to know whether the receiver of the message will follow it or not.

5. Clear Doubts

Verbal Communication is also better form the point of view that the doubts regarding the message, if any, between the sender and
the receiver of message can immediately be cleared and the receiver of the message can immediately get the explanations regarding
any point or the message.

6. Increase in Productivity and Efficiency

Verbal communication is more effective. It increases the productivity and efficiency of workers because they clearly understand it
and follow it.

Disadvantages of Verbal Communication

Verbal communication has the following disadvantages:

1. Lack of Proof of Message

The greatest disadvantages of verbal communication is that there is no proof of the message communicated.

2. Not Suitable for Future Reference

As there is nothing in writing supporting the messages communicated under this method, it is not suitable for future reference. If
there is any dispute on any point of the message, it cannot be helped in any way.

3. Not Suitable in Case of Distance

If the receiver and the sender of the message are living at a distance from each other, this method of communication is not suitable
because it will increase the cost of communication, it will no be effective because of lack of personal touch and it may not be clear
and explanatory.

Written Communication

When a message is communicated in writing, it is called Written Communication. Written Communication takes place in the form
of letters, circular, reports, magazines, notice board, handbook, notice etc. Written Communication is generally, used for

42
communicating a message from the top management to the subordinates. Written message must be clear and understandable. It
must be brief and self-explanatory and must be prepared in a simple language. The language must be polite and sweet so that the
receiver of the message may easily accept it. If possible, it must be in the printed form.

Advantages of Written Communication

1. No need of Personal Contact

In written communication there is no need of personal contact:

2. Economical

If the receiver and sender of the message are at a distance, it is economical to communicate the message in writing because
communicating by post is cheap and quite economical.

3. Written Proof

A great advantage of written communication is that it provides a proof for future reference. If there is any dispute on any point in
this regard, the message may be referred.

4. Clear and Explanatory

Written messages are very clear and self-explanatory. The receiver of the message can easily follow it and understand it.

Disadvantages of Written Communication

Written communication has the following disadvantages:

1. Delay

The greatest disadvantage of written communication is the delay in communication. The message is writing is communicated after a
certain process is completed. It is prepared, verified and order by the concerned officer. Consequently, the message is delayed.

2. Lack of Secrecy

Another great disadvantage of written communication is that secrecy cannot be maintained because these messages can be read by
anyone.

3. Costly

A written communication involves heavily expenditure. If the receiver and sender of message are near to each other, it is fairly costly
to communicate in writing.

Various types of Communication

Q.4. Explain the various types of Communication. Types of Communication
These are as explained below:
According to the Organizational Structure
1. Formal Communication
Such communication is associated with the formal organisation structure. Communication travels through the formal channel we
very other hear the phrase through proper channel; it explains the essence of formal channel. This is a deliberate attempt to regulate
the flow of organizational communication so as to make it orderly and thereby to ensure that information flows smoothly, accurately
and timely. This formal channel is the path of line authority linking the position to its line superior. It is also known as Channel of
Command. Its implications is that all communication to and from a position should flow through the line superior or subordinate
only, i.e., through the scalar chain. This type of formal communication is known as single-path communication. There may be
multiple channel communication which improves communication through more than one path at a time.
Advantages of Formal Communication
1. It helps maintain the authority of line officers that control the subordinates and fixes the responsibility for the activities done.
2. An immediate superior has a direct contact with his subordinates. It helps understand the attitude and behaviour of each other
well.
3. Since an officer knows better about the organisation and his subordinates, solutions of problems become easy.
43
Disadvantages of Formal Communication
1. It increases the workload of the line superior because all communications are transmitted through them. It leaves no time to
perform other functions well.
2. It enables the chances of more transmission errors and reduces accuracy of the message.
3. It is not good for upward communication because officers overlook the interest of their subordinates. It implies delay tactics and
red-tapism.
4. It has generally happened that the contact of distinct subordinates with the topmost superior is far and remote. They do not even
recognize each other. It adversely affects the relationship.
2. Informal Communication
Such communication is free from all formalities because they are based on the informal relationship because the parties. Such
communication includes comments, suggestions or any other informal reactions. Such types of communication are also called
grapevine communication. They may be conveyed by a simple glance, gesture, nod, smile or silence too. It is not the result of any
official action but of the operation of personal, social and group relations of the people. Informal communication is unplanned but
may follow a predictable pattern.
Advantages of Informal Communication
1. Communication is always transmitted at a greater speed and is more flexible.
2. It is dynamic and reacts quickly to its changing environment.
3. It meets the social needs of people, which are not met by formal communication.
4. It provides a means for exchange of mutually beneficial information between people who are not linked through formal channels.
Disadvantages of Informal Communication
1. It is less orderly and less static, any action taken on the basis of such communication may be erratic and may lead the organisation
in difficulty.
2. It very often carries half-truth, rumours and distorted information and it is difficult to fix the responsibility of such erratic
information.
According to Direction of Communication
According to direction of communication, the communication may be of following three types:
1. Downward Communication
Communication which flow forms the superiors to subordinates with the help of scalar chain, is known as downward
communication. They include orders, instruction, rules, policies, programmes and directions etc. There nature is directive.
2. Upward Communication
Upward communications are just reverse of the downward communications. Feedback to the higher authorities by the lower level is
an upward communication. It flow form the subordinates to their superiors through the line. Such communication includes
suggestions, opinion, reactions, complaints and grievance, etc. Generally the superior ignores this type of communication but in
modern times it is regarded as the main source of motivation in employees.
3. Horizontal Communication
It refers to transmission of information among positions of the same level, i.e., when communication takes place between two or
more persons of the same level under the same superior, it is known as horizontal communication. Such communication is to
coordinates the efforts of the person working under various departments. It removes duplication of work and thus minimizes the
wastage of time, money and labour.
According to Way of Expressions
On the basis of their expression communication may be divided in two categories oral and written.
Oral Communication
Transmission with the help of spoken words is a common system of communication. In oral communication both parties in the
process exchange their ideas through oral words either face-to-face or through any mechanical device such as telephone, etc.
Meetings, lectures, conferences are some other media of such communication.
Advantages of Oral Communication
1. It saves time and money.
2. It is more effective, Gesture, tones and facial expression make the communication effective and efficient.
3. The communicator knows the reaction of communicate. They may even clear the doubts, if any in the minds of other party.
4. It is the only way out during emergencies.
5. It is more convenient to measure the effect of communication. The communicator can easily guess whether the recipient is
following him or not.

Organisation
Q.1. Explain the term organisation. Why is it regarded as the foundation upon which the whole structure of
management is built? OR
Define organizing. Explain the nature and process.
Meaning and Definition of Organisation
We live in the age of organisations. Modern civilization requires large aggressions of people working together to produce the goods
and services efficiently. Organisations are grand strategies created to bring order out of chaos when works together. The structure
resulting from three things is known organisation. (i) identifying and grouping of work, (ii) defining and delegating authority and
responsibility, and (iii) establishing relationships among those who are engaged in performing group activities. Without defined
44
relationships, there will be no organisation. Peter Drucker rightly says, An institution (organisation) is like a tune it is not
constituted by individual sounds but by the relating between them. Organisation is a dynamic tool for interweaning six M’s, Men,
Money, Machines, Materials, Methods and Markets. People work for organisation’s objectives and manage its affairs for achieving
them effectively and efficiently.
Some important definitions of organisation may be given as follows:
Hodge and Johnson
An organisation can be thought of as a complex relationships among human and physical resources and work, cemented together
into a network of system.
James Mooney
Organisation is the form of every human association for attainment of a common purpose.
J.L. Massie
Organisation is the structure and process by which a cooperative group of human beings allocates its tasks among its members,
identifies relationship and integrates its activities towards common objectives.
George Terry
Organizing is the establishing of effective Behavioural relationships among persons so that they may work together efficiency and
gain personal satisfaction in doing selected tasks under given environmental conditions for the purpose of achieving some goal or
objectives.
Organisation Concepts
Every scholar has defined organisation from his own perception. But in all, there are three concepts of organisation as follows:
1. Structure
2. Process
3. System
1. Organisation as a Structure
Weihrich and Koontz point out, Organisation implies a formalized intentional structure of roles or positions. Organisation structure
may be defined as the established pattern of relationships among the component parts of an enterprise. In this sense, organisation
structure refers to the network of relationships among individuals and positions in an enterprise. It is the network of horizontal and
vertical relationships among the members of group designed to accomplish some common objectives. This network governs the
activities of people in the form of a social group. The horizontal dimension shows differentiation of job into departments, divisions
or sections. The vertical dimension reflects what is known as hierarchy or chain of command, of authority. The organisation
structure is the skeleton framework of business enterprise. Thus, the organisation structure implies the following things.
(a). Division of labour into group activities under departments, divisions or sections and also into various positions.
(b). Assignment of tasks and activities to different persons and departments.
(c). The formal relationships with well-defined responsibilities.
(d). The hierarchical relationships with allocation of authority between superior and subordinates – delegation and decentralization
of authority.
(e). Span of control with defined number of subordinates under a superior.
(f). Coordination among different departments and people.
(g). A set of policies, procedures, standards (goals) and methods of evaluation of performance, all formulated to guide the people
and their activities.
However, the actual operations and behaviour of people are not always governed by the formal structure of relations. Hence, the
formal structural arrangements are affected and modified by social and psychological forces combined known as informal
organisation.
2. Organisation as a System
Organisation as a system implies the component parts, each of which has its unique properties, capabilities and natural
relationships and thus all are interrelated and interdependent. Hence, system implies an arrangement and set of relationships
among multiple parts operating as a whole, each part being called a sub-system. Every sub-system is itself a system composed of
smaller interrelated parts of sub-system. The system produce synergic effect which means that the sum of all the parts is greater
then the whole i.e., 2 + 2 = more than 4. Organisation as a system also implies that it is an open system, which means that it
interacts with its environment for its survival, growth and development. An organisation as a socio-technological system consists of
the following components or elements:
(a). Inputs
The system takes certain inputs from its environment. These inputs are human resources, physical resources and facilities, energy,
supplies, technology and information.
(b). Processing or Transformation
Processing or transformation involves the utilization of the inputs through some specified technique to convert them into outputs. A
number of sub-systems are created for processing or transformations purpose, such as production, finance, personnel and research
and development. Interrelatedness and interdependence of all these sub-systems is kept in mind.
(c). Output
The processing or transformation technique results in output that may be intended and unintended. Intended outputs are usually
called objectives or goals. For example, high productivity and efficiency we intended objectives. The output may consist of goods
and services. An unintended output may be informal relation among the group members.
(d). Distribution

45
For distributing the output to the target market or consumers, several sub-systems may be created, such as sales, marketing,
advertising, etc. Distribution may be done directly or through intermediaries known as wholesalers, semi-wholesalers and retailers.
(e). Management
The management component of the organisation system is concerned with the determination and implementation of processing and
distribution activities in order to achieve system’s goals. It involves planning, organizing, staffing, directing and controlling.
(f). Feedback
For effective managing, feedback of information with regard to the quality, quantity, cost and time of system outputs is necessary. It
also helps in establishing and enforcing standards for desired results. It facilities corrective action wherever needed in the system.
(g). Environment
The management components helps in coping with the environment, which is complex and fast changing in the modern world.
Management takes adequate steps needed for availing the opportunities and averting the threats in the environment. If the
organisation system intends to survive, grow and develops, it has to interact properly and successfully with its environment.
3. Organisation as a Process
Organisation as a process is known as organizing. Weihrich and Koontz point out, Organizing is (1) the identification and
classification of required activities, (2) the grouping of activities of activities necessary to attain objectives, (3) the assignment of
each grouping to a manager with the authority (dilatation) necessary for coordination horizontally (on the same or a similar
organizational level) and vertically (for example, corporate, headquarters, division, and department) in the organization structure.’

mportance of Organisation

Q.2. What is the importance of Organisation?

Organisation is needed in order to avert the havoc of disorganisation. It may be briefly illustrated as follows: A short sentence is
disorganized like this, riirggnagesnoiztlsuse. In this form it is nonsense. If we reorganize it substantially, it will look like this:
Organizinggetsresults Now it is workable, but difficult. By a slight change, it reads: Organizing gets results. Hence organization
become important for management by results – for accomplishing our goals.
A sound organization contributes greatly to continuity, growth and development of an enterprise in the following ways:
1. Facilities Administration
A properly designed organization facilitates both management and operation of the enterprise by helping in its smooth functioning
through various factors, such as well-defined areas of work for employees; effective delegation and decentralization of authority;
clear mutual relationships; good communication network; coordination of the activities of individuals, groups and units, adequate
and control.
2. Facilitates growth, expansion and diversification
A sound organization structure is flexible enough to accommodate future changes with regard to growth expansion and
diversification of enterprise’s activities. Besides, certain organization practices are developed which lead the business enterprise to
expand and diversify.
3. Permits Optimum Utilization of Resources
Sound organisation permits optimum use of technological improvements and human resources and efforts (right persons being
placed in right positions on the basis of their skills, knowledge and experience). It develops competent people through the facility of
appropriate effective training and promotion opportunities.
4. Stimulates Creativity
Specialization provides individuals with well-defined duties, clear lines of authority and clearly defined responsibilities. Delegation
and decentralization makes it possible for superiors to assign routine and repetitive jobs to their subordinates and to concentrate
themselves on important issues in order to better exploit their own potential and encourage the creative thinking and innovative
skills of the people.

Organisation Charts
Q.3. What are Organization Charts? Discuss their advantages and limitations. Organisation Charts
Organisation structure is represented primarily by means of a graphic illustration called an organisation chart. An organisation
chart is a diagram depiciting organisation’s formal positions and formal lines of authority. In fact, it is structural skeleton of an
enterprise’s heirarchy of management. Organisation charts are a means of avoiding conflict by clarification. With their familiar
pattern of boxes and connecting lines, these charts are used as a management tool for deploying human resources.
An organization chart shows two dimensions of the structure: (a) the vertical authority structure, such as official positions, span of
management, heirarchy of command, etc and (b) the horizontal differentiation of work activities such as work units or departments.
It reflects the pattern of authority flow from top management to the lower levels. It also shows managers, ranks and jurisdications,
types of authority relationships, line, staff or functional – communication lines throughout the organization, the number of levels in
the managerial hierarchy, the span of management and the relative status of different managerial positions and departments.
Organisation charts also help in reflecting as to who reports to whom – who is superior and who is subordinate, how many
subordinates are accountable to a superior and what are the avenue, open for advancement of a manager holding a particular
position in the chart.
The organisation structure can be diagrammed into an organization chart in three different ways:

46
(a). The traditional or conventional vertical chart shows the position of the chief executive at the top of a pyramid form, from where
the authority flows downward. The managers towards the top of the pyramid have more authority than those who are towards the
bottom.
(b). The horizontal chart originates from its left and proceeds to the right, depicting the chief executive’s position at the extreme left
and placing the successively lower managerial positions towards the right end.
(c). The circular or concentric chart places and shows the chief executives position at its center and other middle and lower level
managerial position radiate from the center in concentric circles, the lowest managerial positions being placed on the outermost
circle.
The horizontal and circular charts represents a healthy departure to the extent that they de-emphasize the hierarchical, i.e.,
bureaucratic nature of organisation structure. However, vertical charts are still common in practice. Normally, the greater the
height of a vertical chart, the smaller the span of management and the lower the height, the greater the span of management.
Organisation charts with little height are usually referred to as flat and those with much height as tall.
Advantages of Organisation Charts
They are useful in several ways as follows:

 Organisation chart is a means to indicate graphically how the managerial positions fit into the total organisation and how
they relate to each other.
 It shows at a glance the lines of authority and reporting pattern.
 It provides a conceptional background to identify inconsistencies and deficiencies and thereby helps in deciding for further
improving modifications to cope with future demands of the changing environment.
 It serves as a reliable blueprint for newly recruited personnel who may understood the structure of the organisation and
the interrelationships among its various work units.
 It provides a framework of personnel classification and evaluation systems.
Limitations of Organisation Charts
 Organisation chart depicts only a static view of the organisation, while the organization is a dynamic concept.
 It shows only the formal relationships and fails to describe informal relationships in the organisation, though informal
relationships are equally important and significantly affect the functioning of the organization.
 It does not show the quality and content of the managerial relationships that actually exist in the organization, but shows
only the ‘supposed relationships’. Thus, it fails to tell about the effectiveness of various elements, processes, and other structural
dimensions within the organization.
 Organization charts become quickly outdated because they fail to incorporate into them the frequent changes or
alternations taking place in the organization structure and in the patters of authority and activity relationships.

Decentralization of Authority
Q.4. What is meant by Decentralization of Authority? Decentralization of Authority
Decentralization of authority means dispersal of decision – making power to the lower levels of the organisation. According to Allen,
decentralization refers to the systematic effort to delegate to the lowest level all authority except that which can only be exercised at
central points. Thus decentralization means reservation of same authority (power to plan, organize, direct and control) at the top
level and delegation of authority to make decision at points as near as possible to where action takes place.
Decentralization is not same thing as delegation. Delegation means entrustment of responsibility and authority from one individual
to another. But decentralization means scattering of authority through the organization. It is the diffusion of authority with in the
enterprise. Delegation can take place from one person to another and be a complete process. But decentralization is complete only
when the fullest possible delegation is made to all or most of the people.
Decentralization is distinct from dispersion
Dispersion occurs when plants and offices are located at different place with physical distance between them. Performance of work
in dispersed plants and offices does not necessarily lead to decentralization. A company may be highly centralized although its
physical facilities and employees are widely dispersed and company may be highly decentralized even through all physical facilities
and employees are located in a single building.
Distinction Between Delegation and Decentralization
The points of distinction between and decentralization are given below:
1. Delegation is a process of devolution of authority where as decentralization.
2. Delegation take place between a superior and a subordinate and is a complete process. It may consist of certain tasks alone. But
decentralization involves spreading out the total decision – making power.
3. In delegation control rests entirely with the superior or delegator but in decentralization, the top management may exercise
control only in a general manager and delegate the authority for control to the departmental manager.
4. Delegation is a must for management. Subordinates must be given sufficient authority to perform their assignments otherwise
they will come to the superior time and again even for minor decisions. However, decentralization is optional in the sense that the
top management may or may not decide to disperse authority.

47
Staffing
Q.1. What do you understand by Staffing? OR
Define Staffing. Describe the need and importance of Staffing function is an enterprise.
Meaning and Scope of Staffing
Early definition of staffing focused narrowly on hiring people for vacant positions in an enterprise. Today, staffing is termed as
human resource management and defined more broadly. Staffing may be defined as a managerial function of attracting, acquiring,
developing and retaining human resources in order to provide the talent necessary for work activities leading to accomplishment of
organizational objectives. This definition emphasizes that people are vital and valuable resources requiring proper care and
attention. Thus, staffing involves: filling up various managerial and non-managerial positions created in the organisation structure
with qualified persons, upgrading the quality and usefulness of the members of organisation for its success and its retaining the
members by providing adequately for their welfare and career advancement.
The staffing process involves job analysis, human resource planning, recruitment, selection, placement, orientation, training and
development, compensation performance appraisal, career development, promotion, transfer and separation. In many
organisations most of the aforesaid activities are handled by the Personnel Department, now popularly known as Human Resource
Management Department. It may be noted that staffing decisions and initiatives are the basic responsibility of line managers.
However, the personnel management department provides necessary specialist services as well as supportive and administrative
services to line managers for effective management of human resources
Staffing is a continuous function of management because human resources continue to be a significant factor in organizational
success and therefore the organisation always needs to acquire and retain in proper form its personnel. Moreover, employee welfare
and development, expansion and diversification, promotion and transfers, demotions and separations, retirement and death,
modernization and change etc are common events continually taking place in an organisation, rendering staffing a never ending
process. Managers have to keep a regular watch on the number and composition of people required by the organisation. The
continuous nature of staffing is self-evident, as employees need regular care, balance and development to be effective for
contribution towards achievement of expected results. Establishing and maintaining congruence between organizational goals and
employees, personal goals is also an important regular aspect of organisation’s working. To keep a proper working climate is an
ongoing responsibility of personnel department.

Importance of Staffing
Q.2. Describe the needs and importance of Staffing. Need and Importance of Staffing
Progressive and successful organizations treat all employees as valuable human resources. Productivity and the resultant financial
reward are dependent solely on the quality and skill of people. Some organizations make up for their lack of natural resources by
their dedication to the maximum possible development of their human resources. If employees are put first, they help the enterprise
to prosper. Staffing function provides proper mechanisms for efficient handling of personnel matters, including workers,
grievances. Filed research indicates that employees tend to return the favour when they are treated with dignity and respect.
Specially, it is reported that professional employees kept higher organizational commitment when their employer’s human resource
practice were perceived to be fair and just. Staffing is responsible for creating such practices.
Activities
Staffing activities, though all derived from organisation strategy and structure, in turn activate the strategic management and the
structure. Strategic orientation in staffing function increases the chances of organizational success.
Process
Staffing process and policies play a considerable role in acquiring right people at right time on right positions. Effective staffing
function strives to establish cost-benefit relationship while manning the positions in the organisation structure – people are
acquired at lower outflows for providing greater efforts, optimal contribution and higher commitment.
Relationship
Staffing is important in its relationship with other managerial functions, because without their human resources, organizations
would remain empty skeletons that cannot move to achieve their goals. The functions of planning, organizing, directing and
controlling become nonstarters without people n the organisation. It is clear that the effectiveness of other managerial functions
depends on the degree of efficiency with which the staffing function is done. An organisation is healthy, strong and successful to the
extent that its people are capable, skillful and committed. Further, the attitudes, orientations and performance of people partly
depend on how efficiently the staffing function is handled by the enterprise and how much attention top management gives to it.
Need
Staffing function takes care of the need for building a sound organisation. In a sense, organisation widely differs in their quality and
competence due to large variations in their human resources.

Principles of Staffing
Q.3. Explain the principles of Staffing. Principles
Staffing not only helps in acquiring right talent, but also strives for nurturing. There are no universally accepted staffing principles.
However, Heinz Weihrich and Harold Koontz have identified certain useful major principles or guidelines for understanding and
performing more effective staffing function.
1. Principle of the Objective of Staffing
The objective of managerial staffing is to ensure that those qualified personnel who are able and wiling to occupy them fill
48
organisation roles. There is considerable evidence of failure to achieve results when these qualities are lacking.
2. Principle of Staffing
The clearer the definition of organisation roles and their human requirements and the better the techniques of manager appraisal
and training employed, the higher the managerial quality. Those organisations that have no established job definitions, no effective
appraisals and no system for training and development, will have to rely on coincidence or outside sources to fill positions with able
managers. On the other hand organizations applying the systems approach to staffing and human resource management, will utilize
the potentials of individuals in the enterprise more effectively and efficiently.
3. Principle of Job Definition
The more precisely the results expected of managers are identified, the more the dimensions of their positions can be defined. Since
organizational roles occupied by people with different needs, these roles must have many dimensions – such as pay, status, power,
direction and possibility of accomplishment – that induce managers to perform.
4. Principles of Managerial Appraisal
The more clearly variable objectives and required managerial activities are identified, the more precise can be the appraisal of
managers against these criteria. This principle suggests that performance should be measured both against verifiable objectives (as
in an appraisal approach based on management by objectives) and against standards of performance as managers. The appraisal of
managers as manager considers how well the key managerial activities within the functions of planning; organizing, staffing,
directing and controlling are carried out.
5. Principle of Open Competition
The more an enterprise is committed to the assurance of quality management, the more it will encourage open competition among
all candidates for management positions. Violation of this principles has led many firms to appoint managers with inadequate
abilities. Although social pressures strongly favour promotion from within the enterprise, these forces should be resisted whenever
better candidates can be brought in from the outside. At the same time, the application of this principle obligates the enterprise to
appraise its people accurately and to provide them with opportunities for development.
6. Principle of Management Training and Development
The more management training and development are integrated with the management process and enterprise objectives, the more
effective the development programmes and activities will be. This principle suggests that in the systems approach, training and
development efforts are related to the managerial functions, the goals of the enterprise and the professional needs of managers.
7. Principle of Training Objectives
The more precisely the training objectives are stated; the more likely are the chances of achieving them. The analysis of training
needs is the basis for training objectives that give direction to development and facilitate the measurement of the effectiveness of
training efforts. This principle brings into focus the contribution that training makes to the purpose of the enterprise and the
development of individuals.
8. Principles of Continuing Development
The more an enterprise is committed to managerial excellence, the more it requires that manager practice continuing self-
development. This principle suggests in a fast-changing and competitive environment, that managers cannot stop learning. Instead,
they have to update their managerial knowledge continuously, revaluate their approaches to managing and improve their
managerial skills and performance to achieve enterprise results.

Selection Process
Q.4. Explain in detail the process of Selection. OR
Discuss the various steps or elements involved in the Selection Process.
Selection Process Or Elements of Selection Process
The major steps involved in the selection process may be discussed as follows:
1. Filling in Application Form
This may be regarded as the first step of selection process. Candidates are supposed to provide complete information about them in
a prescribed printed form. It may require information regarding a candidate’s name, father’s name, address, nationality, sex,
marital status, religion, education qualifications, work experience, fields of extra-curriculum activities, references of two eminent
persons and so on. The application of the candidates provides the basis for further analysis of the candidature and examination of
his suitability for employment. The specific type of information required in an application blank may vary from firm to firm any by
positions within the organisation. However, there is high degree of similarity with regard to general information sought in the
application blanks of various organisations. If properly used application blanks can be an effective aid in selection. However, their
usefulness is largely dependent on the accuracy of data and information furnished by the candidates. In their eagerness to obtain
work, some applicants may be tempted to stretch the truth concerning matters such as past experience, responsibilities, salary and
reasons for bearing the previous job. For this reason, many human resource managers make it a point to query applicants further
regarding these matters during the employment interview.
2. Preliminary Screening
This refers to initial assessment of basic suitability of candidates for the job positions. The human resource manage sees whether the
applicants meet the basic academic and other minimum requirements as to age, work experience, etc. Such screening may be done
by going through the data and information supplied in the application blanks or by holding preliminary screening interviews. The
basic objectives of preliminary screening are (i) to eliminate the unsuitable candidates at an early stage, (ii) to reduce the overall
cost of selection.
3. Employment Tests
49
Candidates, who are filtered through the initial screening, submit themselves to certain tests, formal or informal. Test is a means of
evaluating candidates knowledge, skills, experience, attitudes, aptitudes, personality, interest, capacity, physical characteristics,
level of mental ability, likes and dislikes and soon. In some cases, such as typing and shorthand, computer knowledge and efficiency,
etc., tests are the only way to determine the suitability of candidates for the job.
There are several types of tests, which are widely used for selection purposes. They include; intelligence tests, aptitude tests,
personality tests, performance tests and so on. Written tests are found to be most popular in many cases.
Tests provide a more objective, authentic and consistent basis for selection of right candidates. They help the organisation in
arriving at a judgement on the likely work behaviour and performance of candidates. However, certain conditions should be met if
tests are to be used for employee selection. First, the tests should be reliable. In other words, they should provide consistent results.
Secondly, tests should be valid. In other words, they should measure what they are designed to measure. If a test is designed to
predict job performance, prospective employees who score well on the test, should prove to be objective when different scorers
interpreting the results of the same test, arrive at similar interpretations. Finally, tests should be standardized. This requires them
to be administered under standard conditions to a large group of persons. The purpose of standardization is to obtain norms;
therefore specific test scores will be meaningful when compared to other scores in the group. If a test cannot indicate the ability to
perform the job, it must not be used.
Testing helps in achieving the most efficient matching of applicants with jobs. From a social standpoint, testing that is job-related,
serves the objective of equal employment opportunity, to which modern societies are increasingly committed. Thus, it is vital that
organisations have a thoughtful process for validating any selection tests they use. No doubt, testing is a complex, time consuming
and expensive process.
4. Employment Interview
Although employment tests provide a lot of valuation information and insight about the candidate, they do not provide a complete
set of information and knowledge required about a candidate. The interview helps in evaluating information obtained from the
application blank and tests. It provides an opportunity to the interviewer to integrate different pieces of information through his
personal impressions and observations of the interviewee so as to such a decision regarding the suitability of the applicant for
employment. Thus, the combination of tests and in view provides better results in selection. It allows applicants to obtain additional
information about the prospective employer.
An employment interview is part of almost every selection process. It is the most important step in selection. This is because an
interview enables the selectors to get a first hand idea of the personality of the candidate, their gestures, communication skills,
general skills, mannerisms, reactions, presence of mind and confidence. Further more an interview presents an opportunity for both
the organisation and the job applicant to “sell” themselves to one another and to establish their mutual expectations. However, for
such expectations to be accurately established, it is essential that employment interview he as realistic as possible. In order to
prevent unrealistic expectations, disillusionment and feelings of being misled in new employees, which may result in lack of job
commitment and early turnover (leaving the organisation), interviewees should be told negative as well as positive aspects of a
position, so that the applicants who view such negative aspects as unacceptable, can remove themselves from further consideration.
Those who remain will represent a recruitment pool with accurate job expectations. Research by John P. Wanous (1980) suggests
that such “realistic recruitment” contributes significantly to reducing employee turnover.

Types of Interviews
Q.5. Describe the various types of interviews. Types of Interviews
In general, there are several types of interview’s, which may be briefly discussed as follows:
1. Unstructured Or Non-Directive Or Informal Or Traditional Interview
In an unstructured interview, there are no predetermined questions or prearranged sequence of topics for discussion. Consequently,
by design unstructured interviews are highly flexible and informal – no fixed questions format or systematic scoring procedure.
Interviewers are free to probe into those areas seeming to deserve further investigation and to adapt (alter) their approach to the
prevailing situation, as well as to changing stream of job applicants. Spontaneity characterizes this type of interview. Its direction is
large determined by a job applicant’s answers. To be effective, an unstructured interview requires highly skilled and trained
interviewers. Experience shows that, if properly conducted, an unstructured interview can lend to significant job-related insights.
However, such interview is highly susceptible to distortion, bias, inconsistency and difficult verification of its results.
2. Structured Or Patterned Interview
Structured interviews are recommended as alternative to traditional unstructured or informal interview. A structured interview may
be defined as a series of job-related questions with standardized answers that are consistently applied across all interviews for a
particular job. In this interview standardized questions are asked from all applicants for certain jobs and a standard form is used for
recording responses. Standardization permits easy comparison of candidates. It also helps in achieving and proving validity. Of
Course, no interview can be completely unstructured or nondirective and it is hard to conceive of an interview that is totally
structured or patterned.
Generally, structured interviews are constructed, conducted and scored by a committee of three to six members so as to try to
eliminate bias. The structured interviews are more likely to provide consistent and reliable information from the various
interviewers. Furthermore, if the specific interview questions in a format are drawn from an accurate job analysis, then structured
interviews are also more likely to be valid. However, such interviewers have limited flexibility. The unstructured interview format
(form) restricts adaptation (alteration) to unusual circumstances or unusual interviews. Such interviews do not afford the
opportunity to the applicants to demonstrate their job knowledge, communication skills, etc.
3. Stress Interview
50
Most interviews try to place interviewees at ease. However, the opposite is true in the stress interview. It is specifically intended to
determine a job applicant’s interviewer purposefully attempts to create a climate of intimidation (threat), criticism and ridicule
(mockery or making some one appear foolish or worthless). The purpose is to deserve the interviewee’s reaction to stress and
tension. This approach is based on the theory that certain personal traits, for example, emotional stability, can be deserved only
when an individual is placed in stressful surroundings. Thus, an interviewer may deliberately interrupt an applicant in his
mindsentence, cast aspersions on an applicant’s character, remain silent for protracted (longer) periods of time and adopt a hostile
posture in an attempt to create a pressurized situation.
The extent which stress interviews are useful is debatable. Some justify its use when the concerned job position is particularly
stressful, for example, law enforcement officer, airline pilot, sales representative, or fire fighter. However, some critics contend that
the kind of stress created in an interview is rarely similar to that found on a job. Moreover, there are not very many positions in
which the ability to cope with stress in a primary characteristics.
4. Group Interview
Interview also differs according to how many interviewers and applicants are involved. Normally, job applicants meet with
interviewers one-on-one, i.e., individually. However, in the group interview, several applicants questioned together by one or more
interviewers. A small group of fine or six candidates is observed and evaluated in group discussions and interactions, by the
selectors.
5. Series Interview
For certain types of jobs, especially managerial jobs candidates may be required to go through a series of interviews of a
progressively rigorous nature.
6. Board Interview
For important jobs, especially those of a political nature the board interview may be used. Here several interviewers, often members
of a government board or committee, quiz one or more candidates.

51