ve o the maximisation of production. ithe focus was on increasing the and labour. This hich led to @. Maximisation: Here, it refers \ During the industrial revolution, evel of production by optimising capital, time, promoted the philosophy of survival of the fittest, w! mergers and acquisitions. a Centralisation: During the industrial powers were in the hands of top man decisions were taken by the top management, decisions were decentralised. 1.2.2 FORCES BEHIND MANAGEMENT ‘THOUGHTS ee ‘The concépt of management is n\ and has emerged a i Management has been practiced for a complex evolutionary process. many years right from the time of The Sumerians, Babylonia and Romans. However, it gained importance duririg the industrial revolu- tion era and was backed by many forces. Figure 1-1 shows the three main forces of management: revolution, all controlling gement. All policy-related while operational sa result of Figure 1.1: Forces of Management Thoughts study these forces in detail. y oe Pe forces: Political forces, "political institutions, and trade pol ronmental analysis, organisational design and structure, and em- : ay rights. Political pressure has a major impact on organisa- fons’ management as the rights of customers, suppliers, labour, such as government regulations, licies affect in the areas of envi- es creditors, owners, and other segments kc i wwners, ‘eep changing with respect petenees in the political environment of a country. a oa ‘ 1 So rees: These forces can be in the fe is isi Social fo c form of social norms arising from the values and beliefs of people in a society. These forces help mation of social contracts, wherein no particular sets are ea mutually understood. People interact with each other on the basis ‘norms. Similarly, social contracts are also fe arly, a formed between ns and their labour, creditors, investors, and customers. NOTENOTE 1.3.1 CLASSICAL APPROACH The classical approach to management was developed in the period between the 1880s to the 1920s. In this approach, it was recommend- ed that production can be increased by improving the efficiency of an ation. Thus, managers must focus on Raeetining Tie Get ‘ways to perform jobs. The classical approach to management can be studied under three main areas, which are shown in Figure 1.3: | Administrative (Aaninsraive racemes j [__Burcaveratic anagement | [ aacernicmamernen |] Figure 1.3: Classical Approach to Management Let us discuss these three areas in detail in the subsequent sections. SCIENTIFIC MANAGEMENT ‘The scientific management approach was developed by Frederick Winslow Taylor (1856-1915), who was an American engineer. Thus, scientific management is also popular by the name of Taylorism. He a series of experiments in three organisations that greatly management thoughts. His contribution in scientific man. seement can be studied under the following categories: a “Time and motion study: It is a technique of scientific management ase. 10 that was developed to define employee product ty standards. In } _ this technique, a complex job is first divided into a series of simple i After that, the way these tasks are performed is observed to and eliminate waste mations. In this way, the precise taken to apa ihe job is determined, which further helps ing delivery schedules and incentive schemes. Time and _/ tion study is most appropriate for repetitive jobs. ——~ tial piece rate plan: This plan was Meveloped by Taylor on Baar G that all the workers have different capabilities and cane accordingly. This plan is also based on an assump- production system is based on piece rates. Under the time and motion study is used to estimate the standard time ig a job. Based on the standard time, two piece rates. namely higher and lower. The workers who exceed d time are given higher piece rates as wages. On the lower piece rates are given to those workers who do the standard.10. nL. 12. 13. M4, ? Subordination of individual interest to general interest: In this principle, Fayol laid emphasis on aligning individuals’ personal goals to organisational goals. Remuneration: There should be provision of fair wages for workers. The calculation of wages should be done by considering various factors, such as business environment, cost of living, | capacity of organisation to pay, and productivity of employees. Centralisation: According to Fayol, the degree of centralisation should be decided to make the optimum utilisation of employees’ skills. Scalar chain: Scalar chain refers to the hierarchy followed in an organisation from top managers to employees working at lower levels. Accordingtotheprincipleofscalarchain,allcommunication should pass through proper channels of hierarchy. However, i ‘ease there are any delays in communication due to hierarchy, there must be provision of cross communication. According to Fayol, scalar chain is vital to the success of organisations. Order: Order is required for the efficient coordination of all the elements in an organisation. Management must follow the principle of the right place for everything and every man. Equity: The principle of equity means fair treatment of all employees. Management must treat all employees equally and should be free from biases and prejudices. Stability of tenure of personnel: Management must strive to stabilise the tenure of employees by providing them job security. Increased turnover always results in inefficient production; therefore, organisations must attempt to reduce it by improving ‘employee morale and motivation. Initiative: Management must provide freedom to employees so that they can carry out orders effectively. Employees should be ‘encouraged to take initiatives in their respective fields in order to perform their jobs efficiently. Esprit de corps: It refers to team spirit, Management must adopt new ways to improve team spirit among employees. This helps employees to work in harmony. BUREAUCRATIC MANAGEMENT Bureaucratic management was promoted by Max Webber (1864-1920), who was a German sociologist. According to Webber, bureaucratic management is the most appropriate administration, Some of the im- Portant characteristics of bureaucratic management are: Management by standard rules: According to Webber, an organ- must be governed by a set of rules. Upper level managers ust follow these rules while controlling lower level workers.Dae) enue Re ae earns, Systems approach: It was developed in the late1960s with an aim to provide an integrated approach to solve management problems. According to this approach, a system can nned as a set of components that are interacting regularly or are interdependent, thus making a single unit. The systems approach focuses on the following points: ‘Assystem comprises units and sub-units. Each and every part of a system need to be thoroughly under- stood in order to analyse it. + cf ‘A system always has boundaries to define its beginning and ending. ee Every system is developed to achieve a specific goal. ‘No system can exist in isolation. —§ _—~ Contingency approach: This approach is also known as situation- al approach wherein an organisation determines problems by ana- lysing its conditions and environment. According to this approach, there is no single set of rules that is applicable in solving all types of problems in organisations. Therefore, managers need to analyse every problem and various aspects associated with it, and define different ways to solve the problem. 5. Which approach of management was developed in 1800-1930? 6. is also known as Taylorism. re a. Administrative management \~ b. Bureaucratic management c. Scientific management ~ d. Traditional management 7. According to which principle, work should be divided — individuals and groups according to their skills and sawong indi mowledge? = Diner yf vet 8. Who presented 14 principles of management? */* 9. Time and motion study is one of the important traits of bureaucratic management. (True/False) = 10. Is the system approach a modern approach? (Yes/No) \{manag: mole in theBE INTRODUCTION Management is a universal phenomenon and is concerned with all the aspects of an organisation's functioning. Lack of good management may lead to unnecessary wastage of money, time, and efforts of an organisation. The success of an organisation depends a great deal on the effectiveness of management. The main objective of management is to draw’maximum output dut’of minimum efforts and resources. Therefore, every organisation must ensure effective management. For this, it is important for an organisation to understand the nature of management with respect to business activities. In the context of the nature of management, there is a controversy whether management is a science or art. Different experts have given different viewpoints on the nature of management. As science is an organised and systematic body of knowledge that is acquired by per- forming various experiments and observations, management is also based on gaining knowledge through research and experiments. On Poe hand, as art is concerned with having knowledge and skills ving the desired results, management also requires specif- s and abilities; otherwise the performance of the organisation adversel affected. Thus, it can be said that management is nee and art. this, management is also regarded as a function or process combine individual efforts to pursue certain organisation- jis is done by mobilising and utilising resources optimally g a set of skills, introducing advanced techniques, etc. ent is said to be a highly critical function that is vested gree of authority and power to take important decisions them effectively. In this chapter, you will study about ment in detail. is a process of creating and maintaining an environment ials work together to achieve certain goals by using themumber definean organisation. Similar to the nature of management, there is a lot of disagreement among management experts on the classification of management functions. Some experts classify management functions into four types while some into six or seven types. Moreover, different experts have provided different names for the same types of functions. For example, Newman and Summer, leading American management thinkers and scholars, have given only four functions of management, namely planning, organising, leading, and controlling. On the other hand, Henri Fayol has identified five functions of management, which are planning, organising, commanding, coordinating, and controlling. However, there are five management functions that are common in every organisation. These functions are shown in Figure 2.1: Figure 2.1: Functions of Management Let us discuss these functions of management in detail. Q Planning; It is a forward-looking function that involves forecast- ing the requirements of the future to achieve the desired results. ‘The future forecasting is done on the basis of past analysis. In a nutshell, you can say that planning involves determining in ad- vance where to go, how to go, what to be done, and by whom to be In addition, it also attempts to forecast the problems that se in re and the ways to deal with such problems. involves determining and grouping activities and re- such as men, machines, and material) in the most appropri- in order to achieve the results. In addition, organising various relationships in an organisation, such as authori- and inter-departmental relationships. It is because are developed and carried out. Similar to plan- sing is also an on-going activity that changes with any ht about in any of the functions of an organisation. function of organising is different for different objectives and , organising of an accounts department's work from that of a marketing department. involves employing an efficient pool of people in the tie in order to achieve the results. The staffing func- i ermining human resource requirements and with the required skills and competencies. sr directing, managers instruct and guide employ- an perform their jobs effectively. Moreover, the1 eae ee nri Fayo Hien Mews ere bY PaO onthe views ve i i emen| Earlier, you studied the two views on mana i t is also re Apart from this, managemen! amen t possess all the featu fession, le ence fession. However, it does no’ Before discussing management as a pro concept of profession in detail. According to Webster dictionary, “Profession which one professes to have acquired specialised used either in instructing, guiding or advising othe 1 2. . Establishment of a representative professionalism as its goal 4. Ethical codes of conduct 5. Due regards for the priorit; monetary reward After learni aRcaleag Sea ast of profession, let us nde a profession or ni thi tures of a profession with that of ea oo Q Existence of b = Profession has a well- management dea| maine. en rs Gin iques of y of a service over i me Profession has fonts of acquiring Methods of tr,ersare selected on the basis of their managerial experience either theoretical or practical. However, it is true that some managers ‘york without experience but their managerial ability always count for their selection. Establishment of representative professional association: Every profession has an association with institutes or various profession- "I bodies. These institutes perform the following functions: Regulate the behaviour of individuals associated with a partie- ular profession Create a code of conduct to be followed by people in the pro- fession Prescribe minimum qualifications for the profession In India, there are different professional institutes, such as Bar Council of India, Institute of Chartered Accountants: for Chartered Accountants, and All Indian Management Association, have been established. However, these institutes do not give any professional ‘code of conduct and nor provide proper management techniques. ‘Therefore, it can be said that this characteristic of profession does not matehes with management. Ethical codes of conduct: Individuals practising a profession are bound to follow a particular code of conduct. This code of conduct involves rules and regulations for guiding the behaviour of indi- viduals. In case of management, there is a code of conduct that has been laid down to ensure the confidentiality of organisations’ information and prevent the misuse of such information. ‘Due regards for the priority of service over the desire for mone- tary reward: Professionals are respected in the society as they get remuneration for providing their valuable services to the society. ‘Management as a profession also has certain responsibilities to- wards the society. Thus, management can also be called profession. ‘Thus, it can be said that management does fulfil some of the features, and find out different views on whether man- or not. Give examples related to this study. RP ReaDa tuantitative because it can be implied words like myth, ritual, symbols, ete. are the culture. to the ways of thinking, values, and ideas of n the concrete, objective, and visible part of an tain aspect of many important organisation- € commitment and motivation, resource tage, and organisational change. In an ‘employees feel comfortable so that they ‘the accomplishment of organisational goals. the role of corporate culture in an organ- ganisation interact with each other as per 3 thereby developing a sense of belong- employees to relate themselves with the ies of the organisation, which makes the accomplishment of organisational defines the standard code of conduet for em- ion by providing a set of norms, processes, regulations. OF CULTURE, avironment has become a trend of today’s glo- . It helps organisations with a global pres- ffectively from distant locations. How- Tse to cultural differences that impact the as well as of the organisation. The main lly face due to cultural differences is to \er members of their teams especially when geographical locations. isa significant challenge for managers. n ial skills required in the mul- nt, ‘To manage cultural differences effec- gers to consider the various aspects of are called the dimensions of culture. ‘models to understand and analyse the di- "Two commonly used models are Hofst- ‘culture and Trompenaar’s seven dimensions ‘about these two models in detail.versus diffuse: In specific culture, personal and profes- Spral lives are separated. People believe in attaining their objec- tives and follow specified rules. For example, Germany exhibits specific culture. On the other hand, people in diffuse culture like sPform bonds in their professional lives too. Example of diffuse culture is India and Russia. Neutral versus emotional: In neutral culture, people find it diffi- wit to express themselves and limit their interactions. For exam- ple, the UK. and Sweden are neutral culture countries. Inemotion- ‘al culture, people have high regard for emotions and are willing to express their feelings. ‘They also believe in making a rapport with other people. Italy and France are examples of emotional culture. ‘Achievement versus ascription: In achievement-oriented coun- tries, people focus on achieving goals and reward good perfor- mance. Here, a person's position and power is not important. For example, Canada exhibits achievement culture. However, in as- criptis culture, people have high concern for position and title. Italy is an example of ascription culture. 2 Sequential time versus synchronous time: In sequential time cul- ture, high regard is given to events that are planned in a sequence. ‘An example of such culture is the U.S. On the other hand, in syn- chronous time culture, people focus on flexibility and do not lay ‘emphasis on sequential events. Argentina is an example of syn- chronous culture. 2. Internal direction versus outer direction: People in internally d ontrol cultures focus on self-control as well as on con- he environment. For example, the U.K and U.S. exhibit in- ction culture. However, in outer direction culture, peo- in being controlled by the environment. An example of et ch culture is China. 322 ES OF CORPORATE CULTURE 1 cople, There are different cultures present across organisations de- In sisation, corporate culture plays a vital role in bonding p vision, philosophy, and values. Moreover, there can be more thi culture existing in organisations. Irrespective of its 4 ils in an organisation in the form of dominant cul- turea Ulture. Dominant culture is present predominantly in an orgat ‘shared by all its employees, while subculture is lim- ited art department or division of the organisation. Apart . there are various types of cultures that can be found in an NOTES323 COMPONENTS OF CORPORATE CULTURE So far, you have studied the im in an organisation. But what a number of components inv portance of a strong corporate culture makes a corporate culture? There are ‘olved in building an effective corporate me of the main components of corporate Vision Values Practices . Pe Figure 3:4 Components of C. about these components in det: ‘orporate Culture build a strong corporate culture + an organisation first a vision statement that clearly describes the reason ation’s existence. The vision statement represents ation intends to be in the fi juture. For example, tg an online retailer can be “to provide the best online e to customers with easy-to-follow instructions, Payment methods, and fast, quality delivery.” If the 4n organisation are aware of its vision, they would the organisational culture and work towards the ac- of organisational goals and objectives, of corporate culture lies in the values of an or- - Values are a set of beliefs and ideals shared by individ. k u ganisation. These values develop the behaviour and he organisation’s individuals. For example, Tata Mo- ona set of values that are centred on innovation, satisfaction, and concern for environment, values of an organisation hold no relevance unless ted in practices. For example, the values of care and respect, these values must be E the practices, This can be done by providing em- form where they can work, interact, and share their ‘their superiors without fear, These practices must m time to time for further modifications, if an organisa- NOTESiCT BETWEEN CORPORATE E AND ADMINISTRATION , individuals belonging to different culture come to- se in dialogue with each other. Various cultures bring t belie! ideologies, values, and perceptions. This may result sand makes it difficult for individuals to work together: ed that the culture of individuals shapes their person- d in their behaviour. The culture also influences policies and its attitude towards employees. There- ss imperative for the organisation to develop such a cor. re that people from different backgrounds can gel with d harmoniously. ‘example of conflicts arising in organisations is due to the basis of colour, sex, and caste. Sometimes manag- for the employees who belong to the same cultural result, other employees may feel victimised and lose trimental to the growth of the organisation in the long .5 may begin to look for other opportunities. t ‘are many other types of conflicts that may arise sg due to cultural differences. Figure 3.5 shows some of ire 3.5: Types of Cultural Conflicts these conflicts in detail. conflicts: These types of conflicts arise as a result two or more individuals in an organisation. The be in the same department or from different de- cronal conflicts are classified into three catego-Let us study about these ce management: It i a Performan ing employees’ per! and expectations and commu! mance management 1s actually share their ideas and sug! formance. This free exchange helps an organisation to build st Compensation and reward pensation and reward es for employees. Employ: their performance is recognise In case it does not happen, the: forming their jobs, which may h culture. Thus, in ees ar practices in detail. formance by setting perfor nicating them to e a platform where employees can or the improvement of their per- gestions fe and suggestions ultimately of ideas { systems are d and award ave an adverse eff order to create s a continuous process of i mance stan mployees. Pe! rong corporate culture. tems: In any orga the important motiva a y may lose a positive {reward programs carefully by mprov- dards rfor- nisation, com- ating fore- always keen to perform well if ed from time to time. their interests in per- fect on corporate corporate culture, HR levelop pay and oth the behavioural and performance aspects professionals must di taking into account bi of individuals. Recruitment and selection: While hiring fresh talents, HR profes- sionals should look for employees who not only possess appropri- tte skills and capabilities but also have a perfect cultural fit, For this, HR professionals should themselves clearly understand the organisation's culture. while hiring and interviewing candidates, HR profes- sionals must focus on cultural fit questions. For instance, questions must be asked on team coordination, conflict resolution, accomplish- ment of goals, behavioural aspects, etc. This would help HR profes- sionals to hire a pool of efficient employees. Apart from this, Q Training and Development: Another important way of creati strong culture is to conduct behavioural orientation. In ah ae entation, employees are informed about the organisatd oo ori- conduct and ethical values. Moreover, they are trained a og a iow to adapt to the organisational culture. In addition, HR professionals must plan d levelopme: eee for those employees who behave as per the Pea nee ee and requirements. In this way, the culture of the aie culture sation is strengthened. is actually a platform where employ, ees can tT ca a Pie erie 0rents a ae eeeRODUCTORY CASELETbe defined as the logical arrangement responsibilities with the aim to achieve ves of the organisation. In the words of Kast ‘is the established pattern of relationships of the organisation.” An organisational > coordination among individuals in the ing the reporting structure (who will work interpersonal relationships between i broadly categorised into types, name- decentralised structure. In centralised the top level management and passed On the other hand, in a decentralised autonomy to make their own de- nts. Generally, the centralised organisations where there is less hi- icture is followed by organisations where it is impossible to make deci- 4.1 shows an example of organisation- nple of Organisational Structure “are weemeraldinsightco™)ingement oj ive organisational structure represents the arrang' r ese activities, ¢ Is responsible for performing these activ n individuals and departments, and optimal utilis, characteristics of an effe An effecti activities, individu: ordination between indi ma tion of resources. The following are son ive organisational structure: Ree biguous: The structure of an organisation shou|y ain of command so that unnecessary confi, be avoided. Having more than one superviso, n gaps and inefficient monitoring. Th ould a single superior to h; 2 Simpleand unam! have a minimum chi sions and chaos can es can lead to communicati i the chain of command should flow from her subordinates. Flexible and adaptable: As the business environment ey mai the organisational structure should be created in a manner t it can readily be altered as per the changing needs and demands | @ Clarity of roles: Every employee should know the authority-r¢ sponsibility relation whether from top to bottom or horizontal | This would help employees to know to whom they need to repox | and perform their roles and responsibilities effectively. p Involvement of top management: The participation of top man. | agement is erucial to the development of an organisational struc ture. This is because the most important elements, such as orga: isational objectives, functions, and policies, are decided by the to | Princ management. | ploye To maintain effective structures, organisations are required to follow) cePté certain principles. These principles are explained as follows: | ona whi G Division of work: The structure of an organisation should be de ‘ signed in a manner that every employee should be allotted work] Some guj 8s per his/her abilities, skills, and competencies, This helps em-) organisat ployees in achieving specialisation in a particular work; there! increasing their efficiency. Pe ly det © Walty of command: An employee who is given multiple commant: Clear fan aauiliculty for the employee in decision making which, i unde: tum, affeets his/her performance. Thus, there should be a single a Tine of command in an organisation 9 Deter a Principle ofde; fe An on : eter entation: Departmentation involves dividing al str, ie Pepa units (called departments) as pe' Used | Partmentation helps in making the man the tg ‘ pecialisation, ority of the organisation Gun into departments, divisions, orang fune lps in supervising the performance of subordi aa HOFing and controlling organisational aetigiy = es. pan of management: It implies the number of subord,, Pervised by one manager. There should be adequate seal a . er ol must be broken d tions. Authority hy nates, and monit sies under a manager, The number of subordinates un- “depends on the ability of the manager and the sub- ‘of work, objectives to be achieved, ete. It is the line of command that shows the flow of in- employees at different levels in the organisation- is chain specifies the mode through whieh infor- Id be flown from higher authority to lower authority. ‘of information makes employees aware of their roles e: Every organisation strives to meet its purpose. if the top management clearly communicates ‘employees so that they can also work towards to lity: The change is inevitable in any organi structure of an organisation should be flexible o the necessary changes made in the internal and, ent of the organisation, gy: Synergy implies that the efforts of alli ‘result in more than the sum of individual output. of individuals in an organisational structure must spirit: Team spirit in an organisation makes em- rstand the behaviour of each other and learn to ac- r's differences. An effective organisational structure tion of employees to serve the common purpose, ible if team spirit is inculeated among them. organisations must follow while developing their ire are given below: objectives: An organisation should clear and objectives while developing its structure. goals help team members enable individuals to r job roles and responsibilities. appropriate type of organisational structure: hould select a suitable type of organisation- ‘on the authority-responsibility structure « , in a centralised organisational structure, approach is followed to assign tasks and responsi- chain of command: The chain of command ; decided in an organisational structure, For in- leader, the chain of command would be functions and roles would be delegated by a other hand, if there are multiple heads, theobjectives, A few examples of such control, budgeting, information sys- s insight to develop the structure of or- from certain limitations. Some of its limitations : This model is very simplified which is not g tional environment. model is not complete. For instance, the model | power issues nor it includes any competitive tional structure is one of the most complex or- This structure is developed to complete a -a special task. Thus, in this structure, employ- artments of the organisation temporarily work e, the new product development project of an experts from different departments like fi- ing, production, marketing, sales, research re, there is no particular direction of authority a single individual may receive commands s at the same time namely functional man- Functional managers are responsible for‘The line organisational mode] js in small-scale organisations. nisational model, known as scalar, military, or vertical orga! A Line and staff organisational structure: Under this structy the flow of information is from top to bottom in a line and g members support line managers. For example, a pea man. ager (line employee) is responsible for producing goods, while the quality manager (staff member) checks and ensures the quality of goods produced. This model is used in medium and large-scale organisations. 2 Functional organisational structure: It is an organisational strue. ture in which individuals with similar functional areas or skills are grouped in separate units. These separate units are directly controlled and coordinated by the top management of the organ. isation. The functional organisational model is suitable for large. scale organisations having a limited number of products. Q. Divisional organisational structure: An organisational structure in which an organisation is divided into different independent units is called divisional organisational model. The division is made on the basis of product, market, and geographic region of the organi- sation. For example, if the organisation has three different product lines, it would have separate divisions for these product lines. This is one of the most widely used structures by organisations. 1. The logical arrangement of tasks, duties, and roles and responsibilities with the aim to achieve the predetermined objectives of the organisation is called: Organisational matrix b. Organisational structure ce. Functional structure d. Divisional structure . involves dividing a large organisation into | Smaller units(called departments) as per specialised ntinns| 3. “The networking of individuals in an organist must lead to synergy.” What is synergy? ional structure | 4. Who developed the six-box model? organisational structure in which an o Zan to different independent units is calledQ Weaknesses: It is an inherent inadequacy that Be peeneeis dis, advantages for an organisation. Insufficient funds, ie response ty customer requirements, limited product ranges inefficient prodyg, tion, ete. are the weaknesses of an organisation. Opportunities: These are external conditions that are favourably for an organisation and may strengthen the position of the organ, isation. Declining performance of competitors, access to potential customers, leverage in political and legal standards, developmen, of new distribution channels are the examples of opportunities, Threats: These are the conditions that can cause trouble for op, ganisations. For instance, rise in raw material prices, high rate of attrition, improved competitive products, etc. SWOT Analysis The Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis matches organisation's strengths and weaknesses with the opportunities and threats present in the environment. The SWOT analysis is performed with the help of a four cell matrix, each cell representing strengths, weaknesses, opportunities, and threats, ‘The following table shows the SWOT matrix of an organisation:of sharing informati ; ion between t Peeereaeon understanding Maven opie eed to express their thoughts, ideas, with others and share formation. They ig words, actions, 8s depends a great deal on building sound Communication is a crucial factor in de- hips. It is of paramount importance the right message at the right time and at ng with customers, investors, government, F stakeholders. Any miscommunication or negatively impact the image of the or- there happens to be interpersonal com- Superiors, and subordinates. They other to explain common goals and » job expectations, work ethics, rules iunication among people at workplace ts. In this chapter, you will study the con- communication in detail. dasa process of expressing and trans- , or beliefs among individuals either 2x words, communication is a process mation from one party to another. The n derived from a Latin word commits be no communication unles Hie aoating from the exchange of in- Different management experts have tly. The following are some popular‘organise aqtion can happ. een managers and «,, + g be geussed earlien yeen anaes an so ae ican bet ey between employees and th, tows ata ae tiaen deparimene, ‘Communication can hap, pie, cot ordinates: Pustomers, SUPPL nmunication; and ey analy’ erie ike cuter rp ssn, a he target Pe ; horse, changes uae biases rmunieation char Pie munication: mt a pead © «ermal Commsnicaton aad Evternal Comet . 3 ee tt | wside a communication ope om. hepa Informa sea i i) formance y Verbal Communication 1 Non-verbal Communication P| itn Communication B + Visual Communication of Commu Figure 5.4: Different Type In an organi es, such as st customers, @ a the ney on the PURPS Let us now discuss about different types of communieation in the neil PY i. sections. Be : fi ‘ERNAL COMMUNICATION inanol 5.3.1 INTERNAL AND EXT) coe In an organisation, the target audience can be within the organisati:| __prineiple (employees, managers, and departments) or outside the organisato} Formal ¢ (customers, suppliers, dealers, and distributors). Thus, commu aline of tion can be internal or external in the organisation. Let us disc these two types of communication as follows: Internal communication: This type of communication occur’ i side the organisation, Internal comm tunication is categorised i the following type: * Upward communication: from the lower level to the erarehy. For example, whe: the team leader, it is upwa This type of communication Jo" upper level in an organisational na team member communicates rd communication. commun Informa of comm of comm, it also ey formal ¢ ployee gvitamin capsule for women in the mar- communication tools will you select for your newly launched produet consider- ” of any organisation depends a great deal on In an organisational setting, it is impossible without effective communication. This is be- ices the element of socialisation among leads to team spirit and enhanced pro- n plays an important role in all the functions following points show the role of communica- ‘responsibilities; thereby systematising work ong individuals, ial functions effectively, such as plan- g, and controlling. rosy and tools , tions to work towards organisational goals and stand itudes and establishing a code of conduct. nine iness [NESS COMMUNICATION communication is essential to manage It helps an organisation to create a sup- satisfy the needs of both internal andene a edmunication hows some of the benefits of business ¢°7 Thereasing productivity Fostering a supportive team environment needs of internal and external Customers er tin ee See eee Figure 5.6: Benefits of Business Communication 552, BARRIE! Let us discuss the benefits of business communication in detail. communication ae 6 n enables managers tended meaning 2 Saving time and cost: Effective communication gi pet iaricatic to assign duties in an effective manner. It saves the time incurred a ‘on redoing of misunderstood tasks. This ultimately helps in redue- int ing overall time, cost and efforts. 2 Expanding the scale of business: Globalisation has provided am: {Becot ple means to businesses to widen their customer base. Good com- munication helps organisations to reach potential customers and pee convince them to buy their products and services. Not only this, it also allows organisations to take feedback on its products and rom services from their existing customers. In this way, organisations can improve the quality of their products and services and expand ier co. their business by reaching to maximum customers. @ Increasing productivity: Good communication helps in avoid: | pee. of ing confusion and resolving conflicts by making employees cleat about their roles and responsibilities. This results in getting the j (Gees desired outcome more quickly and efficiently. In addition, effective i ‘communication allows a free exchange of ideas and feedback pe" pee ef taining to performance improvement, a Lack o pease A.supportive team environment: This is another mai" tiga siness Communication. Effective business commun naled manner Vrechiea sta work collectively and in a wel-coord ultimatel ve Organisational goals and objectives: Thi 'y fosters teamwork in an organisation. a & Z Unfave ? i 2communication helps external customers, such as suppliers, con- sumers, and investors, to collect information about an organisation through its websites, customer service centres, word of mouth, ete. before actually dealing with the organisation. a Building customer relationships: Effective communication en- ables an organisation to inform customers about its presence and the availability of its products. Moreover, it helps the organisation to understand the needs and expectations of customers and pro- vide them with customised products. 4. Strengthening partnerships: Good communication helps an or ganisation in better dealing with their business partners by clearly understanding their needs and expectations. Moreover, it avoids confusion and misunderstandings between the organisation and its partners. This results in strengthened relationships and effec- tive business deals between the organisation and its partners. 5.52 BARRIERS TO BUSINESS COMMUNICATION Communication often faces a number of obstacles that distort the in- tended meaning of the message. These obstacles are called barriers to communication. The barriers to communication can be categorised into various types, which are shown in Figure 5.7:fortable is Tn such |tion has to make a number of decisions related to its work employees, technology, finance, sales, and production on Every decision made by an organisation ultimately ll business performance. Therefore, an organisation while making decisions. A decision is said to be ef ‘within the given time and by utilising the available of action from all available alternatives. It aims at m and finding out the solution to that problem. to take into consideration various factors be- on, such as economic factors, political factors, ‘a logical process that starts with identifying the ‘decision is to be made; collecting the relevant in- ag the possible courses of action and selecting the g the action; and following up. In this chapter, e concept and importance of decision making MANAGERIAL ING s a conclusion or the best course of ac- ‘after thorough consideration. Decision g the best course of action from all avail- ving method wherein a feasible vailing problem. For instance, when needs to raise share capital or n can be resolved. Different differently. The following are= is, “ king is the study of identifying art dterntines based on the values and preferences ofthe decision maker Making a decision implies that there are alternative choices to be considered, and in such a case we want not only to iden. tify as many of these alternatives as possible but to choose the on that best fits with our goals, objectives, desires, values, and so on. jan ord adaily be cording € jdentifica sion, redt require process al involved i According to Koontz and O'Donnell, “Decision-making is the actu. al selection from among alternatives of a course of action.” In the words of George R. Terry, “Decision-making is the selection | based on some eriteria from two or more possible alternatives.” | | According to Louis A. Allen, “Decision-making is the work whicha | manager performs to arrive at conclusion and judgment.” = the wastage of resources, which ultimately aff isati f fect 7 forties ly organisational per aking is the actual i : se alternatives of a course of action,” Tisai ee | these words. ily the speaker of a. Harris | b. Koontz O'Donnell | © Louis A. Allen d. George R. Terry 2 ik can be deseri c cribed a. course of action that is derived / sete nclusion lected grec, the best T thorough consideration.ee ae ments are selected a from the list for furth, it list of alternatives ves Cow implication, that meet ¢ le ones are eli is way, and asso he require minated an explic the alterna of feasibilit alternativ the infeasibl consideration. In th generated. tive: Managers are now required teraction for solving the defined problem vvects the specified requirements usin, nerally selected. is ternat 4, Selecting the best al select the best course The alternative that limited resources and time is 8¢! ecision: This is one of the most crucial stepg ofthe decision-making process. In this step, managers implemen, the selected course of action for solving the defined problem, Implementation can be effective if managers communicate the selected course of action to employees and assign them tasks accordingly. 6. Following uJ wherein managers ensure that the in achieving the defined objectiv corrective actions are taken on time. Implementing the de p: This is the last step in the decision-making process decision taken is successful In case of any deviations, 6.3.1 DECISION-MAKING MODELS No organisation can completely depend on a particular set of tech. niques for solving problems. This is because a problem is analysed from different perspectives by different individuals. Therefore, var- tous models oe devised for analysing situations from different out looks. me of the it it coe important decision-making models are shown inDI Ce TINS: Figure 6.2: Decision-Making Models Let us discuss these models in detail, a Rational Model: This is a cognitive model in which managers use their thoughts for analysing the available alternatives and select- ing the best one. The rational model is used for making non-pro- grammed decisions, which you will study in the subsequent see- tion of the chapter. This model is based on an assumption that a decision maker has complete information about the impact of the selected alternative. In this model, the decision maker begins with establishing goals, determining the criteria for making the deci- ‘sion, analysing the available alternatives, and finally making a de- Rationality Model: This model was propounded by non. The bounded rationality model is a cognitive de- aking model with limited time to decide. The model as- decision making is a rational process of determining ‘solution by analysing the given information in a specific Model jis is a situation-based model that assumes is no universal model applicable for solving all types According to this model, decisions must be made in all social, political, and economic factors. This model is for making decisions related to leadership, mentoring, behaviour, ete. by which the authority of decision making ‘top management. This type of decision mak- n isations due to their small size ing structure is fo of operations. decision making:overheads as authority is rested at one place a Low managerial a. High degree of con: 2 Total participation ani the success or failure of decisions sucture as there is a line command (de. J and passed to lower levels). sistency as decisions are taken at one point oftop management due to its accountability for a Simple decision-making str cisions are made at top level However, centralisation is not free from limitations The centralised structure promotes strict, autocratic environment that can be detr. sal to the health of the organisation. Moreover, it leads to inet mployees are only required to implement fective communication as e1 4 decisions and are not involved in the decision-making process. 6.3.3 DECENTRALISATION In decentralisation, authority of decision making is distributed among employees working at lower levels in an organisation. However, top management has the control of all strategic issues. The decentralised structure is used in large organisations operating at different locations J Asdiscuss¢ across a country or the world. In such organisations, if decisions are | trlisation | made at a central location, it would be difficult to manage uncertain. J thedistinet ties and changes in the business environment of different locations. a TABLE} ‘The following are the advantages of the decentralised structure: ee Reduction of workload of top management as it is focused on stra tegic goals Effective utilisation of skills of middle and lower level managers a Increase in efficiency and produetivi 3 ifeubicateyavar productivity due to an effective commu 2. Quick response to changes as the need arises. as decisions are made independently However, there are som E ture, which ae shown in ee of the decentralisation struc Reduction oFtop management's control eenawor™” cts tear 5 decision making > Discuss how leadership alle srou! = Explain the role of leadership " grour ERM iNrropuctioN jons like Lucent. Chrys, neh, ete. either Closed 1 think can be the In the past, many well-known organisat 1 Ly Lehman Brothers, Northern Rock, eal i So their operations or were taken over. Wha! eens” possible reasons for the failure of such organisvlOl yi reports, these organisations failed to adapt Oe 1 future All i essfully, and prepare for the uncertain future. 2 these ' prain cause that is ineffective leadership, S per resea S per researgy, strategies suces reasons are centred on one 1 process wherein an individual influences the thought. i another individual or a group of individy. als towards common goals. In today’s dynamic business scenario, long. term sustainability of an organisation depends a great deal on effective ship. A leader sets a clear vision and stimulates people to contrib, ds the accomplishment of that vision. A successful leader ha; to excel in their respective operational areas, Leadership is attitudes, and behaviour of leade: ute tow ability to motivate people In an organisation, leaders are responsible for providing direction to employees and driving them to work collectively to achieve organisa. tional yoals and objectives. They solve problems quickly, engage em- ployces in decision making, and take support from employees in im plementing planned cros functional actions. For this, leaders should have a sense of responsibilities, strong values, and an unbiased atti- tude. In this chapter, you will study the concept and importance of il. In addition, you will study about the roles and leadership in det functions of leaders in an organisation. [2] MEANING OF LEADERSHIP Leadership is an individual's skill to make strony decisions and inspire others to perform efficiently. In the organisational context, leadership is an ability of an individual to influence an employee or a group of employees toward the attainment of a vision or a set of goals, Different argmanagement experts have defined leadership differently. The follow- ing are some definitions of leadership: according to Chester Bernard, “Leadership is the quality of behaviour of the individual whereby they guide people on their activities in organ- ised effort.” According to Livingston, “Leadership is the ability to awaken in others the desire to follow a common objective.” According to Keith Davis, “Leadership is a human factor, which binds « group together and motivates towards the particular goals.” According to Keontz and O'Donnell “Leadership is the ability to exert interpersonal influence by means of communication towards achieve- ment af goals.” ‘According to Eneyclopaedia of Social Sciences, “Leadership is the re- lation between an individual (leader) and a group (followers) around some common interests and behaving in a manner directed or deter- nnined by the individual (leader).” According to Management guru Peter F Drucker, “Leadership is the lifting of people's vision 10 a higher sight, the raising of their perfor- en higher standard, the building of their personality beyond its Aleaderis one who trains and influences people having diverse abilities and skills to work in a coordinated manner and achieve organisation- nd objectives. Traditionally, the term leader was used for an -who was responsible for managing office activities. How- passage of time, the scope of leaders has increased in an ‘setting. Leaders are now responsible for guiding, man- the performance of teams. Leadership nowadays to giving advice and issuing orders to subordinates rath- coordinating with team members, understanding their ‘them, and evaluating their performance. a great deal on the efficiency of leaders. An bbe one who has a set of characteristics, whichae rhe acetiaes esponsibility ae] jsationd esponsibility cal sation ne Co i 3 ) 1s the abc tts sl sere Beit (0° fs ee a plan and = ee ean 9 eespaly. ————————_—_— . hie a Guide emp fee — a Bridge gap = nar at lower lev Consistency and bia’ pol consistency onl 9 Successfull: g Hold diseu: Figure 7: Characteristic Manage ch Let us discuss the characteristics ofa leader in detail ee 4. Responsibility: Leaders should be responsible for every decisioa J 9 taken by them and set an example for other. Apo ron tik Fg they should understand that leadership is not an effort of a single person rather it is a cooperative effort. Thus, leaders should take views and opinions of others in order to make effective strategies, | In am OrBanisé their core com 2 Unbiased attitude: People always expect leaders to take decisions | shows leaders for the well-being of the organisation rather than fulfilling ther personal goals. Thus, leaders should strive to remain unbiased ia order to make good decisions and influence people to implement Cor these decisions. @ Strong values: Leaders should respect the needs of their team members and strive to fulfil those needs. Leaders, who value their team members, are successful in the long run. In addition, they should develop an environment of mutual trust and cooperetiol among team members, Positive attitude, confidence, and a strong Fun personality ean drive a leader to take risks and cope with challent es. i Clear vision: An effective leader sets a clear vision or picture | Ope rganisation would reach in the future. For this, he sh should be well ‘aware of organisational goals and should be ablé | to align them with individual goals. Having a clear vision be!D! finger to Bet the asks and activities done within the stipulsed time. Itis the clear vision that enables leaders to motivate people ® slo motivate peop! aceomplish organisational goals and inculeate team spirit in them 2 Consistency towhichaleader menace: Consistency indicates the exe any situation, A leader who is saan’ He¥el of commitment unde in hishher approach wo‘Business-level leaders: They include divisional or regional Busine’ as vice presidents, general managers, and portfolio man, crea who carry out the direction given by corporate-level lag saerusiness-level leaders direct functional-level leaders. Functional-level leaders: They include departmental heads, such ts finance manager, marketing manager, and production mang These leaders carry out the direction of business-level leaders ang support employees performing specific project functions. Operational-level leaders: It includes leaders who undertake the responsibility of executing plans and strategies within functional areas, Such leaders guide employees working at lower levels of an Organisation. Assistant managers and deputy managers are the examples of operational-level leaders. 72.3 STYLES OF LEADERSHIP Different leaders follow different leadership styles to achieve the de- fined goals. Leadership styles vary based on the attitude, personality, approach, and working patterns of leaders. For example, some leaders keep the authority of making decisions in their own hands, while some may pass a certain degree of authority of decision making to their sub- ordinates. Figure 7.3 lists different leadership styles: a icin yersencs: | (Pree-rein leadership } ) einen aLn rropucrion anes Sees a large amount of information to make effective tions was collected on a daily basis. Earlier, information in organisa- lection and manually. However, the manual procedures of data i and storage led to unnecessary wastage of time, money, and resources. Sometimes information lost ils importance, value, and us- ability because of the late delivery of information. With the advent of advanced technologies, it has become easier for organisations to use the right information in an organised way. Management Information system (MIS) is a computerised application that provides information tomanagers in organisations to make effective decision making. MIS provides managers with tools for effectively running their de- partments. Its main components involve software that helps in deci- sion making; data resources such as databases; hardware resources of asystem; and people management and project management applica- tions. MIS enables managers to have better control over organisation- alresources; thereby improving organisational efficiency. In addition, ithelps managers to determine the type and amount of information required for performing various managerial functions, such as plan- ting, organising, controlling, and directing. An organisation can use three main types of MIS depending on its re- quirements, These are Decision Support System (DSS), Group Deci- Son Support System (GDSS) and expert ystems. In this ehapter, you Will study about the concept of MIS, its importance in an organisation, ‘adits different types and their functions. INFORMATION TECHNOLOGY AND MANAGEMENT formati the most important inventions of mati is one of the ™ N ns ¢ be agn Foe tee ouch “y overy single aspect of Mu Kein “ey s 1 i Tor example, in the e jucal eeton inf on i Baan ot he emergence of various new concepts echnology has led to "he “iueation. Similarly, in- .] a ‘ jstance learning, virtual classes; and distsystem separately, directing, and cont and disseminates inform ‘MIS collects data from: customer 80" you think e2"for such surveys? Why do organisations conduct these e main aim of organisations is to collect data in order to sular decision. Without data, it would be difficult for organ, ce appropriate decisions. For instance, before launching ‘an organisation needs to collect data on product de- ee availability of substitute goods, ete. In llected beforehand, the newly launched product of may lead to failure for many reasons, such as less ity to meet customer needs. n of facts, figures, objects, symbols, and events that from different sources. There are two types of data (the ganisations, namely primary data and secondary data, llected from a first-hand experience and is not used pe of data is collected from various sources, such as ires, interviews, observations, research work, ete. secondary data is the data that has been used in the ‘of secondary data include organisation's health and and vision statements, magazines, executive pment reports, press releases, etc. Although data is “every organisation, it does not serve any PurPose Dprocessed to get the desired results. When data d into a form that has a specific meaning, For example, questionnaires collected on a tomers is data. When this data is analysed the resulting report is information well-processed form of data In other words, information ‘data that facilitates effective decision ibe noted that the main role of MIS is 9 Fo ison to managers so that they can make effective Mise meaningful and useful fit has certain listed in Figure 10. hat information is @ gand Heristics of Infor™characteristics in detail. iscuss these ER ac hnould be error-free, correct, and baseg © Acuna ton isi .z, If an error is spotted in in be used by managers in making decisions, hy ff time, efforts, and cost. In a mutshy n that is ready to be used is called to ineffective tion, it would not would lead to the wastage ©! precise and clear informatio curate information. ‘Timeliness: Information should be available when it is required Tn today’s dynamic business world, managers need to take deg: sions frequently. For example, the marketing manager of an organ, isation needs to constantly select new promotional tools. In sucha case, information is available after the decision has been taken, i would be useless. Thus, it can be said that the value of information is inversely proportional to time. Relevance: Information is said to be relevant if it is appropriateta the respective domain of decision making. For example, a manager needs to formulate marketing strategies. In this case, the collected information should be related to current market trends and needs and preferences of customers. Irrelevant information distracls managers from taking correct and effective decisions. Completeness: Information is said to be complete iif it is Fully ite terpretable. If information does not make a complete sense, it ma not support the decision making process of an organisation. 10.2.2 CHARACTERISTICS OF MIS. MIS nowadays has become an imy ing in ee e portant tool for decision making ‘organisations. Figure 10.2 lists the important characteristics of MIS: ¢ only turns useless, but also leat ‘This ment using‘Row discuss these characteristics in detail. eee ce cents MIS focuses on providing the right infor- fe the ‘manager at the right time. This information is agers to make timely business decisions. a en Peek MIS enables the top management of an or em Betecive decisions by providing adequate infor- sing operational efficiency. Thus, top man= nt invest 's a huge amount on the implementation of MIS. system: MIS i pater: MIS is called an integrated nyo itisa eae and activities. In- oe Bie MIS can be accessed by etHiep Enea of Bee Talshelps the departments to take decisions in a manner. For example, in a manufacturing organisa: ee. Aan needs to decide the appropriate Ber Fe this, the production department needs in- ce sales and inventory of the organisation. easily accessed by the production depart- flow: MIS collects the data from the original source d, stored, retrieved, and captured only once. flow in MIS helps in minimising data process- ng output generation. ‘element: Successful implementation of MIS re- ig and design. MIS is planned and designed proper integration between various elements, loftware, database, information processing, IS consists of various other systems that in- te with each other in order to support decision ‘collectively perform specialised functions to iystem. In order to maintain the uniformity there is a hierarchy of subsys Pocoinins the relationship between different Jation with the main system ny subsystems, # com difor each subsystem. This common sub- jems and serves tpetween these subsyst ent levels of management: -e easily modified in vironment system that can b ves in the business em fs subject to change from time to fon consumer demand can also be accurate decisions: quBee-- al10.2.3 COMPONENTS OF MIS MIS is compose data, to produce m* portant component a of various elements, ful information. its of MIS: People: No system can be operated a Similarly, MIS cannot serve its purpo: eiformation ifit is not operated well By nent of MIS can be divided into two cal oad information system specialists. E information provided by MIS. Exam} searchers, production managers, sales hand, information system specialists are developing and operating MIS. pote lysts and system operators are inform: Hardware: It includes all kind of pl used to operate MIS. Central Processing Ur mouse, desktop, printers, ete. are the exampl are defined by an organisation as per i a red by per its requi Fei srrprosedurce ond data Data: It is unorganised and raw form collected from primary and secondary sot Tier). All the collected data i ary sourees (as ae = ee eB stored in MIS in a way that it ean be Network: It i: eee eee eee ae computers thet Ter ne earbose of sharing information; for exami sean and extranet, There are two types of res ine ‘ication media comprises coaxial co cludes the epene an mae eee to operate MIS efficiently ardware, software, and techno Information: To : re Pe decisions, the collected d cessed, Wor iota sented in the form of graphs Meaningful information.MANAGEMENT INFOH the decentralisation of authority by providing ac- ation at all levels of management. coordination between departments as information ed by any department anytime. tes various types of business reports that help the or- to identify its strengths and weaknesses Srious benefits, MIS also has certain limitations, which are intenance cost. 1se accountability problems. of departments can ¢ nterdepartmental information. e to sharing of i ‘of MIS to provide cr to heavy load of data. e responses in critical situations. eativ' failures due concept of MIS, it is necessary to derstand the hat and separately. terms ee collection of facts, figures, objects, symbols, ‘¢ been gathered from different sources. derstand tw is @ formation that hav avis error-free, correct, and based on facts is led: . Accurate information mation information . Timely nfor! | Relevant it : . Complete information } , processed and converted into a form that has a ning, it becomescoSESE Figure 10.4: Types of DSS. these types of DSS in detail, ee Pesoncotcoeiae support ae ams in an organisation using logy. Examples of communication driven ‘messaging software, and online collaboration. SS: Data-driven DSS helps in fil levant Be evict no acum be ‘managers. Data-driven DSS is deployed through client-server links, or Web. DSS: Document-driven DSS is implemented in tising Web or client server technology: This type the organisation where user groups are compar- ‘main purpose of a DSS is to search Web pages ‘ona specific set of keywords or search terms DSS: This type of DSS is mainly used to get ‘or select products or services. The deploy- d to set up knowledge-driven DSS can be cli- Web, or software running on PCS. SModel-driven DSS is a complex decision 5D, jn evaluating various decisions considered wd selecting the best one. This system 19 fugerver technology or web and software and one computer systems: BENEFITS OF DSS ation on je figures, ete. DSS can D* cient decision making: The in different sectors: ctor, clinical DSS ar comparative sales e used in various following 1e used for medical credit of @ Joan officers to verily th