MCP Unit-3

PARISHKRIT AGRAWAL @ BIT
Organising in Management
Organising is the process of defining and grouping activities and establishing authority relationships among
them to attain organizational objectives.
Organising Definition
"Organisation is the process of identifying and grouping of the works to be performed, defining and
delegating responsibility and authority and establishing relationships for the purpose of enabling people to
work most efficiently" - Louis A. Allen
―Organizing is a function by which the concern is able to define the role positions, the jobs related and the co-
ordination between authority and responsibility. Hence, a manager always has to organize in order to get
results‖- Chester Barnard.
Importance of Organising
1. Specialization - Organizational structure is a network of relationships in which the work is divided into
units and departments. This division of work is helping in bringing specialization in various activities of
concern.
2. Well defined jobs - Organizational structure helps in putting right men on right job which can be done
by selecting people for various departments according to their qualifications, skill and experience. This
is helping in defining the jobs properly which clarifies the role of every person.
3. Clarifies authority - Organizational structure helps in clarifying the role positions to every manager
(status quo). This can be done by clarifying the powers to every manager and the way he has to exercise
those powers should be clarified so that misuse of powers do not take place. Well defined jobs and
responsibilities attached helps in bringing efficiency into managers working. This helps in increasing
productivity.
4. Co-ordination - Organization is a means of creating co- ordination among different departments of the
enterprise. It creates clear cut relationships among positions and ensure mutual co- operation among
individuals. Harmony of work is brought by higher level managers exercising their authority over
interconnected activities of lower level manager.
5. Effective administration - The organization structure is helpful in defining the jobs positions. The roles
to be performed by different managers are clarified. Specialization is achieved through division of work.
This all leads to efficient and effective administration.
6. Growth and diversification - A company‘s growth is totally dependant on how efficiently and
smoothly a concern works. Efficiency can be brought about by clarifying the role positions to the
managers, co-ordination between authority and responsibility and concentrating on specialization. In
addition to this, a company can diversify if its potential grow. This is possible only when the
organization structure is well- defined. This is possible through a set of formal structure.
7. Sense of security - Organizational structure clarifies the job positions. The roles assigned to every
manager is clear. Co- ordination is possible. Therefore, clarity of powers helps automatically in
increasing mental satisfaction and thereby a sense of security in a concern. This is very important for
job- satisfaction.
8. Scope for new changes - Where the roles and activities to be performed are clear and every person gets
independence in his working, this provides enough space to a manager to develop his talents and
flourish his knowledge. A manager gets ready for taking independent decisions which can be a road or
path to adoption of new techniques of production. This scope for bringing new changes into the running
of an enterprise is possible only through a set of organizational structure.

Principles of Organising
The organizing process can be done efficiently if the managers have certain guidelines so that they can take
decisions and can act. To organize in an effective manner, the following principles of organization can be used
by a manager.
1. Principles of Span of Control/Supervision. According to this principle, span of control is a span of

supervision which depicts the number of employees that can be handled and controlled effectively by a
single manager. According to this principle, a manager should be able to handle what number of
employees under him should be decided.
2. Principle of Scalar Chain. Scalar chain is a chain of command or authority which flows from top to bottom.
With a chain of authority available, wastages of resources are minimized, communication is affected,
overlapping of work is avoided and easy organization takes place. A scalar chain of command facilitates
work flow in an organization which helps in achievement of effective results. As the authority flows
from top to bottom, it clarifies the authority positions to managers at all level and that facilitates
effective organization.
3. Principle of Unity of Command. It implies one subordinate-one superior relationship. Every subordinate is
answerable and accountable to one boss at one time. This helps in avoiding communication gaps and
feedback and response is prompt. Unity of command also helps in effective combination of resources,
that is, physical, financial resources which helps in easy co- ordination and, therefore, effective
organization.
4. Principle of Specialization. According to the principle, the whole work of a concern should be divided
amongst the subordinates on the basis of qualifications, abilities and skills. It is through division of work
specialization can be achieved which results in effective organization.
5. Principle of Functional Definition. According to this principle, all the functions in a concern should be
completely and clearly defined to the managers and subordinates. This can be done by clearly defining
the duties, responsibilities, authority and relationships of people towards each other. Clarifications in
authority- responsibility relationships helps in achieving co- ordination and thereby organization can
take place effectively. For example, the primary functions of production, marketing and finance and the
authority responsibility relationships in these departments shouldbe clearly defined to every person
attached to that department. Clarification in the authority-responsibility relationship helps in efficient
organization
6. Principles of Authority. Authority is the formal and legitimate right of a manager to make decisions,
issue orders, and allocate resources to achieve organizationally desired outcomes. A manager's authority
is defined in his or her job description.
7. Principles of Delegation. Delegation is the downward transfer of authority from a manager to a
subordinate. Most organizations today encourage managers to delegate authority in order to provide
maximum flexibility in meeting customer needs. In addition, delegation leads to empowerment, in that
people have the freedom to contribute ideas and do their jobs in the best possible ways.
8. Principles of Centralisation and Decentralisation. A centralized organization systematically works to
concentrate authority at the upper levels. In a decentralized organization, management consciously
attempts to spread authority to the lower organization levels. A variety of factors can influence the
extent to which a firm is centralized or decentralized.
CENTRALISATION
Centralisation means the concentration of authority at the top levels of an organisation. It is a tendency aimed at
centralised performance. Hence, it is the opposite of dispersal and delegation of authority: it has an important
bearing on the processes of policy and decision-making. The two major areas of management or administration
are reserves of the top management in a centralised organisation. The lower levels of the organisational
hierarchy always look upwards for direction, advice, clarification, interpretation, etc. field units or agencies of
the parent do any of decision-making and hence are fully dependent on the central authority, The are implement
the decisions in accordance with the pre-determined guidelines as down to them by the headquarters operating
as the central authority. Centralisation acquires its acute form when an organisation operates from a single
location when it does not have any field agencies. In the words of Harold describe tendencies other than
"Centralisation has been of authority, refers to departmental activities; service divisions, centralised similar or
specialized a single department. But when centralisation is discussed as an aspect of management, refers to
delegating or withholding authority and the authority dispersal or in decision-making?'. Therefore,
centralisation can be regarded as concentration of restrictive use of delegation is, in talking of decentralisation
and decision maldng authority. Limited words, centralisation. Henri while observes, "everything that goes
increase the importance of subordinate's role is decentralisation, to decrease it is centralisation"
Merits of Centralisation
1. It is to uniform policies and, practices in a centralised organisation. Moreover, it can effectively achieve
conformity to the prescribed procedures and can bring about better coordination among the various units
and levels of the organisation.
2. Such a system further adds to the prestige and influence of top executives. Authority being concentrated
at the top level, it is easier to identify the key persons who exercise the real This is helpful in creating a
suitable climate for fulfilling the aspirations of those executives or leaders who prefer to combine
prestige with real organisational operations.
3. If process of centralisation is strengthened, duplication in an administrative organisation can be avoided.
4. It has been claimed by Kohn that a centralised organisation a corporate personality by enabling the full
utilisation of the personnel and the equipment in organisation.
Demerits of Centralisation
1. A centralised organisation does not allow the development of second line of executives as the lower
levels are more dependent on the orders and directions of the top executives. The emergent situations
require immediate decisions for reaching the desired In a centralised organisation, if emergencies arise
at the unit level, their solutions becomes difficult by the unity itself as they do not e n joy any decision
authority.
2. The concept of centralisation works against the possible diversification or of the organisation. The local
needs of the organisation cannot be understood in the right perspective by the centralised executive.
3. There is a minimum use of the concept of delegation of authority because real authority always lies in
the top levels of the organisation. Thus for a decision on every matter, the top executive has to be
approached. Therefore, such an concentrates all decisional authority in a few persons and makes
majority of the personnel only as implementers of orders received from above.
4. As the subordinates have to approach the superiors for taking even minor decisions, the work in the
organisation suffers and unnecessary delay is caused.
DECENTRALISATION
Decentralisation of authority means conscious/systematic effort to bring dispersal (spreading) of decision

making power to the lower levels of the Organisation. In decentralisation, only broad powers will be reserved at
the top level. Such powers include power to plan, organise, direct and control and maximum powers will
delegated to the authority at the lower level. Decentralisation is a natural development when the Organisation
grows large and complex. Here, centralisation of management is neither possible nor desirable. The only

practical solution is to divide the Organisation into decision-making units and giving the powers to take routine
types of decisions in regard to the functioning of those units. This is decentralisation in practice. In
decentralisation, systematic efforts are being made to delegate to the lowest levels all authority except that
which can only be exercised at the central points. Decentralisation is delegation not from one individual to
another but delegation to all units in an Organisation. A company is said to be highly decentralized, when the
delegation is company-wide in all functions and divisions of the company and also for a wide range of
authorities and responsibilities. Decentralisation is different from centralisation as in centralisation, the decision
making power is in the hands of one person only. We observe such centralisation in sole trading concerns. It is
also noted that centralisation is one feature of traditional management in India while decentralisation is a normal
practice under professional management.
According to Henry Fayol, "Everything that goes to increase the importance of the subordinate‘s role is
decentralisation, everything that goes to reduce it is centralisation."
According to Louis Allen, "decentralisation refers to the systematic effort to delegate to the lowest levels all
authority except that which can only be exercised at central point."
Implications of Decentralization
1. There is less burden on the Chief Executive as in the case of centralization.

2. In decentralization, the subordinates get a chance to decide and act independently which develops skills
and capabilities. This way the organization is able to process reserve of talents in it.
3. In decentralization, diversification and horizontal can be easily implanted.
4. In decentralization, concern diversification of activities can place effectively since there is more scope
for creating new departments. Therefore, diversification growth is of a degree.
5. In decentralization structure, operations can be coordinated at divisional level which is not possible in
the centralization set up.
6. In the case of decentralization structure, there is greater motivation and morale of the employees since
they get more independence to act and decide.
7. In a decentralization structure, co-ordination to some extent is difficult to maintain as there are lot many
department divisions and authority is delegated to maximum possible extent, i.e., to the bottom most
level delegation reaches. Centralization and decentralization are the categories by which the pattern of
authority relationships became clear. The degree of centralization and de-centralization can be affected
by many factors like nature of operation, volume of profits, number of departments, size of a concern,
etc. The larger the size of a concern, a decentralization set up is suitable in it.
Limitations of Decentralization
1. Decentralisation may lead to the problem of co-ordination at the level of an enterprise as the decision-
making authority is not concentrated.
2. Decentralisation may lead to inconsistencies (i.e. absence of uniformity) at the Organisation level. For
example, uniform policies or procedures may not be followed for the same type of work in different
divisions.
3. Decentralisation is costly as it raises administrative expenses on account of requirement of trained
personnel to accept authority at lower levels. Even the services of such highly paid manpower may not
be utilised fully, particularly in small organisations.
4. Introduction of decentralisation may be difficult or may not be practicable in small concerns where
product lines are not broad enough for the creation of autonomous units for administrative purposes.
5. Decentralisation creates special problems particularly when the enterprise is facing number of
uncertainties or emergency situations. The decision-making process gets delayed and even correct
decisions as per the changing situations may not be possible.
Determinants
A variety of factors can influence the extent to which a firm is centralized or decentralized. The following is a
list of possible determinants:
The external environment in which the firm operates. The more complex and unpredictable this
environment, the more likely it is that top management will let low-level managers make important
decisions. After all, low-level managers are closer to the problems because they are more likely to have
direct contact with customers and workers. Therefore, they are in a better position to determine
problems and concerns.
The nature of the decision itself. The riskier or the more important the decision, the greater the
tendency to centralize decision making.
The abilities of low-level managers. If these managers do not have strong decision-making skills, top
managers will be reluctant to decentralize. Strong low-level decision-making skills encourage
decentralization.
The organization's tradition of management. An organization that has traditionally practiced
centralization or decentralization is likely to maintain that posture in the future.
Delegation
A manager alone cannot perform all the tasks assigned to him. In order to meet the targets, the manager should
delegate authority. Delegation of Authority means division of authority and powers downwards to the
subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of authority can be
defined as subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.
In addition, delegation leads to empowerment, in that people have the freedom to contribute ideas and do their
jobs in the best possible ways. This involvement can increase job satisfaction for the individual and frequently
results in better job performance. Without delegation, managers do all the work themselves and underutilize
their workers. The ability to delegate is crucial to managerial success. Managers need to take four steps if they
want to successfully delegate responsibilities to their teams.
1. Specifically assign tasks to individual team members. The manager needs to make sure that
employees know that they are ultimately responsible for carrying out specific assignments.
2. Give team members the correct amount of authority to accomplish assignments. Typically, an
employee is assigned authority commensurate with the task. A classical principle of organization warns
managers not to delegate without giving the subordinate the authority to perform to delegated task.
When an employee has responsibility for the task outcome but little authority, accomplishing the job is
possible but difficult. The subordinate without authority must rely on persuasion and luck to meet
performance expectations. When an employee has authority exceeding responsibility, he or she may
become a tyrant, using authority toward frivolous outcomes.
3. Make sure that team members accept responsibility. Responsibility is the flip side of the authority
coin. Responsibility is the duty to perform the task or activity an employee has been assigned. An
important distinction between authority and responsibility is that the supervisor delegates authority, but
the responsibility is shared. Delegation of authority gives a subordinate the right to make commitments,
use resources, and take actions in relation to duties assigned. However, in making this delegation, the
obligation created is not shifted from the supervisor to the subordinate — it is shared. A supervisor
always retains some responsibility for work performed by lower-level units or individuals.
4. Create accountability. Team members need to know that they are accountable for their projects.
Accountability means answering for one's actions and accepting the consequences. Team members may
need to report and justify task outcomes to their superiors. Managers can build accountability into their
organizational structures by monitoring performances and rewarding successful outcomes.
Although managers are encouraged to delegate authority, they often find accomplishing this step difficult for
the following reasons:
Delegation requires planning, and planning takes time. A manager may say, ―By the time I explain this
task to someone, I could do it myself.‖ This manager is overlooking the fact that the initial time spent up
front training someone to do a task may save much more time in the long run. Once an employee has
learned how to do a task, the manager will not have to take the time to show that employee how to do it
again. This improves the flow of the process from that point forward.
Managers may simply lack confidence in the abilities of their subordinates. Such a situation fosters the
attitude, ―If you want it done well, do it yourself.‖ If managers feel that their subordinates lack abilities,
they need to provide appropriate training so that all are comfortable performing their duties.
Managers experience dual accountability. Managers are accountable for their own actions and the
actions of their subordinates. If a subordinate fails to perform a certain task or does so poorly, the
manager is ultimately responsible for the subordinate's failure. But by the same token, if a subordinate
succeeds, the manager shares in that success as well, and the department can be even more productive.
Finally, managers may refrain from delegating because they are insecure about their value to the
organization. However, managers need to realize that they become more valuable as their teams become
more productive and talented.
Despite the perceived disadvantages of delegation, the reality is that a manager can improve the performance of
his or her work groups by empowering subordinates through effective delegation. Few managers are successful
in the long term without learning to delegate effectively.
So, how do managers learn to delegate effectively? The following additional principles may be helpful for
managers who've tried to delegate in the past and failed:
Principle 1: Match the employee to the task. Managers should carefully consider the employees to
whom they delegate tasks. The individual selected should possess the skills and capabilities needed to
complete the task. Perhaps even more important is to delegate to an individual who is not only able to
complete the task but also willing to complete the task. Therefore, managers should delegate to
employees who will view their accomplishments as personal benefits.
Principle 2: Be organized and communicate clearly. The manager must have a clear understanding of
what needs to be done, what deadlines exist, and what special skills are required. Furthermore, managers
must be capable of communicating their instructions effectively if their subordinates are to perform up
to their expectations.
Principle 3: Transfer authority and accountability with the task. The delegation process is doomed
to failure if the individual to whom the task is delegated is not given the authority to succeed at
accomplishing the task and is not held accountable for the results as well. Managers must expect
employees to carry the ball and then let them do so. This means providing the employees with the
necessary resources and power to succeed, giving them timely feedback on their progress, and holding
them fully accountable for the results of their efforts. Managers also should be available to answer
questions as needed.
Principle 4: Choose the level of delegation carefully. Delegation does not mean that the manager can
walk away from the task or the person to whom the task is delegated. The manager must maintain some
control of both the process and the results of the delegated activities. Depending upon the confidence the
manager has in the subordinate and the importance of the task, the manager can choose to delegate at
several levels.
Empowerment
Empowerment refers to enlargement of an employee‘s job responsibility by giving him the authority of decision making
about his own job without approval of his immediate supervisor. Empowerment is the degree of responsibility and
authority given to an employee. By empowerment, the employees are supported and encouraged to utilize their skills,
abilities and creativity by accepting accountability for their work. Empowerment occurs when employees are adequately
trained, provided with all the relevant information and the best possible tools, fully involved in key decisions, and are
fairly rewarded.
Employee empowerment entails identifying how much responsibility and authority an individual can effectively handle
without becoming over-burdened or distressed. Empowerment includes supervisors and employees working together to
establish clear goals and expectations within agreed-upon boundaries.
From an organizational perspective the following pros and cons may be associated with employee empowerment.
Pros of Employee Empowerment

 It leads to greater job satisfaction, motivation, increased productivity and reduces the costs.
 It also leads to creativity and innovation since the employees have the authority to act on their own.
 There is increased efficiency in employees because of increased ownership in their work.
 Lesser need of supervision and delegation.
 Focus on quality from the level of manufacturing till actual delivery and service of goods.
 Employees when empowered become more entrepreneurial and start taking more risks. Greater the risk, greater
are the chances to succeed.
Cons of Employee Empowerment

At the individual level employee empowerment means you are an integral component of the organization. This may
sprout egotism or arrogance in the workers. Apart from disadvantages at the organizational level, there are certain
challenges that emerge at the individual level. Supervisors often complain disgust from the empowered workers. The
following points go against employee empowerment:
 Egotism / arrogance: Worker arrogance can create a big trouble for the supervisors and the managers. There can
be problems in delegating. Employees avoid reporting about their work and feedback can be taken negatively.
 Security: Since information comes and is shared by all, there are apprehensions about leakage of critical data.
 Risk: Creativity and innovation demands a greater risk bearing capacity and there are equal chances of success
and failure. Workers often lack the expertise to execute are enterprise, which can cost big.
 Industrial Democracy: Labor unions and workers are empowered and they may misuse the same. Strikes and lock
outs become more frequent. Also, labor unions gain insights into management and their functioning and they leak
the same.
Span of Management
Span of management refers to the number of subordinates that a manger can efficiently manage. Number
ofsubordinate directly reporting to a manager is known as span. Span of management is important for
Determining the complexity of an individual manager‘s job and
Determining shape and structure of the organisation
Fewer the number of subordinates reporting to a manger larger the number of managers required. Therefore
span for control should be fixed.
Span of management implies total number of subordinates handled by one manager and they have to supervise
every subordinate. It is also termed as span of control, span of supervision, span of responsibility, but it is
preferred to use span of management because it takes the organization as a whole and control and supervision is
a part of management.
There are two types of span one is wide and other is narrow, in wide span large number of subordinates can
be handled while in narrow span number is limited, narrow span is expensive as it has too many levels that
requires large number of managers and staff also. It further creates difficulties in communication. And wide
span decreases the quality of supervision because the number of subordinates are large that reduces the required
time of every subordinate which further affects supervision. Large number of subordinates also deviate from the
objectives of policies.
This decision can be taken by choosing either froma wide or narrow span. There are two types of span of
control:-
a. Wide span of control- It is one in which a manager can supervise and control effectively a large group
of persons at one time. The features of this span are:-
i. Less overhead cost of supervision
ii. Prompt response from the employees
iii. Better communication
iv. Better supervision
v. Better co-ordination
vi. Suitable for repetitive jobs
According to this span, one manager can effectively and efficiently handle a large number of subordinates at
one time.
b. Narrow span of control- According to this span, the work and authority is divided amongst many
subordinates and a manager doesn't supervises and control a very big group of people under him. The
manager according to a narrow span supervises a selected number of employees at one time. The
features are:-

i. Work which requires tight control and supervision, for example, handicrafts, ivory work,
etc. which requires craftsmanship, there narrow span is more helpful.
ii. Co-ordination is difficult to be achieved.
iii. Communication gaps can come.
iv. Messages can be distorted.
v. Specialization work can be achieved.
Factors determining the span of management:

1. Capacity of manager: Each manager has different capacity and ability in terms of decision making,
leadership, communication, judgment, guidance and control etc. mangers having more abilities in
respect to these factors may have more number of subordinates.
2. Capacity of subordinates: capacity of subordinates also affects the span of a manager. Efficient and
trained subordinates may work without much help of their manager. They may just need broad
guidelines and they will perform accordingly. They would require lesser time from their superior due to
which manager can have large number of subordinates under him.
3. Nature of work: If subordinates are performing similar and repetitive routine work they can do their
work without having much time of the manager. Frequent changes in work would require more detailed
instructions from managerwhenever there is change in work. Type of technology used also affects the
span of control.
4. Degree of Decentralization: degree of centralization or decentralization affects the span by affecting
the involvement in decision making process. If manager clearly delegates his authority and defines it
fully this would require less time to devote to manage his subordinates as subordinates will take most of
the actions by their own. Hence managercan have wider span.
5. Degree of Planning: If the planning is effectively done particularly if standing plans procedures rules
methods are clear then subordinates can make their decisions on their own. If they have to make their
own plans they would require more guidelines by superiors and manager can handle narrow span in the
case of improper planning.
6. Communication System: If communication system is modern i.e. tools like electronic devices will save
time of face to face interaction, which require more time, span of manager can be increased
7. Level of Management: level of management also affects the span. Higher the level of management
lesser the number of subordinates as higher level management does not have much time to supervise.
They spend their most of time in planning and other functions. Lower level managers can have wider
span than the higher level managers.
8. Physical location: If all the persons to be supervised are located at same place within the direct
supervision of manager, he can supervise more number of people. If subordinates are at different
locations then manager can supervise less number of spans.
Departmentation
Departmentation is the process of grouping activities to achieve organizational goals and objectives, and
delegating authority to a manager to supervise the division and guide the staff, making him responsible for its
results. Departmentation is a way of dividing the large and complex organisation into smaller, flexible,
administrative units. It is the organisation-wide division of work into various manageable units or departments.
It is the „grouping of activities and employees into departments. Departmentation (also known as
departmentalisation) is an important step of building an organisation. The basic purpose is to take advantage of
division of labour and specialization upto a certain point. There are several bases for departmentation, each of
which is suitable for particular corporate sizes, strategies and purposes.

1. Functional Departmentation: - This is the simplest form of departmentation when grouping of
departments is done on the basis of functions such as production finance marketing sales purchase and
personnel etc, it is known as functional departmentation. Further sub divisions of the functions may be
formed like marketing can be divided in to advertisement sales and after sales service. So we can
classify functions into two parts.
Basic functions i.e. Production Marketing Finance and Personnel

Secondary Functions: - These are further parts of basic functions according to the organizational
needs or operations like Production: - Product planning, R&D, Quality control and material handling
Functional departmentation is useful where there is production of single product or similar kind of
product, for example TV Computer monitor or TFT.
2. Products: - When grouping of activities and departments formed are given name on the basis of
products manufactured in an organization, it is called products departmentation. It is applied where there
is a large range of products are manufactured. When there are several product lines and each product
line consists of a variety of items, functional classification fails to give balanced emphasis on each
product. Apart form this use; product or services may be made the basis of major divisions by a
departmental store, a banking concern and an insurance company. Again, manufacturing an marketing
departments may subdivide their activities on the basis of products.
3. Territories: - Like the products basis, geographical regions are adopted for main division as well as for
subdivision purposes. When activities of an organization are physically dispersed in different locations
territorial departmentation is adopted. Units that are located at different areas are made so many self-
contained divisions of the organization. Marketing activities are very often subdivided on the basis of
geographical areas. This form of departmentation can be useful where business is on national or
international level. For eg. Indian railways, insurance company use territorial departmentation.

4. Customers: - When departments are formed to cater different kind of customers it is known as customer
departmentation this basis of classification is widely followed in subdividing activities of the marketing
department. When the products are offered to market through various channels and outlets, it has the
special merit of supplying goods in accordance with the peculiar needs of customers. Customers may be
classified according to buying capacity or nature like whole sale, retail and export or government or
general public. Most departmental stores may attempt t reach customers preferring low price or higher
price
5. Process or Equipment: This basis of departmentation is sometimes required by the technology itself as
part of the production activity, where the transformation of raw material into finished goods is achieved
through performance of various processes. Example is production unit of textiles, where workshops
dedicated to processes like spinning, weaving, dying etc. sequentially operate to manufacture the
finished goods. For other organizations also, sometimes the cost of specialized technology makes more
sense for some facilities to be organized by process and be shared. Example is the Electronic Data
Processing unit in small a organization.
Authority. Authority is the formal and legitimate right of a manager to make decisions, issue orders, and
allocate resources to achieve organizationally desired outcomes. A manager's authority is defined in his or her
job description.
According to Henri Fayol, "Authority is the right to give orders and the power to exact obedience."
According to Mooney and Reily, "Authority is the principle at the root of Organisation and so important that it
is impossible to conceive of an Organisation at all unless some person or persons are in a position to require
action of others.
Organizational authority has three important underlying principles:
Authority is based on the organizational position, and anyone in the same position has the same
authority.
Authority is accepted by subordinates. Subordinates comply because they believe that managers have a
legitimate right to issue orders.
Authority flows down the vertical hierarchy. Positions at the top of the hierarchy are vested with more
formal authority than are positions at the bottom.
In addition, authority comes in three types:
Line authority gives a manager the right to direct the work of his or her employees and make many
decisions without consulting others. Line managers are always in charge of essential activities such as
sales, and they are authorized to issue orders to subordinates down the chain of command.
Staff authority supports line authority by advising, servicing, and assisting, but this type of authority is
typically limited. For example, the assistant to the department head has staff authority because he or she
acts as an extension of that authority. These assistants can give advice and suggestions, but they don't
have to be obeyed. The department head may also give the assistant the authority to act, such as the right
to sign off on expense reports or memos. In such cases, the directives are given under the line authority
of the boss.
Functional authority is authority delegated to an individual or department over specific activities
undertaken by personnel in other departments. Staff managers may have functional authority, meaning
that they can issue orders down the chain of command within the very narrow limits of their authority.
For example, supervisors in a manufacturing plant may find that their immediate bosses have line
authority over them, but that someone in corporate headquarters may also have line authority over some
of their activities or decisions.
Responsibility - is the duty of the person to complete the task assigned to him. A person who is given the
responsibility should ensure that he accomplishes the tasks assigned to him. If the tasks for which he was held
responsible are not completed, then he should not give explanations or excuses. Responsibility without adequate
authority leads to discontent and dissatisfaction among the person. Responsibility flows from bottom to top. The
middle level and lower level management holds more responsibility. The person held responsible for a job is
answerable for it. If he performs the tasks assigned as expected, he is bound for praises. While if he doesn‘t
accomplish tasks assigned as expected, then also he is answerable for that. Responsibility indicates the duty
assigned to a position. The person holding the position has to perform the duty assigned. It is his responsibility.
The term responsibility is often referred to as an obligation to perform a particular task assigned to a
subordinate. In an organisation, responsibility is the duty as per the guidelines issued.
According to Davis, "Responsibility is an obligation of individual to perform assigned duties to the best of
his ability under the direction of his executive leader." In the words of Theo Haimann, "Responsibility is
the obligation of a subordinate to perform the duty as required by his superior".
McFarland defines responsibility as "the duties and activities assigned to a position or an executive".
Characteristics of Responsibility
1. The essence of responsibility is the obligation of a subordinate to perform the duty assigned.
2. It always originates from the superior-subordinate relationship.
3. Normally, responsibility moves upwards, whereas authority flows downwards.
4. Responsibility is in the form of a continuing obligation.
5. Responsibility cannot be delegated.
6. The person accepting responsibility is accountable for the performance of assigned duties.
7. It is hard to conceive responsibility without authority.
Accountability - means giving explanations for any variance in the actual performance from the expectations
set. Accountability can not be delegated. For example, if ‘A‘ is given a task with sufficient authority, and ‘A‘
delegates this task to B and asks him to ensure that task is done well, responsibility rest with ‘B‘, but
accountability still rest with ‘A‘. The top level management is most accountable. Being accountable means
being innovative as the person will think beyond his scope of job. Accountability, in short, means being
answerable for the end result. Accountability can‘t be escaped. It arises from responsibility.
According, to McFarland, "accountability is the obligation of an individual to report formally to his superior
about the work he has done to discharge the responsibility."
When authority is delegated to a subordinate, the person is accountable to the superior for performance in
relation to assigned duties. If the subordinate does a poor job, the superior cannot evade the responsibility by
stating that poor performance is the fault of the subordinate. A superior is normally responsible for all actions
of groups under his supervision even if there are several layers down in the hierarchy. Simply stated,
accountability means that the subordinate should explain the factors responsible for non-performance or lack of
performance.
Bureaucracy
Max Weber (1864-1920), who was a German sociologist, proposed different characteristics found in effective
bureaucracies that would effectively conduct decision-making, control resources, protect workers and
accomplish organizational goals. Max Weber's model of Bureaucracy is oftentimes described through a simple
set of characteristics, which will be described in this article.
Max Weber's work was translated into English in the mid-forties of the twentieth century, and was oftentimes
interpreted as a caricature of modern bureaucracies with all of their shortcomings. However, Weber's work was
indented to supplant old organizational structures that existed in the earlier periods of industrialization. To fully
appreciate and understand the work of Max Weber, one therefore has to keep the historic context in mind, and
not "just" see his work as a caricature of bureaucratic models.
Max Weber outlined the key characteristics of a bureaucracy:

Fixed division of labor. The jurisdictional areas are clearly specified, and each area has a specific set of official
duties and rights that cannot be changed at the whim of the leader. This division of labor should minimize
arbitrary assignments of duties found in more traditional structures, in which the division of labor was not firm
and regular, and in which the leader could change duties at any time.
Hierarchy of offices. Each office should be controlled and supervised by a higher ranking office. However,
lower offices should maintain a right to appeal decisions made higher in the hierarchy. This should replace a
more traditional system, in which power and authority relations are more diffuse, and not based on a clear
hierarchical order.
Rational-legal authority. A bureaucracy is founded on rational-legal authority. This type of authority rests on
the belief in the "legality" of formal rules and hierarchies, and in the right of those elevated in the hierarchy to
posses authority and issue commands. Authority is given to officials based on their skills, position and authority
placed formally in each position. This should supplant earlier types administrative systems, where authority
was legitimized based on other, and more individual, aspects of authority like wealth, position, ownership,
heritage etc.
Creation of rules to govern performance Rules should be specified to govern official decisions and actions.
These formal rules should be relatively stable, exhaustive and easily understood. This should supplant old
systems, in which rules were either ill-defined or stated vaguely, and in which leaders could change the rules for
conducting the daily work arbitrarily.
Separation of personal from official property and rights Official property rights concerning e.g. machines or
tools should belong to the office or department - not the officeholder. Personal property should be separated
from official property. This should supplant earlier systems, in which personal and official property rights were
not separated to the needed extent.
Selection based on qualifications Officials are recruited based on qualifications, and are appointed, not
elected, to the office. People are compensated with a salary, and are not compensated with benefices such as
rights to land, power etc. This should supplant more particularistic ways of staffing found in more traditional
systems, where officials were often selected due to their relation with the leader or social rank. Benefices such
as land, rights etc. were also common ways of compensating people, which was to be replaced by a general
salary matching qualifications.
Clear career paths Employment in the organizations should be seen as a career for officials. An official is a
full-time employee, and anticipates a lifelong career. After an introduction period, the employee is given tenure,
which protects the employee from arbitrary dismissal. This should supplant more traditional systems, in which
employees' career paths were determined by the leader, and in which employees lacked the security of tenure.
Max Weber viewed these bureaucratic elements as solutions to problems or defects within earlier and more
traditional administrative systems. Likewise, he viewed these elements as parts of a total system, which,
combined and instituted effectively, would increase the effectiveness and efficiency of the administrative
structure.
Max Weber distinguishes three types of authority: Traditional authority, Rational-legal authority and
Charismatic authority.
Traditional authority This type of authority rests on an established belief that leaders have a traditional and
legitimate right to exercise authority, where different traditional circumstances enable and legitimize those in
command to exercise authority. This traditional authority gives rise to patrimonial systems like e.g. patriarchal
and feudalistic systems and societies. These systems are however dependent upon the followers' acceptance of
this authority, and that the followers see this type of authority as legitimate.
Rational-legal authority This type of authority rests on the belief in the "legality" of formal rules and
hierarchies, and in the right of those elevated in the hierarchy to posses authority and issue commands. This
type of authority is often seen as legitimate in bureaucratic systems, which enables impersonal, specific and
formal structures of modern companies. People will hence find this type of authority legitimate, if the authority
is distributed to leaders based on e.g. rationality and capability.
Charismatic authority This type of authority rests on the belief in an exceptional sanctity, heroism or
exemplary character of an individual, and on the normative patterns or orders revealed and issued by him or her.
Charismatic leaders are often seen as legitimate in times of crisis or change when extraordinary leadership is
called for, and when this extraordinary leadership is recognized in the specific authorial figure by followers.
According to Max Weber, only the traditional and rational-legal types of authority relationships are stable
enough to provide the fundament for permanent administrative structures such as e.g. business organizations.
Structures formed on charismatic authority, will therefore most like need to evolve into more stable forms of
authority.
Adhocracy
Adhocracy is a type of organization that operates in opposite fashion to a bureaucracy. The term was first
popularized in 1970 by Alvin Toffler, and has since become often used in the theory of management of
organizations (particularly online organizations), further developed by academics such as Henry Mintzberg.
Adhocracy on the other hand is a structural system that breaks from the traditional ways of bureaucracy by not
holding formal rules or regulations, is usually void of hierarchies, has no standardised procedures for dealing
with routine problems, is low in formalisation and is organised for a temporary life. The major highlight of this
system is its flexibility and responsiveness in dealing with all sorts of situations quickly and efficiently,
particularly in dynamic environments such as computer developments.
Adhocracy was developed during the nineteen forties, specifically designed to be flexible in dealing with ever
changing demands and goals. Within today‘s society, these types of structural systems can be found at work in
high risk organisations, newly developing industries (which are attempting to discover their direction), as well
as in groups that plan on only existing for short periods of time. If the organisations continue to develop, it is
most likely they will become bureaucratic in nature, only because Adhocracy is limited in its ability to cope
with large groups of individuals, and the needs of ongoing big businesses.
The benefits of adhocracy lay in its ability to be adaptive and creative, while at the same time allowing for
collaboration from varied specialists with very few rules which removes any hindrances and allows for
individual creativeness. And with its horizontal managerial structure allowing for more interaction and
collaboration, it becomes a viable alternative to bureaucracy. "On the negative side, conflict is a natural part of
adhocracy. There is no clear subordinate relationships. Ambiguities exist over authority and responsibilities.
Activities cannot be departmentalised, and in short, this system lacks the advantages of standardised work".
MOTIVATION

Motivation is the word derived from the word ‘motive‘ which means needs, desires, wants or drives within the
individuals. It is the process of stimulating people to actions to accomplish the goals. In the work goal context
the psychological factors stimulating the people‘s behavior
One of the most important functions of management is to create willingness amongst the employees to perform
in the best of their abilities. Therefore the role of a leader is to arouse interest in performance of employees in
their jobs. The process of motivation consists of three stages:-
1. A felt need or drive

2. A stimulus in which needs have to be aroused
3. When needs are satisfied, the satisfaction or accomplishment of goals.
Therefore, we can say that motivation is a psychological phenomenon which means needs and wants of the
individuals have to be tackled by framing an incentive plan.
Nature of Motivation
1. It refers to the set of forces that cause people o behave I certain way
2. It is the inner feelings which energize a person to work more
3. The emotions or desires of a person prompt him for doing a particular work
4. There are unsatisfied needs of a person which disturbs his equilibrium
5. A person moves to fulfill his unsatisfied needs by conditioning his energies and attain the state of
equilibrium
Importance
1. Puts human resources into action Every concern requires physical, financial and human resources to
accomplish the goals. It is through motivation that the human resources can be utilized by making full
use of it. This can be done by building willingness in employees to work. This will help the enterprise in
securing best possible utilization of resources.
2. Improves level of efficiency of employees The level of a subordinate or a employee does not only
depend upon his qualifications and abilities. For getting best of his work performance, the gap between
ability and willingness has to be filled which helps in improving the level of performance of
subordinates. This will result into-
a. Increase in productivity,
b. Reducing cost of operations, and
c. Improving overall efficiency.
3. Leads to achievement of organizational goals The goals of an enterprise can be achieved only when
the following factors take place :-
a. There is best possible utilization of resources,
b. There is a co-operative work environment,
c. The employees are goal-directed and they act in a purposive manner,
d. Goals can be achieved if co-ordination and co-operation takes place simultaneously which can be
effectively done through motivation.
4. Builds friendly relationship Motivation is an important factor which brings employees satisfaction.
This can be done by keeping into mind and framing an incentive plan for the benefit of the employees.
This could initiate the following things:
a. Monetary and non-monetary incentives,
b. Promotion opportunities for employees,
c. Disincentives for inefficient employees.
In order to build a cordial, friendly atmosphere in a concern, the above steps should be taken by a
manager. This would help in:
d. Effective co-operation which brings stability,

e. Industrial dispute and unrest in employees will reduce,
f. The employees will be adaptable to the changes and there will be no resistance to the change,
g. This will help in providing a smooth and sound concern in which individual interests will
coincide with the organizational interests,
h. This will result in profit maximization through increased productivity.
5. Leads to stability of work force Stability of workforce is very important from the point of view of
reputation and goodwill of a concern. The employees can remain loyal to the enterprise only when they
have a feeling of participation in the management. The skills and efficiency of employees will always be
of advantage to employees as well as employees. This will lead to a good public image in the market
which will attract competent and qualified people into a concern. As it is said, ―Old is gold‖ which
suffices with the role of motivation here, the older the people, more the experience and their adjustment
into a concern which can be of benefit to the enterprise
Maslow Need Hierarchy Theory
Psychologist Abraham Maslow first introduced his concept of a hierarchy of needs in his 1943 paper "A Theory
of Human Motivation"1 and his subsequent book, Motivation and Personality.2 This hierarchy suggests that
people are motivated to fulfill basic needs before moving on to other needs.
Maslow‘s hierarchy of needs is most often displayed as a pyramid. The lowest levels of the pyramid are made
up of the most basic needs, while the more complex needs are located at the top of the pyramid. Needs at the
bottom of the pyramid are basic physical requirements including the need for food, water, sleep and warmth.
Once these lower-level needs have been met, people can move on to the next level of needs, which are for
safety and security.
As people progress up the pyramid, needs become increasingly psychological and social. Soon, the need for
love, friendship and intimacy become important. Further up the pyramid, the need for personal esteem and
feelings of accomplishment take priority. Maslow emphasized the importance of self-actualization, which is a
process of growing and developing as a person to achieve individual potential.
Types of Needs
Maslow believed that these needs are similar to instincts and play a major role in motivating behavior.
Physiological, security, social, and esteem needs are deficiency needs (also known as D-needs), meaning that
these needs arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant
feelings or consequences.
Maslow termed the highest-level of the pyramid as growth needs (also known as being needs or B-needs).
Growth needs do not stem from a lack of something, but rather from a desire to grow as a person.

Five Levels of the Hierarchy of Needs
There are five different levels in Maslow‘s hierarchy of needs:
1. Physiological Needs These include the most basic needs that are vital to survival, such as the need for
water, air, food and sleep. Maslow believed that these needs are the most basic and instinctive needs in
the hierarchy because all needs become secondary until these physiological needs are met.
2. Security Needs These include needs for safety and security. Security needs are important for survival,
but they are not as demanding as the physiological needs. Examples of security needs include a desire
for steady employment, health insurance, safe neighborhoods and shelter from the environment.
3. Social Needs These include needs for belonging, love and affection. Maslow considered these needs to
be less basic than physiological and security needs. Relationships such as friendships, romantic
attachments and families help fulfill this need for companionship and acceptance, as does involvement
in social, community or religious groups.
4. Esteem Needs After the first three needs have been satisfied, esteem needs becomes increasingly
important. These include the need for things that reflect on self-esteem, personal worth, social
recognition and accomplishment.
5. Self-actualizing Needs This is the highest level of Maslow‘s hierarchy of needs. Self-actualizing people
are self-aware, concerned with personal growth, less concerned with the opinions of others and
interested fulfilling their potential
Limitations of Maslow's Hierarchy.
While Maslow's hierarchy makes sense from an intuitive standpoint, there is little evidence to support its
hierarchical aspect. In fact, there is evidence that contradicts the order of needs specified by the model. For
example, some cultures appear to place social needs before any others. Maslow's hierarchy also has difficulty
explaining cases such as the "starving artist" in which a person neglects lower needs in pursuit of higher ones.
Finally, there is little evidence to suggest that people are motivated to satisfy only one need level at a time,
except in situations where there is a conflict between needs.
Frederick Herzberg Theory of Human Motivation
Frederick Herzberg's theory of motivation is also called 'Two Factor Theory', 'Dual Factor Theory' and 'Hygiene /
Maintenance Theory of Motivation'. This theory is based on the information collected by him and his associates (in the

USA in 1959) by interviewing two hundred engineers and accountants. The information collected relates to the attitude
of people towards work. This attitude towards work depends on two sets of factors namely hygiene or maintenance
factors and the motivating factors
Hygiene Factors of Two Factor Theory
According to Frederick Herzberg, the Hygiene Factors do little contribution to provide job satisfaction. He
called them "dissatisfiers' as their absence cause dissatisfaction but their presence is not motivating but only
prevent dissatisfaction. The hygiene factors meet man's needs to avoid unpleasantness but do not motivate them
to take more interest in the work. Hygiene factors (when provided) create a favorable environment for
motivation and prevents job dissatisfaction. They are not an intrinsic part of a job, but they are related to the
conditions under which a job is performed. When employer is unable to provide enough of these factors to his
employees, there will be job dissatisfaction. However, if they are provided, they will not necessarily act as
motivators. They will just lead employees to experience no job dissatisfaction. Such hygiene factors are as
noted below.
Hygiene / Maintenance Factors are :-
1. Company's Policies and Administration,

2. Supervision,
3. Working Conditions,
4. Interpersonal Relations with superiors and other subordinates,
5. Salary,
6. Job Security,
7. Status,
8. Personal Life, and
9. Employee Benefits.
Motivating Factors of Two Factor Theory
Motivating Factors act as forces of job satisfaction. They create positive and a longer lasting effect on
employee‘s performance and are related to work itself. Adequate provision of such factors called are
'Satisfiers'. They make people happy with their jobs because they serve man's basic needs for psychological
growth. In addition, they also motivate employees in their work. Such factors are five and are called motivators
by Herzberg. The motivating factors are:
Motivating Factors are :-
1. Achievement,
2. Recognition for Accomplishment,
3. Increased Responsibility,
4. Opportunity for Growth and Development, and
5. Creative and Challenging Work.
Motivating factors motivate subordinates to take more interest in the work. They raise efficiency and
productivity of employees. According to Frederick Herzberg, motivating factors are essential in order to provide
job satisfaction and in order to maintain a high level of job performance. Employees will not have job
satisfaction if the motivating factors are not provided in sufficient quality by the employer.
Implications for Management
If the motivation-hygiene theory holds, management not only must provide hygiene factors to avoid employee
dissatisfaction, but also must provide factors intrinsic to the work itself in order for employees to be satisfied
with their jobs.
Herzberg argued that job enrichment is required for intrinsic motivation, and that it is a continuous management
process. According to Herzberg:
The job should have sufficient challenge to utilize the full ability of the employee.
Employees who demonstrate increasing levels of ability should be given increasing levels of
responsibility.
If a job cannot be designed to use an employee's full abilities, then the firm should consider automating
the task or replacing the employee with one who has a lower level of skill. If a person cannot be fully
utilized, then there will be a motivation problem.
Critics of Herzberg's theory argue that the two-factor result is observed because it is natural for people to take
credit for satisfaction and to blame dissatisfaction on external factors. Furthermore, job satisfaction does not
necessarily imply a high level of motivation or productivity.
THEORY X & THEORY Y
Social psychologist Douglas McGregor of MIT expounded two contrasting theories on human motivation and
management in the 1960s: The X Theory and the Y Theory. McGregor promoted Theory Y as the basis of good
management practice, pioneering the argument that workers are not merely cogs in the company machinery, as
Theory X-Type organizations seemed to believe.
The theories look at how a manager's perceptions of what motivates his or her team members affects the way he
or she behaves. By understanding how your assumptions about employees‘ motivation can influence your
management style, you can adapt your approach appropriately, and so manage people more effectively.
Understanding the Theories. Your management style is strongly influenced by your beliefs and assumptions
about what motivates members of your team: If you believe that team members dislike work, you will tend
towards an authoritarian style of management; On the other hand, if you assume that employees take pride in
doing a good job, you will tend to adopt a more participative style.
Theory X Theory X assumes that employees are naturally unmotivated and dislike working, and this encourages
an authoritarian style of management. According to this view, management must actively intervene to get things
done. This style of management assumes that workers:
Dislike working.
Avoid responsibility and need to be directed.
Have to be controlled, forced, and threatened to deliver what's needed.
Need to be supervised at every step, with controls put in place.
Need to be enticed to produce results; otherwise they have no ambition or incentive to work.
X-Type organizations tend to be top heavy, with managers and supervisors required at every step to control
workers. There is little delegation of authority and control remains firmly centralized.
McGregor recognized that X-Type workers are in fact usually the minority, and yet in mass organizations, such
as large scale production environment, X Theory management may be required and can be unavoidable.
Theory Y. Theory Y expounds a participative style of management that is de-centralized. It assumes that
employees are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It
assumes that workers:
Take responsibility and are motivated to fulfill the goals they are given.
Seek and accept responsibility and do not need much direction.
Consider work as a natural part of life and solve work problems imaginatively.
This more participative management style tends to be more widely applicable. In Y-Type organizations, people
at lower levels of the organization are involved in decision making and have more responsibility.
Comparing Theory X and Theory Y
1. Motivation. Theory X assumes that people dislike work; they want to avoid it and do not want to take
responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.
2. Management Style and Control In a Theory X organization, management is authoritarian, and centralized
control is retained, whilst in Theory Y, the management style is participative: Management involves
employees in decision making, but retains power to implement decisions.
3. Work Organization. Theory X employees tend to have specialized and often repetitive work. In Theory Y,
the work tends to be organized around wider areas of skill or knowledge; Employees are also encouraged to
develop expertise and make suggestions and improvements.
4. Rewards and Appraisals. Theory X organizations work on a ‗carrot and stick‘ basis, and performance
appraisal is part of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal
is also regular and important, but is usually a separate mechanism from organizational controls. Theory Y
organizations also give employees frequent opportunities for promotion.
5. Application. Although Theory X management style is widely accepted as inferior to others, it has its place in
large scale production operation and unskilled production-line work. Many of the principles of Theory Y are
widely adopted by types of organization that value and encourage participation. Theory Y-style management
is suited to knowledge work and professional services. Professional service organizations naturally evolve
Theory Y-type practices by the nature of their work; Even highly structure knowledge work, such as call
center operations, can benefits from Theory Y principles to encourage knowledge sharing and continuous
improvement.
ERG Theory
The ERG Theory was proposed by Clayton P. Alderfer in 1969 in a Psychological Review article entitled "An Empirical Test
of a New Theory of Human Need". The model was developed in his book: "Existence, Relatedness, and Growth; Human
Needs in Organizational Settings"
1. Existence Needs co-relate to Maslow's first two levels. This group of needs is concerned with providing the basic
requirements for material existence, such as physiological and safety needs. In a work context this need is satisfied
by money earned in a job for the purchase of food, shelter, clothing, etc.
2. Relatedness Needs co-relate to Maslow's third and fourth levels. This group of needs focuses on the desire to
establish and maintain interpersonal relationships with family, friends, co-workers and employers. This need
includes the need to interact with other people, receive public recognition, and feel secure around people. In a work

context and given the amount of time most people spend at work this need is normally satisfied to some extent by
their relationships with colleagues and managers.
3. Growth Needs co-relate to Maslow's fourth and fifth levels. These needs are about the fulfilment of desires to be
creative, productive and to complete meaningful tasks in order to build and enhance a person’s self-esteem through
personal achievement. These needs are all about by personal development. In a work context a person's job, career,
or profession can provide a significant satisfaction of growth needs.
Differences from Maslow's Needs Hierarchy
Beyond simply reducing the distinction between overlapping needs, the ERG theory improves upon the
following shortcomings of Maslow's Needs Hierarchy:
Alderfers ERG theory demonstrates that more than one need may motivate at the same time. A lower
motivator need not be substantially satisfied before one can move onto higher motivators.
The ERG theory also accounts for differences in need preferences between cultures better than Maslow's
Need Hierarchy; the order of needs can be different for different people. This flexibility accounts for a
wider range of observed behaviors. For example, it can explain the "starving artist" who may place
growth needs above those of existence.
The ERG theory acknowledges that if a higher-order need is frustrated, an individual may regress to
increase the satisfaction of a lower-order need which appears easier to satisfy. This is known as
thefrustration-regression principle.
McClelland’s Theory of Motivaton
One of McClelland‘s most well known theories is that human motivation, is dominated by three needs.
McClelland's theory, sometimes referred to as the three need theory or as the learned needs theory, categorises
the needs as follows;
the need for achievement ( N-Ach), Need for achievement is the urge to excel, to accomplish in relation
to a set of standards, to struggle to achieve success.
the need for power ( N-Pow) Need for power is the desire to influence other individual‘s behaviour as
per your wish. In other words, it is the desire to have control over others and to be influential.
the need for affiliation ( N-Affil). Need for affiliation is a need for open and sociable interpersonal
relationships. In other words, it is a desire for relationship based on co-operation and mutual
understanding.
The individuals with high achievement needs are highly motivated by competing and challenging work. They
look for promotional opportunities in job. They have a strong urge for feedback on their achievement. Such
individuals try to get satisfaction in performing things better. High achievement is directly related to high
performance. Individuals who are better and above average performers are highly motivated. They assume
responsibility for solving the problems at work. McClelland called such individuals as gamblers as they set
challenging targets for themselves and they take deliberate risk to achieve those set targets. Such individuals
look for innovative ways of performing job. They perceive achievement of goals as a reward, and value it more
than a financial reward.
The individuals who are motivated by power have a strong urge to be influential and controlling. They want that
their views and ideas should dominate and thus, they want to lead. Such individuals are motivated by the need
for reputation and self-esteem. Individuals with greater power and authority will perform better than those
possessing less power. Generally, managers with high need for power turn out to be more efficient and
successful managers. They are more determined and loyal to the organization they work for. Need for power
should not always be taken negatively. It can be viewed as the need to have a positive effect on the organization
and to support the organization in achieving it‘s goals.
The individuals who are motivated by affiliation have an urge for a friendly and supportive environment. Such
individuals are effective performers in a team. These people want to be liked by others. The manager‘s ability to
make decisions is hampered if they have a high affiliation need as they prefer to be accepted and liked by
others, and this weakens their objectivity. Individuals having high affiliation needs prefer working in an
environment providing greater personal interaction. Such people have a need to be on the good books of all.
They generally cannot be good leaders.
EXPECTANCY THEORY.
In the early 1960s, Victor Vroom applied concepts of behavioral research conducted in the 1930s by Kurt
Lewin and Edward Tolman directly to work motivation. Basically, Vroom suggested that individuals choose
work behaviors that they believe lead to outcomes they value. In deciding how much effort to put into a work
behavior, individuals are likely to consider:
Their expectancy, meaning the degree to which they believe that putting forth effort will lead to a given
level of performance.
Their instrumentality, or the degree to which they believe that a given level of performance will result in
certain outcomes or rewards.
Their valence, which is the extent to which the expected outcomes are attractive or unattractive.
All three of these factors are expected to influence motivation in a multiplicative fashion, so that for an
individual to be highly motivated, all three of the components of the expectancy model must be high. And, if
even one of these is zero (e.g., instrumentality and valence are high, but expectancy is completely absent), the
person will have not motivation for the task. Thus, managers should attempt, to the extent possible, to ensure
that their employees believe that increased effort will improve performance and that performance will lead to
valued rewards.
In the late 1960s, Porter and Lawler published an extension of the Vroom expectancy model, which is known as
the Porter-Lawler expectancy model or simply the Porter-Lawler model. Although the basic premise of the
Porter-Lawler model is the same as for Vroom's model, the Porter-Lawler model is more complex in a number
of ways. It suggests that increased effort does not automatically lead to improved performance because
individuals may not possess the necessary abilities needed to achieve high levels of performance, or because
they may have an inadequate or vague perception of how to perform necessary tasks. Without an understanding

of how to direct effort effectively, individuals may exert considerable effort without a corresponding increase in
performance.
EQUITY THEORY.
Equity theory suggests that individuals engage in social comparison by comparing their efforts and rewards
with those of relevant others. The perception of individuals about the fairness of their rewards relative to others
influences their level of motivation. Equity exists when individuals perceive that the ratio of efforts to rewards
is the same for them as it is for others to whom they compare themselves. Inequity exists when individuals
perceive that the ratio of efforts to rewards is different (usually negatively so) for them than it is for others to
whom they compare themselves. There are two types of inequity—under-reward and over-reward. Under-
reward occurs when a person believes that she is either puts in more efforts than another, yet receives the same
reward, or puts in the same effort as another for a lesser reward. For instance, if an employee works longer
hours than her coworker, yet they receive the same salary, the employee would perceive inequity in the form of
under-reward. Conversely, with over-reward, a person will feel that his efforts to rewards ratio is higher than
another person's, such that he is getting more for putting in the same effort, or getting the same reward even
with less effort. While research suggests that under-reward motivates individuals to resolve the inequity,
research also indicates that the same is not true for over-reward. Individuals who are over-rewarded often
engage in cognitive dissonance, convincing themselves that their efforts and rewards are equal to another's.
According to the equity theory, individuals are motivated to reduce perceived inequity. Individuals may attempt
to reduce inequity in various ways. A person may change his or her level of effort; an employee who feels
under-rewarded is likely to work less hard. A person may also try to change his or her rewards, such as by
asking for a raise. Another option is to change the behavior of the reference person, perhaps by encouraging that
person to put forth more effort. Finally, a person experiencing inequity may change the reference person and
compare him or herself to a different person to assess equity. For managers, equity theory emphasizes the
importance of a reward system that is perceived as fair by employees.
Types of Motivation
People management - Financial methods of motivation
Though there are many reasons why people work for a living, it is undeniable that money, or other financial
rewards, play a key role in motivating people in the workplace.
There is a wide variety of ways in which a business can offer money (or “financial rewards”) as part of the
―pay package‖, including:
Salaries: fixed amounts per month or year for performing a role; these are common for most managerial
positions (e.g. Accountant, Payroll Manager)
Benefits in kind (“fringe benefits”) – very common in businesses of all kinds; these include staff
discounts, contributions to travel costs, staff uniforms etc
Time-rate pay: pay based on time worked; very common in small businesses where employees are paid
per hour.
Piece-rate pay: pay per item produced – becoming less common
Commission: payment based on the value of sales achieved.
Other performance-related pay: e.g. bonuses for achieving targets
Shares and options: less common in small businesses, but popular in businesses whose shares are
traded on stock markets
Pensions – becoming less common and generous. Small businesses tend not to offer pension benefits.
In most cases, an employee might expect to have a mixture of the above in a pay package.
How important is money as a motivator? It is widely accepted that poor or low pay acts as a de-motivator.
Someone who feels undervalued or under-paid may soon leave to find better-paid employment. However, it is
less clear that paying people more results in better motivation.
For most people, motivation (the will to work) comes from ―within‖. More money can help us feel better about
out work, but it is unlikely to encourage us to work harder or to a higher standard.
Non-monetary incentives- Besides the monetary incentives, there are certain non-financial incentives which
can satisfy the ego and self- actualization needs of employees. The incentives which cannot be measured in
terms of money are under the category of ―Non- monetary incentives‖. Whenever a manager has to satisfy the
psychological needs of the subordinates, he makes use of non-financial incentives. Non- financial incentives can
be of the following types:-
1. Security of service- Job security is an incentive which provides great motivation to employees. If his job
is secured, he will put maximum efforts to achieve the objectives of the enterprise. This also helps since
he is very far off from mental tension and he can give his best to the enterprise.
2. Praise or recognition- The praise or recognition is another non- financial incentive which satisfies the
ego needs of the employees. Sometimes praise becomes more effective than any other incentive. The
employees will respond more to praise and try to give the best of their abilities to a concern.
3. Suggestion scheme- The organization should look forward to taking suggestions and inviting suggestion
schemes from the subordinates. This inculcates a spirit of participation in the employees. This can be
done by publishing various articles written by employees to improve the work environment which can
be published in various magazines of the company. This also is helpful to motivate the employees to feel
important and they can also be in search for innovative methods which can be applied for better work
methods. This ultimately helps in growing a concern and adapting new methods of operations.
4. Job enrichment- Job enrichment is another non- monetary incentive in which the job of a worker can be
enriched. This can be done by increasing his responsibilities, giving him an important designation,
increasing the content and nature of the work. This way efficient worker can get challenging jobs in
which they can prove their worth. This also helps in the greatest motivation of the efficient employees.
5. Promotion opportunities- Promotion is an effective tool to increase the spirit to work in a concern. If the
employees are provided opportunities for the advancement and growth, they feel satisfied and contented
and they become more committed to the organization. The above non- financial tools can be framed
effectively by giving due concentration to the role of employees. A combination of financial and non-
financial incentives help together in bringing motivation and zeal to work in a concern.
Positive Incentives. Positive incentives are those incentives which provide a positive assurance for fulfilling the
needs and wants. Positive incentives generally have an optimistic attitude behind and they are generally given to
satisfy the psychological requirements of employees. For example-promotion, praise, recognition, perks and
allowances, etc. It is positive by nature.
Negative Incentives. Negative incentives are those whose purpose is to correct the mistakes or defaults of
employees. The purpose is to rectify mistakes in order to get effective results. Negative incentive is generally
resorted to when positive incentive does not works and a psychological set back has to be given to employees. It
is negative by nature. For example- demotion, transfer, fines, penalties.

MCP Unit-3

Uploaded by

Copyright:

Available Formats

You might also like

MCP Unit-3

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

MCP Unit-3

Uploaded by

Copyright:

Available Formats

PARISHKRIT AGRAWAL @ BIT

PARISHKRIT AGRAWAL @ BIT

1. Principles of Span of Control/Supervision. According to this principle, span of control is a span of

Decentralisation of authority means conscious/systematic effort to bring dispersal (spreading) of decision

PARISHKRIT AGRAWAL @ BIT

1. There is less burden on the Chief Executive as in the case of centralization.

Pros of Employee Empowerment

Cons of Employee Empowerment

PARISHKRIT AGRAWAL @ BIT

Factors determining the span of management:

PARISHKRIT AGRAWAL @ BIT

Basic functions i.e. Production Marketing Finance and Personnel

PARISHKRIT AGRAWAL @ BIT

Organizational authority has three important underlying principles:

In addition, authority comes in three types:

Max Weber outlined the key characteristics of a bureaucracy:

PARISHKRIT AGRAWAL @ BIT

PARISHKRIT AGRAWAL @ BIT

1. A felt need or drive

d. Effective co-operation which brings stability,

Maslow Need Hierarchy Theory

PARISHKRIT AGRAWAL @ BIT

There are five different levels in Maslow‘s hierarchy of needs:

Limitations of Maslow's Hierarchy.

Frederick Herzberg Theory of Human Motivation

PARISHKRIT AGRAWAL @ BIT

Hygiene Factors of Two Factor Theory

Hygiene / Maintenance Factors are :-

1. Company's Policies and Administration,

Motivating Factors of Two Factor Theory

Motivating Factors are :-

THEORY X & THEORY Y

Comparing Theory X and Theory Y

PARISHKRIT AGRAWAL @ BIT

Differences from Maslow's Needs Hierarchy

McClelland’s Theory of Motivaton

PARISHKRIT AGRAWAL @ BIT

People management - Financial methods of motivation

PARISHKRIT AGRAWAL @ BIT

You might also like