1.

Functions of Management
Management is defined as the procedure of organising, directing, planning and controlling the efforts of
organisational members and of managing organisational sources to accomplish particular goals.

Planning is the purpose of ascertaining in advance what is supposed to be done and who has to do it. This
signifies establishing goals in advance and promoting a way of delivering them effectively and efficiently. In an
establishment, the aim is the obtainment and sale of conventional Indian handloom and workmanship articles.
They trade furnishings, readymades, household items and fabrics made out of classical Indian textiles.

Organising is the administrative operation of specifying grouping tasks, duties, authorising power and
designating resources needed to carry out a particular system. Once a definite plan has been set for the
completion of an organisational intent, the organising party reviews the actions and resources expected to
execute the program. It ascertains what actions and resources are needed. It determines who will do a distinct
job, where and when it will be done.

Staffing is obtaining the best resources for the right job. A significant perspective of management is to make
certain that the appropriate people with the apt skills are obtainable in the proper places and times to achieve
the goals of the company. This is also called the human resource operations and it includes activities such as
selection, placement, recruitment and coaching of employees.

Directing involves directing, leading and encouraging the employees to complete the tasks allocated to them.
This entails building an environment that inspires employees to do their best. Motivation and leadership are 2
chief elements of direction. Directing also includes communicating efficiently as well as managing employees at
the workplace. Motivating workers means simply building an atmosphere that urges them to want to work.
Leadership is inspiring others to do what the manager wants them to do.

Controlling is the management operation of controlling organisational achievement towards the

accomplishment of organisational intentions. The job of controlling comprises ascertaining criteria of
performance, computing the current performance, comparing this with organised rules and taking remedial
action where any divergence is observed. Here management should ascertain what activities and outputs are
important to progress, how and where they can be regulated and who should have the power to take remedial
response.

2. Levels of Management - Top, Middle and Lower

The levels of management can be classified in three broad categories:

 Top level/Administrative level

 Middle level/Executory
 Low level/Supervisory/Operative/First-line managers

Managers at all these levels perform different functions. The role of managers at all the three levels is discussed
below:
 Levels of Management

1. Top Level of Management

It consists of board of directors, chief executive or managing director.

The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It
devotes more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

 Top management lays down the objectives and broad policies of the enterprise.
 It issues necessary instructions for preparation of department budgets, procedures, schedules etc.
 It prepares strategic plans & policies for the enterprise.
 It appoints the executive for middle level i.e. departmental managers.
 It controls & coordinates the activities of all the departments.
 It is also responsible for maintaining a contact with the outside world.
 It provides guidance and direction.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top
management for the functioning of their department. They devote more time to organizational and directional
functions.

In small organization, there is only one layer of middle level of management but in big enterprises, there may be
senior and junior middle level management. Their role can be emphasized as -

 They execute the plans of the organization in accordance with the policies and directives of the top
management.
 They make plans for the sub-units of the organization.
 They participate in employment & training of lower level management.
 They interpret and explain policies from top level management to lower level.
 They are responsible for coordinating the activities within the division or department.
 It also sends important reports and other important data to top level management.
 They evaluate performance of junior managers.
 They are also responsible for inspiring lower level managers towards better performance.
3. Lower Level of Management

Lower level is also known as supervisory/operative level of management. It consists of supervisors, foreman,
section officers, superintendent etc.

In other words, they are concerned with direction and controlling function of management. Their activities
include -

 Assigning of jobs and tasks to various workers.

 They guide and instruct workers for day to day activities.
 They are responsible for the quality as well as quantity of production.
 They are also entrusted with the responsibility of maintaining good relation in the organization.
 They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level
and higher level goals and objectives to the workers.
 They help to solve the grievances of the workers.

3. Management’s Responsibility

Management is responsible for establishing internal controls. In order to maintain effective internal controls,
management should:
1. Maintain adequate policies and procedures;
2. Communicate these policies and procedures; and
3. Monitor compliance with policies and practices.
Responsibilities of management include, planning, organizing, directing and controlling. Controlling,
including monitoring, is a process to ensure what is supposed to be done is being done. Control activities are
the policies and procedures, which help ensure that management directives are carried out and include, but
are not limited to the following:
 Authorizations – Transactions must be authorized and executed in accordance with management’s
intent.
 Segregation of Duties – Segregation of duties is adequate when no one person is in a position to initiate
and conceal errors and/or irregularities in the normal course of their duties.
 Record Keeping – Adequate record keeping ensures that assets are properly controlled and transactions
are properly recorded as to account, amount and period.
 Safeguarding – Limiting access to and controlling the use of assets and records are ways to safeguard
those assets and records.
 Reconciliations – Reconciliations are independent verifications, which help to ensure that the other four
control activities are functioning as intended.

4. Henri Fayol's Principles of Management

The fourteen principles of management created by Henri Fayol are explained below.

1. Division of Work: Henri believed that segregating work in the workforce amongst the workers will enhance
the quality of the product. Similarly, he also concluded that the division of work improves the productivity,
efficiency, accuracy and speed of the workers. This principle is appropriate for both the managerial as well as a
technical work level.
2. Authority and Responsibility : These are the two key aspects of management. Authority facilitates the
management to work efficiently, and responsibility makes them responsible for the work done under their
guidance or leadership.

3. Discipline : Without discipline, nothing can be accomplished. It is the core value for any project or any
management. Good performance and sensible interrelation make the management job easy and comprehensive.
Employees’ good behaviour also helps them smoothly build and progress in their professional careers.

4. Unity of Command : This means an employee should have only one boss and follow his command. If an
employee has to follow more than one boss, there begins a conflict of interest and can create confusion.

5. Unity of Direction : Whoever is engaged in the same activity should have a unified goal. This means all the
people working in a company should have one goal and motive which will make the work easier and achieve the
set goal easily.

6. Subordination of Individual Interest : This indicates a company should work unitedly towards the interest of
a company rather than personal interest. Be subordinate to the purposes of an organisation. This refers to the
whole chain of command in a company.

7. Remuneration : This plays an important role in motivating the workers of a company. Remuneration can be
monetary or non-monetary. Ideally, it should be according to an individual’s efforts they have put forth.

8. Centralization : In any company, the management or any authority responsible for the decision-making
process should be neutral. However, this depends on the size of an organisation. Henri Fayol stressed on the
point that there should be a balance between the hierarchy and division of power.

9. Scalar Chain : Fayol, on this principle, highlights that the hierarchy steps should be from the top to the lowest.
This is necessary so that every employee knows their immediate senior also they should be able to contact any,
if needed.

10. Order : A company should maintain a well-defined work order to have a favourable work culture. The positive
atmosphere in the workplace will boost more positive productivity.

11. Equity: All employees should be treated equally and respectfully. It’s the responsibility of a manager that no
employees face discrimination.

12. Stability : An employee delivers the best if they feel secure in their job. It is the duty of the management to
offer job security to their employees.

13. Initiative : The management should support and encourage the employees to take initiatives in an
organisation. It will help them to increase their motivation and morale.

14. Esprit de Corps : It is the responsibility of the management to motivate their employees and be supportive
of each other regularly. Developing trust and mutual understanding will lead to a positive outcome and work
environment.
5. FW Taylor (Frederick Winslow Taylor) Principles of Scientific Management
1. Science, not the Rule of Thumb- This rule focuses on increasing the efficiency of an organisation through
scientific analysis of work and not with the ‘Rule of Thumb’ method. Taylor believed that even a small activity
like loading paper sheets into boxcars can be planned scientifically. This will save time and also human energy.
This decision should be based on scientific analysis and cause and effect relationships rather than ‘Rule of Thumb’
where the decision is taken according to the manager’s personal judgement.

2. Harmony, Not Discord- Taylor indicated and believed that the relationship between the workers and
management should be cordial and completely harmonious. Difference between the two will never be beneficial
to either side. Management and workers should acknowledge and understand each other’s importance. Taylor
also suggested the mental revolution for both management and workers to achieve total harmony.

3. Mental Revolution- This technique involves a shift of attitude of management and workers towards each other.
Both should understand the value of each other and work with full participation and cooperation. The aim of
both should be to improve and boost the profits of the organisation. Mental Revolution demands a complete
change in the outlook of both the workers and management; both should have a sense of togetherness.

4. Cooperation, not Individualism- It is similar to ‘Harmony, not discord’ and believes in mutual collaboration
between workers and the management. Managers and workers should have mutual cooperation and confidence
and a sense of goodwill. The main purpose is to substitute internal competition with cooperation.

5. Development of Every Person to his Greatest Efficiency- The effectiveness of a company also relies on the
abilities and skills of its employees. Thus, implementing training, learning best practices and technology, is the
scientific approach to brush up the employee skill. To assure that the training is given to the right employee, the
right steps should be taken at the time of selection and recruiting candidates based on a scientific selection.

6. What is Planning?
Planning is ascertaining prior to what to do and how to do. It is one of the primary managerial duties. Before
doing something, the manager must form an opinion on how to work on a specific job. Hence, planning is firmly
correlated with discovery and creativity. But the manager would first have to set goals. Planning is an essential
step what managers at all levels take. It needs holding on to the decisions since it includes selecting a choice
from alternative ways of performance.

7. Nature or Characteristics of Planning:

1. Planning is primary function of management: It is the first function to be performed by the manager. No other
function can be executed without performing a planning function because objectives are set up in planning and
other functions depend on the objectives only.

2. Pervasive: Planning is required at all levels of management. It is not a function restricted to top level managers
only but planning is done by managers at every level. Formation of a major plan and framing of overall policies
is the task of top level managers where departmental managers form plans for their respective departments and
lower level managers make plans to support the overall objective and to carry on day to day activities.

3. Planning is futuristic/forward looking: Planning always means looking ahead or planning is a futuristic
function. Planning is never done for the part. All the managers try to make predictions and assumptions for the
future and these predictions are made on the basis of past experiences of the managers and with the regular
and intelligent scanning of the business environment.

4. Planning is continuous process: Planning is a never ending or continuous process because after making plans
one also has to be in touch with the changes in the changing environment and in the selection of one best way.
So after making plans planners also keep making changes in the plans according to the requirements of the
company.

5. Planning involves decision making: The planning function is needed only when different alternatives are
available and we have to select the most suitable alternative. We cannot imagine planning in the absence of
choice because in planning function managers evaluate various alternatives and select the most appropriate but
if there is no alternative available then there is no requirement of planning.

6. Planning contributes to objectives: Planning starts with the determination of objectives. It is the first process
of planning where managers decide what is the objective of the organisation and plan accordingly.

8. Elements of Planning
A plan has the following elements:-
1. Aim: Any organisation should have definite aim. The aim should be clearly defined so that it can guide and
direct the activities of the enterprise. The main aim of a cooperative organisation is to do service and to improve
the economic conditions of members. Calvert’s definition of cooperation clearly exhibits this aim.

2. Objectives: Webster’s Dictionary defines objectives as “that towards which effort is directed or end of action
or goal”. Hence objectives or goals may be described as the ends towards which the group activities are aimed.

People say “Effective management is management by objectives”. A cooperative organisation can have sub-
objectives for each department or sections and they can be united to have board based objective.

3. Policies: A policy is a verbal, written or implied basic guide that provides direction to a manager for action.
Policies guide the actions of an organization’s performance and its objectives in the various areas of operation.

4. Procedures: Procedures spell out the actions to be taken out in practice to achieve the organizations objectives
as stated in the policies. Procedures may be static or changed often. Organizations have set procedures for
procuring raw materials, recruitment of personnel etc.

5. Methods: Methods are work plans, since they provide the manner and order, keeping the objectives, time and
facilities available. Methods involve only one department and one person. They contribute to the efficiency in
working and help work planning and control. Methods are used in manufacturing, marketing and office work.

6. Rules: Rules are different from procedures and policies. A rule requires a specific and definite action be taken
or not taken with respect to a situation. Rules do not allow any discretion in their application. Also they do not
allow any leniency to come in the way of their application.

7. Budget: Budget is essentially a plan expressed in quantitative terms. Budgets involve both planning and control
element. Like the plan, budget is flexible, realistic and operates within a framework. A budget is differentiated
from other plans in the following respects:-
 a. It is a tool for planning and control.
b. A budget covers specific period.
c. Budget is expressed in financial terms.

8. Programmes: Programmes show the way and lay down procedure for activities to take place within a time
limit for accomplishing, the stated objectives. The constituents of a programme are objectives, policies,
procedures, rules, methods and resources to be made use for obtaining the objectives. Programmes enable the
management to anticipate and prepare them ahead to meet future eventualities.

9. Strategics: Koontz and O’Donnell consider this as an important planning element. “Strategy concerns the
direction in which human and physical resources will be deployed and applied in order to maximize the chance
of achieving a selected objective in the face of difficulties”.

9. Importance of Planning:

1. Planning provides Direction: Planning is concerned with a predetermined course of action. It provides the
directions to the efforts of employees. Planning makes clear what employees have to do, how to do, etc. By
stating in advance how work has to be done, planning provides direction for action. Employees know in advance
in which direction they have to work. This leads to Unity of Direction also. If there was no planning, employees
would be working in different directions and the organisation would not be able to achieve its desired goal.

2. Planning Reduces the risk of uncertainties: Organisations have to face many uncertainties and unexpected
situations every day. Planning helps the manager to face the uncertainty because planners try to foresee the
future by making some assumptions regarding future keeping in mind their past experiences and scanning of
business environments. The plans are made to overcome such uncertainties. The plans also include unexpected
risks such as fire or some other calamities in the organisation. The resources are kept aside in the plan to meet
such uncertainties.

3. Planning reduces overlapping and wasteful activities:

The organisational plans are made keeping in mind the requirements of all the departments. The departmental
plans are derived from the main organisational plan. As a result there will be co-ordination in different
departments. On the other hand, if the managers, non-managers and all the employees are following the course
of action according to plan then there will be integration in the activities. Plans ensure clarity of thoughts and
action and work can be carried out smoothly.

4. Planning Promotes innovative ideas: Planning requires high thinking and it is an intellectual process. So, there
is a great scope of finding better ideas, better methods and procedures to perform a particular job. Planning
process forces managers to think differently and assume the future conditions. So, it makes the managers
innovative and creative.

5. Planning Facilitates Decision Making: Planning helps the managers to make various decisions. As in planning
goals are set in advance and predictions are made for the future. These predictions and goals help the manager
to make fast decisions.

6. Planning establishes standard for controlling: Controlling means comparison between planned and actual
output and if there is variation between both then find out the reasons for such deviations and take measures
to match the actual output with the planned. But in case there is no planned output then the controlling manager
will have no base to compare whether the actual output is adequate or not.

7. Focuses attention on objectives of the company: Planning function begins with the setting up of the objectives,
policies, procedures, methods and rules, etc. which are made in planning to achieve these objectives only. When
employees follow the plan they are leading towards the achievement of objectives. Through planning, efforts of
all the employees are directed towards the achievement of organisational goals and objectives.

10. Process of Planning

1. Determination of goals or objectives : In planning a function manager begins with setting up objectives
because all the policies, procedures and methods are framed for achieving objectives only. The managers set up
very clearly the objectives of the company keeping in mind the goals of the company and the physical and
financial resources of the company. Managers prefer to set up goals which can be achieved quickly and in a
specific limit of time. After setting up the goals, the clearly defined goals are communicated to all the employees.

2. Determination of Planning Premise : Premises refer to making assumptions regarding the future. Premises
are the base on which plans are made. It is a kind of forecast made keeping in view existing plans and any past
information about various policies. There should be total agreement on all the assumptions. The assumptions
are made on the basis of forecasting. Forecast is the technique of gathering information. Common forecasts are
made to find out the demand for a product, change in government or competitor policy, tax rate, etc.

3. Determining Alternative course of action : After setting up objectives the managers make a list of alternatives
through which the organisation can achieve its objectives as there can be many ways to achieve the objective
and managers must know all the ways to reach the objectives.

4. Evaluation alternative courses : After making the list of various alternatives along with the assumptions
supporting them, the manager starts evaluating each and every alternative and notes down the positive and
negative aspects of every alternative. After this the manager starts eliminating the alternatives with more
negative aspects and the one with the maximum positive aspect and with the most feasible assumption is
selected as the best alternative. Alternatives are evaluated in the light of their feasibility.

5. Selecting an alternative : The best alternative is selected but as such there is no mathematical formula to
select the best alternative. Sometimes instead of selecting one alternative, a combination of different
alternatives can also be selected. The most ideal plan is most feasible, profitable and with least negative
consequences.
6. Implement the plan : The managers prepare or draft the main and supportive plans on paper but there is no
use of these plans unless and until these are put in action. For implementing the plans or putting the plans into
action, the managers start communicating the plans to all the employees very clearly because the employees
actually have to carry on the activities according to specification of plans. After communicating the plan to
employees and taking their support the managers start allocating the resources according to the specification
of the plans.

7. Follow up : Planning is a continuous process so the manager’s job does not get over simply by putting the plan
into action. The managers monitor the plan carefully while it is implemented. The monitoring of a plan is very
important because it helps to verify whether the conditions and predictions assumed in the plan are holding true
in the present situation or not. If these are not coming true then immediately changes are made in the plan.
11. SWOT Analysis:
Definition : SWOT analysis is a strategic planning tool employed to analyze the strengths, weaknesses,
opportunities & threats included in any business venture, project, or even in any particular situation.

Elements of SWOT Analysis:

 Strengths – are the aspects of an organization that make it better than its competitors. For example, the
strength of a company can be having one of the best technological tools in the market. A thorough analysis
can help the company use it to improve its business.

 Weaknesses – areas where the organization needs to improve to remain competitive in the industry. Some
examples of weaknesses are high debts, lack of capital, inadequate supply chain, etc.

 Opportunities – are external factors that can help an organization in gaining competitive advantage. For
example, if a country changes its import laws, then a car exporter can increase his sales by taking advantage
of this opportunity.

 Threats – are factors which have the potential to cause harm to an organization. For example, a drought is a
threat to a crop-producing company as it can destroy the crop.

12. Define organising.

'Organising is the process of identifying and grouping the work to be performed, defining and delegating
responsibility and authority, and establishing relationships for the purpose of enabling people to work most
effectively together in accomplishing objectives'.

13. Importance of Organising

Following are the importance of organising:

1. Benefits of Specialization: In an organisation, work is divided into units and departments. This division of work
leads to specialization in various activities of the concern. The entire philosophy of the organisation is based on
the concept of division of work into compact jobs. This leads to systematic allocation of jobs amongst staff, which
enhances productivity and reduces the workload. Division of work refers to assigning responsibility for each
organisational component to a specific individual or group. This, in turn leads to specialization, efficiency and
speed in job performance.

2. Clarity in a Working Relationship: After identification of a job, organising also clarifies the authority and
responsibility of individuals of different departments. It is a means of creating coordination among different
departments of enterprises. It aims at creating clear-cut responsibility, and authority relationships amongst
different levels and ensuring cooperation amongst individuals and groups. Harmony of work is brought by the
high level of management. Every employee knows his superior from whom he has to take the order, and to whom
he has to report. This working relationship helps in fixing responsibility and helps to avoid confusion.

3. Optimum Utilization of Resources: Organising ensures the optimum utilization of human and material
resources. In organising, work is assigned as per skill and knowledge. The clarity in the job in advance of what
the employees are supposed to do avoids confusion and motivates employees to put in their best.

4. Adaption to Change: The process of organising allows an organisation to accommodate changes in a business
environment. So the organisation structure is suitably modified and the revision of the job position and
relationships plan the way for smooth transactions. Thus organising provide flexibility and stability to an
organisation. It helps an organisation to survive and grow, despite people leaving and joining. It also helps to
adapt to changes in technology, new methods of work, etc.

5. Effective Administration: Organising provides a clear description of the jobs and working relationships. It helps
in effective administration by avoiding confusion and duplication of work. Organising also reduces the workload
of the top management by delegating authority. As a result, top management is relieved from routine work and
can concentrate on the administration of the company.

6. Development of Personnel: In the process of organising, a managerial person is trained to acquire a wide
experience in diverse activities through delegation of authority. Delegation allows manager to reduce their work
by assigning future jobs to subordinates. It also gives time to concentrate on important work. The delegation
also develops a sense of responsibility in the subordinates and motivates them to do more challenging work.

7. Expansion and Growth: An organisation’s growth is totally dependent on how efficiently and smoothly it works.
The organising process creates a favorable condition for expansion and diversification of enterprise by enabling
it to deviate from existing norms and take up a new challenge. Organising allows a business enterprise to access
more job positions and departments, and even diversifies its product lines. It helps in the expansion and growth
of the business.

14. Steps in the Organising Process

The steps involved in the process of organising are as follows:

1. Identification and Division of Work: The function of organising starts with the identification of the total work
which is to be done to achieve the organisational goal. The work is divided systematically so that each person
gets a separate task to perform. This helps to avoid unnecessary duplication and wastage of efforts and facilitates
the specialization of efforts and skills.

2. Departmentalisation: Once the identification and division of work are done. The next step is to combine
group-related activities into units and departments. This process of grouping similar and related activities into
groups of large independent units or departments is known as departmentalisation. The grouping may be done
on the basis of function, product, customer, etc.

3. Assignment of Duty: After grouping various activities into departments, the next step is necessary to allocate
the work of different employees. Duty should be assigned based on the knowledge, qualification, experience,
and capability of the individual. There should be a proper match between job requirements and the capabilities
of employees.

4. Establishing Reporting Relationship: After assigning duty, the next step is to clearly define the authority and
responsibility of the employees. If two or more person is working together for a common goal, then it is necessary
to define the relationship between them in clear terms. There is a need to create a hierarchical structure and
help in coordination among various departments.

15. Principles of Organizing

Principles are the guidelines that promote managerial thinking and action. Principles of organizing help managers
in effectively carrying out the organizing function. These principles are as follows:

1. Principle of unity of objectives: All organizational activities are geared towards attainment of objectives.
Objectives are framed for each level (tip, middle and low) and each functional area. The objectives must be
clearly understood by all and support each other at each level to attain ejectives at higher levees.

2. Principle of organizational efficiency: Organizational goals should be achieved efficiently. It means optimum
(efficient) use of resources, that is, maximum output should be achieved out of minimum inputs.

3. Principle of decision of labor : Division of labor means breaking the main task into smaller units. The major
task, say making of a pin is broken into sub-tasks as drawing out wire, straightening the wire, cutting the wire,
grinding the point and putting the pin head. This makes each person concentrate on his part of the job and
perform it efficiently thereby, increasing the total output. Work should be divided and assigned to warders
according to there skills.

4. Principle of authority-responsibility: Authority and responsibility must go hand in hand Responsibility means
obligation to carry out the assigned task. To carry out this task, authority must be delegated to each person.
Conversely, given the authority, the tasks assigned (responsibility) should be within the scope of authority.
Authority without responsibility will result in misuse of authority and responsibility without authority will result
in poor performance.

5. Principle of delegation : The total work load is divided into parts. A part is assigned to subordinates and
authority is given to efficiently carry out that task. Top managers delegate part of their duties to lower levels and
concentrate on important organizational matters.

6. Principle of scalar chain : Scalar chain is the line of authority running from top to lower levels. Authority
flows from top to bottom in this chain and responsibilities flow from bottom to top. This chain promotes
communication amongst people at different levels and facilitates decision-making. Every person in the chain
knowns his superior and subordinate.

7. Principle of span of control: Span of control means the number of workers that managers can effectively
supervise. Exact number of employees that managers can supervise cannot be determined.It depends upon
competence of managers, nature of work, system of control, capacity of subordinates tall organization structures
and supervision large number of workers. There will be more levels in the organs it strictures and vice versa.
Supervising few subordinates creates tall organization structures and supervising large number of workers
creates flat strictures.

8. Principle of flexibility : Organization should be flexible. Changes in structure should be according to changes
in environment factors.

9. Principle of continuity : Organization should adapt to the environmental changes for its long-run survival,
growth and expansion.

10. Principle of simplicity : Organization structure should be simple that can be understood by everyone.
People can work officially in a simple structure as they are clear of various jobs and authority/ responsibility
associated with each job. A simple structure promotes co-operation, co-ordination and effective communication
in the organization.

11. Principle of unity of direction : All organizational activities of similar nature are grouped in one unit
( production or marketing ), headed by the departmental manager and direct their efforts towards a single
objective; the departmental objective.

12. Principle of co-operation: All individual and departments should co-operate with each other and help the
organization achieve its goals.

16. Definition of Leadership.

Leadership is defined as the action or an act of guidance of leading a group of people or an organisation. For
example,- what a pastor does in his state, a commander does in the play area, the supervisor needs to do the
same in his association. Leaders in varying backgrounds possess certain essential characteristics. Leaders ought
to have the option to set up contact with their equivalents, manage their subordinates and guide them, intervene
in clashes, resolve issues by weighing different other options, apportion scant assets appropriately and face
challenges and activities.

17. Importance of Leadership

Leadership is an important function of management which helps to maximize efficiency and to achieve
organizational goals.

The following points justify the importance of leadership in a concern.

(i) Initiates action- Leader is a person who starts the work by communicating the policies and plans to the
subordinates from where the work actually starts.

(ii) Motivation- A leader proves to be playing an incentive role in the concern’s working. He motivates the
employees with economic and non-economic rewards and thereby gets the work from the subordinates.

(iii) Providing guidance- A leader has to not only supervise but also play a guiding role for the subordinates.
Guidance here means instructing the subordinates the way they have to perform their work effectively
and efficiently.

(iv) Creating confidence- Confidence is an important factor which can be achieved through expressing the
work efforts to the subordinates, explaining them clearly their role and giving them guidelines to achieve
the goals effectively. It is also important to hear the employees with regards to their complaints and
problems.

(v) Building morale- Morale denotes willing co-operation of the employees towards their work and getting
them into confidence and winning their trust. A leader can be a morale booster by achieving full co-
operation so that they perform with best of their abilities as they work to achieve goals.

(vi) Builds work environment- Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human relations should be kept into mind by
a leader. He should have personal contacts with employees and should listen to their problems and solve
them. He should treat employees on humanitarian terms.

(vii) Co-ordination- Co-ordination can be achieved through reconciling personal interests with organizational
goals. This synchronization can be achieved through proper and effective co-ordination which should be
primary motive of a leader.

18. Features of Leadership

(i) Influence the behaviour of others: Leadership is an ability of an individual to influence the behaviour of
other employees in the organization to achieve a common purpose or goal so that they are willingly co-
operating with each other for the fulfillment of the same.

(ii) Inter-personal process: It is an interpersonal process between the leader and the followers. The
relationship between the leader and the followers decides how efficiently and effectively the targets of
the organization would be met.
 (iii) Attainment of common organizational goals: The purpose of leadership is to guide the people in an
organization to work towards the attainment of common organizational goals. The leader brings the
people and their efforts together to achieve common goals.

(iv) Continuous process: Leadership is a continuous process. A leader has to guide his employees every time
and also monitor them in order to make sure that their efforts are going in the same direction and that
they are not deviating from their goals.

(v) Group process: It is a group process that involves two or more people together interacting with each
other. A leader cannot lead without the followers.

(vi) Dependent on the situation: It is situation bound as it all depends upon tackling the situations present.
Thus, there is no single best style of leadership.

19. Qualities of a Leader

(i) Personality: A pleasing personality always attracts people. A leader should also friendly and yet
authoritative so that he inspires people to work hard like him.

(ii) Knowledge: A subordinate looks up to his leader for any suggestion that he needs. A good leader should
thus possess adequate knowledge and competence in order to influence the subordinates.

(iii) Integrity: A leader needs to possess a high level of integrity and honesty. He should have a fair outlook
and should base his judgment on the facts and logic. He should be objective and not biased.

(iv) Initiative: A good leader takes initiative to grab the opportunities and not wait for them and use them
to the advantage of the organization.

(v) Communication skills: A leader needs to be a good communicator so that he can explain his ideas,
policies, and procedures clearly to the people. He not only needs to be a good speaker but also a good
listener, counsellor, and persuader.

(vi) Motivation skills: A leader needs to be an effective motivator who understands the needs of the people
and motivates them by satisfying those needs.

(vii) Self-confidence and Will Power: A leader needs to have a high level of self-confidence and immense
will-power and should not lose it even in the worst situations, else employees will not believe in him.

(viii) Intelligence: A leader needs to be intelligent enough to analyze the pros and cons of a situation and take
a decision accordingly. He also needs to have a vision and fore-sightedness so that he can predict the
future impact of the decisions taken by him.

(ix) Decisiveness: A leader has to be decisive in managing his work and should be firm on the decisions are
taken by him.

(x) Social skills: A leader should possess empathy towards others. He should also be a humanist who also
helps the people with their personal problems. He also needs to possess a sense of responsibility and
accountability because with great authority comes great responsibility.

20. What is Directing?

The process of instructing, guiding, counselling, motivating, and leading people in an organisation to achieve the
organisational goals is known as Directing.

21. Importance of Directing

The importance of directing are as follows:

(i) Directing Initiates action: Directing sets an organisation into motion, and helps other managerial
functions to initiate and activate. It helps the managers to supervise, communicate, lead, guide and
motivate the subordinates to achieve the organisational goals. For example, a superior guides his
subordinates and explains the task, which will help the subordinates to start the work and achieve the
goal.

(ii) Directing leads to integrated group activity: The organisational objectives can be achieved only when
individual efforts are integrated. Directing integrates employees’ efforts in such a way that every
individual effort contributes to organisational performance. For example, a leader can convince his
subordinates that group efforts will help to achieve organisational goals.

(iii) Directing attempts to get maximum out of individuals: Directing helps superiors to realise the potential
and identify the capabilities of individuals by motivating and guiding them. By using the elements of
directing, i.e., supervision, motivation, leadership, and communication, the efficiency of employees can
be raised.

(iv) Directing helps to implement changes: Directing helps to introduce changes in an organisation.
Generally, people in an organisation resist changes. Effective communication, supervision, motivation
and guidance help to overcome such resistance at the workplace. For example, the introduction of a new
method of doing a particular task in a factory is resisted by workers, but when managers explain the
purpose, guide and provide them training and rewards, it can be easily accepted by the workers.

(v) Directing provides stability and balance in the organisation: Stability and balance are maintained in an
organisation with the help of directing because it fosters cooperation and commitment amongst
employees, and helps to achieve balance amongst various groups, departments, units, etc. For example,
every individual has personal goals, but the managers integrate the efforts of all the individuals towards
the achievement of organisational goals through guidance, motivation, supervision and communication.

21. Principles of Directing

1. Maximum Individual Contribution : One of the main principles of directing is the contribution of individuals.
Management should adopt such directing policies that motivate the employees to contribute their maximum
potential for the attainment of organizational goals.

2. Harmony of Objectives : Sometimes there is a conflict between the organizational objectives and individual
objectives. For example, the organization wants profits to increase and to retain its major share, whereas, the
employees may perceive that they should get a major share as a bonus as they have worked really hard for it.

3. Unity of Command : This principle states that a subordinate should receive instructions from only one superior
at a time. If he receives instructions from more than one superiors at the same time, it will create confusion,
conflict, and disorder in the organization and also he will not be able to prioritize his work.
4. Appropriate Direction Technique : Among the principles of directing, this one states that appropriate direction
techniques should be used to supervise, lead, communicate and motivate the employees based on their needs,
capabilities, attitudes and other situational variables.

5. Managerial Communication : According to this principle, it should be seen that the instructions are clearly
conveyed to the employees and it should be ensured that they have understood the same meaning as was
intended to be communicated.

6. Use of Informal Organization : Within every formal organization, there exists an informal group or
organization. The manager should identify those groups and use them to communicate information. There
should be a free flow of information among the seniors and the subordinates as an effective exchange of
information are really important for the growth of an organization.

7. Leadership : Managers should possess a good leadership quality to influence the subordinates and make them
work according to their wish. It is one of the important principles of directing.

8. Follow Through : As per this principle, managers are required to monitor the extent to which the policies,
procedures, and instructions are followed by the subordinates. If there is any problem in implementation, then
the suitable modifications can be made.