F W Taylor: Principles of Scientific Management

 1856-1915
 American Mechanical Engineer
 Steel company in US
 President of ASME

Principles of Scientific Management

1. Science not rule of thumb (intuition, trial and error, experience, Personal judgment)
 Even small production activity can be scientifically planned and managed
 There is only one most efficient method to do the job which should be replace with the rule
of thumb :Deciding the route of destiny (optimum path)
 Save time and material
 Operation Research in world war II: to optimise the deployment of war material

2. Harmony, not discord

 Harmony
 Discord
 Organization: Work force and Management: Mental revolution
 Trade union should not go for strike
 Management should share profits
 Work hard and Embrace changes
 Management (employer) cannot prosper for long time unless its employees also prosper at
the same time
 Japanese work culture: if at all workers go to strike they wear black badge but work more
than normal working hours to gain the sympathy of the management

3. Cooperation and not individualism (extension of Harmony, not discord)

 Listen suggestion of the employees: reward
 Worker should be taken in confidence before taking decision and setting standards
 No strike from workers

4. Development of each and every person to their greatest efficiency and prosperity
 Scientifically selection of workers: capabilities
 Trained regularly: improve efficiency
 Efficient employees would produce more and earn more

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Techniques of Scientific management (save time and cost)

1. Functional foremanship
 In the factory system: foreman represent the managerial figure with whom the
workers are in face to face contact on a daily basis

a) Planning In charge (4)

 Instruction card
 Route clerk
 Time and cost clerk
 Discipline

b) Production in charge (4)

 Speed boss
 Gang boss
 Repair boss
 Inspection

2. Standardisation and simplification

 Standardisation: To allow interchange ability
 Simplification: Removal of unnecessary of product features: Product features

3. Method study: number ways to do a same thing

 To find out one best way to achieved the desired o/p
 From procurement of raw materials to delivery of product
 Assembly line (Taylor): Ford Motor

4. Motion study: study of motion while doing a job

 Motion: productive, unproductive and incidental
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 5. Time study: average out time required to complete a job

6. Fatigue study

7. Differential piece wage system

 Differentiate between efficient and inefficient workers
 50rs per unit if o/p is more than 10unit
 40rs per unit if o/p is less than 10unit
 Worker A: 11unit: 550rs
 Worker B: 9unit: 360rs
 O/P difference 2 units
 Wage difference 190rs

Fayol Principle (1841-1925) French management theorist, Mining Engineer

1. Division of work: Divide the work and allot the work

 Specialist

2. Authority and responsibility:

 Authority: the power or right to give orders, make decisions, and enforce obedience
 Responsibility: being accountable
 Balance between Authority and responsibility
 Authority and without responsibility: misuse
 Responsibility and without Authority: incomplete work

3. Discipline:
 Organization policies and employees agreement
 Workers agreed to work for extra hours to revive the company out of loss. Management has
promised to increase the wages of the workers when this mission is accomplished: honour
the commitments
 Follow the rules: Fine

4. Unity of command:
 One and only one boss: Military structure
 Discipline
 Stability

5. Unity of Direction:
 Each dept. One head and one plan and one goal

6. Subordination of individual interest over general interest: Priority should be organization interest,
not individual interest (second priority)
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 7. Remuneration of employees: Justice for wages (not more: loss of company, not less: no motivation)

8. Centralization and decentralization: (Decision making authority)

 Centralization: Power given to the centre: military
 Decentralization: to all level of organization
 Balance: Centralization and decentralization
 Centralization (Major decision) and decentralization (Routine decision)

9. Scalar Chain: route of communication

 The formal lines of authority from highest to lowest ranks are known as scalar chain
 delay in communication
 Gang Plank:

10. Order: People and material must be in suitable places at appropriate time for maximum efficiency
(TQM)

11. Equity: Good sense and experience are needed to ensure fairness to all employees
 no discrimination on any basis
 Efficient and inefficient person: by giving reward
12. Stability of Personal: Hire and fire, no frequent termination, transfer: create insecurity
 Recruitment and training cost: time wastage
 Longer time: Speciality: improve efficiency

13. Initiative: taking first step with self motivation

 Risk
 Encouragement and reward by management
 Giving Motivation sometimes requires resources like money
14. Espirit de corps: Unity of strength
 Management should promote team spirit
 Replace (I) with (We): confidence to employees
 Negative policy: Divide and rule

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Staunch: very loyal and committed in attitude.

Proponent: a person who advocates a theory, proposal, or course of action.

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Elton Mayo (1880 – 1949)

 Workers are not just concerned with money but could be better motivated by satisfying their social
needs at work.
 He introduced the Human Relation School of thought, which focused on managers taking more of
an interest in the workers, treating them as people who have worthwhile opinions and realising
that workers enjoy interacting together.
 1930 psychologist: study of factors affecting productivity
 Mayo conducted a series of experiments at the Hawthorne factory of the Western Electric
Company in Chicago
 He isolated two groups of workers and studied the effect on their productivity levels of changing
factors such as lighting and working conditions.
 He expected to see productivity levels decline as lighting or other conditions became
progressively worse
 What he actually discovered surprised him: whatever the change in lighting or working conditions,
the productivity levels of the workers improved or remained the same.

Mayo concluded that workers are best motivated by:

 Better communication between managers and workers ( Hawthorne workers were consulted over
the experiments and also had the opportunity to give feedback)

 Greater manager involvement in employees working lives ( Hawthorne workers responded to the
increased level of attention they were receiving): Supervised in balanced manner

 Working in groups or teams. ( Hawthorne workers did not previously regularly work in teams)

 In practice therefore businesses should re-organise production to encourage greater use of team
working and introduce personnel departments to encourage greater manager involvement in
looking after employees' interests. His theory most closely fits in with a paternalistic style of
management.

 Criticism: It is a type of manipulation: Its make management believe in their employees, whereas
management is only interested in productivity.

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Frank and Lillian Gilbreth

 Their main focus was on the fields of motion study and time study, combined with an interest on
the psychology of efficiency and work.
 The Gilbreth theory held that there was a “one best way” to do any task. Efficiency, according to
the Gilbreth business management theory, could therefore be improved by finding this “one best
way” and replicating it throughout the manufacturing process. By reducing the number of
“therbligs” for any task, one could increase the efficiency of the worker.

Therbligs are 18 kinds of elemental motions used in the study of motion economy in the workplace. A
workplace task is analyzed by recording each of the therblig units for a process, with the results used for
optimization of manual labour by eliminating unneeded movements.

The management theory of Frank and Lillian Gilbreth can be summed up by the following:

1. Reduce the number of motions in a task to increase efficiency.

2. Focus on the incremental study of motions and time to understand an entire task. (as per next step)

3. The goal of increased efficiency is both increased profit and greater worker satisfaction.

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Look into the technical aspects of the Lillian and Frank Gilbreth management theory

The Gilbreth management theory is rarely applied directly in today's workplace. However, certain aspects
of the theory, especially time-study and motion-study, can be implemented in a variety of workplace
situations. One of the major implementations of the Gilbreth theory is in methods-time management
(MTM), which is widely used in engineering.

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of human
behaviour at work, or in other words, two different views of individuals (employees): one of which is
negative, called as Theory X and the other is positive, so called as Theory Y. According to McGregor, the
perception of managers on the nature of individuals is based on various assumptions.

Assumptions of Theory X

 An average employee intrinsically does not like work and tries to escape it whenever possible.

 Since the employee does not want to work, he must be persuaded, compelled, or warned with
punishment so as to achieve organizational goals. A close supervision is required on part of
managers. The managers adopt a more dictatorial style.

 Many employees rank job security on top, and they have little or no aspiration/ ambition.

 Employees generally dislike responsibilities.

 Employees resist change.

 An average employee needs formal direction.

Assumptions of Theory Y

 Employees can perceive their job as relaxing and normal. They exercise their physical and mental
efforts in an inherent manner in their jobs.

 Employees may not require only threat and external control but they can use self-direction and
self-control if they are dedicated and sincere to achieve the organizational objectives.

 If the job is rewarding and satisfying, then it will result in employees’ loyalty and commitment to
organization.

 An average employee can learn to admit and recognize the responsibility. In fact, he can even
learn to obtain responsibility.

 The employees have skills and capabilities. Their logical capabilities should be fully utilized. In
other words, the creativity, resourcefulness and innovative potentiality of the employees can be
utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees’ nature and behaviour at work,
while Theory Y presents an optimistic view of the employees’ nature and behaviour at work.

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McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he encouraged cordial
team relations, responsible and stimulating jobs, and participation of all in decision-making process.

Implications of Theory X and Theory Y

Quite a few organizations use Theory X today. Theory X encourages use of tight control and
supervision. It implies that employees are reluctant to organizational changes. Thus, it does not
encourage innovation.

Many organizations are using Theory Y techniques. Theory Y implies that the managers should create
and encourage a work environment which provides opportunities to employees to take initiative and
self-direction. Employees should be given opportunities to contribute to organizational well-being.
Theory Y encourages decentralization of authority, teamwork and participative decision making in an
organization. Theory Y searches and discovers the ways in which an employee can make significant
contributions in an organization. It harmonizes and matches employees’ needs and aspirations with
organizational needs and aspirations.

BASIS FOR
Sr. Theory X Theory Y
COMPARISON
No.
Theory X is a motivational theory, Theory Y, is an advanced theory, wherein
which involves high supervision it is assumed that the workers are self-
Meaning and control over the directed and self-motivated, for growth
1
subordinates, and greater degree and development and takes active part in
of centralization. decision making.

Work Dislikes work Work is natural

2

3 Ambition Little to no ambition Highly ambitious

Responsibility Avoids responsibility Accept and seek responsibility.

4

Leadership style Autocratic Democratic

5

Direction Constant direction is required Little to no direction is required

6
Control Tight Lenient
7
Authority Centralized Decentralized
8
Self motivation Absent Present
9
Psychological needs and Security Social needs, esteem needs and self-
Focuses on
10 needs actualization needs.

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Abraham Maslow is well renowned for proposing the Hierarchy of Needs Theory in 1943. This theory is a
classical depiction of human motivation. This theory is based on the assumption that there is a hierarchy of
five needs within each individual. The urgency of these needs varies. These five needs are as follows-

Employees with greater experience know their organization very well and compare themselves with their
own colleagues, while employees with less experience rely on their personal experiences and knowledge
for making comparisons.

1. Physiological needs- These are the basic needs of air, water, food, clothing and shelter. In other
words, physiological needs are the needs for basic amenities of life.

2. Safety needs- Safety needs include physical, environmental and emotional safety and protection.
For instance- Job security, financial security, family security, health security, etc.

3. Social needs- Social needs include the need for affection, care, belongingness, and friendship.

4. Esteem needs- Esteem needs are of two types: internal esteem needs (self- respect, confidence,
competence, achievement and freedom) and external esteem needs (recognition, power, status,
attention and admiration).

5. Self-actualization need- This include the urge to become what you are capable of becoming / what
you have the potential to become. It includes the need for growth and self-contentment. It also
includes desire for gaining more knowledge, social- service, creativity and being aesthetic. The
self- actualization needs are never fully satiable. As an individual grows psychologically,
opportunities keep cropping up to continue growing.

According to Maslow, individuals are motivated by unsatisfied needs. As each of these needs is significantly
satisfied, it drives and forces the next need to emerge. Maslow grouped the five needs into two categories
- Higher-order needsand Lower-order needs. The physiological and the safety needs constituted the
lower-order needs. These lower-order needs are mainly satisfied externally. The social, esteem, and self-
actualization needs constituted the higher-order needs. These higher-order needs are generally satisfied
internally, i.e., within an individual. Thus, we can conclude that during boom period, the employees lower-
order needs are significantly met.

Maslow’s Need Hierarchy Model

Implications of Maslow’s Hierarchy of Needs Theory for Managers

As far as the physiological needs are concerned, the managers should give employees appropriate
salaries to purchase the basic necessities of life. Breaks and eating opportunities should be given to
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 employees.

As far as the safety needs are concerned, the managers should provide the employees job security, safe
and hygienic work environment, and retirement benefits so as to retain them.

As far as social needs are concerned, the management should encourage teamwork and organize social
events.

As far as esteem needs are concerned, the managers can appreciate and reward employees on
accomplishing and exceeding their targets. The management can give the deserved employee higher
job rank / position in the organization.

As far as self-actualization needs are concerned, the managers can give the employees challenging jobs
in which the employees’ skills and competencies are fully utilized. Moreover, growth opportunities can
be given to them so that they can reach the peak.

The managers must identify the need level at which the employee is existing and then those needs can be
utilized as push for motivation.

Limitations of Maslow’s Theory

 It is essential to note that not all employees are governed by same set of needs. Different
individuals may be driven by different needs at same point of time. It is always the most powerful
unsatisfied need that motivates an individual.

 The theory is not empirically supported.

 The theory is not applicable in case of starving artist as even if the artist’s basic needs are not
satisfied, he will still strive for recognition and achievement.

Henry Gantt was an American mechanical engineer and management consultant who is best known for his
work in the development of scientific management. He created the Gantt chart in the 1910s.

According to Gantt theory, a Gantt chart is a bar chart showing the progression of time through the
phases of a project. The charts can be simple or complex, depending on the needs of the project manager
and the team. As you are deciding on how to manage a project, consider the following:

 The management theory of Henry Gantt dictates the use of both resources and time when
evaluating projects. Considering this, how many people will be needed to complete the
project?
 Henry Gantt scientific management is a theory that incorporates benchmarks in a project as
a way to complete the project efficiently. What are the milestones and their deadlines in
your project?

 The Gantt chart: Accepted as a most important project management tool until today. It provides a
graphic mechanism of planning, controlling work and recording the progress of workers toward the

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 task standard. The Chart also led to its modern variation - PERT (Program Evaluation and Review
Technique).

 Industrial Efficiency: Industrial efficiency can only be produce by the application of scientific
analysis to every aspect of work.

 The Task and Bonus System: He linked the manager bonus to how well he teaches his employees to
perform better.

 The social responsibility of business: He believed that the business had obligations to the welfare
of society that it operates in.

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Planning: It is a function of anticipating the future and determining the course of action to achieve the
desired goal.

 No objectives: If we don’t know where to go

 Wastage of resources: time, money, raw material
 Planning means setting objectives and formulating an action plan to achieve it

Step of planning

1. Setting objectives

 Planning requires a systematic approach.

 As far as possible, objectives should be stated in quantitative terms. For example,
Number of men working, wages given, units produced, etc. But such an objective
cannot be stated in quantitative terms like performance of quality control
manager, effectiveness of personnel manager.
 Hence objectives should be practical, acceptable, workable and achievable.

2. Developing premises: Assumption (depends upon forecasts, existing plans or any past
information about policies)

 Establishment of planning premises is concerned with determining where one

tends to deviate from the actual plans and causes of such deviations.
 It is to find out what obstacles are there in the way of business during the course of
operations.
 Establishment of planning premises is concerned to take such steps that avoid
these obstacles to a great extent.
 Planning premises may be internal or external. Internal includes capital investment
policy, management labour relations, philosophy of management, etc. Whereas
external includes socio- economic, political and economical changes.
 Internal premises are controllable whereas external are non- controllable.

3. Identifying alternative courses of action: The course of action which may be taken could be
either routine or innovative.

 When forecast are available and premises are established, a number of

alternative course of actions have to be considered.
 For this purpose, each and every alternative will be evaluated by weighing its pros
and cons in the light of resources available and requirements of the organization.
 Scientific evaluation: the best alternative is chosen.
 The planners should take help of various quantitative techniques to judge the
stability of an alternative.

4. Evaluating alternative courses of action (positives and negatives)

 Usually, there are several alternatives for any plan.
 The manager should try to find out all the possible alternatives.
 At the time of developing alternatives he should screen out most viable alternatives.
 So he has to analyse in detail a limited number of alternatives.
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 5. Selection of an alternative:
 The best plan has to be adopted and implemented. The ideal plan, of course, would
be the most feasible, profitable and with least negative consequences.
 Many quantitative techniques are available to evaluate alternatives.

6. Formulating derivative plan: (Main plan + supporting plan)

 Derivative plans are the sub plans or secondary plans which help in the
achievement of main plan.
 Secondary plans will flow from the basic plan. These are meant to support and
expedite the achievement of basic plans.
 These detail plans include policies, procedures, rules, programmes, budgets,
schedules, etc. For example, if profit maximization is the main aim of the
enterprise, derivative plans will include sales maximization, production
maximization, and cost minimization.
 Derivative plans indicate time schedule and sequence of accomplishing various
tasks.

7. Implementing plan

 The planning should be put into action so that business objectives may be achieved.
 The implementation will require establishment of policies, procedures, standards
and budgets.
 These tools will enable a better implementation of plans.

8. Follow up action

 After the selected plan is implemented, it is important to appraise its effectiveness.

 This is done on the basis of feedback or information received from departments or
persons concerned.
 This enables the management to correct deviations or modify the plan.
 This step establishes a link between planning and controlling function.
 The follow up must go side by side the implementation of plans so that in the light
of observations made, future plans can be made more realistic.

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Types of Plans

1. Single-use Plan:

 A single-use plan is developed for a one-time event or project. Such a course of action is not likely
to be repeated in future, i.e., they are for non-recurring situations.
 The duration of this plan may depend upon the type of the project. It may span a week or a month.
A project may sometimes be of only one day, such as, organising an event or a seminar or
conference.

2. Standing Plan:

 A standing plan is used for activities that occur regularly over a period of time.
 It is designed to ensure that internal operations of an organisation run smoothly.
 Such a plan greatly enhances efficiency in routine decision-making.
 It is usually developed once but is modified from time to time to meet business needs as required.
 Standing plans include policies, procedures, methods and rules. Policies are general forms of
standing plans that specifies the organisations response to a certain situation like the admission
policy of an educational institution.
 Procedures describe steps to be followed in particular circumstances like the procedure for
reporting progress in production.
 Methods provide the manner in which a task has to be performed.
 Rules are very clearly stated as to exactly what has to be done like reporting for work at a particular
time.

Importance

(1) Planning Provides Direction:

 Under the process of planning the objectives of the organisation are defined in simple and
clear words. The obvious outcome of this is that all the employees get a direction and all
their efforts are focused towards a particular end. In this way, planning has an important
role in the attainment of the objectives of the organisation.
 For example, suppose a company fixes a sales target under the process of planning. Now all
the departments, e.g., purchase, personnel, finance, etc., will decide their objectives in
view of the sales target.
 In this way, the attention of all the managers will get focused on the attainment of their
objectives. This will make the achievement of sales target a certainty. Thus, in the absence
of objectives an organisation gets disabled and the objectives are laid down under planning.

(2) Planning Reduces Risks of Uncertainty: (step 2 Developing premises)

 Planning is always done for future and future is uncertain. With the help of planning possible
changes in future are anticipated and various activities are planned in the best possible way. In this
way, the risk of future uncertainties can be minimised.
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  For example, in order to fix a sales target a survey can be undertaken to find out the number of
new companies likely to enter the market. By keeping these facts in mind and planning the future
activities, the possible difficulties can be avoided.

(3) Planning Reduces Overlapping and Wasteful Activities:

 Under planning, future activities are planned in order to achieve objectives. Consequently, the
problems of when, where, what and why are almost decided. This puts an end to disorder and
suspicion. In such a situation coordination is established among different activities and
departments. It puts an end to overlapping and wasteful activities.
 Consequently, wastages moves towards nil, efficiency increases and costs get to the lowest level.
For example, if it is decided that a particular amount of money will be required in a particular
month, the finance manager will arrange for it in time.
 In the absence of this information, the amount of money can be more or less than the requirement
in that particular month. Both these situations are undesirable. In case, the money is less than the
requirement, the work will not be completed and in case it is more than the requirement, the
amount will remain unused and thus cause a loss of interest.

(4) Planning Promotes Innovative Ideas:

 It is clear that planning selects the best alternative out of the many available. All these alternatives
do not come to the manager on their own, but they have to be discovered. While making such an
effort of discovery, many new ideas emerge and they are studied intensively in order to
determine the best out of them.
 In this way, planning imparts a real power of thinking in the managers. It leads to the birth of
innovative and creative ideas. For example, a company wants to expand its business. This idea leads
to the beginning of the planning activity in the mind of the manager. He will think like this:
 Should some other varieties of the existing products be manufactured?
 Should some branch be opened somewhere else for the existing or old product?
 In this way, many new ideas will emerge one after the other. By doing so, he will become used to.
He will always be thinking about doing something new and creative.

(5) Planning Facilitates Decision Making: (from Steps 3, 4 and 5)

 Identifying alternative courses of action, evaluating alternative courses of action and Selection of an
alternative
 Decision making means the process of taking decisions. Under it, a variety of alternatives are
discovered and the best alternative is chosen. The planning sets the target for decision making. It
also lays down the criteria for evaluating courses of action. In this way, planning facilitates decision
making.

(6) Planning Establishes Standards for Controlling:

 By determining the objectives of the organisation through planning all the people working in the
organisation and all the departments are informed about ‘when’, ‘what’ and ‘how’ to do things.
 Standards are laid down about their work, time and cost, etc. Under controlling, at the time of
completing the work, the actual work done is compared with the standard work and deviations are
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 found out and if the work has not been done as desired the person concerned are held
responsible.
 For example, a labourer is to do 10 units of work in a day (it is a matter of planning), but actually he
completes 8 units. Thus there is a negative deviation of 2 units. For this, he is held responsible.
(Measurement of actual work, knowledge of deviation and holding the labourer responsible falls
under controlling.) Thus, in the absence of planning controlling is not possible.

Limitation of planning:

1. Planning leads to rigidity

2. Reduces creativity
3. Time consuming process: research
4. Involve huge cost
5. Does not guarantee success
6. May not work in dynamic environment

Organization

 Organization is a collection of people, who worked together for a common goal. They all tried to
accomplish same objectives and the primary objectives, usually for any business is profit

Importance

1. Increase efficiency of management and administrative

2. Increase productivity
3. Encouragement to specialization

Types of Organization
1. Line (formal) organization
 Each person is directly in charge of all the people below him and reports only to his
immediate superior
 Line of authority and instructions is vertical
 Unity of command is maintained in a straight line

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  The subordinates should get commands only through their immediate superiors.
 There should be a single line of command. One person should get orders from one supervisor only.
 All persons at the same level of authority should be independent of one another.

Departmental

 Various departmental managers are equal to each other in status and authority. They do not
exchange instructions with each other. Any communication between them is routed through their
immediate boss.
 The same level executives do not give or receive orders amongst themselves. But they receive
orders from their immediate boss and give orders to their subordinates. Hence, all the heads are
responsible to the general manager, the general manager, in turn, is responsible to the
shareholders who are the owners.

 This type of organization is followed in the army on the same pattern. So, it is called military
organization. Under type of organization, the line of authority flows from the top to bottom
vertically. So it is called line organization.

Characteristics of line organization

 It consists of direct vertical relationships.

 Authority flows from top-level to level to bottom level.

 Departmental heads are given full freedom to control their departments.

 Each member knows from whom he would get orders and to whom he should give his orders.

 A senior member has direct command over his subordinates.

 Operation of this system is very easy.

 Existence of direct relationship between superiors and subordinates.

 The superior takes decisions within the scope of his authority

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Merits of Line Organization:
The line organization has the following good points:

1. Simplicity:
Line organization is simple to establish and can be easily understood by the employees. There is no
complexity in the organization because every person is accountable to only one boss. Everybody knows
his work and also to whom he is responsible. So it can be operated simply and clearly.

2. Identification of Authority and Responsibility:

Line organization helps in fixing authority and responsibility of each and every person in the organization.
The authority is given with reference to the assignment of task. The authority should be commensurate
with the work assigned. The allocation of work will also help in fixing responsibility of various individuals.
So line organization enables the fixation of authority and responsibility.

3. Co-ordination:
The hierarchy in management helps in achieving effective co-ordination. The general manager is in-charge
of all the departments and he can easily co-ordinate the work of various departments. At departmental
level manager is in-charge and he can direct the activities of his juniors.

4. Effective Communication:
The chain of command goes from top to bottom. There is a direct link between the superior and his
subordinate, both can communicate properly among themselves. The reactions of subordinates also reach
top management in a short span of time.

5. Economical:
Line organization is easy to operate and less expensive. There are no staff personnel to advice line officers.
Line officers take their own decisions without looking to specialized personnel.

6. Quick Decisions:
Only one person is in-charge of a department or division. He has to take various decisions by himself. There
are no staff personnel for consultation too. This enables a manager to take prompt decisions. If a decision
taking process involves the consultation of a number of persons then there are likely to be delays in
deciding things. In line organization only departmental head is required to take decisions and he will not
waste time in deciding things.

7. Unity of Command:
In line organization every person is under the command of one boss only. This type of organization is in
accordance with the principle of scalar chain.

8. Effective Control and Supervision:

The number of subordinates is limited under line organization. The superior can exercise effective control
and supervise over the persons under him. There is a direct link between superior and subordinates. This
also helps in having better control because the subordinates will be under constant watch.

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9. Executive Development:
Under this system the departmental head is involved in taking and executing various decisions. His task is
challenging and he is expected to discharge his responsibility in an efficient way. This helps an executive to
learn many things and develop his capabilities.

10. Flexibility:
Since the manager has to take all important decisions, he can make changes if new situation generates. He
need not to waste time in getting instructions from above. He can take a decision according to the
requirements of the situation.

Demerits of Line Organization:

Line organization suffers from a number of drawbacks.

Some of these drawbacks have been discussed here:

1. Excess Work (overburden upon top executives):
In line organization too much is expected from executives. They are expected to take numerous decisions
and supervise the work of subordinates under them. The work load of executives goes on increasing with
the expansion and diversification of the unit. The line office cannot devote sufficient time to each and
every work and are over loaded with responsibilities.

2. Lack of Specialization:
The lack of managerial specialization is the demerit of line organization. The line officers cannot be experts
in every line of business. Since they are to take decisions with regard to every aspect of business, the
quality of decisions may suffer. The officers will have to depend heavily on subordinates for advice.

3. Lack of Co-ordination and teamwork:

There is a lack of co-ordination among various departments. All departmental heads try to run the
departments in their own way and according to their suitability. There may be a lack of operational
uniformity among various departments. This may become the reason for lack of co-ordination among
different departments.

4. Improper Communication:
The ultimate authority for taking all decisions lies with line officers. The line officers may become
autocratic and start deciding things without consulting their subordinates. The subordinates start keeping
distance from the superiors. The decisions are implemented without comments even if these appear to be
detrimental to the interests of the organization. The subordinates do not convey their reactions or the
reactions of workers to the superiors. The lack of communication creates many problems for the smooth
conduct of business.

5. Lack of Initiative at lower level:

In line organization final decision-making is done by the top management. The lower level officials do not
show initiative in suggesting new things. They feel that their suggestions may not carry weightage with
their superiors so they avoid taking any type of initiative.

6. Favouritism and Autocratic leadership:

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There is a scope for favouritism in line organization. The officers work according to their preferences. They
judge the performance of persons according to their own likings. They judge the performance of persons
according to their own yardsticks. There is a likelihood that some persons may be given favours and
deserving persons, on the other hand, may be ignored.

7. Instability:
The business is dependent upon some key persons and the sudden disappearance of such persons from
the scene may create instability in the business. There is also a lack of grooming the new persons for taking
up important work. The managerial growth also suffers because lower level persons are not involved in
decision-making process.

Sr.
Advantages of line organization Disadvantages of line organization
No.

1 Simplicity Lack of specification

2 Division of authority and responsibility Over loading

3 Unity of control Lack of initiative

4 Speedy action Scope for favoritism

5 Discipline Dictatorial

6 Economical Limited communication

7 Flexibility Instability

Suitability

 This type of organization is suitable to small size business units.

 Where the activities are of routine nature or machine based.

 The business operation is simple in nature.

 A business unit which has straight methods of operations.

2. Functional organization: F. W. Taylor

 Overcome the drawback of line organization
 Based on principle of separation of planning and production

 Under line organization, a single person is in charge of all the activities of the concerned
department. The person in charge finds it difficult to supervise all the activities efficiently.

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  The reason is that the person does not have enough capacity and required training. Under
functional organization, various specialists are for various functions performed in an organization.
These specialists will attend to the work which is common to different functions of various
departments. Workers, under functional organisation, receive instructions from various specialists.

 The need for functional organization arises out of:

 The complexity of modern and large-scale organization
 A desire to use the specialization in full and;
 To avoid the work-load of line managers with complex problems and decision-making

Characteristics of functional organization

 The work is divided according to specified functions.

 Authority is given to a specialist to give orders and instructions in relation to specific function.
 Functional authority has right and power to give command throughout the line with reference to
his specified area.
 The decision is taken only after making consultations with the functional authority relating to his
specialized area.
 The executives and supervisors discharge the responsibility of functional authority.

Merits

 Specialist knowledge
 Effectiveness of supervision: burden of work is less, as everybody has specific task
 Mass production
 Flexible

Demerits

 Discipline
 Lack of co-ordination
 Confusion

Sr. Advantages of functional Disadvantages of functional organization

No. organization

1 Benefit of specialization Complex relationship

2 Application of expert knowledge Discipline

3 Reducing the work load Over specialization

4 Efficiency Ineffective co-ordination

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 5 Adequate supervision Speed of action

6 Relief to line executive Centralization

7 Co-operation Lack of responsibility

9 Increasing the overhead expenses

Line and staff organization

According to Henry Fayol, “Staff is a group of men who have the strength, knowledge and time
which the line manager may lack”.

 The line officers have authority to take decisions and implement them to achieve the objectives of
the organization.
 The line officers may be assisted by the staff officers while framing the policies and plans and
taking decisions organization.
 The authority flows from top level to the lower level of the organisation through the line officers
while the staff officers attached to the various departments advise the departments. The staff
officers are not in a position to compel the line officers to follow the advice by them. Each
department is headed by a line officer who exercises full authority regarding the planning.
 Types of staff
 Personal staff
 Specialized staff
 General staff assistant

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Functions of staff officers
 The staff officers assist the line officers in the planning of business activity.
 The board of directors frames the policies of the business on the basis of recommendations given
by the staff officers.
 The managers can get the advice from the staff officers regarding the selection. ‘training’
placement and remuneration fixation the personnel
 The staff officers give suggestion regarding the method of improving the product, the technique of
reducing the cost of production, increasing the profits of the concern.
 The staff officers prescribe the procedures to be followed by the line officers in the execution of
policies and programs.
 Staff officers of a department help the manager in the preparation of budget of the department.
 the staff officers may be called to solve the administrative problems encountered by the line
officers in general.

Arguments of staff officers against line officers

o The staff officers have only theoretical academic knowledge but not practical knowledge.
o Much of the advice given by the staff officers is impractical
o Since the staff officers unnecessary increases the paperwork of the line officers.
o The staffs give advice without considering the nature of business as a whole.
o Staff officers are very much interested in becoming line officers of the organization rather than
impairing advice to them.

Solution to the conflict between line officers and staff officers

o Both line officers and staff officers should clearly understand the nature of relationship prevailing
between them.
o A separate staff member should be appointed to bring about co-operation between the line
officers and staff officers.
o The line officers should be encouraged to use the advice of staff officers.
o Only qualified persons should be selected and placed as staff officers.
o The staff officers should be convinced by the line officers if their advice is not accepted
o The responsibility for results could be fixed on both line officers and staff officers
o Only experienced persons alone should be promoted as line executives.

Sr.
Advantages of line and staff organization Disadvantages of line and staff organization
No.
1 Facilitates to work faster and better If powers are not defined then get confusion

2 Specialization is attained
3 Enables to utilize experience and advice
4 Officers can take sound advice
5 New technology or procedure can be
introduced without any dislocation
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Line officers may reject advice without any reason
for their action
Staff officers are not responsible if favorable results
are not obtained.
Line officers blame staff officers for unfavorable
results and want to get rewards for favorable
results
 6 Promotes efficient functioning of line
officers
7 Very good opportunity is made available
to young person to get training

Benefits of Staff
There are many advantages and benefits out of the use of staff. A few of them are:
1. Handling complex managerial functions: The necessity of having the advice of qualified staff
specialists in various areas of an organization, especially as operations become more and more
complex.
2. Assisting in decision-making: Managers are now faced with the necessity of making decisions that
require expert knowledge in matters like environmental issues, strengths and weaknesses of
organization, so on and so forth.
3. Relieving an over-burdened top executive: Staff specialists devote their time to think, to gather
data, and to analyze them on behalf of their busy superiors. It is a rare top level executive, who
has the time, or will take the time, to do those things that a staff specialist can do so well.

Limitations of Staff
The use of staff specialists can ensure many benefits to organizations but the nature of staff
authority and the difficulty to understanding it lead certain problems in practice.

1. An escape clause for staff specialists:

Staff specialists only propose a plan, others must make the decision to adopt the plan and put it
into operation. This creates an ideal situation for shifting blame for mistakes. The staff will claim
that it was a good plan and that it failed because the operating manager was inefficient and
ineffective.

2. Line authority being undermined:

Operating (line) managers represent the main line of the organization and they also gain a degree
of indispensability. The staff specialists may, however, forget that their value lives in the extent to
which they strengthen line managers and also that they are to counsel and not to order. They need
to remember that if they undermine line authority, they risk becoming expendable. As a matter of
fact, if there is an expendable person in an organization, it is most likely to be the staff specialist.

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 3. Impracticality of staff recommendations:
Since staff people do not implement what they recommend, it is possible that they may think in a
vacuum, thereby making their recommendations impractical and which in their turn, often results
in friction, loss of morale and sabotage.

4. Disunity in command
Unity of command is unavoidable for the management of any organization to reach its goal. So,
multiple authorities, created out of the use of staff specialists, may create disastrous consequences.

5. Complicacy in leadership and control

The chief executive of a large organization may be so busy dealing with the advice and
recommendations of a large number of staff specialists that he finds little time to devote for
operating departments.
Line authority is responsible to run the organization according to is strategic plan.
Staff authority plays and advisory role as their job is to investigate, research, and give advice to line
managers. For organization to run properly both line and staff member’s contribution is required.

Committee organization: members from different department work together for a particular task

 A Committee as a group of persons either appointed or elected who are to meet for the purpose of
considering matters assigned it

Types of committee

 Advisory committee problem solving committees

 Fast-finding committee
 Action committee

Functions of a Committee

o Collect the necessary information from different sources and arrange the information orderly.

o The collected information is critically analyzed.

o Draft a detailed report containing the recommendations for the purpose of implementation.

o Formulate the standard of performance for the purpose of evolution of actual performance in
future.

Project organization

 The project organization idea was developed after the second war.

 A project organization can also be the beginning of an organization cycle. The project may become
a long term or permanent effort that eventually becomes a program or branch organization
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Features of project organization

 The Success of the project organization depends upon the co-ordination of activities

 There is a grouping of activities for each project. It leads to the introduction of a new line of an
authority.

Drawbacks of Project Organization

 The professionals are deputed for the project. But there is no assurance of continuous work for the
professional in a project organization.

 The decision is taken in the project organization under pressure of the top controls the staff in an
organization.

 The top management does not extend its full co-operation for the effective functioning of the
project organization. Some hindrance may be caused by the top management.

Matrix organization

 It is a type of organizational structure in which people with similar skills are pooled for work
assignments, resulting in more than one manager (sometimes referred to as solid line and dotted
line reports, in reference to traditional business organization charts).
 The matrix organization may be followed where a large no. of small projects have to be managed.

Conditions for effective matrix organisation

 The principle of chain of command is not followed in the matrix organization. A project manager
should give his report to more than one superior.

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  There should be an agreement among the managers regarding the authority of utilizing the
available resources. The term resources include physical resources, financial resources and
human resources.

 For example, all engineers may be in one engineering department and report to an engineering
manager, but these same engineers may be assigned to different projects and report to a different
engineering manager or a project manager while working on that project. Therefore, each engineer
may have to work under several managers to get his or her job done.

 Let’s say that you are a mechanical engineer working in a functional department. Your organization
gets a project and they need a mechanical engineer to assist the project manager on certain tasks.
In this case, you may be assigned to the project for a short time, or they may transfer you there
while your services are required. If you’re assigned there for a short time, you will have to report to
two bosses.

Sr. Merits of Matrix organization Demerits of matrix organization

No.

1 Achievement of objectives Complex relationship

2 Best utilization of resources Struggle for power

3 Appropriate structure Excessive emphasis on group decision-making

4 Flexibility Arising conflict resolution

5 Motivation Heterogeneous

6 Personal development

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Free form organization

 This type of organization is formed whenever a need arises to form an organization, for achieving a
particular object. it will be dissolved after achieving the object of the organization. The free form
organization resembles the project and matrix organization. It otherwise called organic or ratio
organization.

Leadership

Leadership style can be defined as the technique and approach of providing direction, implementing
plans, and method of motivating people.

1. Autocratic or Authoritarian Leadership (North Korean Kim Jong)

In this type of extreme leadership style, the leader possesses total authority and exercises complete power
over the people.
Sr. Positives Negatives
No.
Enables leaders to impose their will and Does not take others inputs into
1
perspective on others consideration
This style is considered good for getting routine No one is allowed to make suggestions or
jobs done by employees who require close to question the decisions and instructions
2
supervision or in situations where decisions of autocratic leaders, even if it's in the
need to be made quickly. best interest
People who like order and set rules and Most creative people resent being
3
instructions thrive under this kind of leadership treated this way.

 This leadership style is usually employed by military commanders.

2. Bureaucratic Leadership or rules-centred leadership

Bureaucratic leaders work upon official rules fixed as duties by higher authorities and go strictly by the
book to apply rules for management and taking decisions.

Sr. Positives Negatives

No.
Such leaders work rigorously to ensure that the A serious drawback of bureaucratic
1 procedures are being followed precisely by leadership is that it has no scope for
those under them. creativity and flexibility.
This leadership style helps fortify operational
2 policies and work processes of
the organisation.

 This leadership style is mostly noticed in organisations where employees are involved in
high-risk routine tasks such as in a manufacturing plant. Bureaucratic leadership is also
employed at various levels in government agencies.

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 3. Laissez- Faire Leadership or free-rein leadership

Laissez- faire leadership is based on trust. The leader is available to provide guidance and furnish the
necessary resources only if the need arises.
Sr. Positives Negatives
No.
The leaders delegate the responsibility to take People who prefer supervision, careful
decisions to group members monitoring, and clear instructions are
1
often not comfortable working under
the laissez- faire leadership style
Allows people to work at their own pace and
2 provides maximum scope for innovation and
flexibility
3 Most effective with self-motivated employees

 Mahatma Gandhi was a laissez- faire leader. Gandhi believed that people should lead by
example and be the change that they wish to see in the world so that others can follow.

4. Participative or Democratic Leadership or consultative

Participative or democratic leaders give importance to the opinion of the team members and engage
them in the decision- making process. This is normally used when you have part of the information, and
your employees have other parts.
Sr. Positives Negatives
No.
Boosts the morale of the team members as The leaders reserve the right to take
1 when the leader considers their inputs, it makes final decisions
them feel valued and satisfied
Makes employees more willing to accept Slows down the decision- making and
2 changes as they consider themselves a part of can even affect efficiency
the decision-making process
Team members may not have adequate
3
expertise to provide high-quality input

 Carlos Ghosn, the chairman, and CEO of Renault believes that change in the organisation’s
culture should not be forced by the top management but should come from the bottom
level. He believes in empowering employees to take decisions and is quite reasonable when
dealing with the subordinates

5. Manipulative leadership (Leaders say: Let’s do this together / Manipulators say: Do this for me)

This style of leadership is based on the belief that employees are persons who should be manipulated by
the leader so that his goal may be attained. It exploits the aspirations of the employees or followers.
Under this style of leadership the followers know that they are being manipulated and thus become bitter.

Major Characteristics

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  Personal goals are reached by the manipulation by the employees.
 Employee needs and desires are viewed as tools to extract performance.

Manipulative Leadership is not effective when……

 A relationship of long standing is involved.

 The structure of an open organization is so controlled that the ability of the manipulator to wheel
and deal is severely restricted.

Characteristics of Leader

1. Vitality and Endurance

2. Decision-Making power
3. Initiative
4. Analytical Capacity
5. Responsibility
6. Enthusiasm, Courage, tact and devotion

Motivation

1. It is an art of stimulating people to get the desired things done

2. Methods/types
1. Positive and negative incentives
2. Individual and collective incentives
3. Monetary and Non Monetary incentives

Herzberg’s Two-Factor Theory of Motivation

1. Motivators: Factors that motivate people to work hard

 Achievement, work itself, Recognition, Responsibility and Advancement

2. Hygiene factors: Essential factors that de-motivate people when not present (basic expectation)
 Company policies (Extra time), supervision (Quality), working condition, quality of inter-personal
relations, salary, status, security
 Hygiene factors doesn’t motivate

In 1959, Frederick Herzberg, (scientist) proposed a two-factor theory or the motivator-hygiene theory.
According to Herzberg, there are some job factors that result in satisfaction while there are other job
factors that prevent dissatisfaction. According to Herzberg, the opposite of “Satisfaction” is “No
satisfaction” and the opposite of “Dissatisfaction” is “No Dissatisfaction”.

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 FIGURE: Herzberg’s view of satisfaction and dissatisfaction

Herzberg classified these job factors into two categories:

a. Hygiene factors- Hygiene factors are those job factors which are essential for existence of
motivation at workplace. These do not lead to positive satisfaction for long-term. But if these
factors are absent / if these factors are non-existent at workplace, then they lead to dissatisfaction.
In other words, hygiene factors are those factors which when adequate/reasonable in a job, pacify
the employees and do not make them dissatisfied. These factors are extrinsic to work. Hygiene
factors are also called as dissatisfiers or maintenance factors as they are required to avoid
dissatisfaction. These factors describe the job environment/scenario. The hygiene factors
symbolized the physiological needs which the individuals wanted and expected to be fulfilled.
Hygiene factors include:

 Pay - The pay or salary structure should be appropriate and reasonable. It must be equal
and competitive to those in the same industry in the same domain.

 Company Policies and administrative policies - The company policies should not be too
rigid. They should be fair and clear. It should include flexible working hours, dress code,
breaks, vacation, etc.

 Fringe benefits - The employees should be offered health care plans, benefits for the family
members, employee help programmes, etc.

 Physical Working conditions - The working conditions should be safe, clean and hygienic.
The work equipments should be updated and well-maintained.

 Status - The employees’ status within the organization should be familiar and retained.

 Interpersonal relations - The relationship of the employees with his peers, superiors and
subordinates should be appropriate and acceptable. There should be no conflict or
humiliation element present.

 Job Security - The organization must provide job security to the employees.

b. Motivational factors- According to Herzberg, the hygiene factors cannot be regarded as

motivators. The motivational factors yield positive satisfaction. These factors motivate the
employees for a superior performance. These factors are called satisfiers. These are factors
involved in performing the job. Employees find these factors intrinsically rewarding. The motivators

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 symbolized the psychological needs that were perceived as an additional benefit. Motivational
factors include:

 Recognition - The employees should be praised and recognized for their accomplishments
by the managers.

 Sense of achievement - The employees must have a sense of achievement. This depends on
the job.

 Growth and promotional opportunities - There must be growth and advancement

opportunities in an organization to motivate the employees to perform well.

 Responsibility - The employees must hold themselves responsible for the work. The
managers should give them ownership of the work. They should minimize control but
retain accountability.

 Meaningfulness of the work - The work itself should be meaningful, interesting and
challenging for the employee to perform and to get motivated.

Limitations of Two-Factor Theory

The two factor theory is not free from limitations:

1. The two-factor theory overlooks situational variables.

2. Herzberg assumed a correlation between satisfaction and productivity. But the research conducted
by Herzberg stressed upon satisfaction and ignored productivity.
3. The theory’s reliability is uncertain. Analysis has to be made by the raters. The raters may spoil the
findings by analyzing same response in different manner.
4. No comprehensive measure of satisfaction was used. An employee may find his job acceptable
despite the fact that he may hate/object part of his job.

Co-ordination

Coordination is a process to establish harmony among the different activities of an organisation, so that
the desired objectives can be achieved.

Importance

1. Unity of command
2. Increase in efficiency
3. Increase in morale
4. Unity in Diversification: (different department)
5. Emphasis upon human relations: Conflict
6. To establish proper balance: equity
7. A key to other managerial functions: planning, organization, leadership and controlling

Delegation of Authority

 Delegation (representatives)
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  Authority (power or right to give orders)
 assign the responsibility for doing something

i. According to F.C. Moore, "Delegation means assigning work to the others and giving them
authority to do so."

ii. According to O. S. Miner, "Delegation takes place when one person gives another the right to
perform work on his behalf and in his name and the second person accepts a corresponding duty or
obligation to do that is required of him."

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.

Objectives of Delegation of Authority

1. To reduce the excessive burden on the superiors i.e., executives and managers functioning at
different levels.

2. To provide opportunities of growth and self development to junior executives.

3. To create a team of experienced and matured managers for the Organisation. It acts as a
technique of management and human resource development.

4. To improve individual as well as overall efficiency of the Organisation.

Four Stages In Process of Delegation of Authority

(A) Assignment of duties to subordinates

Before delegating, the delegator has to decide precisely the duties which are to be delegated to
the subordinate or a group of subordinates. The authority is delegated accordingly and the
subordinate is told what is expected from him. The usual practice is to list the functions to be
performed by the subordinate. Subordinates may be assigned tasks either in terms of activities or
results. The manager (delegator) must communicate clearly his expectations. Competent and
responsible employees may be given general guidelines about what needs to be accomplished.

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 (B) Transfer of authority to perform the duty

In the second stage of delegation process, the authority is granted by the delegator to his
subordinate (delegate). Authority must be delegated strictly to perform the assigned duty. The
performance of duties suffers serious setback when required authority is not delegated along with
the duty. In brief, the transfer of authority should be adequate considering the duties assigned to
the subordinate.

(C) Acceptance of the assignment

In this third stage of delegation process, the subordinate/delegate has to accept or reject the task
assigned to him in the first stage along with the authority given in the second stage. If the
delegates refuse, the delegator has to make fresh plan of delegation or may consider some other
subordinate who is capable and is willing to accept the assignment. On the other hand, the process
of delegation will move to the fourth and the last stage, if the first delegates accept the
assignment of work accompanying the authority.

(D) Creation of Obligation / Accountability / Responsibility

The fourth stage in the, delegation of authority is the creation of obligation on the part of the
subordinate to perform duties assigned to him in a satisfactory manner by using the authority
given. When subordinate accepts a task and the authority is given, an obligation is created. He has
to perform the assigned task by using the authority granted to him. A subordinate is also
responsible/accountable for completing the assigned work. He is held answerable to a superior for
the satisfactory performance of that work assigned. The delegator has to help his subordinate as
and when necessary as he is responsible to his superior/organisation.

Advantages / Importance of Delegation of Authority

1. Relieves manager for more challenging jobs: Delegation makes it possible for the managers to
distribute their workload to others. Thus, managers are relieved of routine work and they can
concentrate on higher functions of management like planning, organising, controlling, etc.

2. Leads to motivation of subordinates: Subordinates are encouraged to give their best at work when
they have authority with responsibility. They take more initiative and interest in the work and are
also careful and cautious in their work. Delegation leads to motivation of employees and
manpower development.

3. Facilitates efficiency and quick actions: Delegation saves time enabling the subordinates to deal
with the problems promptly. They can take the decisions quickly within their authority. It is not
necessary to go to the superiors for routine matters. This raises the overall efficiency in an
Organisation and offers better results in terms of production, turnover and profit.

4. Improves employee morale: Delegation raises the morale of subordinates as they are given duties
and supporting authority. They feel that they are responsible employees. The attitude and outlook
of subordinates towards work assigned becomes more constructive.

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 5. Develops team spirit: Due to delegation, effective communication develops between the superiors
and subordinates. The subordinates are answerable to superiors and the superiors are
responsible for the performance of subordinates. This brings better relations and team spirit
among the superiors and subordinates

6. Maintains cordial relationships: The superiors trust subordinates and give them necessary
authority. The subordinates accept their accountability and this develops cordial superior-
subordinate relationships.

7. Facilitates management development (expansion of business): Delegation acts as a training

ground for management development. It gives opportunity to subordinates to learn, to grow and to
develop new qualities and skills. It builds up a reservoir of executives, which can be used as and
when required. Delegation creates managers and not mere messengers.

The advantages of delegation will not be available easily and automatically. They will be available
only when the process of delegation moves smoothly. Problems may develop, if the delegation is
not introduced with proper planning and in proper spirit. For example, the authority given to
subordinate is inadequate or the subordinate is not competent to discharge the responsibilities
assigned or the superior fails to monitor the whole process of delegation effectively. In all such
cases, the delegation will be ineffective and the expected advantages will not be available to the
Organisation and also to concerned parties.

Obstacles / Barriers to Effective Delegation of Authority

 Obstacles / Barriers on the Part of Manager / Superior / Delegator

1. Unwillingness of the manager to delegate authority: Some superiors/managers tend to think that
they can do the job better when they themselves handle the job. The attitude that 'I can do it
better myself' on the part of superior acts as an obstacle to delegation. Some managers (superiors)
who are autocratic and power worshippers feel that delegation will lead to reduction of their
influence in the Organisation

2. Fear of competition: A manager may feel that if he has a competent subordinate and if he
delegates authority to the subordinate, quite likely he will outshine him. Fear of subordinate's
excellence may come in the way of delegation.

3. Lack of confidence in subordinates: A manager may hesitate to delegate authority, if he feels that
his subordinate is not competent to deal with the problem and take decisions. In addition, fear of
being exposed due to personal shortcomings may act as an obstacle in the process of delegation.

4. Lack of ability to direct: Sometimes, a manager may experience difficulty in directing the efforts of
his subordinates because of his inability to identify and communicate the essential features of his
long-range plans and programmes.

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 5. Absence of controls that warn of coming troubles: An Organisation might not have developed the
controlling techniques to know in advance the serious problems lying ahead. It may happen due to
concentration of power in the hands of few people. As a result, manager may resist delegation.

6. Conservative and cautious temperament of the manager: If a manager has a conservative and
over-cautious approach, there will be psychological barrier in the way of delegation. A manager
avoids delegation as he feels that something may go wrong even when the instructions given are
clear and the subordinates are reliable.

7. Desire to dominate subordinates: Managers (Superiors) normally, have a desire to dominate the
subordinates functioning under their control. They feel that their domination will reduce if the
powers are delegated to subordinates. They also feel that due to delegation, the subordinates will
know their managerial deficiencies. In order to maintain their superior status and in order to
dominate the subordinates, they avoid delegation itself.

8. Unfamiliarity with the art of delegation: lack of theoretical knowledge and practical experience

 (B) Obstacles / Barriers on the Part of Subordinates (Why Subordinates Resist Delegation?)

1. Too much dependence on the manager for decisions: Some subordinates avoid responsibility even
when the superior/manager is prepared to delegate authority. They want the manager to tackle
problems and take decisions.

2. Fear of criticism: Subordinates express unwillingness to accept delegated authority because of the
fear of criticism in the case of mistakes. They fear that they may be criticized by others if they
commit mistakes. Such subordinates have the following feeling in their mind, "Why should I stick
my neck out for my boss?"

3. Lack of information: A subordinate may hesitate to accept a new assignment, when he knows that
necessary information to perform the job is not likely to be made available to him. He is reluctant
to accept delegated functions and authority as he feels that he will not be able to perform well due
to inadequate information available.

4. Absence of positive incentives: Positive incentives like recognition of work and rewards go a long
way in building up the morale of subordinates. In the absence of such incentives in the form of
recognition, appreciation or monetary benefit, a subordinate may not be prepared to accept
delegation of authority.

5. Absence of self-confidence: A subordinate may lack self-confidence about his ability to take quick
and correct decisions. He may not like to accept new challenging functions as he lacks self-
confidence. Thus, lack of self-confidence on the part of subordinates is one obstacle which comes in
the way of delegation of authority.

6. Difficulty in decision-making: A subordinate may not have the skill and the expertise to take quick
and correct decisions. He prefers to go to his superior (boss) and ask for his guidance or opinion.

S. Chakrabarty
 Such psychology acts as a cause for non-acceptance of delegation. A subordinate avoids delegation
due to such mental tension or inferiority complex.

7. Poor superior-subordinate relations: Absence of cordial relations in between the superior and the
subordinates hampers the process of delegation of authority. The attitude of the superior towards
subordinate may not be friendly but hostile. There may be undue interference in the work assigned
to the subordinate. Even the good work of subordinate may not be appreciated by the superior.
Such situation creates unfavourable attitude of subordinate towards delegation

8. Undue interference by superior: A superior should not interfere in the duties delegated to the
subordinate. He may offer guidance as and when asked for. Some superiors interfere in the work of
his subordinate and try to control him often and again.

9. Fear of being exposed: Some subordinates may have inferiority complex. They feel that they have
limited capacity to accept the challenges which are bound to come out to delegation. They feel that
their inability to deal with new problems will be exposed due to delegation. This fear acts as an
obstacle to delegation.

Types of forms of delegation

i. Specific and general delegation

ii. Formal and informal delegation
iii. Lateral Delegation (equal rank or level) or downward (seniors to juniors)
iv. Written and verbal delegation (Written is better)
v. Administrative (admin. Work), functional (on the basis of activities) or technical delegation (on
the basis of technical activities)

Elements of Delegation

Delegation is the entrustment of responsibility and authority to another and the creation of
accountability of performance

Delegation has three important elements:

1. Responsibility: Obligation of a subordinate to complete the task assigned to him

 Responsibility is the activity or task entrusted by the manager to subordinates.

2. Authority: Refers to right and power of an individual to use and allocate the resources efficiently, to
take the decisions and to give orders so as to achieve the objectives of an organization.

 To carry out the responsibility assigned, there is need for authority to allocate resources, command
people, issue directions and make decisions. The authority is therefore, delegated to subordinates
to enable them to carry out the responsibility assigned.

S. Chakrabarty
3. Accountability: Implies being answerable for the final outcome

 When managers delegate part of their work-load to subordinates, they remain accountable for
accomplishment of that task. The responsibility and authority, thus, can be delegated but
accountability cannot.

1. Responsibility:
Responsibility means the work assigned to an individual. It includes all the physical and mental activities to
be performed by the employees at a particular job position. The process of delegation begins when
manager passes on some of his responsibilities to his subordinates which means responsibility can be
delegated.

Features of Responsibility:
1. Responsibility is the obligation of a subordinate to properly perform the assigned duty.

2. It arises from superior subordinate relationship because subordinate is bound to perform the duty
assigned by his superior.

3. Responsibility flows upward because subordinate will always be responsible to his superior.

2. Authority:
Authority means power to take decision. To carry on the responsibilities every employee need to have
some authority. So, when managers are passing their responsibilities to the subordinates, they also pass
some of the authority to the subordinates. The delegating authority is the second step of organising
process. While sharing the authority managers keep in mind that the authority matching to the
responsibility should only be delegated. They shall not pass all their authority to their subordinates.

Features of Authority:
(1) Authority refers to right to take decision due to your managerial position.

(2) Authority determines superior subordinate relationship. As subordinate communicates his decisions to
subordinate expecting compliance from him as per his directions.

(3) Authority is restricted by law and rules and regulations of the organisation.

(4) Authority arises from the scalar chain which links various job positions.

S. Chakrabarty
(5) Authority flows upward as we go higher up in management hierarchy the scope of authority increases.

(6) Authority must be equal to Responsibility

3. Accountability:
To make sure that the employees or subordinates perform their responsibilities in their expected manner,
the accountability is created. Accountability means subordinates will be answerable for the non-
completion of the task; creating accountability is the third and final step of delegation process.

The accountability cannot be passed or delegated. It can only be shared with the subordinates which
means even after delegating responsibility and authority the managers will be accountable for non-
completion of task.

If the production manager is given the target of producing 20 machines in one month’s time and he divided
this target between four foremen working under him, i.e., 5 machines to be produced by each foreman but
one foreman could not achieve the target and at the end of the month only 17 machines are
manufactured, then production manager will be held accountable for non-completion of target as
accountability cannot be transferred or shared: it is an absolute term.

Features of Accountability:
(1) Accountability refers to answerable for the final output.

(2) It cannot be delegated or passed.

(3) It enforced through regular feedback on the extent of work accomplished.

(4) If flows upward, i.e., subordinate will be accountable to his superior.

Definition of Responsibility

Responsibility is defined as an obligation to perform or complete the assigned task. It is the duty of the
subordinate to complete the delegated task adequately. It is generated out of a superior-subordinate
relationship, where the junior is bound to perform the task assigned to him by the senior. Hence, the flow
of responsibility is bottom-up, as the subordinate is responsible to his/her senior. The word responsibility
describes a person or group who is complete in charge of something and will ensure the work will be done
properly.

S. Chakrabarty
Definition of Accountability

The term accountability means a sense of being answerable for the final consequences. When an authority
is delegated, the employee is empowered to perform the task for his superior, but the superior would still
take the ownership of the final result. The flow of accountability is bottom-up, as the subordinate would be
liable to the superior for the task. When a person is accountable for something, he is supposed to explain
the outcomes of his actions, decisions, and omissions. It denotes an individual or group who are ready to
make good or take the blame if the work is not completed properly.

Key Differences Between Responsibility and Accountability

The following points are noteworthy so far as the difference between responsibility and accountability is
concerned:

1. The state of having the duty, to do whatever it takes to complete the task, is known as
responsibility. The condition, wherein a person is expected to take ownership of one’s actions or
decisions, is called accountability.
2. Responsibility refers to the obligation to perform the delegated task. On the other hand,
answerability for the consequence of the delegated task.
3. Responsibility is assigned whereas accountability is accepted.
4. The origin of responsibility is the assigned authority. On the contrary, accountability arises from
responsibility.
5. Responsibility is delegated but not completely, but there is no such thing like delegation of
accountability.
6. The performance of a person is not necessarily measured when he/she is responsible. Unlike,
accountability, wherein the person’s performance is measured.
7. Responsibility is something, wherein a person is held responsible before or after task. In contrast
to, accountability where a person can only be accountable after the task is performed or not
performed satisfactorily.

Principles of Effective Delegation of Authority

1. Knowledge of Objectives: Before delegating authority, the subordinates should be made to

understand their duties and responsibilities. In addition, knowledge of objectives and policies of
the enterprise should be provided to them. This will enable them to discharge their roles
purposefully in the process of delegation.

2. Parity of Authority and Responsibility: This principle of delegation suggests that when authority is
delegated, it should be commensurate with the responsibility of the subordinate. In fact, the
authority and responsibility should be made clear to the subordinate so that he will know what he
is expected to do within the powers assigned to them. There should be proper balance/parity or co-
existence between the authority and responsibility. A subordinate will not function efficiently, if
authority given to him is inadequate. On the other hand, if the excess authority is given, he may
misuse the same. For avoiding this, the subordinates who are assigned duties should be given
necessary/ adequate authority enables them to carry out their duties.

S. Chakrabarty
 3. Unity of Command: This principle of delegation suggests that everyone should have only one boss.
A subordinate should get orders and instructions from one superior and should be made
accountable to one superior only. This means 'no subordinate should be held accountable to more
than one superior'. When a subordinate is asked to report to more than one boss, it leads to
confusion and conflict. Unity of command also removes overlapping and duplication of work. In
the absence of unity of command, there will be confusion and difficulty in fixing accountability.

 For example, if a person cannot accomplish the task assigned to him by boss A, he
may say that he was busy carrying out instructions of boss B and vice versa while it
may not actually be so.

4. The Scalar Principle: The scalar principle of delegation maintains that there should be clear and
direct lines of authority in the Organisation, running from the top to the bottom. The subordinate
should know who delegates authority to him and to whom he should contact for matters beyond
his authority. They (subordinates) should also know what is expected from them. This principle
justifies establishment of the hierarchical structure within the Organisation.

5. Clarity of Delegation: The principle of clarity of delegation suggests that while delegating authority
to subordinates, they should be made to understand the limits of authority so that they know the
area of their operation and the extent of freedom of action available to them. Such clarity guides
subordinates while performing their jobs.

6. Absoluteness of Responsibility: This principle of delegation suggests that it is only the authority
which is delegated and not the responsibility. The responsibility is absolute and remains with the
superior. He cannot run away from the same even after delegation.

7. Use of Exception Principle: This principle of delegation indicates that when authority is delegated,
it is expected that the subordinate will exercise his own judgment and take decisions within the
scope of his authority. He is to be given adequate freedom to operate within his authority even at
the cost of mistakes. He should refer the problems to the top level management only when he is
unable to take decisions. Unnecessary interference in the work of delegates should be avoided. This
normal rule can be given up under exceptional circumstances. Here, the superior can interfere in
the work of his subordinate and even withdraw the delegated duties and authority. The superior
takes this decision under exceptional circumstances.

8. Completeness of Delegation: This principle of delegation suggests that there should be

completeness in the process of delegation. The process of delegation should be taken to its logical
end. Otherwise, there will be confusion of authority and accountability.

 Every part of the total work (except the one which is reserved by managers) should
be delegated down the scalar chain. If some part of the work is not delegated, gaps
would arise in respect of the work not so assigned and the work will not be
completed properly.

S. Chakrabarty
 9. Effective Communication Support System: This principle suggests that there should be continuous
flow of information between the superior and the subordinates with a view to furnishing relevant
information to subordinate for decision-making. This helps him to take proper decisions and also to
interpret properly the authority delegated to him. Delegation system may not work smoothly in the
absence of effective communication between the superior and subordinates.

10. Reward for Effective Delegation: This principle suggests that effective delegation and successful
assumption of authority should be rewarded. This will facilitate fuller delegation and effective
assumption of authority within the Organisation.

Process of Delegation:
The process of delegation involves the following steps:

1. Determine the goals:

The manager establishes the goal or objective of the position so that the person at that position knows
what is expected of him. If delegation is to be initiated in the sales department, the objective should be
made clear, sales promotion or sales retention.

All organisational activities are goal oriented. If every position knows its responsibility regarding what and
how work has to contribute to the goal, delegation will be effective. Unless the goals are clear, the
units/individuals would not know in which direction the delegated authority is to be used.

2. Responsibility:
Once requirement of the job is defined, the responsibility of members is determined in terms of tasks
assigned to them. Tasks should be assigned in terms of results expected so that employees work towards
measurable standards. ‘Selling 10,000 units per month’ is better understood than saying ‘sell as much as
you can’.

When employees know what goals to fulfill and the criterion against which their performance will be
judged, they will perform their duties better. Responsibility also defines their relationship with the
superiors to whom they are accountable and subordinates to whom they can give instructions.

3. Authority:
The job having been assigned, authority is given so that subordinates can efficiently discharge
responsibilities related to that job. Authority defines the right of subordinates to further give instructions
to carry out the assigned responsibilities.

It defines the boundaries within which subordinates shall work – the actions they can perform and those
they cannot perform. Authority permits the subordinates to take action on tasks delegated by spending
resources, making organisational commitments, issuing further order to members of their unit etc.
Authority must be commensurate with responsibility. More the responsibility, more the authority and vice
versa.

S. Chakrabarty
4. Motivation:
The duty of manager does not end by delegating authority and responsibilities. He makes sure that
subordinates willingly contribute to the job assigned to optimally achieve the organisational goals.
Managers motivate the subordinates to do their work with zeal and enthusiasm. They use financial and
non-financial (participative decision-making, recognition etc.) incentives to motivate the subordinates.

The need for acceptance and recognition are important motivators that boost employees’ morale to
perform the delegated tasks. “The desire for recognition or ego satisfaction is central to other incentives in
motivating people.”

5. Training:
Despite giving authority commensurate with responsibility, subordinates may not be able to effectively
carry out the delegated tasks. Managers, therefore, organise training programmes to enhance their
knowledge on the tasks delegated.

6. Control:
Specific standards of performance are communicated to enable the subordinates assess their performance
against standards, control and coordinate their activities with goals of the organisation.

7. Accountability:
Whatever the nature and extent of delegation, managers constantly observe the activities of subordinates,
reviews their progress and provide guidance, whenever necessary. They hold them accountable for the
work assigned but remain ultimately accountable to their superiors for completion of each task and its
coordination with the overall organisational work.

S. Chakrabarty
 Differences between Authority and Responsibility

Sr. No. Authority Responsibility

1 It is the legal right of a person or a It is the obligation of

superior to command his subordinate to perform the
subordinates. work assigned to him.

2 Authority is attached to the Responsibility arises out of

position of a superior in concern. superior-subordinate
relationship in which
subordinate agrees to carry out
duty given to him.

3 Authority can be delegated by a Responsibility cannot be shifted

superior to a subordinate and is absolute

4 It flows from top to bottom. It flows from bottom to top.

Sr. BASIS FOR

RESPONSIBILITY ACCOUNTABILITY
No. COMPARISON
1 Accountability is the
Responsibility is the
condition, wherein a
state of having duty,
person is expected
Meaning to do whatever it
to take ownership of
takes to complete
one's actions or
the task.
decisions.
2 Obligation to Answerability for the
What is it? perform the consequence of the
delegated task. delegated task.
3 Nature Assigned Accepted
4 Arises from Authority Responsibility
5 Done but not
Delegation Not possible.
entirely.
6 Performance Not measured Measured

S. Chakrabarty
Organization (balance between the two)
Centralized organization: decision making authority lies with the top management
Decentralization: Authority shared with lower level (Traffic policeman)

Decentralization can be called as extension of delegation. When delegation of authority is done to the
fullest possible extent, it gives use to decentralization.

Factors influencing Centralisation and Decentralisation:

Sr. More
Basis More Centralisation
No. Decentralisation
1 Environment It is less volatile Is complex and
uncertain
2 Capability and Lower level Lower level managers
Experience managers not capable &
capable as top level experienced to take
managers decisions
3 Voice in Decisions Lower management Lower level
does not want to management wants a
take decisions voice in decisions
4 Importance of Significant like Relatively minor
Decisions investment and decisions
strategies.
5 Crisis Suitable for facing Corporate culture is
crisis or risk open
6 Geographic Not visible Yes, freedom is
Dispersion allowed to local units
7 Size and Smaller the size Larger the size greater
complexity of more the the degree of
organisation centralisation decentralisation
8 Management Conservative Progressive
Attitude
9 Uniformity of Required Not required
Action

S. Chakrabarty
Differentiating between Delegation and Decentralisation:
So far the student must have understood that delegation is the beginning and decentralisation is the next
move in organising. But the two have much dissimilarity, which have been shown in Table 11.2.
Table 11.2: Difference between Delegation and Decentralisation:

Sr.
Basis Delegation Decentralisation
No.
1 Nature Individual, one Totalistic, top
to one management to
last but one
point
2 Scope Creates Creates
superior- operative
subordinate departments
relationships
3 Compulsion Compulsory Not compulsory
4 Purpose Multiplication Increase
of manger subordinate role
in the
organisation
5 Withdrawal of Easy Difficult
Authority
6 Suitability All Suitable for big
organisations organisation
7 Responsibility Cannot be Responsibility is
delegated delegated
8 Operational Does not grant Implies creating
Autonomy operational operative units
autonomy to with autonomy
subordinates to them
9 Importance Delegation does Decentralisation
not require is sought
decentralisation through
delegation

S. Chakrabarty
 Sr.
basis Delegation Decentralization
No.
Managers delegate some of Right to take decisions is shared
1 Meaning their function and authority by top management and other
to their subordinates. level of management.
Scope of delegation is
limited as superior Scope is wide as the decision
2 Scope delegates the powers to the making is shared by the
subordinates on individual subordinates also.
bases.
Responsibility remains of
Responsibility is also delegated
4 Responsibility the managers and cannot
to subordinates.
be delegated
Freedom is not given to the
Freedom to work can be
subordinates as they have
Freedom of maintained by subordinates as
5 to work as per the
Work they are free to take decision
instructions of their
and to implement it.
superiors.
It is an important decision of an
6 Nature It is a routine function
enterprise.
Decentralization becomes more
Delegation is important in
important in large concerns and
Need on all concerns whether big or
7 it depends upon the decision
purpose small. No enterprises can
made by the enterprise, it is not
work without delegation.
compulsory.
It is a systematic act which takes
Grant of The authority is granted by
8 place at all levels and at all
Authority one individual to another.
functions in a concern.
Grant of Responsibility cannot be Authority with responsibility is
9
Responsibility delegated delegated to subordinates.
Degree of delegation varies Decentralization is total by
from concern to concern nature. It spreads throughout
10 Degree
and department to the organization i.e. at all levels
department. and all functions
It is an outcome which explains
Delegation is a process
relationship between top
11 Process which explains superior
management and all other
subordinates relationship
departments.
Delegation is essential of all Decentralization is a decisions
12 Essentiality
kinds of concerns function by nature.
Decentralization is an optional
Delegation is essential for
13 Significance policy at the discretion of top
creating the organization
management.
It is considered as a general
Delegated authority can be
14 Withdrawal policy of top management and is
taken back.
applicable to all departments.
Freedom of Very little freedom to the
15 Considerable freedom
Action subordinates

S. Chakrabarty
Communication

Newman defined communication as “an exchange of facts, ideas, opinions or emotions by two or more
persons.”

Communication is the process of passing information from one person to another. The purpose of
communication understands of information.

Importance of communication
1. Base for Action:
Communication acts as a base for any action. Starting of any activity begins with communication which
brings information necessary to begin with.

2. Planning Becomes Easy:

Communication facilitates planning. Planning is made easy by communication. Any type of information
regarding the human resource requirement of each department of the organisation with their
qualifications, the type and kinds of job etc. can be collected through communication which helps in
human resource planning. Policies and programmes for their acquisition can be prepared and
implemented. In the entire process communication plays a vital role, it also facilitates managerial planning
of the organisation.

3. Means of Coordination:
Communication is an important tool for coordinating the efforts of various people at work in the
organisation.

4. Aids in Decision-Making:
The information collected through communication aids in decision-making. Communication facilitates
access to the vital information required to take decisions.

5. Provides Effective Leadership:

A communication skill bring manager near to his subordinates and exchange ideas and submits appropriate
proposals, knows their opinions, seeks advices and make decisions. This enables a manager to win
confidence of his subordinates through constantly communicating with them and removing probable
misunderstandings. In this way he leads his people to accomplish the organisational goal.

6. Boosts Morale and Motivation:

The main cause of conflict and dissatisfaction is misunderstanding which can be removed through
communication skills. The removal of misunderstanding makes manager and his subordinates understand
each other and create good industrial relations. This boosts up the morale of the people and motivates
them to work harder.

S. Chakrabarty
Types

1. According to organizational structure

a) Formal communication: formal channel, political parties (debate in new parliament)
b) Informal communication: friends, members of the same club, political parties (debate in
new channel)

2. According to direction of communication

a) Downward communication
b) upward communication
c) Horizontal communication

3. According to way to expression

a) Verbal
 Merits
 Saving of time
 More effective
 Knowledge of reaction of message
 Easy to clear doubts
 Demerits
 Lack of proof of message
 Not suitable for future reference
 Not suitable in case of distance

b) Written communication
 Merits
 proof of message
 suitable for future reference
 reduce misinterpretation and distortion

 More effective
 Knowledge of reaction of message
 Easy to clear doubts
 Demerits
 Time consuming
 Difficult to clear doubts
 Secrecy cannot be maintained

Barrier to Communication

 Organizational
 Status of position
 Language
 Socio-psychology
 Mechanical
 Information overload
 other

S. Chakrabarty
1. Organizational barriers: The barriers that generate form within the organization are known as
organizational barriers may be of the following types:

 Negative organizational climate: The main aspect of organizational climate that acts as
communication barrier is the negative attitude of top management. Negative attitude of top
management discourages communication initiative of the employees.

 Absence of communication policy: Well-designed communication policy encourages

communication in the organization. In the absence of such policies, employees fail hesitate to
communicate.

 Excessive authority layers: Excessive authority layers acts as a severe impediment to successful
communication. In the case of excessive authority impediment to successful communication. In the
case of excessive authority layers, information reaches to its final destination passing through
several hierarchical levels. As a result, information may be distorted or lost. Excessive authority
layers also causes delay in communication.

 Filtering: Filtering implies wilful distortion of information. This problem usually arises in upward
communication. In upward communication, employees tend to pass only those messages that create
positive impression about them.

2. Individual Barriers: Barriers created by the sender and receiver are known as individual barriers. Such
barriers include the following:

 Differences in personality: Personality is the set of attributes that define a person. Every person
holds a distinct personality. This individual nature of personality acts as barrier to communication.

 Perceptual differences: Perception is the unique way in which people respond or interpret an
object. Difference in perception is a very common problem in effective communication. It for
example, a subscriber of BTTB’s land phone in Bangladesh may positively react to the government’s
move to privatize BTTB expecting a better service. But an employee of BTTB might view this as step
to cut jobs and retrench existing employees.
 Fear: Fear of reprisal or attack, fear of criticism for knowing very little etc. may create problem in
communication.

 Stereotyping: Stereotyping is generalizing about a class of people or events that is widely held by a
given culture. In case of stereotyping, people develop communication statements and mindsets
about others. This orientation exposes itself in such statements and mindsets. For example, “All
used car salesmen are dishonest,” or “All foreign recruiting agents are liars.” Such all inclusive
perceptions not only are seldom correct but they also block mental activity that is necessary for
successful communication.

 Halo Effect: The halo effect is the tendency to use a general impression based on one or a few
characteristics to judge other characteristics of that same individual. For example, a manger might
identify one trait of an employee, such as an excellent attendance record, and perceive that the
employee’s productivity and quality of work must also be outstanding.

 Inattention: Sometimes communication does not reach due to the inattention of the receiver. Such
inattention may result from busyness, lack of interest about subject, suffering from disease or family
problem etc.

S. Chakrabarty
 3. Language or Semantic Barrier: A common barrier to effective communication is semantic
distortion, which can be deliberate or accidental. Semantic problem arises when words and
symbols have different meanings for different people that lead to a misunderstanding. For
examples, an advertisement states, “we sell for less.” It is ambiguous and raises the question: less
than what? In another case, during meeting, a male colleague said to one of his female colleague,
“Why don’t you dye it?” meaning her hair. The female colleague thought he said, “Why don’t you
diet?” she did not speak to him for a month. Semantic barrier presents difficult challenge when
people from different cultures communicate with each other.

4. Other Barriers: The following factors also act as the barrier to effective communication:

 Information Overload: Information overload may also be a problem of effective communication.

Information overload is the situation when a person is given too much information at a time.

 Faulty expression: Faulty expression of message fails to convey exact meaning to the receiver. It
happens due to lack of clarity, use of vague terms, badly expressed information, improper
organization of ideas etc.
 Status or power difference: Communication problem may arise when people of different power or
status try to communicate with each other. For example, the manger of a company may neglect
suggestion from his subordinates simply because of difference in their status. This under treatment
of people makes the communication ineffective.

 Negative attitudes to change: Some people always resist any kind of change in the organization.
They think that ‘old is good, and are fearful about the changes. Therefore, they create problems in
communication through inattention, false interpretation, rumour, resistance and non-cooperation.

 Noise: Environment factors may also disrupt effective communication. One such factor is noise. For
example, in oral communication, noise hiders smooth flow of information or message. In factories,
loud noise of machines makes oral communication very difficult.

S. Chakrabarty
Definitions of Controlling:
“Managerial control implies the measurement of accomplishment against the standard and the correction
of deviations to assure attainment of objectives according to plans”. Koontz And O’Donnell
“Control is the process of bringing about conformity of performance with planned action.” Dale Henning

Controlling function is performed in all types of organizations whether commercial or non commercial and
at all levels i.e. top, middle and supervisory levels of management. Thus, it is a pervasive function.
Controlling should not be considered as the last function of the management.

The controlling function compares the actual performance with predetermined standards, finds out
deviation and attempts to take corrective measures. Eventually, this process helps in formulation of future
plans too. Thus, controlling function helps in bringing the management cycle back to planning.

Importance of Controlling:
The significance of the controlling function in an organisation is as follows:
1. Accomplishing Organisational Goals:
Controlling helps in comparing the actual performance with the predetermined standards, finding out
deviation and taking corrective measures to ensure that the activities are performed according to plans.
Thus, it helps in achieving organisational goals.

2. Judging Accuracy of Standards:

An efficient control system helps in judging the accuracy of standards. It further helps in reviewing &
revising the standards according to the changes in the organisation and the environment.

3. Making Efficient Use of Resources:

Controlling checks the working of employees at each and every stage of operations. Hence, it ensures
effective and efficient use of all resources in an organisation with minimum wastage or spoilage.

4. Improving Employee Motivation:

Employees know the standards against which their performance will be judged.

Systematic evaluation of performance and consequent rewards in the form of increment, bonus,
promotion etc. motivate the employees to put in their best efforts.

5. Ensuring Order and Discipline:

Controlling ensures a close check on the activities of the employees. Hence, it helps in reducing the
dishonest behaviour of the employees and in creating order and discipline in an organization.

6. Facilitating Coordination in Action:

Controlling helps in providing a common direction to the all the activities of different departments and
efforts of individuals for attaining the organizational objectives.

S. Chakrabarty
Limitations of Controlling:
The defects or limitations of controlling are as following:
1. Difficulty in Setting Quantitative Standards:
It becomes very difficult to compare the actual performance with the predetermined standards, if these
standards are not expressed in quantitative terms. This is especially so in areas of job satisfaction, human
behaviour and employee morale.

2. No Control on External Factors:

An organization fails to have control on external factors like technological changes, competition,
government policies, changes in taste of consumers etc.

3. Resistance from Employees:

Often employees resist the control systems since they consider them as curbs on their freedom. For
example, surveillance through closed circuit television (CCTV).

4. Costly Affair:
Controlling involves a lot of expenditure, time and effort, thus it is a costly affair. Managers are required to
ensure that the cost involved in installing and operating a control system should not be more than the
benefits expected from it.

Process of Control:
Following are the steps involved into the process of control:
1. Establish the Standards:
Within an organization’s overall strategic plan, managers define goals for organizational departments in
specific, precise, operational terms that include standards of performance to compare with organizational
activities. However, for some of the activities the standards cannot be specific and precise.

Standards, against which actual performance will be compared, may be derived from past experience,
statistical methods and benchmarking (based upon best industry practices). As far as possible, the
standards are developed bilaterally rather than top management deciding unilaterally, keeping in view the
organization’s goals.

Standards may be tangible (clear, concrete, specific, and generally measurable) – numerical standards,
monetary, physical, and time standards; and intangible (relating to human characteristics) – desirable
attitudes, high morale, ethics, and cooperation.

2. Measure Actual Performance:

Most organizations prepare formal reports of performance measurements both quantitative and
qualitative (where quantification is not possible) that the managers review regularly. These measurements
should be related to the standards set in the first step of the control process.

For example, if sales growth is a target, the organization should have a means of gathering and reporting
sales data. Data can be collected through personal observation (through management by walking around
the place where things are happening), statistical reports (made possible by computers), oral reporting
(through conferencing, one-to-one meeting, or telephone calls), written reporting (comprehensive and
concise, accounting information – normally a combination of all. To be of use, the information flow should
be regular and timely.
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3. Compare Performance with the Standards:
This step compares actual activities to performance standards. When managers read computer reports or
walk through their plants, they identify whether actual performance meets, exceeds, or falls short of
standards.

Typically, performance reports simplify such comparison by placing the performance standards for the
reporting period alongside the actual performance for the same period and by computing the variance—
that is, the difference between each actual amount and the associated standard.

The manager must know of the standard permitted variation (both positive and negative). Management by
exception is most appropriate and practical to keep insignificant deviations away. Timetable for the
comparison depends upon many factors including importance and complexity attached with importance
and complexity.

4. Take Corrective Action and Reinforcement of Successes:

When performance deviates from standards, managers must determine what changes, if any, are
necessary and how to apply them. In the productivity and quality-centered environment, workers and
managers are often empowered to evaluate their own work. After the evaluator determines the cause or
causes of deviation, he or she can take the fourth step— corrective action.

The corrective action may be to maintain status quo (reinforcing successes), correcting the deviation, or
changing standards. The most effective course may be prescribed by policies or may be best left up to
employees’ judgment and initiative. The corrective action may be immediate or basic (modifying the
standards themselves).

Span of control

The number of subordinates a manger directly controls (6 and 2 subordinates)

 Relationship

1. Complexity of subordinates task

2. Relatedness of task

Expanding On the Concept of Span of Control

While we are addressing span of control, let’s also broaden our understanding to see it in the context of
the organizational structure levels of hierarchy.

Width: Organization structures can be described as wide (with larger span of control) or narrow (with
smaller span of control.)

Height: As there are levels of management, or hierarchy, an organization may be tall (with many levels) or
flat (with fewer levels.)

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Flat organizations have a ‘wide’ span of control and Tall organizations have a ‘narrow’ span of control.
While there are pros and cons with both tall and flat structures, a company’s structure must be designed to
suit the business (the customer and markets) and in a way that fits with the workforce’s capability.

A Tall vs. Flat Organizational Structure

Characteristics of a Flat Organizational Structure (Wide Span of Control)

Pros

 Encourages delegation. Managers must better delegate to handle larger numbers of subordinates,
and grant opportunities for subordinates to take on responsibilities

 Reduces costs. More cost effective because of fewer levels, thus requiring fewer managers

Cons

 High managerial workload comes with high Span of Control

 Role confusion more likely

 May cultivate distrust of management

Characteristics of a Tall Organizational Structure (Narrow Span of Control)

Pros

 More rapid communication between small teams

 Groups are smaller and easier to control/manage

 There’s a greater degree of specialization and division of labor

 More and better opportunities for employee promotion

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Cons

 prevent cross-functional problem solving

 Employees may feel lost and powerless

According to Theo Haimann, “Staffing pertains to recruitment, selection, development and compensation
of subordinates.”

Staffing Process - Steps involved in Staffing

1. Manpower requirements- The very first step in staffing is to plan the manpower inventory required
by a concern in order to match them with the job requirements and demands. Therefore, it involves
forecasting and determining the future manpower needs of the concern.

2. Recruitment- Once the requirements are notified, the concern invites and solicits applications
according to the invitations made to the desirable candidates.

3. Selection- This is the screening step of staffing in which the solicited applications are screened out
and suitable candidates are appointed as per the requirements.

4. Orientation and Placement- Once screening takes place, the appointed candidates are made
familiar to the work units and work environment through the orientation programmes. placement
takes place by putting right man on the right job.

5. Training and Development- Training is a part of incentives given to the workers in order to develop
and grow them within the concern. Training is generally given according to the nature of activities
and scope of expansion in it. Along with it, the workers are developed by providing them extra
benefits of indepth knowledge of their functional areas. Development also includes giving them key
and important jobsas a test or examination in order to analyse their performances.

6. Remuneration- It is a kind of compensation provided monetarily to the employees for their work
performances. This is given according to the nature of job- skilled or unskilled, physical or mental,
etc. Remuneration forms an important monetary incentive for the employees.

7. Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as
opinions of the workers towards their jobs. For this regular assessment is done to evaluate and
supervise different work units in a concern. It is basically concerning to know the development
cycle and growth patterns of the employeesin a concern.

8. Promotion and transfer- Promotion is said to be a non- monetary incentive in which the worker is
shifted from a higher job demanding bigger responsibilities as well as shifting the workers and
transferring them to different work units and branches of the same organization.

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What The Peter Principle Is

In the simplest terms, The Peter Principle is a theory that individuals in a hierarchy who do a good job are
promoted to the next level. If they are competent, they are promoted again to the next higher level. If they
are not competent, they are not promoted and they remain at that level. Thus, people stop getting
promotions and remain one level above the last level at which they were competent. While this
phenomenon is clearly true in many cases, it is not always accurate.

 The individual may not have been promoted because there was no opening above. Two senior
research scientists were peers and just about equal in age, experience, and talent. One was
promoted to Department Manager. The other had to wait a couple of years until a similar position
opened. He was not incompetent - far from it - he just needed a spot to open up higher in the
hierarchy.

 The individual may have been in a higher position and chose to step down a level. Many superior
salespeople get promoted to Sales Manager only to discover that they don't like management and
were happier in sales. They step back into their previous role, where they were competent and very
successful.

 The individual was unprepared for the position into which they were promoted but has worked
hard to develop the skills need to be successful at their new level. They may once have been a Peter
Principle example, but they are no longer.

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Decision Making Process

In general, the decision making process helps managers and other business professionals
solve problems by examining alternative choices and deciding on the best route to take.
Using a step-by-step approach is an efficient way to make thoughtful, informed decisions
that have a positive impact on your organization’s short- and long-term goals.

The business decision making process is commonly divided into seven steps. Managers
may utilize many of these steps without realizing it, but gaining a clearer understanding
of best practices can improve the effectiveness of your decisions.

These steps can be explained as under:

1. Define the problem:

The first and the foremost step in the decision-making process are to define the real
problem. A problem can be explained as a question for and appropriate solution. The
manager should consider critical or strategic factors in defining the problem. These factors
are, in fact, obstacles in the way of finding proper solution. These are also known as limiting
factors.

For example, if a machine stops working due to non-availability of screw, screw is the
limiting factor in this case. Similarly fuse is a limiting or critical factor in house lighting.
While selecting alternative or probable solution to the problem, the more the decision-
making takes into account those factors that are limiting or critical to the alternative
solutions, the easier it becomes to take the best decision.

Other examples of critical or limiting factor may be materials, money, managerial skill,
technical know-how, employee morale and customer demand, political situation and
government regulations, etc.

2. Analysing the problem:

After defining the problem, the next important step is a systematic analysis of the available
data. Sound decisions are based on proper collection, classification and analysis of facts and
figures.

There are three principles relating to the analysis and classification as explained below:

(i) The futurity of the decision. This means to what length of time, the decision will be
applicable to a course of action.

(ii) The impact of decision on other functions and areas of the business.

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(iii) The qualitative considerations which come into the picture.

3. Developing alternative solutions:

After defining and analysing the problem, the next step is to develop alternative solutions.
The main aim of developing alternative solutions is to have the best possible decision out of
the available alternative courses of action. In developing alternative solutions the manager
comes across creative or original solutions to the problems.

In modern times, the techniques of operations research and computer applications are
immensely helpful in the development of alternative courses of action.

4. Selecting the best type of alternative:

After developing various alternatives, the manager has to select the best alternative. It is
not an easy task.

The following are the four important points to be kept in mind in selecting the best from
various alternatives:

(a) Risk element involved in each course of action against the expected gain.

(b) Economy of effort involved in each alternative, i.e. securing desired results with the
least efforts.

(c) Proper timing of the decision and action.

(d) Final selection of decision is also affected by the limited resources available at our
disposal. Human resources are always limited. We must have right type of people to carry
out our decisions. Their calibre , understanding, intelligence and skill will finally determine
what they can and cannot do.

5. Implementation of the decision:

Under this step, a manager has to put the selected decision into action.

For proper and effective execution of the decision, three things are very important i.e.,

(a) Proper and effective communication of decisions to the subordinates. Decisions should
be communicated in clear, concise and understandable manner.

(b) Acceptance of decision by the subordinates is important. Group participation and

involvement of the employees will facilitate the smooth execution of decisions.

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(c) Correct timing in the execution of decision minimizes the resistance to change. Almost
every decision introduces a change and people are hesitant to accept a change.
Implementation of the decision at the proper time plays an important role in the execution
of the decision.

6. Follow up:

A follow up system ensures the achievement of the objectives. It is exercised through

control. Simply stated it is concerned with the process of checking the proper
implementation of decision. Follow up is indispensable so as to modify and improve upon
the decisions at the earliest opportunity.

7. Monitoring and feedback:

Feedback provides the means of determining the effectiveness of the implemented

decision. If possible, a mechanism should be built which would give periodic reports on the
success of the implementation. In addition, the mechanisms should also serve as an
instrument of “preventive maintenance”, so that the problems can be prevented before
they occur.

According to Peter Drucker, the monitoring system should be such that the manager can go
and look for himself for first hand information which is always better than the written
reports or other second-hand sources. In many situations, however, computers are very
successfully used in monitoring since the information retrieval process is very quick and
accurate and in some instances the self-correcting is instantaneous.

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