Module-2 Prepared By: Mrs.

Nisha G R

MODULE-2: ORGANIZING, STAFFING & DIRECTING, CONTROLLING

Organization-

Meaning: An organization can be defined as a social unit or human grouping deliberately structured
for the purpose of attaining specific goals. An organization can also be defined as “The process of
identifying and grouping of the work to be performed, defining and delegating responsibility and
authority and establishing relationships for the purpose of enabling people to work most effectively
together in the accomplishment of their objectives”.

Process of organizing

Consideration of Objectives: Objectives determine the various activities which need to be

performed and the type of organization which needs to be built for this purpose
•Deciding Organisational Boundaries: After the consideration of objectives, the next step is to
decide what to do inside and what outside the boundaries of the organization. The choices define the
boundaries of the organization and how to interacts with its environment.
•Grouping of Activities into Departments: The next step is to group all closely related and similar
activities into departments and sections.
•Deciding which department is the key department: The next step is an analysis of the
contributions which each department makes downward, upward and sideways to decide its relative
status. It is necessary to know key departments i.e., those which are rendering key activities,
essential for the fulfillment of goals. Such key departments demand key attention.
•Determining Levels at which Various Types of Decisions are to be Made: After deciding the
relative importance of various departments, the levels at which various major and minor decisions
are to be made must be determined. This will avoid the need for the decisions to go “looking for a
home”.
• Determining the Span of Management: The next step to be taken in designing a structure is to
determine the number of subordinates who should report directly to each executive. The narrower
the span, the taller would be the structure with several levels of management. A flat structure os
generally desirable.
•Setting up a Coordination Mechanism: A direct consequence of departmentalization is the need
to coordinate the independent activities of the members of the organisations. Effective integration is
as important as careful differentiation. As individuals and departments carry out their specialized
activities, the overall goals of the organization may become submerged among organization
members may develop.

Principles of organizing
1) Objectives: The objectives of the enterprise influence the organization structure and hence the
objectives of the enterprise should first be clearly defined. Then every part of the organization
should be geared to the achievement of these objectives.
2) Specialization: Effective organization must promote specialization. The activities of the
enterprise should be divided according to functions and assigned to persons according to their
specialization.
3) Span of control: As there is a limit to the number of persons that can be supervised effectively
by one boss, the span of control should be as far as possible, the minimum. That means, an
executive should be asked to supervise a reasonable number of subordinates only.

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4)Exception :As the executives at the higher levels have limited time, only exceptionally complex
problems should be referred and routine matters should be dealt with by the subordinates at lower
levels. This will enable the executives at higher levels to devote time to more important and crucial
issues.
5) Scalar Principle: This Principle is sometimes known as the “chain of command”. The line of
authority from the chief executive at the top to the first-line supervisor at the bottom must be clearly
defined.
6) Unity of command: Each subordinate should have only one superior whose command he has to
obey. Multiple-subordination must be avoided for it causes Uneasiness, disorder, indiscipline and
undermining of authority.
7) Delegation: Proper authority should be delegated at the lower levels manager of the
organization also. The authority delegated should be equal to responsibility That is each manager
should have enough authority to accomplish the task assigned to him. Inadequate delegation often
results into multiplication of staff and service activity.
8) Responsibility: The superior should be held responsible for the acts of his subordinates. No
superior should be allowed to avoid responsibility by delegating authority to his subordinates
9) Authority: The authority is the tool by which a manager is able to accomplish the desired
objective. Hence, the authority of each manager must be clearly defined. Further, the authority
should be equal to responsibility.
10) Efficiency: The organization structure should enable the enterprise to function efficiently and
accomplish its objectives with the lowest possible cost.
11) Simplicity: The Organization structure should be as simple as possible and the organization
levels should as far as possible, be minimum. A large number of levels of organization means
difficulty of effective communication and coordination. Too many committees and excessive
procedures Also unduly complicate the structure.
12) Flexibility: The organization should be adaptable to changing circumstances and permit
correction of demonstrated deficiencies in the existing structure without dislocation and disruption
of the basic design.
13) Balance: There should be a reasonable balance in the size of various departments, between
centralization and decentralization, between the principle of span of control and the short chain of
command, and among all types of factors such as human, technical and financial.
14) Unity of direction: There should be one objective and one plan for a group of activities having
the same objective. Unity of direction facilitates unification and coordination of activities at various
levels.
15) Personal Ability: As people constitute an organization, there is need for proper selection,
placement and training of staff. Further the organization structure must ensure optimum use of
human resources and encourage management development programmes.
16) Acceptability: The structure of the organization should be acceptable to the people who
constitute it.Two things generally happen if people oppose the structure: it is modified gradually by
the people, or it is used ineffectively.

Span of Management.

Span of control refers to the number of subordinates a supervisor has. Simply a manager or a
supervisor or a superior who has a group of subordinates, who can directly report him or her is
called a Span of Management.
The span of management indicates the number of subordinates who can be successfully directed by
a supervisor. It is often referred to as span of management, span of supervision, span of authority.

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Span of management is important because of two reasons.

1) Span of management affects the efficient utilization of managers and the effective performance
of the subordinates. If the span is too wide, managers are overburdened and subordinates receive
little guidance. If the span of management is too narrow, the managers are under utilized and
subordinates are over controlled.
2) There is relationship between span of management and organization structure. A narrow span
results in tall organization with many levels of supervision between top management and lowest
organizational levels which creates more communication and cost problems. On the other hand, a
wide span for the same number of employees results in flat organization with fewer management
levels between top and bottom.
•Suppose a sales manager has 12 salesmen reporting to him, his span of management is 12. If he
feels that he is not able to work closely enough with each salesman and decides to reduce the span
by adding three assistant managers – each to supervise four salesmen then his span of management
is three as shown in fig 3.7. In doing so, he has added a level of management through which
communication between him and salesmen must pass and he has added the cost of three additional
managers.

Definition: Departmentalization
The horizontal There are several bases for departmentalization, each of which is suitable for particular corporate
differentiation sizes, strategies and purposes. (1): Process (2): Purpose
of tasks or Process Departmentalization
activities into  Business or Organizational Function: Departmentalisation done on the basis of
a thorough and careful activities of function analysis. Each function is grouped
discrete into a department.
segments is 1. Simple form of grouping activities
1. Fosters sub-goal loyalties
2. Not a good training ground
called 2. Promotes excellence in 3. Unsuitable for large organizations
performance
departmentaliz 3. Promotes economies of scale
4. Evoke conflicting interpretations

ation. 5. Organizational arthritis

6. “common pot” accounting
Departmental
 Technology: : Departmentalisation done on the basis of several discrete stages
ization is one in the process or technologies involved in the manufacture of a Product
important step
of building an 1. Efficient use of costly equipment
1. Feeling less responsible
2. Not a good training ground
organization. 2. Follows the principle of
3. Sequential technology
specialization
3. Suitable for organizations with 4. Difficult to compare
19
many processes 5. Devote extra attention

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Purpose Departmentalisation
• Products
• Customers
• Regions, Territory or Location
• Division
• Time
• Combined Base
Products
•Eminently suited for large organization manufacturing a variety of products.
•For each major product a separate semi autonomous department is created and is put under the
charge of a manager who may also be responsible for producing profit of a given magnitude.
•For each department, all the needed manufacturing, engineering, marketing, manpower and other
facilities are assembled.
•Product departmentalization is the logical pattern to be followed when each product requires raw
materials, manufacturing technology and marketing methods that are markedly different from others
from those used by other products in the organization.
•Example: many companies like Hindustan Lever, Richardson Hindustan and Johnson & Johnson
have product based departments.
Advantages:
1)This form relieves top management from operating task responsibility and therefore can
concentrate on such centralized activities such as finance, R&D and control.
2) Enables top management to compare performances of different products and invest more
resources in profitable products and withdraw resources from unprofitable ones.
3) In this form as the responsibility is entrusted on a particular department head, he is stimulated for
improving his performance.
4) In this form natural team work develops as each worker sees that his contribution is needed to
make the whole product.
Disadvantages
1. Duplication of staff and facilities
2. Department may drift away from overall organisational goal

Customers
•An enterprise may be divided into number of departments on the basis of the customers that
it services.
•Example: An electronics department may be divided into separate departments for military,
industrial and consumer customers.

Regions, Territory or Location

•When production or marketing units of an organization are geographically dispersed in various
locations, it is logical to departmentalize those units on a geographical basis.
•Example: The Indian railways are departmentalized on this basis like north, west, south, eastern,
central are departments in this sense.
Advantages
1) Motivates each divisional head to show high performance.
2) Provides each regional head an opportunity to adapt to his local situation and customer need with
speed and accuracy.
3) Affords valuable top management training and experience to middle-level executives.

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4) Enables the organization to take advantage of location factors, such as availability of raw
materials, labour, market etc.
5)enables the organization to compare regional performances and invest more resources in
profitable regions and withdraw resources from unprofitable ones
Disadvantages
1) Gives rise to duplication of various activities and many of the routine and service functions
carried out by the regional offices can be carried out centrally by the head office very economically.
2) Many regional units may forget the overall interest of the total organization

Departmentalization based on division

•When large, multi-product companies segment themselves into several independent profit centers
on the basis of product, territory or customer, these units are called divisions or free-form
organizations.
•Each divisional head enjoys a relatively free hand to operate his division within the framework of
general company-wide policies.

Departmentalization based on time

•Oldest form of Departmentalization
•For service organizations like hospitals, security, Chemical plants in which shifting of work is
essential due to various reasons.
•Under such circumstances the departmentalization is made on the basis of shifts as first shift,
second shift etc..

A typical matrix organization

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Committee
•A committee is a group of people who have been formally assigned some task or some
problem for their decision and implementation.
•Each unit head working as a Chief to the level below him and As a subordinate to the level above,
He would be performing a linking pin function in a system of interlocking groups comprising the
whole hierarchy of the company.

Types of committees:
Broadly classified into advisory committees and executive committees.
Advisory committees:
1) committees are vested with staff authority
2) Only have a recommendation role and cannot enforce implementation of their advice or
recommendation.
Examples of advisory committees formed in business enterprises: works committees, sales
committees, finance committees etc.
Executive committees:
1)vested with the line of authority
2) Not only take decisions but also enforce decisions and thus perform a double role of taking a
decision nad ordering its execution.
Example: Board of directors is an example of an executive committee.

Are also classified as standing committees or ad-hoc task forces.

(i)Standing committees: Are formed to deal with current organizational problem. Example: finance
committee in a company, loan approval committee in a bank etc. Members of this committee are
chosen because of their title or position, instead of individual qualifications or skills.
(ii)Ad-hoc committees: Have a short duration, dissolved after the task is over, or the problem is
solved and their members are chosen for their skills and experience.

Advantages
1) People get an opportunity to better understand each other’s problems and move towards
organizational goals.
2) Provide a forum for the pooling of knowledge and experience of many persons of different skills,
ages and backgrounds which helps in improving the quality of decisions.
3) Provide an opportunity to many persons to participate decision-making process.
4) Are excellent means of transmitting information and ideas, both upward and downward
5) Contribute indirectly to their training and viewpoints.
6) Are impersonal in action and hence their decisions are generally unbiased and are based on facts
and there is no fear of single individual taking a decision.

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weakness
1) Committees keep up minutes and waste hours by setting up a committee which takes a longer
time to get action than from an individual manager.
2) If wrong decision taken, no member can be individually blamed which encourages
irresponsibility among members of the committee.
3) Can be expensive form of administration where huge amount is spent on convening meetings and
giving allowances to the members.
4) Members of the coordinating committees feel appointed to protect their interests of the
departments rather than finding appropriate solution to the problem.
5) Have a tendency to perpetuate themselves and difficult to dissolve them.
6) Decisions are generally based on some compromise among members which are not best
decisions which results in log rolling.
7) Consists of large number of persons, difficult to maintain secrecy.
8) Chairman often changes, influence accumulate in the hands of some other person which may
result in domination and may bring about resistance from others.

Authority and Responsibility

•Authority is the institutionalized right of a superior to command and compel his subordinates to
perform a certain act. Rests in the chair or position. If position changes the authority of the
individual also changes

Use of Authority
1) It enforces the obedience to norms: The subordinate who accepts the authority of the superior
is motivated to an extent that by the fear of sanctions against him.
2)secures expertise in making the decisions: Helps to enable the enforcement and execution of
expert advice given by the specialists in the organization.
3)permits centralization of decision making and coordination of activity: It is possible to
centralize the function of decision making and force all the members to take mutually consistent
decisions

Responsibility
Responsibility is the obligation the subordinate to obey the commands. Whenever a superior
assigns a task to him, it is the responsibility of the subordinate to perform it.
first dimension is the responsibility for 2)responsibility to
1)Responsibility for: Is the obligation of a person to perform certain duties in job description or
accepted by him
2)Responsibility to: is his accountability to superiors and associated with check up, supervision,
control and punishment
Responsibility cannot be delegated or transferred. The superior can delegate to subordinate the
authority to perform and accomplish a specific job

Centralization
•The systematic and consistent reservation of authority at central point within the organization is
called centralization of authority. The various activities of office are brought under the direct control
of the office manager.
•According to Fayol—"everything which goes to increase the importance of the subordinate's role is
decentralization and everything which goes to reduce it is centralization." The importance of the
subordinate is reduced and the importance of the superior executive is increased in centralization.

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•Centralization of office services may be physical or functional centralization. In the former state of
centralization, all office personnel are placed at a central place for work but in the later set up,
personnel are scattered at departmental level but their control is exercised from a central point.
Centralization of authority in pure sense of the term is not found. A mixture of centralization and
decentralization is the practice of today

Advantages
1. Reduced cost
The standardized procedure and method helps in considerably reduction of office cost. Office cost is
reduced as it does not emphasize on more specialists, and more departmental machines and
equipment.
2. Uniformity in action
Uniformity in action is established throughout the organization because of central administrative
control. The same executive supervises the work and same type of office equipments are used
which ensure uniform performance of activities.
3. Personal leadership
Centralization encourages and permits personal leadership. The introduction of personal leadership
facilitates quick action, aggressive marketing and attainment of pin-pointed objective or purpose,
4. Flexibility
Centralization permits flexibility and adaptability of the organization to the changed circumstances.
Occasional pressure of extra clerical work is handled with the existing staff.
5. Improved quality of work
Improved quality of work is possible because of standardized procedure, better supervision and use
of improved- machinery.
6. Better co-ordination
Centralization facilitates better coordination among various operations. Direct control and
supervision are facilitated which results in less likelihood of conflict of authority and duplication of
work.

Disadvantages
1. Delay in work :Centralization creates loss of man-hours and delay in performance of work
because of transmission of records from and to the central control room. Quick decision is not
possible which also results delay in office work.
2. Remote control : Better supervision is not possible as the executives are under heavy pressure of
work. Slackness in work is developed in the absence of better control and supervision.
3. No loyalty : In centralization there is no subordinate's initiative in work because they are
required to do such works which they were asked for. Workers work like machine which results in
no involvement in work and absence of zeal. All these factors stand as barrier in the development of
loyalty to work.
4. No Secrecy : Secrecy is not possible in centralized set up organization because here orders and
decisions flow from one place and is conveyed to all.
5. No special attention : In centralization no special attention is given to special work as all works
are done at one place.

Decentralization

•Decentralization can be viewed as an extension of delegation. When a part of the work is entrusted
to others, it is known as delegation. Decentralization extends to the lowest level of the organization.

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•A few definitions are given below:

•―Decentralization refers to tire systematic effort to delegate to the lowest levels all authority
except that which can only be exercised at central points.‖ —Louis A. Allen
•―Decentralization is simply a matter of dividing up the managerial work and assigning specific
duties to the various executive skills.‖ —Newman, summer and Wairen
•Thus, decentralization is concerned with the decentralization of decision-making authority to the
lower levels in managerial hierarchy.

Difference between centralization and decentralization

Staffing is the process of filling positions/posts in the organization with adequate and qualified
personnel . The process of recruiting, retaining, developing and nurturing the workforce is
called staffing .

Definitions
•Job - Consists of a group of tasks that must be performed for an organization to achieve its goals
•Position - Collection of tasks and responsibilities performed by one person; there is a position for
every individual in an organization
•Job analysis - Systematic process of determining the skills, duties, and knowledge required for
performing jobs in an organization (functional job analysis , position analysis questionnaire)

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•Job description – document providing information regarding tasks, duties, and responsibilities of
job
•Job specification – minimum qualifications to perform a particular job

Need and Importance of staffing

1) It helps in discovering talented and competent workers and developing them to move up the
corporate ladder.
2) Ensures greater production by putting the right man in the right job.
3) It helps to avoid a sudden disruption of an enterprises production run by indicating shortages of
personal if any in advance.
4) Helps to prevent under utilization of personnel through over manning and the resultant high labor
cost and low profit margins.

5) Provides information to management for the internal succession of managerial personnel in the
event of unanticipated turnover.

Recruitment:

•It is defined as the process of identifying the sources for prospective candidates and to stimulate
them to apply for the jobs. Is also defined as the generating of the applications or applicants for
specific positions. Is defined as the process of attracting potential employees to the company. The
management should have a proper plan of recruitment regarding the quantity and quality of
personnel required and the time when it is needed.

Sources of requirement
1)Re-employing former employees: laid off employees or employees left due to personal reasons
may be reemployed who may require less training compared to the strangers of the enterprise.
2) Friends and relatives of the present employees: personnel with a record of good relationships
may be encouraged to recommend their friends and relatives for Appointment in the concern where
they are employed.
3) Applicants at the gate: suitable unemployed employees who call at the gates of the factories or
companies are called are interviewed by the factory or company personnel and those who are found
suitable for the existing vacancies are selected.
4) College and technical institutes: many big companies remain in touch with the colleges and
technical institutions to recruit young and talented personnel.
5) Employment exchanges: employment exchange set up by the government for bringing together
those men who are in search of the employment and these who are in search of employment and
those who are looking for men.
6) Advertising the vacancy: can be done by advertising the vacancy in leading news papers which
may be used when the company requires services of persons possessing certain special skills or
when there is acute shortage of labour force.
7) Labour unions: persons are sometimes recommended for appointment by their labour unions.

Classification: Can be broadly classified into two categories:

•internal and external

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•Internal: sources refer to the present working force of the company. vacancies other than the at the
lowest level may be filled by the existing employees of the company. (Promotion, Transfers,
Internal Notifications(Advertisement) Former Employees )

•External: Which is not made available in the working environment but highly needed.(Ø Campus
Recruitment (Interview).Press Advertisement. Recruitment through Management Consultants and
Private Employment Exchanges.)

Selection:

A series of steps from initial applicant screening to final hiring of the new employee.

•Steps in the selection procedure: There are three steps in the selection procedure namely job
analysis, job description and job specification.
1)Job analysis: Is the process by means of which a description is developed of the present methods
and procedures of doing a job, physical conditions in which the job is done, relation of the job to
other jobs and other conditions of employment
2)Job description: The results of the job analysis are set down in job descriptions for production
workers, clerical people and the first-line supervisors and managers also.
3)Job specification A job specification is a statement of the minimum acceptable human qualities
necessary to perform a job satisfactorily

Steps in Selection Procedure

1)Application bank: Filling the application bank by the candidate is the first step in which the
applicant gives relevant personal data such as qualification, experience, firms in which he has
worked.
2)Initial interview: Selected personnel based on the particulars furnished in the application bank
are called for the initial interview by the company Which is the most important means of evaluating
the poise or appearance of the candidate.
3) Employment tests: Are used for the further assessment of the candidate of his nature and
abilities certain tests are conducted by the company.
(i)Aptitude test: is used in finding out whether a candidate is suitable for clerical or a mechanical
job which helps in assessing before training as how well the candidate will perform the job.
(ii)Interest test: is used to find out the type of work in which the candidate has an interest.
(iii) Intelligent test: used to find out the candidates intelligence and candidates mental alertness,
reasoning ability, poor of understanding are judged.
(iv) Trade or performance achievement test: this test is used to measure the candidate’s level of
knowledge and skill in the particular trade or occupation in which all he will be appointed, in case
he is finally selected. in this test the candidate is asked to do a simple operation of the proposed job.
Example: A candidate for a driver may be asked to drive to test his driving proficiency, a
typist may be asked to type out some letters to find out his speed and efficiency.
(v)Personality test: is used to measure those characteristics of a candidate which constitute his
personality
4) Checking references: used to know about the important personal details about the candidate, his
character, past history his background verified from the people mentioned in the application after
selection and found satisfactory at the interview.
5) Physical or medical examination: is another step in selection procedure. The objectives of this

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examination are
(i) to check the physical fitness of the applicant for the job applied for (ii)to protect the company
against the unwarranted claims for compensation under certain legislative enactments.
6) Final interview: This interview is conducted for those who are ultimately selected for
employment and the selected candidates are given an idea about their future projects within the
organization.

•Difference : Recruitment & selection

•To attract maximum number To choose best out of theof candidates

available candidates.

•It creates application pool as large as possible It is a rejection process where few are
selected

• Techniques are not very Highly specialized techniques

intensive. are required.

•Outcome is application Outcome is the candidate who

pool. is offered job.

Directing and controlling

According to Koontz and O’Donnell,: •Direction is the interpersonal aspect of managing by which
subordinates are led to understand and contribute effectively and efficiently to the attainment of
enterprise objectives.
The function of direction thus breakdown into two major activities:
1.Giving orders to employees
2.Leading and motivating them
Requirements of effective direction
•The Directing is the main function of the Management.

The following are the basic principles of effective directing or direction:

•Harmony of Objectives,
•Unity of Command,
•Direct Supervision,
•Effective Communication,
•Follow-Up.

•1. Harmony of Objectives:

•It is an essential function of management to make the people realize the objectives of the group and
direct their efforts towards the achievement of their objectives.
•The interest of the group must always prevail over individual interest.
•The principle implies harmony of personal interest and common interest.
•Effective direction fosters the sense of belongingness among all subordinates in such a way that
they always identify themselves with the enterprise and tune their goals with those of the enterprise.

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2. Unity of Command

•This principle states that one person should receive orders from only one superior, in other words,
one person should be accountable to only one boss.
•If one person is under more than one boss then there can be contradictory orders and the
subordinate fails to understand whose order to be followed.
•In the absence of unity of command, the authority is undermined, discipline weakened, loyalty
divided and confusion and delays are caused.

•3. Direct Supervision

•The directing function of management becomes more effective if the superior maintains direct
personal contact with his subordinates.
•Direct supervision infuses a sense of participation among subordinates that encourages them to put
in their best to achieve the organizational goals and develop an effective system of feedback of
information.

4. Effective Communication:

•To have effective direction, it is very essential to have an effective communication system which
provides for free flow of ideas, information, suggestions, complaints, and grievances.

5. Follow-up:

•In order to make direction effective, a manager has to continuously direct, guide, motivate and lead
his subordinates. A manager has not only to issue orders and instructions but also to follow-up the
performance so as to ensure that work is being performed as desired. He should intelligently
oversee his subordinates at work and correct them whenever they go wrong.

Giving Orders

•The order is a device employed by a line manager in directing his immediate subordinates to start
an activity, stop it and modify it. Mary Parker Follett lays down following principles which should
be followed in giving orders.
1.The attitude necessary for the carrying out of an order should be prepared in advance.
2.Face-to-face suggestions are preferable to long distance orders.
3.Law of situation

•Orders may be communicated verbally or in writing. Writing orders are appropriate when
1.The subject is important.
2.Several individuals are affected
3.Many details are involved.
4.Considerable time will pass before work is completed
5.There is geographical distance between the order-giver and the recipient.

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•A manager may follow four types of methods to ensure compliance to his orders:
1.Force
2.Paternalism-limits a persons or group’s liberty
3.Bargain-it is an agreement in which two or more people agree what each of them will do, pay or
receive.
4.Harmony of objectives.

Motivation

•Management is an art of getting the work done by the people and there by achieving the best
results. Getting the work done, depends upon the inducement of the people to better their
performance by inspiring the personnel with a zeal to do work for the accomplishment of objectives
of the organization .it may be called as motivation of people
•Motivation is derived from ‘motive’ means any idea, need, emotional or organic state that prompts
a man to an action.

Nature of Motivation
•Individuals differ in their motives.
•Sometimes the individuals himself is unaware of his motive
•Motives change
•Motives are expressed differently
•Motives are complex.
•Multiple motives make the choice of goals difficult for an individual.

Motivation Theories: Content Theories

1.Maslow’s need hierarchy theory

2.Alderfer’s ERG theory

3.Herzberg’s two-factor theory

4.McClelland’s Achievement theory

Maslow’s hierarchy of needs

• Maslow has suggested that the underlying needs for all human motivation can be organised in a
hierarchical manner on 5 general levels, they are

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1.Physiological needs
2.Safety needs
3.Social needs
4.Esteem needs
5.Self actualization

Physiological needs: It is the lowest order level which include the need for food ,shelter &
clothing. If these are not satisfied other needs will not emerge.
Safety needs: When physiological needs are satisfied the safety need become more important in the
hierarchy. These are needs for the protection against danger or loss of existing physiological needs.
Social needs: It comprises of friendship, affection, belongingness, association & acceptance. If the
first 2 levels are fairly well satisfied ,then a person become keenly aware of the absence of friends
& will be motivated towards affectionate relations with people in general.
Esteem needs: It is classified into 2 subsets. The first subset includes the needs for achievement
,strength & freedom. In essence this is the need for independence. The second subset includes the
needs for status, recognition & prestige. In essence this is the need for self-esteem or self-worth.
Self actualization: It is highest level in hierarchy. This is the need to realise ones potentialities for
continued self-development and the desire to become more & more of what one is & what one is
capable of becoming. This is also known as realization or self attenuation.
•For example: A musician must create music ,an artist must paint in order to achieve ultimate
satisfaction.
The Maslow’s theory criticized on two main grounds:
•The hierarchy of basic needs is not always fixed.
•It is difficult to know about the needs and motives of an individual.
Herzberg’s two-factor theory

•Frederick Herzberg’s well known Two-Factor Theory was designed in year 1959. Based on two
hundred engineers and accountant feedback collected in the USA regarding their personal feelings
towards their working environments.
•Herzberg defined two sets of factors in deciding employees working attitudes and level of

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performance, named Motivation & Hygiene Factors.

•Although Herzberg is most noted for his famous 'hygiene' and motivational factors theory, he was
essentially concerned with people's well-being at work.
•Underpinning his theories and academic teachings, he was basically attempting to bring more
humanity and caring into the workplace.
•He and others like him, did not develop their theories to be used as 'motivational tools' purely to
improve organizational performance. They sought instead primarily to explain how to manage
people properly, for the good of all people at work.
•Herzberg's research proved that people will strive to achieve 'hygiene' needs because they are
unhappy without them, but once satisfied the effect soon wears off - satisfaction is temporary.
•Then as now, poorly managed organizations fail to understand that people are not 'motivated' by
addressing 'hygiene' needs.
•People are only truly motivated by enabling them to reach for and satisfy the factors that Herzberg
identified as real motivators, such as achievement, advancement, development, etc., which represent
a far deeper level of meaning and fulfilment.
•“Respect for me as a person" is one of the top motivating factors at any stage of life.

Two-factor theory
•The two-factor theory (also known as Herzberg's motivation-hygiene theory and dualfactor
theory) states that there are certain factors in the workplace that cause job satisfaction, while a
separate set of factors cause dissatisfaction.
• What do people want from their jobs?
• Do they want just a higher salary? Or do they want security, good relationships with co-workers,
opportunities for growth and advancement – or something else altogether?
•The purpose of the study is to develop the Herzberg theory and its possible application to an
organization as a means of increasing worker’s productivity.
•The study was conducted by means of a systematic research of a representative sample of the
literature available on Herzberg's Two-Factor Theory.
•The Two-Factor Theory is one of the best known and most widely accepted job enrichment
approaches today, however, it has caused considerable controversy among behaviorists.
•Motivators: A sense of achievement meaning employees will know that because of their hard
work the business is going forward. Recognition of workers contribution meaning the owner will
give credit to the workers, making them feel good about themselves
•Hygiene: This factor has the affect to demotivate workers. The hygiene factors affect the
conditions of the workplace. If the hygiene in the area is not adequate then workers might not want
to work.
•Motivators are six in number
1.Opportunity to accomplish something significant
2.Recognition for significant accomplishments
3.Chance for advancement
4.Opportunity to grow and develop on the job
5.Chance for increased responsibility
6.The job itself
•Hygiene Factors
1.Fair company policies and administration
2.A superior who knows the work
3.A good relationship with one’s superior
4.A good relationship with one’s peers

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5.A good relationship with one’s subordinates

6.A fair salary
7.Job security
8.Personal life
9.Good Working condition
10. Status
•The theory criticized for number of reasons
•The theory is based on a sample of 200 accountants and engineers.
•The theory suffers from the weakness inherent in the critical incident methodology
•Motivational and maintenance factors are not wholly uni-directional in their influence

Communication
•Communication is transferring information and understanding from one to one or one to many. It
could take place in a verbal or a written mode and could use forms such as face-to-face meetings,
group discussions, email writing, and even non verbal modes like gestures, body language, etc.

Purpose of communication
• It is needed in the recruitment process to persuade potential employees of the merits of
working for the enterprise.
• It is needed in the area of oreintation to make people acquainted with peers, superiors and
with company's rules and regulations.
• It is needed to enable employees to perform their functions effectively.
• It is needed to acquaint the subordinates with the evaluation of their contribution to
enterprise activity.
• It is needed to teach employees about personal safety on the job.
• Communication is of vital importance in projecting the image of an enterprise in the society.
• It helps the manager in his decision process.
• It helps in acheiving coordination.
• It increases managerial efficiency.
Summary
•Purposes of communication are:
•To provide the information and understanding necessary for group effort
•To provide the attitudes necessary for motivation, cooperation and job satisfaction.

Leadership
According to peter drucker, “leadership is the lifting of man's visions to higher sights, the

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raising of man's performance to a higher standard, the building of man's personality beyond
its normal limitations.”
Characteristics of leadership
•It implies the existence of followers.
•It involves a community of interest between the leader and his followers.
•It involves an unequal distribution of authority among leaders and group members.
•Leadership implies that leader can influence their followers or subordinates in addition to being
able to give their followers or subordinates legitimate directions.

Behavioral Approach

•Leadership behavior studied from three points of view:

•Motivation: It can be either positive or negative. In positive behavior the leaders emphasis on
rewards to motivate the subordinates. In positive behavior the leaders emphasis on penalties and
punishment.

•Authority: leadership style can be autocratic, democratic or free rein.

•Supervision: leadership style can be either employee oriented or production oriented. Employee
oriented is one who cares more for the welfare of his subordinates than for production. Production
oriented is one who cares more for production than welfare of his subordinates.

•Authority: leadership style can be autocratic, democratic or free rein.

1.Autocratic leadership: the leader alone determines policies and makes plan. He tells others what
to do and how to do it.An autocratic leader is one who dominates and drives his subordinates
through coercion, command and the instilling of fear in his followers. An autocratic leader alone
determines policies, plans and makes decisions. He demands strict obedience. Such leaders love
power and love to use it for promoting their own ends. They never like to delegate their power for
they fear that they may loose their authority.
•The merits of this type of leadership is that, it can increase efficiency, save time, and get quick
results under emergency conditions, chain of command and division of work are clear.
The demerits are people are treated machine-like cogs without human dignity, one way
communication without feedback and the leader receives little or no input from his sub-ordinates for
his decision-making which is dangerous in the current dynamic environment.

2.Democratic leadership: the leader thinks “with” rather than “for” his people. The entire group is
involved in and accepts responsibility for goal setting and achievement.This style of leadership is
also known as participative leadership. As the name itself indicates, in this style, the entire group is
involved in goal setting and achieving it. A democratic leader follows the majority opinion as
expressed by his group. Subordinates have considerable freedom of action. The leader shows
greater concern for his people’s interest, is friendly and helpful to them. He is always ready to
defend their subordinates individually and collectively. This type of leadership encourages people to
develop and grow, receives information and ideas from his subordinates to make decisions, and
boosts the morale of employees. The demerits of this type of leadership are (1) Some leaders may

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use this style as a way of avoiding responsibility, (2) Can take enormous amount of time for making
decisions.The leader shows great concern for his people than for high production. He serves more
as coordinator for the group.

3. Free rein: the leader exercises absolutely no control. He only provides information, materials
and facilities to his men to enable them to accomplish group objectives. In this type of leadership,
the leaders exercise absolutely no control. He only provides information, materials and facilities to
his subordinates. This type of leadership is employee centered and the subordinates are free to
establish their own goals and chart out the course of action. This type of leadership can be disaster
if the leader does not know well the competence and integrity of his people and their ability to
handle this kind of freedom.
•1. The leader “tells” subordinates what his decision is.
•2. The leader “sells” his decision.
•3. The leader invites questions from subordinates
•4. The leader presents only a tentative decision subject to change.
•5. The leader presents only problems invites solutions & then make his decision.
•6. The leader presents the problems & let the group make decision.
•7. The leader permits the group make decision within limits.

The ohio state university model

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•In Fig “initiating structure” refers to the leader’s behavior in structuring the job of the follower and
establishing well defined patterns of organization and communication.

•Consideration is the leaders behavior showing mutual trust, respect and friendship.

Coordination

Coordination is the orderly arrangement of individual or group efforts to ensure unity of action in
the realization of common goals.

•Types of Coordination :-

•Coordination may be variously classified as internal or external, vertical or horizontal and

procedural or substantive

•Internal coordination : Coordination among the employees of the same department, among
workers and managers at different levels, among branch offices, plants, departments and sections.

•External coordination : coordination with outside the organization.(Example customers ,

suppliers etc.)

a)Vertical coordination-coordination between department head and his subordinates.

b)Horizontal coordination-coordination between co-workers or supervisors etc.

•Procedural: specification of the organisation. It establishes lines of authority of organization.

•Substantive: content of the organisation’s activity.

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Techniques of coordination

a. Employing only basic coordinating techniques

b. Increasing Coordination Potential

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Controlling- Meaning

Need for control system

•A control system is needed for four purposes:

1. Measuring Progress

2. Uncovering deviations

3. Indicating corrective actions

4. Transmitting corrective action to the operation

Measuring Progress

•The control process continually measures progress towards goals.

•It functions as navitor.

Uncovering deviations

•Major events which tend to pull an organization “off target” are as follows:

•Change: It is an integral part of any organization’s environment. The control function enables
manager to detect changes. They can move to cope with the threats or opportunities that these
changes represent.

•Complexity: Today’s vast and complex organizations with geographically separated plants and
decentralized operations make control a necessity. Diversified product lines need to be watched
closely to ensure that quality and profitability are being maintained.

•Mistakes: Managers and their subordinates often commit mistakes. Eg: wrong pricing decisions are

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made, etc.. A control system enables managers to catch these mistakes before they become serious.

•Delegation: When managers delegate authority to subordinates, their responsibility to their own
superiors is not reduced. The only way managers can determine if their subordinates are
accomplishing the tasks that have been delegated to them is by implementing a system of control.

3. Indicating corrective actions

•Controls are needed to indicate corrective actions.

•Eg: plans need to be redrawn/goals need to be modified, there is need for reassignment or
clarification of duties or for additional staffing.

4. Transmitting corrective action to the operation

•Controls are needed to transmit corrective actions to the operation while it is progressing so that
the transformation subsystem modifies its inputs or its production plan to reduce any discrepancy or
error and keeps the output “on course”.

•The thermostat is a classic example of this operating principle.

•The transformation subsystem is a closed loop as shown in fig. below

Benefits of control

•A well developed control system

•Increases productivity

•Reduces defects and mistakes

•Helps meet deadlines

•Facilitates communication

•Improves safety

•Lowers cost

•Gives the workers control over their environment

Essentials of effective control system

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•Suitable: The control system should be appropriate to the nature and needs of the activity. Every
concern should evolve such a control system as would serve its specific needs.

•Timely and forward looking: Although an ideal control system should be able to detect deviations
before they occur, the same is not possible in personnel and marketing controls which always
include a time lag between the deviations and corrective action. In any case the feedback system
should be as short and quick as possible &the information should reach the superior before it is too
late to head off failures.

•Objective and comprehensible: The control system should be both objective and understandable.
Objective controls specify the expected results in clear and definite terms and leave little room for
argument by the employees.

•Flexible: The control system should be flexible so that it can be adjusted to suit the needs of any
change in the basic nature of the inputs and the sizes, varieties of the same product or service. One
way of introducing flexibility into a control system is to make the adjustments automatic. The basis
for shifting the control standard is built right into the system.

• Economical: the benefit derived from a control system should be more than the cost involved in
implementing it.

•Prescriptive and operational: control system must disclose where failures are occurring, who is
responsible for them, and what should be done about them. It must focus more on action than on
information.

•Acceptable to organization members: the system should be acceptable to organization members.

•Reveal Exceptions at Strategic Points: the system should be such as to Reveal Exceptions at
Strategic Points. Small exceptions in certain areas have greater significance than larger deviations in
other areas. The purpose of strategic points is principally to direct attention rather than to evaluate.

Guidelines in picking these strategic points:

•Able to catch important deviations quickly

•Practical & economic

•Provide controls over large blocks or activities

•Helpful in advancing knowledge

•Motivate people to high performance: A control system is most effective when it motivates
people to high performance.

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•Should not lead to less attention to other aspects: eg: if controls put pressure on employees to
increase output, the quality of work, care of equipment and prevention of waste should not be
neglected.

•Should be periodically reviewed and evaluated

Steps in contol process

1. Establishing Standards

•The task of fixing goals and standards takes place while planning but it plays a big role in
controlling also. This is because the main aim of controlling is to direct a business’s actions towards
its goals. If the members of an organization know their goals clearly, they will invest their entire
focus in achieving them.

•It is very important for managers to communicate their organization’s goals, standards
and objectives as clearly as possible. There must never be ambiguities amongst employees in this
regard. If everybody works towards common goals, it becomes easier for an organization to
flourish.

•The goals that managers have to set and work towards may be either tangible/specific or
intangible/abstract. Tangible goals are those which are easy to quantify in numerical terms. For
example, achievement of sales worth Rs. 100 crores within one year is a tangible goal.

•On the other hand, intangible goals are those which are not quantifiable numerically. For example,
a company may aim to win some prestigious award for its corporate social responsibility activities.

2. Measuring and comparing actual results against standards

•Once managers know what their goals are, they should next measure their actual performance and
compare. This step basically helps them in knowing whether their plans are working as intended.

•After implementing a plan, managers have to constantly monitor and evaluate them. They must
always be ready to take corrective measures if things are not working properly. In order to do this,
they should keep comparing their actual performance with their ultimate goals.

•Apart from taking corrective action, this step of process control also helps managers in predicting
future problems. This way they can take measures immediately and save their business from losses.

•In order to compare their actual performance, managers first have to measure it. They can do so by
measuring results in monetary terms, seeking customer feedback, appointing financial experts, etc.
This can often become difficult if managers want to measure intangible standards like industrial
relations, market reputation, etc.

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3. Taking corrective actions

•In case there are discrepancies between actual performances and goals, managers need to take
corrective actions immediately. Timely corrective actions can reduce losses as well as prevent them
from arising in the future again.

•Sometimes, business organizations formulate default corrective actions in the form of policies.
This, however, can be difficult to do when it comes to complicated problems.

•In such cases, managers need to first quantify the defect and prepare a course of action to remedy
it. Sometimes, they may have to take extraordinary measures for unpredictable problems.

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