EKLAVYA ACADEMY

COMMERCE & MANAGEMENT

BUSINESS MANAGEMEN

By,
Mrs. Abhilasha.N
Mcom, MPhil, NET-JRF,SET, (Ph.D. in commerce),
Contact No: 9620925899
 MOTIVATION

The term ‘motivation’ has been derived from the word ‘motive’. Motive may be defined as an
inner state of our mind that activates and directs our behaviour. It makes us move to act. Motivation is
something that movesthe person to action and continues him in the course of actionalready initiated.

According to S.P.Robbins,”Motivation is the willingness to exert high levels of effort towards

organizational goals,conditioned by the effort and ability to satisfy someindividual need”.
The relationship between the organization and its members is influenced by what motivates
them to work and the reward and fulfilment they derive from it. The manager needs to know how best to
elicit the co-operation of staff and direct their performance to achieving the goals and objectives of the
organization.

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 MOTIVATION

Motivation is a psychic force that drives an individual towards goal realizations.

• Rensis Likert has called motivation as the core of the management.
• Motivation derived from Latin word Movere which means to move.
• Need = physiological + psychological
• If the individual has high intensity for the achieving the goal then his level of motivation is alsohigh.
• Motivation- A goal directedbehavior.
• Motivation related to satisfactions.
• Satisfactions refer to the contentment experiences of an individual which he derives out of need fulfillment.
• Persons motivated in totality not in part.
•Nature of motivation – based on motives, affected by motivating, goal directed behavior, related to
satisfaction, person motivated in totality, complex process.

• Need is a natural and biological phenomenon in an individual. EKLAVYA- 9620925899

 TYPESOFMOTIVATION
There are mainly two typesof motivations suchas
• Extrinsic Motivation
• Intrinsic Motivation
Extrinsic Motivation is geared toward external rewards and rein forcer's. Some examples of external
rewards are money, praise, awards, etc. Some examples of external rein forcer's are policy and
procedures, disciplinary action, speeding tickets, boundary-setting, etc. Extrinsic motivation is
external in nature. The most well-known and the most debated motivation is money. Below are
some other examples: Employee of the month award, Benefit package, Bonuses,Organizedactivities

Intrinsic Motivation is geared toward internal rewards and rein forcer's. People may work at a job
because it gives them feelings of competence and a sense of personal control doing the job is fun,
the work is matter of pride, the tasks are challenging, and so on. Our deep-rooted desires have the
highest motivational power. Below are someexamples:Curiostiy,independence,honour,power etc
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 THEORIES OF MOTIVATION
CONTENT BASED
“Identify internal factors influencing
motivation or it answers to what
motivates an individual”
Maslow’s need hierarchy theory
Alderfer’s ERG
Mc Celland’s need theory
Herzberg’s motivation
X and Y theory
PROCESS BASED
“Identify process by which internal
factors and cognitions influences on
motivation or The process theories deal
with “How” the motivation occurs”
Adam’s Equity theory
Vroom’s expectancy theory
Goal sitting theory
Adam’s Equity Theory
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1.MASLOW– HIERARCHYOFNEEDS:

Maslow's hierarchy of needs is a theory in psychology proposed by Abraham Maslow in his

1943 paper "A Theory of Human Motivation" in psychological Review. Maslow subsequently
extended the idea to include his observations of humans' innatecuriosity.
Human behavior is goal-directed. Motivation cause goal-directed behaviour. It is through
motivation that needs can be handled and tackled purposely. This can be understood by
understanding the hierarchy of needs by manager. The needs of individual serves as a driving force
in human behaviour. Therefore, a manager must understand the “hierarchy of needs”. Maslow
hasproposed “The NeedHierarchy Model”.

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2.Herzberg’s Motivation-Hygiene Theory:
Its given by Fredrick Herzberg and his associates, who studied the variables that are perceived to
be desirable to achieve goals and the undesirable conditions to avoid. In this context, the study
was conducted wherein the experiences and feelings of 200 engineers and accountants were
analyzed. It is also calledTWO FACTORTHEORY.

HYGIENE FACTOR MOTIVATING FACTOR

“These factors essential for existence of
motivation at workplace, if these factors non-
existent at workplace, then they lead to
dissatisfactions”
Salary
Company policy
Physical working conditions
Job security
Quality of supervision & relationship with others
“Increase in these factors will satisfy employees
and helps to improve performance. But decrease
in these factors will not cause dissatisfactions”
Promotion
Opportunity for personal growth
Recognition
Achievement
Be role model to others
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 3.McClelland’s Needs Theory:
McClelland’s Needs Theory was proposedby a psychologist David McClelland, who believed
that the specific needs of the individual are acquired over a period of time and gets molded
with one’s experience of the life. McClelland’s Needs Theory is sometimes referred to asThree
Needtheory or LearnedNeedsTheory.
• Need for Power (n-pow): What is Power? Power is the ability to induce or influence the behavior of
others. The people with high power needs seek high-level positions in the organization, so as to exercise
influence and control over others. Generally, they are outspoken, forceful, demanding, practical/realistic-
not sentimental, andlike to get involved in theconversations.
• Need for Affiliation (n-affil): People with high need for affiliation derives pleasure from being loved by
all and tend to avoid the pain of being rejected. Since, the human beings are social animals, they like to
interact and be with others where they feel, people accept them. Thus, people with these needs like to
maintain the pleasant social relationships, enjoy the sense of intimacy and like to help and console others
at the time oftrouble.
• Need for Achievement (n-ach): McClelland found that some people have an intense desire to achieve. He has
identified the following characteristics of high achievers: Intense desire for success and fear of failureand
takes difficult goals & takes realistic approach to risk. EKLAVYA- 9620925899
 4.ALDERFER’S ERGTHEORY:

Clayton Paul Alderfer’s ERG Theory is theextension

of Maslow’s Needs Hierarchy, wherein the Maslow’s five needs are
categorized into three categories, Viz. Existence Needs, Relatedness Needs, and
Growth Needs.
• ExistenceNeeds:The existence needs comprises of all those needs that relate
to the physiological and safety aspects of human beings and are a
prerequisite for the survival. Thus, both the physiological and safety
needs of Maslow are grouped into one category because of their same
nature and asimilar impact on the behavior of anindividual.
• Relatedness Needs: The relatedness needs refer to the social needs, that an
individual seeks to establish relationships with those for whom he cares.
These needs cover the Maslow’s social needs and a part of esteem needs,
derived from the relationship with otherpeople.
• Growth Needs:The growth needs cover Maslow’s self-actualization
needs as well as a part of esteem needs which are internal to the
individual, such asa feeling of being11unique, personnel growth,etc.
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 X & Y THEORY
“ In 1957,Douglas Mc Geoger introduces X & Y theory”

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 ProcessTheories:
1.VROOM’SEXPECTANCYTHEORY:
Vroom’s Expectancy Theory was proposed by Victor. H. Vroom, who believed that people are
motivated to perform activities to achieve some goal to the extent they expect that certain actions on their
part would help them to achieve the goal. Also, called VIE theory (Valence, Instrumentality and
Expectancy).
MOTIVATION = VALENCE * INSTRUMENTALITY*EXPENTANCY
• Expectancy – aperson’s belief that more effort will result in success. If you work harder, it will result in
better performance.
• Instrumentality– the person’s belief that there is a connection between activity and goal. If you
perform well, you will get reward.
• Valence– the degreeto which aperson valuesthe reward, the results of success.

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2.ADAM’SEQUITYTHEORY:
The Adam’s Equity Theory posits that people maintain a fair relationship between the
performance and rewards in comparison to others. In other words, an employee gets de-motivated by the job
and his employer in

case his inputs are more than the outputs. The Adam’s Equity Theory was
proposed by John StaceyAdams, and is based on the following assumptions: Individuals make contributions
(inputs) for which they get certain rewards.
• Overpaid = Outcome > input (Guilt feeling)
• Underpaid = Outcome < input (dissatisfaction)
• Equity = Outcome = Input (Satisfaction)

“EQUALPAYFOR EQUAL WORK”

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3.GOALSETTINGTHEORY:

In 1960’s, Edwin Locke put forward the Goal-setting theory of motivation. This
theory states that goal setting is essentially linked to task performance. It states that specific and
challenging goals along with appropriate feedback contribute to higher and better task
performance. The important featuresofgoal-settingtheoryare asfollows:

The willingness to work towards attainment of goal is main source of job

motivation. Clear, particular and difficult goals are greater motivating factors than easy, general
and vaguegoals.In simple,intentionto work towardsa goalis main sourcesof work motivation.

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4.REINFORCEMENT THEORY:
This theory is basedon the conceptsof operand conditioning developedby B.F.Skinner. It argues
that the behavior of people is largely determined by its consequence.In other words, thoseactions that tend to have
positive or pleasant consequencestend to berepeated more often in future, while those actions that tend to have
repeated negative or unpleasant consequencesare lesslikely to berepeated again.
The reinforcement theory suggeststhat managers should try to structure the contingencies of
rewards and punishments on the job in such away that the consequencesof effective job behavior are positive while
the consequences of ineffective work behavior are negative or unpleasant. The focus of this approach is upon
changing or modifying the behavior of people on the job. that is why it is alsoregarded asorganizational behavior
modification.
1. PositiveReinforcement:Amethod of strengthening behavior with rewards or positive outcomes afteradesired
behavior is performed.
2. Avoidance / Negative reinforcement: Used to strengthen behavior by avoiding unpleasant consequences that
would result if the behavior was not performed.
3. Punishment:Usedto weaken undesired behaviors by using negative outcomes or unpleasant consequencewhen
the behavior is performed.
4. Extinction: Used to weaken undesired17behaviors by simply ignoring or not reinforcing that behavior.
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 LEADERSHIP
“Ability of a manager to induce the subordinates to work with confidence and
zeal”
TYPES OF LEADERSHIP :

1. Transformational Leader: (Higher level – Top line growth)

- Given by James Burns (1978)
- It is the abilities that allow the leader to recognize the change to create
the vision to guide that change.

2. Transactional Leader: (Lower level – Bottom line growth)

- By Adams
- It involves routines work EKLAVYA- 9620925899
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LEADERSHIP STYLE
1. Authoritarian or autocratic :The autocratic style of leadership is also known as authoritative
style or directive style of leadership, in which the autocratic leader retains most of the authority for
himself/herself. An autocratic leader gives orders to his/her subordinates and expects that
subordinates should give complete obedience to the orders issued. In this type, the decisions are
taken by the leader without consulting others.
2. Participative or democratic: This style of leadership is also known as participative style of
leadership. In this style, the subordinates are also involved in decision making. The democratic style
of leadership can be further categorized into three types: Consensus: A consensus leader makes a
decision only after consulting the group members. A decision is not made final until all the members
agree with the decisions. Consultative: A consultative leader takes the opinion of the employees
before making a decision Democratic: In the democratic style, the final authority of making
decisions rests with the subordinates.
3. Delegating or Laissez faire leadership:The Laissez-Faire leadership is also known as free-
reign leadership. In this style of leadership, the decision making power is completely left with the
subordinates. The leader’s involvement in making decision is minimized and the people are allowed
to make their own decisions. The group members are given complete freedom in setting their own
goals and achieving them, which give them complete autonomy. Employees under this leader, tend
to become self-sufficient and guidance is not offered by leaders unless requested
 LEADERSHIP THEORIES
1. Great man theory: It says leaders are born and not made
2. Trait theory (by Bernard) : Modification of great man theory he says leader need not
always be born, leadership qualities can be acquired. Certain identified qualities that are
unique in leaders
3. Contingency theory (RM Stogdill): There is no one best style of leading. Leadership
effectiveness varies from situation to situation.
4. LPC model (By Fiedler’s): Its refers to Lease preferred co-worker. High LPC leader
are “Relationship oriented” and low LPC leader are “Task oriented” leadership.
5. Behavioural theory: It advocates that leadership is shown by acts rather than traits.
6. Michigan theory : It has two dimension: a) Employee oriented (Relationship) b)
Production oriented (Task)
7. Path Goal theory : Its given by Robert House, it’s the communication of situational
leadership and vrooms expectancy theory of motivation.
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 MANAGERIAL GRID
“Its given by Blake and Mouton. It has two dimension a) Task concern for
production b) Relationship concern for people”
 1.9 (Country club) : High concern for
people and low concern for production (HCP
& LCP)

 9.9 (Team management) : High concern for

production and high concern for people

5.5. (Middle of the road): Middle path of


people and production.

1.1 (Impoverished) : Low concern for

 people and low concern for production

9.1 (Task): High concern for production and

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 LIKERT MANAGEMENT SYSTEM
Its given by Rensis Likert. He has identified 5 system of management:
➢ Exploitative : No trust and confidence in subordinates
➢ Benevolent : Confidence and uses rewards to encourage but decision making by
management
➢ Participative : Leader engages subordinates in decision making
➢ Consultative : Leader consults workers in decision making
➢ Democratic – Complete freedom

TRIDEMENSIONAL GRID (3D management)

It is given by Reddin. He has given 3 dimension towards leadership
a) Task
b) Relationship
c) Effectiveness EKLAVYA- 9620925899
 SPAM OF MANAGEMENT
“Span of management/span of control/span of supervision”, it refers of
number of subordinates which should be put under one superior. Ideally
between 3 to 8 subordinates is good for manage.

RESPONSIBILITY
“Obligation of an individual to carry out assigned activities (mental or
physical) to the best of his or her ability. In simple, it refers to obligations to
do somethings. Some of the types of responsibilities centre:
a) Cost centre
b) Profit centre
c) Investment centre
d) Contribution centre
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 AUTHORITY (Formal right to do work)
“Power and right of a person to use and allocate the resources efficiently to
take decisions and to give orders so as to achieve organisational objectives”
Therefore, Authority is the right whereas responsibility is obligation.
Authority flows download and responsibility flows upward (bottom to top)
DELEGATION
“Process of assigning authority from a superior to his subordinates”

DECENTRALISATION
“Organisational process by which dispersal of authority take place through the
organisation. It is an end result of process of delegation. Top level manager
have overall control and operating control vests with the subordinates.
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 CORPORATE GOVERNANCE
“It is the way the companies are directed and managed”. It is conducted by
BOD and concerned committee’s for companies stakeholders benefits.

PRICIPLES OF GOOD GOVERNANCE:

• Honesty
• Transparency
• Accountability
• Fairness
• Independence
• Responsibility
• Social responsibility
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 CONTENTS OF CORPORATE GOVERNANCE
A) Composition of BOD
• SEBI has prescribed that all those companies whose share are listed on any
stock exchange must have atleast 50% independent directors
B) Disclosure of information
C) Management practices

BUSINESS ETHICS
“It refers to a code of conduct that business are expected to follow while
doing business”
Principles: a) Loyalty b) Honesty c) Integrity d) Fairness e) Leadership

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CORPORATE GOVERNANCE COMMITTEE REPORT

1. Cadbury committee Report, 1992

2. Sarbanes Oxley Act 2002
3. Kumar Mangalam Birla Committee Report, 1999
4. JJ Irani Committee Report, 2004
5. Narayan Murthy Committee Report, 2003
6. Naresh Candra Committee Report, 2002

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1. In the managerial grid, the managers who have little
or no concern for production but are concerned only for
people are known as what type of managers ?
(A) 1.1 Management
(B) 5.5 Management
(C) 9.1 Management
(D) 1.9 Management

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2. The following are the steps of management control process:
(i) Taking corrective action from standards
(ii) Establishing standards
(iii) Measuring actual performance
(iv)Comparing performance against standard Select the correct sequence of
these steps from the codes given below :

Codes:
(A) (i), (ii), (iii), (iv)
(B) (ii), (iii), (iv), (i)
(C) (iii), (iv), (i), (ii)
(D) (ii), (iv), (i), (iii)

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3. Match the items of List – I with the items of List – II and select the
correct answer :
LIST I LIST II
i. Abraham Maslow a) Achievement motivation
ii. Herzberg b) ERG theory
iii. Alderfer c) Two factor theory
iv. McClelland d) Need hierarchy theory

(A)(a) (b) (c) (d)

(B) (d) (c) (b) (a)
(C) (c) (b) (a) (d)
(D) (d) (c) (a) (b)

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4. Match the names of the Authors given below with the motivational
theories they are associated with
LIST I LIST II
1. Herzberg a) ERG Theory
2. Mc Gregor b) Three need theory
3. Alderfer c) Theory x and y
4. David McClelland d) Two factor theory

Codes:
(A) a b c d
(B) d c b a
(C) b a d c
(D) d c a b
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5. Who has modified Maslow’s Hierarchical levels of needs and developed
ERG model?
(A) Frederick Herzberg
(B) David C. McClelland
(C) Douglas McGregor
(D) Clayton Alderfer

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6. Where does recognition of an Employee fall in Maslow’s hierarchy of
needs theory ?
(A) Self-actualisation
(B) Security needs
(C) Social needs
(D) Esteem needs

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7. Which one of the following is not an example of Herzberg’s hygiene
factors ?
(A) Advancement
(B) Interpersonal relations
(C) Job security
(D) Work conditions

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8. According to which theory, people are motivated to the extent to which they
expect that their actions will help in achievement of goals?
(A) Vroom’s Vector Valence Theory
(B) Need Theory
(C) Z Theory
(D) X Theory

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9. Identify the correct sequence of steps involved in planning:
(i) Selecting the best course of action
(ii) Establishing the sequence of activities
(iii) Establishment of objectives
(iv) Evaluating alternative courses
(v)Determining alternative courses
codes:
(A) (i), (ii), (iii), (iv) and (v)
(B) (iii), (v), (iv), (ii) and (i)
(C) (v), (iv), (iii), (ii) and (i)
(D) (iii), (v), (iv), (i) and (ii)

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10. While establishing relation between Maslow’s and Herzberg’s theories,
which Needs of Hierarchy Theory will fall under the Hygiene Factors?
(A) Self actualisation, esteem and social needs
(B) Esteem, social and safety needs
(C) Social, safety and physiological needs
(D) Only social needs

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11. Who has given ‘fourteen Principles of Management’?
(A) Barnard
(B) Henry Fayol
(C) F.W. Taylor
(D) Flemming

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12. Match the following:
List-I List-II
a. An ordinary person does not want to work on his own 1. Hierarchy Theory
b. An individual is willing to work on his own 2. Hygiene Theory
c. Motivational Factors 3. X-Theory
d. Esteem Needs 4. Y-Theory

Codes:
(A) 1 2 3 4
(B) 3 4 1 2
(C) 1 4 2 3
(D) 3 4 2 1

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13. Which of the following is not a principle of management according
to Henri Fayol?
(A) Subordination of individual interest over the organizational interest
(B) Esprit de crops.
(C) Unity of Managers
(D) Unity of Direction

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14. Who propounded “Theory Z”?
(A) William Ouchi
(B) Peter F. Drucker
(C) Joseph H. Jurau
(D) Douglas McGregor

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15. According to McClelland’s Needs Theory, which of the following is
not a motivating need ?
(A) Need for Power
(B) Need for Security
(C) Need for Achievement
(D) Need for Affiliation

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