Chapter one:-Fundamentals of Management

1.1 Definition of Management

As there is no universally accepted definition for management, it is difficult to define it. But
a simple traditional definition, defines it as the "art of getting things done by others". This
definition brings in two elements namely accomplishment of objectives, and direction of
group activities towards the goal. The weakness of this definition is that firstly it uses the
word "art", whereas management is not merely an art, but it is both art and science. Secondly,
the definition does not state the various functions of a manager clearly.

A more elaborate definition given by George R. Terry, defines management as a process

"consisting of planning, organizing, actuating and controlling, performed to determine and
accomplish the objectives by the use of people and resources." Firstly it considers
management as a "process" i.e. a systematic way of doing things. Secondly it states four
management activities: Planning, organizing, actuating, and controlling. Planning is thinking
of actions in advance. Organizing is coordination of the human and material resources of an
organization. Actuating is motivation and direction of subordinates. Controlling means the
attempt to ensure no deviation from the norm or plan. Thirdly it states that manager uses
people and other resources. For example a manager who wants to increase the sales, might
try not only to increase the sales force, but also to increase advertising budget. And fourthly,
it states that management involves the act of achieving the organization's objectives..

1.2 Significance of management

This statement means that all the development that has taken place in the world is due to
efficient management. The points below bring out the significance or importance of
management.

1. Encourages Initiative:-Management encourages initiative. Initiative means to do the right

thing at the right time without being told or influenced by the superior. The employees
should be encouraged to make their own plans and also to implement these plans. Initiative
gives satisfaction to employees and success to organization.

2. Encourages Innovation:-Management also encourages innovation in the organization.

Innovation brings new ideas, new technology, new methods, new products, new services, etc.
This makes the organization more competitive and efficient.

3. Facilitates growth and expansion:-Management makes optimum utilization of available

resources. It reduces wastage and increase efficiency. It encourages team work and motivates
employees. It also reduces absenteeism and labor turnover. All this results in growth,
expansion and diversification of the organization.

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4. Improves life of workers:-Management shares some of its profits with the workers. It
provides the workers with good working environment and conditions. It also gives the
workers many financial and non-financial incentives. All this improves the quality of life of
the workers.

5. Improves corporate image:-If the management is good, then the organization will
produce good quality goods and services. This will improve the goodwill and corporate
image of the organization. A good corporate image brings many added benefits to the
organization.

6. Motivates employees:-Management motivates employees by providing financial and non-

financial incentives. These incentives increase the willingness and efficiency of the
employees. This results in boosting productivity and profitability of the organization.

7. Optimum use of resources:-Management brings together the available resources. It

makes optimum (best) use of these resources. This brings best results to the organization.

8. Reduces wastage:-Management reduces the wastage of human, material and financial

resources. Wastage is reduced by proper production planning and control. If wastage is
reduced then productivity will increase.

9. Increases efficiency:-Efficiency is the relationship between returns and cost. Management

uses many techniques to increase returns and to reduce costs. Higher efficiency brings many
benefits to the organization.

10. Improves relations:-Management improves relations between individuals, groups,

departments and between levels of management. Better relations lead to better team work.
Better team work brings success to the organization.

11. Reduces absenteeism and labor turnover:-Absenteeism means the employee is absent
without permission. Labor Turnover means the employee leaves the organization. Labor
absenteeism and turnover increases the cost and causes many problems in the smooth
functioning of the organization. Management uses different techniques to reduce absenteeism
and labor turnover in the organization.

12. Encourages Team Work:-Management encourages employees to work as a team. It

develops a team spirit in the organization.

1.3 Functions of management

According to the functions approach originated by Henri Fayol, in every organization
managers perform certain basic functions in order to achieve their results.

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The 4 basic management functions that make up the management process are described in the
following sections:

Planning: Planning involves choosing tasks that must be performed to attain organizational
goals, outlining how the tasks must be performed, and indicating when they should be
performed.

Planning activity focuses on attaining goals. Managers outline exactly what organizations
should do to be successful. Planning is concerned with the success of the organization in the
short term as well as in the long term.

Organizing:-Organizing can be thought of as assigning the tasks developed in the planning

stages, to various individuals or groups within the organization. Organizing is to create a
mechanism to put plans into action. People within the organization are given work
assignments that contribute to the company’s goals. Tasks are organized so that the output of
each individual contributes to the success of departments, which, in turn, contributes to the
success of divisions, which ultimately contributes to the success of the organization.

Influencing:-Influencing is also referred to as motivating, leading or directing. Influencing

can be defined as guiding the activities of organization members in the direction that helps
the organization move towards the fulfillment of the goals. The purpose of influencing is to
increase productivity. Human-oriented work situations usually generate higher levels of
production over the long term than do task oriented work situations because people find the
latter type distasteful.

Controlling:-Controlling is the following roles played by the manager:-Gather information

that measures performance. Compare present performance to pre established performance
norms. Determine the next action plan and modifications for meeting the desired
performance parameters. Controlling is an ongoing process.

1.4 Levels of management and types of managers

1. Top Level Management:

Top level management consists of Chairman, Board of Directors, Managing Director,

General Manager, President, Vice President, Chief Executive Officer (C.E.O.), Chief
Financial Officer (C.F.O.) and Chief Operating Officer etc. It includes group of crucial
persons essential for leading and directing the efforts of other people. The managers working
at this level have maximum authority.

Main functions of top level management are:

(a) Determining the objectives of the enterprise. The top level managers formulate the main
objectives of the organization. They form long- term as well as short- term objectives.

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(b) Framing of plans and policies. The top level managers also frame the plans and policies
to achieve the set objectives.

(c) Organizing activities to be performed by persons working at middle level. The top level
management assigns jobs to different individuals working at middle level.

(d) Assembling all the resources such as finance, fixed assets etc. The top level management
arranges all the finance required to carry on day to day activities. They buy fixed assets to
carry on activities in the organization.

(e) Responsible for welfare and survival of the organization—Top level is responsible for the
survival and growth of the organization. They make plan to run the organization smoothly
and successfully.

(f) Liaison with outside world, for example, meeting Government officials etc. The top level
management remains in contact with government, competitors, suppliers, media etc. Jobs of
top level are complex and stressful demanding long hours of commitment towards
organization.

(g) Welfare and survival of the organization.

2. Middle Level Management:-This level of management consists of departmental heads

such as purchase department head, sales department head, finance manager, marketing
manager, executive officer, plant superintendent, etc. People of this group are responsible for
executing the plans and policies made by top level.

They act as a linking pin between top and lower level management. They also exercise the
functions of top level for their department as they make plans and policies for their
department, organize and collect the resources etc.

Main functions of middle level management are

(a) Interpretation of policies framed by top management to lower level. Middle level
management act as linking pin between top level and lower level management. They only
explain the main plans and policies framed by top level management to lower level.

(b) Organizing the activities of their department for executing the plans and policies.
Generally middle level managers are the head of some department. So they organize all the
resources and activities of their department.

(c) Finding out or recruiting/selecting and appointing the required employees for their
department. The middle level management selects and appoints employees of their
department.

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(d) Motivating the persons to perform to their best ability. The middle level managers offer
various incentives to employees so that they get motivated and perform to their best ability.

(e) Controlling and instructing the employees, preparing their performance reports etc. The
middle level managers keep a watch on the activities of low level managers. They prepare
their performance appraisal reports.

(f) Cooperate with other departments for smooth functioning.

(g) Implementing the plans framed by top level.

3. Supervisory Level/Operational Level:-This level consists of supervisors, superintendent,

foreman, sub-department executives; clerk, etc. Managers of this group actually carry on the
work or perform the activities according to the plans of top and middle level management.

Their authority is limited. The quality and quantity of output depends upon the efficiency of
this level of managers. They pass on the instruction to workers and report to the middle level
management. They are also responsible for maintaining discipline among the workers.

Functions of lower level management are:

(a) Representing the problems or grievances of workers before the middle level management.
The supervisory level managers are directly linked with subordinates so they are the right
persons to understand the problems and grievances of subordinates. They pass these
problems to middle level management.

(b) Maintaining good working conditions and developing healthy relations between superior
and subordinate. The supervisory managers provide good working conditions and create
supportive work environment which improve relations between supervisors and subordinates.

(c) Looking to safety of workers. Supervisory level managers provide safe and secure work
environment for workers.

(d) Helping the middle level management in recruiting, selecting and appointing the workers.
The supervisory level managers guide and help the middle level managers when they select
and appoint employees.

(e) Communicating with workers and welcoming of their suggestions. The supervisory level
managers encourage the workers to take initiative. They welcome their suggestions and
reward them for good suggestions.

(f) They try to maintain precise standard of quality and ensure steady flow of output. The
supervisory level managers make sure that quality standards are maintained by the workers.

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(g) They are responsible for boosting the morale of the workers and developing the team
spirit in them. They motivate ‘the employees and boost their morale.

(h) Minimizing the wastage of materials.

1.5 Managerial roles and skills

Managerial roles are the set of activities that are to be done by the manager in which how a
manager maintains relation with subordinate and outsider. It is the specific categories of
managerial behavior. Henry Mintzberg criticized the traditional functional approach and

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made a research. He found that the manager serves 10 different which are related to each
other and are categorized into three groups. Managerial roles were divided into three types
as:

1. The interpersonal role: - is concerned with maintaining formal and informal relation with
employees and with the public at large. This role relates manager’s contact and dealings with
other people. This role of the manager is related to the dealing and contact of manager with
other people. Interpersonal role include:

a. Figurehead:-The manager plays this role when they perform their duty in ceremonies and
other social functions. This includes greeting guest, attending functions, etc. This role is
symbolic in nature and ceremonial.

b.Leader:-The manager plays this role when they perform an official function. Leadership
role includes directing, motivating, leading and controlling. This role helps to maintain
discipline and efficiency among staff. This role helps manager to direct the task as per the
organizational goal.

c.Liaison:-The manager plays this role when they work as connecting link between
organization and outsider. This role helps to maintain social and business relation with the
outsider. By performing this role manager play as the bridge between a unit of organization
and outside world.

2. Informational role:-is necessary for every organization. Informational role of manager

consists of receiving, collecting, and circulating non routine information. These roles help the
manager to use necessary information for decision making. This role establishes the manager
as the center point of collecting the information. This role involves:

a. Monitor:-These roles involve receiving information about the internal and external
environment. Manager examines the environment to collect the information about changes,
opportunity, and problem. Manager appoints other skilled manpower to examine the
environment.

b.Disseminator:-These roles involve transmitting relevant information to the members of the

organization. The information can be about internal operations and external environment.

c.Spokesperson:- This role of a manager involves the formally relaying the information to
people outside the organization. The manager explains the viewpoint of enterprises on
significant matters or quires of the people.

3. Decisional role:-is concerned with choosing the best solution of a problem from among
many alternatives. This role of manager helps manager to solve the organizational problem.
It involves:

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a. Entrepreneur:-This role involves initiating a change in working approach in the
organization. An entrepreneur takes the risk for betterment by developing new ideas and
strategic model for implementation.

b.Negotiator:-A manager plays this role to bargain with other unit and individual to obtain
advantages. Negotiation may concern work performance, objectives, resources or other units.

D.Resource allocator:-The manager plays this role to allocate proper resource to the proper
department at the right time. Resources may include money, people, time, equipment. The
manager decides which subordinate required what kind of resource and time required to do
any task.

E.Disturbance handler:-This role involves taking corrective measure when there occurs any
disturbance in normal operation of the organization. Unexpected disturbances may be a
strike, the feud between subordinate. The manager has to solve the problems tactfully.

Managerial Skills:-Skills are ability to perform a particular task in the effective and efficient
way. Managerial success primarily depends on the skill and performance of the manager.
Manager with proper managerial skills performs the task successfully but without good
managerial skill, their performance will be below the expectation. There are major three
skills needed by a manager as:

Technical skills:-is the ability to use equipment or procedure of specific work in an efficient
and effective way. Technical skills are mainly required by lower level management as they
need to work with the different instrument while performing daily activities. This skill
consists of specialized knowledge and ability to perform within the specialty.

Human skills:-is the ability of the manager to work with a subordinate. Manager with good
human skill can understand and motivate subordinate to get work done by them. Human
skills are equally important to all level of management as this skill help them to motivate,
communicate, inspire, lead and trust subordinate.

Conceptual skills:-Conceptual skills are the ability to analyze and diagnose complex
situation or problem in the organization. Conceptual skills are the mental ability that is
mostly required by top level management. Conceptual skills help manager to conceptualize
the environment, to analyze the forces working in a situation and take board overview of the
organization.

To become a good manager a person need to different skills. Manager faces lots of
challenges and complexities. So a manager needs to learn different skills to prove himself as
a successful manager. The manager can acquire required skills through means of education,
experience and situation.

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Roles of education:-Education is the foundation for managerial skill. Education provides
theoretical knowledge to the manager. Education develops learning habit in a person. An
educated person follows a well-developed program of study and becomes familiar with the
business environment through research and thinking.

Roles of experience:-A person cannot be successful manager only with good education only;
he needs to work efficiently in the organization. Managerial skills can be enhanced through
experience because they get familiarized with day to day pressure situation and challenges.
Experiences provide manager a good practical knowledge.

Roles of situation:-A manager learns a different kind of skills through the variety of
management situation. A way to solve a problem today may not be effective tomorrow. So
different situation helps a manager to learn a different technique for solving the problem at a
different situation. The manager should learn the uniqueness and complexity of any situation.

1.6. Universality of management

There has been and still is considerable controversy about the universality of management
process and functions. The area of management has a worldwide command and acceptability.
Scholars have different views about whether management knowledge is applicable
everywhere or not. If are the management knowledge has universal approach then it can be
communicated through persons going from one country to another, persons from developing
countries going to developed countries and going back after learning management principles
or by organizing management development program in developing countries

Some scholars discourse that management principles and processes have universal
application. They feel that managerial principles can be applied in all types of business
organizations and in every country. There are different views of management thinkers about
universality of management. Authors like Henry Fayol, Taylor, James Lundy, Louis Allen,
Dalton F. Mc Farland and Koontz and O’ Donnell are of the view that management has
universal application. But there are others who do not subscribe to the view of universality of
management. They include Joan Woodward, Ernest Dale, Peter Drucker, and W. Oberg.

Arguments for Universality:-The supporters of this view say that basis of management is
the same and can be found in all types of organizations situated in any country.

These scholars give the following arguments:

1. Management Process is Universal:-The fundamental functions of management like

planning, organizing, staffing, leading and controlling are basic and are performed by every
manager in all organizations. The management process is similar among managers. In the
words of Fayol, “There is a universal science of management applicable alike to commerce,
industry, politics, religion, war or charity.

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2. Management Knowledge is Universal:

(i) Management is Culture-Bound:-It is argued that different countries have different

cultures and varying levels of economic development. Culture consists of attitudes, beliefs
and values of a society. There are differences in personality traits and educational, social,
political and economic standards are also different. Since management is people oriented
there is always a possibility that application of management principles will be affected by
these factors. When the ground rules under which a manager operates are different in
different cultures then common strategies of management will not be possible.

(ii) Different Objectives:-The objectives of an enterprise determine the type of management

required. Different enterprises have different objectives so these managerial needs are linked
to these objectives. According to Peter Drucker, the skills, the competence, and the
experience of management cannot as such be transferred and applied to every type of
institution. Only analytical and administrative types of skills and abilities can be transferred.
Thus, management principles cannot be applied universally.

(iii) Differences in Philosophies:-There are differences in philosophies of different

organizations. Philosophies refer to those general concepts and integrated attitudes that are
basic to an enterprise. Managers operate with a specific philosophy in a particular enterprise.
This philosophy can be different even in same type of enterprises. These philosophies require
different kinds of managerial techniques. Earnest Dale says, “No individual could be a good
manager in religious, academic, military and business institutions of both communist and
democratic countries, because the philosophies that underlie each, are very different and one
person could not encompass so much. “Philosophies exert different influences on managerial
working there cannot be any principles which can have universal application. Common laws,
principles and concepts tend to be true in all managerial problems. Management principles
can be applied in all types of organized human endeavors. In the words of F.W. Taylor, “The
fundamental principles of scientific management are applicable to all kinds of human
activities from our simplest individual acts to the work of our great corporations.”

Some people do not distinguish between management fundamentals and techniques. They
oppose universality of management on the basis of techniques of management. Management
techniques are the tools for performing managerial functions. Management techniques can
differ from person to person, organization to organization or from country to country but
basic principles and theories remain the same.

3. Management Skills and Principles are Transferable:-Management skills and principles

are transferable from one person to another, from one organization to another, from one
country to another. When skills and principles can be transferred then it has universal
applicability. Managers can be developed through education and training. This knowledge

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can be acquired by any one and anywhere so it is not related to particular caste, creed or
country. All this is possible only if management is universal in nature.

Arguments against Universality:-Some experts feel that management principles and

knowledge do not have universal application due to cross- cultural differences. They are also
of the view that same management skills cannot be applied in all situations and fields and the
skills are not transferable.

Following arguments are given to show that management does not have universal
application:

1. Difference in Objectives:-Peter Drucker is of the view that, “the skill, the competence, the
experience of management cannot, as such be transferred and applied to the organization and
running of other institutions. A career in management is, by itself, not a preparation for major
political office or for leadership in armed forces, the church or a university.” There is a
difference in objectives of the organizations. Business organizations exist to maximize
profitability whereas social organizations like clubs, educational institutions have social
service as the objective. Different organizations with separate objectives will have to be
managed differently.

2. Difference in Philosophies:-There is a feeling that same person may not prove to be a

good administrator in different organizations. The management of a business enterprise, a
church, a hospital, a military academy may riot be the same because of their different
philosophies. Even in the same category, the philosophy of enterprises may be different. One
enterprise may aim to go for quick profits while the other may aim at long-term returns. The
philosophies will exert different influences on productivity, organization structure, pattern of
communication, delegation of authority etc.

3. Difference in Culture:-Some authors are of the opinion that cultural backgrounds of

managers do have an influence on their working. Gonzale and Mc Millan concluded in their
study that ‘management philosophy is culture- bound.’ They were also of the opinion that
external environmental forces affect the management philosophy. W. Oberg also came to the
conclusion that the applicability of management principles is limited to a particular culture.

The managers from traditional, religious and cultural bias societies will not have that
scientific temperament which the managers from liberal social background may have. The
differences in cultural backgrounds also limit the universality of management.

A Critical analysis of the above arguments brings out that every type of organization requires
management. Managerial functions like planning, organizing, staffing and controlling are to
be performed in all types of organizations. The objectives of enterprises may differ but the
type of situations to be dealt with by them are the same? Managers shift from one enterprise
to another because they have general managerial skills and principles of management work

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are similar. It is obvious that principles, concepts and skills are universal, only practices
change. It can be concluded that basic principles and functions of management are universal
in nature. These can be applied in every type of organization and in every country.

1.7 Is Management an Art science or a professional?

Management: Art or science?-Management involves characteristics of both art and science.
While certain aspects of management make it a science, certain others which involve
application of skills make it an art. Every discipline of art is always backed by science which
is basic knowledge of that art. Similarly, every discipline of science is complete only when it
is used in practice for solving various kinds of problems. Whereas under "science" one
normally learns the "why" of a phenomenon, under "art" one learns the "how" of it. In the
words of Robert H. Hilkert: "In the area of management, science and art are two sides of the
same coin". In the beginning of development of management knowledge, it was considered
as an art. There was a jungle of management knowledge. Any one used it to get things done
in his own way. But later by codifying and systemizing the management, it became a science
as well as being an art.

Management as an Art:-Management can be an art in the sense that it has the following
characteristics: Just like other arts it has to be practiced and performed. The knowledge
should be learned and practiced, just as medical or legal practitioners practice their respective
sciences. The manager gains experience by continual application of management knowledge
and facing new experiences. This helps to develop more skills and abilities for translating
knowledge into practice.

Application calls for innovativeness and creativity:-The fourth reason is that in many
situations, theoretical knowledge of management may not be adequate or relevant for solving
the problem. It may be because of complexity or unique nature of the problem.

The art is in knowing how to accomplish the desired results. This implies that there exists a
body of knowledge which management uses to accomplish the desired results in organization

Management as a Science:-Management as a science has the following characteristics: Its

principles, generalizations and concepts are systematic. In this case the manager can manage
the situation or organization in a systematic and scientific manner.

Its principles, generalizations and concepts are formulated on the basis of observation,
research, analysis and experimentation, as is the case with the principles of other sciences.
Like other sciences, management principles are also based on relationship of cause and
effect. It states that same cause under similar circumstance will produce same effect. Suppose
if workers are paid more (cause), the produce more (effect).

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Management principles are codified and systematic, and can be transferred from one to
another and can be taught. Management principles are universally applicable to all types of
organizations.

There is no tailor - made answer to a question- Is management a science or art? To ascertain

the nature of management with respect of science or art, there is a need to know the exact
meaning of the words 'science' or 'art' and subsequently, their application to management.

Management: A profession:-The following criterion identifies the statues of a profession to

management:-Profession is a body of specialized knowledge. Professional knowledge in
systemized and codified form can be learned through formal education system. A profession
emphasizes on having a central body to formulate a code of behavior for its members.

A profession calls for rendering competent and specialized services to clients.

A profession maintains the scientific attitude and commitment for discovering new ideas and
upgrading in order to improve quality of service and level of efficiency provided to clients.

A profession requires members to exercise restraint and self-discipline.

Management knowledge meets the first two criteria because it has grown into a systematic
body of knowledge and also it can be acquired and learned through the formal education.

There is no minimum qualification prescribed either for getting entry in the management
profession or for becoming members of it. In practice, whosoever manages in known as
manager, irrespective of qualifications? Peter Drucker in support of this view says that "no
greater damage could be done to our economy or to our society than to attempt to
professionalize management by licensing managers, for instance, or by limiting access to
management to people with a special academic degree."

Regarding professional approach, a manager has to continuously strive for discovering new
ideas, relationships and concepts and act in a dynamic and innovative manner to cope with
the changing environment. Even so, managers are not respected as other professionals like
doctors, advocates and chartered accountants.

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 Chapter two: -The planning functions
2.1 Concepts and Needs for Planning
Many people. Agree that “planning is a thinking process, an organized foresight and vision
based on fact and experience that requires an intelligent action.

Planning is the most fundamental function of management. An organization can succeed

in effective utilization of its human, financial and material resources only when its
management decides in advance its objectives, and methods of achieving them. Without its
purposive and coordinate effort is not possible and what result is chaos, confusion and
wastage of resources.

Planning involves determination of objectives of the business, formulation of program

and courses of action for their attainment, development of schedules and timings action
and assignment responsibilities for their implementation.

Planning is deciding in advance the objectives of the organization in the short as well as
long- run, and the means for attaining them.

It is an attempt to determine what should happen and then to take steps that will make it
likely to happen … it includes … setting of objectives and goals and formulation and
selection of alternative strategies and courses of action forecast the goals and objectives.

The elements of planning are:

1. What will be done? What are the objectives of business in the short and in the long- run?

2. What resources will be required? This involved estimation of the available and potential
resources, estimation of resources required for the achievements of objectives, and filling the
gap between the two.

3. How it will be done?- this involves two things:

I. Determination of tasks, activities, projects, programs etc required for attainment of

objectives and;

Ii.Formulation of strategies, policies, procedures, methods, standards and budgets etc for the
above purpose.

4. Who will do it? – It involves assignment of responsibilities to various managers relating to

contributions they are expected to make for the attainment of enterprise objectives.

This is preceded by the breaking down of the total enterprises objectives into segmental
objectives, resulting into divisional, departmental, sectional and individuals objectives.

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5.When it will be done? - It involves determination of the timing and sequences, if any for
the performance of various activities and execution of various projects and their parts.

2.2 Types of planning

Plans can be classified on the bases of different factors:
factors:
2.2.1 Plans Based on Formality/Status
a) Informal Plans - are unwritten plans which are made in the daily life of individuals.
b) Formal Plans - are written, documented plans developed through an identifiable
process.
process.
2.2.2 Plans Based on Scope/Breadth Dimension.
These types of plans refer to the level of management; i.e. they are related to the hierarchy of
plans at the three levels of management. Therefore, based on where (in the organization’s
hierarchy of management) the plans are formulated, determines the classification of the plans
into: strategic plans, tactical (intermediate) plans, and operational plans.
a) Strategic Plans: -
Strategic plans are defined as plans that determine the major objectives of an organization
and the policies and strategies designed by top-level management to govern the acquisition,
use and disposition of resources to achieve organizational objectives.
The following are distinguishing characteristics of strategic plans.
i) Strategic plans require looking outside of the organization at the external
environment of the organization for threats and opportunities.
opportunities.
ii) They take longer period of time.
iii) They tend to be top management responsibility
iv) They address such issues as:
 How to allocate resources;
 What the business is and what it should be.

The above three types of plans can be summarized as indicated in the following table.
Level of Time Detailed
Type of Plan Scope Management
Strategic plan Wide TLM* More than 5 Years Less
Tactical plan Medium MLM* 1 to 5 Years Medium
Operational plan Narrow LLM* Less than 1 Year More

b) Tactical Plans:
Plans: -
Tactical plans are the means to achieve strategic plans and their usual span is one year. They
usually center on translating the broad objectives set by top-level management into more
specific goals.
c) Operational Plans: -

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Operational plans are concerned with the day-to-day activities of the organization and are
made and/or developed by lower level managers.

2.2.3 Plans Based on Time Dimension

These plans show how long they stay in operation. Based on time frame or length of them,
we can classify plans into three; these are
a) Long-term Plans:
Plans: - These plans establish long-term goals and work out strategies,
policies and programs to achieve the goals. They extend beyond five years.
b) Medium-term Plans:
Plans: -These plans are usually made to support long-term plans. They
cover a period of more than one year, but less than five years. Here the length of time may
vary from one business to another depending on the nature, risk and other factors.
c) Short-term Plans:
Plans: - Generally such types of plans are made to achieve short-term goals
and are instrumental in implementing long-term plans.
These plans are action-oriented and the responsibility of lower level managers.
2.2.4 Plans Based on Use Dimensions
Use-based plans indicate whether we can use the plans repeatedly for uniformity or for a
single period. Based on use dimension, plans could be further classified in to single-use plans
and standing use plans let us see each one by one

a) Single-Use Plans: - These types of plans focus on relatively unique situations within the
organization and are used only once. These plans can be subdivided into:
i) Programs:
Programs: Programs are a complex of goals, policies, procedures, rules, task assignments,
steps to be taken, resources to be employed and other elements necessary to carry out a given
course of action. They are ordinarily supported by budgets. A primary program may call for
many supporting programs.
E.g. The Ethiopian airlines may have a major program of acquiring a $500 million fleet of
jets within a period of two years.
ii) Projects:
Projects: A project is a small and separate portion of a plan. Each project has limited
scope and distinct directives concerning assignments and time. Projects are characterized by
the following
I) they are a one-time activity or a unit activity with a well-defined set of desired end results
ii) They can be accomplished in order to achieve the project goals.
iii) A project must often be coordinated with other projects being carried out by the same
parent organization.
iv) Budget:
Budget: Budgeting is the formulation of plans for a given future period in numerical or
financial terms. A budget is a financial plan outlining how funds will be spent in a given
period of time and how these funds will be obtained. Budgets have to be based on past
experience present realities and an accurate assessment of future events.

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b) Standing-Use Plans:
Plans: - These are plans which remain roughly the same for a long period
of time and are used in organizational situations that occur repeatedly. The most common
kinds of standing plans are:
i) Policies:
Policies: Policies are broad and general guides to action that constrain or direct and
facilitate objective attainment. They do not tell organizational members exactly what to do
but they do establish the boundaries within which they must operate and ensure that decision
will be consistent with and contribute to an objective.
Policy is a general statement or understanding which guides or channels thinking in decision
making. Requirements for a sound policy:
.They should be consistent with strategies and objectives.
.They should be renewed frequently and amended as needed.
.Policies should be in writing.
writing.
-Written policies are more precise than unwritten ones.
- They can be transmitted quickly to those who must implement them.
-Written policies are easier to understand and less time-consuming to communicate to new
managers and management trainees. Advantages of policies
.Policies helps to save time.
.Policies helps to prevent managerial mistakes.
.Policies helps to improve the consistency of managerial performance.
ii) Procedures:
Procedures:
A procedure is a series of related steps or tasks expressed in chronological order for a
specific purpose. Procedures are defined in step-by-step fashion through which policies are
achieved. They are guides to action rather than to thinking and they give the details of the
exact manner in which certain activities must be accomplished.
The following are some of the requirements for sound procedures.
procedures.
.Procedures should be simple enough to be understood by those who implement them.
.They should be in writing.
.They should be tested prior to full adoption.
.They should be well communicated so that they may be thoroughly understood by those who
are required to follow them.
iii) Rules:
Rules: Rules are statements that a specific action must or must not be taken in a given
situation. Rules leave little doubt about what is to be done. They permit no flexibility and
deviation. Unlike procedures, rules do not have to specify sequence. Procedures and rules are
subsets of policies.
Example of a rule:-Employees must wear safety clothes and equipment while operating their
machines
2.3 Planning process
Determining objectives and outlining the courses of action needed to achieve these
objectives is referred to as the planning process. The actual steps in the planning process

17
are difficult to specify for all organizations because of wide differences in size and
complexity. It is possible to reduce the planning process to the following steps:

1. Identify goals: - the first step in the planning process is to identify the goals of the
organization. The objectives fixed most clearly indicated what is to be achieved, where
action should take places that are to performance, how it is to be undertaken and when it is to
be accomplished. Generally speaking, objectives must be established in all areas where
performance affects the health of organization.

2. Developing premises (collect and forecast information):-After establishing objectives,

it is necessary to collect and forecast information the current status of the organization in the
environment must be assessed with a forward look at the future changes. Planning premises
supply the necessary information concerning internal as well as external environment.
Actually premises are the assumptions about the environment in which plans are to be
implemented. Because the future is too uncertain, it is unrealistic to make assumptions in
great detail about environmental factors.

3. Determine and evaluate alternatives plans:-Alternatives plan developed and evaluated

thoroughly. Developing alternatives courses of action is not a truly exercise. The difficulty
lies in reducing the alternatives so that the more fruitful ones can be analyzed. Once
alternatives courses actions have been determined, they must be evaluated. Future
uncertainties, financial problems and other intangible complex usually alternatives plans are
evaluated against such factors like, cost, risks, benefits organizational facilities etc.

4. Select the plan and develop sub plans:-Selection of one course of action to face future
challenges introduces rigidity and inflexibility in the planning process. Once choice is made
and a master plan drafted, derivative plans must be developed to support it within the
framework of the basic plan, derivative plans are formulated in each function of area .The
divisions of master plan into departmental, sectional and individual plans, provides realistic
picture of things to come in future. In order to be effective, the planning process should also
provide for a feedback mechanism.

2.4 Planning techniques

How do you plan a project? I see many project managers sitting down with sticky notes or a
laptop and trying to collect information from emails and conversations into one plan. There’s
nothing wrong with sticky notes and laptops, by the way. It’s the ‘trying to do it all yourself’
part that is a problem. If you want an amazing plan, you have to use amazing planning
techniques, and it is virtually impossible to do that alone.

1. Work as a team:-It’s really important to realize that as a project manager you don’t have
all the facts to hand. That’s why you have a team. A project team is made up of the experts
who will actually be doing the job. Why wouldn’t you ask them for help when it comes to

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calculating how long the work will actually take? Get your team together and invite them to
take part in building the project plan. By working together you’ll be able to work faster, be
smarter about how you create your plan and you will have a lower risk of forgetting to add
tasks in.

2. Use a Work Breakdown Structure:-A Work Breakdown Structure (WBS) is a way of

creating a visual map of all your project deliverables. It’s a decomposition of the overall
project plan into the smaller component parts. Project managers use a WBS primarily to
ensure that the team hasn’t forgotten anything – in other words, that the whole scope of the
project is included in the plan. Having this marked out visually is a good way of making sure
that you haven’t left anything out. It’s also a great tool for people who think visually. Having
said that, a WBS is an overestimated list, so even if you don’t consider yourself someone
who likes to work with pictures and graphics, give it a try anyway.

3. Use a mind map:-Mind mapping software isn’t just for capturing ideas generated during
creative thinking sessions. You can also use mind maps to plan out your project. Take your
WBS and add task properties to the items on the map. Once you have created start date and
end dates for the tasks and added resource names you’ll have enough information for mind to
create your Gantt chart for you.

4. Circulate a draft for approval:-Don’t publish your plan as soon as you’ve finished your
Gantt chart. Let your work rest for a bit. Circulate a draft plan to your project team and let
them take a look at it. It’s probably been a few days since they were in that planning
workshop with you and they may well have remembered additional work that should go into
the plan. Only issue your plan as a final version once everyone has agreed that this is
representative of the work that needs to be done. At this stage you can have lots of different
iterations because it’s still the early days of the project. Best that you work out the complete
list of actions now than spend time worrying about how you will do tasks you had not
included when they come to light in a few months.

5. Share your plan:-Once you are happy that your plan is the final version, share it with a
wide audience. Publish your high level milestones. Make sure that people know when they
are expected to do their tasks – and make sure they know that this is the actual, final, current
version of the plan, not iteration out for discussion. This is what they have signed up for, so
they had better start being accountable for the deliverables down against their name.

Circulate your plan via email or by using online project viewing tools to share it with people
who don’t have Microsoft Project. Regularly share the updates too so people are always
working from the latest version.

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 2.5 Objectives of planning
Here we detail about the six major objectives of planning in India, are

(a) Economic Growth:-Attainment of higher rate of economic growth received topmost

priority in almost all the Five Year Plans of the country. As the economy of the country was
suffering from acute poverty thus by attaining a higher rate of economic growth eradication
of poverty is possible and the standard of living of our people can be improved.

The First Plan envisaged a target of 11 per cent increase in national income against which 18
per cent growth in national income was achieved. The Second, Third and Fourth Plan
envisaged targets for annual growth rate of 5 per cent. 5.6 per cent and 5.7 per cent
respectively against which the achievements were 4 per cent, 2.6 per cent and 3.4 per cent
respectively.

Again the Fifth and Sixth Plan also proposed the annual growth rate of 4.37 per cent and 5.2
per cent against which the achievements were 5.0 per cent and 5.2 per cent respectively. The
Seventh Plan also set the target of 5 per cent in respect of annual growth rate of national
income.

The Eighth Plan and the Ninth Plan set the target of 5.6 per cent and 7.0 per cent annual
growth rate of national income against which the achievements were 6.5 per cent and 5.4 per
cent respectively. The Tenth and Eleventh Plan set the target of 8.0 per cent and 9.0 per cent
in its annual average growth rate of GDP. Thus attaining higher rate of economic growth is
found as a common objective for all the Five Year Plans of our country.

(b) Attaining Economic Equality and Social Justice:-Reduction of economic inequalities

and eradication of poverty are the second group of objective of almost all the Five Year Plans
of our country particularly since the Fourth Plan. Due to the faulty approach followed in the
initial part of our planning, economic inequality widened and poverty became acute.

Under such a situation, the Fifth Plan adopted the slogan of ‘Garibi Hatao’ for the first time.
The Seventh Plan document shows that nearly 37.4 per cent of the total population of our
country was lying below the poverty line and the plan aimed to reduce this percentage of
29.2 per cent by 1990.

Thus To Achieve The Target, Various Poverty Alleviation Programs Like The National
Rural Employment Program (NREP), Composite Rural Training And Technology Centre
(CRTTC), Crash Scheme For Rural Employment Program (CSREP), Rural Landless
Employment Guarantee Program (RLEGP) Etc.

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(C) Achieving Full Employment:-five year plans of India gave importance on the subject to
employment generation since the third plan. The generation of more employment
opportunities was considered as an objective of both the third and fourth plan of our country.
But up to the fourth plan employment generation never received its due priority.

The fifth plan in its employment policy laid special emphasis in absorbing increments in
labor force during this fifth plan period. The sixth plan accorded much importance on the
reduction of incidence on unemployment. It has been estimated that the employment will
grow at the rate of 4.17 per cent per annum as against the annual growth of labor force at
2.54 per cent.

To achieve this target the major program which were introduced during this plan were
integrated rural development program (IRDP), the national rural employment program
(NREP), the operation flood dairy development project, schemes in the villages and small
industries sector the national scheme of training rural youth for self employment (TRYSEM)
and various other components of the minimum needs program.

One of the major objectives of the seventh plan was a faster growth of employment
opportunities. Thus the plan aimed that the employment potential would grow at 4 per cent as
against the 2.6 per cent growth in the labor force. Again, the eighth plan envisages an annual
employment growth of 2.6 to 2.8 per cent over the next ten years 1992-2002.

(d) Attaining economic self-reliance:-one of the very important objectives of Indian

planning is to attain economic self-reliance. But this objective attained its importance only
since the fourth plan, when the plan aimed at elimination of the import of food-grains under
pl480. The fifth plan also laid much importance on the attainment of self-reliance.

Thus this plan aimed at achieving self-sufficiency in the production of food-grains, raw
materials and other essential consumption goods. The fifth plan also emphasized the need for
import substitution and export promotion for attaining economic self- reliance.

The sixth plan also put importance on strengthening the impulses of modernization for the
achievement of economic and technological self-reliance. The seventh plan and eighth plan
also followed the path for achieving self-reliance.

Although India achieved self-sufficiency in respect of food-grains but it has not yet achieved
self- sufficiency in respect of edible oil. In the mean time we have developed number of
import substitute industries particularly basic and capital goods industries but huge import of
petroleum oil along with some other items are creating a serious drain on our foreign
exchange reserves leading to a depletion of foreign exchange reserves to such an extent in
1991-92 that the country has reached at the near- bankruptcy level with a huge external debt
obligation, thus the objective of self-reliance still remains unfulfilled.

21
(e) Modernization of various sectors:-another very important objective of five year plans of
our country was the modernization of various sectors and more specifically the
modernization of agricultural and industrial sectors. The fourth plan laid much emphasis on
the modernization of agricultural sector and undertook a vigorous scheme for modernization
of agriculture in the name of green revolution. The successive plans also continued their
efforts in the same direction but at a reduced rate.

The sixth plan categorically mentioned this objective of modernization for the first time.
Here the objective of modernization means those structural and institutional changes in
economic activities which can transform a feudal and colonial economy into a progressive
and modern economy. Thus through modernization economy may be diversified.

It requires setting up of various types of industries and advancement of technology. In the

mean time some sort of modernization always gone against employment generation thus the
country is facing a conflict between the objective of modernization and the objective of
removal of unemployment and poverty.

(f) Redressing imbalances in the economy:-regional disparities and imbalances in the

economy have become so acute in India that it needed special attention in our five year plans.
Thus by regional development we mean economic development of all the regions by
exploiting various natural and human resources and by increasing their per capita income and
living standards.

Since the second plan onwards, the government realized the need for balanced development.
Thus the second, third, fourth and fifth plans laid emphasis on the redressed of economic
imbalances for attaining a balanced regional development.

The sixth plan again aimed at progressive reduction in regional inequalities in the pace of
development and in the diffusion of technological benefits. The seventh plan and eighth plan
also carried this objective of balanced development in systematic manner. Besides then long
term objectives, our plans also laid importance on short term objectives like control of
inflation, industrialization, rehabilitation of refugees, building up infrastructural facilities etc.

22
 Chapter- three:-Decision- making
3.1Definition of decision making
.It is the process by which individual select a course of action from among alternatives to
produce a desired result. It is process made up of for continuous in related phase.

.Explorative (searching) .Evaluative (weight) and

.Speculative (analysis) .Selective (commitment)

1. Explorative- must find occasions for making a decision. Must take realistic of where the
firm and what are the current problem. Asks what should be done? What are the challenges?

2. Speculative – should analysis various factors affecting a decision problem so that

appropriate response can be obtained.

How to take advantages of the challenging opportunities in the environment.

‘How to utilize the resources to get the maximum possible benefit for the organization.

3. Evaluative: - the decision maker is expected to make a cost benefit analysis of various
alternatives.

.What is the costs?

.Asking what are the costs? (Weighting)

4. Selective: - this is a question of making a choice among alternatives that would maximize
the decision maker’s total expected relative value. In other words decision making is the
process by which the decision maker tries to jump over the obstacles placed between his
current position and the desired future position.

Nature (characteristics) of decision making

1. Decision making is goal oriented process

2. Decision imply alternatives
3. Analytical intellectual decision making contains conscious and unconscious aspects.
4. Dynamic process is characters are process rather than as one statics entry one.
5. Is not the entirely of management

3.2 The Rational Economic Model

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A rational decision making model provides a structured and sequenced approach to decision
making. Using such an approach can help to ensure discipline and consistency is built into
your decision making process. As the word rational suggests, this approach brings logic and
order to decision making. Our rational decision making model consists of a series of steps,
beginning with problem/opportunity identification, and ending with actions to be taken on
decisions made.

First though why not take a look at our comprehensive decision making e-guides with a great
half price offer. You’ll find they contain our rational decision making model complete with
tools, along with a comprehensive range of other guides to improve your decision making.

It’s a great half price offer. We talk through the benefits and features of our complete
decision making resources in finding the right decision making model. Why not take look,
you’ll see we’ve developed new models, tips and tools that you won’t find elsewhere.

There seems to be a problem with decision making. According to Ohio State University
management professor, Paul C. Nutt, we only get about 50% of our decisions in the
workplace right! Half the time they are wrong, so there is clearly plenty of scope to improve
on our decision making processes. Based on his research into over 300 decisions, made in a
range of organizations, he discovered that “Some tactics with a good track record are
commonly known, but uncommonly practiced.”

Why? Well one reason that emerged from his research is that:

“Too often, managers make bad tactical selections ….. Because they believe that following
recommended decision-making practices would take too much time and demand excessive
cash outlays.” Nutt argues that using good decision making practices actually costs very
little. Our rational decision making model is our free tool to help you improve the way you
make decisions.

This article is part of our series on decision making. Our first article, types of decision
making outlines a range of decision making approaches. Rational decision making forms part
of what we have termed types of decision, categorized by process. In this category we have
put two contrasting approaches, that of rational decision- making and that of judgments or
intuitive decision- making.

A General Rational Decision Making Model

Rational decision- making processes consist of a sequence of steps designed to rationally

develop a desired solution. Typically these steps involve:

24
Identifying a problem or opportunity:-The first step is to recognize a problem or to see
opportunities that may be worthwhile. A rational decision making model is best employed
where relatively complex decisions have to be made.

The first decision making lesson should be to ask yourself if you really have a problem to
solve or a decision to make. Then read this article for more specific advice: Problem Solving
Skill: Finding the Right Problem to Solve.

Gathering information:-What is relevant and what is not relevant to the decision? What do
you need to know before you can make a decision, or that will help you make the right one?

Analyzing the situation:-What alternative courses of action may be available to you? What
different interpretations of the data may be possible? Our Problem Solving Activity uses a set
of structured questions to encourage both broad and deep analysis of your situation or
problem.

Developing options:-several possible options. Be creative and positive. Read the Power of
Positive Thinking for our five questions that create possibilities.

25
Evaluating alternatives:-What criteria should you use to evaluate? Evaluate for feasibility,
acceptability and desirability. Which alternative will best achieve your objectives?

Selecting a preferred alternative:-Explore the provisional preferred alternative for future

possible adverse consequences. What problems might it create? What are the risks of making
this decision?

Acting on the decision:-Put a plan in place to implement the decision. Have you allocated
resources to implement? Is the decision accepted and supported by colleagues? Are they
committed to making the decision work?

Strengths and Weaknesses of the Rational Decision Making Model

The main strength of a rational decision making model is that it provides structure and
discipline to the decision making process.

It helps ensure we consider the full range of factors relating to a decision, in a logical and
comprehensive manner. These are a key feature of our comprehensive guide: Making Better
Decisions.

However, we should always remember that whilst the model indicates what needs to be done,
it’s often how things are done that characterizes effective decision making.

Paul C. Nutt’s research illustrates that bad decisions were usually bad because two things
were missing: adequate participation of stakeholders in the decision making process;
sufficient time spent generating a range of possible solutions.

Too often those who should have been involved weren’t, and solutions were proposed and
acted upon too quickly. Often with disastrous effects!

A second weakness arises if we attempt to use the model in isolation. This is particularly
important where complex or important decisions are involved.

The principle assumption of the rational decision making process is that human beings make
rational decisions. However, there are numerous factors which determine our decisions,
many of which are not rational. In many situations decisions have to be made with
incomplete and insufficient information.

Judgment, intuition, experience and knowledge all come together when making decisions.
This critical aspect is further explored in our article: Intuition and Decision Making.

26
Putting the Rational Decision Making Model to work

Regardless of any perceived weaknesses these models are essential tools. You’ll find more
on these and other practical techniques in our related e-guides (below) or in Making Better
Decisions. Use the tools in this guide to help your decision making:

Tool 1: Do you need to make a decision? Tool 4: 7 step decision making process

Tool 2: The POCA decision making model Tool 5: Team decision making

Tool 3: Decision levels Tool 6: Evaluating alternatives

3.3 Types of decision making process

The quality of decision making skills is one of the critical factors in managerial success.
Managers are evaluated by the decisions they make and more often by the results obtained
from their decisions.

1. Basic strategic (non routine and routine decisions)

Basic decisions are decision concerning unique problems or situations.

It is one time decision demanding large investment. E.g. Decision about launching a new
production plant buying more advanced computer system.

.It is application between top management levels.

Routine decision is repetitive in a nature.

.It requires little deliberation.

.Once generally concerned with sort term commitments.

.Always it is repetitive again and again needing.

2. Personal and organizational decision

.According to Barnard decision can divide on the basis of the environment in which they are
made.

.Decisions to watch television to study or retire early one examples of personal decision.

.Organizational decision is made by managers in their official or formal capacity as

controllers and allocator of organizational resources.

Decisions are aimed at furthering the interest of organization.

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3. Programmed and unprogram decisions

.Hebert Simon has provided a popular classification scheme for managerial decision
programmed and none programmed.

A programmed decision

.Is routine and repetitive

.Rules and policies are established well in advance to solve recurring problems quickly. E.g.
A hospital establishes a procedure for admitting new patients supervisory administer
disciplinary actions against workers reporting late for work non programmed decisions.

.Deals with unique/unusual problems.

.It is poorly structured situations.

.It is novel and none recurring in the features.

.Often involves broad long range consequences for the organization.

.It is made by higher level personnel only.

Table 1. Characteristics of programmed and non programmed decisions

Programmed decision Non programmed decision

 Problems are routine and repetitive.  Problems are unique and novel
 Solutions are offered in accordance with  They no reestablished policies or
some habit rule or procedure. procedures to rely on. Each situation is
 The conditions for programmed decisions different and needs a creative solution.
are highly certain  The conditions for non programmed
 Made by lower level people decisions are highly uncertain.
 Top management responsibility
3.4 The decision making process
1. Awareness of problem

.It is 1st step in decision making .Must looks for opportunities to make
process. .identifies the gap between the decision.
current & desired affair.

2. Diagnose and state the problem

.What is the problem?

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.Which problem to solve? .What is the real cause the problem?

3. Developing Alternatives

The ability to develop alternatives is important as making right decision among alternatives.
The following alternatives may be considered

a. Adequate compensation package.

ii. Incentive schemes for improved performance.

iii. Restricting the jobs to as to make them more.

.Meaningful .Interesting and challenging

iv. Offering better training facilities and

V Sympathetic considerate and understanding supervisors.

4. Evolution of alternatives
 Out lines advantages and disadvantages of each alternative.
5. Selections of the best alternatives:- Peter Ducks four criteria for making the right
choice among an available alternatives.

1. The risk 4. Limitation of resources

2. Economy of effort 5. Implementation and follow up
3. Timing

 Understand its functionality

 See feedback regarding effectiveness
 Can setup budget allocate time and money

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 Chapter four:-the organizing function
4.1 Concept of organizing and organization
After the objectives of the enterprise have been determined, and plans, programs and
policies are formulated for the achievement of these objectives, the next logical step in
the managerial process is organizing. It comprises the following elements.

1. Determination of specific activities required for the implementation of plans and

policies leading to the accomplishment of predetermined goals.
2. Logical regrouping to these activities into jobs and regrouping of jobs into functions
and department so as to create effective interrelationships and coordination among
them.
3. Assignment of jobs to specific people and position.
4. Linking them through a network of authority responsibility relationships.

4.2 Formal and informal organization

Formal organization

.Is a group of people working together cooperatively under authority toward goals that
mutually benefits the participants and the organization.

It is a system of well-defined jobs .Each bearing defined measure of authority, responsibility

and accountability, basically emphasis one. The manager describes organizational
relationships in written and graphic form.

Informal organization

 May or may not act in support of formal goals and objectives.

 Emphasis status, power and policies.
 Their relationships develop spontaneously.

Table 2 comparison of characteristics of formal and informal organization

Point of analysis Formal organization Informal organization

1. Structure Planned, rational and stable. Spontaneous, emotional and
dynamic.

30
 2. Goals Profit/service to society. Member satisfaction.
3. Focus Job Rule
4. Authority Positional, flow top down Depends on person flows bottom
up
5. Communication Well defined formal routes and Grapevine, channels unspecified
flow of information’s way and and information flow two ways
often slow. and very fast.
6. Control system Promotions or demotions based on Norms regulate behavior.
performance.
7. Behavior Rules and regulation govern Group norms, values govern
behavior. behavior.

4.3 Departmentalization meaning bases

Departmentation is defined as the establishment of a district area, unit or subsystem of an
organization. It involves grouping of people or activities into a single department or unit to
achieve organizational goals.

Departmentation is essential because of the following specialization

 Departmentation:- Permits an organization to take advantage of specialization,

Enables each person to know the particular part,
 Facilitates communication, coordination and control.
 Provides an adequate plat form around which the loyalties of organizational members
may be built.
 Enables a manager to locate the sources of information, skills and competence to take
certain vital managerial decisions.

Bases of departmentation

A. Basis (pattern) types of departmentation

There are certain basic methods of dividing the duties and responsibilities within an
organization structure. They are:

1. Departmentation by functions
2. Departmentation by products or service
3. Departmentation by regions (area or location) or territory
4. Departmentation by customers
5. Departmentation by process
6. Departmentation by time
7. Departmentation by numbers

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 8. Departmentation by marketing channels
9. Matrix organization
1. Departmentation by Enterprise Function:-Functional departmentation is perhaps the
most logical and basic form of departmentalization. It is a form of departmentalization in
which everyone engaged in one functional activity, such as marketing or finance, is grouped
into one unit. It works best when the environment of the organization faces stable and tight
control over processes and operations desired.
It is used mainly (but not only) by smaller firms that offer a limited line of products, because.

.it makes efficient use of specialized resources

.it makes supervision easier
.it makes it easier to mobilize specialized skills, and bring them to bear where they are most
needed

Advantages
1. It is a logical reflection of functions
12. Maintains power and prestige of major functions
3. Follows principle of occupational specialization /fosters development of expertise/.
4. Simplifies training
5. Furnishes means of light control at top.
6. Requires little internal coordination.
7. Requires fewer interpersonal skills.
Disadvantages
1. Reemphasis of overall company objectives.
2. Overspecializes and narrows view points of key personnel.
3. Reduces coordination between functions.
4. Responsibility for profits is at the top only.
5. Slow adaptation to changes in environment.
6. Limits development of general managers.
7. Slows responses time in large organization
8. Causes bottlenecks due to sequential task performance.
9. Does not encourage innovation; has narrow perspective
10. Fosters conflicts over products priorities.
11. Does not foster development of general managers.
12. Obscures responsibility for the overall task.

By Function
President

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Vice President Vice President Vice President of a company
Viceby
President
2. Departmentation by product or service:-organization divisions, that
brings together allMarketing
Production those involved with a certain type of product or service.
Finance This type of
Human Resource
departmentation is made by the large multi-product companies. Each department is
responsible for a product or related family.

Advantages of products: This is a logical pattern to follow when a product type calls for
manufacturing technology and marketing methods that differ greatly from those used in the
rest of the organization.

1. Places attention and effort on product line

2. Facilitates use of specialized capital, facilities, skills and
knowledge
3. Permits growth and diversity of products and services
4. Improves coordination of functional activities.
5. Places responsibility for profits at the diversion level
6. Furnishes measurable training ground for general managers.
7. Flexible strategy could be developed for different products.
Disadvantages

1. Requires more persons with general manager abilities

2. It is expensive
3. Presents increased problem of top management control.
4. There is a danger of duplication of work.
5. Creates conflicts between divisional tasks and corporate priorities.
3. Departmentation by region or area or territory
This brings together in one department all activities performed in the region where the unit
conducts its business. This arrangement follows logical when a plant must be located as
close as possible to

a. Its sources of raw materials - mining & oil producing

companies.
b. Its major markets.
c. Its major sources of specialized labor.
Territorial departmentation is especially attractive to large-scale firms or other enterprises
whose activities are physically or geographically dispersed and its customer’s needs and
characteristics vary greatly. It is most often used in sales and in production; it is not used in
finance, which is usually concentrated at the headquarters.

Advantages

1. It makes possible effective span of control.

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 2. It reduces the cost of operation and gains saving in time.
3. The sales may be increased with the help of intimate knowledge about the
testes and preferences of the customers in the local market.
4. Regional managers could win the confidence of customers and remove the
competitors from the market.
5. Accounts are prepared area-wise. So, the profitability of each area is
known to the management.
6. It provides opportunities to mangers to improve their skill in various
fields.
7. Control process is very easy to manage.
Disadvantages

1. It increases the number of personnel and involves high cost of operation.

2. The control of head office is a less effective one.
3. It may also involve duplication of work.
4. A small business concern cannot manage the high cost of operation.

By Product

By geography President

Vice President Vice President Vice President Vice President

Marketing Finance Production Human Resource

Resource and
Development Marketing Production Finance

34
 Vice President
Vice President Vice President
Europe, Africa and
North America Latin America Middle East
and Far East
Product B
Product c
Products A
4. Departmentation by customers

It occurs when a division sells most or all of its products to a particular class of customer.
This type of departmentation is preferred when the various needs of customers are different
in nature. For example a bank my divide its loan section into a number of heads and assign
them to various departments.

- loan to businessmen
- loan to farmers
- loan to professionals, and so on
Advantages

1. It fulfills the exceptions and needs of customers.

2. It develops specialization among the organizational staff.
3. Gives customers feeling that they have an understanding supplier
4. Customers will get better service and the supplier can boast its sales by
understanding customer’s needs.
Disadvantages

1. May be difficult to coordinate operations between competing customer

demands.
2. Requires managers and staff expert in customers' problems.
3. Customer groups may not always be clearly defined.
4. There is a wastage of available resources and facilities
5. There may be duplication of activities.

By Customer
President

35
 Vice President Vice President Vice President
5. Departmentation by Process:-In this kind of departmentation, people and materials are
brought together in order to carry out aCustomer
Industrial particular operation. This type ofMilitary
departmentation is
followed when the production activities are carried on in many places.
Products
Products
For example, a textile will have many departments such as

 Ginning  Weaving  Packing and sales

 Spinning  Dyeing and printing

Advantages

1. Achieves economic advantages

- The costlier machines can be used effectively
- There is no duplication of activities.
2. Uses specialized technology
3. Utilizes special skills
4. Simplifies training
5. Helps the top to have effective performance control.
6. Used for processing industries.

Disadvantage

1. Coordination of departments is difficult

2. Responsibility for profit is at the top
3. is unsuitable for developing general manager.
4. More specialists are essential to each process.
5. Heavy cost of operation - separate rooms for operation and other
facilities should be given to all the process.
6. Departmentation by time:-The business activities are grouped together on the basis of
the time of the performance. If the work is not completed within the normal working hours,
extra time will be given to complete in after the normal working hours. Whatever is the work
performed after the normal working hours, a separate department will be in charge of this
type of activity?
For example: -Universities extension programs have their coordinator. Hospitals, Fire
departments, Steel furnace use same method.

Advantages

36
 1. Services can be rendered beyond the typical 8-hours day
2. It enables activities/ processes not to be interrupted
3. Expensive capital equipment can be used more hours (more than 8 hours a
day)
4. Convenient to employees to work at any shift
Disadvantages

1. Supervision may be lacking during the night shift

2. There is the fatigue factor i.e. it is difficult for most people to switch from day to
night shift and vice versa
3. The changing of the shifts may cause problems in coordination and
communication
4. The payment of overtime rates can increase the cost of the product or service
7. Departmentation by numbers:-Similar type of duties is performed by small groups.
Each group is controlled by a supervisor or an executive. It was once an important method in
the organization of tribes, clans and armies. The essential fact is not what these people do,
where they work or what they work with but that the success of the undertaking depends only
upon the number of people involved in it.
Its usefulness has declined with each passing century. Because

A. Technology has advanced, demanding more specialized and different skills

B.Groups composed of specialized personnel is frequently more efficient than those based on
more number.
C.It is useful only at the lowest level of the organization structure. For example, the army;
soldiers are grouped into squads, battalions, companies, brigades, and regiments. The
principles of span of management or control or supervision are used under this type of
departmentation.
8. Departmentation by marketing channels:-This type of departmentation is adopted on
the basis of the channel of distribution chosen by the particular business unit. Normally the
channel of distribution is selected by the business unit on the basis of nature of goods and
marketability of the product.

9. Matrix organization:-It is a form of organization in which some manager’s report to two

bosses rather than to the traditional single boss as in the case of pure line or line-and-staff
organization. Every matrix contains three unique and critical roles:
I. The top manager-heads and balances the dual chains of command;

ii. The matrix bosses or functional production managers share subordinates;

iii. The managers report to two different matrix bosses.

37
The chart below shows that the production manager is in charge of three groups of
subordinates, each of which is also assigned to either project A, B, C. Therefore, the groups
of subordinates report to both their functional manager and to their project managers. In turn,
the functional managers and the project to the top manager, who oversees the organization?

Top Manager

Marketing

Production Manager

Manager

Marketing
Production
Group
Group
Project A

Manager
Production

Project B Group
Marketing
Manager
Group

Project C
Production Marketing
Manager
Group Group

38
Matrix Organization is used:

1. When it is absolutely necessary that the groups be highly responsive to two sectors at
the same time. Such as markets and technology;
2. When the bosses face uncertainties that generate very high information processing
requirements;
3. When they must deal with strong financial and/or human resources.
The following are some of the common disadvantages of matrix organization.

1. It violates the unity-of-command principle because the subordinates are accountable

to two managers.
2. It may lead to power struggles. One manager may compete with another manager for
the services of a joint subordinate.
4.4 Span of management
 Is concerned with number of subordinates each manger should direct.
 There is no correct number for span of control.
 It is determined for each manager based on the interplay of the:-
o Complexity and variety of the subordinates work;
o The ability and training of subordinates;
o The ability of the manger and the company’s;
o Centralization or decentralization at decisions making;

Span of control can be narrow or wide

 It is narrow when a manager supervises a few numbers of subordinates

 It is wide when greater numbers of subordinates are managed

4.5 Authority
Authority refers to the rights inherent a managerial position to give orders and expect the
compliance from subordinates.

Types of authority

1. Line authority:- is a direct supervision relationship

 It is the relationship between superior and subordinates
2. Staff authority:- is advisory in nature
 They have the role of providing advice and technical assistance
3. Functional authority; - it is delegated authority to an individual (department over specific
activities under taken by personnel in other department.

39
 4.6 Line and staff departments
Line departments: - are headed by line managers and are established to meet major
objectives of the organization.

.Staff department: - provide assistance to the line department and each other.

.Give advice service and assistance .E.g. Legal department, public relation etc

Unit of command:-States that each person within an organization should take orders from
and report to only one person.

Delegation:-Describes the passing of formal authority to another person supervisors delegate

or pass authority to subordinates in order to facilitate work being accomplished. Delegation
has the following sequences of events.

1. Assignment of task
2. Delegation of authority
3. Acceptance of responsibility: - responsibility is the obligation to carry out one’s
assigned duties to the best of one’s ability.
4. Creation of accountability: - accountability has to answer to someone for you actions.
It means taking the consequences either credit or blame.

4.7 The Organizing process

The organizing process has five steps

1. Consider plans and goals

2. Determination of the work activities necessary to accomplish objectives.
3. Classifying and grouping activities. This step asks managers to perform three
activities.

.Examine each activity, identified to determine its general nature (marketing finance etc)

.Group the activity into these related areas.

.Establish the basic department designs for the organization structure.

4. Assigning work and delegating appropriate authority

5. Design a hierarchy of relationship. This step requires the determination of both
vertical and horizontal operations relationship of the organization as a whole.
The vertical structuring of the organization results in a decision making hierarchy
(from bottom to top)

40
The horizontal structuring has two important effects.

1. It defines the working relationships between operating departments.

2. It makes the final decision on the span of control (the number of subordinates under the
direction of each manager. The result of this step is a complete organization. This structure is
shown visually by an organization chart.

Organization chart tells us

 The span of control

 Channel of official communication
 How the company is structured departmentation
 The hierarchy is of decision making
 The work being done in each job the labels on the box

Types of authority relationship

1. Solid connections show line authority

2. Dotted lines show staff and functional authority

Types of charts

There are three major types of charts

I. Pyramid cal charts

II. Horizontal chart and
III. Concentric(circular) chart
I. Pyramid cal chart is the traditional and most widely used types of chart. It shows the
vertical flow of authority communication.
II. The horizontal chart moves from left to right. The chief executive is shown at the
extreme left and operative workers at the extreme right.

Its advantages are:-

a. It is in accordance with the normal left to right reading habit

b. It makes it easier to understand the flow of authority relationships
c. It show a missions, if any, in the channel of command and
d. It depicts relative strength of lines of formal authority
III. Concentric or circular chart shows chief executive in the center of a series of concentric
circle, each of which depicts the next successive level in the hierarchy. The outer
most circles show the operative workers. It advantage is that it tends to de-emphasize
vertical, authority relationships. At the same, it appears too complex.

41
 4.8 Group dynamics and committees
Managers deal with groups of people. They give direction to groups of people in the
organization. Therefore they need to understand group dynamics (the interaction of people in
group setting). This understanding is made possible by studying psychology.

4.8.1 Behaviors Manifested by groups:-Groups show behaviors such as conformity,

aggression, competition and cooperation. Conformity is compliance with existing rules or
customs. Groups require members to conform by obeying group norms, accepting group
sanction and giving up certain rights. Individuals conform because of fear, insecurity and
good judgment. The extent of conformity desired depends on the type of organization, the
person’s position within the organization, and the kind of task being performed. Aggression
may be either socially acceptable or unacceptable.

Competition is a struggle between two or more individuals or groups to obtain

encouragement.

Competition may be internal or external

Cooperation is a joint effort by two or more people to attain a common goal and requires an
individual to subordinate his or her self-interest.

4.8.2 Committees and their characteristics

A committee is a group of persons assigned or asked to investigate or act on some matter.

Committees can be permanent or temporary.

a. Standing committees are permanent committees:- they can be given authority to make
key decisions on matters such as guilt or innocence of someone accused of a crime,
whether to go ahead with a major project and size of next year’s budget. Other
committees may have only advisory power by which they recommend what particular
action may be taken to solve a problem.
b. Ad Hic Committees are temporary committees formed for specific purposes. An Ad hoc
committee is usually dissolved after its recommendations have been submitted.
Committees are widely used to provide more information for decision-making. They
facilitate coordination. They foster support for decision. They can broaden the
knowledge of the people who participate in them.

4.8.3 Limitations of committees

i. They are expensive

ii. They often act slowly
iii. They may come up with compromise solutions

42
iv. They do not fix responsibility. Whatever decision is made, no individual takes the
responsibility.

4.8.4The Plural executive

Most committees are purely advisory. But some have more power. A committee that has
been assigned authority to make decisions and to perform management functions is referred
to as a plural executive. E.g. A corporate broad of directors is a plural executive, since it has
the power to plan, organizes, staff, direct and control.

Some organization establish an “executive committees” or “management committees” or a

finance committees” or a “policy committee” that serves as a plural committee. These types
of action oriented committees may formulate basic strategy, decide on key policies, allocate
money and other resources to various projects, settle disagreements between divisions of the
enterprises or make other high level decisions.

4.8.5 Guidelines for maximizing the effectiveness of committees

Committees usually spend a lot of time and money either attending committee meetings or
preparing for them. So committee effectiveness can be achieved if the following principles
for successful committee operations are observed.

I. Establishes the right size of committees

Deciding how large a committee should be is always judgmental, unless the size is specified
by law. Large committees are designed when:

 The main purpose is to inform the members who comprise it

 Widely differing talents and experience are needed to make the recommendation or
decision;
 The scope of the committees activity is very broad , if small committees are desired,
it is wise to divided the work among subcommittees
 Speedy action is needed
 The matter assigned to the committees must not be kept confidential the more persons
serving on a committee the greater the chance of information leaks.

ii. Select the right members. The following are criteria for selecting the right members

 Interest in the purpose of the committees

 Knowledge and experience related to the committee’s purpose
 Psychological compatibility (ability to compromise)
 Sufficient time to prepare for and attend meetings

iii. Select the right chairperson, an effective chairperson should have the following qualities

43
 Planning ability objectivity, diplomacy, experience and efficiency

iv. Define instructions clearly. The following must be made clear:

 The committees purpose

 Its authority
 A deadline for completion of the committee’s work
 Money, staff and other resources assigned to the committees
 The name of the chairperson or how one is to be selected
 Whether the report will be oral or written and
 To whom the final report will be made
v. Define operating procedures clearly:-
 Where and for how long the meeting will be held;
 What voting procedures will be followed
 Whether a non committees member will be eligible to attend and
 Plans for should be established
vi. Provide needed information and staff assistance
vii. The committees work, check frequently on the committee progress to ensure that the
deadline will be met
viii. Require a final report read and signed by the members
ix. Take action on the committees report

Chapter Five:-Staffing an Organization

5.1 What is staffing
44
In simple words, staffing is the processing of obtaining and maintaining capable and
competent people to fill all positions from top management to operative level this includes:-

 Securing
 Recruiting
 Selecting
 Training
 Appraising and
 Maintaining of the individuals in organizations
 Management scholars define the staff as follows
 Staffing is the function by which managers build an organization through the
recruitment, selection development of individuals as capable employees.
 Staffing is the executive function which involves the recruitments selection
compensation, training, promotion and retirement of subordinate managers.
 Staffing is concerned with the placement, growth and development of all those
members of the organization whose function is to get things done through the efforts
of other individuals.
 Staffing is the whole personnel function bringing in and training the staff and
maintaining favorable conditions of work.

5.2 Responsibility for staffing

Different scholars have different options

.Some staffing in an organization should rest up personnel department.

.Some scholars strongly feel that the responsibility for effective execution of staffing of
personnel function rests up on all the members in the organization. As koontz has pointed out
neither the personnel department nor any other implied duty of every manager.

Some important points about staffing

1. Staffing is not a temporary exercise.

It is continuing activity as the demand for work force in present day organization is
constantly changing.
2. Staffing is an ill understood function of management.
A. Sometimes the subject of staffing is approached solely from the stand point of
personnel development.
B. Sometimes staffing is being approached solely the standing point of effective
supervisions.
C. Yet, another reason why staffing is not well understood as other functions of
management.

45
 D. One common misunderstanding about staffing that many people regard staffing solely
as the function of hiring or recruiting and selecting mangers at different levels.
3. Staffing a complex process
The complex nature of staffing is particularly evident in the frustration which personnel
specialist experience in attempting to explain and justify their respective roles.
4. Staffing is logical exercise
Staffing starts with the estimation of organizational requirements.
5. Staffing deals with both comment and future
- Since position are filled not only for the present but for the future
6. Staffing involves people
Staffing difficult because it deals with people
The function of staffing and directing are concerned almost completely with people
(Koontz)
7. Staffing involves development of future managers
Organization are encouraging this new sense of responsibility because there is a
widespread realization that effective managing of an organization structure is one the best
assurances of a successful operation and growth.
8. Staffing problems are not new
The function of management people is as old as organization endeavor.
Every organization from a time from times immemorial is required to concern itself with
the selection.
Utilization and development of people
The earlier personnel philosophies
Principles and methods were often rude and barbarous

5.3 Training
Training begins the very first day an employee start to work. Training is learning process that
involves the acquisition of skills, concepts, rules or attitudes to increase the performance of
employee.

Training is a continuous and should be manager by expert

Objectives of training

To be effective training program should accomplish a number of objectives;-

A. Training must be based on organizational and individual.

B. Training should address problems that need to be solved.
C. Training programs should be based on sound the theories of learning.
D. Training must be evaluated and modifications in training programs must be made
whenever necessary.

46
 The training logic

Training is the systematic acquisition of skills, rules, knowledge and attitudes that have
specific or narrow applicability to a limited set of situations in a specific job environment.

It is a systematic process of altering the behavior and attitudes of employees in a direction to

increase organizational goal achievement.

Training is significant of part of an enterprise investment in human resources.

5.4 Executive Development

Managers and executives are the most crucial in effective decision making for an enterprise
training and development of crew managers and executives in indispensible because of the
following: - without development and training the skills of the executives become obsolete.

1. Basic change in the style of management and posture of managers of today gives rise to
the training and development of the traditional managers.
2. A trend toward conglomeration and integration in the present day business word calls
for special training and development of manager’s manpower obsolesce turns out to be
costly games, as in the present area of stiffing competition the survival and success of
the firm is increasingly depending on the manpower and especially managerial quality.
3. A major tool organization has for harnessing knowledge is executive talent.
4. Many executives exhibit fear for handling computers
5. A part from the technical skills the executives are required to learn the techniques of
dealing with people.

The primary objective of executive’s effective leaders to organization.

.To provides effective leaders to organization.

.To increases the efficiency of the performance of current executives.

.To develops unity of purpose and develops morale.

.To serves as a means of control operations.

5.5 Separation
Means stop giving services in an organization. This takes place as a result of the following

47
A. Resignations:- because of personal of health problems
B. Discharge: firing for violation of rules inadequate performance
C. Retrenchment: permanent termination for economic reasons
D. Layoffs: temporary separation
E. Retirement: because of finishing essential services or being oldness

48
 6.1 Chapter Six:-Leading Function
Meaning and the need for leadership
Leadership is the art of influencing other to direct their will abilities and efforts to the
achievement of leader’s goals. In the context of organization leadership lays influencing
individuals and group effort towards the optimum achievement of organizational objectives.

Leadership focuses on “peoples” aspect of management and is based on the assumption that
organizational effectiveness significantly depends on their motivation, effort and abilities.
Leadership is a social influence process. Leadership is as defined as the process of
influencing group activities towards the accomplishment of goals in a given situation.

The importance of leadership

1. Leadership is relationship between two or more people in which influence and power
are evenly distributed.
2. Leaders do not of flourish in vacuum.
3. Leadership is a function for the leader, the followers and other situational variables; it
is a matter removing barriers in a situation, so that subordinates work with freedom
and independence.
4. Leadership is essentially continuous process of influencing behavior

6.2 Concept and meaning of leadership theories

Leadership is complex and multidimensional in character and as such no one can afford to
jump prematurely prescription and generalization from the leadership research.

Leadership is crucial ingredient in organization effectiveness. It is a complex interpersonal

process of influencing behavior. There are three theories of leadership trait theory, behavioral
theory and situational theory:-

1. The Trait Approach to the Study of Leadership:-According

Leadership:-According to this approach, leadership
emphasizes psychological traits (qualities), compelling obedience from subordinates. The
leader is endowed with natural psychological traits that give him/her advantages over most
mortals. Leaders in general as a group have been found to be brighter more extrovert and
more self-confident than non-leaders; they also tend to be taller. This theory is connected to
the notion that leaders are born and not made. However, this approach is contested by a
number of weaknesses. Even though it was mostly accepted during 1930s and 1950s.

2. The Behavioral Approach to the Study of Leadership:-Unlike

Leadership:-Unlike traits, behaviors can be
learned and so it follows that individuals trained in appropriate leadership behavior would be
able to lead more effectively. Thus, rather than trying to figure out what effective leaders

49
were, researchers tried to determine what effective leaders did, how they delegate tasks, how
they communicated with and tried to motivate their subordinates, how they carried out their
tasks and so on.

These researchers have focused on two aspects of leadership behavior: leadership functions
and leadership styles. The two major functions of leaders are “task related” or problem-
solving functions and “group-maintenance’’ or social functions. Task-related functions might
include suggesting solutions and offering information and opinions; group maintenance
functions may include anything that helps the group operate more smoothly, agreeing with or
complimenting another group member or mediating group disagreements.

Leadership behavior focuses on one of two styles that a leader may use in dealing with
subordinates: a task-oriented style and an employee-oriented style.

Task-oriented managers closely supervise subordinates to ensure that the task is performed to
their satisfaction. A manager with this leadership style is more concerned with getting the job
done than with the development and growth of subordinates. Employee-oriented managers
try to motivate rather than to control subordinates. They encourage group members to
perform tasks by allowing group members to participate in decisions that affect them and by
forming friendly, trusting and respectful relationships with group members. In order to
analyze the relationship between the two factors a matrix grid has been developed.

3. Situational theories; both the trait and behavioral approaches proved to fail short of a
comprehensive and adequate theory of leadership style. An effective leader must be flexible
enough to adapt to the differences among subordinates and situations.

6.3 Concept and meaning of leadership styles

The behavior exhibited by leader during supervision of subordinates is known as leadership
style. Basically three styles are; - autocratic and raiser- fair leaders.

1. Autocratic:- these kinds of leaders give definite instructions, demand compliance,

emphasize task performance, exercise supervision and permits very little or no
subordinate influence on decisions, don’t of welcome suggestions from them, use
coercion threat and authority to enforce discipline and ensure performance. The leader
–centered production centered and directive eldership styles are often considered
identical to authoritiants style.
2. Democratic or participative leaders
These involve their subordinates individually as well as groups in making decisions
relating to their goals, plans etc permit them scope to take initiative and exercise
judgment, emprise group effort, exercise broad supervision, motivate subordinates for
high level of performance, use influence rather than authority and built two way

50
 communication. These leaders are also called employee centered consultative, primitive
and equalitarian.
3. Laiser –fair leader: these kinds of leaders take no interest either in production or people
“lets things drift” Laiser –faire leadership left the group without any direction many
good feelings about working together.

6.4 Motivation
6.4.1 The concepts of motivation an overview
There are many motivation theories. “Each motivation theories attempts to describe what
human begin are and what human beings can become. For this reasons, it is customary to say
that a motivation theory has content in the form of a particularly view about people. The
content of a motivation theory helps us understand the world of dynamic engagement in
which organization operate by depicting managers and employees engaging in organizations
every day. Since motivation theories deal with people’s development the content of a
motivation theory also helps managers and employees wrestle with the dynamics of
organizational life.
Frank Landy and Wendy Becker observe that motivation research is still a vigorous contest
for finding “one best way” to think about motivation.
6.4.2. Carrot and stick approach
The phrase "carrot and stick" is a metaphor for the use of a combination of reward and
punishment to induce a desired behavior. It is based on the idea that a cart driver might
activate a reluctant mule by dangling a carrot in front it and smacking it on the rear with a
stick. The idea sometimes appears as a metaphor for the realist concept of 'hard power'. The
carrot might be a promise of economic aid from one nation to another; the stick might be a
threat of military action. "And" may be replaced with "or" ("the carrot or the stick)" to
suggest the choice between reward and punishment as a means to alter behavior.
The earliest citation of this expression recorded by the Supplement to the Oxford English
Dictionary is to The Economist magazine in the December 11, 1948, issue. Earlier uses of the
expression were published in 1947 and 1948 in Australian newspaper commentary discussing
the need to stimulate productivity following World War II. An earlier American example was
published in February 1948 in a Daily Republic newspaper article discussing Russia's
economy.
An example of the use of this policy is Stalin's control of Eastern Europe during the period of
the Cold War. He applied it among countries of the Soviet Sphere of Influence to have a
tighter control on them.[citation needed.
Carrot on a stick is a similar, but separate, idiom. It refers to a policy of offering a reward for
making progress towards benchmarks or goals but not necessarily ever actually delivering.
The original metaphor referred to a boy sitting on a cart being pulled by a donkey. The boy
held a long stick to which a carrot had been tied, and he dangled the carrot in front of the
donkey but just out of its reach. As the donkey moved forward to get the carrot, it pulled the

51
cart—and the boy—so that the carrot always remained just out of reach as the cart moved
forward.

Carrot and the stick

Boardman Robinson cartoon using the carrot on a stick Metaphor.

6.4.3 Early theories of motivation

Motivation was one of the earliest concepts with which managers and management
researchers wrestled. A so called traditional model is often associated with Frederick Taylor
and scientific management. Managers determined the most efficient way to perform
repetitive tasks and then motivated workers with a system of wage incentives the more
workers produced, the more they earned. The underlying assumption was that managers.
Understood the work better than workers, who were essentially lazy and could be motivated
only by money. A so-called human relations model is often associated with Elion mayo and
his contemporaries – mayo and other human relations researchers found that the boredom
and repetitiveness of many tasks actually reduced motivation, while social contracts helped
creates and sustain motivation.
The conclusion is that managers could motivate-employees by acknowledging their social
needs and by making they feel useful and important. Modern day legacies of this model
include suggestions boxes, company uniforms, organization newsletters and employee input
in the performance evaluation process.Under the traditional model, workers had been

52
 expected to accept management authority in return for high wages. Under the human
relations model workers were expected to accept management authority because supervisors
treated them with consideration and allowed them to influence the work situation.
A so-called human resources model is often associated with Douglas McGregor. McGregor
and others theorists criticized the human relations model as simply a more sophisticated
approach to the manipulation of employees. They also charged that, like the traditional
model, the human relations model over simplified motivation by focusing on just one factor
which as many or social relations.
McGregor identified two different sets of assumptions about employees. The traditional view
known as theory x, holds that people have an inherent dislike of work. Although workers
may view it as a necessity, they will avoid it whenever possible. In this view, most people
prefer to be directed and to avoid responsibility. As a result, the work is of secondary
importance, and managers must push employees to work.
Theory Y is more optimistic, it assumes that work is as nature as pay or rest. In theory y,
people want to work and can derive a great deal of satisfaction from work. In this view,
people have the capacity to accept-even seek- responsibility and to apply imagination,
ingenuity and creativity to organizational problems.
The problems according the theory, is that modern industrial life does not fully tap the
potential of human beings. To take advantage of their employees innate willingness and
ability to work managers scope for personal improvement participative management is one
way to do this.

Table 2 Early views of motivation

Traditional model Human relations model Human resources model
1. Work in inherently 1. People want to feel useful 1. Work is not inherently distasteful
distasteful to most people. and important. people want to contribute to
meaningful goals that they have helped
establish.
2. What they do is less 2. People want to belong and 2. Most people can exercise for more
important than what they to be recognized as creativity self –direction and self-
earn for doing it. individuals. control than their present jobs demand.
3. Few want or can 3. These needs are more 3.______________________________
handle work that requires important than money in -----------------------------------------------
creativity, self direction or motivating people to work. -
self control.
1. The manager should closely 1. The manager should make 1. The manager should make use of
supervise and control each worker feel useful underutilized human resources.
subordinates. and important.
2. He or she must establish 2. He or she should keep 2. He or she must create an
break down tasks into subordinates informed and environment in which all members may

53
 simple, repetitive, easily
listen to their objections to contribute to the limits of their ability.
learned operations. his or her plans.
3. He or she must established 3. The manager should allow 3. He or she must encourage full
detailed work routines and
subordinates to exercises participation in important matters,
procedures and enforce some self-direction and self- continually broadening subordinate
these fairly but firmly. control on routine matters. self-direction and self-control.
1. People can tolerate work if1. Sharing information with 1. Expanding subordinates influence
the pay is decent and the bosssubordinates and involving self-direction, and self controlled will
is fair. them in routine decisions will lead to direct improvement in operating
satisfy their basic needs to efficiency.
belong and to feel important.
2. It tasks are simple enough 2. Satisfying these needs will 2. Work satisfaction may influence as a
and people are closely improve morale and reduce “by product” of subordinates making
controlled, they will resistance to formal full use of their resources.
produce up to standard. authority-subordinates
willingly cooperates.

6.4.4. Contemporary theories of motivation

Landy and Becker have sorted many modern approaches to motivation theory and practice in
to five categories need theory, reinforcement theory, equity theory, expectancy theory and
goal setting theory.
Need theory:- has a long-standing tradition in motivation research and practice. As the term
suggests, need theory focuses on what people require to live fulfilling lives. A practice, need
theory deals with the part work plays in meeting such needs.
According to need theory, a person is motivated when he or she has not yet attained certain
levels of satisfaction with his or her life. A satisfied need is not motivator. There are various
need theories which differ regarding what those levels are and when satisfaction is actually
reached.
6.4.5 Maslow’s Need Hierarch
Maslow’s hierarch of needs developed by Abraham Maslow has probably received more
attention from managers than any other theory of motivation. Maslow viewed human
motivation as a hierarchy of five needs ranging from the most basic physiological needs to
the highest needs or self actualization. According to Maslow, individuals will be motivated to
fulfill which ever need is prepotency or most powerful, for them at a given time. The
prepotency of a need depends on the individuals current situations and recent experiences
starting with the physical needs, which are most basic, each need must be satisfied before the
individual desires to satisfy a need at the next higher level.

54
 Figure 6 a need theory of motivation

Need (deprivation) Drives (tensions or

drives to fulfill a need)

Satisfaction (Reduction Actions

of the drive and (Goals –directed behavior)
satisfaction of the
organization need)

Schematic version of the five level triangle is portrayed in figure 7

1. Physiological needs: are the biological needs required preserving human life, these
needs includes needs for food, clothing and shelter. These needs must be met at least
partly before higher level needs emerge.

Features physiological needs are

i. They are relatively independent of each other

ii. In many cases they can be identified with a particular organization in the body
(hunger – stomach etc)

Figure 7. Maslow’s hierarchy of needs

Self
Actualization

Esteem

Social

Safety

Iii. In any affluent culture these needs are unusual rather than typical motivators
Physiological

55
 Iv.Physiological needs are essentially finite

V.They must be met repeatedly within relatively short time periods to remain fulfilled

Vi. Satisfaction of physiological needs is usually associated not with money itself but what
it can buy. The value of money diminishes as one goes up the hierarchy

vii. Most of the physiological needs require some conscious provision for their future
satisfaction.

2. Safety needs:-Once physiological needs become relatively well gratified, the safety needs
begin to manifest them and dominate human behavior. These include

i. Protection from physiological dangers (fire accident)

ii. Economic security (fringe benefits, health, insurance program)
iii. Desire for an orderly, predictable environment and
iv. The desire to know the limits of acceptable behavior

Maslow stressed emotional as well as physical safety. Thus these needs are concerned with
protection from hazards of life from danger, deprivation and threats. Safety needs are
primarily satisfied through economic behavior. Organizations can influence these security
needs either positively through pension schemes, insurance plans or negatively by arousing
fears of being fired or laid off. Safety needs too, are motivational only if they are unsatisfied.

3. Higher order needs (social Need):- After the lower order needs have been satisfied the
social or love needs become important motivators of behavior man is a gregarious being and
he wants to belong, to associate, to gain acceptance from associates, to give and receive
friendships and affection. Social needs lend to be stronger for some people than for others
and stronger in certain situations. Social needs have certain features in common.

i. They provide meaning to work life

ii. Social needs are regarded as secondary because they are not essential to preserve
human life.
iii. Social needs are substantially life.
iv. Social needs are primarily satisfied through symbolic behavior of psychic and social
content.

4. The Esteem needs (ego need):-Esteem needs are two fold in nature: self-esteem and
esteem of other. Self-esteem needs include those for self-confidence achievement,
competence, self respect, knowledge and for independence and freedom. The second group
of esteem needs is those that related to one’s reputation needs for status, for recognition, for
appreciation and the deserved respect of one’s fellows associates.
Common features esteem needs are:

56
 i. They do not become motivators until lower level needs are reasonably satisfied.
ii. These needs are insatiable unlike lower order needs, these needs are rarely satisfied.
iii. Satisfaction of esteem needs produced feelings of self-confidence, worth, strength,
capability and adequacy of being useful and necessary in the world (Maslow) the
waiting them results in feelings of interiority, weakness and helplessness.
iv. The satisfaction of esteem needs is not always obtained through mature or adaptive
behavior.
v. The modern organization offers few opportunists for the satisfaction of these needs
to people at lower levels in the hierarchy.

5. The self-actualization needs:- These are the needs for realizing one’s own potentialities
for continues self-development for being creative in the broadest sense of that term. “Self
fulfilling people are rare individuals who come close to living up to their full potential for
being realistic accomplishing things, enjoying life and generally exemplifying classic human
values. Self –actualization is the desire to become what one is capable of becoming. A
musical must make music, a Pose must write, a general must win battles, an artist must paint,
a teacher must teach etc.

Some of common features

(i) The specific form that these needs take will vary greatly from person to person. In one
person it may be expressed materially, in still another, aesthetically.
(ii) Self- realization is not necessarily a creative urge
(iii) The way self-actualization is expressed can change over the life cycle
(iv) These needs are continuously motivational, for example scaling mountains, winning
titles fields like tennis etc
(v) These needs are psychological in nature and are sub substantially innate
(vi) The conditions of modern life give only limited opportunity for these needs to obtain
expression.

6.4.6. Hertzberg’s two factors theory

For several years ago, managers had been wondering, why their fancy personnel policies and
fringe benefits were not increasing employee motivation on the job? To answer this
Frederick Herzberg of case Western Reserve University provided an interesting extension of
Maslow’s need hierarchy theory and developed a specific content theory of work motivation.
It is also called the Dual factory theory and the motivation hygiene theory of motivation. The
theory originally was derived by analyzing “critical incidents” written by 200 engineers and
accountant in nine different companies in puts burgh Areas USA, Herzberg and his
associated conducted extensive interviews with the professional’s subjects in the study and
asked them what they liked or disliked about their work. The research approach was
simplistic and built around the question. “Think of a time when you felt exceptional good or

57
exceptionally bad about your job, either you present job or other, job you have had. “This
approach has been repeated many times with a variety of job holders in various countries.
The results indicated that when people talked about feeling good or satisfied they mentioned
features intrinsic to the job and when people talked about feeling dissatisfied with the job
they talked about factors extrinsic to the job. Herzberg called these motivation and
maintenance factors respectively.

Theory: a skeleton view

1. Hygiene factors: when absent, increase dissatisfaction with the job, when present
help in preventing dissatisfaction but do not increase satisfaction or motivation.
2. Motivators; when absent, prevent both satisfaction and motivation. When present
lead to satisfaction and motivation
Hygiene factors

Hygiene factors represent the need to avoid pain in the environment. They are not intrinsic
part of a job, but they are related to the conditions under which a job is performed. They are
associated with negative feelings. They are environment related factors, hygiene. They must
be viewed as preventive measures that remove sources of dissatisfaction from the
environment. Like physical hygiene they do not lead to growth but only prevent
deterioration. Maintaining a hygiene work environment will not

Neutral state of
motivation, satisfaction
and performance. 58
 High state of
motivation satisfaction
and performance.

Extrinsic (content hygiene) Intrinsic content

Motivators’ satisfiers
Maintenance
-achievement
- Company policy and Factors
administration -recognition
- Relationship with superior Ten Factors
.Work itself
- Work condition
-responsibility
Six
- Salary
-relationship with peers
-advancement
-personal life
-relationship with subordinates .Growth
- Status
-security
- Supervision

Figure 8. Herzberg’s motivation maintenance factors

Improve motivation any more than garbage disposal water purification. Mr Fictious, who is
excellent health, will not become any healthier by eating food but if he does not food he may
become sick and die. Hygiene factors produce no growth in worker output but they prevent
loss in performance caused by work restriction. Hertzberg believed that hygiene creates a
zero level of motivation and if maintenance at proper level prevents negative type of
motivation from occurring. According to Scott Myers “maintenance factors are characterized

59
by the fact that they inspire little positive sentiment when added, but incite strong negative
reactions when removed.

-Environmental, external to job

-prevent Dissatisfaction
Hygiene -Zero level motivation, if maintained
-Never satisfied completely
-Money is the most important
HygienFactor
Fig 9. Hygiene factors

Motivators are associated with positive feelings of employees about the job. They are related
to the content of the job. They make people satisfied with their job. If managers wish to
increase motivation and performance above the average level, they must enrich the work and
increase a person’s freedom on the job. Motivators are necessary to keep job satisfaction and
job performance high. On the other hand, if they are not present they do not prove highly
satisfying.

- Content factors
Motivators - Affect satisfaction
- Spur individual to superior performance

Fig .10 Motivators

6.4.7. Expectancy and equity theory

6.4.7.1 Expectancy theory:-According to expectancy theory, people choose how to behave

from among alternative courses of action, based on their expectations of what there is to gain
from each action. David Nadler and Edward Lawyer describe four assumptions about
behavior in organizations on which the expectancy approach is based.

.Behavior is determined by a combination of factors in the individuals and factors in the

environment.

.Individuals makes conscious decisions about their behavior in the organization.

60
.Individuals has different needs, desires and goals.

.Individuals decides between alternative behaviors on the basis of their expectations that a
given behavior will lead to a desired outcome. These assumptions become the basis for the so
called expectancy model, which has three components:

1. Performances –outcome expectancy individuals expect certain consequences of their

behavior these expectations, in turn; affect their decisions on how to behave. For example, a
worker who is thinking about exceeding the sales quota may expect praise, a bonus no
reaction or even hostility from colleagues.

2. Valence: the outcome of a particular behavior has a specific valence or power to motivate,
which varies from individuals to individual. For example, to a manager who values money
and achievement, a transfer to a higher –paying position in another city may have high
valence, to a manager who values affiliation with colleagues and friends, the same transfer
may have low valence.

3. Effort- performance expectancy people’s expectations of how difficult it will be to

perform successfully affect their decisions about behavior. Given a choice, individuals tend
to select the level of performance that seems to have the best chance of achieving an outcome
they value.

We can think of these three components as three questions. Its do this, what will be the
outcome? Is the outcome worth the effort to me? What are my chances of achieving on
outcome that will be worthwhile for me? Thus according to expectancy theory, individuals
are motivated when they see a favorable combination of what is important to them and what
they expect as a reward for their efforts, and they behave accordingly Wal-Mart policies,&
such rituals as the cheer, appear to assure associates about the outcomes they can expect from
their effort.

An individual’s behavior will be depends to some extent on the types of outcome expected.
Some outcomes act as intrinsic rewards that are “felt’ directly by the individuals. Examples
are feelings of accomplishment, increased self-esteem and the satisfaction of developing new
skills. Extrinsic rewards, in contrast, such as bonuses, praise or promotions, are provided by
an outside agent, such as a supervisor or work group. A single level of performance may be
associated with a combination of intrinsic and extrinsic outcomes each having its own
valence. Expectancy theory implies that managers must pay attention simultaneously to a
number of factors in dealing with their employees; Nadler and Lawler recommend those
managers;

1. Determined the rewards valued by each employees. If rewards are to be motivators, they
must be suitable for the individuals involved, managers can determine what rewards their

61
employees seek by observing their reactions in different situations and by asking them what
rewards they desire.

2. Determined the performance you desire managers must identify what performance level or
behave or they want to they can tell employees what they must do to be rewarded.

3. Make the performance level attainable. If employees feel the goal they are being asked to
pursue is too difficult or impossible, their motivation will be low.

4. Link rewards to performance. To maintain motivation, the appropriate reward must be

clearly associated within a short period of time with successful performance.

5. Analyze what factors might counteract the effectiveness of their reward conflicts between
the managers is reward system and other influences in the work situation may require the
manager to make some adjustments in the reward. For example, if the employees work group
favors low productivity, an above average reward may be required to motivate an employee
to high productivity. Seniority benefits for example, reward the duration of one’s
employment in the organization, not the quality of one’s performance.

6. Makes sure the reward is adequate minor rewards will be minor motivators

6.4.7.2 Equity theory:-Equity theory is based on the assumption that a major factor in
job motivation is the individual’s evaluation of the equity or fairness of the reward received.
Equity can be defined as a ration between the individual’s job inputs/ such as effort or skills
and job rewards (such as pay or promotion).According to equity theory individuals are
motivated when they experience satisfaction with what they receive from an effort in
proportion to the effort they apply. People judge the equity of their rewards by comparing
them either to the rewards others are receiving for similar input or to some other effort
reward ratio that occurs to them. An example will demonstrate the difference.

Suppose that you and a co-worker are both assigned projects that involving developing a
pricing strategy on a product. “Your” product is a new part of the organization product line
and faces a complex competitive situation. Your co-worker’s product has between sold for
ten years and has a track record regarding the relationship between sales and price levels.
Your effort will probably need to be much greater than your co-ward’s given the relatively
greater uncertainties’ that you will face in completing the task.

6.4.8. Goal setting theory: focuses on the process of setting goals themselves. According
to psychologists Edwin Locke, the natural human inclination to set and strike for goals is
useful only if the individual both understands and accept a particular goal. Furthermore,
workers will not be motivated if they do not possess- and know they do not possess- the
skills needed to achieve a goal. According to goal-setting theory, then individuals are
motivated when they behave in ways that move them to certain clear goals that they accept

62
and can reasonably expect to attain. So goal –setting theory joins expectancy theory and
reinforcement theory as different ways to explain why people behave as they do. At Wal-
Mart, goals such as superior customer service are reaffirmed every time a store visit occurs.

Christopher early and Christine shalley describe the goal-setting process in terms of four
phases of a person reasoning.

1. Establishment of a standard to be attained.

2. Evaluation of whether the standard can be achieved.

3. Evaluation of whether the standard matches personal goal.

4. The standard is accepted, the goal is there by set, and behavior proceeds toward the goal

Try this model as a way of explaining how you reached your decision to attend the college or
university that you do.

Research shows that when goals are specific and challenging, they function more
effectively as motivating factors in both individual and group performance. Research also
indicates that motivation and commitments are higher when employees participate in the
setting of goals. Employees need accurate feedback on their performance, however, to help
them adjust their work methods when necessary and to encourage them to persist in working
toward goals.

6.4.9. Concept and meaning of communication

Communication is defined as the interchange of ideas, information, feelings and emotions

among two more persons in a way that share a common understanding about it. It is the
transfer of information from the sender to the receiver.

Importance

Communication is one of the most central aspects of all managerial activities. It has
estimated that manager spends 90% of his time in communicating, reading, writing, listening,
and instructing approving and so on.

Objectives, plans, policies, procedures, standards, methods, instructions, rules and orders
should be appropriately and adequately communicated so subordinates in order to enable
them to perform adequately.

Objectives of communication

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Communication enables to give and receive information, advice, order, suggestions,
persuasion, education, warning motivation etc.

Principles of effective communication

A. Clarity of thought
B. Clarity of expression
C. Completeness/ meaning fullness
D. Brevity
E. Attentiveness
F. Integrity
G. Timely
H. Objectivity
I. Adaptability

The communication process

The major variables in the communication process includes;-

A. Stimulus and motivation from the sender

B. Encoding: the process of translating an idea into message
C. The message
D. Choosing media (channel e.g. Face to face discussion memos, magazines, radio,
newspaper etc
E. Decoding is the process of translating a message in to idea
F. The receiver
G. Feedback

Types of communication

I. Based on direction of flow

 Down word communication

 Upward communication
 Horizontal communication

ii. Based on media

A. Written communication
B. Oral communication
C. Non verbal communication

ii. Based on formality

A. Formal communication

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 B. Informal communication

Barriers to effective communication

1. Perception:- persons view of realty

2. Semitic (language barriers)
3. Value judgment (perception)
4. Motivation and interests
5. Attention
6. Sources of credibility
7. Filtering
8. Hidden agenda
9. Values laden wards
10. Omission
11. Context
12. Hoarding translating more documents
13. Information overload
14. Pressure of time
15. Hierarchical differences

Chapter Seven:-The Controlling Functions

7.1 Meaning and Need For Control

65
.Precisely defined, control refers to the task of ensuring that activities are producing the
desired results.
.Control is defined as the regulation of work activity in accordance with predetermined plans
as to ensure the accomplishment of organizational objectives.
.Control is any process that guides activity toward some predetermined goal.
.Control involves keeping the organizational activities and functions on right track and
aligned with plans and goals. In other words, control systems are closely linked to the
planning function of management.
7.2 Process of control
Whatever the level at which control is exercised the process control is basic and involves the
following stages:-
(i) Establishment of standards
Control begins logically by setting standards. Standards are the criteria for judging results
can be measured.
(ii) Measurement of performance
After standards are appropriately drawn the next step in the control process is the
measurement of performance. Measurement is no mean task. We have to consider a
number of questions such as what to measure, how to measure, and how to solve the
problem of measurement in less technical or qualitative jobs?
(iii) Comparison of performance with standards
After the standards are set and performance is accurately measured in immediate step is to
compare them to see any variation between two. Comparison looks to be easy task, but in
fact, it is formidable one. Ralph. C Davis identifies four phases in the comparison:
1. Receiving the raw data
2. Accumulation, classification and recording of this information
3. Periodic evaluation of completed action to date
4. Reporting the status of accomplishment to higher line authority
5. Corrective action
Having established the variation between the standards and actual performance the next
important step into take appropriate action. Control process would be incomplete, for that
matter, meaningless, if corrective action isn’t taken.

7.3 Types of Control

Depending on the “time” at which control is applied, controls are of three types:-
(A)Historical control (Feedback):- Traditionally, control was viewed as historical. It is
because most of control methods measure results after the performances. Control provides
information as how the goals of organization are met or not met.
(B) Concurrent control:-It is called ‘real time’ control, concurrent control techniques
immediately consider any problem and analysis’s it to necessary and corrective steps before

66
any major damage is done. Concurrent controls are also known by another name steering
controls and occur while an activity is taking place.
(C) Predictive control (feed forward control):-Here the control system anticipates
problems the management encounters in future. Cash budget is an example of this type where
the finance manager is in a position to estimate the next year’s flow of cash.

7.4 Effective control system

The control process is not automatic. It is deliberate. An effective control system requires the
following essentials.
1. Control must be understandable:-Controlling requires proper training and
employment of competent people in the execution of control system. With the proper
understanding if managers use the recently innovated control devices it would be
catastrophic to the organization and have adverse consequence. So understanding and
proper knowledge of devices are the foremost important essential in the control system.
2. Control must flexible
.Flexibility in control is generally achieved through flexible budgets
.Flexibility makes control workable in the face of changes plans, unforeseen circumstances or
outright failures.
3. Control must be economical:- Control should be worth its costs.
4. Control must be objectives
.The effective controls system calls for objectives accurately, suitable and definite standards
or plans
.If controls are subjective then managers or subordinates personality my influence
.Judgments and hence there may be any elements of bias in decisions leading to ineffective
performance.
5. Controls should recognize the importance of the time elements:- Time lines are one
very important factor that cannot be ignored in controlling. Effective a control system
attaches great important to the time element.
6. Control system should provide useful, understandable information:-An effective
control system provides information to the right people who can use them in correcting
deviations and festering growth.
7. Control should be forward looking
 An effective control system always aiming at future
 Control aids in further planning
 It is rightly said that the starting points of planning is control
8. Controls should be selective:- For every organization there are certain key determinants
of efficiency and effectiveness. An effective control system considers management by
exception as an important concept to be practiced in reality.
9. Controls should reflect the organization structure and needs:-Effective control
system is that which reflects the organizational structures, positions and needs. And plans

67
 organization structure clarifies the roles of people in organization and control system.
Reflects as to who is responsible for what, execution of plans and for any deviation from
them.
10. Control should lead to corrective action:- Merely discovering deviations in the
performance of operations is not enough. An effective control system must lead to
appropriate and corrective action. The system must also disclose the key areas of
concentration where are the problem areas, who are responsible for that etc.

Blue Nile College

Teaching-Learning Process

68
 Department of Management
Study guide
Modul Management
e
Name
Course Introduction to Management
title
Course MGMT211
code
Degree BA-degree in management
progra
m
Modul 1
e No
Credit 3
hours
progra Instructor’s name lecturer student
m And address

Days Periods Room departme Sectio

s nt n
Regula 1.Leykun Assaye Saturday,Sunday,Thues After 1 MGMT 1
r Mobile 0918740961 day &Wednesday noon
Email &mornin
leykunassaye@gmail.c g
om
Target 1st year first semester Management-Introduction to management
group
Course Objectives.
 The course enables students to have an understanding on:
 Define the term management, basic concepts and principles of management.
 Explain the general overview of management in relation to its importance,
roles, skills and universality.
 Acquire sound understanding of the nature and practice of management.
 Develop a comprehensive understanding.

Course Description
This course is designed to expose management students to the basic concepts
and area of managerial application of introduction to management. The topics
include: Fundamentals of management, the planning function, the decision-

69
 making function, the organizing function, the staffing function, the leading
function, and the controlling functions are basics topics of this course.

Weeks Topics and sub topics Teacher activity Student’s .delivery

and hours activity methods
Week1& Chapter one:- Fundamentals of introducing attending Lecturing
2 management -asking questions Discussing writing Group
6 hours 1.1. Definition of management. -inviting students to some short note and discussion
1.2. Significance of management. ask questions answering
1.3. Function of management.
1.4. Levels of management and
types of managers.
1.5. Managerial roles and skills.
1.6. Universality of management.
1.7. Is management an art, a science
or a profession?

Week3,4 Chapter two:-The planning function introducing attending Lecturing

and 5 2.1.Concepts and Needs for - asking questions Discussing writing Group
9hours planning -inviting students to some short note and discussion
2.2.types of planning ask questions answering
2.3.planning process
2.4. Objectives of planning
2.5.planning techniques
Week 6 Chapter three:- The decision- introducing attending Lecturing
3hours making function - asking questions Discussing writing Group
3.1meaning of decision-making -inviting students to some short note and discussion
3.2 rational of decision-making ask questions answering
process
3.3 types of decision-making
Weeks Chapter four:-The organizing introducing attending Lecturing
7&8 function - asking questions Discussing writing Group
9hours 4.1Concept of organization and -inviting students to some short note and discussion
organizing ask questions answering
4.2 Formal and Informal
organization
4.3Organizational chart
4.4departmentalization:-meaning
and bases
4.5 Span of management

70
 4.6 Authority and power: Sources
of power
4.7 Delegation, centralization and
decentralization
4.8 Groups and committees

Week Chapter Five:-Staffing an introducing attending Lecturing

9&105ho organization - asking questions Discussing writing Group
urs 5.1.The procurement function -inviting students to some short note and discussion
5.2 training and development ask questions answering
5.3.maintenance and utilization
5.4.Separation
11,12,13 Chapter Six:- The leading function introducing attending Lecturing
&14 6.1.The Need for leadership and - asking questions Discussing writing Group
meanings -inviting students to some short note and discussion
6.2.Concept and meanings of ask questions answering
leadership theories
6.3.concept and meaning of
leadership style
6.4.Motivation
Week Chapter seven:- The control introducing attending Lecturing
15&16 function - asking questions Discussing writing Group
8hours 7.1.meaning need for control -inviting students to some short note and discussion
7.2.control process ask questions answering
7.3.types of control
7.4.Techniques of control
7.5.Effective control system
Assessment Methods
.For the purpose of insuring how students’ understood the main objective of the, following
evaluation methods will be used.

N Assessment types Weight Chapters included Scheduled Time

o.
1 Peer group assignment 15% Chapters 4&6 .at the end of 8th week
2 Quiz or attendance 5% Included up to class end .At the end of 5th week
3 Test one 15% Chapters 1,2&3 .at the end of 8th week
4 Test two 15% Chapters 3& 4 at the end of 10th week
5 Final examination 50% Chapters 5,6&7 .at the end of 16th week
6 Total 100%

71
Course policy
.Attendance: it is compulsory to come to class on time and every time. If you are going to
miss more than three classes during the term, you should not take this course.
.Assignment: you must do your group assignment and submit on time. Not late assignment
will be accepted.
.Tests: you will have short tests almost every unit. If you miss the class or, are late to class,
you will miss the test. No makeup tests will be given. You are expected to observe the rules
and the regulations of the College as well.
.Cheating: you must do your own work and not copy and get answers from someone else.
When you are in class; please do not chew gum, something, listening to recorders or CD
players, or involving in acts that spoil the normal teaching-learning process; switch off your
cell phones, before class and exam sessions. Any attempt to use cell phones in exam session
will be considered on act of cheating and hence, dealt accordingly.

72