MANAGEMENT PERSPECTIVE

Process
August 2008, N L Dalmia
Full Time- 1st. Sem

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 Definition
• Accomplishment of objectives through the
efforts of people performing certain
functions.
• Analyze definition (1) Accomplishment of
results thru the efforts of other people.
(2)Art of getting things done – organized
groups. (3) Mgmt is a process of Planning,
Organizing, Actuating and Controlling to
determine and accomplish the objectives.

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 Management as a process
• Series of interrelated functions- Planning,
organizing, staffing, leading, & controlling.
• Social process – provides an environment,
provides incentives for good performance.
• Management as a discipline – specialized
branch of knowledge.
• Management as an activity performed by
managers; planning, organizing, staffing,
directing & controlling.
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 Scope of Management
• Three distinct areas.(1) Economic resource, (2)
System of Authority, (3) A class or elite.
• Economic resource along with land, labor and
capital. Effective use of the 5 M’s (Manpower,
materials, money, machinery, methods)
• System of Authority- Herbison & Myers declares
Mgmt is rule enforcing body bound together by
relationships between superior & subordinates
• Mgmt as a class or elite – a distinct class in
society having own value system

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 Functions of Management
• Five functions: 1. Planning 2. Organizing
3. Staffing. 4. Leading 5. Controlling.
• Management applies to any kind of
organizations.
• Applies to managers at all levels
• Aim of all managers is to create surplus
• Management is concerned with
productivity, effectiveness & efficiency
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 Functions of Management
• Managers must operate in external
environment that effect operation.
• Must be responsive to economic, social,
ecological, political & ethical factors.
• Time spent for each function may differ.

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 Why management principals?
• 1. To increase efficiency: Principles aid
thinking & action. Need for guess work,
haphazard activities reduced. Rapid
changes in the environment can be solved
• To crystallize the nature of
Management: Principals crystallize
knowledge without which not possible to
impart knowledge & provide training to
managers.

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 Why management principals?
• To improve research in management:
Management deals with highly
unpredictable human beings. Principals
help in testing human behavior
understanding & predicting the outcome.
To attain social goals: Managers quality
of life & standard of living can be improved
Managers can commit resources & employ
them in a judicious manner.
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 Skills of An Effective Manager
• Must possess 5 skills as presented below
• Planning skills: Ability to forecast, ability to
think ahead, state organizational objectives
clearly and precisely, set performance standards
• Organizing skills: Ability to analyze & describe
various organizational jobs. Ability to select,
train, develop, maintain & retain people. Ability
to define working relationship & authority flow.
Ability to get along with changing situations

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 Skills of An Effective Manager
• Leading skills: Ability to see big picture. Ability
to communicate ideas effectively. Ability to
inspire people to do better. Ability to inculcate a
sense of team work. Ability to assess situation &
initiate changes.
• Controlling Skills: Ability to keep the activities
on the desired path. Ability to initiate corrective
steps at right time. Ability to ensure control
without hurting the feelings of employees.

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 Skills of An Effective Manager
• Decision making skills: Ability to make
good and timely decisions. Ability to
devote on key, important and strategic
issues. Ability to make right choices & take
the organization forward. Ability to commit
funds to the best advantage.

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 Levels of Management
• In a large organization, 3 levels of management
are usually identified Top, Middle Lower level
management.
• TOP MANAGEMENT :
• Determines objectives and policies
• Designs the basic operating & financial
structure of an organization
• Provides guidance and direction
• Lays down standards of performance
• Maintains good public relations.
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 Levels of Management
• MIDDLE MANAGEMENT
• Interprets and explains the policies framed by the top
management
• Issues detailed instructions
• Participates in operating decisions
• Trains other managers
• LOWER MANAGEMENT
• Plans day to day operations, arranges tools & eqipment
• Assign jobs to workers, provides supervision
• Maintain discipline

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 Who are effective Managers?
• Have vision, think long term, set direction.
• Are good communicators & good listeners
• Understand operations
• Know where to spend time and prioritise
• Do not resist change
• Delegate well, accept responsibility & admit
mistakes
• Are motivating, curious, honest, credible &
decisive
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 Emergence of Management Thought

• Federick W Taylor – Father of scientific

management. Increase productivity through
greater efficiency in production.
• Increased pay for workers – Apply scientific
knowledge
• Create group harmony and cooperation for
maximizing output & developing workers.
• Gantt: Scientific selection of workers.
Cooperation between labor & management.

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Emergence of Management Thought

• Frank & Lilian: Time and motion studies.

• Henri Fayol: Introduced modern
operational theory. Divided industrial
activities in 6 groups (A) Technical (B)
Commercial (C) Financial (D) Security (E)
Accounting & (F) Managerial
• Elton Mayo: Famous for studies of social
attitudes & relationship of work groups.
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 Fayol’s 14 Universal Principals
• 1. Division of work – specialization of labor
• 2. Authority – right to give orders.
• 3. Discipline- Obedience & respect
• 4. Unity of command- Each employee receives
orders only from one supervisor.
• 5. Unity of direction: Coordinated & focused
• 6. Subordination of individual interest
• 7. Remuneration: Should be paid fairly

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 Fayol’s 14 Universal Principals
• 8. Centralization & Decentralization is a matter
of proportion.
• 9. Scaler chain: Formal chain of command
• 10. Order: Men & material in proper places
• 11. Equity: Fairness & justice lead to devoted &
loyal service.
• 12. Stability & tenure: to learn jobs
• 13. Initiative: satisfaction to carry out plan.
• 14. Esprit de corps: Team spirit for harmony.
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 Environment of Management
• External environment- Operating in a
pluralistic society
• Technological environment: The
knowledge age- rethinking to balance
freedom & restriction for control purposes
• Ecological Environment- relation of people
with land, water air. Example: (a) Bhopal
tragedy and Union Carbide. (b) The
greening of Toshiba.
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 Organizational Environment
• Intrapreneur & Entrepreneur
• Intrapreneur- person who focuses on
innovation & creativity within the
organization for profitable venture.
• Entrepreneur- person does above things
but outside the organizational settings
• They see an opportunity, obtain capital,
know-how and other inputs. Take personal
risk of success or failure.
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 Management- Science or Art
• Arguments on both sides: start - science
• Systemized body of knowledge
• Management is a social science
• Management is an inexact science: not
like physics or chemistry. No absolute
principals as business conditions flexible
• Manager Vs Scientist: Scientist can wait
but managers cannot.
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 Management- Science or Art
• Start : Art – Use of Knowledge
• Creative art – Combines human & non
human resources to achieve results.
• Personalized: Every manager has his own
way of managing people. Managers learn
over years by trial & error method.
• Constant practice: Learn from mistakes.
Gains knowledge over a period of time
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10 Managerial roles - Mintzberg
Interpersonal Roles
Figure head role
Leader role
Liaison role
Informational role
Recipient role
Disseminator role
Spokesperson role
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10 Managerial roles - Mintzberg
• Decision role
• Entrepreneurial role
• Disturbance handler role
• Resource allocator role
• Negotiator role

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 Environment in Management
• Managers, in business, govt, university etc
takes account of external environment.
• In Pluralistic society many groups exercise
power. Manager’s must integrate aims.
• Manager’s identify, evaluate & react to the
forces outside the enterprise
• Society has influence on organizations
which can affect their operations.
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Manager’s Social Responsibility
• Corporate Social Responsibility & Social
Responsiveness
• Public needs have changed. Discourages
govt. intervention. More freedom/flexibility.
• Benefits to society & neighborhood.
• Reaction or proaction?
• The role of government.

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 Ethics in Managing
• Definition: Defined as the discipline dealing with
what is good and bad and with moral duty and
obligation.
• Personal Ethics: Rules by which an individual
lives own personal life
• Accounting Ethics: Codes that guide the
professional conduct of accountants.
• Business Ethics: Concerned with truth and
justice (for society, competition, public relation,
advertising, corporate behavior etc.) in home
country & abroad.

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 Ethics in Managing
• Managers compete for information, influence &
resources – 3 theories.
• Utilitarian theory- plans & actions should be
evaluated by their consequences, greatest good
for greatest number of people.
• Theory based on their rights – all people have
basic rights - right to freedom, free speech etc.
• Theory of Justice – Decision makers be guided
by fairness, equity & impartiality
• Ethics be institutionalized.

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 Institutionalizing Ethics
• Top level managers responsible to create
organizational environment fostering
ethical decision by institutionalizing ethics
• 1. By establishing company policy or
code and publish the same
• 2. By using formally appointed ethics
committee
• 3. Teaching ethics in Management
Development Programs
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 Planning
• Involves selecting missions and objectives
& actions to achieve them
• Requires decision making to choose future
course of action from alternatives.
• Various types of plans ranging from
overall purposes to detailed action.
• No plan exists until a decision – a
commitment of human or material
resources has been made
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 Planning
• Practical steps in planning
• 1. Being aware of opportunity in light of the a)
Market b) Competition c) Customer’s want d)
Strength & e) Weakness
• 2. Setting objectives or goals a) where we want
to be? b) What we want to accomplish and
when?
• 3. Considering planning premises a) In what
environment? b) Internal or external. c) Will our
plans operate?

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 Planning
• 4. Identifying Alternatives – what are the most
promising alternatives
• 5. Comparing alternatives – in light of goals.
Which alternatives give us the best chance at
lowest cost and highest profit
• 6. Choosing an alternative: Selecting the course
of action to be pursued.
• 7. Formulating supporting plans: such as plans
to a) buying equipment b) buy materials c) Hire
& train workers d) develop a new product.

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 Planning
• 8. Numbering plans by making budgets

Develop such budgets as:

• 9. Volume & price of sales.
• 10. Operating expenses
• 11. Expenditures for capital equipment

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 Planning
• Strategy & Policy
• The term “strategy” derived from the Greek word
STRATEGOS meaning general.
• Strategy refers to the determination of the
purpose or mission & long term objectives.
• Adopts courses of action and allocation of
resources to achieve aims.
• Objectives are a part of strategy formulation

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 PLANNING
• Policies
• Are general statements guiding manager’s
thinking in decision making.
• Decisions must fall within certain limits.
• Intend to guide managers commitment to
the decision they ultimately make.
• Essence of policy is discretion. Strategy,
on the other hand concerns the direction
in which human & material will be applied
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 Strategic Planning Process
• Industry Analysis.
• Formulation of strategy requires
evaluation of attractiveness of an industry
by analyzing the external environment.
• Focus should be on the competition.
• Possibility of new firms entering market.
• Availability of substitute products/services.
• Bargaining position of suppliers & buyers
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 Major Objective & Strategic Intent
• Major objective
• Are the end points towards which the
activities of the enterprise are directed
• Strategic Intent
• It is the commitment to win in the
competitive environment

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 Present & Future External
Environment
• Above must be assessed in terms of
threats and opportunities.
• Evaluation focuses on the competitive
situation, economic, social, political, legal,
demographic & geographic factors.
• Environment is scanned for technological
developments for products & services.
• For other factors, check competitive
factors.
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 Internal Environment
Internal environment should be audited &
evaluated in respect to its resources.
Weakness & strength in research &
development, production, marketing, operations,
procurement & services evaluated.
Internal factors should include human & financial
resources, company image, organization
structure, planning & control system & relations
with customers.

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 Development of Alternative
Strategies
• Strategic alternatives are developed on
the basis of an analysis of the external &
internal environment.
• Firm may diversify operation into new &
profitable markets.
• Another strategy is to go international.
• Under certain conditions, liquidation
strategy by terminating unprofitable line.
• Retrenchment strategy often an option.
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Consistency Testing & Contingency
Planning
• This is the last aspect but essential
• Even if alternative seems profitable,
management may decide against it
because it may hurt the value system.
• Since future cannot be predicted,
contingency plans need to be prepared.
• Contingency plan may be made where the
scenario includes major recession.
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 TOWS Matrix – A Modern Tool
• TOWS matrix has been introduced for analyzing
competitive situation of a company or nation.
Updated version of BCG matrix – Boston
Portfolio Matrix.
• Has a wider scope but does not replace the
earlier one.
• TOWS- conceptual frame work for systematic
analysis.
• Matches external threats & opportunities with
internal weaknesses and strengths.

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 TOWS Matrix
• T- threats, O- opportunities, W- weakness,
S- strengths. TOWS starts with threats.
• Strategic planning takes place in
conditions of threat, or perceived crisis or
problem.
• 4 alternate strategies – analysis of
external & internal environment (TOWS).

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 4 Alternative Strategies
• WT strategy- lower right hand corner-
aims to minimize weakness & threats
(mini-mini strategy) Form JV, retrench or
liquidate.
• WO strategy- minimize weakness &
maximize opportunities. Develop areas
within organization or acquire needed
competencies. (Middle right hand, above
WT)
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 4 Alternative Strategies
• ST- strategy, Organization’s strength to deal with
threats in the environment. Maximize strength
minimize threat. (Left of WT-Middle column
bottom)
• Use technological, financial, managerial or
marketing strength to cope with threats of a new
product introduced by its competitor
• Most desirable situation- can use strengths to
take advantage of opportunities – SO strategy.
Weakness have be overcome making them
strengths. Facing threats will help them cope &
focus on opportunities. Middle column middle.
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TOWS Matrix- Time Dimension
• External and internal environment are
dynamic. Some factors change over time.
• Strategy designer must prepare several
TOWS matrixes at different points of time
• May start TOWS analysis of the past,
continue analysis of the present and most
importantly focus on different time period
in the future.
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 The Portfolio Matrix
• Tool for allocating resources
• Business Portfolio Matrix developed by Boston
Consulting Group shows linkages between the
growth rate of the business & the relative
competitive position (market share) of the firm.
• Question mark – need cash investment.
• Star – opportunities for growth & profit- continue
cash supply for more profits
• Cash cows – provide cash to organization
• Dogs – not profitable, can be disposed of.
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 Management By Objectives
• MBO- a comprehensive system integrating key
managerial activities in systematic manner. It is
directed towards firms’ organizational
achievements.
• It should be goal driven, success oriented
comprehensive management system.
• Can be used for performance appraisals,
motivating individuals & strategic planning.
• Other sub systems include HR , planning,
development, reward system, budgeting etc.

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 How To Set Objectives
• Objectives to be measurable & verifiable
• Non Verifiable & Verifiable Objectives Make
reasonable profit- Achieve return on investment
of 12% at end of fiscal year.
• Improve productivity of Production Dept-
Increase production output by 5% by Dec 31,08
without extra cost & current quality level.
• Install a computer system- Install computerized
control system in production dept by 31 Dec, 08
within 500 hours operating at less than 10%
downtime during 1st 3 months & 2% thereafter.

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 Benefits Of MBO
• Considerable evidences show motivation due to
clear goals.
• Improvement of managing through result
oriented planning
• Clarity on organizational jobs, structures &
delegation of authority.
• Encouragement of personal commitment to their
own & organizational goals.
• Development of effective controls, measuring
results leading to corrective action.
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 Failure of MBO
• Failure to teach the philosophy of MBO. Managers
do not explain to subordinates.
Give guidelines to goal setters. Managers must know
corporate goals, know planning basics and
knowledge of company policies
Difficulty in setting verifiable goals. Participating in
MBO programs. Excessive concern for economic
results encourage unethical behaviour.
Emphasis on short term goals at the expense of long
term goals. Danger of flexibility make managers
hesitate change objectives even if was good for the
company.
Overuse of quantitative goals- using numbers where
they are not applicable. Downgrade important goal
that are difficult to state result.
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 Organizing
• Good managers make any organization pattern
work. Good people and those who want to
cooperate will work together.
• For an organizational role 3 things are needed.
1) Verifiable objectives – major part of planning.
2) Clear idea of major duties and 3) An
understood area of discretion or authority so that
the person filling the role knows what he or she
can do to accomplish goals

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 Organizing
• In addition, to make role work effectively,
provision should be made for supplying needed
information & performance.
• Organizing is
• 1. Identification & Classification of required
activities. 2) The grouping of activities necessary
to attain the objective. 3) Assignment of each
grouping to a manager with the authority
(delegation) necessary to supervise it & 4)
Provision to have horizontal (same org level) &
vertical (e.g. corporate head quarters, divisions
& department) in the organizational structure.
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 Organization Structure
• Organization structure should be designed to
classify who is to do what tasks & who is
responsible for what results – no confusion &
uncertainty of assignment, & furnish decision
making & communications networks reflecting
enterprise objectives.
• Organizational structure is formal framework by
which tasks are divided, grouped & coordinated.
• When Managers develop or change an
organization structure, they are engaged in
organization design needing 6 key elements.
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 Organizational Design
• 6 key elements
• 1.Work specialization 2.Departmentalization
• 3. Chain of command 4.Span of control
5.Centralization & decentralization
6.Formalization.
• Work Specialization
• Essence of work specialization is that an entire
job is broken down into steps & each step is
completed by different person.
• Entire job is never done by one person.
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 Organizational Design
• Departmentalization : The basis by which jobs
are grouped together is called
departmentalization. Every organization has its
own way of grouping/classifying.
• 5 common forms of departmentalization
• Functional dept: Groups by job function.
• Product dept: group jobs by product line. Each
major product area under one manager who is a
specialist.

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 Organizational Design
• Geographical Dept: Groups jobs on the
basis of territory or regions or by
countries.
• Process Dept: Groups jobs on the basis
of product or customer flow. Work
activities follow a natural processing flow
of products or customers.
• Customer Dept: Group jobs on basis of
customers having common needs or
problems to be solved by specialists.
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 Organizational Design
• Chain of Command: It is the continuous line of
authority that extends from upper organizational
levels to the lowest levels & clarifies who reports
to whom.
• Span of control: It indicates how many
employees can a manager efficiently &
effectively manage. To a large degree this
determines the number of levels and managers
an organization has. Every thing being equal,
the wider the span, the more efficient the
organization.
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 Organizational Design
• Centralization & Decentralization: In some
organizations, top managers make all decisions
and lower level managers & employees carry out
their directives.
• In other extreme decision making is pushed
down to the managers who are closest to action.
Former – Centralized, Later – Decentralized.
• If top managers make key decisions with no
inputs from below, then the org is centralized. In
contrast, if lower level employees make
decisions, the more decentralization there is.
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 Organizational Design.
• Formalization: Refers to the degree to which
jobs within the org are standardized & the extent
to which employee behavior are guided by rules
and procedures.
• When job highly formalized – minimum
discretion. When formalization is low – job
behavior is unstructured – more freedom
• High degree of formalization needs explicit job
description, rules & defined procedures
• Varies widely between organizations e.g.
Newspapers – high discretion. Compositors &
type setters – highly standardized.
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Common Organizational Design
• Traditional Organizational Designs:
• 1.Simple, 2.Divisional & 3. Functional
structure – tend to be more mechanistic-
rigid & tightly controlled structure. High
specialization , narrow span of control, rigid
departmentalization, high formalization,
limited info network (mostly downward
communication), less participation in
decision making by lower level employees.

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 Simple Structure
• An organizational design with low
departmentalization, wide spans of
control, authority centralized & little
formalization.
• Most common in small businesses in
which the owner & manager are the same.
• Strengths: Fast, flexible, inexpensive,
clear accountability.
• Weakness: Not proper as org grows,
reliance on one person risky.
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 Functional Structure
• It is an organizational design that groups similar
or related occupational specialist together. It’s
the functional approach to departmentalization.
• Strengths: Cost saving from specialization
(economies of scale, minimal duplication)
• Weakness: Managers loose sight what’s best for
the org because of pursuing functional goals.
• Functional specialists become insulated & have
little understanding what other units are doing.

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 Divisional Structure
• It is an organizational structure made up of
separate units or divisions. Each unit has limited
autonomy with divisional manager responsible
for performance. He has strategic & operational
authority over his unit.
• Here the parent unit acts as an external
overseer to coordinate & control various
divisions. Provides legal & financial support.
• Strengths: Focuses on results. Divisional
managers responsible for their products &
services.
• Weakness: Duplication of activities & resources
increases costs & reduces efficiency.
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 Delegation of Authority
• Authority is delegated when a superior gives a
subordinate discretion to make decisions.
Superiors cannot delegate authority they do not
have.
• Process of delegation involves 1. Determining
the results expected from a position 2. Assigning
tasks to the position 3. Delegating authority for
accomplishing these tasks. 4. Holding the
person in that position responsible for the
accomplishment of the tasks.
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 Delegation of Authority
• Splintered authority: Splintered authority
exists wherever a problem cannot be
solved without pooling the authority of two
or more managers
• Such problems could be handled by
merely referring the decision upward until
it reaches a person with the authority to
make it unilaterally.

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 Delegation of Authority
• Recovery of Delegated Authority:
Manager who delegates authority does not
permanently dispose of it – delegated
authority can always be regained.
• Reorganization inevitably involves some
recovery & redelegation of authority
• Rights are recovered by the responsible
head of a firm & then redelegated to
managers of new or modified departments
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 Delegation of Authority
• Art of Delegation: Most failures in delegation
occur not because managers have not
understood it, but because they are unable or
unwilling to apply them.
• Much of the reason lies in personal attitudes
towards delegation.
• Receptiveness: The delegator is unwilling to
give others a chance, feels unsafe when
decision of junior differs with superiors. They
cannot welcome new ideas or compliment them
on their ingenuity
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 Delegation of Authority
• Willingness to let go: The manager must
effectively delegate authority & relinquish
his right to make decisions.
• Small business owners who have grown
large wants to continue making decisions
• Presidents & VP’s should spend quality
time in doing more important work rather
than engaging themselves to routine
decision making work.
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 Delegation of Authority
• Willingness- let others make mistakes No manager
would like to see his juniors making mistakes. However,
if continual checking is done, purpose of delegation is
defeated. Since everybody makes mistakes, juniors be
allowed to make mistakes & their cost must be
considered as investment for personal development.

• Repeated mistakes: Can be avoided by nullifying

delegation or hindering the development of subordinates.
Counseling, explaining objectives & policies can solve
problem. Should never discourage subordinates.

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 Delegation of Authority
• Willingness to trust subordinates: When
delegating, superiors must trust their
subordinates. Delegation implies trustful attitude.
Superior may put off delegation with the thought
that subordinates are inexperienced.
• Provide training or select other subordinates
who are prepared to assume responsibility.
• Sometimes bosses feel threatened & do not
wish to let go their powers or do not know how to
set up controls ensuring proper use of authority
and delegate wisely.
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 Delegation of Authority
• Willingness to establish broad Controls If
superiors cannot delegate responsibility for
performance & should not delegate authority
unless they are willing to find means of getting
feedback to convince themselves that they are
doing it for the good of the organization.
• More than often, reluctance to delegate & trust
comes from superiors inadequate planning &
fear of loss of control.

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 Guide for Overcoming Weak
Delegation
• 1. Define assignment & delegate authority in
light of results expected.
• 2. Select person in light of job to be done.
• 3. Maintain open lines of communication –
Seniors do not delegate all the authority or
abdicate all responsibility, decentralization
should not result in insulation. There should be
free flow of information & subordinates should
receive information related to make decisions &
to interpret them properly. Delegation, therefore,
depends on situations.
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 Establish Proper controls
• Because no manager can relinquish
responsibility, delegations should be
accompanied by techniques for ensuring
that the authority is properly used. But if
controls are to enhance delegation, they
must be relatively broad & be designed to
show deviations from plans, rather than
interfering with routine actions of
subordinates.

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 Reward Effective Delegation &
Success
• Assumption of authority: Managers
should be watchful for means of rewarding
both effective delegation & effective
assumption of authority.
• Although, many of these rewards will be
monetary, the granting of greater
discretion & prestige – both in a given
position & by promotion to a higher
position is often even more of an
incentive.
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 Advantages of Decentralization
• 1.Relieves top management of some
burden of decision making & forces upper
level managers to let go.
• 2. Encourages decision making &
assumption of authority & responsibility.
• 3. Gives managers more freedom &
independence in decision making.
• 4. Promotes establishment & use of broad
controls which may increase motivation.
• 5. Makes comparison of performance of
different organizations units possible.
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Advantages of Decentralization
• 6.Facilities for setting up profit centers.
• 7. Facilitates product diversification.
• 8. Promotes development of General
Managers.
• 9. Aids in adoption in fast changing
environment.

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 Limitations of Decentralization
• 1. Makes it difficult to have uniform policy.
• 2. Increases complexity of coordination of
decentralized organizational units.
• 3. May result in loss of some control by
upper level managers.
• 4. May be limited by inadequate control
techniques.
• 5. May be constrained by inadequate
planning & control systems.
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 Limitations of Decentralization
• 6. Can be limited by the availability of
qualified managers.
• 7.Involves considerable expenses for
training managers.
• 8. May be limited by external forces (Govt,
national labor unions, control, tax policies).
• 9. May not be favored by economies of
scale of some operations.
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 Chapter

Fundamentals of Organizing

80
Copyright © 2002 by South-Western, a division of Thompson Learning. All rights reserved.
 Organizing

• The deployment of organizational

resources to achieve strategic goals
• Reflects deployment of resources
• Shows division of labor
• Formal lines of authority and
mechanisms is developed

81
 Organization Structure

Defines how tasks are divided,

resources are deployed, and
departments are coordinated
The set of formal tasks assigned
Formal reporting relationships
The design of systems to ensure
effective coordination of employees
across department
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The Organization Chart

Visual representation

Set of formal tasks

Framework for vertical control

Formal reporting relationships

83
 Work Specialization

• Tasks are subdivided into individual

jobs
• Division of labor concept
• Employees perform only the tasks
relevant to their specialized function
• Jobs tend to be small, but they can be
performed efficiently
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 Chain of Command

• Unbroken line of authority that links all

persons in an organization
• Shows who reports to whom
• Associated with two underlying
principles
Unity of Command
Scalar Principle

85
 Authority
• Formal and legitimate right of a manager
to make decisions and issue orders
• Allocate resources to achieve
organizationally desired outcomes
• Authority is distinguished by three
characteristics
Authority is vested in organizational
positions, not people
Authority is accepted by subordinates
Authority flows down the vertical
hierarchy
86
 Responsibility

• The duty to perform the task or

activity an employee has been
assigned
• Managers are assigned authority
commensurate with responsibility

87
 Accountability

Mechanism through which authority

and responsibility are brought into
alignment
People are subject to reporting and
justifying task outcomes to those
above them in the chain of command
Can be built into the organization
structure
88
 Delegation

Process managers use to transfer authority and responsibility

Organization encourage managers to delegate authority to lowest possible level

89
 Delegation

Give thorough Maintain Evaluate and reward

instructions feedback performance

Techniques for Delegation

Delegate the whole task Ensure that authority Select the right
equals responsibility person
90
 Span of Control

• Number of employees who report to a supervisor

• Traditional view, about seven subordinates per
manager
• Many lean organizations today have 30, 40, or even
higher subordinates
• When supervisors must be closely involved with
subordinates, the span should be small
• Supervisors need little involvement with subordinates,
it can be large

91
 Factors Associated With Less Supervisor Involvement
• Work is stable and routine
• Subordinates perform similar work tasks
• Subordinates are concentrated in a single location
• Subordinates are highly trained
• Rules and procedure defining task activities are
available
• Support systems and personnel are available for the
manager
• Little time is required in nonsupervisory activities
• Managers’ preferences and styles favor a large span

92
 Tall versus Flat Structure
• Span of Control used in an organization
determines whether the structure is tall or
flat
• Tall structure has a narrow span and more
hierarchical levels
• Flat structure has a wide span, is
horizontally dispersed and fewer
hierarchical levels
• The trend has been toward wider spans of
control 93
Centralization versus Decentralization

• Greater change and uncertainty in the

environment are usually associated
with decentralization
• The amount of centralization or
decentralization should fit the firm’s
strategy
• In times of crisis or risk of company
failure, authority may be centralized
at the top
94
 Departmentalization
The basis on which individuals are grouped into
departments
Vertical functional approach.
People are grouped together in
departments by common skills.
Divisional approach. Grouped
together based on a common
product, program, or geographical
region.
Horizontal matrix approach.
Functional and divisional chains of
command. Some employees report
to two bosses 95
Team-based approach. Created to
accomplish specific tasks
Network approach. Small, central hub
electronically connected to their other
organizations that perform vital
functions. Departments are
independent, and can be located
anywhere.
Virtual approach. Brings people together
temporarily to exploit specific
opportunities then disbands

96
Five Approaches to Structural
Design

97
Five Approaches to Structural
Design
Slide 2

98
Divisional Structure Advantages

• Efficient use of resources

• Skill specialization development
• Top management control
• Excellent coordination
• Quality technical problem solving

99
Divisional Structure Disadvantages

• Poor communications
• Slow response to external changes
• Decisions concentrated at top
• Pin pointing responsibility is difficult
• Limited view of organizational goals
by employees

100
 Horizontal Matrix Advantages

• More efficient use of resources than

single hierarchy
• Adaptable to changing environment
• Development of both general and
specialists management skills
• Expertise available to all divisions
• Enlarged tasks for employees
101
Dual Authority Structure in a
Matrix Organization

102
Horizontal Matrix Disadvantages
• Dual chain of command
• High conflict between two sides of
matrix
• Many meetings to coordinate
activities
• Need for human relations training
• Power domination by one side of
matrix
103
 Team Advantages

• Same advantages as functional

structure
• Reduced barriers among
departments
• Quicker response time
• Better morale
• Reduced administrative overhead
104
 Team Disadvantages

• Dual loyalties and conflict

• Time and resources spent on
meetings
• Unplanned decentralization

105
Network Approach Advantages

• Global competitiveness
• Work force flexibility
• Reduced administrative overhead

106
Network Approach Disadvantages

• No hands-on control
• Loss of part of the organization severely
impacts remainder of organization
• Employee loyalty weakened

107
 Horizontal Organization

• When organizations grow and evolve,

two things happen:
New positions and departments are
added
Senior managers have to find a way to tie
all of the different departments together

108
 Coordination

Quality of collaboration across departments

109
Evolution of Organization Structures

Traditional Teams and Project Reengineering to New Workplace

Vertical Managers for Horizontal Learning Organization
Structure Horizontal Processes
Coordination

110
 Structural Design
• Task Force...A temporary team or
committee formed to solve a specific short-
term problem
• Team…Participants from several
• Team…Participants from several departments who
departments who meet to solve ongoing
meet to solve ongoing problems
problems

• Project Manager…A person responsible

for coordinating the activities of several
departments
111
 Leadership & Management
• Committee: It is a group of persons to whom as group
some matter is committed (board, task force,
commission, team etc)
• Team: A small number of people with complimentary
skills, committed to a common purpose or goals for
which they hold themselves mutually accountable.
• Group processes in committees & teams : Groups go
through 4 stages
• 1. Forming : The group gets to know each other
• 2. Storming: Members of the group determine the
objective of the meetings, conflicts arise.
• 3. Norming: Group agrees on norms & behavioural rules
112
 Leadership & Management
• 4. Performing: Group gets down to task.
• Functions of committees: Some undertake managerial
functions, some make decisions, while others deliberate.
Some have authority, others do not.
• A committee may have either staff or line functions
depending on its authority.
• Committees may be formal or informal. If established
with delegated duties & authority, they are formal. Those
that are informal are organized without delegation of
authority.
• Committees can be permanent or temporary. Formal
committees are relatively permanent and may be formed
for a specific task after which it is disbanded.

113
 Reasons for using committees &
teams.
• The advantage of group deliberation & judgment. Most problems
require more knowledge, experience & judgment from production,
finance, engineering or sales.
• Fear too much authority in a single person
• Fear of delegating too much to one person
• Representation of interested groups :
• Board of directors are often selected on the basis of groups
interested in the company
• Coordination of Departments, Plans & Policies: There is general
agreement that committees are very useful for coordinating
activities, plans & policies & implementing the same.
• Transmission & sharing of information: Committees are useful
for transmitting & sharing information All group members affected by
a mutual problem can learn about it simultaneously & decisions and
instructions can be received uniformly. This saves time.

114
Motivation through participation
• Committees permit wide participation in decision
making. Persons who take part in
planning/decision making a program feel
enthusiastic about accepting & executing it.
Limited participation can be helpful.
• Avoidance of action: One of the surest ways to
delay the handling of a problem & even to
postpone a decision indefinitely is to appoint a
committee. At times committee members are
chosen in a way aimed at delaying
i action.
115
 Team & Team Building.
• Team is a small number of people with
complimentary skills who are committed to a
common purpose, goals for which they hold
themselves mutually accountable.
• Some make recommendations, others have the
power to make decisions, some actually run
operations, some teams solve problems, others
engage in activities in cross functional areas in
design, marketing, finance etc.
• Team members should be selected according to
the skills needed to achieve the purpose.
116
 Team & Team Building.
• Teams should have the right mix of skills such
as functional or technical skills problem solving
and decision making skills
• The team needs to be guided by rules for group
behaviour such as attendance etc.
• Goals and tasks should be identified early in the
team formation.
• Members should encourage each other through
recognition, positive feed back & reward.

117
 Team & Team Building.
• Self Managing Teams: Organizations have
started using self managing teams where the
members have a variety of skills.
• These teams are empowered what, when &
how to do.
• Virtual Teams: Virtual management is
described as “ the ability to run a team whose
members aren’t in the same location, don’t
report to you, and may not even work for your
organization. Therefore, it is important to have a
clear purpose, task, and communicate the same
to all concerned. Carefully watch for conflicts.
118
 Group Decision Making
• Many of the basic processes of individual &
group decision are same. The rational model is
used both by individuals & groups
• Impact of groups on decision making: The
process of social interaction makes group
decision different from individual decision
complicating the dynamics. Sometimes group
decisions can be an asset but at other times it
can be a liability.
• The trick for a manager is to discover when &
how to invite group participation in discussions.
119
 Group Decision Making
• Many of the basic processes of individual &
group decision are same. The rational model is
used both by individuals & groups
• Impact of groups on decision making: The
process of social interaction makes group
decision different from individual decision
complicating the dynamics. Sometimes group
decisions can be an asset but at other times it
can be a liability.
• The trick for a manager is to discover when &
how to invite group participation in discussions.
120
 Group Decision Making
Group impact relative to non programmed decisions:
1. In establishing objectives – Groups are typically
superior to individuals-they bring greater cumulative
knowledge to problems 2. In identifying alternatives:
Individual efforts ensure that different & perhaps unique
solutions are identified from various functional areas that
later can be considered by the groups
3. In evaluating alternatives group judgment is often
superior to individual judgment because it involves a
wide range of view points.
4. In choosing alternatives, involving group members
often leads to greater acceptance of the final outcome
5. In implementing the choice, individual responsibility is
generally superior to group responsibility Whether
decisions are made individually or collectively,
individuals perform better in carrying out the decision
than groups do. 121
 Assets & Liabilities of Group
Decision Making
• Assets :Groups can • Liabilities: Groups often work
accumulate more knowledge & more slowly than individuals.
facts. • Group decisions involve
• Groups have a broader considerable compromise that
perspective & consider more may lead to less than optimal
alternatives. decisions.
• Individuals who participate in • Groups are often dominated by
group decisions are most one individual or a small clique
satisfied with the decision & thereby negating many of the
are more likely to support it. virtues of the group processes.
• Group decision processes • Over reliance on group
serve an important decisions making or inhibit
communication function as well management’s ability to act
as a useful political function. quickly & decisively when
necessary.

122
 Guidelines for Overcoming
Groupthink
• For the company: Establish several independent
groups to examine the same problem
• Train managers in groupthink prevention techniques.
• For the leader: Assign everyone the role of critical
evaluator
• Use outside experts challenging the group
• Assign a devil’s advocate role to one member of the
group
• Try to be impartial & refrain from stating your own views.
• For group members: Try to retain your objectivity & be
a critical thinker.
• Discuss group deliberations with a trusted outsider &
report back to the group.
123
 Guidelines for Overcoming
Groupthink
• For the deliberation process:
• At times, break the group into sub groups
to discuss the problem.
• Take time to study what other companies
or groups have done in similar situations.
• Schedule second – chance meeting to
provide an opportunity to rethink the
issues before making a final decision.
124
 Managing Change
• First, the focus is on change of individuals (Specifically
manager development & training). Second, the focus
shifts to groups and individuals.
• Manager development refers to long term, future
oriented programs and the progress the person makes
learning how to manage
• Managerial training pertains to programs that facilitate
the learning process and is mostly a short term activity.
• Organizational development is a systematic, integrated
& planned approach to improving the effectiveness of
groups of people and of the whole organization or a
major organizational unit.

125
Manager Development Process
• Manager development & training must be
based on needs analysis derived from a
comparison of actual performance & behaviour
with required performance & behaviour.
• Future needs: Progressive organizations go
one step further; they prepare for the more
distant future. They forecast what new
competencies will be demanded by changing
technology & methods.
• On the job training: Many opportunities for
development can be found on the job.
126
Manager Development Process
• Planned progression is a technique that gives
managers clear idea of their path of development.
Managers know where they stand & where they are
going.
• Job rotation: Purpose is to broaden the knowledge of
managers. They may rotate through 1. Non supervisory
work 2. Obser- vation assignments 3. Various
managerial training positions 4. Middle level ‘assistant’
positions 5. Unspecified rotation to various managerial
positions in different deparments.
• Creation of “Assistant–to” positions_ frequently
created to broaden the view points. Work closely with
senior managers who devote time for development of
trainees.

127
Manager Development Process
• Temporary promotions: Appointed as “acting”
managers. Temporary promotions are
developmental device
• Committees & junior boards: Used as
developmental techniques. Work with
experienced managers.
• Coaching: it is the responsibility of every line
manager. Must be done in a climate of
confidence & trust. Patience & wisdom are
required of superiors willing to delegate authority
& give recognition & praise for jobs well done.
128
 Approaches to Manager
Development
• Conference programs
• University Management Program
• Readings, Television & Video instructions
• Business simulation & Experimental
Exercise
• Special Training program
• Evaluation & Transfer.

129
 Resistance to Change.
• Many reasons why people resist change.
• What is not known causes fear & induces
resistance. People want to feel secure &
have some control over the change.
• Not knowing the reason for the change
can cause resistance. (why necessary?)
• Change may result in a reduction of
benefits or a loss of power.
130
 Reduction of Resistance
• Reduction of resistance can be achieved in
many ways.
• Involvement of organizational members in
planning change can reduce uncertainty.
• Communication about proposed changes also
helps clarify the reasons or effects of the
changes.
• Some approaches focus on the people involved
in the change, others involve changes in
organization structure or technology.

131
 Learning Organization
• A learning organization is one that can
adapt to changes in the external
environment through continuous renewal
of its structure & practices.
• 5 technologies that help the organization
to learn.
• 1. Systems thinking 2. Personal mastery
3. Mental models. 4. a shared vision 5.
Team learning.
132
 Control Process
• Basic control process involves 3 steps.
• 1. establishing standards 2. measuring performance against these standards 3.
correcting variations from standards & plans. Plans are yardsticks to devise
controls.
• Establishment of standards: Plans vary in detail & complexity, so managers
don’t use it
• Standards are simply criteria of performance
• They are the selected points in an entire planning program at which measures of
performance are made. Best standards are verifiable goals.
• Measurement of Performance: Should be ideally done on a forward-looking
basis, so that deviations can be detected in advance & avoided by appropriate
action.
• Deviations should be disclosed as early as possible. If standards are properly
drawn, appraisal of actual performance is fairly easy There are many activities
which are hard to measure. In the less technical kinds of work for eg. controlling
the work of the Vice President finance or Director, Industrial Relations is not
easy because definite standards are not easily developed.
• The superior managers often relies on vague standards such as financial health
of the company, the attitude of the labor unions, the absence of strikes etc
133
 Control Process
• Correction of deviation: It is the point at
which control can be seen as a part of the
whole system of management. Managers
may correct deviations by redrawing their
plans or by modifying their goals. They
may hire additional staff or train their
subordinates.

134
 Critical Control Points
• Principle of critical-point control: Effective
control requires attention to those factors critical
to evaluating performance against plans.
• The points selected for control should be critical,
in the sense either of being limiting factors or of
showing better than other factors.
• With such standards, managers can handle a
larger group of subordinates and thereby
increase their span of management with
resultant cost saving & improved communication

135
 Selecting Critical Points of Control
• The ability to select critical points of control is
one of the arts of management.
• Questions are to be asked – 1. What will best
reflect goals of the department? 2. What will best
show us when these goals are not being met? 3.
What will measure best critical deviations? 4.
What will tell me who is responsible for any
failure? 5. What standards will cost the least? 6.
For what standards is information economically
available?
136
 Critical Point Standards
• Standards are of the following types:
• 1. Physical Standards: eg. Labor-hours
• Cost standards.: eg. labor cost per hour
• Capital standards: eg. Return on investment
• Revenue standards.: average sale per customer
• Program standards.: program for improving quality of
sales force.
• Goals as standards.: Verifiable quantitative or qualitative
goals
• Intangible Standards :Public relations program
effectiveness
• Strategic plans as control points for strategic control:
here planning and controlling are closely related
137
 Benchmarking
• Approach for setting goals & productivity
measures based on best industry practices.
• Developed out of the need to have data against
which performance can be measured. What
should be the criteria?
• 3 types of bench marking: 1. Strategic bench
marking 2. Operational benchmarking 3.
Management benchmarking.
• Identify what is to be benchmarked. Select
superior performers. Data gathered & analyzed.
This becomes the basis for performance goals.

138
 Control as a Feedback System
• Management control is perceived as a feedback
system similar to that which operates in common
household thermostat Managers do measure
actual performance correcting for deviation.
• Managers do measure actual performance
compare this measurement against standards,
identify & analyze deviations.
• Develop a program for corrective action &
implement this program to arrive at the required
performance level.

139
Real-time information & Control.
• One of the interesting advances arising from the use of
the computer and from electronic gathering, transmission
and storage of data is the development of systems of
real time information.
• Some people see real time information as a means of
getting real-time control in areas of importance to
managers. Here control can be effected at the very time
information shows a deviation from plans.
• Development of programs of correction & the
implementation of these programs are likely to be time
consuming tasks.
• Prompt measurement of performance is necessary. The
sooner the manager knows that activities are not
proceeding as per plans, the faster they can take action.
140
 Feedforward Control
• The time lag in the management control process
shows that control must be directed toward the
future if it is to be effective.
• Using feedback & this measurement of output as
means of control is not enough.
• Managers need for effective control is a system
that will tell them in advance to take corrective
action. Otherwise the whole exercise becomes a
post mortem.
• Future directed control is largely disregarded in
practice as managers are used to accounting &
statistical data for purposes of control
141
 Requirements for feedforward
Control
• 1. Make a thorough & careful analysis of the
planning & control system & identify the more
important input variables.
• 2. Develop a model of the system.
• 3. Model to be up to date. It should be reviewed
regularly to check input variables are identified.
Their interrelationships continue to represent
realities.
• 4. Collect data on input variables regularly & put
them into the system.

142
 Requirements for feedforward
Control
• 5. Regularly assess the variations of
actual input data from planned-for inputs,
and evaluate the impact on the expected
end result.
• 6.Take action. Like any other technique of
planning and control, all that the system
can do is indicate problems; people must
obviously take action to solve them

143
 Information Technology for
Controlling
• Management information system has been
used differently by various authors. It is defined
as a formal system of gathering, integrating
comparing, analyzing & dispersing information
internal & external to the enterprise in a timely,
effective and efficient manner.
• MIS has to be tailored to specific needs & may
include routine information & information
necessary to predict the future.

144
 Impact of Computers
• Information needs differ at various levels:
• Supervisory level activities are usually highly
programmable & repetitive. Use of computers is
wide spread at this level. Scheduling, planning,
& controlling are just a few examples.
• Middle level managers: Dept heads, plant mgrs
receives information which are also shared by
the top management regarding administration &
coordination.
• Need for middle level mgrs reduced because of
computer. Their roles may be expanded or
changed.
145
 Impact of Computers
• Top level managers are responsible for the
strategy and overall policy.
• The tasks of CEO’s are not easily
programmable. Yet they can use the computer
to get information from the data base to facilitate
the application of decision models.
• Enables the company to make timely responses
to changes in the external environment.
• Will affect the jobs of top managers less
severely than it will affect the jobs of those at
lower levels.

146
Challenges Created By Information
Technology
• Resistance to computer application.
• Speech Recognition Devices.
• Telecommuting.
• Computer Networks
• Internet

147
 Total Quality Management
• One popular approach to improve quality is called Total Quality
Management – TQM
• Definition- Organizations long term commitment to the continuous
improvement of quality – throughout the organization and with active
participation of all members at all levels – to meet and exceed
customers’ expectations.
• TQM requires careful analysis of the customers’ needs, an
assessment of the degree to which these needs are currently met, &
a plan to fill the possible gap between the current & the desired
situation.
• To make TQM effective, top managers must be involved including
cooperation of suppliers. Management must provide vision,
emphasize quality, set quality goals and deploy resources for the
quality program.
• TQM demands free flow of information – vertically, horizontally and
diagonally.

148
 Total Quality Management
• Training & development are very important Need
developing skills to use tools & techniques.
Teamwork often becomes a prerequisite for an
effective & efficient operation.
• Quality improvement efforts need to be
continuously monitored thru data collection
evaluation, feedback & improvement programs.
• TQM should result in greater customer
satisfaction, fewer defects, less waste, higher
productivity, reduced cost & improved
profitability and an environment for high quality.
149
 Motivational Techniques
• What motivational techniques managers can use? There
is no single best answer.
• Money: 1. Money cannot be overlooked as a motivator,
in the form of wages, incentives, bonus, stock options,
insurance, medical. Gives status & power.
• 2. Difference of opinion: Some behavioral scientist think
money is important to those who are young & raising
family, but not so important to those who have “arrived”-
their needs are not urgent.
• 3. Money is needed in organization to avoid poaching &
keep adequate staff. Wages & salaries need to be
competitive. Managers in comparable levels are paid
similar compensation.
• 4. Bonuses must reflect individual performance.
150
 Motivational Techniques
• Participation: People are motivated by being consulted on action affecting
them. Participation also means recognition. It gives people a sense of
accomplishment.
• Quality Of Working Life (QWL): Interesting approach to motivation. Gives
very broad approach to job enrichment. Also gives interdisciplinary field of
inquiry covering psychological, social & leadership theory.
• Received support from managers as they think QWL is useful means for
dealing with stagnating productivity. Workers & unions also like it as they
see it as a means to improve their working conditions and improved
productivity can justify their higher wage demands. The government feels it
can reduce labor disputes as QWL can be a means of increasing
productivity & reducing inflation.
• Job Enrichment: Research & analysis indicates importance of making job
challenging & meaningful. This applies to jobs for managers as well as to
those of non managers. Job enrichment should be distinguished from job
enlargement. Job enlargement attempts to make a job more varied by
removing the dullness of the repetitive job. This means enlarging the scope
of the job by adding similar tasks without enhancing responsibility. In job
enrichment, the attempt is to build into jobs a higher sense of challenge.

151
 Motivational Techniques
• Limitations to job enrichment: One of the limitations
are technology. With specialized machinery & assembly
line techniques, it may not be possible to make all the
jobs meaningful.
• Another limitation is cost. Another question whether
workers really want job enrichment, especially the kind
that changes the basic content of their jobs. High
percentage of workers are not dissatisfied with their
present job. Few need more interesting jobs. Above all
they need job security and pay. Moreover, workers are
concerned that changing the nature of tasks to increase
productivity may mean a loss of jobs.

152
 Motivational Techniques
• Limitation of job enrichment apply mainly to
jobs requiring low skill levels. The jobs of highly
skilled workers, professional & managers
already contain varying degrees of challenge &
accomplishment. Perhaps these could be
enriched considerably more than they are. But
this can probably be done best by management
techniques such as managing by objectives,
more status symbols in the form of titles,
delegation of authority, tying bonus & other
rewards to performance.
153
 Motivational Techniques
• Making Job enrichment effective:
1.Organizations need a better understanding of
what people want. Wants vary with people &
situations.
• Workers with few skills want such factors as job
security, pay, benefits, less restrictive plant rules
& more sympathetic & understanding
supervisors.
• As people move up the ladder they find that
other factors become increasingly important..
But very little research has been done on high
level professionals & managers.
154
 Motivational Techniques
• 2. Second, if productivity increases are the main
goal of enrichment, the program must show how
the workers will benefit.
• 3. Third, people like to be involved and to be
given an opportunity to offer suggestions.
• 4. Fourth, people like to feel that their managers
are truly concerned with their welfare. Workers
like to know what they are doing & why. They
like feedback on their performance. They like to
be appreciated & recognized for their work.

155
 Organizational Communication
• In an organization, communication flows in various
directions, downward, upward, & crosswise.
Traditionally downward communication was
emphasized but problems can develop. It can be argued
communication should start with the subordinate & this
means primarily upward communication.
Communication also flows horizontally that is between
same levels. Communication involving persons from
different levels who are not in direct reporting
relationship such information flow is called diagonal flow.
• Since horizontal & diagonal communication has some
common characteristics, they are also called crosswise
communication
156
 Organizational Communication
• Downward Communication: It flows from higher level
to lower level in the organizational hierarchy normally
seen in an authoritarian atmosphere.
• Oral downward communication include speeches,
instructions, memorandum, letters, policy statements,
telephone, meetings, loudspeakers, handbooks,
pamphlets, procedures, & electronic news displays.
• Information is often lost or distorted as it comes down
the chain.
• Top management’s issuance of policies are not
understood or even read. Consequently, a feedback
system is essential to know what went wrong.
• Downward flow of information through different levels is
time consuming and frustrating for top management.
157
 Organizational Communication
• Upward Communication: It travels from subordinates to superiors.
Often this flow is hindered by managers who filters the messages &
do not transmit all the information- specially unfavorable news to
their bosses. Upper management needs to know production
performance, marketing information, financial data, what lower level
people are thinking & so on.
• Upward communication is primarily non directive & is usually found
in participative & democratic organizations. Suggestions, appeal,
grievance, complaints, counseling are encouraged.
• Ombudsperson: Companies have found that the position of the
ombudsperson can provide a valuable upward communication link.
Effective upward communication requires an environment in which
subordinates feel free to communicate.
• Managers must create an informal climate that encourages upward
communication.
• Lack of upward communication can be disastrous.

158
 Organizational Communication
• Crosswise Communication: This type of
communication includes the horizontal flow of
information, among people on the same or similar
organizational levels, & the diagonal flow, among
persons at different levels who have no direct reporting
relationships with one another.
• This kind of communication is used to speed information
flow, to improve understanding, & to coordinate efforts
for the achievement of organizational objectives. A great
deal of communication does not follow the organizational
hierarchy but cuts across the chain of command.

159
 Organizational Communication
• Written, Oral & Nonverbal Communication: Each mode has
favorable & unfavorable characteristics. Therefore, they are used
together so that the favorable qualities of each can compliment the
other.
• Visual aids & handouts may be used to supplement oral & written
communication.
• Written Communication: It has the advantage of providing
records, references & legal defenses. Good for mass mailing. It can
promote uniformity in policy & procedure
• Disadvantages: Written messages may create mountains of paper,
may be poorly expressed & may provide no immediate feedback. It
may take a long time to know whether a message has been
received or properly understood.

160