Management Process and Skill Development

UNIT – I

Introduction, Concept and Nature of Management Process, Functions, Skills &

Roles, evolution of Management through System & Contingency Approach, Social
responsibility of business.

Management is the process of designing and maintaining an environment in which

individual working together in a group efficiently accomplishes selected aims.

Objectives of Management

Today’s management is playing a vital role in the progress and the prosperity of the
business enterprises. The main purpose of the management is to run the enterprise
smoothly. The board objectives of the management are as follows:
1. Optimum utilization of resources: the most important purpose of the
management is to use resource of the enterprise in the most economic way. Proper
use of man, materials, machines and money will help a business to earn sufficient
profits to satisfy various interests, i.e. prop writers, customer, employee etc.
2. Growth and development of business : By proper planning , organization and
direction etc. management leads a business to growth and development. It leads to
a profitable expansion of the business. It provides a sense of security among the
employers and employees.
3. Better quality goods: the role of sound management has always been to reduce
the better products at minimum cost. Thus it tries to remove all types of wastage
in business
4. Mobilizing best talents: The employment of experts in various fields will help in
enhancing the efficiency of various factors and production. There should be a
proper environment ,which should encourage good persons to join the
enterprises. The better pay scale, proper amenities , future growth potentialities
will affect more people in joining a concern.
5. Improving performance:- Management objective is to improve the performance
of each and every factor of the production has the environment is made congenial
so that workers are able to their maximum to their enterprises. The fixing of
objective of various factors of production helps is improving their performance.
6. Planning for future:- Another important .objective of management is to prepare a
perspective plan. No management can feel satisfied with present if it has not
thought of tomorrow .Future performance will depend upon present planning.
The manager has to fulfill various responsibilities in order to achieve
organizational goal:-
(a) Provide direction to the firm :- Managers has to first of all set objectives
which the firm must achieve. Objectives provide the direction the firm must
take.

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 (b) Managing survivor and growth:- Ensuring service to the firm is the critical
task of the manager along with survival. Manager has also to actively seek
growth no matter how big or powerful a firm may be. Today it is sure to be
left behind in the race by another healthier and more efficient firm if it does
not pursue growth.
(c) Managing firm efficiency in terms of profit generation:- Efficiency is ratio of
output. A manager has not only to produce result but to do so in the most
efficient manner possible .The more output that the manager can produce with
the same input the greater will be the profit generated. Profit is the surplus or
difference the manager can generate between the value of input and output.
(d) Meeting the challenge of increasing competition:-In today’s fast changing
world one of the critical tasks of every manager is to anticipate and prepare
for the increasing competition in term of more competitors , product and a
customer who is today better informed and more aware than ever before.
(e) Managing for innovation:-In the context of business ,innovation has to be
defined in terms of the additional value it impart to the existing product or
services .Value is not expressed in terms of increased cost or rise but in terms
of the difference it make to the customer. Successful firms innovate in
response to market needs involving potential user in the development of
innovation and understand users need.
Building human organization:-A good worker is the valuable asset to any company and
every manager must constantly be on the look out for the people with potential and attract
them to join his company. Manager with a competent team has already won half the
battle. .However, competent or brilliant individuals may be, if they cannot work together
with each other they are of not much use to accompany. It is to the manager to match
individuals in to a well-knit team. The manager who cannot build his team cannot
succeed. Teams should be built on the principles of the divisions of labour ,specialization
of work and mutual give and take.

Functions,

Function of the management include planning, organizing, staffing, heading ,motivating ,

communication and controlling.

Planning:- Planning involves selecting mission and the action to achieve them; it requires
decision making, that is choosing future courses of action from other alternatives.
Planning bridges the gap from where we are to want to go .More plans exists until a
decision –a commitment of human or material resource has been made .Before a decision
is made, all that exists is a planning study, an analysis ,or a proposal ;there is no real plan.

Organizing-is a part of managing that involves establishing an intentional structure of

roles and position to fill in an organization.

For an organizational role to exist and be meaningful to people , it must incorporate clear
idea of the major duties or activities involve and understand area of discretion or
authority so that the person filling the role knows what he or she can to do to accomplish

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goals . It is in this sense that we think of organizing as(1) the identification and
classification of required activities (2) the group of activities necessary to attain
objectives (3) the assignment of each grouping to a manager with the
authority(delegation)necessary to supervise it ,and (4) the provision for coordination
horizontally and vertically on the organization structure.

Staffing:-involves filling and keeping the position in the origination structure. This is
done by identifying work force requirement ;inventorying the people available ;and
recruiting , selecting , placing, promoting , appraising , enhancing the careers by
compensating and training or otherwise developing both candidates and current
jobholders to accomplish theirs effectively and efficiently.

Leadership:- Is defined as the art or process of influencing people so that they will strive
willingly and enthusiastically towards the achievement of group goals .Ideally ,people
should be encouraged to develop not only willingness to work but also willingness to
work with zeal and confidence . Zeal is ardor , earnestness and intensity in the execution
of work ; confidence reflect experience and technical ability . Leaders act to help a group
to attain objectives through the maximum application of its capabilities .They do not
stand behind the group to push and prod ; they place themselves before the group as they
facilitate progress and inspire the group to accomplish organization goals.

The most important problems arises from people –their desires and attitudes, their
behavior as individuals and in-group and that effective managers also need to be effective
leaders ,.since leadership implies followership and people tend to follow those who offer
a make of satisfying their own needs , wishes and desires, it is understandable that
leading involves motivation , leadership style and communication

Motivation:- Is the process that accounts an individual intensity, direction and persistence
of efforts towards attain a goal

Intensity is concerned with how hard a person tries .This is the element most of us focus
on when we talk about motivation. However high intensity is unlikely to lead to a
favorable job performance outcome unless the efforts is channeled in a direction that
benefits the organization therefore we have to consider the quality of efforts as well as its
intensity. Finally motivation as a persistence dimension, is a measure of how long a
person can maintain their efforts. Motivated individuals stag with a task long enough to
achieve their goals

Communications: It is the process of passing information and understanding from one

person to another . A successful manager should develop an effective system of
communication so that he may issue instructions and receive the reaction of subordinate
and motivate them.

A communication is useless until it is transmitted and understood by others. Perfect

communication would exist when a thought or idea was transmitted so that the mental
picture perceived by the receiver was exactly the same as that envisioned by the sender

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Controlling:- It is measuring and correcting of activity of sub ordinates to ensure that
events conform to plan. It measures performance against goals and plans, shows where
negative deviation exist and by putting in motion actions to correct deviation help ensure
a compliment. Although planning must precede controlling plans are not self achieving.
Plans guide managers in their use of resources to accomplish group goals. Ideally people
should be encouraged to develop not only willingness to work but also willingness to
work with zeal and confidence.. Zeal is ardor , earnestness and intensity in the execution
of work. Confidence reflect experience and technical ability. Leaders act to help a group
attain objectives through the maximum application of its capability. They do not stand
behind the group to push and prod they place themselves before the group as they
facilitate progress and inspire the group to accomplish organizational goals. The most
important problem arise from people - their desire and attitudes , their behavior as
individuals and in groups and that effective leaders since leadership implies followership
and people tend to follow those offers a make of satisfying their own needs wishes and
desires, it is understandable that leading involves motivation leadership styles and
communication.

Skill & Roles,

Managerial roles
A) Interpersonal roles:-Managerial roles that involve people and other duties that
are ceremonial and symbolic in nature. it includes:-
(i) the figurehead role (performing ceremonial & social duties as the
organization’s representatives
(ii) the leader role
(iii) the liason role(communicating particularly with outsiders)

B) Informational roles:- Managerial roles that involves receiving, collecting &

disseminating information
(1) the recipient role (receiving information about the operation of an
enterprise)
(2) the disseminator role (passing information to subordinate )
(3) the spokesperson role (transmitting information to those outside the
organization)
C) Decision roles:- Managerial roles that revolve around making choices
(1) the entrepreneurial role
(2) the disturbance –handler role
(3) the resource allocater role
(4) the negotiator role

Evolution of Management through system and contingency Approach,

Social responsibility of Business / Management.

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As business operator in society , it can’t exist and grow unless carrier for society. It exist
vis-à-vis society. It requires to meet different needs of the society. For meeting these
needs , business has certain social reasonability to discharge. “Corporate social
responsibilities “ is defined as considering the impact of the company’s action on society
.A newer concept ,”social responsibilities “, is defined as the ability of a corporate to
refute it’s operation and policies to social environment in ways that are mutually
beneficial to both the company and society. Social responsibilities of business are
different for different sections of society which include responsibilities towards.
(a) Employees
(b) Consumers
© Government
(d) Society as a whole

Responsibilities towards employee

1. Fair wages and regular payment

2. Good working condition and safety
3. Reasonable working standard and forms
4. Labor welfare service :-health, education, recreation and accommodation
5. Training and promotion
6. Recognition and respect for hard work, honesty, sincerity and loyalty
7. Efficiency of redressing employee grievance.

Responsibilities towards customers

1. Providing goods and services at a reasonable price.

2. Supply goods and services of promised quality, durability and services.
3. Supply social harmless product.
4. Offering an efficient consumer redress mechanism.
5. Resisting profiteering and black marketing.
6. Improving product quality towards R & D

Responsibilities towards government

1. Regular payment of taxes

2. Resisting bribing bureaucrats and administrators.
3. Cooperating with Government in up gradation of environment.
4. Cooperating with Government in up keeping of social value.

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Responsibilities towards society as a whole

1. Prevention of environment pollution.

2. Preservation of ethical and moral values.
3. Making provision of health education and cultural services.
4. Minimizing ecological imbalance.

UNIT – II

Planning and Decision making, Nature and elements of Planning, Stages in

Planning, Levels of plan, Strategic planning, Decision Making process, Models of
Decision Making, Management by Planning, Organising Meaning and Nature,
Approaches to design Org. – Closed and open System, Basic for Departmentation,
Span of Control, Delegation & Decentralisation

PLANNING

Planning is selecting mission and objectives & the actions to achieve them , it requires
decision making, that is ,choosing among alternative future course of action. Planning
bridges gap from where we are to where we want to go. There are several reasons of
planning.
1) Planning gives directions
2) Planning reduces the impact of change
3) Planning minimize waste
4) Planning set standards used in controlling

TYPES OF PLANS:-
A plan can encompass any course of future action ,which clearly shows that plans are
varied.. They are classified as –
1) Purpose or mission
2) Objective
3) Strategies
4) Policies
5) Procedures
6) Rules
7) Program
8) Budget

Purpose or Mission:- The mission or purpose identifies the basic function or task of an
enterprise or agency

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Objective ;- Objective or goods are the end towards which activity is aimed. They are
results to be achieved. They represent not only the end point of planning but the end
towards which organizing , staffing, leading and controlling are aimed.

Strategies :- Strategies are the determination of the basic long term objectives of an
enterprise and the adoption of course of action and allocation of resources necessary to
achieve these goals.

Policies :- Policies are general statement or understanding which guide or channel

thinking in decision making. Policies define an area within which a decision is to be
made and ensure that the decision will be consistent with and will contribute to an
objective. Policies help decide issue before they become problems , make it unnecessary
to analyze the same situation every time they comes up and unify other plans thus
permitting manager to delegate authority and still maintain control over what their
subordinates do.

Procedure :- Procedures are plans that establish a required method of handling future
activities. They are guides to action , rather than to thinking and they detail the exact
manner in which certain activities must be accomplished. They are chronological
sequence of required actions

Rules :- Rules spell out specific required action or non actions, allowing non discretion.
A procedure might be looked upon as a sequence of rules, a rule however may or may not
be part of procedure for ex: “no smoking” is a rule quite unrelated to any procedure but a
procedure governing the handling of older may in corporate the rule that all older must be
conformed the day they are received.

Program:- The concern of program is to organize and schedule repetitive activities that
constitute a complete set or work in most efficient manner. They are concerned with
activities rather than decision.
Budgets :-A budget is a statement of expected results expressed in numbered terms.
A budget may be expressed either in financial terms or in terms of hours , unit of product
, machine hours or any other numerically measurable term . It may deal with operations
as the operations budget does; it may reflect capital outlay , as the capital expenditure
budget does ; or it may show cash flow as the cash budget does.

The budget is the fundamental planning in many companies. The budget forces a
company to make in advance a numerical application of expected cash flow expenses
and revenues ,capital outlags, or labor or machine hour utilization. The budget is for
control, but it cannot serve as a sensible standard of control unless it reflects plans.

STEPS IN PLANNING
1) Be aware of opportunities :- An awareness of operations in the external environment
as well as with in the organizations is the real starting point for planning . it is
important to take a look at possible future operations in the light of the market

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 ,completions needs and wants of a customer and the company own strength and
weakness . setting objectives depends upon this awareness. Planning require realistic
diagnosis of the opportunity situation.
2) Establishing objective :- The second step is to establish objective for the enterprise
and than for each work unit . this is to be down for the long term as well as for the
shoot range . objectives specifies the excepted results and the end point of what is to
be down , where the primary is to be placed ,and what is to be accomplish by the
network of policies,products rules ,budget and program
3) Develoing promise:- Promise are the about the environment in which the plan is to
be carried out .forecasting is important in about kind of market will there be ? what
value of sales ? whatprice? What products? Etc. the more thoroughly changed with
planning understand and agree to until planning promise the more enterprise planning
will be.
4) Deterring course :- The fourth steps in planning is to search and examining
alternative courses of action, specify does not immoderation apparent . the planner
must usually make a examination to discover the most frontal possibilities.
5) Evaluating alternative courses :- After seeking out alternative courses and examine
their strong and weak points,the next step is the alternative by in the light of promises
of goals.
6) Selecting a course:- this is the point at which the plan is adopted the real point of
decision making . occasionally an annuluses and evaluation of alternative course will
disclose that two or more are advisable and the manager may decide to follow several
course rather than the one best course.

STRATEGIC PLANNING

Strategic management is a set of managerial decision and actions that determine the long
run of an organization. Strategy is concern with the direction in which human and
materiel resource will be applied in order to increase the chance of achieving selecting
objective.
Strategic planning is often referred to as strategy formulation or long range
lancing and is concerned with developing a corporation mission objective strategies and
polices. It begins with situation analysis. The process of finding a strategic fit between
external opportunities and interval strengths.

GENERIC COMPETITIVE STRATEGIES BY PROTER

Prof. Michael porter identified two generic strategies a firm may adopt. These
strategies are generic because they may be suitable on a broad level for different kind of
organizations.
A) lower cost strategy:- it is the ability of a company or a business unit to design,
produce and market a comparable product at a lower price than its competitor.
B) Differentiation strategy:- it is the ability to provide unique and superior value to the
buyer in terms of rodent quality, special feature or after sales service.

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 The company has to further deiced weather it should compete head to head with
its major competitors for the biggest but most rough after share of the market, or
should a company focus on a Nichia in which it can satisfy a less rough after but
also refillable segment of the market.
Simply put, a company can choose a broad target(that is, aim at mass market) or a narrow
target (that is, aim at a market niche). Combining these two type of target markets with
the two combative strategies result in the four variations of generic strategies

When the lower cost and differentiation strategies have a board mass market
target, they are simply called cost leadership and differentiation. When they are
focused on a market niche (narrow target), however. They are called cost focus
and different focus

MAJOR KINDS OF STRATEGIES AND POLICIES

For a business enter prices, the major strategies and polices that give an overall
direction to operation are likely to be in the following areas.
a) Finance:- The financial plans and polices of an organization are related to the
availability, usage and management of found. Plans and polices have to be
made for capital borrowing: reserve and surplus or sour of found; and it
relationship with lenders, banks, and financial institutes.
The important factors regarding usage of
for
Founds are relevant are capital investment, fixed asset acquisition, current asset
loans and advances, dividend decision and relationship with shareholders.
The major factors for which plans and polices related to management of found
have to be made are the system of finance, accounting, and budgeting; management
control system, cash, credit and Rick management.
b) Marketing plan and polices related to marketing have to be formulated and
implemented on the basic of 4ps of the marketing mix, that is, rodent, pricing,
place(distribution) and price. The management major issues and decision
related to these marketing mix factors such as what type of product to often?
At what price? Through what distribution channel? And by the use of which
promotion tool? Have to be answered
c) Operation:- the plans and policies for operations are related to the production
system ,operational planning and control and r & d

The production system is concerned with capacity

,location ,layout ,products or service design, work
system ,degree of automation etc. plans and policies
related to operational planning and control are
concern with aggregate production planning
.material supply ,inventory ,cost and maintenance
of plant and equipment.

Plans and policies for r& d deals with product development , level of technology
used , technology transfer and absorption ,technological collaboration and support.

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 d) Personal:- Personal plan and policies relate to the personal system
,organizational and employee characteristics and industrial relation
plan and policies relate to personal system deal with factors
like man power planning , selection , development ,
compensation and appraisal.
Organizational and employee characteristics include factors
, such as the cooperate image ,quality of manager , staff and
workers ,perception about the image of the organization as
a employer ,availability & development opportunities for
employee ,working condition and so on .
Plans and policies related to industry relation deals with such as union
management relationship , collective bargaining ,safety ,welfare and security , employee
satisfaction and moral and so on.

RESOURES OF FIALURE OF STRATEGIC PLANNING

A) manager are inadequately prepared for strategic planning
B) the information for preparing the plans is insufficient for planning for action.
C) The goals of the organization are too vague to be of value .
D) The business units are not clearly identified
E) The reviews of the strategic LANs of the business unit are not done effectively .
F) The link between strategic planning and controls is insufficient .

SUCCSSFUL IMPLIMATION OF STRAGICES

a) Communication straggles to all key decision –making managers:-Strategies
should be communicated in writing and to executive and their subordinate must make
sure that everyone involves in implementing strategies understand them.
b) Developing and communication planing remise :-Manager must develop premise
critical to plans and decision .explained them to all those in the decision making
chain and give instruction to develop programmers and make decision in line with
them .
c) Reviewing strategies regularly:-strategies may case to be suitable if condition
change. Therefore, they should be reviewed from time to time
d) Developing contingency strategic and programmers :- If considerable change in
competitive factors or other elements in the environment may occur , strategic such
contingencies should be formulated .
Making the organization structure fit planning needs:- The organization structure,
with its system of delegation should be designed to help managers accomplish goals and
make the decision nessary to put plans in to effects.

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 Decision making is defined as selection of a course of action from among
alternatives; it is core of planning. The process leading to making a decision might
be thought of as (1) Premising (2) Identifying alternatives (3) evaluating
alternatives in terms of the goal sought and (4) choosing an alternative, that is
making a decision.

The optimizing decision-making is rational i.e. the decision-maker

makes consistent value maximizing choices within specific constrains.
These choices are made following a six-step rational decision-making
model.

The model begins by defining the problem. Problem exists

when there is a discrepancy between an existing and desired state of
affairs many poor decisions can be traced to the decision-maker
overlooking a problem or defining the wrong problem.

Once a decision-maker has defined the problem, he or she needs

to identify the decision criteria that will be important in solving the problem.
In this step, the decision-maker determines what is relevant in making a
decision. This step brings the decision-makers interest, values and similar
personal preferences into the process. Identifying criteria is important
because what one person thinks is relevant, other person may not. Any
factors not identified in this stage are considered irrelevant to the decision-
maker.

The criteria identified are rarely all equal in importance. So the third
step requires the decision-maker to weight the previously identified criteria
in order to give them the correct priority in the decision.

The fourth step requires the decision-maker to generate possible

alternatives that could succeed in resolving the problem. Once the
alternatives have been generated the decision-maker must critically
analyze and evaluate each one. Rating each alternative on each criterion
does this. The strengths and weaknesses of each alternative become
evident as they are compared with the criteria and weights established in
the second and third steps.

The final step in this model requires computing the optimal decision. This
is done be evaluating each alternative against the weighted criteria and selecting
the alternative with the highest total score.

ORGANIZING

Organization implies a formulized intentional structure of roles or positions. For

an organization role to exist and be meaningful to people it must incorporate
1. verifiable objectives, which are major part of planning
2. a clear idea of the major duties or activities involved

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3. an understood area of discretion or authority so that the person filling the rolled
knows what he or she can do to accomplish goals.

Organizing includes the following steps:

a. the identification and classification of required activities

b. grouping of activates necessary to attain objectives
c. the assignment of each grouping to a manager with the authority necessary
to supervise it
d. the provision for co-ordination horizontally (on the same or similar
organizational level) and vertically(e.g. corporate headquarters, divisions
and department) in the organization structure.

An organization structure should be designed to clarify who is to do what tasks

and who is responsible for what results.
FORMAL ORGANIZATION:- intentional structure of roles in a formally
organized enterprise
UNFORMAL ORGANIZATION:- a network of personal and social relations
not established or required by the formal organization but arising spontaneously
as people associate with each other

One aspect of organizing is the establishment of departments. Department

designates a distinct area, division or branch of an organization over which a
manager has authority for the performance of specified activities
There is no single best way of departmentising that is applicable to all
organizations or to all situations. The pattern used will depend on given situation
and on what mangers believe will yield the best results for them in the situation
they face. Departmentation can be on the basis of :
a. time
b. simple numbers
c. function
d. territory or geography
e. customer
f. product
g. matrix organization

a. Deportation by a simple number: Departmentation by a simple numbers was

once an important method in the organization of tribes, clause and armies. The
essential fact is not what people do, where they work or what they work with, it
is that the success of the undertaking depends only upon the number of people
involved in it.
The usefulness of this organizational device has declined with each passing century. For
one thing, technology has advanced, demading more specialized and different skills.
Specialized personal are frequently more efficient than those based purely on numbers.
Departmentaion by number is useful only at the lowest level of the organization structure.
As soon as any factor other than pure human power becomes important the simple
number basis of Departmentation fails to produced good results.

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b. Departmentation by time: one of the oldest forms of Departmentation generally
used at lower level of the organization is grouping of activities on the basis of
time. The use of shifts is common in many enterprises where for economic,
technological or other reasons the normal work day will not suffice example this
kind of Departmentation can be found in hospitals, the fire department has to be
ready to respond to emergencies at any time.

Advantages:- services can be reentered that go beyond the typical 8 hour day ,
often extending to 24 hours a day.
Second ,it is possible to use process that can not be interrupted , those that require a
continuing cycle
Third ,expensive capital equipment can be used more than 8 hours a day .when workers
in several shifts use the same machine.
Fourth, some people student attending classes during the day for instance find it convent
to work at night.

Disadvantages- first, supervision may be lacking during the night shift

Second, there is the fatigue factor , it is difficult for most people to switch ,for instance
from a day shift to night shift and vise versa
Third, having several shifts may cause problem in coordination and communication.
Fourth, the payment of over time rate can be increase the cost of the product or service

c. DERPATMENTATIION BY ENTERPRISE FUNCTION :- growing activities in accordance

with the function of an enterprise functional Departmentation embodies what enterprises typically
do .since all enterprise undertake the creation of something useful and desired by others ,the
basic enterprise function are
a) production
b) marketing
c) financing

functional daprtmentaion the most widely used basis for organizational activity and its
present in almost every enterprise at some level in the organization structure.the
characteristics of marketing ,production and financing are so widely recognized and
thoroughly understood that they are the basis not only of departmental organization but
also most often of Departmentation at the top level.

ADVANTAGES:- the most important advantage of functional departmention is that it is a

logical and time proven method. Functional Departmentation, follows the principle of
occupational specialization and thereby facilitates efficiency in the utilization of people.

DISADVANTAGES:- Functional departmention may tend to de-emphasize overall

enterprise objectives. Accountants ,production experts and marketing people working in
specialized departments, often have problems seeing the business as a whole , and
coordination among them is frequently difficult to achieve.

c. DEPARTMENTATION BY TERRITORY OR GEOGRAPHY: Departmentation based on

territory is common in enterprises that operate over wide geographic areas. In this case,
it may be important that activities in a given area or territory be grouped and assigned to
a manager. territorial Departmentation is most often used in sales and in production; it is
not used in finance; which is usually consternated at the head quarters.

ADVANTAGES

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Departmenttion by terririrty offers a number of advantages. It places
responsibilities at the lower level, encourages local participation in decision
making and improves coordination activities in a region. Mangers can give
special attention to the needs & problems of local markets. Thus , they may result
local sales people who are familiar with special situation in the area. More over ,
these sales people can spend more time sailing and less time travailing.

Production may also be organize on a territorial basis by established plants in a

particular region. This can reduce transpiration coast and delivery time. More
over labor coast may be lower in certain regions, and producing things locally
may create jobs & goodwill in the local community.

DISADVANTAGES

This kind of departmention requires more persons with general managerial

abilities and shortage of them often a factor limiting the growth of an enterprise.

Geography Departmentation tends to lead to duplication of services . thus

managers of a territory want to have their own purchasing, personal, accounting
& other services that are also carried out in their home office. This duplication
can be castle .

Finally, geography Departmentation may increase the problem of control by top

managers at the head quarters, who may findid difficult to mentioned the activity
of the department located at veracious territories.

E. CUSTOMER DEPARTMENTATION

Grouping activities so that they reflect primary interest in customers is common

in verity of enterprises bank can have a number of department, each catering to
the needs of a specific type of customers. They can be departments for

1. community- city banking

2. real estate & mortgage loan
3. corporate banking
4. agriculture banking
5. institutional banking

ADVANTAGES.

1. encourages construction on customers needs

2. gives customers feeling that they have an understanding supplier (banker).
3. Develop expertness in customers area.

DISADVANTAGES

1. May be difficult to coordinate operation between committing customers

demand .
2. Requires managers and staff experts in customers problems .
3. Customers group may not always be clearly defined.

F. DEPARTMENTATION BY PRODUCT.

Grouping activities on the bases of product or product lines has long been
growing in importance in multilane large scale enterprises. This structure permits

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 top management to delicate to a division executive extensive authority over the
manufacturing , sales, services and engineering function that relate to a given
product or product line and to exact a considerable degree of profit responsibility
from each of the managers.

ADVANTAGES

1. places attention and effort on product line.

2. Facilities use of spliced capital, facilities, skills & knowledge.
3. Permits growth and diversities and of product and services.
4. Improves coordination of functional activities .
5. Places responsibilities for profits at the division level .
6. Furnishes measurable training ground for general managers.

DISADVANTAGES

1. Requires more persons with general manger abilities.

2. Tends to make maintenance of economical center and services difficult.
3. Presents increases problem of top management control.

G. MATRIX ORGNISATION.

AN ORGANISIOTNAL structure that assigns speslist from different functional

area to work on more project being led project manager. One unique aspect of
matrix organization is dual chain of command” employees in a matrix
organization have two manager
a) There functional departmental manager
b) B) Project manager
Advantages
Is oriented toward end results
Professional identification is maintained
Pin points product profile responsibility
Disadvantage
Conflict in organization authority exists
Possibility of sisuynity of command exist
Require manager effective in human relations

Various stages in decision making process

Decision making is defined a selection of a course of action from amo9ng
alternatives, it is core of planning. The process leading to making a decision
might be thought of as (1) Premising (2) identifying alternatives (3) evaluating
alternatives in terms of the goal sought and (4) choosing an alternative. That is
making a decision.
The optimizing decision making is rational i.e. the decision maker makes
consistent value maximizing choices within specific constrains, choices are made
following a six step rational decision making model.
The model begin as by d4efininmg the problem. Problem exists when there is
discrepancy between an existing and desired state of affairs many pro decisions
can be traced to the decision maker overlooking a problem or defining the wrong
problem.
Once a decision maker Hades defined the problem he or she needs to identify
the decision craters that will be important in solving the problem in these step the
de3cisonj maker determines what is relevant in making a decision. This step
brings the decision makers interest, values and similar personal preferences into
the process. Identifying criteria is important because what one person thinks is

15
 relevant, other person may mot. Any factors not identified in this stage are
considered irrelevant to the decision maker.
The criteria identified are rarely all equal in importance. So the third step requires
the decision maker to weight the previously identified criteria in order to give
them the correct priority in the decision.
The fourth step requires the decision maker to generate possible alternatives that
could succeed in resolving the problem. Once the alternatives have been
generated the decision maker must critically anile and evaluate each on. Rating
each alternative on each criterion does this. The strengths and weaknesses of
each alternative become evident as they are compared with the criteria and
weights established in the second and third steps.

The final step in this model requires computing the optimal decision. This is done be
evaluating each alternative against the weighted criteria and selecting the alternative with
the highest total score.

Span of control

Span of control is defined as the number of subordinates a manager can efficiently direct.
A wide span of management is associated with few organizational levels; a narrow span
with man levels, Factors that determine the span of control include.

a. Subordinate Training:- the better the training of subordinates the fewer the number
of necessary superior-subordinated relationship. Well-trained subordinated require
not only less of their managers time but also less contact with their managers.

b. Clarity of delegation of authority: - The principal causes of the heavy time burdens
of superior-subordinate relationship is to bee found in the poorly conceives and
confused organization. The most serious symptom of poor organization affecting the
span. If a manger clearly delegates authority to undertake a well defined task a well
trained subordinate can get it done with a minimum of mangers time and affection.

Clarity of plans: - much of the character of a subordinate job is defined by the plans to
be into effect. If these plans are well defined, if they are workable, if the authority to
undertake them has been delegated, and if the subordinate understand what is expected,
a little of supervisor time will be required.

Rate of charge:- certain enterprise charge much more rapidly ha others. The rate if
charge is an important determinate of the degree to which policies can be formulated and
the stability of polices maintained.

The time frame of decision:- where quick on the spot decisions must be made the
authority to make them must be delegated encouraging decentralization.

Authority is delegated when a superior gives a subordinates desecration to make

decisions. Delegation is necessary for an organization to exist. Just as no one pressing in
an enterprise can do all the tasks necessary for accomplishing a group purpose, so it
impossible, as an enterprise to grow, for one person to exercise all the authority for
making decisions. The process of delegation involves:-
a. Determining the results expected from a position.
b. Assigning tasks to a person.
c. Delegating authority for accomplishing these tasks

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 1. Functional clarity:- the function to be performed, the methods of operation and the
results expected must be clearly defined the authority delegated must be adequate to
ensure that these functional are well performed.
2. Matching authority with responsibility:- Responsibility and authority are highly
interconnected. Authority should be adequate and should only match the duties to be
performed but also the personal capabilities of the subordinate.
3. Unit of command:- A subordinate should be responsible to only one superior who is
delegating the authority in the first place. in this manner the responsibility for mistake
or accomplishments is traceable and chances of conflict or confusion is minimal.
4. Principal of communication:- a misunderstood responsibility can be very
dangerous. A general authority can be easily misuse. Accordingly, both the
responsibility and authority must be clearly specify openly communication must be
continuously kept open for issuing direction as well as receiving feedback.

Even though delegation of authority has some definite advantages and is necessary for
optimal organizational operations, some managers are very reluctant to delegate
authority and many subordinate avoid taking on the responsibility and authority. the
causes for such reluctance are based upon certain beliefs and attitude which are
personal behavior in nature.

RELUCTANCE OF MANAGER
A) a manager may believe that he can do his work better than his subordinate. He might
think that his subordinate are not capable enough.
B) Since the manager is responsible for the action of his subordinate , he many not be
billing to “takes chances” with the subordinates
C) Some managers lack the ability to direct their subordinate. They may not be good in
organizing their thoughts as well as activity and thus may not no what to do after
delegation in order to help the subordinate complete the task.
D) Some manger feel very insecure in delegating authority, specially when the
subordinate is capable of doing the job better
RELUCTANCE OF SUBORDINATE:- while delegation of authority can be highly
motivating factor for some subordinate other may be reluctant to take it for the following
reasons.
a) many subordinates are reluctant to accept authority and make decision for fear that
they would be criticized or dismissed for making wrong decision. this is specially true
in situation where a subordinate has make a mistake earlier.
b) Some subordinate hesitate to accept new and added assignment where there is a
lack of necessary information and when the available resources are not adequate or
proper.
c) The subordinate may lack self. Confidence in doing the job and may fear that the
superior will not available for guidance once the delegation is made and this makes
them feel uncomfortable with additional responsibility.
The subordinate may not be given sufficient incentive for assuming extra responibilies
which could mean working harder under pressure. According in the absence of adequate
compensation in the form of higher salary or permeation opportunities a subordinate may
avoid the promotional opportunities a subordinate may avoid additional authority.

Delegation

Organization authority is the discretion conferees on people to use their

judgement to make decision and issue instruction. Decentralization is nay
tendency to dispersed decision making authority in an organized structure.

17
 1. Size and complexity of the organization:- large organization with diverse
product line and conglomerates and companies involved in different field
would find decentralized t be more effective due to limitation in managerial
expertise as well as increased executive work load.
2. Location of target market:- If the customer of an organization are located
geographically for apart, decentralization would be more appropriate
management resources would be placed close to the customers allowing
quicker decisions and faster customer service.
3. Desirability of creativity in the organization:- Decentralization is
suggested if creativity within the organization is desirable and necessary. It
gives the subordinates freedom to be innovative and find better ways of
doing things freedom is a highly motivational factor which encourages
creativity.

UNIT – III

Leading & recognition of human factor, Motivation – Theories & Models,

Leadership styles & Leadership effectiveness, Management contract – Nature,
Control process, Kinds of control system, overview of control techniques, effective
control system.

Motivation – theories and Models

Motivation: it is process that accounts for an individual intensity direction and persistence
of effort towards attaining goal. Intensity is concerned with how hard a person tries.this is
the element most of as focus on when we walk about motivation.however high intensity
is unlikely to lead to favorable job performance outcome unless the effort is channeled in
a direction that benefits the organization.therefore we have to consider the quality of
effort as well as intensity.Finally motivation has a persistence dimension. This is a
measure of how long a person can maintain their effort. Motivated individuals stag with a
task long enough to achieve their goal.

MOTIVATION

Motivation is a process that accounts for an individuals intensity, direction and

persistence of efforts towards attaining a goal.

The purpose of motivation is to Crete conditions in which people are willing to work with
zeal, initiative, interest and enthusiasm, with a high personal and group moral
satisfaction, with a sense of responsibility , loyalty and discipline and with pride and
confidence in a most cohesive manner so that the goals of an organization are achieved
effectively.

Motivation represents an unsatisfied need which creates a state of tension or

disequlbrium, causing the individual to move in a goal directed pattern towards restoring
s state of equilibrium by satisfying the need. Hence it is possible to look at motivation as
involving a chain reaction. Felt needs give rise to wants or goals sought which create
tensions( that is unfilled desires), which give rise to action towards achieving goals, which
finally result in satisfying actions.

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MASLOW NEED HIERARCHY THEORY OF MOTIVATION

One of the most widely mentioned threes of motivation is the hierarchy of needs theory
put forward by Abraham Mallow. According to Mallow, needs have a definite sequence of
domination i.e. unless the needs of the lower order are reasonably satisfied, those of the
higher order do not dominate.

Mallow need hierarchy theory stresses two fundamental premises:-

1. man is a working animal whose needs depend on what he already has. Only needs
not yet satisfied can influence behavior. In other words, a satisfied need is not a
motivator.
2. Man’s needs are arranged in a hierarchy of importance. Once one need is satisfied
another need emerges and demands satisfaction.

a. Physiological Needs:- at the lowest level are the Physiological needs. These are the
basis needs of sustaining human life itself, such as food, water, clothes and shelter.
Mallow took the position that until these needs are satisfied to the degree necessary
to maintain life, other needs will not motivate people.
b. Security needs:- when physiological needs have been reasonably satisfied, the next
higher needs emerge viz. the safety needs. The needs for security includes:-

1. Avoidance of harm from physical environment

2. Safety against diseases.
3. Protection from law & order problems.
4. Economic security.

3.affiliation or affection ends (social needs) since people are social beings, the need to
belong , to be accepted by others. These needs are concerned with:-
1. getting companyship, associating with someone , having a spouse and children.
2. Seeking acceptance by his fellow-beings.
3. Giving and receiving love and affection.
4. Becoming a member of a group, club, society etc.
5. esteem needs:- these needs are concerned with the awareness of importance to
others (self esteem) and actual esteem from others. Self esteem
1) self esteem (i.e. self esteem) :- comprising feelings of competence, autonomy,
independence, domainace, achievement and acquisition.
2) Esteem from others include the need for recognition attention, importance or
appreciation or prestige, status and power to control.

6. self actualization:- mash regards this as the highest need in his hierarchy. These are
the needs which help realize ones own potentialities for continued self development
and for creative. It is the desire to become what one is capable of becoming to
maximum one’s potential and to accomplish something.

TWO FACTORS OR HYGIENE THEORY OF HERZBERG.

Mastow,s need approach has been considerably modified by Fredrick herzberg. His
research purports to find a two factor theory of motivation according to herzberg.
1) there are some conditions of a job which operate primarily to dissatisfy employees
when they are not present. However, the presence of these conditions does not bring
strong motivation. herzberg called these factors maintain or hygiene factors, since
they are necessary to maintain current status, i.e. a reasonable level of satisfaction .
these factors causes much dissatisfaction when they are not present. But they do not
provides storage motivation. Some of the maintenance factors include
a) company policy and administration

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b) interpersonal relation with peers, subordinate and supervisor
c) technical supervision.

There are some job condition which, if present build high level of motivation and job
satisfaction. however if these condition are not present they do not causes
dissatisfaction. he called these motivation factors or satisfies these hour.
Achievement
Recognition
Advancement(through creative and challenging work)
Possibilities of personal growth
Responsibility
Herzberg was of the opinion that these factor, had to strong strong motivation, and,
there for , job satisfaction. When they are present, but do not cause much
dissatisfaction when they are absent.
Self actualization
Ego & esteem
Application or social needs
Security needs
Physiological needs

VROOM’S EXPEECTANCY THEORY

Room’s theory is that peoples motivations towards doing anything will be determine
by the value they place on the outcome of their efforts ( whether positive or negative)
, multiplied by the confidence they have that their efforts will Br materially and in
achieving a goal . in others words, vrooms makes the point that motivation is a
product of the anticipated worth that an individual place on a goal and the chances he
or she sees of achieving that goal. Using his own terms, vroom’s theory may be
stated as.
Force valency* expentancy
Where force is the strength of a person’s motivation. Valency is the strength of an
individual presence for an outcome and expentancy is the probability that a particular
action will lead to a desired outcome.
CARROT AND STICK THEORY

This theory assumes that people can be motivated to work if rewards are offered with
held. The rewards are attached to, and made contingent upon, effective performance.
Person are rewarded for special accomplishment. But are penalized if their false
below some minimal level . this approach is meaningful only so long as an individual.
Is struggling for subsistence. It does not work at all once. He has reached an
adequate substance level and his motivating primarily. By higher need. “the
philosophy of management by direction and control is inadequate to motivate
because human needs, on which these theory realize ,are today unimportant
motivator of behavior. Direction and control are essentially useless in motivation
people whose important needs are social and egoistic.

Management generally uses financial and non financial motivators to motivate their
employee.
Financial motivators:- such motivation is a connected directly or indirectly with
money. Wages and salary , bonus, profit sharing, live with pay, medical
reimbursement etc. are included under this type of motivation.
Non financial motivators:- non financial motivators are psychic rewards, of the
rewards of enchanted position, that can be secure in the work organization. Some of
the most commonly used non finical motivator are
1) apparisal, praise and prestige.
2) Status and pride

20
 3) Competition
4) Delegation of authority
5) Participation
6) Job security
7) Job enlargement
8) Job rotation
9) Job enrichment
10) Quality of work life.

1.apparisal, praise and prestige:- when he does his work well the employed naturally
wants it to be praised and recognized by his boss and fellow workers. Praise seems
to have its greatest value when given and received as recgnigation. Recognition
stacified human need for esteem by other and for self-esteem. This recognition may
be shown in the form of praise, of a pat on the beck of the employee or a
recommendation for a pay raise, promotion or assignment of more interesting tasks.

2.STATUS AND PRIDEU:- status refers to the “social rank of a person” and satisfies
social egoistic needs. A management often tries to satisfy these needs by
establishing status symbols and distinctions in its organization. Individual try hard to
gain these have been achieved, there is a carving for higher status symbols.

3.competition:- as a form of motivation, competition is widely used in an organization.

Individual do complete with one another if they feel they have chance of winning and
satisfying their”ego”. This compassion may be in regards to sales production or
safety assures. The person who is agiuaged the best is awarded the coveted prize.

4.delegation of authority :- an authority is the right to act, to direct, and to requisition

resources needed to properly perform the job. The delegation of a substantial amount
of responsibility to execute a given task often proves to be a strong motivation. The
subordinate is more or less on his own. The supervisor trusts him. He feels that he
must show results.

5. participation:- it implies the physical and mental involvement of the people in an

activity especially in that of decision making. This satisfies one’s ego and self esteem
and the needs of creativeness and initiative.

6. Job security:- for some employees, this is an equally important motivator. Job
security implies that an employee would continue on the job in the same plant or
elsewhere and that he shall enjoy economic and social security against sickness,
unemployment, disability, old age and death.

7. Job enlargement:- it is the process of increasing the complexity of the job in order to
appeal to the higher order needs of workers. It implies that the employee perform
more varied tasks, which are all of the same level the idea being to make the jobs
less monotonous. The idea of job enlargement is to provide the workers with the
opportunity to make greater use of their need for self esteem and dignity.

8. job rotation:- it implies the shifting of an employee from one job to another so that
monotony and boredom are reduced. The basic objective of job rotation is to increase
the skill and knowledge of the employee about related jobs. In job rotation workers
learn to do all the different activities necessary for an operation or unit of work.

9. Job enrichment:- it is a form of changing or improving a job, so that a worker is likely

to be more motivated. It provides the opportunity for greater recognition,
advancement growth and resoponsibity. An employee where job is enriched will
perform the management function of planning and control so far as his own work is

21
 concerned. In an enriched job, an employee knows the overall deadlines and the
quality standards he must meet, and within that framework he plans the order in
which he will tackle the various tasks and the time should be devoted to each. He
holds himself responsible both for meeting the deadlines and for predicting work in
the necessary quality, and he does not pass his work or pet others to judge it till he is
satisfied that it meets the required standards.

10. Quality of work life: the term quality of work life means different things to different
persons. To a worker on as assembly time, it may just mean a fair day’s pay.,safe
working conditions and a supervisor who treats him with dignity. To a young new
creative tasks and a successful career.

a) there are many factors which can contribute to quality of work life like:
b) adequate and fair healthy environment.
c) A safe and healthy environment.
d) Jobs aimed at developing and using employee’s skill and abilities
e) Growth and security: jobs aimed at expanding employee capabilities, rather than
leading to their obsolescence.
f) An environment in which employee’s right to privacy, dissents equity etc.

LEADERSHIP

Leadership is the capacity to frame plans which will succeed and the faculty to persuade
others to carry them out in the face of all difficulties.

A good leader one whose thoughts are pure and there is a

complete harmony in his thoughts , words and deeds. A man who says that what he
thinks, and does what he says, is always trusted; that indeed is the man who can lead
others. And it is only a man of character who can and here others and to this principle.
Anyone who picks up tools and techniques of human relations, communication
eloquence, public image or styles of effectiveness may get some short to result. However,
under stress and strain, such shallow abilities crumble and true motives of the man
show up destroying all human relation. Indeed, it is the character that communicate most
eloquently.
Leader ship process

To
Tell
To see
To do
To be

To be is the source of leadership.

To do is the style of leadership by personal example.
To see and to tell are the function, tools and technique of leadership.
“to be” means the aggregate of all that there is leader and gives him a distinctive identity, his
value, his quality and his knowledge. In others word, his personality. ”to be” is a begging and the
end of leadership
“to do” indicates the best style of leadership is to lead by personal example. Style is the reflection
of the substance in a man his personality. Personal example can be set only if the TO BE of the

22
leader is worthy of emulation. The personal example transparent the most polenta technique of
influencing people. Hence it is rightly called the method of silent persuasion.
TO SEE implies that a leader mist be incomplete touch with the realties of the situation in which
he is operating. He should have the fullest possible information regarding the problem about
which a decision and a plan has to be formulated only than can he make around decision it also
involves going out and seeing things one self on the ground.
TO TELL means communicating to others what a leader want them to do. Telling is effective if the
instructions of the leader are clearly understood.

FUNCTIONS OF LEADERSHIP:- in practical term, a leader has to achieved the task function,
group functions, and individual functions

TASK NEEDS
Defining the task
Making the plans
Allocating work and resources
Controlling quality and tempo of work
Checking performance against plan

GROUP FUNCTION
Setting standard –example
Maintain discipline
Building team sprit
Encouraging, motivating, giving a sense of purpose
Appointing subleader
Ensuring communication with in the group
Training the group

INDIVIDUAL NEEDS:-
Attending to personal problem
Parsing of individual
Knowing individual personally
Recognizing and using individual abilities
Training individual

CHARACTERISTICS OF A GOOD LEADER

Selflessness:- selflessness (or unselflessness or self sacrifice is the hub and heart indeed very
foundation of a leader. Its two components are knowledge and character. Knowledge helps leader
to determine what to do in any given situation. And the strength of character helps him to get
things done by appropriately handling people who have to what he wants done. Knowledge and
characters land to each other. More knowledge without character makes a man more character
not by knowledge, puts a on a leader’s potential.
It Is to realize that selfness is the fountainhead of all that is noble in
human character; without which it is impossible to others. Selfless man is neither greedy more
looking for shortcuts to get on in life; hence his never verse. He sets on unfair advantage over
others; hence honesty comes naturally to him. He is not self seeker; his is steady and strong.

2. Courage:- Courage is the most admired of human in all societies. The most important act of
courage for a leader is to take decisions and to act. To take decisions means being for success or
fail but nothing happens or without a decision.
Cowardice makes a man hide the truth; conversely, one who is will not live. It is
an expression of courage to demand high standard of performance even at the cost of facing
unpopularity. Again, it takes courage to say (on) to an act, which is unethical.

3. Will power: - Will power to persist is another vital virtue invariably present in all outstanding
leaders. In the implementation of any plan, programs or project, hundreds of difficulties arise and

23
failure on the part of people who have to a plan. A good leader must have the all power
(determination) to persist in spite of stay back and obstacles that may arise in the implementation
of plan.

4. Initiative:- An effective leader is always to jumps a head of events. He does so be intelligent

anticipation based on sound information system to overcome difficulties obstacles and that crop
up. He is also on the lookout for openings and opportunities to exploit for the furtherance of his
task. All these abilities are the sign of initiative. In a nutshell, a man of initiative is a self-starter
and that makes him dynamic.

Handling people working for a leader

1. Self control: - No team captain hope to control and inspire his team unless he learns to
control and discipline himself. Self control does not only add to the leadership potential, it also
is a source of great happiness.
2. Success and Failure: - It is a basic trait of human nature that an individual ascribes success
of an organization to the part played by him and blames failures on the system. On the other
hand, a good leader gives credit to his men for success and takes responsibility for failures.
This approach binds men together in a collective effort to work for the organization.
3. Setting Targets: - It is useful to let themselves to set targets for work. In this event not only
are they likely to meet these targets, but even surpass them.
4. Correcting Mistakes: - A leader has often to correct who father, show tracks of weakness or
fail. It is better to say “this is not what is accepted of a person of your caliber and ability”
rather than words to the effect “ what else. One could expect from a lot like you”. The first
approach a man self respect even in failure. The second approach makes him your enemy.
5. Accessibility: - It is a leader’s responsibility to that he is accessible. He could institutionalize
the time and place for meeting the members of his team.
6. Recognition: - Good and effective leaders have should the human for recognition with telling
effect to faster interpersonal bonds with their people and to motivate them. They have
scrupulously used the principle of praise in public and to reprimand in private to create an
organizational culture in which people work much beyond the call of the duty to maintain
excellence in their organization.
7. A leader is one who guides and directs other people he gives the efforts of his following a
direction and purpose by influencing their behavior.
Leadership is psychological process of influencing followers or subordinates and providing
guidance to them it is always related to situation which means a leader may be effective in
one situation while ineffective in another. To be effective, a leader should change his
leadership style dependency upon the requirements of the situations. Leadership is a
compound of atlas four major ingredients.
(a) The ability to use power effectively and in responsible manner.
(b) The ability to comprehend that human beings have different motivation forces at different
times and different situations.
(c) The ability to inspire and
(d) The ability to act in a manner that will develop a climate conductive to responding to and
arousing motivation.
Style of Leadership
Leadership style refers to a leader’s behavior. Behavioral pattern, which the leader reflects in his
role as a leader is often described as the style of leadership. Different leadership patterns exists
among leaders in different times and in different situations. Leadership style is the result of
leaders philosophy, personality, expression and value system. It also depends upon the type of
followers and organizational atmosphere prevailing in the enterprise. Different type of leaderships
styles are:
1. Autocratic or Dictatorial Leadership: - Autocratic leaders keep the decision-making
authority and control in their own hands and full responsibility for all action. Also, they
structure the entire work situation in their own way and expect the workers to follow their
orders and tolerate no deviation from their orders. The autocrat ranges from tough to
paternalistic, depending upon whether his motivational approach is threat and punishment or

24
 rewards. The autocratic leader believes that his leadership based upon the authority
conferred upon him by some source, such as his position, knowledge, strength or the power
to punish and reward.
Advantages
a) Autocratic leadership is useful when the r new on the job and have no experience Richter in
the manager decision making or performing with out active supervision.
b) It can increase efficiency, when appropriate, and get quicker result, specially in a crisis or
emergency situation. When the division must be taken immediately.
c) The paternalistic autocrat is useful when the r not interested in seeking responsibility or when
they feel insure at the job or when they work better under clear and detailed.
d) It is useful when the chain of command and the division of work is clear and understood by
all.

Disadvantages
a) One-way communication without feedback leads to and communication breakdown.
b) An autocrat leader makes his own decision which can be very dangerous in this age of
technological and sociological complexity.
c) Since it inhibits the worker’s freedom, it fails to develop his commitment to the objective of
the organization.
d) Since it provides for worker resentment. It creates problems with their morale resulting in
poor productivity in the long run.
e) It is unsuitable then the work force is knowledgeable about their jobs and the job cells for
teamwork and cooperative spirit.

2) Participate or democratic leadership

In this type of leadership, the subordinates are consulted and their feedback is taken into
the decision making process. The leader’s job is primarily of a moderator even thought he
makes the final decision and he alone is responsible for the results. The group remember
are to demonstrate initiative and creativity and take intelligent interest in setting plans and
police and have maximum participation in decision-making. This ensures better
management—labor relations, higher moral and greater job satisfaction. This type of
leadership is especially effective when to work force is experience and dedicated and
is able to work independently with least directive.

Advantages:-
a. Active participation in the management by labor assures rising productivity
satisfaction.
b. Workers develop a greater sense of self-esteem, due to importance given to their
ideas and their contribution.
c. They become more comities to changes that may be brought about by policies
changes, since they themselves participated in bringing about these changes.
d. The leadership induces confidence cooperation and loyalty among workers.
e. It results in higher employee morale.

Disadvantages:-

a. The democratic leadership requires some favorable conditions that the labor must be
literate informed and organized. This is not always possible.
b. This approaches assumes that all workers are genuinely interested in the organized
and they their individual goals are successfully fused with the organization goals. The
assumption may not always be valid.
c. There must be total trust on the part of management as well as employees. Some
employees may consider this approach simply an attempt to manipulate them.
Accordingly the employees must be fully receptive e4 to this approach to make it
meaningful.

25
 d. Some group members may feel alienated if their ideas are not accepted for action.
This may create a feline of frustration and ill will.
e. This approach is very time consuming and too many viewpoints and ideas may make
the solid decision more difficult and may be source of frustration of impatient
management.
f. Some manager may be uncomfortable with this approach because they may fear
erosion of their bower – base and their control over labor.
g. This approach relies heavily on incentives and motivation of recongnitions
appreciation, status and prestige. The labor may be more interested financial
incentives instead of prestige.

2. Laissez- faire or free-region Leadership

In this type of leadership, the leader is just a figurehead does not give any direction. He
acts principally as liaison between the group and the outside elements and supplies
necessary materials and provides information to group members. He leers the
subordinates plan and organize and develop their own techniques for accomplishing
goals within the generalized organizational policies and objectives. The leader participate
very little and instead of leading and directing, he becomes just one of the members. He
does not attempt to intervene or regulate or control and there is compile group or
individual freedom in decision-making. This type of leadership is highly effective when the
group members are highly intelligent and are fully aware of their roles and responsibilities
and have the knowledge and skills to accomplish these tasks without direct supervision.

This type of leadership is evident in reach laboratories where the scientists are fairly free
to conduct their research and make their decisions. Similarly in a university or a college,
the chairpersons does not interface in the professor’s etching methods, but only assigns
the courses to be taught. From then onwards the professors are very much their own
leaders.

Advantages:-

A. It creates an environment of freedom, individually as well as the team sprit.

B. It is highly creative, with a free and informal work environment.
C. This approach is very useful where people are highly motivated and achievement
oriented.

Disadvantages

A. it may result in disorganized activities, which may lead to inefficiency an chaos.

B. Insecurity an frustration may develop due to lack of specific decision making authority
and guidance.
C. The team sprit may suffer due to possible presence of some uncooperative
members.
D. Some members may put their own interests above the group and team interests.

In practice, a leader may use all styles over period of time, but one style tends to
predominate as his normal way of using power. For example, factory supervisor who is
normally autocratic may be participate in determining vacation schedules and free rein in
selecting the departmental representative for safety committee. It should be noted that
the classification is not scientific.

THE PATH GOAL APPORACH TO LEADERSHIP EFFECTIVNESS

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The path goal theory suggests that the main function of the leaders is to clarify the set
goals with subordinates, help them find the best path for achieving the results and
remove obstacles.

Leader behavior is categorized in to four groups:-

1. Supportive leadership:- Behavior gives consideration to the needs of the

subordinates, show a concern for their well-being, and creates a pleasant
organistaniol climates. It has the greatest impact on subordinates performance when
they are frustrated and dissatisfied.
2. Participate leadership:- Allows subordinates to influence the decisions of their
superiors and can result in increased motivation.
3. Instrumental leadership:- It gives subordinates specific guidance and clarifies what
is expected of them; this includes aspctsof planning, organizing, coordinating and
controlling by the leader.
4. Achievement-oriented leadership:- it involves setting challenging goals, seeking
improvement of performance and having confidence that subordinates will achieve
high goals.

TRAIT APPROACHES TO LEADERSHIP

This theory considers personal qualities and characteristics that differentiate headers
from non-headers. Six traits on which headers tend to differ from non-headers are:-
a. Ambition
b. The desire to lead
c. Honesty & integrity
d. Self confidence
e. Intelligence
f. Job related knowledge

In addition to his, people who are high self-monitors i.e. are highly flexible in adjusting
their behavior in different situations- are more likely to emerge as leaders in GroupWise
than low self monitors.

FIELDERS CONTINGENCY APPORACH TO LEADESHIP

This theory holds that people become leaders not only because of the attributes of their
personalities but also because of various situational factors and the interactions between
the leaders and group members. According to his theory the effective groups depend on
a proper match between the leaders style of interacting with the subordinates and the
degree to which the situation gives control and influence to the leader.

Fielder described three critical dimensions of the leadership situation that determine
leadership effectiveness.

A. Lead-member relations:- The degree of confidence, trust and respect members

have in their leader.
B. Task structure: The degree to which assignements are procedures i.e. the extent to
which tasks can be clearly spelled out and people held responsible for them.
C. Position power:- The degree of influence a leader has over power variables such as
hiring, firing, discipline, promotion and salary increases.

LIKERT FOUR SYSTEMS OF MANAGEMENT

Lakers has developed certain ideas and approaches important to understanding

leadership behavior. He see an effective mangers as strongly oriented to subordinates,

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 relying on communication to keep all parties working as a unit. All members of the group,
including the manager/leader adopt a supportive attitude in which they share in one
another’s common needs, values, Spartans, goals and expectations. Since it appeals to
human motivations, Lakers views this approach as the most effective way to lead a
group.

Lakers has suggested four systems of management. Systems management is

described as “explotive-authrtive”, its mangers are highly autocrat have little trust in
subordinates, motivates people through fear and punishment and only occasional
rewards fear and punishment and only occasional rewards, engage in down ward
communication and limit decision making to the top. System 2 management is calls
“benevolent- authoritative:, it mangers have a patronizing confidence and trust in
subordinates motivate with rewards and some fear and punishment permit some upward
communication, solicit some ides and opinions from subordinates, and allow some
delegation of decision making but with close policy control system 3 management is
referees to as “ consultative” angers in this system have substantial but not complete
confidence and trust in subordinates, usually try to make use of subordinates ideas and
opinions use rewards for motivation with occasional punishment and some participation
engage in communication flow both down and up make broad policy and general decision
at the top while allowing specific decision to be made at lower levels, and act
consultatively in other ways.

Lakers saw system 4 management as the most partipative of all and referred to it as “
participate group”. System 4 managers have complete trust and confidence from
subordinates and confidence in subordinates in all matter; they always get ideas and
opinion from subordinated and constructively use them. They also give economic
rewards on the basis of group participation and involvement in such areas as setting
goals and appraising progress towards goals. They engage in much communication
down and up and with peers, encourage decision making throughful the organization.

In general Lakers found that those mangers who applied the system 4 approach to their
operation ahs greatest success as leaders. Moreover he notes that departments and
companies mangaes by the system 4 approach ere most effective in setting goals and
achieving them and were generally more productive. He ascribed this success mainly to
the degree of participation and the extern to which the practice of supporting subordinates
was maintained.

THE MANAGEMENT GRID

A well- known approach to defining leadership styles is the managerial grid, developed by
Robbers Blake and Jane Mouton. The grid has two dimensions: “concern for” is meant to
convey “how mangers are concerned about production or” how” they are concerned
about people and not such thing as “ how much” production they are concerned about
getting out of a group.

“CONCERNED FOR PRODUCTION” INCLUDES THAT ATTITUDES OF A

SUPERVISIOR TOWORDS A WIDE VARIETY OF THINGS, SUCH AS THE
QUALITY OF POLICY DECISION PRODUCTION AND PROCESS CREATIVENESS
OF REASEARCH QUALITY OF STAFF SERVICES, WORK efficiency and volume of
output. “ concern for people” is likewise interpreted in a broad way. It includes such
demeans as degree of personal commitment towards goal achievements maintenance of
the self esteem of workers, placement of responsibilities on the basis of trust rather than

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obedience, provision of good working conditions and maintenance of satisfying
interpersonal relations.

UNIT – IV

Management skill Development – Importance and Nature of Business

Communication, Process of Communication, Methods of Communication, Barrier
in communication, effective communication & Interactive skill, presentation of
reports, public speaking, negotiation & conducting meeting.

COMMUNICATION: it is the process of passing information and understanding from

one person to another. A successful manager should develop an effective system of
communication so that he may issue instructions and receive the reactions of the
subordinates and motivate them.
A communication is useless until it is transmitted and understood by others.
Perfect communication would exist when a thought or idea was transmitted so that the
mental picture perceived by the receiver was exactly the same as that envisioned by the
sender.

THE SENDER OF THE MESSAGE

Communication begins with the sender, who has a thought or an idea which is then encoded in
a way that can be understood by both the sender and the receiver.

Use of a channel to transmit the message

The information is transmitted over a channel that links the sender with the receiver. The
message may be oral or written, and it may be transmitted through a memorandum, a computer,
the telephone. A telegraph or television. Since many choice are available each with advantages
and disadvantages, the proper selection of the channel is vital for effective communication.
The receiver of the message :- the receiver has to be ready for the message so that it can be
decoded into thoughts. Accurate communications can occur only when both the sender and
receiver attach the some meanings to the symbols that compose the message communication is
not complete unless it is understood.
Noise and feedback in communication:- “ noise” is anything whether in the sender the
transmission or the receiver that winders communication. For example “ a noise or a confined
environment may hinder the development of a clear thought
-encoding may be faulty because of the use of ambiguous symbols.
-transmission may be interrupted by static in the channel, such as may be experienced in a poor
telephone connection.
-decoding may be faulty because the wrong meaning may be attached to words and other
symbols.
-understanding can be obstructed by prejudices.

To check the effectiveness of communication, a person must have feedback. One can never be
sure whether or not a message has been effectively encoded, transmitted, decoded and
understood until it is confirmed by feedback.

The communication flows in the organization

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In a effective organization, communication flows in various direction downward and upward.
Communication also flow horizontally, that is, between people on the some or similar
organizational levels.
Downward communication flows from people at higher levels to those at lower levels in the
organizational hierarchy. This kind of communication exists especially in organizations with an
authoritarian atmosphere.
Upwards communication travels from subordinates to superiors and
continue up the organizational hierarchy.

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