Management in all business and human organization activity is the act of getting people together to
accomplish desired goals and objectives. Management comprises planning, organizing, staffing, leading
or directing, and controlling an organization (a group of one or more people or entities) or effort for the
purpose of accomplishing a goal.
OR
• Planning: Deciding what needs to happen in the future (today, next week, next month,
next year, over the next 5 years, etc.) and generating plans for action.
Planning is most basic and primary function of management. Planning is a process for
accomplishing purpose. It is blue print of business growth and a road map of
development. It helps in deciding objectives both in quantitative and qualitative terms.
It is setting of goals on the basis of objectives and keeping in view the resources.
Process of creating and maintaining a plan and process of thinking about the
activities required to create a desired goal on some scale. As such, it is a
fundamental property of intelligent behavior.
It is essential to the creation and refinement of a plan, or integration of it with
other plans, that is, it combines forecasting of developments with the preparation
of scenarios of how to react to them.
Organizing, in companies point of view, is the management function that usually follows
after planning. And it involves the assignment of tasks, the grouping of tasks into
departments and the assignment of authority and allocation of resources across the
organization.
• Staffing: Job analyzing, recruitment, and hiring individuals for appropriate jobs.
Staffing function become important as organization growing day by day with technoly. It
involves:
Determination of manpower
Recruitment and interviews
Selection of suitable candidates
Training ,induction and orientation programs
Promotion, Demotion, performance appraisal and compensation
• Leading/directing: Determining what needs to be done in a situation and getting people
to do it. It involves Issuing orders and instructions, supervising subordinates at work,
motivation, effective communication
• Coordination is the act of coordinating, making different people or things work together
for a goal or effect.
• Controlling/Monitoring, checking progress against plans, which may need modification
based on feedback.
One of the enduring questions in the field of management is whether it is an art or a science. An
art as "skill in conducting any human activity" and science as "any skill or technique that reflects
a precise application of facts or a principle."
Management – A science:
1. Management as a science would indicate that in practice, managers use a specific body of
information and facts to guide their behaviors.
2. Science is a collection of systematic knowledge, collection of truths and interfeaces afer
continuous study and experiments. The relationship between variables and limits are
defined and the fundamental principles are discovered.
3. Science has got 3 specific characters:
It is the systematic and organized knowledge and based on the scientific methods
and observations.
Interferences are arrived after continuous observation and experiments
It has logical principles which are well defined and universally applicable w/o
any limitations.
4. Management principles have also evolved and it is changing day by day according to the
change in human behavior. Managers must study the way that workers perform their
tasks and understand the job knowledge (formal and informal) that workers have, then
find ways to improve how tasks are performed.
5. Managers must codify new methods of performing tasks into written work rules and
standard operating procedures.
6. management as a science are likely to believe that there are ideal managerial practices for
certain situations. That is, when faced with a managerial dilemma, the manager who
believes in the scientific foundation of his or her craft will expect that there is a rational
and objective way to determine the correct course of action. This manager is likely to
follow general principles and theories and also by creating and testing hypotheses.
7. E.g. if a manager has a problem with an employee's poor work performance, the manager
will look to specific means of performance improvement, expecting that certain
principles will work in most situations. He or she may rely on concepts learned in
business school or through a company training program when determining a course of
action, perhaps paying less attention to political and social factors involved in the
situation.
Management – An Art:
1. Art uses the known rules and principles and uses the skill, expertise, wisdom,
perience to achieve the desired result. The point is how to get the things done in
the desired manner to get the desired result. New methods can be adopted from
past experience and incidents what to do and what not to do. Effective
management is extracting voluntary cooperation from the staff. So it is definitely
an art and it can be acquired only by practicing the theoretical knowledge
skillfully.
2. These managers are likely to rely on the social and political environment
surrounding the managerial issue, using their own knowledge of a situation, rather
than generic rules, to determine a course of action.
3. E.g as a contrast to the example given previously, a manager who has a problem
with an employee's poor work performance is likely to rely on his or her own
experiences and judgment when addressing this issue. Rather than having a
standard response to such a problem, this manager is likely to consider a broad
range of social and political factors, and is likely to take different actions
depending on the context of the problem.
Thus management is a blend of art and science to more effectively cultivate managerial talent.
This is evident in recent theories of management, research in workplaces, and education and
development of managers.
• The mission of the business is its most obvious purpose -- which may be, for example, to
make soap.
• The vision of the business reflects its aspirations and specifies its intended direction or
future destination.
• The objectives of the business refers to the ends or activity at which a certain task is
aimed.
• The business's policy is a guide that specifies rules, regulations and objectives, and may
be used in the managers' decision-making. It must be flexible and easily interpreted and
understood by all employees.
• The business's strategy refers to the coordinated plan of action that it is going to take, as
well as the resources that it will use, to realize its vision and long-term objectives. It is a
guideline to managers, stipulating how they ought to allocate and utilize the factors of
production to the business's advantage. Initially, it could help the managers decide on
what type of business they want to form.
MANAGEMENT SKILLS
A manager’s job is diverse and complex, and requires a range skills. Three basic kind of
skills : technical, human and conceptual
Technical skill- Is the ability to use the procedures, techniques and knowledge of
a specialized field. Surgeons, engineer, musicians and
accountants.
Human skill - The ability to work with, understand and motivate other people
as individuals or in groups.
Management Environment:
Business is normally under-taken for profit maximization. The internal factors are
generally regarded as controllable factors because the company has control over these
because the company has central over these factors; it can alter or modify such factors as
its personnel, physical facilities, organization and functional means, such as marketing
mix to suit the environment. The spirit of the internal environment of a firm is derived
from its mission. The entire process takes place within the framework of a value system
and corporate culture and the persons occupying different line and staff positions here to
fit themselves into the value and culture framework. These factors establish the broad
internal environment within which different departments of the firm operate in an
interrelated manner.
It has to act and react to what happens outside the factory and office walls. These factors
that happen outside the business are known as external factors or influences. These will
affect the main internal functions of the business and possibly the objectives of the
business and its strategies. These are considered as uncontrollable factors.
Macro factors are the one that affect the organization indirectly, these are (STEPEL)
• Social – how consumers, households and communities behave and their beliefs. For
instance, changes in attitude towards health, or a greater number of pensioners in a
population.
• Technological – how the rapid pace of change in production processes and product
innovation affect a business.
• Economic – how the economy affects a business in terms of taxation, government
spending, general demand, interest rates, exchange rates and European and global
economic factors.
• Political – how changes in government policy might affect the business e.g. a decision to
subsidise building new houses in an area could be good for a local brick works.
• Ethical – what is regarded as morally right or wrong for a business to do. For instance
should it trade with countries which have a poor record on human rights.
• Legal – the way in which legislation in society affects the business. E.g. changes in
employment laws on working hours.
Micro External factors are those which affect the organization directly it involve (CCSPM)
• Customers: The customers have a direct impact on the business, companies go to create
and sustain customers for continuity of business. A company may have different
categories of customers viz,
o Industrial customers
o Retailers customers’
o Wholesalers customers
o Government bodies customer’
o Foreign customers
• Competitors: Competitors play a vital role in running the business enterprise; business
has to adjust its various business activities according to the behavior of the competitors.
Product competition, Brand competition which improves quality of products, availability
of products at cheap prizes to attract customers.
• Suppliers: The important force in the micro environment of a company is the suppliers
i.e., those who supply the inputs like raw materials and components to the company. For
the smooth functioning of the business it is very important to have reliable source of
supply. Uncertainty regarding the supply or other supply problems will compel the
companies to maintain high inventories which will cause increase in costs.
• Public: A company may encounter certain publics in its environment. A public is any
group that has an actual or potential interest in or impact on an organization’s ability to
achieve its interests. Media public, citizen action publics and local publics are some
examples.
• Marketing: The marketing intermediaries are those firms aid the company in promoting,
selling, and distributing its goods to final buyers. The marketing intermediaries include
middlemen such as agents and merchants who “help the company find customers or close
sales with them.
Planning
“Planning is the process defining the organization’s goals, establishing an overall strategy for
achieving these goals, and developing a comprehensive set of plans to integrate and coordinate
organizational work.”
Purposes of Planning.
PLANS
Through planning, managers can inform their subordinates about the expectations of the
management and the objective of the organization can be realized.
Whatever activities are planned by the managers, there are several questions that need to be
asked to realize the organization’s goals.
1. What activities are required to accomplish the objectives?
2. When should these activities be carried out?
3. Who is responsible for doing what?
4. Where should the activities be carried out?
5. When should the action be completed?.
Objectives of Planning:
Vision
A vision is a statement that describes the ideal state an organization wants to reach. It invigorates
and induces the employees to strive toward that ideal. Generally, vision is a concise descriptive
phrase or slogan, easily understandable to everyone. In short, it describes the ‘kind of an
organization we want to become”
e.g. Ford Motor Company :To become the world’s leading consumer company for automotive
products and services.
Mission
A mission statement describes the raison d’être or rationale of the organization. It is a concise
description of what the organization was formed to perform and provides the premises on which
the organizational design and direction are built.
e.g. Infosys Technologies Limited :To achieve our objectives in an environment of fairness,
honesty, and courtesy towards our clients, employees, vendors and society at large.
Goals
Goals state clearly the measurable and specific results to be accomplished by the organization
and the timeframe to attain them. Goals are expected to be timely, specific, measurable,
attainable and rewarding. Clearly stated, objectives help in monitoring the day to day activities
and ensure the activities are progressing in the right direction.
Strategies
A strategy is an approach to identify the major outcomes around which the organization allocated
its resources and prioritizes its efforts. It is in the form of strategic, tactical and operational plans
by following which an organization strives to accomplish the objectives.
Policies
Policies are the guidelines that are in line with the strategies. They are derived from a consensus
of the organization leadership and serve to identify what behaviors and attitudes are important to
be built into the fabric of the day-today operation of the organization. The policies are only
useful and effective when employees see them in action, applied to everyone, day in and dayout.
Procedures:
Procedures are the detailed set of instructions for performing sequence of actions. A procedure
is a prescribed series of related steps to be taken under certain recurring circumstances.
1) Procedures are detained and inflexible; policies are general.
2) Well established and formalized procedures are often called standard operating procedures
(SOPs).
• Evaluating environment
• Establishment of objectives
• Establishing planning premises
• Choice of alternative course of action
• Formulation of derivative plan
• Securing Co-operation
• Followup
BENEFITS OF PLANNING
• Better coordination
- Planning provides a foundation for the coordination of a broad range of
organizational activities.
- Plan helps to define the responsibilities of individuals and work groups and helps
coordinate their activities.
• Focus on forward thinking
- The planning function forces managers to think a head and consider resource
needs and potential opportunities or threats that the organization may face in the
future.
• Participatory work environment
- Successful planning requires the participation of a wide range of organizational
members.
• More effective control system
- The implementation of the plan can be evaluate and progress toward the
achievement of performance objectives can be monitored.
- An organization’s plan provides a foundation for control of the process and
progress of the organization.
- Controls provide mechanism for ensuring that the organization is moving in the
right direction and making progress toward achieve its goals.
Types of Plans:
Effective planning is essential at all levels of organizations to identify opportunities and avoid
problems. It sets the direction for the other functions of management and for teamwork. Planning
horizon is a key differentiation between strategic, tactical, and operational planning.
Strategic Plans: For strategic plans to be effective, it is essential to develop:
Tactical Plans:
• Tactical planning turns strategy into reality.
• It is aimed at achieving the tactical goals set by and for middle management.
• Tactical planning deals primarily with the implementation phase of the planning process
and have a 1-2 year time horizon. It is usually tightly integrated with the annual budget
process.
• The elements of tactical planning include Project plans, Project budgets, Project reviews,
Monthly reports and Annual reports. Preparation of project planning requires consideration of
many issues such as existing environment, user needs, available expertise, alternative
solutions, budget constraints and time-schedules.
Operational Plans:
• Operational Plans have a short-term focus and are set by and for lower-level managers.
Generally, they deal with the day-to-day and week-to-week work routine.
• The structure of operational planning is closely related to organizational structure. In a
traditional hierarchical organization, team leaders usually assemble with a senior
manager on a regular basis to share information.
• Additional periodic meetings are often required to coordinate efforts with other units in a
process-oriented organization. So a mechanism must be put in place to insure proper flow
of communication.
STRATEGIC PLANNING
Definition:
Long range planning focus on the organizing as a whole. It need managers to considers
the organization as a total unit and ask themselves what must be done in along term to
attain organizational goals.
Strategic Management:
Definition:
The process of ensuring that an organization possesses and benefits from the use of an
appropriate organizational strategy.
A. The first step is identifying the organization’s current mission, objectives, and strategies.
1. Every organization needs a mission, which defines the purpose of the organization. What
is the organization’s reason for being in business?
2. It’s also important to identify the organization’s current objectives and strategies, as well.
B. Step 2 is analyzing the external environment. It’s important to analyze the environment
because, to a large degree, it defines management’s strategic options.
1. A successful strategy is one that aligns well with the environment.
2. This step is complete when managers have an accurate grasp of what is taking place in
the external environment and are aware of important trends that might affect the
organization.
C. Step 3 The third step is identifying opportunities and threats. After analyzing the external
environment, managers need to assess what opportunities to exploit and what threats to avoid.
1. Opportunities are positive external environmental factors.
2. Threats are negative external environmental factors.
D. Step 4 is analyzing the organization’s resources. In this internal analysis, managers are
looking at the organization’s specific assets, skills, and work activities.
1. Managers look for core competencies, which are an organization’s major value
creating skills, capabilities, and resources that determine its competitive advantage.
2. This step forces managers to realize that every organization, no matter how large or
powerful, is constrained in some way by its resources and skills.
E. Step 5 is identifying strengths and weaknesses. The analysis in step 4 should lead to a clear
assessment of the organization’s internal resources.
1. Strengths are those activities the firm does well or the unique resources it controls.
2. Weaknesses are those activities the firm doesn’t do well or the resources it needs but
doesn’t possess.
3. One area that’s often overlooked in this step is an analysis of the organization’s
culture and its strengths and weaknesses.
a. Remember that culture is the organization’s personality.
b. The strength of the culture is a result of how much employees understand and
support the shared values.
c. A strong culture should make it easy for managers to convey to employees the
organization’s distinctive competencies. However, the strong culture will
make it more difficult to change, if needed.
d. Strategic choices will also be influenced by the culture’s tolerance of risk and
innovation and how performance is rewarded.
e. The culture can also promote or hinder an organization’s strategic actions.
4. The merging of steps 3 and 5 results in a SWOT analysis, which is an analysis of an
organization’s strengths, weaknesses, opportunities, and threats. It brings together the
internal and external analyses in order to identify a strategic niche the organization might
exploit.
5. In light of the SWOT analysis, managers need to reevaluate the organization’s current
mission and objectives.
F. Step 6 is formulating strategies. Strategies need to be established for the corporate, business,
and functional levels of the organization. In formulating strategies, manager hopes to give the
organization a competitive advantage.
G. Step 7 is implementing strategies. The strategies must now be put into action. Strategies are
only as good as their implementation.
H. Step 8 in the strategic management process is evaluating results. Managers must evaluate the
results to determine how effective their strategies have been and what corrections are necessary.
Strengths
A firm's strengths are its resources and capabilities that can be used as a basis for developing a
competitive advantage. Examples of such strengths include:
• patents
• strong brand names
• good reputation among customers
• cost advantages from proprietary know-how
• exclusive access to high grade natural resources
• favorable access to distribution networks
Weaknesses
The absence of certain strengths may be viewed as a weakness. For example, each of the
following may be considered weaknesses:
In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a
large amount of manufacturing capacity. While this capacity may be considered a strength that
competitors do not share, it also may be a considered a weakness if the large investment in
manufacturing capacity prevents the firm from reacting quickly to changes in the strategic
environment.
Opportunities
The external environmental analysis may reveal certain new opportunities for profit and growth.
Some examples of such opportunities include:
Threats
Changes in the external environmental also may present threats to the firm. Some examples of
such threats include:
Strengths Weaknesses
• S-O strategies pursue opportunities that are a good fit to the company's strengths.
• W-O strategies overcome weaknesses to pursue opportunities.
• S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability
to external threats.
• W-T strategies establish a defensive plan to prevent the firm's weaknesses from making
it highly susceptible to external threats.
Decision Making
Definition:
Decision-making is defined as the process of choosing a course of action for
dealing with a problem or opportunity.
Types of Decisions:
Certainty is a situation in which a manager can make accurate decisions because the outcome of
every alternative is known. However, this isn’t characteristic of most managerial decisions.
Uncertainty is a condition in which the decision maker chooses a course of action without
complete knowledge of the consequences that will follow implementation.
Risk is the possibility that a chosen action could lead to losses rather than the intended results.
a. Uncertainty is seen as the reason why situation is risky.
b. A rapidly changing environment is a major cause of uncertainty.
It’s quite obvious that no one wants to take wrong decisions but sometimes there are situations
where decisions has to take under pressure.
If a job might require to make decisions under pressure, take an offensive approach—look ahead
and consider various potential eventualities, the decisions might make, and their likely outcomes.
By doing this, even if one do not encounter the exact situation, you will have already thought
through a number of different scenarios and your thinking will be faster, clearer, and more
readily accessible, whatever decision is required. When an important decision must be made in a
high-pressure situation, it is natural to worry about making a “bad” or “wrong” decision. Most
people prefer to have sufficient time to analyze a situation and consider the alternatives. In a
high-pressure situation, however, time is often a luxury they cannot afford. In the workplace,
people are often expected to make good decisions in a very short space of time.
Such decisions are put on hold till the decision–makers feel that the time is right. A go-ahead is
given only when required elements are in place. It prevents one from making a decision at the
wrong time or before all the facts are known. It may, at times result into forgoing of
opportunities in the market that needs fast action.
Forecasting
Definition:
It is a process of estimating future based on the analysis of past and present behavior.
Forecasting is the process of predicting changing conditions and future events that may
significantly affect the business of an organization.
1. Forecasting is important to both planning and decision making.
2. Forecasting is used in a variety of areas such as: production planning, budgeting, strategic
planning, sales analysis, inventory control, marketing planning, logistics, planning, and
purchasing among others.
Types of Forecasting:
Organizing
Organizing as a structure:
“Organizing is a function by which the concern is able to define the role positions, the jobs
related and the co- ordination between authority and responsibility.”
Organizing as a process:
“It is a process of determining, arranging, grouping and assigning the activities to be performed
to attain a specific objective.”
Characteristics of Organization:
Every organization has its own purposes and objectives. Organizing is the function employed to
achieve the overall goals of the organization. Organization harmonies the individual goals of the
employees with overall objectives of the firm.
Individuals form a group and the groups form an organization. Thus, organization is the
composition of individual and groups. Individuals are grouped into departments and their work is
coordinated and directed towards organizational goals.
Differentiated functions
The organization divides the entire work and assigns the tasks to individual in-order to achieve
the organizational objectives each one has to perform a different task and tasks of one
individuals must be coordinated with the tasks of others.
Continues process
An organization is a group of people with defined relationship to each other that allows them to
work together achieve the goals of the organization. This relationship do not come to end after
completing a task. Organization is a never ending process.
Principles of organizing:
Job description detail the responsibilities and tasks associated with a given job.
Span of control is the number of subordinates reporting to a supervisor, or boss. The span
of control principle says there is a limit to the number of subordinates on superior should
supervise. The exact numbers that can be effectively managed by a supervisor depends on
certain factors.
• Authority: Right to make decision and take actions. Various organization distribute
authority differently.
• Specialization: Identifying specialized task, assigning to individuals/ work who are trained.
Middle managers will be responsible for directing work, functional and first line usually
supervise such as marketing, accounting or quality control.
• Standardization :Developing the procedures an organization uses to ensure employees
perform their tasks in uniform and consistent manner
• Coordination: Formal and informal procedures that integrates both managerial and
employees activities.
• Responsibility
• Efficiency
• Flexibility
Span of control:
- Similarity of Functions
If similarity of subordinates activities increase, the span of management
appropriate for the situation widens.
- Geographic continuity
The closer subordinates are physically, the more of them managers can supervise
effectively.
- Complexity of Function
The more difficult and involved the activities are, the more difficult it is to
manage a large number of individuals effectively.
- Coordination
The greater the amount of time that must be spend on such coordination, the
smaller span of management should be.
- Planning
The more time managers must spend on planning activities, the fewer individuals
they can manage effectively.
Flat – Steep/tall-
Flat wide span of authority Short span of authority with
many organizations levels.
Advantages :
- Superiors are forced to delegate
- Clear policies
- Subordinates must willing to obey
Disadvantages :
- decision not passed down because of managing subordinates.
- Danger of the superior’s loss control
Advantages :
- Close supervision and control
- Rapid communication between subordinates and superior.
Disadvantages:
- Superior too involved with subordinates
- Many levels costly
- Excessive distance between the lowest and the highest level.
Narrow Span (a great number of time spent Wide span (very little time spent with
with subordinates) subordinates)
• Little or no training of subordinates • Thorough training of subordinates
• Inadequate or unclear authority • Clear delegation and well-defined tasks
delegation
• Unclear plans for nonrepetitive • Well-defined plans for repetitive
operations operations
• Nonverifiable objectives and standards • Verifiable used as standards
• Fast change in external and internal • Slow changes in external and internal
environments environments
• Use of poor or inappropriate • Use of appropriate techniques, such as
communication techniques, including proper organization structure and
vague instructions written and oral communication
• Ineffective interaction of supervisor and • Effective interaction between
subordinate supervisor and subordinate
• Ineffective meetings • Greater number of specialists at upper
• Greater number of specialists at lower level (top managers concerned with
and middle levels external environment)
• Incompetent and untrained manager • Competent and trained manager
• Complex task • Simple task
• Subordinates’ unwillingness to assume • Subordinates’ willingness to assume
responsibility and reasonable risks responsibility and reasonable risks
• Immature subordinates • Mature subordinates.
Departmentalization:
Departmentalization is the clustering of individuals into units and of units into departments
and larger units in order to facilitate achieving organizational goals.
1. An organization design is an overall pattern of departmentalization.
2. There are four major patterns of departmentalization.
A. The functional structure groups jobs into units based upon similarity of expertise, skills,
and work activities, e.g. accounting, HR, Admin
B. The divisional structure groups jobs into units according to the similarity of products/
project/ programme or markets.
This again classified as
• Product divisions
• Geographical divisions
• Customer
• Process
C. The hybrid structure combines aspects of both the functional and divisional forms, with
some jobs grouped into departments by functions and other grouped by products/ project/
programme or markets.
D. The matrix structure superimposes a horizontal set of divisional reporting relationships
onto a hierarchical functional structure.
A. Functional: Grouping jobs by functions performed
• Advantages
Efficiencies from putting together similar specialties and people with common skills,
knowledge, and orientations
Coordination within functional area
In-depth specialization
• Disadvantages
Poor communication across functional areas
Limited view of organizational goals
B. Divisional structure
Divisional structures are also called “self-contained structures” because each division contains
the major functional resources it needs to pursue its own goals with little or no reliance on other
divisions.
Product: Grouping jobs by product line
Departmentalization by product assembles all functions needed to make and market a particular
product are placed under one executive. For instance, major department stores are structured
around product groups such as home accessories, appliances, women’s clothing, men’s clothing,
and children’s clothing.
Advantages:
• Allows specialization in particular products and services
• Managers can become experts in their industry
• Closer to customers
Disadvantages:
• Duplication of functions(means accounting, production, marketing these functions are
repeating )
• Limited view of organizational goals
Geographical: Grouping jobs on the basis of territory or geography
• Advantages
• More effective and efficient handling of specific regional issues that arise
• Serve needs of unique geographic markets better
• Disadvantages
• Duplication of functions
• Can feel isolated from other organizational areas
Departmentalization by process groups jobs on the basis of product or customer flow where work
activities follow a natural processing flow of products or even customers.
Advantages: More efficient flow of work activities
Disadvantages:
• Duplication of functions
• Limited view of organizational goals
C. Hybrid structure
1. Hybrid structures are adopted by large organizations to gain the advantages of functional and
divisional structures.
a. Functional departments are created to take advantage of resource utilization efficiencies,
economies of scale, or in-depth expertise.
b. Divisional departments are usually created to benefit from a stronger focus on project /
products, services, or markets/ community.
• Advantages
a. Corporate and divisional goals can be aligned.
b. Specialized expertise and economies of scale can be achieved in major functional areas.
c. Adaptability and flexibility may be achieved in handling diverse product or service lines,
geographic areas, or customers.
• Disadvantages
a. Conflict may arise between departments and divisions.
b. Hybrid organizations tend to develop excessively large staffs in the corporate-level functional
departments.
c. There may be a slow response to exceptional situations requiring coordination between a
division and a corporate functional department.
D. Matrix structure
An organization with a matrix structure has a functional and a divisional structure at the same
time.
Employees who work in a matrix organization report to two “bosses,” thus, the unity-of-
command principle are violated.
Organizations that adopt a matrix structure usually go through several identifiable structural
stages.
Stage 1 is a traditional structure, usually a functional structure, which follows the unity-of-
command principle.
Stage 2 is a temporary overlay in which managerial integrator positions are created to handle
issues of finite duration that involves coordinating across functional departments.
Stage 3 is a permanent overlay in which the managerial integrator positions become permanent.
Stage 4 is a mature matrix, in which matrix bosses have equal power.
• Advantages
a. Decision making can be decentralized.
b. Horizontal coordination is strengthened.
c. Environmental monitoring is improved.
d. Responses to environmental changes are quickly made.
e. Functional specialists can be added to or resigned to projects as needed.
f. Support systems can be allocated to projects as needed.
• Disadvantages
a. Administrative costs are increased.
b. Lines of authority and responsibility may not be clear to individual employees.
c. Possibilities of conflict are increased.
d. Individuals can become preoccupied wit internal relations at the expense of clients and project
goals.
e. All decisions may become group decisions, leading to gross inefficiency.
f. Reactions to change may be slowed if interpersonal skills are lacking or top management fights
for control.
Authority:
The right to perform a command and make decision with respect to work assignments and to
require subordinates to perform assigned tasks in accordance with the decision made.
Authority is delegate from top. Each employee and each superior should know
Types of authority
a) Line authority
A manager is responsible for the work of his unit and its direct contributions to the
objectives of the organization.
b) Staff authority
Each individual or group pays a supporting role and contributes to the objectives of the
organization.
4.8 DELEGATION:
- The process of transforming the responsibility for a specific activity or task to
another member of the organization.
- Basic consideration in delegation are:
1. Responsibility
2. Authority
3. Accountability.
4. The Scalar principles
5. Unity of command.
Superior delegate authority to subordinates in order to facilitate work being accomplished
Unity of command
- Each employee should report to only one superior.
- Enable individual to know to whom they are accountable and whose
instruction they must follow.
Steps of delegation:
Delegation is the downward flow of formal authority - from superior to subordinate. Shared
decision making can improve the quality and acceptance of decisions, increase employee
motivation, create sense of belonging and improve interpersonal relations with employees. The
delegation process has five phases: (1) preparing, (2) planning, (3) discussing, (4) auditing, and
(5) appreciating.
1. Preparing includes establishing the objectives of the delegation, specifying
the task that needs to be accomplished, and deciding who should accomplish it.
2. Planning is meeting with the chosen subordinate to describe the task and to ask the
subordinate to devise a plan of action.
3. Discussing includes reviewing the objectives of the task as well as the subordinate’s plan
of action, any potential obstacles, and ways to avoid or deal with these obstacles.
4. Auditing is monitoring the progress of the delegation and making adjustments in response
to unforeseen problems.
5. Appreciating is accepting the completed task and acknowledging the subordinate’s
efforts.
BENEFITS OF DELEGATION
In spite of several advantages, managers are found unwilling to delegate authority and many
subordinates are found unwilling to accept it. The reasons for this unwillingness on both sides
are as under:
On the managers’ side, the reluctance to delegate may be due to the following reasons:
Fear of loss of power,
The ‘I can do it better myself’ fallacy,
Lack of confidence in subordinates,
Fear of being exposed,
Difficulty in briefing.
On subordinates’ side:
They may refuse to accept authority because of their fear of criticisms by their managers
in case they commit mistakes in decision-making,
They may avoid accepting any authority if they feel that they lack adequate information
and responsibility to help them discharge their duties properly,
They may lack self-confidence and initiatives and this may also be the cause for them
unwilling to accept it,
They may avoid accepting any authority because there are no positive personal gains to
them for assuming extra responsibility.
Assuming you’re willing and able individual, it is your responsibility to provide clear
information on what is being delegated, the result you expect and any time or performance
expectations you hold.
Centralization VS Decentralization:
Centralization and decentralization are two very important concept of managing. No organization
is cent percent centralized or cent percent decentralized. The relative degree of centralization or
decentralization depends on some underlying factors. If an organization is cent percent
decentralized then the existence of the top-level executives will be cease to exist. On the other
hand, if an organization centralizes all its power and authority, then it will be difficult to create
formal organization. Centralization-decentralization is a relative, not absolute, concept. What we
mean by this is that an organization is never completely centralized or decentralized. Few
organizations could function effectively if all decisions were made only by a select group of top
managers; nor could they do so if all decisions were delegated to the lowest level of the
organization. Rather, organizations will be relatively centralized or relatively decentralized. Let
us define the two terminologies:
Centralization is the process of systematically retaining power and authority in the hands of
higher –level managers
Centralization advantages
a. It is easier to coordinate the activities of various units and individuals.
b. Top managers have more experience and may therefore make better decisions.
c. Top managers have a broader perspective on decision situations.
d. Duplication of effort by various organizational units can be avoided.
e. Strong leadership is promoted.
Disadvantages :
• Each section may not have standard procedure.
• More reporting and inspection may be needed than if the control were centralized.
Decentralization advantages
a. Top managers can concentrate upon major issues.
b. The jobs of lower-level employees are enriched by the challenge of making decisions.
c. Decisions can be made faster.
d. Individuals at lower levels may be closer to the problem and may be in a better position to
make good decisions.
e. Relatively independent units emerge as divisions, with more easily measured outputs.
An organic organization, on the other hand, is most often found in unstable and
unpredictable environments, in which constant change and uncertainty usually dictate
higher level of fluidity and flexibility. Thus an organic organization is a fluid and flexible
design most appropriate for unstable and unpredictable environments.
Staffing
Staffing is critical to improve the quality and performance of employees at all levels of an
organization. Therefore, it should be a strategic priority for the manager. The manager has to not
only set the vision and strategy but also hire the people to achieve them. A staffing system is
defined as a model and a process for those who recruit, screen, interview, and hire new
employees. When properly designed and implemented, it leads manager through the hiring
process from start to finish.
Staffing Process
The best staffing option is the one that takes into consideration, to the greatest extent possible,
both the current and future business needs of your organization. By choosing options that can, in
the long run, save time and resources, you can ensure the availability of staff for the work that
needs to be done – for now, and for the future.
The staffing process generally involves at least four steps. These four steps are:
(1) Defining the job, involving the development of a position description;
(2) Determining the qualifications and competencies
(3) Filling the position, which involves screening applicants and selecting an individual; (4)
training.
Defining the job involves developing job analysis, job descriptions and job specifications around
measurable criteria related to ideal performance behaviors. Job analysis is benchmarking basic
task and skill requirements for a job. Job description outlines the expectations and skill
requirements of a job. Job specifications outline the knowledge, skill and abilities required of the
incumbent.
The next step in the staffing process is to decide what qualifications are needed to do the job.
Qualifications are the attributes or accomplishments determined to be essential for the competent
performance of a job. For most positions qualifications include competencies, knowledge, skills
and abilities, education, training and experience.
There are many methods of assessment and any valid predictor of the applicant’s job
performance may be chosen. In most cases a combination of methods will be used. Some of the
most common are: Oral Interviews, Written Tests, Simulations, Work Samples, Physical Tests
and Past Work Performance. Once the right candidate is hired, he or she is trained in skills
needed for efficiently handling the job. Common training methods are Lectures, Role-plays and
Case Studies (for improving interpersonal relations skills or group decision-making) and onthe-
job and vestibule training (to facilitate learning physical skills through practice and actual use of
tools).
MANAGING HUMAN RESOURCE
Definition:
Refers to the individuals within the organization who make valuable contribution to the
management system.
RECRUITING
- The process of finding qualified applications
- Must begin with the understanding of the position to be filled so the broad range of potential
employees can be narrow intelligently.
- Techniques used to gain the understanding are:
Job analysis Process for collecting information on the
important work related aspect of the job
Job description Description of the basic tasks, duties and
responsibilities of an employee holding a
particular job.
Job specification Qualification needed to successfully perform a
particular job.
JOB ANALYSIS
SELECTION
The process of screening job applicants to ensure that the most appropriate candidates
are hired.
Understudy Assignment:
- Working with coach/mentor
- Provide support and encouragement from
experience workers
Films and - To demonstrate technical skills that are not easily to videos
presented by other training methods.
b) Employee Comparison
Rank employees according to job performance, value to
organization etc.
d) 360 Degree
Methods that utilizes feedback from supervisor, employees and co-
workers.
Leading
Definition:
Process of directing and influencing the tasks related activities of group members
to achieve goals. The process of directing human resource efforts toward organizational
objectives
Importance to organization
This theory is believe that people can learn the characteristic of a leader or people can be
train to be a leader. Two aspects of leadership behavior :
- Leadership function
- Leadership styles
LEADERSHIP FUNCTION:
LEADERSHIP STYLES :
Generate into two different leadership styles :
COMMUNICATION
Communication Process
Communication is a linked social process of sender, encoding, medium, decoding, receiver, and
feedback. The sender’s mission is to translate internal thought patterns into words, gestures or
symbols that the intended receiver of the message will be likely to understand. This is the
process of encoding. An encoded message is then ready to be transmitted over one or more
channels of communication, that is, pathways along which information travels, to reach the
desired receiver.
Sender : Person with information to communicate
Encoding : Ways in which the information is expressed. E.g spoken
English .
Medium : From in which the message is. The telephone
Message : The information itself as encoded by the sender. E.g I’m looking
for a place on cad course.
Decoding : Interpretation- The receiver’s thought process on getting
The message.
Receiver : Person who receive the information. E.g switch board
Operator.
Feedback : The element of the receiver’s response which the receiver
communicates to the sender. E.g that course is full.
Noise : Any kind of interference which results in distortion. So that
the receiver gets a different message from the one that was
sent e.g incomplete information.
Information flows around organization whether or not they try to control it.
b) Lateral communication
Known as Horizontal communication. Information flow at the same level.
\
a. Vertical b. Horizantal
INFORMAL COMMUNICATION
LEVEL OF COMMUNICATION
1. Intrapersonal communication
Between you and god
2. Interpersonal communication
Deals with communication between people usually face to face.
3. Group communication
Relates to the interaction of people in a small groups, usually in decision
making setting.
4. Organizational communication
Occurs in large cooperative networks and include virtually all aspects of both
interpersonal and group communication.
5. Mass Communication
Deals with public communication . Received by or used by large number of
people ( postal service, internet etc)
1. Poor listening
Happen when employees are not allowed to participate in the decision making
process and are not given a detailed explanation of rules and procedures to be
implemented. It can be very responsive to the change and they may refuse to
listen.
2. Semantic
Certain words may be interpreted differently by different people.
3. Filtering
Alteration of information to make it interesting, positive and acceptable to the
receiver.
4. Credibility of the sender
Associated with person’s feeling of love, anger, hate, jealousy, fear,defensive,
embarrassment and enthusiasm.
5. Noise
Factor interferes, confuse or disturb the messages from reaching the receiver.
6. Filtering
The deliberate manipulation of information to make it appear more favorable to
the receiver.
7. Selective perception
When people selectively interpret what they see or hear on the basis of their
interest, background, experience and attitudes.
8. Emotion
How a receiver feels when a message is received influences they interprets it,
Often interpret the same message differently depending on whether you’re happy
or distressed.
9. Information Overload
The information we have to work with exceeds our processing capacity. They
tend to select out, ignore pass over or forget information.
10. Defensiveness
Respond in ways to hide an effective communication when people feel that
they’re being threatened
11. Language
Words means different things to different people, age, education and cultural back
ground are the most variable that influence the language of a person..
Jargon – specialized terminology or technical language.
12. National culture
Cultural differences can affect the way a manager chooses to communicate US
tend to be individual rely on memoranda, announcement and other formal forms
of communication.
Japan – more interact to their subordinates and used a more informal manner. Use
verbal consultation over on issues and draws up formal document to outline the
agreement that was made.
13. Credibility of a sender
How trustworthy the sender or the source of the message. If the sender is known
to be trustworthy , the information will get to receiver clearly. Where else, if the
sender has low credibility the receiver may ignore the information.
Motivation
Motivation is the key to performance improvement and the job of a manager is not just to get
things done through the employees but to get things done more efficiently and quickly.
Motivation is a psychological process that gives behavior purpose and direction. Motivated
employees are more productive. To be effective, managers need to understand what motivates
employees within the context of the roles they perform. Performance is essentially a function of
skill and motivation. While skill is contingent upon education, experience and training,
motivation is induced by either internal or external stimuli.
Broadly, there are ten strategies to induce employee motivation and improve their work
performance: (a) job security, (b) sympathetic help with personal problems, (c) personal loyalty
to employees, (d) interesting work, (e) good working conditions, (f) tactful discipline, (g) good
wages, (h) promotions and growth in the organization, (i) feeling of being in things, and (j) full
appreciation of work done.
Theories of Motivation:
According to Maslow, employees have five levels of needs: physiological, safety, social, ego,
and self- actualizing. Maslow reasoned that lower level needs had to be satisfied before the next
higher level need would motivate employees. Physiological needs are biological needs necessary
for basic survival, such as food, water and sleep. Security needs are essential for a safe physical
and emotional environment. Belongingness needs are the desire for love and affection. Esteem
needs are recognition and respect from others. Self actualization needs are realizing one’s
potential for personal growth and development.
The pyramidal hierarchy is used to depict the different levels of importance of each need. The
most predominant needs must be satisfied before the next higher level of needs can be addressed.
Thus, although all people need food, safety, social acceptance and esteem, they must demand
food first and more strongly than anything else. An unsatisfied need triggers a chain of events
leading to actions. The need causes tension and stress within the employee, and leads him to
some kind of behaviour in an attempt to satisfy the need. Understanding this relationship
between motivation and behavior is the starting point for understanding the conditions for
stimulating action on the part of subordinates. But, the five levels of need are not always present
and ordinal importance of needs is not always the same.
1. Physiological needs
These need are our basic needs. These are for our survival. E.g food, water, and
shelter from environment
A manager’s task is to ensure that the hygiene factors are not deficient and do not hinder
motivation, while providing employees the opportunity to experience increased motivational
factors through the use of job enrichment and the redesign of jobs. The criticism against Two-
Factor Theory is that the assumption of job performance improving with satisfaction is weak and
subsequent research does not uphold this contention.
THEORY X AND THEORY Y (McGregor Theory)
This theory was developed by Douglas McGregor. This theory describes the views or
perception of managers with regard to their employees.
Controlling
Establish Standards Control: Standards should be expressed in quantifiable terms and conform
to organizational goals. Control standards should be explicit indices of performance.
Measure Performance: Performance measures must be reasonable indices of performance.
Compare Performance Against Standards: Ascertain what acceptable digression from the
performance standard is and use the suitable schedule for measurement.
Determine the Need for Corrective Action: Ascertain whether to maintain the status quo or
correct the deviation to bring activities into observance with the standard. Change the
performance standard if it was set too high or too low