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 Authority is the power to command, to act or not to act in a manner deemed by the
possessor of the authority to further enterprise or departmental performance". –
Koontz and O'Donnell

Types of Authority:
Basically the following types of authority are given below:
1. Legal Authority.
The authority is based upon the rank of the person in the organisation and such
authority may be given by law or by social norms, rules and regulations protected by
law. Ex: the president of a company has the right to fire an employee because that is
how the rules and policies of the company have been established.
2. Traditional or Formal or top-down Authority.
This authority is based upon the belief in traditions and the legitimacy of the status of
people exercising authority through those traditions. Such traditions have evolved
from a social order and communal relationships in the form of the ruling “Lord” and
the obedient “subjects”. Traditional authority has flowed from the top of the
organisation to the bottom, from the owners or stockholders to the board of directors
to the president to the vice-presidents to middle managers to supervisors to workers.
3. Acceptance or Bottom-up Authority.
The acceptance theory of authority presents a contrast to the traditional formal view
of authority. According to the acceptance theory, authority in the ultimate analysis
depends on the acceptance or consent of the people who are managed (subordinates)
rather than legitimacy, or any legal, social or cultural norms. If the subordinates don’t
accept the command of their superior, the superior cannot be said to have any
authority with reference to them.
4. Charismatic Authority.
The Charismatic Authority rests on personal charisma of a leader who commands
respect of his followers on the basis of his personality and his personal traits such as
intelligence and integrity. This is especially true of religious and political leaders. The
followers become highly attached to the leader partly because the leader’s goals seem
to be consistent with their own needs.
5. Competence or personal Authority.
This is also known as “technical authority” and is implicit in person’s special
knowledge or skill. For example, when doctor advises you to rest, you accept his
“order” because you respect his knowledge and his skills as a doctor. Again, this
order will not get results unless you accept and obey and in that sense it rests on
acceptance theory of authority.


The Delegation of Authority is a process through which manager assigns responsibility to

the subordinate with a certain level of authority, i.e. power to take decisions, in order to
accomplish certain assignments on the manager’s behalf. Every superior delegates the
authority to subordinates for getting a particular work done. The process goes to the level
where actual work is executed. The person who is made responsible for a particular work
is given the requisite authority for getting it done.
Elements of Delegation of Authority:
1. Responsibility: The responsibility means, assigning the work to an individual. The
managers assign certain responsibility to the subordinates for the completion of certain
tasks on his behalf. An individual has to apply all his physical and mental ability to get
the task completed efficiently. Here it is to be noted, that manager can only assign the
responsibility, and in the case of the subordinate fouls, the manager will be answerable to
his seniors. Thus, the responsibility flows upwards.
2. Authority: To fulfill the responsibility, certain authority is delegated to the subordinate.
Authority means the power to take decisions. Hence, the manager along with the
responsibility also delegates authority to enable the subordinate to take decisions
independently and accomplish the task efficiently.
3. Accountability: Accountability means, to check whether the subordinates are performing
their responsibilities in an expected manner or not. The Accountability cannot be
delegated which means, in the case of non-completion of the task, the manager will only
be held responsible for it, not the subordinates. The accountability also flows upward, i.e.
subordinates will be accountable to the manager and the manager to his superior.


Definition: The Selection is a process of picking the right candidate with prerequisite
qualifications and capabilities to fill the jobs in the organization. The selection process is
quite lengthy and complex as it involves a series of steps before making the final
selection. The procedure of selection may vary from industry to industry, company to
company and even from department to department. Every organization designs its
selection process, keeping in mind the urgency of hiring people and the prerequisites for
the job vacancy.
Steps Involved in Selection Procedure:
A scientific and logical selection procedure leads to scientific selection of candidates.
The criterion finalized for selecting a candidate for a particular job varies from company
to company.

1. Inviting applications:
The prospective candidates from within the organization or outside the organization are
called for applying for the post. Detailed job description and job specification are
provided in the advertisement for the job. It attracts a large number of candidates from
vari-ous areas.
2. Receiving applications:
Detailed applications are collected from the candidates which provide the necessary
information about personal and professional details of a person. These applications
facilitate analysis and comparison of the candidates.
3. Scrutiny of applications:
As the limit of the period within which the company is supposed to receive applications
ends, the applications are sorted out. Incomplete applications get rejected; applicants with
un-matching job specifications are also rejected.
4. Written tests:
As the final list of candidates becomes ready after the scrutiny of applications, the written
test is conducted. This test is conducted for understanding the technical knowledge,
atti-tude and interest of the candidates. This process is useful when the number of
applicants is large.
Many times, a second chance is given to candidates to prove themselves by conducting
another written test.
5. Psychological tests:
These tests are conducted individually and they help for finding out the indi-vidual
quality and skill of a person. The types of psychological tests are aptitude test,
intelligence test, synthetic test and personality test
6. Personal interview:
Candidates proving themselves successful through tests are interviewed per-sonally. The
interviewers may be individual or a panel. It generally involves officers from the top
management. The candidates are asked several questions about their experience on
another job, their family background, their interests, etc. They are supposed to describe
their expectations from the said job. Their strengths and weaknesses are identified and
noted by the interviewers which help them to take the final decision of selection.
7. Reference check:
Generally, at least two references are asked for by the company from the can-didate.
Reference check is a type of crosscheck for the information provided by the candidate
through their application form and during the interviews.
8. Medical examination:
Physical strength and fitness of a candidate is must before they takes up the job. In-spite
of good performance in tests and interviews, candidates can be rejected on the basis of
their ill health.
9. Final selection:
At this step, the candidate is given the appointment letter to join the organization on a
particular date. The appointment letter specifies the post, title, salary and terms of
employment. Generally, initial appointment is on probation and after specific time period
it becomes permanent.
10. Placement:
This is a final step. A suitable job is allocated to the appointed candidate so that they can
get the whole idea about the nature of the job. They can get adjusted to the job and
perform well in future with all capacities and strengths.
Types/Sources of Recruitment
For any organization, recruitment is a crucial part of developing and maintaining an
effective and efficient team. A good recruitment strategy will cut down the wastage of
time and money, which would have incurred for extensive training and development of
unqualified resources.
Internal Sources
Internal sources of recruitment refer to hiring employees within the organization
internally. In other words, applicants seeking for the different positions are those who are
currently employed with the same organization. The various internal sources of
recruitment are:
1. Promotions
2. Transfers Recruiting
3. Former Employees
4. Internal Advertisements (Job Posting)
5. Employee Referrals
6. Previous Applicants
External Sources
External sources of recruitment refer to hiring employees outside the organization
externally. In other words, the applicants seeking job opportunities in this case are those
who are external to the organization. External employees bring innovativeness and fresh
thoughts to the organization. Although hiring through external sources is a bit expensive
and tough, it has tremendous potential of driving the organization forward in achieving its
goals. Let us now discuss in detail the various external sources of recruitment.
1. Direct Recruitment
2. Employment Exchanges
3. Employment Agencies
4. Advertisements
5. Professional Associations
6. Campus Recruitment
7. Word of Mouth Advertising


Training constitutes a basic concept in human resource development. It is concerned with
developing a particular skill to a desired standard by instruction and practice. Training is
a highly useful tool that can bring an employee into a position where they can do their job
correctly, effectively, and conscientiously. Training is the act of increasing the
knowledge and skill of an employee for doing a particular job.
There are two methods through which managers can improve their knowledge and skills.
One is through formal training and other is through on the job experiences. On the job
training is very important since real learning takes place only when one practices what
they have studied.
1. On-the-job Training (OJT) Methods:
This is the most common method of training in which a trainee is placed on a specific job
and taught the skills and knowledge necessary to perform it.

1. Job rotation:
This training method involves movement of trainee from one job to another gain
knowledge and experience from different job assignments. This method helps the trainee
under-stand the problems of other employees.
2. Coaching:
Under this method, the trainee is placed under a particular supervisor who functions as a
coach in training and provides feedback to the trainee. Sometimes the trainee may not get
an opportunity to express his ideas.
3. Job instructions:
Also known as step-by-step training in which the trainer explains the way of doing the
jobs to the trainee and in case of mistakes, corrects the trainee.
4. Committee assignments:
A group of trainees are asked to solve a given organizational problem by discussing the
problem. This helps to improve team work.
5. Internship training:
Under this method, instructions through theoretical and practical aspects are provided to
the trainees. Usually, students from the engineering and commerce colleges receive this
type of training for a small stipend.

Off-the-job Methods:
On the job training methods have their own limitations, and in order to have the overall
development of employee’s off-the-job training can also be imparted. The methods of
training which are adopted for the development of employees away from the field of the
job are known as off-the-job methods.

The following are some of the off-the-job techniques:

1. Case study method:
Usually case study deals with any problem confronted by a business which can be solved
by an employee. The trainee is given an opportunity to analyse the case and come out
with all possible solutions. This method can enhance analytic and critical thinking of an
2. Incident method:
Incidents are prepared on the basis of actual situations which happened in different
organizations and each employee in the training group is asked to make decisions as if it
is a real-life situation. Later on, the entire group discusses the incident and takes
decisions related to the incident on the basis of individual and group decisions.
3. Role play:
In this case also a problem situation is simulated asking the employee to assume the role
of a particular person in the situation. The participant interacts with other participants
assuming different roles. The whole play will be recorded and trainee gets an opportunity
to examine their own performance.
4. In-basket method:
The employees are given information about an imaginary company, its activi-ties and
products, HR employed and all data related to the firm. The trainee (employee under
training) has to make notes, delegate tasks and prepare schedules within a specified time.
This can develop situational judgments and quick decision making skills of employees.
5. Business games:
According to this method the trainees are divided into groups and each group has to
discuss about various activities and functions of an imaginary organization. They will
discuss and decide about various subjects like production, promotion, pricing etc. This
gives result in co-operative decision making process.
6. Grid training:
It is a continuous and phased programme lasting for six years. It includes phases of
planning development, implementation and evaluation. The grid takes into consideration
parameters like concern for people and concern for people.
7. Lectures:
This will be a suitable method when the numbers of trainees are quite large. Lectures can
be very much helpful in explaining the concepts and principles very clearly, and face to
face interaction is very much possible.
8. Simulation:
Under this method an imaginary situation is created and trainees are asked to act on it.
For e.g., assuming the role of a marketing manager solving the marketing problems or
creating a new strategy etc.
9. Management education:
At present universities and management institutes gives great emphasis on management
education. For e.g., Mumbai University has started bachelors and postgraduate degree in
Management. Many management Institutes provide not only degrees but also hands on
experience having collaboration with business concerns.
10. Conferences:
A meeting of several people to discuss any subject is called conference. Each par-ticipant
contributes by analyzing and discussing various issues related to the topic. Everyone can
express their own view point.


Definition: There are several Theories of Motivation that are developed to explain the
concept of “Motivation”. The motivation is a drive that forces an individual to work in a
certain way. It is the energy that pushes us to work hard to accomplish the goals, even if
the conditions are not going our way. With the establishment of human organizations,
people tried to find out the answer to, what motivates an employee in the organization the
most. This gave birth to several content theories and process theories of motivation.

The content theories deal with “what” motivates people, whereas the process theories
deal with, “How” motivation occurs. Thus, theories of motivation can be broadly
classified as:
Content Theories: The content theories find the answer to what motivates an individual
and is concerned with individual needs and wants. Following theorists have given their
theories of motivation in content perspective:

Process Theories: The process theories deal with “How” the motivation occurs, i.e. the
process of motivation and following theories were given in this context:

Maslow’s Need Hierarchy Theory:

It is probably safe to say that the most well-known theory of motivation is Maslow’s need
hierarchy theory Maslow’s theory is based on the human needs. Drawing chiefly on his
clinical experience, he classified all human needs into a hierarchical manner from the
lower to the higher order.

Herzberg’s Motivation Hygiene Theory:

The psychologist Frederick Herzberg extended the work of Maslow and propsed a new
motivation theory popularly known as Herzberg’s Motivation Hygiene (Two-Factor)
Theory. Herzberg conducted a widely reported motivational study on 200 accountants
and engineers employed by firms in and around Western Pennsylvania.

He asked these people to describe two important incidents at their jobs:

(1) When did you feel particularly good about your job, and
(2) When did you feel exceptionally bad about your job? He used the critical incident
method of obtaining data.

According to Herzberg, the opposite of satisfaction is not dissatisfaction. The underlying

reason, he says, is that removal of dissatisfying characteristics from a job does not
necessarily make the job satisfying. He believes in the existence of a dual continuum. The
opposite of ‘satisfaction’ is ‘no satisfaction’ and the opposite of ‘dissatisfaction’ is ‘no
McClelland’s Need Theory:

Another well-known need-based theory of motivation, as opposed to hierarchy of needs

of satisfaction-dissatisfaction, is the theory developed by McClelland and his associates’.
McClelland developed his theory based on Henry Murray’s developed long list of
motives and manifest needs used in his early studies of personality. McClelland’s need-
theory is closely associated with learning theory, because he believed that needs are
learned or acquired by the kinds of events people experienced in their environment and
culture. He found that people who acquire a particular need behave differently from those
who do not have. His theory focuses on Murray’s three needs; achievement, power and
affiliation. In the literature, these three needs are abbreviated “n Ach”, “n Pow”, and “n
Aff” respectively’.
McGregor’s Participation Theory:

Douglas McGregor formulated two distinct views of human being based on participation
of workers. The first basically negative, labeled Theory X, and the other basically
positive, labled Theory Y.

Theory X is based on the following assumptions:

1. People are by nature indolent. That is, they like to work as little as possible.

2. People lack ambition, dislike responsibility, and prefer to be directed by others.

3. People are inherently self-centered and indifferent to organisational needs and goals.

4. People are generally gullible and not very sharp and bright.

On the contrary, Theory Y assumes that:

1. People are not by nature passive or resistant to organisational goals.

2. They want to assume responsibility.

3. They want their organisation to succeed.

4. People are capable of directing their own behaviour.

5. They have need for achievement.

Urwick’s Theory Z:
Much after the propositions of theories X and Y by McGregor, the three theorists Urwick,
Rangnekar, and Ouchi-propounded the third theory lebeled as Z theory.
The two propositions in Urwicks’s theory are that:

(i) Each individual should know the organisational goals precisely and the amount of
contribution through his efforts towards these goals.

(ii) Each individual should also know that the relation of organisational goals is going to
satisfy his/her needs positively.
In Urwick’s view, the above two make people ready to behave positively to accomplish
both organisational and individual goals.

However, Ouchi’s Theory Z has attracted the lot of attention of management practitioners
as well as researchers. It must be noted that Z does not stand for anything, is merely the
last alphabet in the English Language.

Theory Z is based on the following four postulates:

1. Strong Bond between Organisation and Employees

2. Employee Participation and Involvement

3. No Formal Organisation Structure

4. Human Resource Development

Argyris’s Theory:

Argyris has developed his motivation theory based on proposition how management
practices affect the individual behaviour and growth In his view, the seven changes
taking place in an individual personality make him/her a mature one. In other words,
personality of individual develops in maturity and immaturity

Argyris views that immaturity exists in individuals mainly because of organisational

setting and management practices such as task specialisation, chain of command, unity of
direction, and span of management. In order to make individuals grow mature, he
proposes gradual shift from the existing pyramidal organisation structure to humanistic
system; from existing management system to the more flexible and participative

Vroom’s Expectancy Theory:

One of the most widely accepted explanations of motivation is offered by Victor Vroom
in his Expectancy Theory” It is a cognitive process theory of motivation. The theory is
founded on the basic notions that people will be motivated to exert a high level of effort
when they believe there are relationships between the effort they put forth, the
performance they achieve, and the outcomes/ rewards they receive.

Porter and Lawler’s Expectancy Theory:

In fact, Porter and Lawler’s theory is an improvement over Vroom’s expectancy theory.
They posit that motivation does not equal satisfaction or performance. The model
suggested by them encounters some of the simplistic traditional assumptions made about
the positive relationship between satisfaction and performance. They proposed a multi-
variate model to explain the complex relationship that exists between satisfaction and

Directing is one of the most important functions of management. Without the direction
provided to the employees, the workforce would be clueless about which path to follow.
Let us understand the concept of direction and the elements of directing.

According to Koontz and O ‘Donnel; “directing is a complex function that includes all
those activities which are designed to encourage subordinate to work effectively and
efficiently in both the short and long-run.”

Techniques of Directing:

Directing is an important function carried out by top management. It is the order or

instruction to subordinate staff to perform a work or not to perform in a specific way. The
techniques of directing are: delegation, supervision, orders and instructions.

(i) Delegation: Delegation is an important mean of directing. The subordinates are

assigned tasks and given powers to recruit them. In delegation, a superior assigns some of
his work to the subordinates and gives them rights or powers. The subordinates are
authorized to undertake the assigned work. Delegation is a means of sharing authority
with the subordinates and providing them with an opportunity to learn. Delegation as a
means of directing may bring out some problems.

(ii) Supervision: Supervision is a means to oversee the work performed by subordinates.

It should be ensured that work is performed as per the plans and guidelines. Every
superior has to supervise the work of his subordinates. At operative level supervision is
the job of a manager. A supervisor at the lower level remains in touch with the workers.
He guides them for doing the work, maintains discipline and work standards and solves
the grievances of workers. Supervision at different levels acts as a directing activity.

(iii) Issuing Orders and Instructions: The issuing of orders and instructions is essential
to undertake the work for achieving the organizational goals. No manager can get a work
done without issuing orders and instructions to subordinates. An order, instruction,
directing or command is a means of initiating, modifying or stopping an activity. In the
words of Koontz and O’Donnel has a directional technique, an instruction is understood
to be a charge (command) by a superior requiring a subordinate to act or refrain from
acting in a given circumstance.

Importance of Direction:

Directing various employees in an organization is an important managerial task. It is

indispensable for achieving enterprise objectives.

1. Initiates Action:
Direction is required to initiate action. The functions of planning, organizing, staffing
etc., will be taken up only when direction is given to initiate them. Direction starts the
actual work for achieving enterprise objectives.

2. Improves Efficiency:
A manager tries to get maximum work from his subordinates. This will be possible only
through motivation and leadership and these techniques are a part of direction.

3. Ensures Co-ordination:
Direction helps in ensuring mutual understanding and team work. The individual efforts
are directed in such a way that personal performances help in achieving enterprise
objectives. The integration of various activities is possible through direction.

4. Helpful in Implementing Changes:

A business operates in a changing environment. New situations develop every now and
then. A proper system of motivation will help employees in taking up new challenges.

5. Provides Stability:
Effective leadership, supervision and motivation will help in the smooth growth of an
enterprise. A growing concern will provide stability to its activities.

6. Motivation:
Motivation is an important element of direction. Motivation is a factor which encourages
persons to give their best performance and help in achieving enterprise goals. A strong
positive motivation will enable the increased output of employees. A key element in
direction is motivation. It helps in getting willing co-operation of employees. Every
organisation makes efforts that its employees contribute maximum for achieving
enterprise goals.

7. Supervision:
Direction involves giving instructions to employees for undertaking some work. In order
to see whether employees are doing the things as per targets or not there is a need for
supervision. In supervision all the activities of the employees are controlled and efforts
are made to ensure proper achievement of targets. In case the performance is less than the
targets then remedial steps are taken for improving the performance. So supervision is an
integral part of direction.

8. Co-ordination:
Direction will be effective only when there is a proper co-ordination. In direction,
different persons are asked to perform specific tasks. In order to see that efforts of every
employee are in the direction of achieving organizational goals there is a need to co-
ordinate various activities. In the absence of co-ordination every person will go in his
own direction without bothering for the enterprise target. When various activities are co-
originated then overall enterprise objectives will be easily achieved.


Leadership is the ability of an individual or a group of individuals to influence and guide

followers or other members of an organization.

Leadership involves making sound -- and sometimes difficult -- decisions, creating and
articulating a clear vision, establishing achievable goals and providing followers with the
knowledge and tools necessary to achieve those goals.

A leader has got multidimensional traits in him which makes him appealing and effective in
behavior. The following are the requisites to be present in a good leader:

Physical appearance- A leader must have a pleasing appearance. Physique and health are very
important for a good leader.
Vision and foresight- A leader cannot maintain influence unless he exhibits that he is forward
looking. He has to visualize situations and thereby has to frame logical programmes.
Intelligence- A leader should be intelligent enough to examine problems and difficult situations.
He should be analytical who weighs pros and cons and then summarizes the situation. Therefore,
a positive bent of mind and mature outlook is very important.
Communicative skills- A leader must be able to communicate the policies and procedures
clearly, precisely and effectively. This can be helpful in persuasion and stimulation.
Objective- A leader has to be having a fair outlook which is free from bias and which does not
reflects his willingness towards a particular individual. He should develop his own opinion and
should base his judgement on facts and logic.
Knowledge of work- A leader should be very precisely knowing the nature of work of his
subordinates because it is then he can win the trust and confidence of his subordinates.
Sense of responsibility- Responsibility and accountability towards an individual’s work is very
important to bring a sense of influence. A leader must have a sense of responsibility towards
organizational goals because only then he can get maximum of capabilities exploited in a real
sense. For this, he has to motivate himself and arouse and urge to give best of his abilities. Only
then he can motivate the subordinates to the best.
Self-confidence and will-power- Confidence in himself is important to earn the confidence of
the subordinates. He should be trustworthy and should handle the situations with full will power.
(You can read more about Self-Confidence at : Self Confidence - Tips to be Confident and
Eliminate Your Apprehensions).
Humanist-This trait to be present in a leader is essential because he deals with human beings
and is in personal contact with them. He has to handle the personal problems of his subordinates
with great care and attention. Therefore, treating the human beings on humanitarian grounds is
essential for building a congenial environment.
Empathy- It is an old adage “Stepping into the shoes of others”. This is very important because
fair judgment and objectivity comes only then. A leader should understand the problems and
complaints of employees and should also have a complete view of the needs and aspirations of
the employees. This helps in improving human relations and personal contacts with the
From the above qualities present in a leader, one can understand the scope of leadership and its
importance for scope of business. A leader cannot have all traits at one time. But a few of them
helps in achieving effective results.