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NATURE AND SIGNIFICANCE OF MANAGEMENT
Consider the following
A school without a principal
A cricket team without a captain,
An army
WHAT IS MANAGEMENT
Management is considered to be the activity that enables the performance
of a job, by organizing the effort of other people. This aspects is
extremely important in a business organization because most businesses
have a number of people working together and therefore it becomes
essential to ensure that all of them work together harmoniously, for
achieving the goals of the business. Just consider what would happen to
the working of a country if there was no government. There would be
anarchy and unrest. In such a context then, the government works as a
manager just as the principal of a school or the directors of a company or
partners in a business etc. What about a sole trader? Is he / she is doing
all the work alone, there is no management because the latter requires
people, but if there are employees working in such a business there will
be a management.
(A manager creates conditions for his people to achieve results)
In the case of a business unit, different people get together to achieve
some objectives and in the process, there can arise different problems
that need to be solved, thereby making management essential. It is the
management that will:
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1. Assemble resources
2. Assemble people
3. Provide instructions and guidance about the work
4. Check on the performance of the employees
5. Generally ensure that all related aspects are looked after
Management has been defined as follows:
C.S. George: Management consists of getting things done
through others, a manager is one who accomplishes objectives by
directing the effort of others. Koontz and ODonnell: Management is the creation and
maintenance of an internal environment in an enterprise where
individuals, working in groups, can perform efficiently and
effectively towards the attainment of group goals.
John F. McFarland: Management may be defined as the art of
securing maximum results with minimum of efforts so as to
secure maximum prosperity and happiness for both employer and
employee and give the public the best possible service.
Joseph Massie: Management is defined as the process by which a
cooperative group directs action towards common goals.
L.A. Appley: Management is the development of people and not
the direction of things. Management is personnel administration.
Stanley Vance: Management is simply the process of decision
making and control over the action of human beings for the
purpose of attaining pre-determined goals.
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American Society of Mechanical Engineers: Management is the
art and science of organizing and directing human efforts applied
to control the forces and utilize the materials of nature for the
benefit of man.
Taking a cue from the above quoted definitions it is easy to conclude
that parents at home, teachers in classrooms, principals in schools,
supervisors in stores or factories, chairmen of multinationals or even the
Prime Minister or President of a country are all involved with
management in some way or the other.
FEATURES OF MANAGEMENT
It is now right to examine the features of management and they are:
1. It is a group Effort. Management is required only when there is a
group of people working towards the achievement of any goal.
Take the example of a vegetable hawker such a person moves
from place to place along with the goods meant for sale, in search
of customers. Assuming that the person is operating alone, there is
no scope for management as used in the business sense. People can
argue that the person needs to manage ones own self and there can
be merit in that opinion, but when used in business terminology,
management refers to the channelizing of group effort and
therefore there is a need for plurality of persons.
2. It aims to Attain Pre-Determined Goals. All business
organizations are established with the aim of achieving a specific
purpose which is determined at the outset by the management of
the organization. It is then the duty of the management to make all
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possible efforts to achieve the goals that have been established so
that the purpose of establishing the organization can be justified. It
is possible that the goals may undergo minor / major changes with
changing times and conditions but the effort of the management
must not change and it should continue to strive whatever goals are
established over long and short periods of time.
3. It is Universal. Management is found in all types of organized
activity involving group effort and should not be incorrectly linked
with business organizations. Thus, whether an organization is a
school, college, hospital, club, religious establishment, etc., there
will be an effort made to get people to do the work so that the pre-
determined goals can be achieved. In other words, there is
management. This aspect of universality covers all types of
organizations involving group offers and also extends to all types
of organizations (small or large, simple or complex) spread out all
across the globe. University also implies that management exists
throughout an organization and not just at the top levels.
4. It is tangible. This refers to the fact that management as an
activity does not have a visible presence and therefore there is no
solid thing to show up as management. There are of course the
managers of an enterprise who can be referred to as the
management but this is not the physical presence of the activity
involving management. Therefore, although it is possible to
understand the impact of management, it is not possible to view the
concept as such and accordingly management is considered to be
intangible.
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5. It is Social. Management involves the working of a number of
people together, for the purpose of achieving common goals. Since
there is a multiplicity of people, there is bound to be interaction
between them and that creates a society. Thus. Management is
regarded as a social activity since it influences the behaviour of
people and also because it is modified by the manner in which
people of an organization behave.
6. It has the Quality of Integrating Goals . Most organizations have
a single primary objective and multiple secondary objectives. It
is the duty of any management to ensure that all the objectives of
an organization are linked together so that they can be achieved in
an efficient manner. There should also be integration between the
long term and short term aims of a business and the duty of linking
all the objectives is performed by the management of an enterprise.
7. It is activity based. Management has been defined by one writer
as management does. This and other definitions (quoted earlier),
make it clear that management is an activity based exercise and
therefore it involves the performance of some or the other thing.
Management is not static but dynamic because it involves the
performance of some or the other activity continuously.
(Features of Management at a Glance)
1. It is a group effort
2. It aims to attain pre-determined goals
3. It is universal
4. It is intangible
5. It is social
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6. It has the quality of integrity goals
7. It is activity based
OBJECTIVES OF MANGEMENT
The section is an attempt to discover what goals or targets are desired to
be achieved by management. The following can be stated as the main
aims of management:
1. Survival of the Enterprise. This aims at trying to ensure that an
organization continues to exist in the future despite competition
from external forces and changes in environmental conditions.
Every management needs to be dynamic enough to anticipate
changes and also be prepared to manage them so that an
organization can survive successfully.
2. Profitability of the enterprise: The main aim of any business is to
earn profits and it is the management of any enterprise that strives
to achieve that aim by making meaningful decisions for the success
of the organization.
3. Building up the image of the organization. This refers to the
establishment of a good name for a business and then striving to
maintain it. Businesses like Wipro, Reliance, Toyota, Nokia,
General Motors, etc. have all been led by management teams that
have worked hard to ensure that their organizations were at the
helm in their respective fields so that they have the special
advantage that goodwill brings to them.
4. Aiming to Expand the Business. The is essential in order to
increase the profits because there is a direct relationship between
the scale of operations and the earning of profits. It is no wonder
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then, that multinational corporations normally earn the highest
profits. Naturally, every management must try to increase the scale
of operations.
5. Supply of Quality Goods at Reasonable Prices. This is essential
because consumers these days are very aware of their rights and do
not accept sub standard products / unreasonable prices. Therefore
the sellers need to take account of these facts and the managements
must act accordingly.
6. Environmental protection and conservation. With growing
awareness of environmental protection and the increasing laws
applicable to the business sector it has become very important for
the management of business enterprises to ensure that their
organization does not defy and laws and in fact, contributes
positively to the conservation of natural resources as well as
environmental protection.
7. Promotion of Moral Values. It is believed that modern managers
generally adopt ethical principles in the process of managing. This
practice would help people in distinguishing between the right
and the wrong aspects in life and thereby promote a more
civilized society.
8. Payment of Taxes on Time to the Government. This becomes
possible due to the maintenance of appropriate records, which
makes it easy to calculate the correct taxes. Moreover, the
existence of ethical managements makes it necessary to pay taxes
on time.
9. Employment opportunities. Management is a field where there
are plenty of job opportunities. This is true whether or not a person
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possesses specialized managerial education from business
schools. With the growing world economies and increasing
globalization, the job opportunities extend not only to ones own
country but also to other parts of the world if people are prepared
to take up the option.
10. Fair wages and reasonable working conditions for employees.
Most modern managements recognize the fact that satisfied
employees lead to organizational success. They, therefore, make
an attempt to provide as many facilities as are possible, for the
employees so that the organization may finally gain. Thus, whether
it is fair earnings or good working conditions or free travel
etc., the aim is to make the organization finally gain.
11. Provision of Training and Development Opportunities. Every
contemporary management aims to improve the efficiency of its
work force because that would led to organizational efficiency.
This would also include the ascertaining of the employees that
need to be trained from time to time and all other such measures
that an organization can take so that the employees feel generally
good working where they are. The importance of this aspect lies at
the core of the increasing importance of the concept of Human
Resource Management.
12. Job Security and Job Enrichment for workers. This is related to
the previous point to the extent that it deals with the aspect relating
to employees. In this specific case, there is emphasis on the
provision of a sense of security to the employees so that they can
work more efficiently they need to be free from the problems
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associated with the thought What happens if I am jobless
tomorrow?.
Objectives of Management at a Glance
1. Survival of the enterprise
2. Profitability of the enterprise
3. Building up the image of the organization
4. Aiming to expand the business
5. Supply of quality goods at reasonable prices
6. Environmental protection and conservation
7. Promotion of moral values
8. Payment of taxes on time to the government
9. Employment opportunities
10. Fair wages and reasonable working conditions for employees.
11. Provision of training and development opportunities for the
workers
12. Job security, job enrichment for workers.
Management can be interpreted as an activity, process, discipline and as a
group
MANAGEMENT AS AN ACTIVITY
We know that:
Dancing is an activity
Trekking is an activity
Painting is an activity
Why?
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The underlying answer is that they all involve the doing of something.
What about management does it involve the doing of anything? The
answer is Yes! in that case, it is reasonable to regard it as an activity.
The question that can arise is what does management do? The answer is
that it consists of making and implementing decisions for the purpose of
achieving targets. Or, as Harold Koontz has observed, it is the art of
getting things done through and with people in formally organized
efforts.
Thus, management does the work of setting goals (through the various
plans) and then it does the work of getting people to achieve those goals.
All these involves considerable decision making and therefore this forms
the decision making activities performed by the management.
The other activity is related to the passing on of information and such
activity is entitled informational activity.
Finally, management performs activities connected to maintaining good
relations among the people working in the organization and such
activities are entitled inter personal activities, e.g. addressing the
grievances of subordinates.
MANAGEMENT AS A PROCESS
Some people regard management as process. What then is a process? The
answer could be a course of action or a manner of working or a route
taken, etc. The underlying idea is that a process involves a series of steps
for the purpose of accomplishing some goals. It is, therefore, like cooking
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or tailoring or computer programming or even surgery, all of which
involve the performance of a series of steps, in order to achieve specific
targets.
The process of management likewise involves certain steps like
planning, organizing, staffing, directing and controlling all of which
are undertaken for the specific purpose of accomplishing targets like
profit earning, employee welfare, customer satisfaction, etc.
As a process, management is regarded as a social process because it aims
to make people work together, it is also regarded as an integrating
process because it aims to ensure that all the resources (financial,
physical and human), work together in an integrated manner and
management is regarded as a dynamic or continuous process because it
never stops rather, it is carried on continuously.
MANAGEMENT AS A DISCIPLINE
When viewed in this context, management is considered to be a
specialized field of knowledge, which is not only studied as a distinct
field of knowledge but also has extensive application.
The western world has already recognized the importance of
management by making it essential to appoint qualified managers for
large scale organizations, the underlying assumption being that the more
qualified they are, the better is their ability to make successful decisions.
Qualified managers would mean those managers who have studied the
theory of management and also learnt to apply it. They should have
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completed the requisite course of study that are available and accordingly
make management eligible to be considered as a discipline.
Management can be considered to be a multidisciplinary subject, as it is a
combination of various subjects like economics, statistics, sociology,
mathematics, psychology, anthropology, etc. Also, the study of
management can be divided into several sub fields like production
management, financial management, marketing management etc.
Management is being studied as a discipline these days both within the
country and globally. There are numerous management schools or
institutes imparting the required knowledge and there is great demand
for qualified managers. No one can deny that there is a high premium on
the products of elite business or management schools like the Indian
Institutes of Management in India and the Harvard Business School in
the United States.
MANAGEMENT AS A GROUP
A group is understood to be a collection or assembly of various people,
e.g. a group of students, a group of teachers or a group of employees or
even a group of managers. Thus, when management is regarded as a
group, it is viewed as a collection of people who are doing the work of
managing or organization. The group may be divided into several levels,
viz. the top level, the middle level and the lower level.
The group would include managers at various levels of the organization
(top, middle and supervisors) but the fact is that together all the levels
form the group of management. For example, the management of
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Reliance Industries or the management at Infosys or at Coca Cola or at
the Reserve Bank of India etc. Thus management being universal, the
group will be found everywhere irrespective of the size of the
organization, the country being considered or the type of industry being
researched, etc. some people suggest that when referred to as a group,
management includes only the top level people this cannot be denied but
it applies in a narrow context.
Thus, according to Drucker: Management is a multipurpose organ that
manages a business and manages managers and manages workers
and work.
IMPORTANCE OF MANAGEMENT
It can be seen by one and all the management is becoming a very
important activity these days and qualified managers are much sought
after persons, as is entry to good management schools, like the Indian
Institutes of Management. This would lead one to accept that
management serves a important and useful purpose. Fortunately, these
are no two opinions about this conclusion and thus one needs to study the
aspects that make management so important. Some of these aspects are:
1. Best Use of Owned Resources: It is essential that the resources
available to a business be used in the best of most efficient manner
so that the business is able to earn the maximum from those
resources. The efficiency of the management normally determines
the degree of efficiency with which the resources are used.
Efficient managers will be able to decide with greater precision
about the type of goods / services that should be produced and
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marketed, the type of labour to be hired and the accompanying
remuneration packages and many other important decisions
relating to the organization.
2. Best Use of National Resources. Efficient managements not only
benefit the organization that they look after, but also the entire
nation. This happens because the efficiency of one organization
can lead to the conservation of resources of the nation since each
one makes a difference. Thus, Dhirubhai Ambani, the late founder
of Reliance Industries was able to increase his personal, corporate
and national wealth by simply managing his organization in an
efficient manner.
3. Lowest Possible Costs. This aspects relates to the fact that it is
the duty of any management to ensure, that wherever possible, it
should reduce the cost of operations. This is on account of the
simple logic that profit (the main goal of any business) is the
difference between the sales revenue and the cost of sales. It is
therefore possible to improve profits by reducing costs, wherever
possible. However, it should also be remembered that lowering of
costs should not be achieved at the expense of quality of products /
services, e.g. the Indian Railways should not aim to reduce the fare
of its Shatabdi trains by offering poor quality food or reduced
efficiency in services to customers.
Thus, the management seeks to lower the costs at any
predetermined level of quality of operations.
4. Improving Human Relations. Management is important because
it aims to improve the relationship between the people working
together in an organization. Good managers know that the
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efficiency of an enterprise is determined greatly by the level of
satisfaction of the people working therein and therefore they strive
to provide an environment for the best performance of the people
in the organization, and ultimately benefit everyone involved.
5. Achieving organizational goals. This is achieved by the efficient
combination of the different factors of production which is the
main task of any management. It is the management that is
responsible for acquiring the various resources, deciding how they
are to be combined and then implementing their decisions. The
management must also check on the efficiency of its decisions by
collecting information from the dealers, suppliers, customers, etc.
and then make the required changes for the future.
6. Creating job opportunity. These days, there are many jobs for
managers and real life experiences will vouch for the fact that
efficient managers are able to command very good remuneration.
Ever since 1991, when liberalization on a large scale was
introduced in India, leading to the entry of the multinational
companies, which in turn brought in expert management and the
accompanying high salaries there has been in an all round interest
in management jobs in this country. The opportunities are
numerous despite the competition but the fact is that management
is now a lucrative source of employment.
Importance of Management at a Glance
1. Best of owned resources
2. Best use of national resources
3. Lowest possible costs
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4. Improvement of human relations
5. Achievement organizational goals
6. Creating job opportunity.
LEVELS OF MANAGEMENT
In management the word level is used to refer to the differences in the
degrees of importance enjoyed by the various people managing an
organization. The importance consists of the right to make decisions for
the organization and everyone can agree to the conclusion that in all
organizations there are some people whose decisions affect the entire
unit, while there are three levels of management i.e. top, middle and
supervisor (low).
Top Level
This is so named because it includes that part of management which
enjoys the maximum importance in the organization. It includes the
owners of a business and also their chosen representatives appointed for
the purpose of making overall decisions, eg. The Manager, General
Manager, Managing Directors etc. Such people are rarely seen to be
doing any work in fact they appear to be enjoying themselves. The fact,
however, is that they are the ones who make decisions that can make or
break the organization and there fore shoulder the entire responsibility of
the organization. They:
(a) Set the overall goals
(b) Choose the important personnel
(c) Communicate important decisions to the concerned people
(d) Link all the people / departments / regions
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(e) Check the working of the branches and departments
Middle Level
This normally consists of that level of management, which provides
assistance to the top managers for the purpose of managing the
organization. It is known as the middle level of management because it is
in the middle of the top and the low levels of management and it has the
function of linking both the other levels to one another. This level has
less authority than the top level and naturally its area of responsibility is
also limited as compared to the top level. This level generally includes
Assistant Managers, Deputy Managers or even Area Managers, in the
case of those organizations that have offices in different areas.
Supervisor or Low Level
This level of management consists of all those managers who operate at
the lowest levels of authority in an organization and do not have any
managers working below them. Also known as operative management, it
is this level, which has an authority to get work done from others. This
level includes Factory Supervisors. Factory forement. Office
superintendents. Section officers, etc. and such manager arrange for the
performance of the actual work on a day to day basis by assigning work
to people, arranging the required resources conveying the essential
instructions and providing guidance wherever needed.
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NATURE OF MANAGEMENT
Management as a Science
The world science brings to mind subjects like physics, chemistry,
biology or other such subjects that have a systematic and organized
content, which is also supported by practical experiments.
If one looks into the details of the term science, the following features
can be distinguished
1. There exists a systematic and organized field of knowledge
2. There exists a cause and effect relationship between the different
variables under consideration
3. The principles are developed through observation, experimentation
and analysis
LEVELS OF MANAGEMENT
TOP MANAGEMENT(Board of Directors, Chairman,
Managing Director, General Manager)
MIDDLE MANAGEMENT
(Departmental heads, Viz. MarketingManager, Production Manager,
Manager Finance)
LOWER MANAGEMENT(Office Manager, Superintendents,
General Foremen, Foreman, Chief
Clerks Supervisors)
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4. The truth of the principles can be tested under the specified
conditions
5. The principles apply universally
Having listing the features of a subject that qualifies as a science, it is
now time to ascertain whether management is a science. For this purpose,
it is essential to relate the above stated features to management.
1. As an organized field of knowledge. Does management have this
quality? The answer to this one is a definite yes! There exist
various principles, theories and extensive research work related to
management.
2. Cause and effect relationship between the various elements.
This is true of management too. The underlying reason is that the
principles have been developed through a study of the cause of
certain behaviour and its resulting effect. Take the example of
Piece Rate Payment Plans they suggest that if a person is paid
according to the number of units (pieces) produced, he / she will
try to increase the output.
3. Principles Developed through Experiment and Analysis. This
feature is also applicable to management since the management
theories and principles have been developed after carefully
observing and experimenting with the behaviour of human beings.
An important management theory is Taylors Scientific
Management and in that he has brought out the fact that if human
beings work in harmony they can increase productivity.
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4. Testing of Theories and Principles. This one also applies to
management because under the stated conditions managerial
theories can be tested for similar results.
5. Universal applicability. Although there are some managerial
principles and theories that appear to apply universally, i.e. to all
the all the aspects being considered mostly this is where
managerial theories fail to pass the test, unlike the other science
subjects. For example, it is a scientific fact that a burning object
will be extinguished if it is deprived of oxygen this fact applies
whether the fact is tested in India or Egypt or Australia or Canada!
However, in the case of management theories, this need not
happen. A theory application in America need not have the same
conclusion in India or elsewhere, for the simple reason that
management relates to human behaviour and that is different
places and also at different times thereby altering the conclusions
at various times of experimentation. Take the case of Money as
an incentive! In India it may be possible to motivate an employee
by offering more money for more work but in Germany, it may not
be possible to do so especially at the higher income levels for the
simple reason that the Indian worker behaves in a different way
compared to the German worker.
Thus, management can be regarded as a science to a large extent but not
in an exact sense. Since it fails to satisfy all the principles applicable to a
science. It would therefore be reasonable to regard it as a behavioral
science because the outcome of managerial principles depends on the
behavior of human beings.
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Management as an Art
When we think of an art, we think of drawing, painting, acting, dance,
music or any other such activity that requires some kind of skill or talent
that a person is born with. Some of the distinct features of an art are:
1. The existence of individual skill or talent
2. the existence of a creative approach
3. the existence of practical knowledge
4. the ability of apply the knowledge and skill for achieving desired
results
5. Results practice by the individual.
The reader would surely agree that all these features would be present in
the lives of Lata Mangeshakr, M.F. Husain, Amitabh Bachan, Picasso.
Mozart, Pandit Ravi Shanker, Ustad Amjad Ali Khan and Many other
artistic personalities. The question that needs to be considered now is
whether management is an art and to find the answer we need to correlate
the features of an art with management.
1. Existence of Individual Skill or Talent. This feature is clearly
visible in management because every manager has his / her own
style of managing the work and the level of skill and talent
possessed by him / her will determine his / her style. This aspect
may be contradicted by the products of management schools who
believe in the principle that managers are made not born, but the
can, in turn easily asked to explain the existence of successful
managers from the business world who may even be totally
illiterate! We shall leave this matter to rest on the conclusion that
in order to be a successful manager one needs to possess skill and
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talent. The example of the late Dhirubhai Ambani who is a
success story in managing Indias largest private enterprise,
Reliance, bears fruit to this conclusion.
2. Existence of a Creative Approach. This implies the desire to
make something new something that does not already exist.
Management also satisfies this feature of an art since each
manager in order to accomplish the work. In the process he/she
may discover and create new things and new ways of doing the
assigned jobs.
3. Existence of Practical knowledge. This refers to the availability
of various aspects of knowledge relating to a subject and the use
of that knowledge in actual life. Just like any other art,
management also has many theories, principles and in fact,
extensive knowledge to be acquired about the subject. There is
full scope to apply the knowledge in real life and accordingly
management is also regarded as an art.
4. Ability to apply the knowledge to Achieve the desired results .
The mere existence of knowledge is not enough there should be
an attempt to apply or use that knowledge if a subject is to qualify
as an art. This aspect is satisfied by management because the
existing knowledge on the subject is actually put into use for the
purpose of accomplishing the goals of the organization by
regulating human behaviour e.g. one theory of management
because the existing knowledge on the subject is actually put into
use for the purpose of accomplishing the goals of the organization
by regulating human behaviour e.g. one theory of management
suggests that a worker is subject to fatigue levels after
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accomplishing a certain level of work and therefore needs to be
given some rest. This theory is put into actual practice by
managers in the form of rest time or breaks (something which
we get even while watching television).
5. Regular Practice by the Individual. Every art requires that the
practitioner be regular in applying the art if he / she desires to
improve the subsequent performances. The underlying philosophy
of the maxim is practice makes perfect. Thus, dancers like Raja
and Radha Reddy will improve their performance with regular
practice, as will Lucky Ali or Adnan Sami (the singers). This
aspect is visible in management also because the more
experienced the manager, the better is his ability to manage. No
wonder then, there is such a high monetary package for
experienced manages.
From the above analysis it is possible to conclude that management is
more of an art than a science some people go as far as to say that
managing a business is an art and not a science.
Management as a Profession
To recognize any body of knowledge as a profession, one has to look for
the following distinct features.
1. There should be specialized
2. the entry should be regulated through testing / examinations
3. There should be a strict code of conduct prescribed for the persons
practicing the profession.
4. There should be an inherent motive of service to the people,
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5. There should exist a regulating agency for the working of the
professionals.
All these features can be found in professions like Law, Medicine,
Architecture, etc. However, one needs to determine if they are present in
the case of management because if they are not, then management cannot
be regarded as a profession.
1. Specialized Knowledge. Is there specialized knowledge relating to
management?
The answer to this one is positive, because there is sufficient
theoretical knowledge related to management that has been
developed over the previous century. Outstanding managerial
writers include Taylor, Fayol, Drucker, Sheldon, Lyndall, Urwick
and many others. Since management is regarded as a dynamic
subject, there is research effort being made even now and therefore
there will be improvements and more new theories on the subject,
in the future.
2. No regulated Entry. Is there any restriction on individuals
regarding the entry to management? In other words, does a person
have to compulsorily pass any tests / examinations in order to
become a manager? The answer to this one is negative, because in
reality, anyone can be a manager tests and examinations are not
necessary to become a manager. If a person has the ability to
organize people get them to work jointly, he will be regarded as a
managers (think of Mahatma Gandhi). Of course, there are people
who become managers, after pursuing simple and complex
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managerial courses, but the fact remains that there is no restriction
on the entry to management.
3. No code of conduct. Is there a strict code of conduct regulating the
working of the members? The answer to this is also negative since
there is no code of conduct for the working of managers and each
manager is on his / her own.
4. Motive of Service. Do managers work with the aim of service to
the people? This is a debatable point since some people feel that it
is only money that motivates managers and they are willing to
compromise on all levels so long as their decisions get them the
monetary return. On the other hand, there is a school of thought
that feels that managers work together with people in order to
achieve the goals of an organization and therefore they have an
attitude of caring and understanding their subordinates. Thus, they
work with a service motto. We can then conclude that to some
extent managers work with a service objective.
5. No regulating agency. Is there an agency that regulates the
working of managers? This aspect will also be answered in the
negative because in India there is no such organization that
governs / regulates the working of managers? The existence of the
All India Management Institute may be cited as an example of a
central level governing body for the working of managers but the
fact remains that it is not in a position to lay down rules and then
enforce them with regard to managers. Even on the global level,
there is no such governing body.
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The obvious conclusion then is that management is not a profession.
This section can then is that management is not a profession. This section
can then be summed up as follows management has some principles
that have been scientifically derived (to that extent it is regarded as a
science), it even exhibits certain features of a profession (there is the
existence of specialized knowledge) but over and above all the related
aspects, it is more of an art than anything else. This finding is based on
the fact that management is practical in nature since it aims to deal with
reality and it definitely improves with practice like any other art.
MANAGEMENT AND ADMINISTATION
Consider the following:
In a business organization, when a newly appointed worker met with
an accident while at work and had to be subsequently hospitalized, the
question of granting a leave of absence could not be decided by his
immediate boss he was informed that the matter was under
managements consideration. It was only after the administration
rules on the matter, would the employee know, whether he was being
granted a leave of absence.
Having read the above example, it is possible that some readers of this
text would conclude that management and administration are two
different words that have a similar meaning and can therefore be used
interchangeably. This conclusion is not entirely incorrect but actually it is
incomplete. Management and administration are two different terms and
are regarded as such by one school of thought while another school of
thought regards them a different terms.
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Management and Administration are Interchangeable Terms. This
school of thought believes that managers as well as administrators are
those people in an organization who make decisions at various levels
throughout an organization and therefore they are essentially the same
the terms management and administration interchangeable authors like
Henri Fayol, McFarland, Koontz and Duse hold this view.
Management and Administration are Distinct Concepts. This school
of thought believes that the two concepts are different from one another.
However, there is no consensus on the nature of difference between
them. The European writers believe that management is the all important
aspect since administration is only a part of it, while the American
writers feel that it is administration that is supreme or most important and
that management is subordinate to it.
The further explain the concept the Europeans feel that management is
the most important activity undertaken in any organization because it
involves undertaken in any organization because it involves the making
of over all decisions and policies of the organization. Administration on
the other hand, is concerned with the implementation of the policies laid
out by the management.
The American think the reverse because they believe that it is the
administration that lays down the policies for the entire organization
while management is concerned with the execution of the policies. Thus,
according to the Americans, it is administration that is most important
and management is subordinate to it. The importance of administration is
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visible as one goes up the levels of management and simultaneously, the
significance of management decreases thus, the two concepts have an
inverse relationship.
ADMINISTATION AND MANAGEMENT
Top
Middle
Supervisory
Management and Administration at a Glance
Basis of difference Management Administration
1. Essence It is a going activity It is a thinking activity
2. Level at which practiced Middle and low Top
3. Commonly used in Business organizations Government
organizations
4. Affected by Internal environment External environment
5. Generally undertaken by Employees Owners
6. Aim To implemented policies To formulate policies7. Important at Middle and low levels of
an organization
Top level of the
organization
8. Title of practitioner Manager, Managing
Director, General
Manager etc.
Minister, Governor,
Commissioner,
Registrar etc.
New Terms Learnt
Management It consists of getting work done through the effort ofother people.
Management as an activity consists of the doing of some thing.
Management as a Process Consists of the performance of a series of
steps, in order to achieve specific goals.
Administration
Management
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Management as a Discipline Refers to a specialized field of knowledge
Management as a Group Refers to the people who undertake the task of
managing an organization.
Administration The top level management that has the task of making
important decisions for the entire organization.
Functions of Management
1. Planning:- It is the conscious determination of future course of
action. This involves why an action, what action, how to take
action and when to take action. Thus, planning includes
determining of specific objectives, determining programmes,
setting policies and strategies, setting rules and procedures
and preparing budget. Planning depend upon forecasting.
Planning can be long term or short term.
2. Organizing: It is the process of dividing work into convenient
tasks or duties to the individuals according to their positions.
Organizing functions also includes structure and hierarchy levels
in the organization.
3. Staffing: It includes creating human resources for the
organization, it includes the function of recruiting, training, fixing
financial compensation, appraisal of performance etc.
4. Directing:- When people are available in the organization they
must know what they are expected to do in the organization
superiors communicate about their goal, then they motivate lower
level to work and thus lead them to achieve higher efficiency
towards goal.
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5. Controlling:- Controlling involves identification of actual
results, comparison of actual results with expected results,
identification of deviation between two, if any, and take corrective
action. So that result match with expected results.
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CHAPTER 3
ORGANISING
Organizing has defined by Koontz et.al., as the grouping of activities.
Which are necessary to attain objectives, the assignment of each such
grouping to a manager with the authority necessary to supervise it, and
the provision for coordination horizontally and vertically in the enterprise
structure.
The purpose of organizing is to create an organization structure that is
designed to clarify who is supposed to do what and who is responsible
for which results; to remove obstacles to performance caused by
confusion and uncertainty of assignment, and to furnish decision making
and communication networks reflecting and supporting the enterprise
objective.
Organization is basically used with reference to:
A certain company or group of persons working together. E.g. Tata Iron
and steel company limited, or Torrent Pharmaceuticals Limited.
The organization is a structure or a network with specified relationship
among its members.
According to G.R. Terry, organizing is the establishing of
effective behavioural relationship among selected work persons
and work places so that the groups can work together efficiently.
According to John Pfiffner, Organization is essentially a matter of
relationship
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Chester Bernard, Organization is a system of cooperative
activities of two or more persons.
L.Urwick Organization is the process of dividing up the activities,
which are necessary to any purpose and arranging them in groups,
which are assigned to individual.
Mooney and Reiley, Organization is the form of every human
association for attainment of a common purpose.
PRINCIPLES OF ORGANISATION
There is a need to follow certain principles in order to formulate and
develop and sound and efficient organization structure. Some of the
important principles of organization are as follows:
Principles of Objectives: The formulation or organization
structure is very much influenced by the objectives of the
business concern. In view of this, the objectives of the business
concern should be clearly stated. This helps the management informulating the org structure and also in achieving the enterprise
objectives with minimum cost and effort.
Principle of specialization: It is similar to the principles of
division of work. In this the org structure should be formulated in
such a way that the activities of the enterprise are divided
according to different functions and the same are assigned to
persons according to different functions and the same are
assigned to persons according to their specialization.
Principles of Span of Control: The span of control should be
minimum because there is a limit to the number of persons that
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can be effectively supervised by one boss. The number of
subordinates may be few or many. This depends upon the ability,
the job, the complexity of the duties of the subordinates may be
few or many. This depends upon the ability, the job, the
complexity of the duties of the subordinates, the nature and
importance of the work to be supervised etc. these factors should
be considered at length before taking any final decision in this
respect.
Principles of Exception: Only exceptionally complex matters
should be referred to the executives for their decision and thesubordinates themselves should decide matter of routine nature.
This is necessary because the executive at a higher level instead
of spending their time for deciding routine matters can
concentrate on more important matters.
The Solar Principle: This principles is sometimes known as the
the chain command also. The line of authority should be clearly
stated. The line of authority from the Chief Executive at the top
of the enterprise to the bottom must be clearly defined.
The principle of Authority: authority is the element of Org
Structure. It is the tool by which a manager is able to create an
environment for individual performance. So the responsibility
and authority of each manager and supervisor should be clearly
defined. Authority that is given to the manager enables him to
accomplish the objective of the enterprise. Hence the authority,
should be clearly defined and it should be equal to the
responsibility entrusted to him
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The principle of unity of command: according to this principle,
each subordinate should have only one superior and dual
subordination should be avoided. Dual subordination may result
indiscipline of subordinates, under mining of authority, disorder,
delay and confusion. This principle avoids the possibility of
conflicts in instructions and develops the feeling of personal
responsibility for the work
Principle of Delegation: The org structure should provide for the
delegation of authority at every level. The authority delegated
should be equal to responsibility so as to enable the concernedperson to accomplish the task assigned to him by his superior.
Principle of Flexibility: The org structure should be such which
should be adaptable to the changing circumstances. There should
be a possibility, if the circumstances warrant, for expansion and
replacement without disrupting the basic design of the structure.
Principle of simplicity: The org structure should be simple with
a minimum number of levels. If the org structure has a large
number of levels, the problem of effective co-ordination and
communication may arise.
Principle of Continuity: There should be continuity in the org
and it is possible only if the org is dynamic and capable of
adopting itself to the needs of changing circumstances.
Principle of Unity of Direction: It means, for a group of
activities having the same objective, there should be one plant
and one objective. The facilities verification and coordination of
activities and also completion of task as per the schedule.
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Principle of Efficiency: The structure that is formulated should
enable the business concern to function efficiently and achieve its
objectives with minimum cost and effort.
The principle of Balance: In every org structure there is need for
balance. For effective grouping and assigning activities, this
principle calls for putting balance on all types of factors human
technical as well as financial.
Process of Organization
Organization is a continuous process. Even after the organization hasbeen created, changes may need to be made from time to time. Since the
org is created in order to meet the enterprise objectives. It must change
whenever what change can help achieve the organizational objectives
better.
The process of org. as described by Koontz et.al. is a follows:
1. Establishment of enterprise objectives
2. formulation of supporting objectives, strategies and plans
3. Identification and classification of activities necessary to
accomplish these objectives.
4. Grouping these activities in the light of human and material
resources and best possible way of utilizing them and assigning
responsibility for performing those activities.
5. Delegation to the lead of each group, the authority necessary to
perform activities in effective manner.
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6. Coordinating those activities horizontally and vertically through
flow of information and authority relations.
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DEPARTMENTATION
This first real task in designing an org structure is the identification of
activities and top group them properly. The process of grouping the
activities is commonly known as departmentation. The terms used to
denote the departments that result from departmentation are different as
in the business organizations, such terms as division, departments and
section are used. In government, these are called branch, department,
bureau and section, in military, these are referred to as battalion, group
company, etc. moreover, the terms used to designate departments may
differ in different organizations of the same nature. However, the process
of departmentalization will remain the same.
Need and importance of Departmentation
1) Advantages of specialization: The basic advantage of the
specailisation lies in terms of efficiency with which the work is
performed because a person focuses his attention on a narrow
aspect of the work and he gets mastery over that aspect. Naturally,
this results into performing the work more efficiently. Thus, if the
managerial function is conceived as a set of activities facilities the
work of the org. these activities can be carried out more efficiently
and effectively through the division of work leading to a
specialization of managerial function.
2) Fixation of Responsibility: Departmentation helps in fixing the
responsibility and consequently accounting for the results.
Responsibility can be discharged properly when it is clear, precise
and definite. Through departmentation, the work is fixed
accurately. The manager concerned to whom responsibility and
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authority are clearly specified, a manager knows what exactly he
has to do in the org. this helps the manager to become more
effective.
3) Development of Managers: Departmentation helps in the
development of managers. Development is possible because of the
two factors. First, the managers focus their attention on some
specific problems, which provides them effective on the job
training. Second, managerial need for further training can be
identified easily because the managers role is prescribed and
training can provide them opportunity to work better in their area
of specialization. Thus, need for training and its methods can be
easily identified.
4) Facility in appraisal: Managerial performance can be measured
when the area of activities can be specified and standards in
respect of these can be fixed. Departmentation provides help in
both these area. When a broader function is divided into small
segments and a particular segment is assigned to each manager the
area to be appraised is clearly known: the factors affecting the
performance can be fixed easily because factors affecting the work
performance can be known clearly. Thus, performance appraisal
will be more objective when departments have been created.
5) Feeling of Autonomy: Departmentation provides motivation by
developing feeling of autonomy to the extent possible. Normally
departments are created in the org with certain degree of autonomy
and freedom. The manager in charge of a department can take
independent decisions with in the overall framework of the org.
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thus, he enjoys satisfaction of being important to the org. This
feeling itself is a source of better performance among managers.
BASES OF DEPARTMENT
There are several bases of departmentation
1. Functional department
2. Product department
3. Territory department
4. Process department
5. Customer department
Functions
The grouping of common activities to from an org unit is known as
functional departmentation. Functional departmentation is the most
widely used basis for organizing activities and is present almost in every
large org at some level. Since functional departmentation can be adopted
at various levels of the org., the various functions of the org are divided
into basic and secondary functions.
Basic Functions: The basic or major functions are those, which are
essential for the organizations, and their operations contribute to the
organizational efficiency. E.g. in a manufacturing org, basic functions
may be produced. Marketing and finance. Similarly in a finance
company, financing activities may be basic functions. Thus, basic
functions are determined on the basis functions are determined on the
basis of their importance to the achievement of organizational activities.
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Secondary Functions: When departments are created on the basis of
major functions and a manager feels that his span of management is too
wide to manage effectively or take the advantages of specialization, he
may create departments within the major functional department. Such
departments will be created by dividing the major function into sub
functions. This process may go down further when a department may be
created at the top level. However, in order to perform marketing function
properly, particularly in large organization. It may be divided into
selling, marketing research, advertising etc. further advertising may be
divided into print media advertising. T.T. Advertising etc. Thus the
process of functional differentiation will continue through several levels
in the org.
Advantages of Functional Departmentation:
Advantages of specialization
Ensuring performance of activities necessary for the achievement
of organization objectives.
Elimination of unnecessary activities.
Maintaining the relative importance of functions in the org.
Disadvantages of Functional departmentation
Lack of responsibility for the end results
Over specialization and consequently lack of general
management point of vie
Problems of conflicts and coordination among functional
departments
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Therefore the functional departmentation is useful only up to top or
immediately below the top level.
Production Departmentation:
Product departmentation involves the grouping together of all activities
necessary to manufacture a product for product line. As the org grows in
size, it becomes difficult for managers to coordinate the activities of the
expanding product lines. One commonly adopted strategy is to establish
departments based on products. Product departmentation is preferred
expansion and diversification when manufacturing and marketing
characteristics of each product are of primary concern. It is generally
used when the product is relatively complex and a great deal of capital is
required for plant and other facilities such as automobile electronics.
Advantages of product departmentation
Beneficial for multiple products
Takes care of product lines more efficiently
Reduces problems of coordination for different products
Provides opportunities fur further diversification and expansion
of org
Provides product specialization necessary for managers specially
when each product is different from others.
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Disadvantages of product departmentation
Problem at top level management for coordination, multiplicity of
efforts because same functional facilities are required for
different products and problem in maintaining economical central
staff services.
Territory Departmentation
Territorial or geographical departmentation is specially useful to large
sized organizations having activities which are physically or
geographically spread such as banking insurance, transportation, etc. Insuch as case, all the activities in a given are of operations are grouped
into zones, branches, divisions etc. The assumption is that if markets are
widely dispersed, an improved cost profit situation will result if all
activities affecting a product line or service in a specific geographical
region are grouped totter. E.g. LIC.
Advantages
Territorial departmentation is specially to large scale
organizations of other organizations whose activities are
physically or geographically spread
In such cases, territorial departmentation provides certain
efficiency in operation.
Local factors such as customers, culture, styles, preferences etc.
always affect organizational functioning. In fact, the same kind of
work is always different when location is different. Thus,
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knowledge of local conditions is an important element in
effective management.
Moreover, some costs of operations can be save for example,
serving of customers at different location. The corresponding
facilities are created looking into the needs for local conditions.
Territorial depatmentation may provide training to mangers to
look after every aspects of organizational operations. Therefore,
they can develop a skill of looking at the org as a whole and can
progress at the tope level of the org where general management
qualities are needed.
Disadvantages :
The first importance problem is of communication. However, this
problem can be overcome without much difficulty once the
system of communication is developed added with modern
communication facilities.
Another problem that comes in the way is the distance between
policy framers and policy executors. Often both of them are at a
distance not only in terms of physical distance but also in terms of
mental distance because of different local conditions. However,
this problem can be overcome by providing suitable training to
the managers concerned.
Some problems or coordination may also arise between top level
and territorial level managers as some of the functions are to be
performed at the head office level. This arrangement requires
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many managers with general management skills. Therefore,
training and development should be a continues process.
Process Departmentation:
The process departmentation processes involved in the production or
various types of equipments used are taken as basis for departmentation.
When the production activities involve the use of several distinctive
processes, these can be used as the base for grouping of activities. Such
activities may be textiles, oil production etc.
Advantages:
The basic purpose of such departmentation is to achieve
economic advantages.
The processes are set in such a way that a series of operations is
feasible making operations economic. In such a case, efficient can
be achieved if department are created for each process as each has
its peculiarities.
It provides advantage of specializations required at each level of
total processes, maintenance of plant can be done in a better way
and manpower can be utilized effectively.
Disadvantages
This arrangement has the problem of coordination because the
work of each process is dependent fully on the entire process.
Therefore, there are chances of conflicts among managers looking
after different processes. However, this problem can be overcome
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by developing suitable norms and understanding among
managers.
Another problem that comes in the way is the distance between
policy framers and policy executors. Often both of them are at a
distance not only in terms of physical distance but also in terms of
mental, distance because of different local conditions. However,
this problem can be overcome by providing suitable training to
the managers concerned.
Some problems of condition may also arise between top level and
territorial level. This arrangement requires many managers withgeneral management skills. Therefore, training and development
should be a continues process.
Process Departmentation
The process departmentation, process involved in the production or
various types of equipments used are taken as basis for departmentation.
When the production activities involve the use of several distinctive
processes, these can be used as the base for grouping of activities. Such
activities may be textiles, oil production etc.
Advantages:
The basic purpose of such departmentation is to achieve
economic advantages.
The processes are set in such a way that a series of operations is
feasible making operations economic. In such a case, efficient can
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be achieved if department are created for each process as each has
its peculiarities.
It provides advantage of specializations required at each level of
total processes, maintenance of plant can be done in a better way
and manpower can be utilized effectively.
Disadvantages
This arrangement has the problem of coordination because the
work of each process is dependent fully on the entire process.
Therefore there are chances of conflicts among managers lookingafter different processes. However, this problem can be overcome
by developing suitable norms and understanding among
managers.
Customer Departmentation
Customer based departmentation is basically market oriented in which
departments are created around the markets served or around marketing
channels. While both these approaches to departmentation are used to
emphasis marketing and make it more effective they differ in some
respects. Grouping of activities around marketing channels involves
making an org structure reflect the ways an org reaches an ultimate
customer market centered grouping supports marketing efforts for
different types of customers. Therefore such a grouping is suitable to
these organizations which either serves different customers such as a
pharmaceutical company supplying to hospitals government, retail stores
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etc. for applying different marketing channels like wholesale, retail,
installment and hire purchase, export etc.
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Advantage of Customer departmentation
If focuses on customer who are the ultimate suppliers of money to
the org. Therefore different types of customers can be satisfied
easily through specialized staff. In fact the basic idea of this
departmentation is to provided services to clearly identified, group
of customers. Each group of customers has different purchase
behaviour, payment schedule, demand pattern, etc. Therefore, they
can be attracted to the organizations business by satisfying them
by providing services most suitable to each of them.
Disadvantages
Coordination between sales and other functions becomes difficult
because this method can be followed only in marketing division.
Duplication and confusion may raise in product, research and
development activities as well as in manufacturing, as the market
oriented managers demand special attention and services. This may
generate more conflicts in the org.
Further, there may be unemployment of manpower in some
departments, specially when demand for the customer group
decreases. Therefore, customer oriented departments should be
created to the extent they justify their existence.
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DELEGATION OF AUTHORITY
Delegation of authority is one of the important factors in the process
of organizing It is essential to the existence of a formal organization.
To delegate means to grant or confer. Here delegation means
conferring authority from one manager or organizational unit to
another in order to accomplish particular assignments. A manager
simply does not delegate authority: he delegates authority to get certain
work accomplished. By means of delegation the manager extends his
area of operations, without delegation, his actions are confined to what he
himself can perform.
Features of Delegation
The Important features of delegation are as follows :
1 Delegation of Authority : Delegation of authority is an
authority to a manager to act in a certain manner. The degree of
delegation defines the limit within which a sub ordinate
manager has to decide the things .Being formal authority org at
top level. it is distributed delegation or re- delegation.
2 Person Delegating Holds Authority : A sub- ordinate staff
receives authority from his superior still holds his original
authority.
3 Delegated Authority can be enhanced, reduced or
withdrawn : This may happen at any time depending upon the
situation and requirement E.g. Change in policy. Procedure or
method etc may bring a change in the degree of delegation of
authority.
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4 No delegation without Authority : A manager cannot delegate
authority , which he himself does not possess. or what is vested
to him.
5 There cannot be total delegation : A manager cannot delegate
the entire authority vested in him because if he delegates all his
authority. He is no more required. Therefore only a part of the
authority is delegated.
6 Delegation may be general or specific : Delegation is called
specific when courses of action for particular objectives are
specified. It is general when these are not specified. Though
objectives may be specified, delegation may also be formal or
informal written or implied.
7 Authority to delegate depends upon several factors : These
factors are the ability of the executive to delegate, the ability of
the subordinate to accept delegation, the philosophy of
management the confidence of the superior in the subordinate
etc.
8 No escape from Responsibility : No manager can escape from
his obligation by delegation authority to sub ordinates.
Therefore, he has to provide a means to check whether the work
assigned to the subordinate has been done as the wishes.
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Importance of Delegation of Authority
The Importance of delegation can be judged from the following
1 It has dynamics of management and essence of sound
organization: It has been observed that an individual cannot
manage an control everything in the org due to various limitations.
Therefore, he has to divide the work load and share the
responsibility with his subordinates. When a mans job grows
beyond his capacity, he must share it to get it done successfully
through other people.
2 It is an art of getting things done : Delegation of authority has
been recognized as an art of getting things done in the best possible
manner. By delegating, the superior or senor share their workload
with others and concentrates on more important policy matters. He
is relieved of the routine matters.
3 It establishes healthy relationship: In this healthy relationship
between the executive and his subordinates are established. it
increases interaction and understanding among managers and
subordinate. It is managements best technique to help, to improve
the job satisfaction, motivation and morale of subordinates. It is
helpful in satisfying the needs for recognition responsibility and
freedom.
4 It facilities management authority: A manager who does not
delegate. It is because of simple reason that the management
harnesses fully the skills and the capabilities of the sub ordinates.
Therefore the managers cannot do much more than they could do if
they had not delegate. By delegation they multiply themselves.
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5 Delegation aids to executive development Delegation aids to
managers at lower levels to get valuable experience in decision-
making. They develop their abilities and team fill the higher
position in case of need. It facilities the diversifleation and
expansion of business through a team of component and contented
workers. Its is practically definite that an org cannot expand itself
without delegation.
6 Creation of right and responsibilities : Through the delegation
process each position in the org become a cluster of high,
responsibilities, relationship and obligations, which demand the
person to function in certain defined ways.
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Principles of Delegation
Delegation of authority is a conscious effort on the part of the manager.
Therefore, in delegating authority, he should observe certain principles so
as to make delegation effective.
1 Delegation by Results Expected : Delegation should be based on
results expected from a position in the org, Delegation by results
expected implies that planning exercise has been taken and goals
for each position have been set, communicated and properly
understood by those who are responsible for achieving these golas,
Often managers fail to delegate adequately because either they
have very vague ides about the contributions of their subordinates
or they just do not bother to determine whether the subordinates
have authority to do the things.
2 Functional Definition : Closely related with the principle of
delegation based on results expected is principle of functional
definition. In an org, activities are classified and grouped to create
departments or units. Each department contributes to
organizational objectives but at the same time has its own
objectives. Thus, there is a need for coordination of objectives and
activities of the department in such a way that they contribute
maximum to the org. This gives rise to the principle of functional
definition. The more a department has clear definitions of results
expected, activities to be undertaken, authority delegated and
authority and information relationships with other departments.
The more adequately the department can contribute towards
accomplishing the organizational objectives.
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3 Clarity of Lines of authority :Each position in the org is linked
with others through authority relationship: some directly through
line authority, others indirectly. More clearly these lines of
authority are defined, more effective is the delegation of authority.
In this respect, classical authors have given two principles, which
guide the delegation of authority. These principles are scalar chain
and unit of command. Scalar chain principle refers to the chain of
direct authority and relationship from superior to subordinate
throughout the org. Clearer the line of authority from the top
manager to every subordinate position in the org, the more
effective will be responsible decision making and organizational
communication. The other principle, that is unity of command
suggests that a subordinate should be responsible to a single
superior and he should receive instructions from the same superior
only. The more complete an individual has a reporting relationship
to a single superior, the less is the problem of conflict in
instructions and greater the feeling of personal responsibility for
results.
4 Level of authority: Authority level principle suggests that
maintenance of intended delegation requires that decisions within
the authority competence of individuals are made by them and not
refers upward in the org structure. Thus, managers should make
whatever decisions they can in the light of their delegated authority
and only matters that authority limitations keep them from
deciding should be referred upward. This is possible if authority
delegation is clear and managers at each level are sure what
authority they have.
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A problem comes when two or more managers can decide the things
jointly without referring the matter upward but singly none of them can
decide. Such a mater may be related with inter deter mental functioning.
A single manager cannot make decision because of splintered authority.
Splintered authority exists whenever a problem cannot be solved or a
decision made without pooling the authority delegation of two or more
manages. Eg. production manager of plant A can reduce his costs by
some procedural changes in plan B However. he cannot do this unless he
pools his authority with manager of plant B. Alternatively, he can refer
the mater upward and positive thing can happen by the action of
common superior In such a case it is preferable to consolidated and
pool splintered authority rather than referring the matter upward fro
decision
Splintered authority rather than referring the matter upward for decision,
Splintered authority cannot be wholly avoided in making decisions.
However, recurring decisions on the same matters may indicate the need
for recognition and red legation of authority.
5 Absoluteness of Responsibility : Responsibility is an obligation
to get the assigned work done. Since responsibility cannot be
delegated, a superior cannot be absolved of his responsibility for
the activities assigned to his subordinates to their superiors for
performance is absolute; once they have accepted an assignment
and the authority to carry it out, superior cannot escape
responsibility for the performance of activities of their
subordinates.
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6 Parity of Authority and responsibility : A common saying in
management is that authority and responsibility should be always
equal, It implies that since authority is the discretionary right to
carry out assignment s and responsibility is the obligation to
accomplish them, authority should correspond to the
responsibility. Thus, responsibility for actions cannot be greater
than authority delegated, nor should be less. This parity is not
mathematical but, rather, coextensive, because both relate to the
same assignment.
Blocks to Effective Delegation
There are many factors that can blocks effective delegation of authority.
Factors in Delegation (Superior)
The qualities of superior managers play an important part in determining
the kind of functional and social equilibrium that will achieved in the
superior subordinate relationships, and consequently the delegation of
authority. A superior manager is likely to delegate less authority in the
following situations.
1 Love for Authority : A superior will delegate his authority
specially if is an autocrat. Such a manager has intense desire to
influence others, to make his importance felt in the org. and to see
that his subordinates come frequently to get their decisions
approved. Such desires on the part of the manager keep him away
from delegation of adequate authority to his subordinates
irrespective of their needs.
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2 Maintenance of Tight control : A manager does not delegate
authority because he wants to maintain tight control over the
operations assigned to him. He likes to show business and security
created by work piled high on his desk. Doing tangible work is a
pleasurable activity, whereas spending ones time thinking
planning and other less tangibles is a difficult process. The
manager may become habituated to the constant contact of
subordinates bringing matters to him for approval.
3 Fear of Subordinates: A manager may not delegate adequate
authority because of fear of subordinate. The fear of a
subordinates growth may be real. It can take two forms.
The subordinate might show that he can perform the
superiors work so well that he becomes entitled to his
position, status, title, or prestige.
The subordinates increasing ability might earn him a
promotion to some other part of the org and the superior
may lose the best subordinate.
In this case, the may adopt defensive behavior. He simply fails to
delegate simply because adequate delegation may reveal managerial
shortcomings being practiced. This may happen specially when the
superior has poor operating procedures, methods and practices.
5 Attitudes towards subordinates : Delegation of authority is a
particular kind of trust between superior and his subordinates.
Therefore his attitude towards subordinates, and their attitudes
towards him become important in the process of delegation.
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Negative attitudes work against delegation of authority in several
ways.
If a superior has a lack of confidence in his subordinates
capacity he will not like to delegate them authority.
The superior may feel that his subordinates just do not
require more authority than they have been delegated
Such feeling may result into inadequate delegation of
authority.
The superior may not have good interpersonal
relationship with subordinates, which may result into less
delegation of authority.
6. Personality of Superior : Personality factors of superior also
affect the degree of delegation of authority E.g. An autocrat
superior will delegate less authority as compared to a democrat.
Similarly, a superior believing in the application of modern
techniques likes to delegate adequately. A superior coming from
the rank and file may delegate less, Similarly a manager who has
not been delegated adequate authority in his career is likely to
delegate less.
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Factors in Delegant (Subordinates)
The degree of delegation of authority is also determined by the
qualities of subordinates While superior a perception about the
qualities of subordinates plays an important role in delegation of
authority, subordinates themselves after the degree of delegation of
authority . They affect the delegation in several ways
Some subordinates have more capability to assume more
responsibility Since responsibility and authority go together,
competent subordinates may get more authority. The delegation of authority is formal and institutional but is
exercise is personal. Thus a competent subordinate may assume
and exercise more authority than others although working within
the context of same set of delegation.
In the following situations however subordinates are expected to exercise
less authority.
1 When they fear jarsh criticism for unfavourable results.
2 When they lack self confidence
3 When they lack resources.
4 When the have inadequate positive incentives
5 When their superior is easily available for making decision
on their part.
Organizational Factors Although personal factors affect the authority
delegation to a very great extent, other organizational factors also affect
the degree of authority delegation. Individual managers do not have
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control over these factors but have to work within the context of these
factors. Eg. even the autocrat has to delegate authority if the
organizational factors so warrant factors so warrant. Various
organizational factors such as management philosophy policy towards
centralization or decentralization availability of managerial personnel.
control techniques etc. determine the delegation of authority at various
levels of managements. If these factors are not favorable delegation of
authority will be affected adversely.
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DECENTRALISATION OF AUTHORITY
In the words of Satya Saran Chatterjee:- Decentralization is the pushing
down of authority and power of decision making to lower levels of
organization
According to Henri Fayol Everything that goes to increase the
importance of the subordinates role decentralization. He has obviously
referred the division of authority with certainty is the essence of
decentralization.
Factors Determining Degree of Decentralization
The factors determining the degree of decentralization are:
1. Size of Organization: Decentralization depends on the size of the
org. The larger the size of an org. the m