unit 3 organising-150217

S.Palanivel Associate Prof./Mech Engg Kamaraj College of Engg. & Tech. Virudhunagar(Near)

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ORGANIZINGORGANISING is theIdentification and classification of required activitiesGrouping of activities necessary to attain objectivesAssignment of each group to a manager with authority necessary to supervise itProvision for coordination horizontally and vertically in the organisation structureOrganisation structure should be designed to clarify who is to do, what tasks and who is responsible for what results in order to remove obstacles to performance caused by confusion and uncertainty of assignment and to furnish decision making and communication networks reflecting and supporting enterprise objectives.


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Formal organisation• The intentional structure of roles in a formally organised structure

PresidentVice President 1 Vice President 2 Vice President 3

DVM1.1

DVM1.2

DVM1.3

DVM2.1

DVM2.2

DVM3.1

DVM3.2

DVM3.3

DptMr1.1.1(2)

DptMr1.2.2 (3)

DptMr1.3.34

DptMr2.1.1(5)

DptMr2.2.1(2)

DptMr2.2.2(3)

DptMr3.1.1 (2)

DptMr3.2.2(2)

DptMr3.3.3(2)

DVM : Division Manager : Dpt Mr : Department ManagerFormal orgnisation must be flexible . If a Manager is to organize well, the structure must furnish an environment in which individual performance, both present and future contributes most effectively in achieving group goals. There should be room for discretion for beneficial utilization of talents and to recognize individual capacities. Yet individual effort in a group situation must be channeled toward group and organisational goals.


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Informal organisation

• It is a network of interpersonal relationships that arise when people associate with each other. Thus informal organisations relationships not appearing on an organisation chart might include machine shop group, morning walkers team, evening coffee goers etc.

• Mechanical department, EEE department, ECE department are Formal organisations. Group of friends drawn or joined on their own from various departments informally to do certain works like playing, singing, dancing, going to movies are Informal organisations.

• In a formal organisations direction will flow from top to bottom and in steps. Definite number of tiers/ classifications will be there.

• In an informal organisations flow of communication will not flow any definite route. Cluster of roles at different levels will be there


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Department•One aspect of organising is the establishment of departments.•Department means a distinct area, division or branch of an organisation over which a Manager has the authority for the performance specified activities •Examples : production dept., sales dept., accounts dept., maintenance dept., Inspection dept., safety dept., training dept.•In large enterprises department indicates hierarchical relationship. Vice President may head one unit of different companies headed by the President. Separate Division managers may be there for looking after production, sales, accounts, marketing, inspection, safety . Under each division several required no. of departments may be there.•In the chart shown, under President there are three Vice presidents as VP1, VP2 & VP3. •Under VP1 there are 3 DVMs , with VP2 2 DVMs & with VP3 there are 3 DVMs• Under each DVMs required no. of Dpt.Mr (Department Manager ) are

located.


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Organisational levels• Purpose of organising is to make human cooperation effective, the

reason for levles of organisation is the limitation of the span of management.

• Organisational levels exist because there is a limit to the number of persons a manager can supervise effectively, even though this limit varies depending on situations.

• Organisation with narrow spans : Human resources are distributed in the organisation in various levels. Each level controls people placed below them. No. of persons reporting to the higher level are limited. Large companies having a strength of over 1000, has to adopt this. Otherwise directing & controling will be a problem .

• Organisation with wide spans : No. of levels will be limited may be 1 to 3. All the personnel will have to report to one or two managers only. Small companies having strength upto 50 to 100 can try this.


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Advantages & Disadvantages of levels• Organisation with narrow spans :Advantages : Close supervision Close control Fast communication between subordinates and supervisorDisadvantages : Supervisors tend to get too much involved in subordinates

work Many levels of management make things taking more time High costs due to many levels Excessive level between lowest level and the highest level

makes the feed back system works bit late and non effective.


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Advantages & Disadvantages of levelsOrganisation with wide spansAdvantages : Superiors will have to delegate works Clear policies must have to be made Selection of sub ordinates have to be done carefullyDisadvantages : Tendency of overloading to superiors will be there, it may

create bottlenecks in decision making Danger of superior’s loss of control also there Requires exceptional leadership quality for Managers


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Factors influencing span of managementNarrow span ( a great deal of time spent with sub ordinates)

Wide span ( very little time spent with sub ordinates)

Little or no training of subordiantes Through training of subordinates

Inadequate or unclear delegation Clear delegation and well defined tasks

Unclear plans for nonrepetitive works Well defined plans for repetitive works

Fast changes in external and internal environments

Slow changes in external & internal environments

Non-verifiable objectives & standards Verifiable objectives used as standards

Ineffective interaction between superior and subordinate

Effective interaction between superior and subordinates

Ineffective meetings Effective meetings

Greater no. of specialists at lower and middle levels

Greater no. Of specialists at top level

Incompetent and untrained manager Competent & trained manager

Complex task Simple task

Subordinates unwilling to take responsibility & to take risk

Subordinates willing to take responsibility & to take risk

Immature subordinates Mature subordinates


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Structure and process of organising

• The structure must reflect objectives and plans, because activities derive from them.

• It must reflect the authority available to an enterprise’s management . Authority in a given organisation is socially determined right to exercise discretion and the discretion is subject to change.

• It must reflect its environment. Just as premises of a plan may be economic, technological, political, social or ethical so may be of an organisation. It must be designed to work to permit contributions by members of a group and to help people achieve objectives efficiently in a changing future. Workable organisation can never be static. There is no single organisation structure that works best in all kinds of situations, organisation structure depends on the situation.

• The grouping of activities and authority relationships of an organisation structure must take into account people’s limitations and customs. Though structure designing is done around goals and accompanying activities , an important consideration is the kinds of people who are to staff it.


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Logic of organising• The organising process consists of following steps (first two

steps belong to planning) Establishing enterprise objectives Formulating supporting objectives, policies and plans. Identifying, analyzing and classifying the activities necessary

to accomplish these objectives. Grouping these activities in light of the human and material

resources available and the best way under the circumstances of using them.

Delegating to the head of each group the authority necessary to perform the activities

Trying the groups together horizontally and vertically through authority relationships and information flows.


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Effective organising It is useful to analyze the managerial functions by raising and

answering following questions: What determines the span of management and hence the

levels of organisation. ( it depends on no. of people working under different depts, no. of levels of control & directing required, no. of activities required to reach objectives)

What determines the basic frame work of departmentation? And what are the strengths and weaknesses of basic forms.

What kind of authority relationships exist in organisations How should authority be dispersed throughout organisation

structure and what determines the extent of this dispersion How should manager make organisation theory work in

practice.


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Departmentation

• The limitation on the number of sub ordinates that can be directly managed would restrict the size of enterprises.

• Grouping activities and people into departments makes it possible to form a structure and expand it in future.

• Departments differ with respect to basic patterns used to group activities. These patterns are developed out of logic and practice.

• Grouping activities according to functions . Basic functions are - production, -( creating utility or adding

utility to a product or service)- Selling –(finding customers, clients who will agree to accept

the product or service) Financing –(raising invoices, collecting the money,

accounting income and expenditure and managing funds) Departments -Engineering, production, sales and finance


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Departmentation by Enterprise Function• Functional departmentation is the mostly used basis for

organising activities and is present in almost every enterprise at some level in the organisation structure.

• Production, selling and finance functions of enterprises are widely recognized and they are the basis for formation of organisation at every level including at top level.

• Coordination of activities among departments may be achieved through rules and procedures, various aspects of planning like goals & budgets, personal contacts and some time liaison departments. Such a department may be used to handle design or change problems between engineering and manufacturing


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Advantages & Disadvantages – Dept. by Functions• Advantages Logical reflection of

functionsFollows principle of job

specializationMaintains power and

prestige of major functions

Simplifies trainingFurnishes means of

tight control at the top

• Disadvantages De- emphasises overall

company objectives Over specialisation and

narrow view point of key personnel

Reduces coordination between functions

Responsibility for profit is at Top only

Slow adaptation of change in the environment

Limits development of General Managers


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Departmentation by Terriority or Geography• Departmentation based on territory is common in Enterprises that operate

over wide geographic areas.• In this case, it may be important that activities in a given area or terriority

be grouped and assigned to a manager.• Though there may be more no. of personnel will be positioned like In-charge

of Northern, Southern, western and eastern areas, it will be easier to monitor activities.

• Many Govt. agencies like Tax dept., Banking services, Courts , Postal services adopt this basis of organisation in their efforts to provide services simultaneously across the nation.

• Local banks attached to main branch, so many Main branches forms into a circle, so many circle of banks integrates into regional units and so many regional units reporting to Corporate head office

• Sub Courts,(Local) Dist. Munsif courts (district), Sessions court (Inter Dist.), High Court (State) and Supreme Court (Nation) are formed as organisation by terriority.

• Terrorital organisations are widely used in sales and in production and it is not used in Finance which is usually concentrated at the head quarters.


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Advantages & Disadvantages – Dept. by terriority• Advantages Places responsibility at lower

level Places emphasis on local

market & problem Improves coordination in a

region Takes advantages of economies

of local operations Better face to face

communication with local interests

Furnishes measurable training ground for general Managers

• Disadvantages Requires more persons to

head units as General mangers

Tends to make maintenance of economical central services difficult and may require services such as personnel or purchasing at the regional level.

Makes control more difficult for top managemnt


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Departmentation by Customer group

• Grouping activities so that they reflect a primary interest in customers. Customers are the key to the way activities are grouped when each customer group is managed by one department head.

• A Wholesaler of industrial sales also sells to retailers.

• Business owners and managers frequently arrange activities on the basis to cater the requirement of customer groups.

• Colleges & Universities offer regular and extension courses to serve different groups of students


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Advantages & Disadvantages – Dept. by Customers

• AdvantagesEncourages focus on

customer needsGives the customer

the feeling that they have an understanding supplier

Develops expertness in customer areas

• DisadvantagesMay be difficult to

coordinate operations between competing customer demands

Requires managers and staff expert in customers’ problems

Customer groups may not always be clearly defined (Large Corp. firms vs other Corp. businesses


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Department by product• Grouping activities on the basis of products or product lines is

beneficial in multiline, large scale enterprises (Ex. BHEL has separate units for Boiler, turbine upto 125 MW and turbine above 125 MW, Electircal, Control & Instrumentation, auxiliaries- Power plant manufacturing)

• This structure permits top management to delegate to a division Executive excessive authority over their function.

• Product line managers may be saddled with heavy overhead costs allocated from the expenses of Head office, research and development and many central services depts.

• Managerial job will became complex and the span of management limited the mangers ability to increase the no. of immediate sub ordinate managers.

• Managers are involved in a particular departments they may not be exposed to problems that happening in other areas thus it leads to limiting Managers to acquire skills to occupy Top level management positions.


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Advantages & Disadvantages – Dept. by product• Advantages Places attention and effort on

production line Facilitates specialised capital,

skills & knowledge Permits growth & diversity of

products & services Improves coordination of

functional activities Places responsibility for

products at division level Furnishes measurable

training ground for general managers

• Disadvantages• Requires more persons

with general managers ability

• Tends to make maintenance of economical central service diffciult.

• Presents increased problems to top management control,


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Matrix organisations• Essence of Matrix organisation is the combining of

functional and project or product patterns of departmentation in the same organisation structure.

• There are functional managers in charge of engineering functions and an overlay of project managers responsible for end product.

• This form is common in engineering and research and development

• This is seen in construction (building a bridge), in aero space (designing and launching a weather satellite)


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Advantages & Disadvantages – Matrix organ.• AdvantagesOriented toward end

resultsProfessional

identification is maintained

Pinpoints product- profit responsibility

• DisadvantagesConflict in

organisational authority exists

Possibility of disunity of command

Requires a manager effective in human relation


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Guidelines to make Matrix organs effective• Define objectives of project or task • Clarify the roles, authority & responsibilities of managers

and team members• Ensure the influence is based on knowledge and information

rather than on rank.• Balance the power of functional and project managers• Select an experienced manager for the project who can

provide leadership.• Undertake organisation and team development• Install appropriate cost, time and quality controls that report

departments from standards in a timely manner.• Reward project managers and team members fairly.


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Strategic Business Units (SBU)• They are distinct little business set up as units in a larger

company to ensure that certain products or product lines are promoted and handled as though each were an independent business. ( TNEB has ETPS, TTPS, NCTPP, Hydro power plants- NLC- Mines I, Mines IA, Mines II, TPSI, TPS- I Expn, TPS- II, TPS- II Expn)

• By this Enterprises ensure that each product or product line offered by the company would receive the same attention as it would if it were developed ,produced & marketed by an independent organisation.

• SBUs have to have its own mission, distinct from other SBUs, have definable groups of competitors, prepare plans differently , manage its own resources and be of an appropriate size.


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Organisation for Global environmentOrganisation structure differs greatly for enterprises operating in the global environment. Structure depends on various factors such as degree of International orientation and commitment.A Company may begin its operation by creating its head quarters as an international department headed by an export manager.As the Company expands its International operation, foreign subsidiaries and later on International divisions may be established in various countries, reporting to the In charge of global operations situated at Head quarters.With further growth in International operations, several countries may be grouped into regions such as Africa, Asia, America , Europe.Companies may choose different regions for different functions such as exploring in Alaska/Mumbai , refinery actions at another place Agra and marketing petroleum products throughout India.IOC operates its operation at Srilanka by importing crude from Gulf, refineries and then distribution at Srilanka.


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Virtual organisation• Group of independent firms or people that are connected through

usually Information technology.• These firms may be suppliers, customers and even competing

companies.• The aim of the virtual organisation is to gain access to another firm’s

competence to gain flexibility to reduce risks or to respond rapidly to market needs

• Virtual organisations coordinate their activities through market where each party sells its goods and services.

• Virtual organisations may have neither organisation chart nor a centralised building.

• National Stock Exchange – transacts its business thro IT. Purchase and sale of shares are being undertaken thro Internet on a specified time. The whole operations are being done by time tested procedures and rules


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Choosing patterns of departmentation• There is no best pattern of departmentation that is applicable to all

organisations and all situations.• Managers have to select what is best by looking at situation, job to be done,

way it has to be done and people involved and the technology employed in the department, the customers whom are to be served and internal and external environmental factors in the situation.

• However if the Managers know various departmentation patterns and its advantages & disadvantages and dangers of each, practicing managers should be able to design the organisation structure most suitable for their particular operations.

• Aim is achieving of Objectives thro departmentation• Mixing types of departmentation within functional areas. • The objective of departmentation is not for building a rigid structure , balanced

in terms of levels and charceterised by consistency and identical bases but to group activities in the manner that will best contribute in achieving enterprise objectives. If a variety of bases does this, there is no reason why, Managers should not take advantage of the alternatives before them.


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Authority and Power

• Power a much broader concept than to authority is the ability of individuals or groups to induce or influence the beliefs or actions of other persons or groups.

• Authority in organisation is the right in a position to exercise discretion in making decisions affecting others. It is one type of power, but power in an organisational setting.


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Types of Power• Legitimate Power normally arise from position and derives from

our cultural system of rights, obligations and duties whereby a position is accepted by being legitimate.

In a Privately owned business authority of position arises primarily from the social institution of a private property.

In a Govt. this authority arises basically from Institution of representative government like legislature (Assembly, Parliament)

A traffic officer who controls the traffic has the power to do so because he has been appointed by the govt. to enforce traffic regulation.

• Expert Power :Power may come from the expertness of a person or group. This is the power of knowledge. Doctors, lawyers, Professors may have considerable influence on others since they are respected for their specialised knowledge


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Types of Power

• Referent Power : Influence that people or groups may exercise because people believe in them and their ideas. Leaders like Martin Luther King had very little legitimate power , but by his powerful speech and ability to preach he could strongly influence the behavior of people. Cine stars like Rajini, Kamal, Vijay , Ajeeth posses referent power.

• Reward power : Power arises from ability of people to grant rewards with little position power. Professors have considerable reward power by giving or with holding grades.

• Coercive Power : It is the power to punish by firing a sub ordinate or by withholding an increment or pay increase. This power is closely related to reward power.

• Orgnaisational authority is the power to exercise discretion in decision making. It arises from power of position. Authority in managerial refers to power of position . At the same time other factors such as personality, style of handling people also adds power


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• Power should be equal to responsibility (P=R)• If Power is greater than responsibility (P>R),

then this could result in autocratic behavior of the superior who is not accountable for his actions.

• If responsibility is greater than power (R>P), then this could result in frustration because the person is not having needed power to carryout task for which he is responsible


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Line/ Staff authority• Line authority gives a superior a line of authority over a

subordinate. It exists in all organisations as an uninterrupted scale or series of steps.

• Scalar prinicple in organisation , the clearer the line of authority from the top management position to every subordinate position, the clearer the responsibilty for decision making and the more effective will be organisational communication. In many large firms the steps are long and complicated.

• From scalar principle that line authoirty is that relationship in which a superior exercises direct supervision over a subordinate.

• The nature of staff relationship is advisory. The function of people in a pure staff capacity is to investigate, research and give advice to line Managers.


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Functional authority• The right delegated to an individual or a department to control

specified processes, practices, policies or other matters relating to activities undertaken by other departments.

• In a company Board may delegate certain power to Chairman com MD to function such as deciding on Tenders upto a certain value ie Rs. 20 Crores if tender is processed on Press tender, Rs. 10 crores if tender is processed on Limited Tender, Rs. 5 crores if tender is processed on single tender, Rs. 1 crore if work is awarded on nomination. This value will vary to Directors, General Managers, Chief Managers. These powers are given or delegated to them to discharge their functions effectively.

• The functions may be floating of tender, receiving tenders, placement of order, acceptance of work, deputing personnel for study, tour, training etc, recruiting, promoting to higher grade, transfer, grievance redressal . Functions depend upon activities.


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Functional authority• Functional authority is a small slice of authority of a line supervisor which

enables him/her to discharge their obligations under their control.• Authorities are given based on the requirements of the functions and

policies of the top managers. If the top managers want to involve in every step of the functions, he /she may not like to delegate any power / authority to his/her line supervisors. If the top managers want to fix broad objectives and interested in only in end results to meet the targets, he/she may like to delegate all powers/authorities to line supervisors.

• But numerous reasons like, lack of specialized knowledge, lack of ability to supervise specified processes, not taking risks, explain why all managers are not allowed to exercise the powers. In such cases they will face difficulty in the absence of authority to execute the works.

• Certain authorities are given to a specialist and too on requirement, for example, Company Financial controller is given functional authority to prescribe the system of accounting ( Submission of proposal, getting approval, Mode of ordering, Invoicing, making payment, entering into the relevant records ) through out the company.


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Decentralisation of authority• It is a tendency to disperse decision making authority in an

organised structure. So long an orgnaisation is small and managable all powers can be rested centrally to a person . Here everyone takes orders and reports to one person.

• If an organisation grows , their activities are numerous, follws different processes and works in different departments, it is better authorities are grouped and are prescribed up to certain limits they can perform their functions. This is done to make functions take place effectively and there is no slow down of activities for want of instructions from top, approvals requirement from top. In an effect activities at various departments will be continued at ease by following decentralised authorities. Types activities, extent upto which line managers can exercise their powers are normally defined clearly.


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Decentralisation as a policy• Decentralisation is more than delegation. It reflects a

philosophy and management.• It requires careful selection of which decisions to push down

the organisation structure and which hold near the top, proper selection and training of people and adequate controls.

• A policy of decentralisation affects all areas of management and can be looked upon as an essential element of a managerial system. Infact without it, managers could not use their discretion to handle ever changing situation they face.

• A prudent company has to monitor the effect of introduction of decentralisation through outputs, productivity, industrial relation, morale of employees, training , attrition rates. If the feed backs are good they can continue with decentralisation otherwise company has to modify to suit its requirements


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Advantages of decentralisation Relieves top management of some burden of decision making

and forces other levels of managers to let go. Encourages decision making and assumption of authority &

responsibility Gives managers more freedom and independence in the

decision making Promotes establishment and use of broad controls that may

increase motivation Makes comparison of performance of different units are possible Facilitates setting up of profit centres. Facilitates product diversification Promotes development higher level and General Managers. Helps in adaptation to fast changing environment.


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Limitations of decentralisationMakes it more difficult to have a uniform policy Increases complexity of coordination of centralised

units.May result in loss of some control by upper level

managers.May be limited by inadequate control techniques.May be constrained by inadequate planning and control

systems.Can be limited by the lack of qualified managers Involves considerable expenses in training managersMay be limited by external forces (labour unions, Govt.

Controls, tax policies)


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Systems approach to Human Resource management• Managerial function of staffing relates to the total management system.• The present and projected organisation structures determine the number

and kinds of managers required. These demands are compared with available talent through management inventory.

• On the basis of this analysis, external & internal sources are utilized in the processes of recruitment, selection, placement, promotion and separation. Other essential aspects of staffing are appraisal, career strategy, training and development of managers.

• Well trained managers create an environment in which people, working together in groups can achieve enterprise objectives anda t the same time accomplish personal goals.

• Staffing requires an open system approach. It is carried out within the enterprise Internal factors of the firm such as personnel policies, organisational climate and reward system must be taken into account. If there are adequate rewards it is impossible to attract and keep quality managers. External environment can not be ignored, high technology demands trained, well educated and highly skilled managers are to be positioned. Inability to meet the demand may well prevent n enterprise from growing at a desired rate.


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Numbers and kinds of Managers• Number of managers needed in an enterprise depends not only on its size

but also on • The complexity of the organisation structure (no. of levels)• Plans for expansion and • Turnover rate of managerial personnel The ratio between the number of Managers and the number of employees

does not follow any law. An enterprise can have any ratio suiting them. Number of Managers will increase or decrease by expanding or contracting the delegation of authority to Managers. (if the no. of employees grouped under each manager increased there will be less requirement of managers and if the no. of employees grouped under each manager is reduced, the requirement of managers will get increased).

In addition to the number of Managers, kind of managers required is also vital for firm’s performance. Specifically, qualifications for individual positions have to be identified so that best suited managers can be selected


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Determination of Available Managerial resources• It is common for any business to keep an inventory of raw

materials and goods on hand to enable it to carry on its operation. Same way enterprises have to keep an inventory of available human resources.

• It can be done by Inventory chart (also called as managment replacement chart or Succession plan chart), which is simply an organisation chart of a unit with managerial positions indicated in each department & positions along with details as no. of years of services and degree of promotablity to a higher position of every persons.

• By looking at this chart, Management can who else are suitable for promotion or demotion or dismissals. This chart will reveal who will succeed whom and when also. This chart will enable management to adopt a suitable career policy to fill a vacancy or restructure organisation. It will help to identify no. of positions to be filled by internal and external resources.


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External and Internal Information sources• By analysis of number of managers required and numbers available are

identified by management inventory.• But there are other factors, internal and external that influence the demand

for and supply of managers.• External forces include economic, technological, social, political and legal

factors. ( For example economic growth may result in increased demand for a product, which in turn requires an expansion of work force and demand for managers).

• Need for and availability of personnel give rise to four demand and supply situations each requiring different emphasis in personnel actions and they are Demand and Supply high(HDHS) , Demand high Supply low (HDLS), Demand Low Supply high (LDHS)and Demand and Supply low (LDLS)

• HDHS – Selection , promotion, placement, • HDLS – Internal - Training , Compensation , recruitment from external• LDHS- Change in company plans, outplacement, layoffs, demotions, Early

retrenchment• LDLS – Training & development if change is expected in the future.


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Situational factors affecting staffing

• Internal factors : They include organisational goals, tasks, technology used, organisation structure, kinds of employees, demand and supply of the managers within the enterprise, the reward system and policies.

• If all these factors are good and accepted by the employees in a firm, there will be less attrition from the company. If the organisation is structured one, every one will get reward as promotion to a higher grade retention of employees will be there.

• External factors : They include the level of education, prevailing attitudes in society, laws and regulations affecting staffing, the economic conditions, demand and supply for managers outside enterprise.


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Staffing in the international environment

• One must look beyond the immediate external environment and recognize the worldwide changes brought by advanced communication technology and by the existence of multinational corporations.

• MNC firms to have top management teams composed of managers of different nationals. The geocentric attitude is the basis for viewing the organisation as a worldwide entity engaged in global decision making including staffing.

• Companies have three sources for staffing the positions in international operations

Managers from the home country of firm Managers from the host country Managers from third countries In the early stage of International company , Managers are often

selected from the home country to utilize their familiarity.


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Internal environment

• Promotion from within: It means workers proceeded into first line supervisory positions and then upward through organisation structure. Thus a firm was pictured as a nonmanagerial employees from which future managers emerged.

• Promoting from within the enterprise not only has positive values relating to morale, employees’ long run commitment to the company and firm’s reputation, but also allows the enterprise to take advantage of presence of potentially line managers among its employees.

• However these positive but unmeasurable values are important, Executives should not be blind to the dangers of either over emphasising this source or relying on it exclusively.

• A danger presented by the policy of exclusively promoting from within is that it may lead to the selection of persons who have only imitated their superiors. This is not necessarily fault, especially if only the best methods, routines and view points are cultivated. Enterprises often need people from the outside to introduce new ideas and practices. Hence this is a good reason to avoid policy of exclusive promtion from within.


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Promotion from within in large companies• Policy of promotion from within may be suitable for very large

companies. Such as Railways, postal services, PSUs like ONGC, NTPC, CIL, NLC, BHEL . Usually these companies have so many qualified people for less number of higher positions, hence promotion from within the companies are possible. All the qualified people are not usually promoted , only competent persons alone get promoted. This is like an open competition policy.

• Even in large companies like PSUs upto certain positions, promotions are effected from within the company and certain very high positions like Executive Directors, directors, CMDs are selected among the eligible Executives from state, central , PSUs.

• There are four levels as Workers, Supervisors, Executives, Managers . There is a limit being set by departments upto which one can get promotions. In Govt. & PSUs there is a definite percentage being followed among promoted and induction level.

• It is desirable that a certain amount of new persons are inducted. That’s why only 50 to 67 % of Executive positions filled in by direct recruitees and remaining by promoting from lower levels.


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Policy of open competition

• Vacant positions should be filled in by the best qualified persons available whether inside or outside of the enterprise.

• It gives firm the opportunity to secure the services of best • A policy of open competition is a better and more honest

means of ensuring managerial competence than is obligatory promotion from within.

• If the morale of managers are to be protected, the enterprise must have a fair and objective methods of appraising and selecting its people. Firm should also do everything possible to help them develop so that they can qualify for promotion.

• If people know that heir qualifications are being considered, fairly appraised and given opportunities for development, they do not feel a sense of injustice if an opening is given to an outsider. For a superior candidate , the policy of open competition may be a challenge nor the hindrance to forward


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Job Design• Job must be designed to meet organisational and individual needs. In

addition, positions must be evaluated and compared so that the incumbents (new entrants) can be treated equitably.

• In identifying job requirements following are to be considered What has to be in done in this job? How is it done? What back ground knowledge, attitudes and skills are required? As the positions are not static, additional questions like can this job done

differently ?, if so what are the new requirements. Finding answers to these questions requires that job is to be analyzed This can

be done by observation, interviews, questionnaires or even system analysis. A job description based on job analysis lists important duties, authority-

responsibility and relationship to other positions. Many firms also include objectives and expected results in job descriptions.

Appropriate scope of job and the job design should suit managerial skill to make job design effective.


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Staffing• It is a management function of filling and keeping filled

positions in the organisation structure and this is done By identifying the work force requirements By looking at the available staffs in each position. Identifying the vacancies to be filled and their schedule Initiation of Recruiting proceses Selecting staffs Placing them into the departments after training or not as

per requirement Promoting the staffs thro appraisal or defined policy Appraising the staffs of their status Planning careers Compensating staffs on retirement, resignation or dismissals


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Job enrichment/enlargement.

People spend a great deal of time on the job and it is therefore important to design jobs so that individuals feel good about their work. Focus of job design can be on individual position or on work groups. Job enlargement or enrichment can be done

Firstly by grouping tasks into natural work units. This means putting tasks that are related into one category and assigning an individual to carry out the tasks.

Secondly, related approach is to combine several tasks into one job. Third way of enriching job is to establish direct relationships with the

customer or client. Rather than reporting to his superior, who would make recommendations to top management, a system analyst may present his findings and recommendations directly to the managers involved in the systems change

Fourthly, prompt and specific feed back should be built into system whenever appropriate. Sales figures in a retail store given for a day and summary figures for a month

Fifthly job can be enriched through vertical job loading, which means increasing individuals’ responsibility for planning, doing & controlling job.


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Decentralisation of authority• It is a tendency to disperse decision making authority in an

organised structure. So long an orgnaisation is small and managable all powers can be rested centrally to a person . Here everyone takes orders and reports to one person.

• If an organisation grows , their activities are numereous, follws different processes and works in different departments, it is better authorities are grouped and are prescribed upto certain limits they can perform their functions. This is done to make functions take place effectively and there is no slow down of activities for want of instructions from top, approvals requirement from top. In an effect activities at various departments will be continued at ease by following decentralised authorities. Types activities, extent upto which line managers can exercise their powers are normally defined clearly.


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• Costs of changing to new job designs must also to be considered. It makes a great deal of difference whether a plant is newly designed or an old plant to be redesigned and changed to accommodate new design concepts.

• Organisation structure must also taken into account. Individual jobs must fit in overall structure. Autonomous groups may work well in a decentralised organisation, but it may be inappropriate in a centralised structure.

• Organisational climate influences job design . Groups may function well in an atmosphere that encourages participation, job enrichment and autonomous work, while they may not fit into an enterprise with an autocratic, top-down approach to managerial leadership.


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Factors affecting Job designIn designing jobs the requirements of the enterprise have to be taken into account. But other factors also to be considered in order to realize maximum benefits, they areIndividual differences, technology involved, costs involved in restructuring jobs, organisation structure and internal climate People have different needs. Those with unused capabilities and need for growth want to have their job enriched and to assume greater responsibility.While some prefer to work by themselves Some with social needs to work with groups.Technology used in Germany in Volswagon may not be suitable for India. Technology used will enhance working culture.


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Skills needed in Managers

• To be effective Manages need various skills as technical, human, conceptual, design. The relative importance of these skills varies according to the level top, or middle or lower.

• In addition to that analytical, problem solving abilities, personal characteristics such as communication skills, empathy, Integrity, honesty, desire to manage/lead and past performance as manager are sought.

• Analytical and problem solving abilities : Managers must able to identify problems, analyze complex situations and by solving problems encountered, managers exploit the opportunities presented in the problems.

• They must scan the environment and identify through a rational process, those factors that stand in the way of oppurtunities.

• Analytical skills should be used to find the needs of customers and then to satisfy those needs with a product or service. This opportunity seeking approach can mean corporate success.

• But problem analysis are not enough, they need will to implement the solutions, they must recognize emotions, motivations of people involved interested in initiating changes and people resisting to changes.


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Skills needed by Managers – personal characteristics•Desire to Manage : The successful manager has a strong desire to manage, to influence others and to get results through team efforts of sub ordinates.•Many people want privileges of managerial positions such as high status and salary, but they may lack basic motivation to achieve results by creating an environment in which people work together toward common goals. •The desire to manage requires effort, time energy and usually long hours of work.Communication skils : Ability to communicate through written reports, letters, speeches and discussion is the must desired charcter of a Manager.Communication demands clarity but evn more it demands empathy. This is the ability to understand the feelings of another person to deal with emotional aspects of communication.Communication skills are important for Intragroup comminucation that is communication with the same organisational unit.Intergroup communication becomes increasingly important when you move in the cadre. This is not only with ther departments but also with groups outside enterprise customers, suppliers, government officials, community and stake holders of business.


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Skills needed by Managers – personal characteristics• Integrity and Honesty : Managers must be morally sound and worthy

of trust. Integrity in Managers include honesty in money matters and dealing with others, adherence to the truth and behavior in accordance with ethical stanadrds. Positioning of a person into a management level should always enjoy the TOP Management to continue their position and as well as to move further in the laddder. To achieve this Integrity and honesty will always work like a double line to take your journey as a manager as comfortable journey.

• Past performance as manager : Another important factor for selection is past performance as manager. It is probably the most reliable forecast of manager’s future performance.

• An assesement of managerial experience is not possible in selecting first line supervisor into managerial level since they have not had such experience. But their past achievements are important considerations in selection into the selection of middle and then upper level managerial positions


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• After the positions are identified, managers to suit the positions are identified/selected/found through recruitment, selection, placement and promotion/transfer. There are two sources of managerial personnel

• i) Promotion or transfer of people from within the enterprise• Ii) hiring from the outside.• For internal promotions a computerized information system may

help identify qualified candidates. It can be used along with a comprehensive human resource plan of the company.

• There are several external sources available and enterprise may use different channels to find qualified Managers. Many employment agencies (private and public) locate suitable candidates for positions. Other sources are professional associations, educational institutions, referrals from people within enterprise or outside and unsolicited applications from persons interested in firms.


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Recruitment of Managers• Recruiting involves attracting candidates to fill the positions

in the organisation structure. Before recruiting begins, the position’s requirements, which should realte directly to the task, must be clearly identified to facilitate recruitment from outside.

• Enterprises with a favorable public image find it easier to attract qualified candidates. Firms like BHEL, NTPC, RIL, TATA, ONGC, IOC find it easier to attract qualified candidates

• While small firms , which may be offering excellent growth opportunities not known much, may have to make greater efforts to communicate to applicants the kind of business they do and the opportunities they offer.


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Selection, Placement and promotion

• Selecting a Manager is choosing from among the candidates the one who best meets the position requirements.

• Selection may be for a specific job opening or for future managerial requirements , this can be done in two ways

• Selection approach : Selecting people among the applications sought to fill a positions with specific requirements. Requirements are notified, applications received and selection of best suited candidates are done.

• Placement approach : The strengths and weaknesses of the individuals are evaluated, and a suitable position is found or suitable position is designed. Individuals thus evaluated are placed in the suitable positions.

• Promotion is a move within the organisation to a higher position that has greater responsibilities and requires more advanced skills. It gives a raise in status and salary. Promotion may be given as a reward for outstanding work or top management wants to utilize individuals skills and abilities in a better way.

• Promotion has to be given if there is an evidence of potential competency to hold higher responsibility, otherwise, the persons may be promoted to a level at which they are incompetent and they will find it difficult.


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Selection process• There are some variations of the specific steps in the selection process. • For example, the interview of a candidate for a first line supervisor

position may be relatively simple when compared with the rigorous interviews for a top level executive. Typical process is indicated as

• First selection criteria are established based on current and some times future job requirement. They include education, skills and experience.

• Then the candidate is requested to fill in the form, this step may be omitted if the candidate is from within the organisation.

• A screening interview follows to identify more promising candidates. Additional information may be obtained by testing the candidate’s qualifications for position.

• Formal interviews are then conducted by manager or by a superior or by a designated team.

• The information provided by the candidate is checked and verified. A physical examination may be required to check the candidates physical soundness and suitability for the position.

• Finally on the basis of information gathered, the candidate is either job is offered or not selected for the position.


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Interviews• Virtually every manager appointed or promoted by on eor more people.

Several techniques to improve interviewing process and over come some of the weaknesses are

• Firstly, Interviewers should be trained or got prepared so that the y know what to look for. While interviewing people within the enterprise, they should analyze and discuss past records, study the results achieved , key managerial activities performed. Performance appraisal shows in greater detail about the various performance done and expected. When selecting people from outside these data are more difficult to obtain, Interviewers mostly get these data from referrals.

• Secondly, Interviewers should be prepared to ask the right questions. There are structured interview, unstructured interview& semi structured interview. In a structured interview the Interviewer asks a set of prepared questions. In anu unstructured interview, an interviewer may ask “Tell me something about your last job”. In semi structure interview, the Interviewer follws an interview guide but also ask other questions.


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Interviews Third way to improve selection is to conduct multiple interviews utilizing

different Interviewers. Thus several people can compare their evaluations and perceptions. However , not all the Interviewers should vote in selecting a candidate rather their role is to provide additional information for the manager who will be responsible for final decision.

Fourth, the interview is just one aspect of the selection process. It should be supplemented by data from application form, the results of tests and the information obtained from persons listed as references.

In the selection process, marks obtained in the qualifying exams constitute a certain percentage varies from 25 % to 50 %, written test marks constitutes 25 to 50 %, Group discussion constitute another 20 to 30 % , Interviews constitute 10 to 20 %. Summing up of all the constituents, selection panel can decide about the best suited persons.To keep secrecy of selection and to avoid bias, Interview panel is not provided with any marks obtained by the candidates in other constitutents.


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Tests

• The primary aim of testing is to obtain data about applicants that help predict their probable success as managers and to find the best person for the job. Commonly used tests are

• Intelligence tests : These are designed to measure mental capacity , memory , speed of thought and ability to see relationships in complex problem situations.

• Proficiency and aptitude tests : They are conducted to discover interests, existing skills and potential for acquiring skills.

• Vocational tests : They are designed to indicate candidate’s most suitable job or the areas in which the candidate’s interests match the interests of people working in those areas.

• Personality tests : They are designed to reveal candidate’s personal characteristics and the way the candidate may interact with others, there by giving a measure of leadership potential.


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Assessment centers• Assesement center is not a location but a technique for

selecting and promoting managers. This approach may be used in combination with training.

• Assessment centers were first used for selecting and promoting lower level supervisors, but now they are applied to middle level managers as well. However it is inapproriate to top executives.

• Group of people identified or persons at particular level are selected for assessment centers intended to measure how a potential manager will act in typical managerial situations, in this center approach candidates take a part in a series of exercises. During this period , they are observed and assessed by psychologists or experienced managers.


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Appraisal• Performance of Employees, supervisors, Executives and Managers are

evaluated thro appraisal system.• Every enterprise has its own way of appraising their staffs. Normally it can be

done by the higher level officials. It is being done by more than one higher officials. For example : Employee’s performance are assessed firstly their reporting official supervisor, reviewed by another higher official may be from Department head and then by division head and finally accepted by Unit head.

• Appraisal of Executives and Managers are being done direct assessment of individuals concerned and further reviewed by higher level managers and finally accepted by vey high level managers.

• Appraisals are called as Self Appraisal Reports (SAR). SAR will have different sections, first section contain selection of Key Performance Areas (KPA) which are to be selected and filled in by Individual manager at the start of financial year and marks or grades are awarded by Individual manager – it is called reporting section of SAR, SAR is to be reviewed by minimum of two higher level Managers , while reviewing the performance reviewing officers are also have to award marks/ grades . Final tally of performance is being done by summing individual marks based on KPAs and marks based on reviewing officials.


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Appraisal• Method of computing marks and grades are normally different depending

upon the level of managers.• Lower level managers are evaluated on a scale of 5 +5+ 50+40 first 5 marks

are assigned for the whole performance of the Company , the next 5 marks are assigned to performance of the Unit to which he belongs, 50 marks are assigned to performance as per KPAs fixed by him and the remaining 40 are evaluated by reviewing officers on his performance on technical skills and managerial as expected/ selected among the criteria set by company.

• Middle level Managers are evaluated on 10 + 10 +40 + 40 scale, first 10 marks pertains to the performance of the Company, next 10 pertains to the performance of the unit, 40 marks pertains to the performance of KPAs and other 40 marks are divided as 20 marks for possessing technical skills and 20 marks for possessing leadership/managerial skills.

• Top level managers performance are evlauated on 10 mraks for performance of the company, 10 marks for the performance of unit and 16 to 20 inputs/targets on various activities like, placement of orders, no. of accidents, keeping ready plant, cost /per employee, consumption of spares etc.

• All the Managers are rated as satisfactory, good, very good, excellent based on marks scored (<60 =satisfactory, >60 <75 =good, >75,90 = v.good, >90=Excellent


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Human Resource Management• Analysing the human requirements for meeting the objectives of the

company• Finding the right persons for the right job thro recruitment/placement• Training them and putting them into jobs• Appraising them periodically• Promoting and positioning as per requirements and on their skills.• Keeping the morale by offering career planning. Every offciials who are

putting up a good amount of work have to be promoted to higher grade at a span of 3 to 7 years (this will vary depending upon the levels available)

• Succession plan – Department/division/unit heads may retire, resign and vacancy may arise any time. HR department should have managers Inventory showing the availability of managers with skills & work knowledge details so that from that a suitable Manager can be identified and positioned when ever a vacancy arises.


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Recruitment in an IT firm

Following are the steps that may be followed in IT firms Assessing the requirements of persons at different capacities

based on the orders on hand and orders expected. Grouping the activities that can be grouped. Finalising nos. Check with the staffs available and finding out the future vacancies. For example requirements = 10,000 (programmers = 8000, testes 1000 and BPO operation 1000) for the orders on hand, requirements for future orders = 10,000 (programmers 7500, testers =1500 BPO = 1000), Available staffs = 9000 (programmers = 7000, Testers =1000, BPO= 1000). Vacancies to be filled =11000( programmers = 8500, testers= 1500, BPO=1000)

Mode of selection may be on a campus drive or thro mega job fair or thro advertisements, or thro agencies providing trained persons or thro referrals.


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Recruitment in an IT firm• Campus drive : IT firms follow these steps• Short listing persons based on reputed tests scores like Amcat,

University marks grade GPA more than 6, no standing arrears/no history of arrears (norms will vary to firm to firm)

• Shortlisted persons have to undergo series of tests on verbal ability, logical thinking, Quantitative skills etc. Based on marks scored persons will get shortlisted and advanced to other round as checking speaking ability thro Group discussion.

• Successful persons will have to face technical interview where in , they will be tested about their level of the subject/work knowledge

• Persons successful at technical rounds they have to attend HR rounds where in they will be tested whether they have attitudes towards the job they are going to undertake and whether they agree to terms and conditions of the company like pay, working hours, Bond etc.

• Successful persons are offered appointment letters. They have to be medically fit and they have to report for duties on a specified dates.


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Recruitment in an IT firm• Persons joining in an IT firm have to undergo rigorous

Training on the nature of jobs they have to do. They will have to appear for periodical tests and Viva-voce. Only persons successful in these tests alone are offered jobs or put inot jobs others will get termination from training.

• During the jobs, normally IT firms will give works to a team to perform or complete a task within a targeted time. Depending upon the performance in a team persons will get promotion or placement on a higher responsibilities based on assessment and appraisal.

• A person joining in an IT firm as a programmer, travels as Team leader, group leader, Project leader, Group leader, unit head. IT major like TCS informs the appraisal of an individual monthly so that he/she can modify their working so as to move into higher position.


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Recruitment in an Government• State like T.N. have four groups as Group I , Group – II, Group – III, Group –IV.

Specific qualifications are prescribed.• For selecting personnel for government jobs there is a Public selection board.

Notification of vacancies are notified, applications received. Eligible persons are called to write a written tests. Persons are shortlisted as per the marks secured in the written tests and called for personal interviews. Persons are selected based on the reservation applicable.

• Some departments may fill vacancies from employment exchange department .

• For selecting Central government jobs, there is Union Public service commission (UPSC).

• Banks are selecting their employees and officers thro a separate common banking official selection boards.

• All Public sector Undertakings in India are selecting their Officers thro a Common Entrance exam called GATE. Persons are required to appear for gate exams being conducted once in a year. Vacancies are notified by individual PSU, qualified persons can apply with their Gate score. Based on gate score, persons are shortlisted and will have to appear for personal Interview, successful persons are offered jobs.


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Recruitment by private Companies• Private companies are following different methods of finding

their personnel in many ways depending on the size and nature of job

Campus drives Mega job fairs Getting selected thro professional bodies Private Consultants Referrals from outside Referrals from within the company Calling applications thro PRESS Considering the unsolicited applications received.


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General principles in recruitment• Following steps /principles are followed in recruitment Firstly number of vacancies and timings are determined Depending upon the size and nature of vacancies mode selected Recruitment process is based on requirement Vs respondent Mostly respondent to requirement will be more Selection is to get the BEST and mostly few compared to need Hence steps involved are having elimination of people in rounds Firstly based on marks , certain persons only called for tests Secondly based on test scores moved to Group Discussions Shortlisted in GDs have to appear Tech. & then HR Interviews. In

Technical interviews candidates are checked whether they have required technical knowledge and in HR Interview , Candidates are checked whether they posses right attitude for Job.

Finally successful candidates are offered Jobs. From 500 to 1000 applicants 25 to 50 are selected.

unit 3 organising-150217

Leadership & Management