What are the contributions of Neo-classical theories to the evolution of Management? ANS: The neo classicists focused on the human aspect of industry. They modified the classical theory by emphasizing the fact that organization is a social system and the human factor is the most important element within it. They conducted some experiments (known as Hawthorne Experiments) and investigated informal groupings, informal relationships, patterns of communication, patterns of informal leadership, etc. his led to the development of human relations approach. Elton mayo is generally contributors to this school include Roethlisberger, Dickson, Dewey, Lewin, etc. It revealed the importance of social and psychological factors in determining workers productivity and statisfaction. The human relationsts argued that achievement of organizational objectives is impossible without the willing cooperation of people and such cooperation cannot be automatically secured or ordered. It has to be consciously achieved.
The neo-classical approach advocated people oriented organization structure which will integrate both informal and formal organizations. The basic tenets of neo-classical theory or human relations approach are as under : 1. the business organization is a social system. 2. the behaviour of an individual is dominated by the informal group of which he is a member. 3. an individual employee cannot be motivated by economic incentives alone. His social and psychological needs must be satisfied to improve the level of motivation. 4. in an organization, it is ultimately cooperative attitude and not the mere command which yields esult. 5. management must aim at developing social and leadership skills in addition to technical skills. It must take interest in the welfare of workers. 6. morale and productivity go hand in hand in an organization. Factors affecting human relations Organization should be viewed as a social system. Human relations in the organization are determined by the individual, work-group, leader and work environment as shown in fig. 5. 2. 1. Individual 2. Work-environment 3. Work-group 4. Leader 1. Individual. The individual is an important element of the organization and each individual is unique.
The Term Paper on Social Recognition of the Human Individual
“From the time of puberty onward the human individual must devote himself to the great task of freeing himself from his parents.” -Sigmund Freud (General Intro. to Psychoanalysis) As a child develops from infancy to adulthood, it soaks up its environment and processes it like a biological computer. As it matures, so does the way it copes with the challenges life presents to him. If the child has ...
Behaviour of an individual is affected by his feelings, sentiments, values and attitudes. Motivation of employees should give due consideration to their economic, social and psychological needs. Thus, motivation is a complex process. 2. Work-group. The work group is the centre of focus of human relations approach. It has an important role in determining the attitudes and performance of individual workers. The Hawthorne studies showed that the informal groups exert thremendous influence over the behaviour patterns of workers. 3. Work- environment.
Human relationists advocated the creation of a positive work environment where organizational goals are achieved through satisfaction of employees. In general, when employees needs are satisfied, the work environment is termed positive and when employee needs are not satisfied, the work environment is termed negative. 4. Leader. The human relationists gave great importance to leadership. The leader must ensure full and effective utilization of all organizational resources to achieve organizational goals. He must be able to adjust to various personalities and situations.
He must behave in a way that generates respect. As the Hawthorne studies showed, a supervisor can contribute significantly in increasing productivity by providing a free, happy and pleasant work environment. Hence the ultimate aim of neo classical approach is to establish ,cultivate and develop an environment where the HUMAN ELEMENT is given due importance and recognition. This environment is cultivated and developed where there is an awareness of the needs, aspirations, feelings and emotions as a strategic means managing individuals. HAWTHRONE STUDIES
The Research paper on The Role of Group Work in Enhancing Speaking Skill in Primary Level
The Role of Group Work In Enhancing Speaking Skill In Primary Level The Role of Group Work in Enhancing Speaking Skill in Primary Level Effective language skills are essential for children to access the curriculum. In the classroom, spoken language is the primary medium through which teachers teach and children learn. In developing their speaking skills, children need to learn to adapt their talk ...
In 1927 a group of researchers led by GEORGE ELTON MAYO. And F. J Roethliseberger at Harvard university business school were conducted HAWTHRONE experiments. These are of three types. 1. Illumination experiments2. Relay assembly room experiment3. Bank wiring observation room experiment. 1. Illumination Experiment. This experiment was conducted to establish relationship between output and illumination. The output tended to increase every time as the intensity of light was improved. But the output again showed an upward trend when the illumination was brought down gradually from the normal level.
Thus, it was found that there is no consistent relationship between output of workers and illumination in the factory. There were some other factors which influenced the productivity of workers when the intensity of light was increased or decreased. 2. Relay Assembly Room Experiment. In this experiment, a small homogeneous work-group of girls was constituted. Several new elements shorter working hours, rest pauses, improved physical conditions, friendly and informal supervision, free social interaction among group members, etc. roductivity and morale increased considerably during the period of the experiment. Morale and productivity were maintained even if concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation, cohesive work-group, and non-directive supervision held the key for higher productivity. 3. Bank Wiring Observation Room Experiment. This experiment was Conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers.
After the experiment, the production records of this group were compared with their earlier production records. There were no significant changes in the two because of the maintenance of ‘normal conditions’. However, existence of informal cliques in the group and informal production norms were observed by the researchers. The findings of bank wiring Experiment included the following observations : 1. Each individual was restricting output. 2. The group had its own “unofficial” standards of performance. 3. Individual output remained fairly constant over a period of time. 4.
The Term Paper on Codman & Shurtleff : Planning And Control System
1. The Johnson & Johnson planning and control system efficiency Definition : Management & Control System Management control system can be defined as a critical function in organizations. (K. A Merchant & Wim A. Van Der Stede, 2007). In other words, it can also be described as the process by which an organization secures to achieve its performance. Major roles of control systems – ...
Departmental records were distorted due to differences between. actual and reported output or between standard and reported working time. Human Relations Approach vs. Behavioural Sciences Approach 2. Define planning. Explain the advantages and is-advantages of planning. ANS: “Planning is the process of deciding in advance what is to be done, who is to do it, how it is to be done and when it is to be done. ” In the words of Koontz, O’Donnell and Weithrich, “Planning is an intellectually demanding process ; it requires the conscious determination of courses of action and the basing of ecisions on purpose, knowledge and considered estimates. ” Planning involves anticipation of future course of events and deciding the best course if action. It is basically a process of thinking before doing. Results, at specified cost, in a specified period of time. It is a deliberate attempt to influence, exploit, bring about and control the nature, direction, extent, speed and effects of change. It may even attempt deliberately to create change, remembering always that change (like decision) in any one sector will in the same way affect other sectors”. To quote G. R.
Terry planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve results. Henri Fayol explained the importance of planning as a looking ahead, gives some idea of the importance attached to planning in the business world, and it is an essential part of it. George Terry viewed planning as basic to the other managerial functions. Without the activities determined by planning, there would be nothing to organize, no one to actuate and no need to control.
This stress the importance of planning in the management process. Planning provides a rational approach to predetermined objectives as it requires a lot of systematic mental exercise on the part of planners. planning helps in selecting from among alternative future courses of action for the enterprise as a whole and for its every department. It lays down clearly what every segment of the enterprise should dot to achieve the organizational obejectives. No organisation can achieve its objectives without proper planning because of certain obvious reasons.
The Term Paper on How To Do Production Planning And Control
Objectives • The ultimate objective of production planning and control, is to contribute to the profits of the enterprise. • this is accomplished by keeping the customers satisfied through the meeting of delivery schedules. • Specific objectives of production planning and control are to establish routes and schedules for work that will ensure the optimum utilization of materials, workers, and ...
These reasons are as follows : 1. Growing complexities of modern business because of rapid technological changes and keen competition in the market. 2. Rapid social, economic and political changes. 3. Recognition of social responsibilities. 4. Growth of trade unionism. 5. Uncertainties caused by trade cycles. 6. Shortage of certain resources. 7. Increasing government control over business. 8. Need for research and development activities. These are the challengers before the managers of modern era which can be dealt with effectively only through proper planning.
Looking at the significance of planning, management of every organisation should give due weightage to the planning functions. Good planning is the foundation of efficient management. Benefits or Planning Effective planning can result in the following advantages : 1. Focuses Attention on Objectives. Since all planning is directed towards achieving enterprise objectives, the very act of planning focuses attention on these objectives. Laying down the objectives is the first step in planning. If the objectives are clearly laid dowm. The execution of plans will also be directed towards these objectives. . Ensures Economical Operation. Planning involves a lot of mental exercise which is directed towards achieving efficient operation in the enterprise. Is substitutes joint directed effort for uncoordinated piecemeal activity, even flow of work for uneven flow, and deliberate decisions for snap judgements. This helps in better utilization of resources and thus minimizing costs. 3. Reduces Uncertainty. Planning helps in reducing uncertainties of future because it involves anticipation of future events. Effective planning is the result of deliberate thinking based on facts and figures.
It involves forecasting also. Planning gives an opportunity to a business manager to foresee various uncertainties which may be caused by changes in technology, taste and fashion of the people, etc. sufficient provision is made in the plans to offset these uncertainties. 4. Facilitates Control. Planning helps the managers in performing their function of control. Planning and control are inseparable in the sense that unplanned action cannot be controlled because control involves keeping activities on the predetermined course by rectifying deviations from plans.
The Term Paper on Engineering Management People Staff Manager
... of a good manager. 2. 5 Management Philosophy Any organisation revolves around management; ... of Telstra managing vigorously people like line staff and those sorts of people ... and planning Motivation / incentives Does he take an active roll in motivate staff ... manager would be irrelevant. (2) Leadership involves an unequal distribution of power among leaders and group members.Leaders have the authority ...
Objectives helps control by furnishing standards of control. It lays down objectives and standards of performance which are essential for the performance of control function. 5. Encourages Innovation and Creativity. Planning is basically the deciding function of management. It helps innovative and creative thinking among the managers because many new ideas come to the mind of a manager when is planning. It creates a forward looking attitude among the managers. 6. Improves Motivation. A good planning system ensures participation of all managers which improves their motivation.
It improves the motivation of workers also because they know clearly what is expected of them. Moreover, planning serves as a good training device for future managers. 7. Improves Competitive Strength. Effective planning gives a competitive edge to the enterprise over other enterprises that do not have planning or have ineffective planning. This is because planning may involve expansion of capacity, changes in work methods, changes in quality, anticipation tastes and fashion of people and technological changes etc. 8. Achieves Better Coordination.
Planning secures unity of direction towards the organistional objectives. All the activities are directed towards the common goals. There is an integrated effort throughout the enterprise. It will also help in avoiding duplication of efforts. Thus, there will be better coordination in the organisation. Limitations of Planning Sometimes, planning fails to achieve the expected results. There are many causes of failure of planning in practice. These are discussed below : 1. Lack of reliable data. There may be lack of reliable facts and figures over which plans may be based.
Planning loses its value if reliable information is not available or if the planner fails to utilise the planner must determine the reliability of facts and figures and must base his plans on reliable information only. 2. Lack of initiative. Planning is a forward looking process. If a manager has a tendency to follow rather than lead, he will not be able to make good plans. Therefore, the planner must take the required initiative. He should be an active planner and should take adequate follow up measures to see that plans are understood and implemented properly. 3.
The Term Paper on Devolving Hr to Line Staff
Human Resource Management (HRM) is the function within an organization that focuses on recruitment and management, and providing direction for the people who work in the organization. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee ...
Costly process. Planning is time consuming and expensive process. This may delay action in certain cases. But it is also true that if sufficient time is not given to the planning process, the plans so produced may prove to be unrealistic. Similarly, planning involves costs of gathering and analyzing information and evaluation of various alternatives. If the management is not willing to spend on planning, the results may not be good. 4. Rigidity in organizational working. Internal inflexibility in the organisation may compel the planners to make rigid plans.
This may prove deter the managers from taking initiative and doing innovative thinking. So the planners must have sufficient discretion and flexibility in the enterprise. They should not always be required to follow the procedures rigidly. 5. Non-acceptability of change. Resistance to change is another factor which puts limits on planning. It is a commonly experienced phenomenon in the business world. Sometimes, planners themselves do not like change and on other occasions they do not think it desirable to bring change as it makes the planning process ineffective. 6.
External limitations. The effectiveness of planning is sometimes limited because of external factors which are beyond the control of the planners. External stringencies are very difficult to predict. sudden breakout of war, government control, natural havocs and many other factors are beyond the control of management. This makes the execution of plans very difficult. 7. Psychological barriers. Psychological factors also limit the scope of planning. Some people consider present more important than future because present is certain. Such persons are psychologically opposed to look ahead.
Long-range well-being of the enterprise cannot be achieved unless proper planning is done for future. 3. What is organisation structure? Explain the factors influencing organisation Structure. ANS:The establishment of formal relationships among the individuals working in the organisation is very important to make clear the lines of authority in the organisation and to co-ordinate the efforts of different individuals in an efficient manner. In order to organize the efforts of individuals, any of the following types of organisation structures may be set up: 1.
Line organisation, 2. Line and staff organisation, 3. Functional organisation, 4. Committee organisation, 5. Project organisation, and 6. Matrix organisation, the nature, merits and demerits of these structures are the topics discussed in this chapter. The line organisation represents the structure in a direct vertical relationship through which authority flows. Advantages of Line Organisation 1. It is very easy to establish line organisation and it can be easily understood by the employees. 2. It facilitates unity of command and thus conforms to the scalar Principle of organisation. . There is clear-cut identification of authority and responsibility relationship. Employees are fully aware of the boundaries of their jobs. 4. It ensures excellent discipline in the enterprise because every Individual knows to whom he is responsible. 5. It facilitates prompt decision-making because there is definite authority at every level. An executive cannot shift his decision making to others, nor can the blame be shifted. Disadvantages of Line Organisation 1. With growth, the line organisation makes the superiors too overloaded with work.
If he executives try toe keep up with every activity, they are bogged down in myriad details and are unable to pay proper attention to each one. It will hamper their effectiveness. 2. There is concentration of authority at the top. If the top executives are not capable, the enterprise will not be successful. 3. Line organisation is not suitable to big organisations because it specialised knowledge to perform them. 4. There is practically no communication from bottom upwards because of concentration of authority at the higher levels. If anybody having the courage to point out its deficiencies.
In spite of these drawbacks, the line organisation structure is very popular particularly in small organisations where there are less number of levels of authority and a small number of people. The line executive is often described as the individual who stands in the primary chain of command and is directly concerned with the accomplishment of primary objectives. In line and staff organisation, the line authority remains the same as it does in the line organisation. authority flows from top to bottom. The main difference is that specialists are attached to line managers to advise them on important matters.
These specialists stand ready with their speciality to serve line men as and when their services are called for to collect information and to give help which will enable the line officials to carry out their activities better. The staff officers do not have any power of command in the organisation as they are employed to provide expert advise to the line officers. Staff means a supporting function intended to help the line manager. In most organisations, the use of staff can be traced to the need for help in handling details, gathering data for decision-making and offering advice on specific managerial problems. LINE AUTHORITY STAFF AUTHORITY
Advantages of Line and Staff Organisation The line and staff organisation has the following merits : 1. Specialised knowledge. Line managers get the benefit of specialised knowledge of staff specialists at various levels. 2. Reduction of burden. Staff specialists relieve the line managers of the botheration of concentrating on specialised functions like accounting, selection and training, public relations, etc. 3. Proper weightage. Many problems that are ignored or poorly handled in the line organisation can be properly covered in the line and staff organisation by the use of staff specialists. 4. Better decisions.
Staff specialists help the line executives in taking better decisions by providing them with adequate information of right type at the right moment and expert advice. 5. Flexibility. Line and staff organisation is more flexible as compared to the line organisation. general staff can be employed to help line managers at various levels. 6. Unity of command. Under this system, the experts provide special guidance without giving orders. It is the line manager who only has got the right to give orders. The result is that the enterprise takes advantage of functional organisation while maintaining the unity of command i. . , on subordinate receiving orders from one boss only. Demerits of Line and Staff Organisation Line and staff organisation suffers from the following demerits : 1. There is generally a conflict between the line and staff executives. There is a danger that the staff men may encroach on the line authority. Line managers feel that staff specialists do not always give right type of advices and staff officials generally complain that their advice is not properly attended to. 2. The allocation of very clear. This may hamper coordination in the organisation. 3.
Since staff men are not accountable for the results, they may not be performing their duties well. 4. There is a wide difference between the orientation of the line and staff men. Line executives deal with problems in a more practical manner. But staff officials who are specialists in their fields tend to be more theoretical. Superiority of Line & Staff Organisation over Line Organisation Line and staff organisation is considered better than the line organisation because of the following reasons : 1. Staff makes available expert advice to the line executives.
This is necessary to deal with complex problems of management. For instance, personnel determent is established as a staff department to advise the top executives and other line executives on personnel matters. Similarly accounts, law and public relations departments may be set up to advise on problems related to accounting, legal issues and public relations. 2. Better decisions are ensured in line and staff organisations as compared to a simple line organisation. 3. Line and staff structure is more suitable for large organisation as expert advice is always available.
The line managers can make use of the knowledge of staff specialists to deal with complicated problems. Therefore, line and staff organisation is certainly better than line organisation. Line Organisations vs. Line & Staff Organisation It is a means of putting the specialists in top positions throughout the enterprise. It confers upon the holder of a functional position a limited power of command over the people of various departments concerning their function. The features of functional organisation are as follows : 1. The entire organisational activities are divided into specified unctions, such as operations, finance, marketing, personnel relations etc. 2. Each functional area is put under the charge of a functional specialist. The specialist has the authority or right to give orders regarding his function Wheresoever that function is performed in the enterprise.
If anybody in the enterprise has to take any decision relating to a particular function, it has to be in consultation with the functional specialist. Line Authority Functional Authority Advantages of Functional Organisation The merits of functional organisation have been discussed below : . Specialisation. Functional organisation helps in achieving the benefits of specialisation of work. Every functional incharge is an expert in his area and can help the subordinates in better performance in his area. 2. Executive development. A functional manager is required to have expertise in one function only. This makes it easy to develop the executives. 3. Reduction of Workload. Functional organisation reduces the burden on the top executives. There is joint supervision in the organisation. and every functional incharge looks after his functional area only. . Scope for expansion. Functional organisation offers a greater scope for expansion as compared to line organisation. it does not face the problem of limited capabilities of a few line managers. 5. Better control. The expert knowledge of the functional managers facilitates better control and supervision in the organisation. Demerits of Functional Organisation Functional organisation suffers from the following drawbacks : 1. Functional organisation violates the principle of unity of command since a person is accountable to a large number of bosses. 2.
The operation of functional organisation is too complicated to be easily understood by the workers. Workers are supervised by a number of bosses. This creates confusion in the organisation. 3. Functional organisation develops specialists rather than generalists. This may create problem in succession of top executive positions. 4. A functional manager tends to create boundaries around himself and thinks only in terms of his own department rather than of the whole enterprise. This results in loss of overall perspective in dealing with business problems. . There is generally a lack of coordination among the functional executives and delay in decision making when a decision problem requires the involvement of more than on specialist. Line Organisation vs. Functional Organisation 1. There is strict discipline. 2. It is suitable for small scale operations. Comparison of Line, Line & Staff and Functional Authority 4. State the meaning of communication. Explain the different forms of communication. ANS:The word ‘communication’ is derived from the Latin word ‘communis’ which means common.
If a person affects a communication, he has established a common ground of understanding. Thus, communication involves imparting a common idea and covers all types of behavbiour resulting therefrom. This indicates that various factors enter into the process of communication. These are the communicator or source of information, the receptor or receiver of information, the content of communication and the manner of communication. Thus, ‘communication’ in its broad sense means both the act of communicating something and the manner of communications such as letter, notice or circular.
According to Hudson, “Communication in its simplest from is conveying of information from one person to another. ” In the words of Allen, “Communication is the sum of all the things one person does when he wants to create understanding in the mind of another. It is a bridge of meaning. It involves a systematic and continuous process of telling, l listening and understanding. ” Thus, communication may be defined as interchange of thought or information to bring about mutual understanding and confidence. It is the information intercourse by words, letters, symbols or messages.
It is the exchange of facts, ideas and viewpoints which bring about commonness of interest, purpose and efforts. The success of a manager depends to a great extent on his ability to communicate. Theo Haimann regards communication as fundamental and vital to all managerial functions. “Communication is the process of passing information and understanding from on person to another… it is the process of imparting ideas and making oneself understood by others” Communication is an indispensable activity in all organisations. No rganisation can think of its existence without effective communication. Communication is a managerial skill which is essential for effective leading, and motivation of people at work.
A manager who is in a position to communicate well, will be able to get the cooperation of subordinates towards the objectives of the organisation effective communication as the Foundation of Sound Management In short, communication is quite indispensable for the management in getting, the things done by other personnel in the organisation. That is why, Chester Barnard remarked, “The first executive function is to develop and maintain system of communication. ” Majority of the complex problems which the managers generally face are people centred. The concept of democratic leadership places a high premium on communication. It is only through communication that executives can attempt to mould the attitudes of persons within the organisation, motivate subordinates to carry out certain function, fulfil a leadership role, and coordinate the efforts of people within the organisation. The role of communication is summarised in the following points : 1. Better Planning. Communication improves the quality of planning.
The management can receive suggestions and comments from the subordinates and also gather information from the external sources. This will ensure formulation of effective plans throughout the organisation. 2. Effective Operations. Communication helps the management in explaining the objectives, plans and policies of the enterprise to the employees. This enables the workers to understand their job responsibilities. Clearly and relate to the company’s objectives and plans. As a result, there will be effective implementation of company’s plans. 3. Decision-making.
A manager can take better decision by collecting The necessary information from various sources, developing various alternatives and their systematic evaluation. The quality of decision depends upon the quality of information on which it is based. 4. Controlling. Communication helps in control by transmitting Information about the performance of the subordinates to the manager. If the information received by the manager reveals that the performance of the subordinates is not up to the mark, he can take corrective action immediately. 5. Co-ordination.
The major requirement for achieving coordination is the presence of an effective communication system. Top management can communicate its policies, objectives, programmes, etc. to the lower levels. This will help in integration of activities at various the subordinates. 6. Motivation. Communication can help in motivating the subordinates and getting their cooperation. A manager can motivate his subordinates by using appropriate words to commend their performance. Clear-cut instructions by a manager also help a great deal in motivating the subordinates. 7. Better Human Relations.
Communication develops proper understanding between the superiors and the subordinates. It leads to congenial human relations in the organisation. 8. Workers’ Participation. Communication is an effective device for ensuring participation by the workers in the decision-making process. Management can consult the workers and receive their suggestions before taking decisions. 9. Facilitation of Change. Communication facilitates change on the part of employees by sharing the necessary information about the change and securing their effective cooperation. 10. Public Relations.
Effective communication with the external groups such as shareholders, customers, suppliers, trade unions, press and government is very important for a modern business. It can build a good public image of the business. Process of Communication 1. Sender. The person who initiates the communication process is known as sender, source or communicator. The sender has some information which he wants to communicate to some other person to achieve some purpose. But initiating the message, the sender attempts to achieve understanding and a change in the behaviour of the receiver. . Message. The message is the substance of the communication process. It may any form that could be experienced and understood by one or more of the sense of the receiver. Speech may be heard, written words may be read and gestures may be seen or felt. Thus. A message may take any of the three forms, viz. , oral, written or gestural. 3. Encoding or Communication Symbol. The sender of information organises his idea into a series of symbols (words, sighs, etc. ) which. He feels, will communicate to the intended receiver or receivers.
This is known as encoding of message, i. e. , converting ideas into communicable codes which will be understood by the receiver of the message. 4. Communication Channel. After encoding the message, the sender chooses the mode of transmission (such as air for spoken words and paper for letters. ) the mode of transmission is often inseparable from the message. The channel is the link that connects the sender and the receiver. Air, sight and sound are the important communication channels. The receiver must be considered while selecting a chanel. 5. Receiver.
The person who receives the message is called receiver. The communication process in incomplete without the existence of receiver of the message. It is the reciver who receives and tries to understand the message. If the message does not reach the receiver, communication cannot be said to have taken place. 6. Decoding. Decoding is the process by which the receiver draws meaning from the symbols encoded by the sender. It is affected by the receiver’s past experience, education, perception, expectation, and mutuality of meaning with the sender. 7. Feedback.
After receiving the message, the receiver will take necessary action and send feedback information to the communicator. Feedback is a reversal of the communication process in which a reaction to the sender’s message is expressed. The receiver becomes the sender and feedback goes through the same steps as the original communication. Generally, greater the feedback, the more effective the communication process is likely to be. For instance, early feedback will enable the manager (sender) to know if his instructions have been properly understood and carried out. 5. Explain the meaning and need for control.
ANS: Control is an important function of management. It is the process that measures current performance and guides it towards some predetermined objectives. It involves setting up standards of individual and organizational performance, checking actual performance against these standards to make sure that the objectives are being achieved as originally anticipated in organisation’s plans. “In an undertaking, control consists in verifying whether everything occurs in conformity with the plan adopted, the instructions issued and the principles established.
The modern concept of control envisages a system that not only provides a historical record of what has happened to the business as a whole but also pinpoints the reasons why it has happened and provides data that enable the chief executive or the departmental head to take corrective steps if he finds he is on the wrong track. As a matter of fact, action is the essence of controlling. It is this feature of control that makes it forward looking. Control is a basic managerial function which implies measurement and correction of performance of subordinates to ensure that the redetermined objectives are accomplished. E. F. L.
Breach has defined control as follows : “Control is the process of checking actual performance against the agreed standards or plans with a view to ensuring adequate progress and satisfactory performance. According to Koontz and Weihrich, “The managerial function of controlling is the measurement and correction of the performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplisher. ” The process of control has the following characteristics : . Pervasive Function. Control is a function of every manager alongwith other managerial functions like planning, organising, staffing and directing. It is, in fact, a follow-up action to other functions of management. Managers at all levels have to perform this function to contribute to the achievement of organizational objectives. 2. Review of Past Events. Control leads to appraisal of past activities. Thus, it is looking back. The deviations in the past are revealed by the control process. This is also known as feedback information.
It will help in knowing the reasons of poor performance, corrective actions can be initiated accordingly. 3. Forward Looking. Control is linked with future as past cannot be controlled. A manager can take corrective action only in regard to future operations. control is usually preventive as presence of control system tends to minimise wastages, losses and deviations from standards. 4. Action-Oriented. Control implies taking corrective measures. Action is the essence of control.
The purpose of control is achieved only when corrective action is taken on the basis of feedback information. It is only action which adjusts performance to predetermined standards whenever deviations occur. A good system of control facilitates timely action so that there is minimum waste of time and energy. 5. Continuous Process. Just like other functions of management, control is also a continuous activity. It involves constant analysis of validity of standards, policies, procedures, etc. it also suggests corrective actions in various processes.
It does not stop anywhere. A manager has to perform this function continuously alongwith other functions. 6. Dynamic Process. Control is a dynamic process. It is flexible and not rigid. Control involves continuous review of standards of performance and results in corrective action which may. Lead to change in the performance of other functions of management. Since management is managing a business entity which keeps on changing, managerial control is also dynamic. Management will be failing in its duty if its approach is not dynamic. 7. Control does not curtail the rights of individuals.
To some people, control is opposite of freedom. It is not so. It is a preventive action so that losses may be avoided in future. It is, in fact, an act of guidance. Control in an enterprise is based on facts and figures and not on the whims of managers. Its purpose is to achieve and maintain acceptable productivity from all the resources of an enterprise. SIGNIFICANDE OF CONTROLLING OR, NEED FOR Controlling is an important function of management. Without control, a manager cannot complete his job. All other managerial functions are only preparatory steps for getting the work done, and controlling is oncerned with making sure that there is proper execution of these functions. Control is necessary whenever a manager assigns duties over the actions of his subordinates so that the delegated authority is used properly.
By controlling, the manager ensures that resources are obtained and used economically and efficiently for the achievement of organizational objectives. A good control system provides timely information to the manager which is very much useful for taking various decisions. Control simplifies supervision by pointing out the significant deviations from the standards of performance. It eeps the subordinates under check and brings discipline among them. An effective system of control will help in achieving the following benefits : 1. Coordination. the size of modern business organisations is quite large. A large amount of capital and large number of people are employed in them. This complicates the problem of control as there are many units producing and distributing different products. In order to coordinate their activities, an efficient system of control is necessary. 2. Corrective Action. An efficient system of control provides the basis for future action.
Taking corrective action may lead to modification of planning, organising and directing. Control will also check the mistakes being, repeated in future. 3. Decision-making. Control is basic to decision-making. The process of control is complete when corrective actions are taken. This involves making a right decision as to what type of follow up action is to be taken. This will lead to accomplishment of organisation objectives. According to W. T. lerome, “Control is needed both to simplify the making of subsequent decisions and to ensure the realisation of the objectives implicit in the original long-range policy decisions. 4. Better Planning. Control is the only means to ensure that the plans are being implemented in the real sense. It points out the shortcomings of planning by comparing the actual performance with the planned standards and suggests steps to improve planning. 5. Decentralisation of Authority. The modern trend of business enterprise towards decentralisation calls for a systematic attempt for controlling. under decentralisation, the authority of decision-making is dispersed throughout the organisation. Management must keep control in its hands to know whether the authority is being used properly.
Without adequate controls, decentralisation cannot succeed. 6. Effective Supervision. Control facilitates effective supervision by pointing out significant deviations. It keeps the subordinates under check and brings discipline among them. While conrol cannot cure habitual dishonesty in all cases, management is irresponsible if it does not make a reasonable effort to provide order and discipline among its employees weak points very quickly. This enables the expansion of span of control at all levels in the organisation. Limitations of Control A control system may be faced with the following limitations : 1.
An enterprise cannot control the extenal factors such as government policies, technological changes, fashion changes, social changes, etc. 2. Control is an expensive process because sufficient attention has to be paid to observe the performance of the subordinates. This requires an expenditure of a lot of time and effort. 3. Control system loses its effectiveness when standards of performance cannot be defined in quantitative terms. For instance, it is very, difficult to measure human behaviour and employee morale. 4. The effectiveness of controls mainly depends on their acceptance by the subordinates.
They may resist controls if they feel that these will reduce or curtail their freedom. Control also loses its significance when it is not possible to fix the accountability of the subordinates. 6. Explain the contributions of F. W. taylor to management thought. ANS: According to Taylor, “Scientific Management is the substitution of exact scientific investigations and knowledge for the old individual judgment or opinion in all matters relating to the work done in the shop. ” Scientific management is a process of directing human efforts which employees scientific methods for getting highest productivity.
In the words of Petter F. Drucker, “The thread of scientific management runs through operational study of work, the analysis of work into simplest elements and the systematic improvement of the workers’ performance of each element. ” Scientific management is a thoughtful, organised human approach To the job of management as contrasted with hit or miss, rule of thumb. “It is the art of knowing exactly what you want men to do and then seeing that how they do it in the best and cheapest way. ” Scientific management includes finding the most efficient methods of production, scientific selection nd training of workers, proper allotment of duties and work achieving cooperation between workers and management. In short, scientific management involves : 1. scientific study and analysis of work ; 2. scientific selection and training of employees ; nad 3. standardisation of raw materials, working conditions and equipment. Aims of Scientific Management, Objectives The aims of scientific management may be summarised as under : a) Increased Production. Increase in the rate of production by use of standardised tools, equipment and methods. b) Quality Control.
Improvement in the quality of the output by research, quality control and inspection devices. c) Cost Reduction. Reduction in the costs of production by rational planning and regulation, and cost control techniques. d) Elimination of Wastes. Elimination of wastes in the use of resources and methods of production. e) Right Men for Right Work. Placement of right person on the right job through scientific selection and training. f) Incentive Wages. Payment of wages to workers according to their Efficiency. The elements or mechanisms or scientific management as suggested y F. W. Taylor are discussed below : 1. Scientific Task Setting. Taylor felt that the workers restricted their output because of the major reason that there was no standard about a proper day’s work. Therefore, it is essential to set the standard task which an average worker should do during a day. Taylor termed it “a fair day’s work. ” The standard task is to be set by the management scientifically so that it represents the amount of work which an average worker, working under average standardised conditions in an atmosphere of mutual trust and cooperation, will be able to do during a day.
It will act as a norm for the workers and will prevent them from doing work much below their capacity. 2. Work Study Work study implies an organized, objective, analytical an critical assessment of the efficiency of various operations in an enterprise. It is a generic term for those techniques which are used in the examination of human work in all its context and which lead systematically to the investigation of all factors which affect the efficiency and economy of operations. Work study includes the following techniques : a) Method study.
This study is conducted to know the best method of doing a particular job. It helps in reducing the distance traveled by materials, and brings improvements in handling, transporting, inspection and storing of raw materials and goods. b) Motion study. It is the study of the movement of an operator or a machine. Its purpose is to eliminate useless motions and find out the best method of doing a particular job. By undertaking motion study, and attempt is made to know whether some elements of a job can be eliminated. c) Time study or Work measurement.
Time study is an art of observing and recording the time required to do each detailed element of an industrial operation. Through time study the precise time required for each element of a man’s work is determined. It helps in fixing the standard time required to do a particular job. d) Fatigue study. Fatigue, physical or mental, has an adverse effect on worker’s health and his efficiency. Fatigue study helps in reducing fatigue among the workers. Fatigue is generally caused by long working hours without rest pauses, repetitive operations, excessive specialization and poor working conditions.
The purpose of fatigue study is to maintain the operational efficiency of the workers. 3. Planning the Task. Taylor emphasised the need for planning work. He advocated that planning function should be separated from the executive function. Workers should not be supposed to choose their own methods and decide what they have to do. The detailed planning should be done by the planning department. The planning department should (a) prepare detailed instructions for the workers as to the type, shape, quality and quantity of the products to be produced. b) lay down the machines and equipment operations, (c) determine the time required for completion of various operations, (d) make available the necessary materials and tools in carrying out the operations, and (e) receive feedback information for the modification of planning, if necessary. 4. Wage Rate Setting. Wage rates should be fixed in such a way that the average worker is induced to attain the standard. Taylor suggested the differential piece-wage system. Under this sysem, higher rates are offered to those workers who produce more than the standard quantity.
Taylor was of the view the efficient workers should be paid from 30% to 100% more than the average workers. 5. Standardisation Taylor advocated the standardisation of materials, tools and equipment, cost system and several other items. Efforts should also be made to provide stadardised working conditions and methods of production to the workers. Thus, stadardisation is an important task for the introduction of scientific management in any enterprise. There are many advantages of stadardisation. Firstly, operators can be trained easily.
Secondly, it is economical to have standardised materials, toolds and economies of large scale production. Lastly, stadardisation will improve the quality of production and reduce the cost of repairs and maintenance. 6. Scientific Selection and Training of Workers. The selection procedure must be designed carefully because errors committed at the time of selection may prove to be very costly later on. If the selection process is faulty, there will not be right workers on the right jobs. Thus, the efficiency of the organisation will be reduced.
Taylor advocated the need for proper selection and training of workers. Only a worker who meets the requirements of his job can do it well and at the minimum cost. Training of workers is the other task of management after the appropriate placement of workers. Training helps in changing the behaviour of the workers. It can be of great help in teaching them the best method of doing their job. Since the workers are trained, they will produce goods of high quality and incur less wastages. 7. Specialisation Taylor advocated that specialization must be introduces in a factory.
He advocated functional foremanship for this purpose. In his scheme planning was separated from executing. He recommended eight foremen in all to control the various aspects of production. He advocated four foremen in the planning department, namely, route clerk, instruction card clerk, time and cost clerk and shop disciplinarian. The four foremen recommended for getting the required performance from the workers include gang boss, speed boss, repair boss and inspector. The detailed description of the responsibilities of these foremen is given later in the chapter.
Taylor’s scientific management is based on five principles which are discussed below : 1. Replacement of old rule of thumb method. Scientific investigation should be used for taking managerial decisions instead of basing decisions on opinion, intuition or rule of thum. The principle of use of science for rule or thumb is the starting point that distinguishes scientific management from traditional management. Under scientific management decisions are made on the basis of acts as developed by the application of scientific method to the problem concerned.
This is in contrast with the approach followed under traditional management according to which decisions are based on opinions. Prejudices, or rule of thumb. Thus substitution of rule of thumb or opinion by scientific approach is one of the primary contributions of Taylor to the field of management. 2. Scientific selection and training of workers. The procedure for selection of workers should be designed scientifically. The errors committed at the time of selection may prove to be very costly later on. If we do not have right workers on the right job, the efficiency of the organisation will be reduced.
Therefore, every organisation should follow a scientific system of selection. The selected workers are to be trained to avoid wrong methods of work. The management is responsible for the scientific education and training. The management has to provide opportunities for development of workers having better capabilities. 3. Co-operation between labour and management. There should be cooperation between the management and the workers. This requires change of mental attitudes of the workers and the management towards each other. Taylor called it mental revolution. When this mental revolution takes place, orkers and management turn their attention towards increasing profits. They do not quarrel about the distribution of profits. 4. Maximum output. The management and the workers should try to achieve maximum output in place of restricted output. This will be beneficial to both the parties. Maximum output will also be in the interest of the society. 5. Equal division of responsibility. There must be equal division of responsibility between the managers and the workers. The management Should assume responsibility for the work for which it is better suited.
For instance, management should decide the method of work, working conditions, time for completion of work, etc. instead of leaving these to the discretion of workers. The management should be responsible for planning and organising the work, whereas the workers should be responsible for the execution of work as per instructions of management. 1. Scientific Investigation in place of Rule of Thumb Decisions and Methods. 2. Scientific Selection and Training of Workers. 3. Cooperation between Management and Labour. 4. Maximum Output in place of Restricted Output. 5. Equal Division of Responsbility. 7.
What is Motivation ? Explain the importance of motivation. ANS: Motivation is an effective instrument in the hands of a manger for inspiring the workforce and creating a confidence in it. By motivating the workforce, management creates ‘will to work’ which is necessary for the achievement of organisational goals. Motivation involves getting the members of the group to pull weight effectively, to give their loyalty to the group, to carry out properly the tasks assigned and to pay an effective role in contributing towards the purpose of the organisation. he following results may be expected if the employees are properly motivated : 1. The workforce if the employees are properly motivated : them with opportunities to fulfil their physiological and psychological needs. The workers will cooperate voluntarily with the management and will contribute their maximum towards the goals of the enterprise. 2. Workers will tend to be as efficient as possible by improving upon Their skills and knowledge so the they are able to contribute to the progress of the organisation. This will also result in increased productivity. 3.
The rates of labour turnover and absenteeism among the workers will be low. 4. There will be good human relations in the organisation as friction among the workers themselves and between the workers and the management will decrease. 5. The number of complaints and grievances will come down. Accident rate will also be low. 6. There will be increase in the quantity and quality of production. Wastage and scrap will be less. Better quality of products will increase the public image of the business. Dubin had defined motivation as “the complex of forces starting and keeping a person at work in an organisation. otivation is something that moves the person to action and continues him in the course of action already initiated. ” According to Dalton E. McFarland, “Motivation refers to the way in which urges, drives, desires, aspirations, strivings or needs direct, control or explain the behaviour of human beings. ” Tension Reduction of Tension Frustration Nature of Motivation The features of motivation are as under : 1. Motivation is an internal feeling of an individual. If can’t be observed directly ; we can observe an individual’s actions and then interpret his behaviour in terms of underlying motives.
This leaves a wide margin of error. Out interpretation may not reveal the individual’s true motivation. 2. Motivation is a continuous process that produces goal directed behaviour. The individual tries to find alternatives to satisfy his needs. 3. Motivations is a complex process. Individuals may differ in their motivation even though they are performing the same type of job. For example, if two men are engaged in cutting stones for constructing a temple, one may be motivated by the amount of wages he gets and the other by the satisfaction he gets by performing the job. 4.
Motives of an individual change from time to time, even though he may continue to behave in the same way. For example, a temporary worker may produce more in the beginning to become permanent. When made permanent, he may continue to produce more, this time to get a promotion. 5. Motivation is different from satisfaction. Motivation implies a drive towards an outcome while satisfaction involves outcomes already experienced. Satisfaction is the contentment experienced when a want has been satisfied. 8. Who is a leader ? State the qualities of a good leader. ANS: Leadership is a process of influence on a group.
It is an important part of a manager’s job. A manager must be able to lead the group working under him for inspiring team-work for the accomplishment of the objectives of the enterprise. Leadership is the ability of a manager to induce subordinates to work with confidence and zeal. It is the driving force which gets things don by others. A good leader achieves maximum cooperation from the group members by providing two-way communication and by motivating. He is also able to coordinate the activities of the followers to achieve common objectives.
Effective leadership is necessary for inspiring the people to work for the accomplishment of given objectives. It provides a cohesive force which holds the group intact and develops a spirit of cooperation. Effective leadership is also essential for efficient direction of human efforts towards the predetermined goals. “The fact that a leader can have an immense-effect on the performance of those under him has been noted for centuries that while some officers receive only grudging obedience, others are able to inspire their men to do the seemingly impossible and do it willingly.
The same phenomenon has been noted in therefore, that business would like to discover some way of selecting better leaders and for training its mangers in effective leadership techniques. But while the power of good leadership to produce extraordinary results is a fact, it is difficult to produce facts about what it actually consists of. ” The significance of leadership in management will be more clear if we study the functions which are performed by a leader. The functions are as follows : 1. Determination of Goals. A leader performs the creative function of laying down goals and policies for the followers.
He acts as a guide in interpreting the goals and policies. 2. Organisation of Activities. A good leader divides organisation activities among the employees in a systematic manner. The relationships between them are clearly laid down. This reduces the chances of conflict between them. 3. Achieving Coordination. A leader integrates the goals of the individuals with the oganizational goals and creates a community of interests. He keeps himself informed about the working of the group. He shares information with the group for the coordination of its efforts. 4. Representation of Group.
A leader is a representative of his group. He takes initiative in all matters of interest to the group. He also attempts to fulfil the psychological needs of his followers. 5. Providing Guidance. A leader guides the subordinates towards the achievement of organizational objectives. He is available for advice whenever a subordinate faces any problem. 6. Inspiration of Employees. A good leader inspires the subordinates for better performance. Motivation is necessary for getting the desired work from the subordinates. The leader motivates the employees by providing them economic and non-economic rewards. . Building Employee’s Morale. Good leadership is indispensable to high employee morale. The leader shapes the thinking and attitudes of the group. He develops good human relations and facilitates interactions between the members of the group. He effective leader is able to overcome. Resistance to change on the part of workers and thus facilitate change. Definition of Leadership Chester Barnard viewed leadership as the quality of behabiour of individuals whereby they guide people or their activities in organizing efforts. In the words of Louis A.
Allen, “ A leader is one who guides and directs other people. He gives the efforts of his followers a direction and purpose by influencing their behabiour. ” Leadership is a process of influencing the subordinates so that they cooperate enthusiastically in the achievement of group goals. According to Theo Haimann, “Leadership is the process by which an executive imaginatively directs, guides and influences the work of others in choosing and attaining specified goals by mediating between the individuals and the organisation in such a manner that both will obtaing maximum satisfaction. Characteristics of Leadership An analysis of the above definitions of leadership that it has the following characteristics : 1. Leadership is a process of influence. Leadership is a process whose important ingredient is the influence exercised by the leader on group members. A person is said to have an influence over others when they are willing to carry out his wishes and accept his advice, guidance and direction. Successful leaders are able to influence the behaviour, attitudes and beliefs of their followers. 2.
Leadership is related to a situation. When we talk of leadership, it is always related to a particular situation, at a giver point of time and under a specific set of circumstances. That means leadership styles of time, the subordinates may accept the autocratic behaviour of the leader while at a different point of time and under a different set of circumstances, only participative leadership style may be successful. That is why, it is said that leadership is always particular and not general. 3. Leadership is the function of stimulation.
Leadership is the function of motivating people to strive willingly to attain organisational objectives. Leaders are considered successful when they are able to subordinate the individual interests of the employees to the general interests of the organisation. a successful leader allows his subordinates to have their individual goals set up by themselves in such a way that they do not conflict with the organizational objectives. When this congruency is achieved, workers act enthusiastically to achieve these goals. 4. Leadership gives an experience.
Of helping attain that common objectives. Under successful leadership, every person in the organisation feels that his operation, however minor it may be, is vital to the attainment of organizational objectives. It happens when the manager feels the importance of invividuals, gives them recognition and tells them about the importance of activities performed by them. 5. Employees must be satisfied with the type of leadership provided. Only short-term productivity of employees can be increased by pressure and punishment.
This approach is not in the long-term interests of the organisation. force generates counter-force which results in a decreased long-term productivity. Long-term interests of the organisation are best served when managers allow subordinates to influence their behaviour, particularly when subordinates are knowledgeable and competent. A good manager recognizes the fact that leadership is a shared function. A good leader shares everything with his followers ; he shares credit, he shares blame, he shares ideas, opinion and experience. 9. Write a note on De-centralisation.
ANS: Decentralisation means dispersal of decision-making power to the lower l levels of the organisation. according to Allen, “Decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central points. Thus, decentraalisation means reservation of some authority (power to plan, organise, direct and control) at the top level and delegation of authority to make decisions at points as near as possible to where actions take place.
The important factors that cause decentralization of authority are as follows : 1. Decentralization is facilitated when need is realised to take quick and appropriate decision on the spot at a level at which it is really required with a view to cash on the opportunity present. 2. When the top management wants to reduce communication work, decentralisation is preferred. 3. The nature of company’s products or markets may require decentralisation of decision-making to provide special emphasis on a product line or a market.
Technological changes may also create conditions favorable to decentralisation. 4. Growth and diversification of activities of the company may make decentralisation necessary to introduce flexibility in operation, facilitate good direction and to relieve the top executives of the burden of extra work. 5. Physical dispersion of activities of the company may require decentralisation of authority for better results. Ernest Dale has given four tests to find out the degree of decentralisation in an organisation. The degree of decentralisation of authority is greater when : 1.
The number of decisions made lower down the management hierarchy Is greater. 2. The more important decisions are made lower down the management hierarchy. For example, the greater the sum of capital expenditure that can be approved by the plant manager without consulting any one else, the greater the degree of decentralisation in this field. 3. More functions are affected by decisions made at lower levels. Thus, companies which permit only operational decisions to be made at different plants are less decentralised than those which also permit financial and other decisions at the plant level. . There is less checking on the decisions taken at the lower levels. decentralisation is greater when no check at all must be made ; less when superiors have to be informed of the decision after it has been made ; still less if superiors have to be consulted before decision is made. The fewer the people to be consulted and the lower they are on managerial hierarchy, the greater the degree of decentralisation. Distinction Between Delegation and Decentralisation They points of distinction between delegation and decentralisation are given below : 1.
Delegation is a process of devolution of authority whereas decentralisation is the end-result which is achieved when delegation of authority is exercised at more than one level. 2. Delegation takes place between a superior and a subordinate and is a complete process. It may consist of certain tasks alone. But decentralisation involves spreading out the total decision-making power throughout the organisation. 3. In delegation, control rests entirely with the superior but in decentralisation, the top management may exercise control only in a general manner and delegate the authority for control to the departmental managers. . Delegation is a must for management. Subordinates must be given sufficient authority to perform their assignments otherwise they will come to the superior time and again even for minor decisions. However, decentralisation is optional in the sense that the top management may or may not decide to disperse authority. 5. Delegation creates superior-subordinate relationships while decentralisation results in diffusion of decision-making authority throughout the organisation. 6. Delegation is a technique of management to get things done through others.
However, decentralisation is a philosophy of management which influences the design of organisation structure. 7. Delegation of authority can take place without decentralisation but there cannot be decentralisation without delegation of authority. The advantages of decentralisation are discussed hereunder : 1. Reduction in the Burden of Chief Executive. When there is centralisation of authority in an enterprise, the chief executive alone has to bear the entire burden of decision-making. This diminishes the time at his disposal to concentrate on important managerial functions.
Decentralisation of authority reduces his burden as he delegates a major part of his authority to his subordinates and this will enable him to devote more time on important functions. 2. Quick Decisions. Decentralisation avoids red tapism in making decisions as it places authority for decision-making as near as possible with the place where actions take place. Those closest to the work situation can make reasonably quick and accurate decisions because they are well aware of the realities of the situation. Decentralisation also minimizes the delay in transmitting information from and to the workplace. . Diversification of Activities. With the addition of new product lines, an organisation may grow complex and pose a challenge to the top executives. The challenge can be met effectively by decentralizing the authority under the overall co-ordinating purview of the top management. 4. Development of Managerial Personnel. When authority is decentralised, the subordinates get the opportunity of taking initiative to develop their talents and to enable themselves to develop qualities for managerial positions. They learn how to decide and depend on their own judgement and how to manage.
This will lay down the foundation for the growth of prospective managerial personnel. 5. Effective Control and Supervision. The greater the degree of decentralisation, the more effective becomes the span of control. It leads to effective supervision as managers at the lower levels have complete authority to make changes in work assignment, to change production schedules, to recommend promotions and to take disciplinary actions. 6. Effective Coordination. Under decentralisation, coordinated efforts are required only at the levels of segments created by decentralisation.
This makes coordination more effective. 7. Improvement of Motivation and Morale. Decentralisation of authority fulfils the human needs of power, independence and status. It gives the local executives an opportunity to take initiative and to try new ideas. This improves their motivation and heightens their morale. This will also foster team spirit and group cohesiveness among the subordinates. 8. Miscellaneous Economies. In addition to the above advantages, decentralisation also achieves several internal and external economies.
Internal economies include speedier communication, better utilisation of lower level and middle level executives, greater incentive to work and greater opportunities for training. These make possible for the management to reduce the cost of production and meet competition effectively. Limitations of Decentralisation There are certain disadvantages and limitations of decentralisation which are discussed below : 1. Decentralisation increases the administrative expenses because it requires the employment of trained personnel to accept authority.
The services of such highly paid personnel may not be fully utilised particularly in small organisations. 2. Decentralisation requires the product lines of the concern to be broad enough to allow creation of autonomous units which is not possible in small concerns. 3. Decentralisation of authority may create problems in bringing coordination among the various units. 4. Decentralisation may not be possible because of external factors. If a company is subject to uncertainties, it may not be able to meet these under decentralisation. 5.
Decentralisation may bring about inconsistencies in the company. For instance, uniform procedures may not be followed for the same type of work in various divisions. Each divisional head may use his genius in designing procedures and methods of work. Achieving Effective Decentralisation For making decentralisation of authority, the following suggestions may be followed : 1. Appropriate Degree of Centralisation. There should be centralised planning and control for making delegation effective. If this is not done, there will be lack of integration and overlapping of functions.
There should be a workable balance between centralisation and decentralisation of authority depending upon the type of people working and the resources available with the organisation. 2. Development of Managers. It is essential to develop completent managers who can independently handle their departments. Managers could be developed through delegation of authority and sending talented employees to management development programmes.
Communication. And effective communication system should be established to ensure continuous interaction between superiors and subordinates. ecessary feedback on operating results should be made available to superiors. Open communication system will also enable managers to provide advice and guidance to subornidates. 4. Coordination. Decentralisation tends to create rivalry and conflict among departmental managers who compete for scarce resources. Effective coordination is essential to prevent such disintegrating tendencies. Interdepartmental coordination helps to prevent the danger of fragmentation. Committees, liaison officers and other mechanisms of coordination may be used to ensure coordination. 5. Adequate Control. Effective decentralisation requires adequate controls.
Unless the top managers have a well-established system for measuring the operating results, it is very difficult to achieve the benefits of effective decentralisation. 9. What is business forecasting ? ANS: The limitations of forecasting are as under : 1. Though forecasting is a necessity in a modern business, it should not be forgotten that all forecasts are subject to a degree of error and they can never be made with a hundred percent accuracy. Guesswork can never be omitted from forecasts though it can be reduced to a minimum with the help of modern quantitative techniques. . The quantitative techniques with the help of which forecasts are made have also get certain limitations. These techniques are based on certain assumptions. So the conclusions derived by the application of quantitative models can be no better than the assumptions on which they are based. 3. Managers often neglect to examine whether the forecasts are s supported by reliable information. Managers must use their knowledge, experience and available information with a great degree of skill and take care to make forecasts more dependable.
In spite of its limitations, forecasting has gained wide acceptance because managers feel that they can plan more successfully on the basis of forecast than they can think. An attempt should always be made to make forecast more reliable in order to improve the effectiveness of planning. The forecasting techniques should be improved and as far as practicable, the assumptions underlying forecasting should be objective in nature. Moreover, they should be based on all relevant facts. Sufficient informations must be collected to have better forecasts. STEPS IN FORECASTING
The process of business forecasting involves the following steps : 1. Understanding the problem The first step in the forecasting process is the understanding of real problem about which forecasts are to be made. A manager must know clearly the purpose of forecasting. Forecasts may be made in regard to technological conditions, sales, choice of people, availability of finance and so forth. The clear understanding of the scope of forecasting will help the manager to probe the relevant information only. 2. Developing the Groundwork In this stage, the manager will try to understand what changes in the past Have occurred.
He can use the past data on performance to get a speedometer reading of the current rate (say of sales or production) and how fast this rate is increasing or decreasing. This will help in analysing the causes of changes in the past. 3. Selecting and Analysing Data There is a definite relationship between the choice of statistical facts and the determination of why business fluctuations have occurred. Statistical data cannot be selected intelligently unless there is proper understanding of the business fluctuations. The reasons of business fluctuations will help in choosing the relevant information.
After selecting the data, they are analysed in the light of past changes. Statistical tools can be used to analyse the data. 4. Estimating Future Events Future events are estimated on the basis of analysis of past data. Here, The managers must use his past experience and judgement. He must know clearly what he expects in the future in the light of overall organizational objectives. He should make an estimate of future business from a number of probable trends revealed by the systematic analysis of data. The estimated results can be compared with actual results in the future.
This will help in refining the process of forecasting. TECHNIQUES OF FORECASTING There is nothing new about business forecasting as forecasting is being done by the businessmen for centuries. They have been using their past experience and intuition to predict the future events. Even today this method is still popular in the business world. But in recent years, new techniques of forecasting have come into existence because the old technique is always likely to lead to absurd conclusions. Attempts are being made to make forecasting as scientific as possible.
Each of the techniques has its special use. Care must be taken to select the right technique for every occasion. The choice of a method of forecasting depends on the following factors : a) the relevance and availability of historical data, (b) the context of b) the forecast, (c) the desired degree of accuracy, (d) the time period to be covered, (e) the cost benefit of the forecast, and (f) the time available for making the analysis. Various techniques of forecasting may be classified into two major categories : (1) Quantitative and (2) Qualitative.
Quantitative techniques apply various statistical toold to data for predicting future events. They include time series analysis, regression analysis, econometric models and extrapolation. Qualitative techniques employ mainly human judgement to predict future events such as historical perspective (business barometers), panel consensus, Delphi method, morphological research method and relevance tree method. These methods are used where quantitative data is not readily available. For instance, quantitative methods cannot be used to forecast technological environment.
A brief discussion of various quantitative and qualitative methods of forecasting is gives below : 1. Time Series Analysis Time series analysis assists to identify and explain : 1. Any regular or systematic variation in the series of data which is due to some seasons ; and 2. Cyclical trends that repeat every two or three years or more, With the help of time series analysis, a trend line can be fitted (by using the method of least squares) which is the best indicator of the trend.
Time series analysis provides an initial approximation forecast that takes into account the empirical regularities which may be measured, the original after the seasonal effects have been identified and measured, the original data may be adjusted for these influences, yielding a new historical time series consisting of the trend and seasonally adjusted data. The new time series may be used in the analysis and interpretation of cyclical and residual influences. This method has certain limitations also. Since the future does not always reflect the past, the time series analysis may give misleading results in some cases.
Moreover, this method can be used only when data of several years are available. 2. Regression Analysis Regression analysis is the means by which we can select from among the many possible relationships between different variables which are relevant to forecasting. If two variables are functionally related, then the knowledge of one will make possible an estimate of the other. Ofr instance, if it is known that advertising expenditure and sales are correlated, then we can fine out the probable increase or decrease in sales with the given increase or decrease in the advertising expenditure.
Regression analysis also helps in forecasting where there are one dependent variable and several independent variables. The help of computer programmes may be sought to estimate the equations that are very complex and time consuming. 3. Econometric Models Econometrics refers to the application of mathematical economic theory and statistical procedures to economic data in order to verify economic theorems and to establish quantitative results. Econometric models take the from of a set of simultaneous equations. The number of equations may be very large in some cases.
So the help of electronic data processing equipment may be sought to solve these equations. It is also significant to point out that the development of an econometric model requires sufficient data so that the correct relationships can be established. The econometric models revel in quantitative terms the way in which various aspects of a problem are interrelated. These models are very complex in practice as they combine the knowledge of economics, mathematics and statistics. That is why, they are not popular with the small business houses. 4. Extrapolation
This technique is used frequently for sales forecasts and other estimates when other forecasting methods may not be justified. It is the simples method of forecasting. In many forecasting situations, it can be expected more reasonably that the variable will follow its already established path. Extrapolation assumes the relative consistency in pattern of past movements in some time series. If this assumption is taken, the problem is to determine accurately the appropriate trend curve and the values of its parameters. Numerous trend curves are suitable for business forecasting.
They include arithmetic trend, semi-log trend, modified exponential trend, logistic curve, etc. selection of an appropriate curve depends on empirical and theoretical considerations relevant to the forecasting problem. 5. Historical Perspective (Business Barometers) Historical perspective technique uses business barometers to make business forecasts. The term ‘barometer’ is used to indicate the economic situations. The assumption behind the use business barometers, i. e. , various indices, is that past patterns tend to repeat themselves in the future and that the future can be predicted with the help of certain happenings of the present.
The various barometers which can be used in forecasting include gross national product, wholesale prices, consumer prices, industrial production, volume of money supply, stock exchange quotations, etc. some of these index numbers may also be combined into a general index of business activity. The general index refers to general conditions of commerce and industry. However, this composite index may show quite contrary tendencies from those of some of its components. So proper care must be taken while using the index numbers for business forecasting.
If the business barometer being used is reliable, it will reduce the chances of wrong forecasting. 6. Panel Consensus Method Under this method, data is presented openly to a group of experts related to a particular problem area is prepared with great care and the experts are brought together to have a face-to-face discussion and arrive at a consensus forecast. Such a forecast is expected to prove better as compared to a forecast made by one expert. Several experts can determine a better forecast than one working alone. 7. Delphi Method
This method enjoys respectability due to its scientific approach to the problem of forecasting. It is used for a systematic probing of the minds of the people who possess the necessary expertise in the pertinent or related areas. under this method, a panel of experts related to a particular problem area is prepared. Instead of bringing these experts together to have a face-to-face discussion, they are kept apart and their identity is kept secret from one another. this is done to prevent experts from being influenced by others and to eliminate the possibility of the emergence of a band-wagon mentality.
The opinions of the experts are solicited by eliciting their response to a carefully prepared questionnaire. The answers collected are studied carefully to separate the answers to questions on which a general consensus has emerged. The experts who have differed with majority opinion are fed back the results of the first round of survey and are requested to communicate the reasons for their divergence. Similarly, in the case of such questions on which wide difference of opinion has surfaced, the same process is employed to narrow down the differences. The process of successive feedbacks and seeking of pinions continues until the experts re-evaluate their estimates and a better convergence of opinion emerges or at least the scatter of opinion gets narrowed. The final results are taken as the forecasts. It should be noted that the Delphi method would not give only one Answer in all the cases. 11. What is Herzberg’s theory of motivation ?
A significant development in motivation was distinction between motivational and maintenance factors in job situation. A research was conducted by Herzberg and his associates based on the interview of 200 engineers and ccountants who worked for eleven different firms in Pittsburgh area. These men were asked to recall specific incidents in their experience which made them feel either particularly good or particularly bad about jobs. The findings of the research were that good feelings in the group under test were keyed to the specific tasks that the men performed rather than to background factors such as money, security or working conditions and when they felt bad, it was because of some disturbance in these background factors which had caused them to believe what are called as ‘Motivators’ and Hygiene factors’.
To this group of engineers and accountants, the real motivators were opportunities to become more expert and to handle more demanding assignments. Hygienic factors served to prevent loss of money and efficiency. Thus, hygienic factors provide no motivation to the employees, but the absence of these factors serves as dissatisfier. Hygienic factors include such things as wages, fringe benefits, physical conditions and overall company policy and administration. The presence of these factors at a satisfactory level prevents job dissatisfaction, but they do not provide motivation to the employees.
So they are not considered as motivational factors. Motivational factors, on the other hand, are essential for increasing the productivity of the employees. They are also known as satisfiers and include such factors as recognition, feeling of accomplishment and achievement, opportunity of advancement and potential for personal growth, responsibility and sense of job and individual importance, new experience and challenging work, etc. Herzberg also said today’s motivators are tomorrow’s hygienes because they stop influencing the behaviour of persons when they get them.
When a person gets one thing, then something else will motivate him and the need which has been fulfilled will have only negative significance in determining his behabiour. Maslow Model vs. Herzberg Model 12. What is “delegation of authority”? ANS: Delegation means devolution of authority on subordinates to make them perform the assigned duties or tasks. It is that part of the process of organisation by which managers make it possible for others to share the work of accomplishing organisational objectives. According to Douglas C.
Basil, “Delegation consists of granting authority or the right to decision-making In certain defined areas and charging the subordinate with responsibility for carrying through the assigned task. ” The process of delegation involves three essential elements or aspects: 1. entrustment of responsibility (duties or work) to another for performance ; 2. granting of authority to make use of resources, take necessary decisions and so on for carrying out the responsibility ; and 3. reation of an obligation or accountability on the part of the person accepting the delegation to perform in terms of the standards established. 1. Entrustment of Responsibility or Duty. Responsibility means the work or duties assigned to a person by virtue of his position in the organisation. In order to enable the subordinate perform his responsibility well, the superior must clearly tell the former as to what is expected of him. In other words, the superior must determine clearly the task or duty to be assigned to the subordinate.
The duty must be expressed either in terms of functions or in terms of objectives. If a subordinate is asked to control the operations of a machine, the duty is in terms of function. But if he is asked to produce a number of pieces of a product, the duty is in terms of target or objectives. Determination of duties in terms of objectives will enable the subordinate to know by what standards his performance will be evaluated. 2. Granting of Authority. Authority is the right or power granted to an individual to make possible the performance of work assigned.
Power to produce or use raw materials, spend money, or ask for allotment of money. To hire and fire people, etc. has to be delegated to individuals to whom the work is assigned. For instance, if the General Manager of a plant assigns to the Production Manager the production of particular goods and services, he will also grant him the authority to use materials, money and machinery, hire workers and so on to fulfil the production schedule prescribed as his duty. 3. Creation of Obligation or Accountability. According to Louis A.
Allen, Accountability is the obligation to carry out responsibility and exercise Authority in terms of performance standards established. ” It means holding an individual answerable for results. The subordinate is held accountable to the superior. Accountability originates because the manager has a right to require accounting for the authority delegated and task assigned to a subordinate. The process of delegation of authority is incomplete unless accountability is created. The term ‘accountability’ should not be confused with ‘responsibility’ Responsibility denotes the work to be done.
It can be done. it can be assigned to the subordinates. A subordinate will perform his responsibility well if he is given sufficient authority alongwith it. When the authority is accepted by the subordinate, he commits himself to account for the use of authority. Thus, accountability is the obligation for the performance of work assigned and authority delegated. In other words, it is the responsibility to account for results. Authority can be delegated but accountability cannot be delegated. When a senior executive assigns some duties to a junior executive, he as to delegate corresponding authority also. The junior executive may, in turn, take the help of a foreman working under him in performing the work assigned. But the junior executive will continue to be accountable for performance to the senior executive.
That means if the foreman does not do the job properly, it is the junior executive who is responsible to the senior executive. Thus, accountability can’t be delegated, it always moves upward. In simple words, an executive cannot escape the responsibility (or authority to his subordinates. however, he can take ction against the subordinate for his carelessness or negligence in doing the job. Accountability moves upward because a person who is delegated of authority is always accountable to the superior who delegated him the authority. However, as is obvious from the mechanism of the delegation process, responsibility and authority move downward. The extent of accountability depends upon the extent of delegation of authority and responsibility. A person cannot be held answerable for the jobs not assigned to him by his superior. For instance, if the roduction manger is given responsibility and authority to produce a specified quantity and quality of certain product and the personnel department is given responsibility and authority for the development of workforce, the workforce.
“Accountability is, by the act which creates it, of the same quality and weight as the accompanying responsibility and authority. ” 13. Write a note on “strategies”. ANS:Identification of alternative strategies for an enterprise is an important aspect of strategic planning. The major options in strategy formulation may be divided into the following broad categories : . Stability strategy. 2. Growth strategy. 3. Retrenchment strategy. 4. Combination strategy. 1. Stability Strategy This strategy is the most frequently used by business organisations. Under this strategy, the business will concentrate on utilizing its present resources so as ‘o develop its competitive strength within a restricted product-market configuration.