B.com Part 2 Management Notes!

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Q.4. Describe the characteristics or features of Policy.
Characteristics Or Features of Policy

Policy has the following important features:


1. A policy is a standing, repeat-use plan for answering the recurring problem of the similar nature.

2. It is a guide thinking in decision making. It is not an exact order in which things are done. It provides the framework within which decisions should be taken. It unfolds the broad guidelines for achieving organizational objectives.

3. It allows some amount of judgement or discretion on the part of the executives.

4. It prescribes the course of action selected to guide and determine present and future decisions.

5. It lays down the limits within which decisions are to be made. This ensures consistent and unified performance and exercise of discretion on the part of the executives.

6. Policies are generally framed by top-level management, however, managers at other levels also can frame necessary policies to deal with recurring problems of similar nature, such as departmental policies, divisional policies - formulated at the level of department or division.

7. Departmental or divisional policies are formulated within the limits of the authority of hte respective in charge and also within the limits set by the organizational policies.

8. A policy is not static. Policies are reviewed and modified from time to time as per requirements or demands of the changing environment.

















Q.5. Describe the Various types / Classification of Policies.
Classification of Policies

A number of policies are used in an enterprise in order to attain the organizational objectives. Policies may be classified as follows:


(A) On the Basis of Source

According to their source, origin or emergence, policies may be of the following kinds:


1. Originated Policy

It is also known as formulated policy. It is a policy deliberately formulated by top management to guide decision-making at lower levels, board of directors, the chief executive, the executive committee of the board or heads of the major departments or divisions. Such policies are broad in scope and affect usually the whole organisation or its major segments. These policies are often written ones, typically in the form of a policy manual of the organisation and flow down.


2. Appealed Policy

It is a policy formulated on the appeal or request of subordinates for filling the gaps left by originated policies. In other words, when a subordinates refers an exceptional problem of recurring nature not covered by existing policies, to his superior and appeals for a policy decision. When the superior makes decision in such a case, it becomes a precedent (policy) for future action. Such policies may be formulated at any level and are in the nature of flowing upward policies.


3. Imposed Policy

It is a policy, which an organisation is compelled to adopt due to some outside forces, such as the government and its regulatory agencies, trade association, trade unions.


(B) On the Basis of Functions

Policies are needed in all areas of business of an enterprise. These may be classified on the basis of different managerial functions as follows:


1. Production Policy

Raw material, purchase policy, repairs and maintenance policy, technology adoption and development policy, quality control policy, inventory policy and research and development policy are some examples in the category. Indent for the purchase of raw materials should be made at least a week in advance is an example of Raw Materials Purchase Policy.


2. Human Resource Policy

Examples in this category are recruitment policy, training policy, employee career development policy, wages and salary policy, placement policy, promotion policy and transfer policy, employee participation policy. Any vacancy shall be filled first by promotion from within the organisation and then, if need be, from outside sources Is an example of Recruitment Policy.


3. Marketing Policy

Capital structure policy, packaging policy, distribution policy, advertising policy, customer service policy, credit policy, market research policy and important examples in this category. Customer's complaint must be responded within the next day is an example of Customer Service Policy.


4. Finance Policy

Capital structure policy, fixed capital policy, working capital policy, investment policy, research policy, divident policy are some examples in this category. Excess capital, if any should be invested for short term only, preferably in limited company shares registered in stock exchange is an example of Investment Policy.


5. Accounting Policy

Inventory valuation policy, depreciation policy, provisions policy (for bad debts etc) deferred revenue expenditure policy etc. are examples in this category. Deferred revenue expenditure (e.g., a huge amount spent on advertisment) should be spread over the years of its benefit generation and written off every year accordingly, is an example of Deferred Revenue Expenditure Policy.

 

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Q.6. Describe the process of policy formulation.
Process of Policy Formulation

Policy formation is a creative and analytical phase of planning. It is based on the underlying objectives of the organisation. Policy formulation process involves various steps or activities and their analysis in order arrive at a decision. The important steps involved in policy formulation may be briefly described as follows:


1. Understanding of Corporate Objectives

Organizational objectives are the starting point for policy formulation. They are ultimate results, which an organisation tries to achieve. They provide the foundation for policy formulation.


2. Analysis of the Environment

The basic purpose of policies is to integrate the organisation with its environment; hence the policy makers must know the nature and other feature of the organisation environment. This requires a comprehensive analysis of the environment - its opportunities and threats.


3. Internal Analysis

The policy makers should be fully conversant with the strengths and weaknesses of the organisation. They should clearly identify the factors which are critical for the success of the organisation.


4. Definition of Policy Area

Policy makers should then specify clearly the areas, which require policies to be made.


5. Choice Or Selection of Policy

After evaluation of different policy alternatives, the most appropriate or suitable policy alternative is selected. This is the stage where the manager arrives at the right policy in the concerned area.


6. Communication and Implementation of Policy

The selected policy is communicated in clear words to those who are supposed to implement it. Implementation of policy is the operative aspect of policy whereby it is put into action. The concerned people apply the policy when problematic situations arise or when they normally do their jobs.


7. Review and Modification of Policy

The correctness of a policy is perceived when it is put into practice. On the basis of feedback from the executors of the policy, a periodical review is carried out and wherever necessary, desired modification are made in the policy from time to time. Sometimes outdated or obsolete policies are reconstituted or reframed.

 

[Hoorain]

Chapter 10:

Chapter 10 - Leadership

* Leadership

* Various theories of leadership

* Different styles of leadership
Q.1. What leadership means? What are its important characteristics? Why is their need of leadership also discussing its importance?


Meaning and Definition of Leadership

Simply stated, leadership is the process of influencing the behaviour of others towards the attainment of desired goal or purpose in given circumstances. Leadership is a tool to get the desired work done through employees or subordinates. Leadership is majorly explained on the basis of influence relationships and motivational considerations. One method of solving the problem of motivation is the effort to provide inspiring and effective leadership to the employees. The success of a manager is largely decided by the fact as to how much effective he is as a leader. Leadership is the ability to make people act the way the manager or leader wants. It is the process of influencing others to become what they are capable of becoming in the view of the leader. Leadership, in essence is carrying the people with the leader by their consent.

Different scholars have defined leadership in the following ways:


Rober Tannenbaum

Leadership is interpersonal influence, exercised in situations and directed, through the communication process, towards the attainment of goals.


George Terry

Leadership is the leadership in which one person or the leader influences others to work together willingly on related tasks to attain that which the leader desires.


Theo Haimann

Leadership can be defined as the process by which an executive imaginatively directs, guides and influences the work of others on choosing and attaining specified goals by medicating between the individual and the organisation in such a manner that both will obtain maximum satisfaction.


E.B. Reuter

Leadership is an ability to persuade or direct men without use of the prestige or power of formal office or external circumstances.


Weihrich and Koontz

Leadership is defined as influence that is the art or process of influencing people so that they will strive willingly and enthusiastically inward the achievement of group goals.


Peter Drucker

Leadership is lifting of a man's vision to higher sights, the raising of a man's performance to a higher standard and the building of a man's personality beyond its normal limitation.


Characteristics Or Features of Leadership (Nature)

The important characteristics of leadership, which indicate its nature, may be described as follows:


1. Leadership is an influence process stimulating group members.

2. It is a relational concept in which two sides are included, influencing agent and the persons influenced. The first side is called leader the second side is called followers.

3. Leadership is a complex relationship which exists between the leader, the followers, the organisation, the social values and the economic and political condition. Each of these ingredients or factors has its own peculiarities which are the cause of the complexity of this relationship.

4. Leadership required aptitude and basic attitudes with regard to behaviour pattern, tolerance, human psychology and achievement.

5. Leadership depends on the properties of the situation and the persons to be led. In other words, these two factors especially affect the effectiveness of leadership. Generally, it is the function of the leader, the followers and other situational variables.

6. The leader's role and the degree of its acceptance by the group members, condition the leadership. In other words right person's right role proves him to be a good leader.

7. Th core of leadership is to motivate the employees by integrating their individual goals with those of the organisation.

8. A leader leads he does not push. It means that a leader takes his followers and their achievements to such a height where they do not believe to reach. When a leader leads, he serve also , i.e., he fully cars for the satisfaction of his followers.

9. Leadership appears to be more of an emotional than an intellectual or rational process, because its direct concern is with men whose both emotional and rational powers are to be stimulated or incited. Such powers can be had by means of dedication not only by use of knowledge. Leadership is a rational to the extent that is is goal directed.

10. Persons capable of exercising effective leadership in organisations are in critically short supply in relation to their tremendous demand.

11. Leadership is part of management, but not all for it.

12. Leadership is a nebulous, not fully clear accept even after so research done in this field. In other words, still there is no simple answer to the riddle.

 

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Q.2. Briefly describe various theories of leadership.
OR
Discuss different approaches to leadership.
OR
Explain the main theories of leadership.
OR
Differentiate between tratist and situationalist theories. Which of the two is near to the modern thinking?
OR
Enumerate the qualities of leadership.


Theories of Leadership

Leadership styles focus on the behaviour pattern exhibited by a leader during supervision of the subordinates. On the other hand, who will emerge an effective leader? Or how effective a leadership style will be? such questions are answered by leadership theories. Simply stated, theories focus on various approaches to successful leadership.
The theories of leadership may be classified into three categories, Trait theories, Behavioural theories and situational theories.

1. Tratist Leadership Theory
In its early stage, this theory was called great man theory of leadership, which says that leaders are born and not made. Ancient people thought that certain natural qualities of leadership exist in a person. Ultimately, the great man theory gave way to a more real theory the Trait approach.
Trait theory views leadership as a conglomerate (or a large set) of different traits or qualities. The great man theory believed that traits were inherited. Whereas, trait theory holds that traits are not always inborn but can be acquired through education, training and experience. Trait theory holds that leadership is largely a matter of personality, a function of specific traits. It suggests that there are certain unique qualities or traits clearly identifiable in leaders. The greater the degree of such traits possessed by a person the better and more successful will be proved as a leader. It further suggests that leaders differ from followers with respect to certain key traits and these traits remain unchanged across time. The trait theory attempts to isolate the attributes of successful and unsuccessful leader and using such a list of traits, it predicts the success of failure of persons as leaders. It is to be noted that these traits are not measurable.
Various thinkers have differed on the package of traits. Many studies of traits have been made. Ralph Stogdill found (1974) that various researchers have identified specific traits related to leadership ability as follows:

1. Physical Traits
Five in all, such as energy, appearance and height.

2. Intelligence and Ability Traits
Four in all, such as high level of intelligence and judgement.

3. Personality Traits
Sixteen in all, such adaptability, agressiveness, enthusiasm and self-confidence.

4. Task-Related Characteristics
Six in all, such as achievement drive, persistence and initiative

5. Social Characteristics
Nine in all, such as cooperativeness, interpersonal skills and administrative ability.
It may be noted that the discussion of the importance of traits still goes on. More recently (1991). Shelly Kirkpatrick and Edwin Locke have identified the following key leadership traits.

1. Drive
Including achievement, motivation, energy, ambition, initiative and tenacity (i.e. firmness).

2. Leadership Motivation
The aspiration to lead but not to seek power as such.

3. Self-Confidence
Including motional stability.

4. Cognitive Ability
The ability of knowing, including consciousness of things and judgement about them.

5. An Understanding of the Business
According to them, less clear is the impact of creativity, flexibility and charisma (i.e. strong personal charm to attract and influence) on the leadership effectiveness.
In general the study of leaders traits has not been a very fruitful approach to explaining effectiveness of leadership. Not all leaders possess all the traits and many followers (non-leaders) may possess most or all of them. Further, the trait theory does not indicate as to how much of any trait a person should have to be an effective leader. Also, most of these so-called traits are really patterns of behaviour. Furthermore, the list of traits is not uniform. Effective leadership is not a function of some traits only, situation also plays an important role in making someone a successful leader.

2. Behavioural Theories of Leadership
Dissatisfaction with the results of the trait approach has caused a significant change in the emphasis of leadership research and the focus shifted in the actual behaviour and actions of leaders from the traits or characteristics of leaders. Thus, Behavioural theories attempt to describe leadership in terms of what leaders do rather than what they are. According to Behavioural approach, leadership is the result of effective role behaviour. This approach hold that an effective leader is one who performs these acts which help the group to attain its goals.
The most popular models of leadership based on the behavioural appraoch may briefly be discussed as follows:
Likert's for systems of management. Rensis Likert has studied the patterns and styles of leaders and manager for three decades (1961). He has developed a continuum of our systems of management or leadership styles as follows:

1. System 1 Management
It is described as exploitative authoraitative. Its managers are higher autocratic have little trust in subordinates and motivate people through fear and punishment and only occasionally reward. They engage in downward communication and limit decision making to themselves.

2. System 2 Management
It is called benevolent - authoritative. Its managers have a patronizing confidence and trust in subordinates. They motivate with rewards and some fear and punishment. They permit some upward communication and solicit some ideas and opinions from subordinates. They allow some delegation of decision making but with close policy control.

3. System 3 Management
It is referred to as Consultative. Its managers have substantial but not complete confidence and trust in subordinates. They usually try to make use of subordinates ideas and opinions. They use reward for motivation with occasional punishment and some participation.

 

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Q.3. Briefly discuss various leadership styles and also refer to their advantages, disadvantages and conditions of use. Which is the best style in your opinion?
Leadership Styles

Simply stated, the term Leadership style refers to the pattern of behaviour, which a leader adopts in directing behaviour of the followers towards the attainment of organizational goals. From another viewpoint, leadership style is the position that a leader usually takes with regard to how much decision making freedom he allows to his followers to have. Similarly, the behaviour exhibited by a leader during supervision of his followers is known as leadership style. The nature and form of leadership style is affected by the following factors, existing circumstances, time period, personality of the leader, his experience, attitude and orientation, nature of followers, external environmental and so on. Most of the managers use several styles at one or the other point of time, but in which category a manager falls, is decided by the style that is mostly used by him. Basically and broadly, there are three important leadership styles as follows:

1. Autocratic Or Authoritarian Style
It is also known as directive style. It is basically treated as a traditional method of leadership. An autocratic leader centralize power and decision making in him and exercise complete control over the subordinates. He dominates and drives his group through coercion and command. He uses both positive and negative motivations, for example, reward, praise, fear of criticism or punishment. When he uses positive motivations that is called benevolent autocratic style and when he uses negative motivations that is known as dictatorial or oppressive autocratic style. The autocratic leader likes, Theory X-undemocratic thinking, he emphasizes work only.
The autocratic leder himself decides all policies. He gives orders to the subordinates and expects them to follow such orders completely without any grudge or question. Under this style, subordinate are thought to be inexperienced and wisdom less and therefore they are given no freedom - the autocratic leader decides the technicalities and modalities of the work and the course of action. Hence any one except the leader does not know the future action.
Autocratic style permits quick decision making provides strong motivation and satisfaction to the leader centralize power and dictates terms, yields positive results when great speed is required and needs less competent subordinates at lower levels. Its major disadvantages are, It leads to frustration, low morale and conflict among subordinates are induced to avoid responsibility, initiative and innovative behaviour. Full potential of subordinates and their creative ideas are not utilized. In the absence of the leader, organizational continuity is threatened because subordinate gets no opportunity for development.
This style may be appropriately used where subordinates are uneducated, unskilled, unwise, inexperienced, where the company endorses fear and punishment as accepted disciplinary techniques and where the leader prefers to be active and dominate to decision making.

2. Democratic Or Participative Styles
The democratic leader decentralizes power. He involves subordinates in the decision making. Decision are made in consultation and participation with the subordinates. The style emphasizes group-discussion and group decision making. The democratic leader like Theory Y-fairness, equity and human relation. He emphasizes both work and worker. The subordinates are encouraged to utilize their full talent potential and capacities and assume greater responsibilities. The democratic leader shares power with subordinates, delegate adequate authority to them, keeps them well informed about matters of their interest and concern and allow adequate freedom for thinking, discussing, expressing and making suggestions. He has faith in the subordinates and their wisdom, skills and capacities. He holds objective approach. Communication pattern is multi-dimensional.
The major advantages of this style are, It improves job satisfaction and moral, develops positive attitude, reduces resistance to change, generates self-motivation due to participative decision making and freedom of thought and impression, increases productivity and develops better subordinates.
The major disadvantages of this style are, It is time consuming and causes delays in decision making; may fail when the communication pattern and skill are not strong enough is not workable where subordinates do not want to take extra responsibility of sharing in decision making and becoming part of every decision decreases productivity in some cases especially when decisions are diluted to appease or please everybody.
Democratic style is more appropriate where subordinates are educated, skilled, wise, creative and enthusiastic, where the company endorses self-direction and self-control and rewards and involvement as prime means of motivation and control and where leader desires to hear subordinates before making decisions and to develop a strong and capable force of followers.

3. Free Rein Or Laissez-Faire Or Permissive Style
There are several forms of this style. For example, in some cases the subordinates are given a goal to achieve in their own way, whereas in some other cases they themselves decide their group goals. Infact, there is almost complete delegation of authority and the path leading to the goals is decided by the subordinates themselves. The leader behaves primarily as a member of the group and plays the role of a member only. He give his opinion or suggestion only when it is demanded from him. Under this style, the group members are educated and motivated by themselves, the leader is not required to educate but he acts, as a link primarily for arranging adequate resources needed for attaining the goals, for establishing contact between employees and the outside world, for collecting necessary information from external sources and for establishing coordination. The concept of management by exception promotes this type of style. Subordinates themselves plan, control, evaluate and decide.
The major advantages of this style are, It increases subordinates, freedom, develops their expression, compels them to work as group members, increases job satisfaction and moral, utilities subordinates potential to the maximum possible extent and promotes creativity or innovation.
The free-reign style is appropriate where subordinates themselves are well trained and highly knowledge about their tasks and unheisitatingly ready to assume extra responsibility, where the company has a wide and effective communication network acceptable to the subordinates and it endorses complete freedom and full involvement as means of motivation and control and where the leader is ready to compromise with the status in the group and is interested in delegating the whole authority to the subordinates. It is mostly used in circumstances where the leader feels him in a position to leave the alternative or selection fully on the group's choice.


Choosing a Leadership Style

Which leadership style is best or which to choose? Different scholar makes different suggestions in this regard. However, widely known for their effective management practices the Japanese favour participative leadership style. In actual practice it is difficult to hold my one style, is the best leadership style. As discussed above, each style has got its merits and demerits. Hence the choice of a style will depend upon several factors, such as suggested by Tannenbaum and Schmidt.

1. Forces in the Manager
Manager's value system, confidence in subordinates, own leadership inclination and feeling of security in an uncertain situation.

2. Forces in the Subordinates
Their need for independence, readiness to assume responsibility for decision making, tolerance, for ambiguity (or strangeness), interest in problem at hand, understanding and identification with the goals of the organisation, knowledge and experience to deal with the problem and learned expectatio of sharing in decision making process.

3. Forces in Situation
The type of organisation, group effectiveness, the complexity of the problem itself, pressure of time on the situation etc.
Effective manager should be expert enough to adapt or modify their leadership style as per the need of the moment. Sticking to one best considered style at all times in all situations with all people may not work well to be a good leader. Most suitable leadership style is that which fits with the situation the followers and the leader.

 

[Hoorain]

Chapter 11:

Chapter 11 - Planning


* Planning

* Various Steps of Planning

* Various elements of good planning

* Environment

* Internal Environment

Q.1. Define Planning and discuss its main characteristics.
OR
Discuss the advantages, limitation and principles of Planning.
OR
What is planning? Outline the steps in planning process.
OR
What is the concept of planning as an element of Management process? Discuss its nature and role in a modern business organisation.


Meaning and Definition of Planning

Planning is thinking in advance or before doing something. All kinds of organisation do planning. Planning helps us in looking into the future. Planning establishes goals or objectives and identifies the ways to achieve them. A plan is a predetermined course of action to be taken in future.

George Steiner
Planning is a process that begins with objectives, defines strategies, policies and detailed plans to achieve them.

Peter Drucker
Planning is the continuous process of making present entrepreneurial (risk taking) decisions systematically and with best possible knowledge of their futurity.


Nature of Characteristics of Planning

There are a number of features or characteristics of planning that indicate towards its nature. These may be outlined as follows:

1. Goal-Oriented
Planning is goal-oriented in the sense that plans are prepared and implemented to achieve certain objectives.

2. Basic to all Managerial Functions
Planning is a function that is the foundation of management process. Planning logically precedes all other function of management, such as organizing, staffing etc because without plan there is nothing to organize nothing to control. Every managerial action has to be properly planned.

3. Pervasive
Planning is a function of all managers, although the nature and extent of planning will vary with their authority and level in the organisation hierarchy. Managers at higher levels spend more time and effort on planning than do lower level managers.

4. Interdependent Process
Planning affects and is affected by the programmes of different departments in so far as these programmes constitute an integrated effort.

5. Future Oriented
Planning is forward looking and it prepares an enterprise for future.

6. Forecasting Integral to Planning
These essence of planning is forecasting. Plans are synthesis of various forecasts. Thus, planning is inextricably (inseparably bound up with planning).

7. Continuous Process
Planning is an ongoing process. Old plans have to be revised and new plans have to be prepared in case the environment undergoes a change. It shows the dynamic nature of planning.

8. Intellectual Process
Planning is a mental or conceptual exercise. It therefore involves rational decision making, requires imagination, foresight and sound judgement and involves thinking before doing thinking on the basis of facts and information.

9. Integrating Process
Planning is essential for the enterprise as a whole. Newman and others have drawn our attention towards this feature of planning, without planning, an enterprise will soon disintegrate the pattern of its actions would be as random as that made by leaves scampering (running quickly in short steps) before an autumn wind and its employees would be as confused as ants in an upturned anthill. If there are no plans action will be a random activity in the organisation instead there will be chaos.

10. Planning and Control are Inseparable
Unplanned action cannot be controlled, without controlled, planned actions cannot be executed. Plans furnish standards of control, In fact Planning is meaningful without control and control is aimless without planning. Planning is measuring rod of efficiency.

11. Choice among Alternative Courses of Action
The need for planning arises due to several ways available for an action. If there is only one way-out left, there is no need for planning.

12. Flexible Process
The principle of navigational change (i.e. change according to changes in environment) applies to planning. In other words, effective planning requires continual checking on events and forecasts and the redrawing of plans to maintain a course towards desired goals. Thus, plans have to be adaptable to changing circumstances.​

 

[Hoorain]

Q.2. Describe in detail the various steps of Planning.
Planning Process

The process of planning involves the following steps:

1. Analyzing Environment
At the outset, the internal and external environment is analyzed in order to identify company's strengths and weaknesses (in internal environment) and opportunities and threats (existing int the external environment). This is also known as SWOT (strengths, weaknesses, opportunities and threats) analysis.

2. Establishing Objectives Or Goals
In the light of the environmental scanning (study), clear or probable opportunities that can be availed are identified. In order to avail them, objectives or goals are clearly defined in specific term along with priorities in all the key areas of operations. Major problems associated with such objectives are also identified and defines, so that there may be special emphasis on their planned solutions.

3. Seeking Necessary Information
All relevant facts and data are collected from internal and external sources. For example, availability of supplies, physical and human resources of the company, finances at disposal, relevant government policy, general economic conditions and relevant specific market situation. Then such investigated and collected information and factors are analyzed. Such information analysis is used in two ways - first, to make necessary modifications in objectives or goals and secondly to take help from them in premising (considering) assumptions.

4. Premising Or Establishing the Planning Premises
In order to develop consistent and coordinated plans, it is necessary that planning is based upon carefully considered assumptions and predictions. Such assumptions and predictions are known as planning premises. The assumptions under which plans are supposed to operate should be clearly brought out. Such presumptions and forecasts are prepared for various areas, such as sales, prices, wages, taxes, changes in fashions and habits, purchasing power, standards of living, population competitors and so on.

5. Identifying and Developing Alternative Courses of Action
After establishing objectives or goals and taking other related steps, feasible alternative programmes or courses of action are seached out. Impossible or highly difficult propositions are left out.

6. Evaluating the Alternatives
Probable consequences of each alternative course of action in terms of its pros and cons (e.g. costs, benefits, risks, etc) are assessed and than relative importance of each of them is found out by looking at their overall individual strengths and limitations especially in the light of the present objectives and the environment of the company.

7. Choosing the Most Appropriate Alternative Or Course of Action
After weighing the pros and cons of each of the alternative courses of action and realizing their individual relative importance, the most appropriate alternative in the light of the overall consideration is selected to be followed. In other words, the alternative which appears to be most feasible and conducive to the accomplishment of company's predetermined objectives, is chosen as a final plan of action - as strategy.

8. Preparing the Derivative Plans
Derivative plans involve short range, operating plans that are useful in day-to-day operation and provide a working basis for such operations. Such plants are developed in the form of schedules, budgets, programmes, procedures, methods, rules, policies etc. The derivative plans are prepared in different departments and their timing and sequence are also specified. Such plans are prepared in concrete terms showing specific results to be attained within specified time limit and by utilizing the allocated resources. An integrative mechanism has also to be provided for effecting coordination between and among different derivative plans being executed by different departments.

 

[Hoorain]

Q.3. Discuss the various elements of good planning.
OR
Discuss briefly the various types of plans.


Elements of Good Planning

Managerial planning comprises various types of plans, which are also known as elements of good planning. Some of the important types of plans may be discussed as follows, which must be included in a sound planning system.

1. Objectives
Objectives may be defined as the targets people seek to achieve over different time periods. Objectives gives direction to human behaviour and effort. Hence, an essential task of management it to formulate, classify and communicate organizational objectives. Managers are required to set both general and specific objectives. Survival, growth and development are general objectives of a business enterprise. The specific objectives include the goals set for various departments, divisions, groups and individuals. The general objectives are long term in nature, where as the specific objectives are short range, though the short range objectives are and should be a part of long term objectives. Departmental objectives must be consistent with the conductive to the overall, corporate objectives.

2. Policies
A policy is a general statement that guides thinking, action and decision making of managers for the successful achievement of organizational objectives. Policies define the limits within which decision are to be made. This ensures consistent and unified performance and exercise of discretion by managers. Top management generally frames the policies. However, a manager at any other level may lay down policies within the limits of his authority and also within boundaries set by policies of his seniors. A policy is not static and may be modified or reviewed in the light of changes the environment. A policy may be verbal, written or implied. A well defined policy helps the manager to delegate authority without undue fear, because the policy lays down the limits for decisions by the subordinates.

3. Procedures
A procedure prescribes the sequence of steps that must be completed in order to achieve a specific purpose. A procedure is a guide to action rather than to thinking. It details the exact manner in which a certain activity must be accomplished. Its essence is chronological sequence of required actions or steps. A procedure is generally established for repetitive activity so that same steps are followed each time when that activity is performed. The procedures do not allow much latitude in managerial decision making because they lay down a definite way of doing certain things. Procedures are designed to execute policies and achieve objectives. Procedures are used in all major functional areas. Purchase procedure, materials issue procedure, costumer's order executing procedure, accounting procedure, grievance handling procedure, etc, are some of the examples of usual procedures.

4. Rules
Like a procedure, a rule is a guide to action. But it does not lay down any sequence of steps as in the case of a procedure. A role tells us whether a definite action will be taken or will not be taken in case of a given situation. Examples of rules are: (i) Customer's complaint must be replied within one day (under customer satisfaction policy), (ii) No smoking in the factory (under safety policy). Thus, a rule is prescribed course of action or conduct that must be followed. As such, a rule does not leave any scope for discretion on the part of the subordinates. Rules are definite and rigid because there must be no deviation from the stated action, except in very exceptional cases.
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5. Strategy
Strategy is a pattern or plan that involves matching organisation competences (i.e. internal resources and skills) with the opportunities and risks created by environmental change, in ways that will be both effective and efficient over the time such resources will be deployed. Effective formal strategies contain three elements: (i) the most important goals, (ii) the most significant policies, (iii) the major programmes. Strategy deals with unpredictable and unknowable. It is developed around a few key concepts and thrusts. A well-formulated strategy helps to marshal and allocate and organisation's resources into a unique and viable posture in relation to the strengths and weaknesses of the organisation, the anticipated changes in the environment and the contingent moves of the opponents. Generally when we walk of organizational strategy, it refers organisation's top level strategy. However, strategies exist at other levels also.

6. Programmes
A programme lays down the principal steps for accomplishing a mission and sets an approximate time for carrying out each step. George Terry says, A programme can be defined as a comprehensive plan that includes future use of different resources in an integrated pattern and establishes a sequence of required actions and time schedules for each in order to achieve stated objectives. Programmes outline the actions to be taken by whom and where. A programme is made up of objectives, policies, procedures, task assignment, budgets, schedules etc. Examples of programmes are, building programme, expansion programme, moral improvement programme, acquisition of the new line of business programme, training programme, development of a new product programme, advertising programme and so on. Programmes may be measure or minor, primary or derivative and long-term, medium term or short term.

7. Projects
Often a single step in a programme is set up as a project. In fact a project is simply a cluster of activities that is relatively separate and clear cut. Thus, projects have some features of a programme but are usually parts of some programmes. Building a hospital, designing a new package, building a new plant, are some examples of projects. The chief virtue of a project lies in identifying a nice, neat work package within a bewildering array of objectives, alternatives and activities.

8. Budgets
A budget is a statement or a plan of expected results expressed in numerical terms, such as man hours, units of production, machine hours, amount of expenditure or any other quantitatively measurable term. Then it may be expressed in time, money, materials or other quantitative units. Budget is prepared prior to a definite period of time of the policy to be pursued during that period for a purpose of a given objective. It introduces the idea of definiteness in planning. A budget is an important control device also because it provides standards against which actual performance may be measured. Examples of budgets are, production budget, sales budget, material budget, cash budget, capital expenditure budget, expenses budget and so on.

9. Schedules
A schedule is an operational plan, timetable of work that specified time-periods (with beginning and completion time points) within which activity or activities are to be accomplished. In order to keep the schedule realistic and flexible, minimum and maximum time-periods may be specified. Three main elements are involved in planning a schedules, (i) identification of activities or tasks, (ii) determination of their sequence, (iii) specification of starting and finishing dates for each activity as well as for teh sequence as a whole. Scheduling is the process of establishing a time sequence for the work to be done. Schedules translate programmes into actions. Scheduling is necessary in all organisations with a view to providing for an even flow of operations and to ensure completing of each task at the right time. While planning schedule, the avialability of resources, processing time and the delivery commitments should be kept in view. Due allowance should be made for delays created by factors beyond the control of management as well as for non-productive time.

10. Forecasts
Planning presupposes forecasting as the former is defined as deciding what is to be done in future. Henri Fayol has described a plan as the synthesis of various forecasts - annual, long-term, short-term, special etc. The targets cannot be fixed with any degree of precision unless forecasts are made. Forecasts are estimates of future events, providing parameters to planning. Forecasts do not involve any kind of commitment of organizational resources. Planning without forecasts is not possible. In fact, forecasts are predictions or estimates of the changes in the environment, which may effect the business plans. A manager has to make forecasts keeping in view the planning premises. There are various types of forecasts, such as economic, technological, political, social and so on. However, sales forecast is the basis of most planning.

 

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Q.4. What is environment? What is environment analysis and diagnosis? Explain the importance of environment analysis and diagnosis.

OR

Explain the term "environment" and discuss why environment analysis and diagnosis is necessary in strategic management.




Environment

Organisations are not island in themselves they function neither in isolation nor in vacuum. They are part of a society and exist in association with their environment, i.e., certain facts surrounding various situations. Organisation's profitability is not determined by what the products look like, nor whether it embodies high or low technology; it is rather determined by the environment within which it operates. Thus, organisations are affected by environment. If an organisation is to remain successful and prosperous, it must regularly adapt to its environment, which is uncertain and changing. Failure adequately adapt to the environment may be a mojor cause of organisation's failure. However, organisations also affect the environment.

Although William Starbuck has identified some 20 different uses of the work environment in order to perform an efficient and effective environmental analysis the environment of an organisation is generally divided into two distinct levels; external or general and internal or specific environment.

External or general environment is a set of those factor that affect and organisation from outside is boundaries. The external environment contains elements that have broad and long-term implications for managing the organisation. Such environment has both direct action and indirect action elements. Direct action element of external environment include various stakeholders lie shareholders, customer, suppliers, competitors, employees, community (or society), special interest groups, government and international issues. They are also designated as economic environment or task environment. Indirect action elements of external environment include political-legal socio-cultural and technological components.

Internal or specific or organizational environment is a set of those factors that affect an organisation from inside its boundaries. It contains elements that exist within the organisation and normally have immediate and specific implications for managing organisation. Broadly speaking, internal environment includes organizational objectives, organizational resources, organizational structures, processes and techniques. Organizational resources include, financial and physical or material resources and human technological capabilities. Organisation structures, processes and techniques include; marketing, production, finance and accounting. From a more specifically management viewpoint, internal environment includes planning, organizing, staffing, directing and controlling.


Environment Analysis

Organisations are open system of management that constantly interacts with their environment. Environmental analysis is the study of organizational environment to identify and indicate those environmental factors that can significantly influence organizational operations and managers strategic decision making. It is thinking about the unthinkable, and it is seeing new insights rather than extrapolation. Environmental analysis is the discerning (seeing and understanding well) of those aspects of the environment, which shall have the greatest influence on the organisation's ability to achieve its objectives. Such a discerning is made within and with the help of a framework provided by the knowledge of the organisation's goals and the existing strategy of the organisation.


Environment Diagnosis

Environment diagnosis is an exercise attempted to identify the factors of causes in the environment that affect the function of an organisation and use such identification as a base for developing plans or strategic to improve or maximize the dynamism and effectiveness of the organisation. Environment analysis is a tool of environmental diagnosis.


Environmental Diagnosis Analysis and Diagnosis

The purpose of environment analysis and diagnosis is to identify the ways in which changes in various organizational factors may directly and indirectly influence the organisation and management. Managers commonly perform environment analysis in order to understand different activities and happenings inside and outside their organisation and thereby increase the chances of framing sound and effective organisations and managerial strategies by coping with the probable demands of the environment.

Environmental analysis is required due to its needs and importance for the following reasons:


1. Environmental factors are primary impact makers on corporate strategy of organisations.

2. Such analysis helps in anticipating opportunities and to plan alternative responses to those opportunities.

3. It helps in determining threats and developing an early warning system to prevent threats to the organisation or to determine the risks that may be faced by organisation in its future operations.

4. It helps to identify those adjustments or adaptations, which are required for greater accomplishment of organizational objectives.

5. It is sort of SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis which helps in deciding about the rights course of action for managerial to successfully negotiate with the prevalent circumstances around the organisation in order to ensure its survival, growth and development.

6. Environmental information strengthens the planning process and strategy formulation.

Environmental analysis is well accepted and recognized as an essential ingredients of strategic management. It may, however be noted that the behaviour of the environment may be predictable, partially predictable or unpredictable. Further, the predictable or partially predictable behaviour may be controllable, partially controllable or uncontrollable. Moreover the environment may be homogeneous or diversified and stable or changing.


Environmental Influences on Organisation and Management

Environmental factors affect an organisation in two ways (i) they set the limits or constraints over its functioning, (ii) they provide opportunity and challenges. The factors themselves act as limits, which are sometimes visisble and at other moments, invisible. The environment provides opportunities by way of markets for new products, etc and challenges in the form of competitors etc. We daily find in newspaper headlines about government's new regulations, competitors, new schemes, consumer revolts, anti pollution activities of the community, trade union, strikes and so on. To deal with these groups is an integral part of all manager's job. Such a job becomes more important the higher a manager rises in managerial hierarchy.

 

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Q.5. What is internal environment? How managers can match this internal environment with the external environment of their organisation?
OR
Explain the important techniques by means of which proper organizational strategy may be systematically developed to match the internal environment with the external environment.
OR
Explain the meaning of internal environment. What are the tools available to managers for matching the internal environment with the external environment?


The Internal Environment

The part or level of an organisation's total environment that exists inside the organisation and usually has immediate and specific implications for managing the organisation is called the internal environment. It consists of those factors inside an organisation that affect the management of the organisation. In broad terms, the aspects included in the internal environment are, objectives, resources and facilities (human and physical), informal organisation (or group), other divisions or units of the organisation, unions, marketing and accounting. It may be notes that employees and unions of an organisation have such a nature as they are to be included both in external and in internal environment. From a more specifically management viewpoint, internal environment includes the state of planning, organizing, staffing, directing and controlling with the organisation.


Matching the Internal Environment with the External Environment

It is clear from the above discussion that on organisation (internal environment) must be suited to its external environment. The management develops its organizational strategies through an environment analysis. On the basis of the results of such environmental analysis, proper organisational strategy may be systematically developed by means of the following special tools and techniques.

1. Critical Questions Analysis (CQA)
Several contemporary management writers suggest that an appropriate organizational strategy is a process of answering some critical or basic question as follows:
(a) What are the purposes and objectives or goals of the organisation?'
The answer to this question unfolds the desination where the organisation wants to go. Appropriate strategy must reflect organizational purpose and objectives in order to minimize inconsistencies in strategy.
(b) Where is the organisation currently heading?
The answer to this question tell about the state of achievement of organizational goals and also whether the level of present progress is satisfactory or not. Managers come to now the gaps in their performance. In fact, this question focuses on where the organisation is actually going - whether on desired path or in wrong direction.
(c) What is the present environment in which the organisation exists and what changes are expected in it in relevant future?
The answer to this question brings out the special features of the current environment and its future trends. However, it may be noted that this question focuses on factors both inside and outside the organisation. For example, lack of technically qualified personnel in the organisation and a sudden arrival of latest computerized technology in the market are the factors that exist respectively in the internal and the external environment.
(d) What steps are essential to better accomplish the objective in future?
In fact, the answer to this question focuses on the requirements of the actual strategy of the organisation in order to remove all inconsistencies and gaps in the currently adopted strategy. However, it may be noted that correct answer to this question depends on the opportunity provided to the managers to reflect on he previous three questions.
Thus, managers can have appropriate strategy to match internal environment with external environment only if they have a clear understanding of three things, (i) Where the organisation intends to go, (ii) Where the organisation is currently going, (iii) What is the environment in which it exists and is expected to exist.

2. SWOT analysis
Strategic thinking tends to focus on analysis of the strengths and weaknesses of the firm and opportunities and threats of the external environment. Only after completing a comprehensive appraisal of the internal and external situations (strengths, weaknesses, opportunities and threats) of the firm, managers could consider the viable strategic options. Such options could only be broadly classified as, for instance, growth (to increase the amount of business), diversification (to reallocate resources to new attractive products in order to exploit new market segments), harvest (to maximize the short term cash flow from the business), retrenchment (to strengthen or protect the amount of business being currently generated) and divestiture (to eliminate an organisation segment, commonly known as Strategic Business Unit (SBU), that is not generating a satisfactory amount of business and that has little hope of doing so in the near future). Good strategic option (selected out of the aforesaid strategic options) should build on strengths and exploit opportunities.
The logic of this analysis indicates that as each firm will be facing a differnet set of opportunities and threats (Os and Ts), and each will have differing strength and weaknesses (Ss and Ws), the strategies that result will be unique to the firm. However, a precaution has to be taken in selecting the managers who conduct the SWOT analysis, because if it is given to inexperienced hands, then it may tend to generate long lists of points and the longer the list, the cloudier will be the emerging strategic picture.
It may be noted that they may be two ways to superior performance of the organisation (i) either the organisation should become the lowest-cost producer in its industry, (ii) it should differentiate its products or services in such respects as are valued by the customers so high that they will pay a premium price to get and enjoy such edging benefits. Thus, organizations can choose to apply either of these two general strategies.

3. Business Portfolio Analysis
Under this type of analysis, sound and unsound business activities are separately identified in relation to market share of business and the growth of markets in which business exists. Sound activities are then continued, supported and emphasized, while unsound activities are discarded, discontinued and de-emphasized.

4. Competitor Analysis
Managers should know quite a lot about their competitors because it is essential to stay in competition in order to capture a lion's share of the market. Organisations should devote the time and effort required to gain a deep understanding of their competitors. If they know their enemy, it will help them to anticipate the strategic moves that the rivals might make. For purposes of making a systematic examination of the competitors and their strategies the following steps are required to be taken:

(i). To examine the existing and potential (future) competitors by close scrutiny of the needs that organisation's products or services are satisfying.
(ii). To examine the competitor's current activities, capabilities, drives, expected moves and vulnerabilities (weaknesses).
(iii). To concentrate on four main areas with a view to establishing a comprehensive profile of the competitors their future goals, assumptions, current strategy and capabilites.

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Chapter 13:


* Control

* Characteristics of control

* Importance of control

* Effective control system

Q.1. Define Control. Discuss the importance of Control in organizational system also explain the elements of control.
Meaning and Definitions of Control

Control is necessary function to make all other managerial functions effective. Its ensures that the corporate goals are achieved effectively and efficiently. Controlling is the process that the corporate goals are achieved effectively and efficiently. Controlling is the process by which management regulates that work activities according to designed plans, policies, procedures and programmes so as to ensure the accomplishment of the organizational resources and people in a direction leading to organizational goals.

some important definitions of control may be given as follows:


Henri Fayol

Control consists in verifying whether everything occurs in confirmatory with the plan adopted, the instruction issued and principles established. It has for object to point our weaknesses and errors in order to rectify them and prevent recurrence. It operates on everything, things, people, action.


Theo Haimann and William Scott

Controlling is the process which check the performance against standards. It makes sure that organisation goals and objectives are being met.


Robert Anthony

Management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of an organisation's objective.


Weihrich and Koontz

Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.












Q.2. Describe the characteristics, nature and feature of control.
Characteristic Or Features of Control

Controlling has the following important features, which clearly bring out its nature:


1. Control is a Continuous Process

Control is not a single step activity. Rather, it is a dynamic process that involves constant analysis of actual and planned performance and the resultant deviations as well as the revision of objectives, plans, policies, procedures, positions, incentives etc in the light of such deviations.


2. Purpose of Control is Positive

George Terry says, the function of controlling is positive - it is to make things happen, i.e. to achieve the goal within stated constraints, or by means of the planned activities. Controlling should never be viewed as being negative in character - as a hurdle in getting objectives won. Controlling is a managerial necessity and a help, not an impediment or a hindrance.


3. Controlling is a exercise at all levels in the Management Hierarchy

Control is a function of every manager, from Chairman and Managing Director to a supervisor, though it may vary in scope among managers. For example the top managers are concerned with administrative control, which is exercised through broad policies, plans and other directives. The middle level managers are concerned with the executor control for the purpose of getting the plans, policies, and programmes executed. At the lower level, supervisors exercise operational control to ensure successful performing of actual operations or production activities by their close monitoring.


4. Control Guides Behaviour of People and use of Resources and Facilities

Control guides the action and the behaviour of the people who are responsible for carrying out different activities or operation, and also guide the use by them of different organizational resources and facilities in order to effectively and efficient, contribute toward accomplishment objectives.


5. Control is mainly Forwarding Looking

Control mainly aims at the future because future is a head and past in gone. However, the experience about the criterion for future standards, but it may be noted that control may also be past control and current control. Thus it is not full correct to say that control is looking back.


6. Control Measures and Evaluate Performances

Controlling involves measurements of the actual results in order to facilitate other evaluation or comparison against the planned results. It also suggests guidelines for future course of action.


7. Control Facilities Coping with Environment

Effective controlling system foresees the likely changes in consumer preferences and demands and therefore guides the members of the organisation to modify the products or services to meet the anticipated needs and requirements of the consumers in the future market.
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8. Control Closely Related to Planning

Planning is the basis of controlling. Control implies the existence of certain standards or yardsticks against which actual results are to be evaluated. Planning provides such standards, if there is no plan; it means that there is no basis for control. Planning sets the course of action and controlling monitors the operation or activities to follow such course of action. In fact, planning initiate the process of management and control completes this process. Without a plan control is blind because it does not know where to go and weather it is going on a right path or not. Control looks active in the company of a plan because then it seeks to compel events to confirm to the plan. Without a plan is handicapped. H.G. Licks comments, Planning is clearly a pre-requisite for controlling, it is utterly foolish to think that controlling could be accomplished without planning. Without planning there is no predetermined understanding of the desired performance. In fact planning without corresponding control is likely to be a hollow hope.


On the other hand, planning without control is not a reality. In the absence of a control system, best designed plans may go astray and thus will fail to reach their destination. Control ensures to the organizational activities and the functions on the right track and aligned with plans and goals. Standards for evaluation of performance are the beginning point of the control process. Controlling indicates the need for revision of plans in case the standards are not achievable or if the environment has changed. The information collected by the control system is also useful for planning in future. Without control planning will be a futile exercise remaining on the papers only. Control makes plans meaningful and effective, similarly controlling is effective only when it is specially tailored to plans.


Thus, it is correct to comment that planning is manning less without control and control is aimless without planning. Weihrich and Kortz comments, Planning and controlling may be viewed as the blades of a pair of scissors, the scissors cannot work unless there are two blades. Without plans and objectives, control is not possible because performance has to be measured against some established criteria. Similarly, without control, realization of plans is not possible be guided on the right path leading to the accomplishment of plans. This is why that Weihrich and Koontz has commented as follows. Planning and controlling are inseparable the Siamese twins of management. Any attempt to control without plans is meaningless, since there is no way for people to tell whether they are going where they want to go (the result of the tusk of control) unless they first know where they want to go (part of the task of planning). Plans thus furnish the standards of control. Thus, there is complete interdependence between planning and controlling.

 

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Q.3. Describe the Importance of Control.
Importance of Control

The major benefits of a good control system may enlisted as follow:

1. Stimulates Action
A good control system stimulates action by spotting the significant deviations from the original plan and by highlighting them for the people who set thing right i.e., who can take corrective action. Thus, it guides and keeps the organization's operations on the right back.

2. Facilities Decentralization and Coordination
Control encourages top management to delegate authority to subordinates throughout the organisation without completely losing their grip over it. In the context of predetermined goals, control keeps all activities and efforts within their specified limits and makes the operations to move towards organizational goals through coordinated efforts.

3. Facilities other Managerial Functions
Control and planning are closely related to each other. Control points out the deficiencies in plans and policies by verifying their quality and correctness. It helps to review, revise and update the plans and policies in order to cope with changes in the environment. By doing so, control also indicates the limitations and drawbacks of organizing staffing, motivation, leadership and decision-making.

4. Enhances Employee Morale
Control is vital to the strength and moral of company employees because it prevents the individuals form going astray from plans and thus prevents anarchy to develop. Employees do not like a situation that goes out control because in that case they may become victims to any within and cannot predict what will happen to them. Thus without control their morale may be lowered. The tremendous complexity of modern organisation and certain psychological dependencies of the employees on order and stability, make the control system a necessity.

5. Creates Psychological Pressure to Work
If there exists a sound control system in an organisation, employees have psychological pressure to work hard and perform well. Efficient control system provides order and discipline in activities and helps to minimize dishonest behaviour on the part of employees. Employees remain alert in their efforts.

6. Other Benefits
Several other benefits from good control system may be as follow:

• Control is necessary for the optimum use of organisation's scarce resources.

• It helps in organisation's growth and change

• It helps in forecasting and thus provides basis for future action.

• Control techniques like rules, procedures, budgets etc stand as effective guides to managers.

• In the absence of control, the plans will remain but mere pipedreams.

• Control helps in judging the accuracy of standards.

• In the area of their responsibility, if managers do not control events, they will be at the mercy of the events.

 

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Q.4. Discuss the requirements of an effective control system.
Requirements of Effective Control System

A control system is a deliberate creation, not an automatic phenomenon. Through different organisations may design their control systems according to their unique and special characteristics or conditions, yet in designing a good and effective control system the following basic requirements must be kept in mind:

1. Focus on Objectives and Needs
The effective control system should emphasis attainment of organizational objectives and therefore it should be designed in accordance with practical needs of the enterprise. For example, the marketing department may use pre-controls for introduction of new products into the market, and current control for specific advertisements. Similarly, more sophisticated and broad ranging controls may be developed for production managers than for a shop floor supervisor. Thus, controls should be tailored to plans and positions.

2. Prompt Indicator
An ideal control system could detect and report significant deviation as promptly as possible so that necessary corrective action may be taken adequately in time. This needs an efficient system of appraisal and flow of information. Rapid reporting of variations of the core of control.

3. Forward Looking
Control should be future-oriented, marketing valuable forecasts to the managers so that they become aware of the problems likely to confront them in the future.

4. Understandable and Economical
Control tools and techniques adopted should be such as are clearly understandable by the managers. They must know all the details and critical points in the control device as well as its usefulness. If developed and complex statistical and mathematical techniques are adopted, then proper training should be imparted to the persons who are supposed to execute such control system. Besides the control system should be worth its costs. Expensive and elaborate control system will not suit, for example to small enterprise.

5. Control by Functions and Factor
Control should emphasis function, such as production, marketing, finance, human resources, etc it should also focus on four factors, quality, quantity, time use and costs. Not one but multiple controls should be adopted.

6. Strategic Points Control
Every detail or thing is not be controlled in order to save time, cost and effort. Certain strategic or vital points in the functioning of an enterprise must be identified and appropriate control devices should be designed and imposed at those stages. Thus, only critical, major deviations should be attended to and control should concentrate on exceptional problems only. Control should be selective and concentrate on key result areas of the company.

7. Flexible
It means that the control system should be able to accommodate such modifications or revisions as are made necessary in the wake of rapidly changing and complex organizational environment. Control must not become ends in themselves. They must be suited to the environment in which an organisation finds itself. Flexibility in control system is generally achieved by the use of alternative plans or flexible budgets.

8. Objective
To the maximum possible extent, controls, i.e., standards of performance should be objective (unbiased) and specific. For this purpose control measures should be verifiable or quantified. Standards should be determined based on facts and participation.

9. Indicative as well as Suggestive
Controls should not only be able to point to the deviations, but they should also suggest corrective action that is supposed to check the recurrence of variations or problems in future.

10. Correct Action at Correct Time
A significant test of the effectiveness of a control system is whether correct action is taken at correct time.

11. Attention to Human Factor or Emphasis on Self-Control Aspect
It is said that excess control causes corruption. Control system should be designed is such a way, as it does not arouse negative reactions among organizational people. Good controls are designed to develop positive feelings in the members by focusing on work and not on worker. It facilities creative action within properly laid down limits. The aim of control should be to create self-control among members. For this purpose, the tendency over the years has been toward such techniques as participative budgeting and human resources accounting.

 

[Hoorain]

Chapter 14:
Chapter 14 - Motivation & Morale

* Motivation

* Characteristics of Motivation

* Moslow's theory of motivation

* Salient features of Maslow's Needs Model

Q.1. How would you define motivation? Set out the importance of motivation in an organisation.
OR
What is motivation? Explain the term motivation. What does motivate people in an organisation?
Meaning and Definition of Motivation

Success at work is not a matter of only technical expertise but also dependent on the interest of the worker. Creating interest in people to give their best to the work and the workplace is the key to motivation. For this purpose, the managers should know why people act as they do and what will make them to give their best on their jobs.
Some important definitions of motivation may be given as follows:
Carroll Strartle
Motivation is a reported urge or tension to move in a given direction or to achieve a certain goal.

Micheal Jucius
Motivation is the art of stimulating someone or oneself to set a desired course of action or push the right button to get the desired action.

E.F.I. Brech
Motivation is a general inspirational process which gets the members of the team to pull their weight effectively, to give their loyalty to the group, to carry out properly the tasks that they have accepted and generally to play an effective to play an effective part in the job that the group has undertaken.

Weihrich and Koontz
Motivation is a general term applying to the entire class of drives, desires, needs, wishes and similar forces. To say that managers motivate their subordinates is to say that they do those things which key hope will satisfy these drives and desires and induce the subordinates to act in a desired manner.
In sum, motivation is a psychological process which is related to human side and through which the desires, needs or tensions of the employees are understood and they are inspired in such a way that they proceed in a desired direction, provide maximum help in the achievement of specified goals, keep on the drive to work, continue to cooperate with each other, develop and maintain the sense of belongingness towards the enterprise, feel satisfied and their morale remains high. Thus, motivations are the process of steering a person's inner drives and actions towards certain goals and committing his energies to achieve these goals.​

Q.2. Describe the characteristics, nature and features of motivation.
Characteristics Or Features of Motivation

Some important features of motivation may be brought out as follows:

1. Personal and Internal Feeling
Motivation is a psychological phenomenon, which is generated within an individual in the form of an energetic force that drives him to behave or not to behave in certain ways. These are some environmental and other forces that trigger these drives.

2. Art of Stimulating Someone Or Oneself
A manager can use motivation to inspire not only his subordinates, but to motivate himself also. For self-motivation, he has to take following steps

• He should set a goal for himself and should not close sight of it.

• He should supplement his long term objectives with short-term goals.

• He should learn a challenging task every year.

• He should make his job a different one with a view to improving objectives for his position and increasing his productivity.

• He should develop an area of expertise by building on his strengths and developing his weaknesses into strengths.

• He should give himself the feedback and reward himself by celebrating his accomplishment.

3. Produces Goal - Directed Behaviour
Motivation is closely intertwined with behaviour. As a Behavioural concept, it directs human behaviour toward certain goals.

4. Motivation can be either Positive or Negative
Positive motivation is also known as Carrot Approach and includes use of additional pays, incentives, praise possibility of becoming a permanent employee etc. Negative motivation is also called Stick Approach and implies punishment, such as reprimands, threat of demotion, threat of termination, etc.

5. The Central Problem of Motivation is HOW
Motivation is necessary for successful achievement of goals. However, it is a complex process because different employees have different needs, their motives are varied and needs and motivates change from time to time. Moreover, motivation is partly logical and partly emotional. Further, people satisfy their needs in many different ways. Hence, the central problem of motivation is how to inspire such a typical group of individuals towards attainment of goals in a concerned manner.

6. Motivation is System Oriented
Motivation is the result of interplay among three sets of different factors:

• Influences operating within an individual, for example, his needs, tensions, motives, values, goals etc.

• Influences operating within the organisation for example, its structure, technology, physical facilities, various processes, the nature of job, advancement avenues etc.

• Forces operating in the external environment, for example, society is culture, norms, values, customs, government policy regarding the business of the enterprise etc.

7. Motivation is a Sort of Bargaining
Inducements from the side of the enterprise and contributions from the side of the employees.

8. Motivation is different from Satisfaction
Motivation refers to the drive and effort to satisfy a want or goal. Satisfaction refers to the contentment experienced when a want is fulfilled. In other words, motivation implies a drive toward an outcome and satisfaction is the outcome already experienced.​

 

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Q.3. Describe the Maslow's theory of Motivation.
Theories of Motivation

Different management scholars to explain how behaviour is energized, gets started, sustained, directed or stopped have propounded several theories.


Maslow's Needs Hierarchy Theory

Maslow's need priority model is one of the most widely referred to theories of motivation. Abraham Maslow, a clinical psychologist, thought (1943) that a person's motivational needs could be arranged in a hierarchical manner, starting in an ascending order from the lowest to the highest needs and concluded that once a given level of needs (set of needs) was satisfied, if ceased to be a motivator. The next higher level of need to be motivated in order to motivate the individual. Although the hierarchical aspects of Maslow's theory are subject to question and often not accepted, his identification of basic needs has been fairly popular.
The five categories of needs may be described as follows:

1. Physiological Needs
These are the basic needs for sustaining human life itself: needs for food, drink, shelter, clothing, sleep, sex etc. Man can live on bread alone, if there is no bread. But once these basic needs are satisfied, they no longer motivate.

2. Safety Needs
Safety or securing needs are concerned with freedom from physical or psychological (mental) harm, danger, deprivation or threat, such as loss of jobs, property, food, clothing or shelter.

3. Social Or Affiliation Or Acceptance Needs
These are belongingness needs emanating from human instinct of affiliation or association with others. These include owners, love and affection, needs of mutual relations, identification with some group etc. These are the needs more of mind and spirit than of physique.

4. Esteem Needs
This set of needs represents higher level needs. These needs represent needs for self-respect, respect of others a general feeling of being worthwhile, competence, achievement, knowledge, independence, reputation, status and recognition.

5. Self-Actualization Needs
This set of higher order needs concerns with reaching one's potential as a total human being. It is the desire to become what one is capable of becoming, i.e. to maximum one's capacity and abilities in order to accomplish something appreciable and self-fulfilling. It is a need for being creative or innovative, for transforming self into reality.

Q.4. Describe the salient features of Maslow's needs model.
Salient features of Maslow's Needs Model

1. The urge to fulfill needs is a prime factor in motivation of people at work. Human beings strive to fulfill a wide range of needs. Human needs are multiple, complex and interrelated.
2. Human needs form a particular hierarchy or priority structure in order of importance.
3. Lower-live needs must be at least partially satisfied before higher-level need emergy. In other words, a higher-level need does not become an active motivating force until the preceding lower-order needs are satisfied. All needs are not felt at the same time.
4. As soon as one need is satisfied, the individual discovers another need which is still unfulfilled.
5. A satisfied need ceases to be a motivator, i.e., does not influence human behaviour. Unsatisfied needs are motivators, i.e., they influence human behaviour.
6. Various need levels are independent and overlapping. Each higher-level need emerges before the lower-level need is completely satisfied.
7. All people to a greater or lesser extent; have the identified needs.


Critical Evaluation of Maslow's Model

1. Human needs cannot be classified into clear and only specified categories, i.e. their hierarchy cannot be definitely specified. The determination of higher and lower levels is dependent on people's cultural values, personalities and desires. For example, the higher-level need of an Indian worker may be the lower-level need of an American worker.
2. It is not necessary that a time only one need be satisfied. In other words, needs of more than one levels may be fulfilled jointly, for example: physical and esteem needs, Maslow's model does not explain this multi-motivation fact.
3. Some of the assumptions of Maslow's theory are not always found in practice.
4. It has been found by some scholars like Lawler and Suttle that physical and safety needs may be probably satisfied, but high-level needs do not appear to be rather satisfiable.
Though Maslow may not be the final answer in motivation, yet his model does make a significant contribution in terms of making management aware of the diverse needs of human beings at work, their diverse motives. Needs may not be the only determinants of human behaviour but they are definitely important for understanding such behaviour.​

 

[Hoorain]

Chapter15:

Chapter 15 - Business Communication

* Communication and its elements

* Objectives of Communication

* Advantages and Disadvantages of Communication

* Various types of Communication

Q.1. Define Communication & its elements.
Communication Defined

The term communication has been derived from the Latin work communis which means commons. It refers to the serial of contact process. Communication is a continuous process of telling, ordering, commanding, listening, questioning and answering.


Communication is one of the Fundamental Functions of Management

Communication is the conveying of information from one person to another. It is two-way exchange of ideas and information that leads to a common understanding. In other words, communication means perfect identity of mind. Though the communication underlies all functions of management, it assumes greater importance in the function of directing. For the successful leadership and manager ship, communication is a must. Communication means and includes every device that may be used to convey meaning from one person to another. A few definitions of communications are given below.

Allen
Communication is the sum of all things one person does when he wants to create understanding in the mind of another. It involves a systematic and continuous process of telling, listening and understanding.

Haimann
Communication means the process of passing information from one person to another. It is the process of importing ideas and making oneself understood by others.

Newman and Summer
An exchange of facts, ideas, opinion or emotions by two or more persons.
To sum up, communication is the process of passing and understanding information from one person to another.


Elements of Communication

A communication passes through the following five processes:

1. Preparing the message, i.e., any fact, idea, order, complaint, etc.
2. Sending the message by the sender.
3. Receiving the message by the receiver.
4. Channelizing the communication.
5. Symbolising the communication or encoding.
Communication is an all-pervading field of human contact, exchange of views. It can well be summed up through these lines. Communication is generally understood as spoken or written words. But in reality, it is more than that, it is the sum total of feelings, actions, gestures and tones. Even silence is an effective form of communication. A twist in the face is often a more expressive disapproval than hundreds of words put together.​

 

[Hoorain]

Q.2. Define the Objectives of Communication.
Objectives of Communication

1. Information Sharing

The main purpose of communication is to transmit information form a source to target individuals or groups. Various types of information's are transmitted in the organisation-policies and rules and changes and development in the organisation etc.


2. Feedback

There is a need to give good feedback to the employees on their achievements, to the departments on their performance and to the higher management of the fulfillment of goals and difficulties encountered.


3. Control

The management information system is well known as a control mechanism. Information is transmitted to ensure that the plans are being carried out according to the original design. Communication helps in ensuring such control, a monitoring mechanism.


4. Influence

Information is power and one purpose of communication is to influence people. The manager communicates to create a good climate, right attitude and congenial working relationship.


5. Problem Solving

In many cases, communication aims at solving problems. Communication between management and the union on some issues (negotiation) is aimed at finding a solution. Many group meetings are held to discuss alternative solutions for a problem and to evolve a solution.


6. Decision Making

For arriving at a decision several kinds of communication are needed, e.g., exchange of information, views available, alternatives, favorable points to each alternative, Communication helps a great deal in decision making.


7. Facilitating Change

The effectiveness of a change introduced in an organisation depends to a large extent on the clarity and spontaneity of the communication. Communication between the consultants and the managers between the managers and the employees and amongst the employees help in knowing the difficulties in the planned change and in taking corrective action.


8. Group Building

Communication helps to build linkages of the organisation with the outside world. The organisation can use its environment to increase its effectiveness. It can also influence the environment itself the government, client system, the resource system etc. Communication plays a critical role in this respect.

Q.3. Discuss the Advantages and Disadvantages of Verbal and Written Communication.


Verbal Communication

When a message is communicated verbally and not is writing by exchanging the words in face communication or through telephone or through the other visual aids, etc., it is called Verbal Communication. It may take place at meetings, interviews, etc.


Advantages of Verbal Communication

Verbal Communication has the following advantages:


1. Saving of Time

The greatest advantages of verbal communication, is saving of time. Under this system of communication the messages are communicated immediately without consuming any time. Verbal communication is the only way out during urgent condition and when immediate action is necessary.


2. Saving of Money

As there is no formal method of communicating the message, no help of any particular media of communication is taken, this type of communication saves a lot of money.


3. More Effective

As there is direct touch of the sender of message with the receiver of message these messages prove to be more effective. The sender of message can also exercise his personal influence over the receiver of message.


4. Knowledge of Reaction of Message

An important advantage of verbal communication is that under this method of communication, the sender of message can judge the reaction of the message on its receiver. He comes to know whether the receiver of the message will follow it or not.


5. Clear Doubts

Verbal Communication is also better form the point of view that the doubts regarding the message, if any, between the sender and the receiver of message can immediately be cleared and the receiver of the message can immediately get the explanations regarding any point or the message.


6. Increase in Productivity and Efficiency

Verbal communication is more effective. It increases the productivity and efficiency of workers because they clearly understand it and follow it.


Disadvantages of Verbal Communication

Verbal communication has the following disadvantages:


1. Lack of Proof of Message

The greatest disadvantages of verbal communication is that there is no proof of the message communicated.


2. Not Suitable for Future Reference

As there is nothing in writing supporting the messages communicated under this method, it is not suitable for future reference. If there is any dispute on any point of the message, it cannot be helped in any way.


3. Not Suitable in Case of Distance

If the receiver and the sender of the message are living at a distance from each other, this method of communication is not suitable because it will increase the cost of communication, it will no be effective because of lack of personal touch and it may not be clear and explanatory.


Written Communication

When a message is communicated in writing, it is called Written Communication. Written Communication takes place in the form of letters, circular, reports, magazines, notice board, handbook, notice etc. Written Communication is generally, used for communicating a message from the top management to the subordinates. Written message must be clear and understandable. It must be brief and self-explanatory and must be prepared in a simple language. The language must be polite and sweet so that the receiver of the message may easily accept it. If possible, it must be in the printed form.


Advantages of Written Communication

1. No need of Personal Contact

In written communication there is no need of personal contact:


2. Economical

If the receiver and sender of the message are at a distance, it is economical to communicate the message in writing because communicating by post is cheap and quite economical.


3. Written Proof

A great advantage of written communication is that it provides a proof for future reference. If there is any dispute on any point in this regard, the message may be referred.


4. Clear and Explanatory

Written messages are very clear and self-explanatory. The receiver of the message can easily follow it and understand it.


Disadvantages of Written Communication

Written communication has the following disadvantages:


1. Delay

The greatest disadvantage of written communication is the delay in communication. The message is writing is communicated after a certain process is completed. It is prepared, verified and order by the concerned officer. Consequently, the message is delayed.


2. Lack of Secrecy

Another great disadvantage of written communication is that secrecy cannot be maintained because these messages can be read by anyone.


3. Costly

A written communication involves heavily expenditure. If the receiver and sender of message are near to each other, it is fairly costly to communicate in writing.

​

​

 

[Hoorain]

Q.4. Explain the various types of Communication.


Types of Communication

These are as explained below:


According to the Organizational Structure

1. Formal Communication

Such communication is associated with the formal organisation structure. Communication travels through the formal channel we very other hear the phrase through proper channel; it explains the essence of formal channel. This is a deliberate attempt to regulate the flow of organizational communication so as to make it orderly and thereby to ensure that information flows smoothly, accurately and timely. This formal channel is the path of line authority linking the position to its line superior. It is also known as Channel of Command. Its implications is that all communication to and from a position should flow through the line superior or subordinate only, i.e., through the scalar chain. This type of formal communication is known as single-path communication. There may be multiple channel communication which improves communication through more than one path at a time.


Advantages of Formal Communication

1. It helps maintain the authority of line officers that control the subordinates and fixes the responsibility for the activities done.

2. An immediate superior has a direct contact with his subordinates. It helps understand the attitude and behaviour of each other well.

3. Since an officer knows better about the organisation and his subordinates, solutions of problems become easy.


Disadvantages of Formal Communication

1. It increases the workload of the line superior because all communications are transmitted through them. It leaves no time to perform other functions well.

2. It enables the chances of more transmission errors and reduces accuracy of the message.

3. It is not good for upward communication because officers overlook the interest of their subordinates. It implies delay tactics and red-tapism.

4. It has generally happened that the contact of distinct subordinates with the topmost superior is far and remote. They do not even recognize each other. It adversely affects the relationship.


Informal Communication

Such communication is free from all formalities because they are based on the informal relationship because the parties. Such communication includes comments, suggestions or any other informal reactions. Such types of communication are also called grapevine communication. They may be conveyed by a simple glance, gesture, nod, smile or silence too. It is not the result of any official action but of the operation of personal, social and group relations of the people. Informal communication is unplanned but may follow a predictable pattern.


Advantages of Informal Communication

1. Communication is always transmitted at a greater speed and is more flexible.

2. It is dynamic and reacts quickly to its changing environment.

3. It meets the social needs of people, which are not met by formal communication.

4. It provides a means for exchange of mutually beneficial information between people who are not linked through formal channels.


Disadvantages of Informal Communication

1. It is less orderly and less static, any action taken on the basis of such communication may be erratic and may lead the organisation in difficulty.

2. It very often carries half-truth, rumours and distorted information and it is difficult to fix the responsibility of such erratic information.


According to Direction of Communication

According to direction of communication, the communication may be of following three types:


1. Downward Communication

Communication which flow forms the superiors to subordinates with the help of scalar chain, is known as downward communication. They include orders, instruction, rules, policies, programmes and directions etc. There nature is directive.


2. Upward Communication

Upward communications are just reverse of the downward communications. Feedback to the higher authorities by the lower level is an upward communication. It flow form the subordinates to their superiors through the line. Such communication includes suggestions, opinion, reactions, complaints and grievance, etc. Generally the superior ignores this type of communication but in modern times it is regarded as the main source of motivation in employees.


3. Horizontal Communication

It refers to transmission of information among positions of the same level, i.e., when communication takes place between two or more persons of the same level under the same superior, it is known as horizontal communication. Such communication is to coordinates the efforts of the person working under various departments. It removes duplication of work and thus minimizes the wastage of time, money and labour.


According to Way of Expressions

On the basis of their expression communication may be divided in two categories oral and written.


Oral Communication

Transmission with the help of spoken words is a common system of communication. In oral communication both parties in the process exchange their ideas through oral words either face-to-face or through any mechanical device such as telephone, etc. Meetings, lectures, conferences are some other media of such communication.


Advantages of Oral Communication

1. It saves time and money.

2. It is more effective, Gesture, tones and facial expression make the communication effective and efficient.

3. The communicator knows the reaction of communicate. They may even clear the doubts, if any in the minds of other party.

4. It is the only way out during emergencies.

5. It is more convenient to measure the effect of communication. The communicator can easily guess whether the recipient is following him or not.

​

 

[Hoorain]

chapter16:

Chapter 16 - Group

* Group
* Group cohesiveness


Q.1. Define Group, why they are formed?

Group Defined

From times immemorial, man has lived in a social system (a large group), and the family (a small group) is an integral part of it. On this earth, there are groups, large or small, which influence our social system, social relations and communication.

Group exists in every organisation and they effect the behaviour of their members and also other groups. They have also impact on the whole organisation. If one wants to study and organisation, one will have to understand the groups existing in that organisation and their functioning. There are so many small groups existing in that organisation. Such groups are formed by the organisation by dividing its ultimate task into small tasks, which are assigned to various subunits known as departments, sections units etc. Besides there are many other groups, which are created automatically (may be called informal groups) because of the operation of socio-pychological factors at the work place.

The social process by which people interact fact to face in small groups in called group dynamics. Interaction in small groups is not always governed by rules, regulations and conventions though well established.

The word dynamics is originally a Greek word implying force. Thus, group dynamics means the study of forces operating within a group in social interaction. It concerns the interactions and forces between group's members in a social situation. When the concept of group dynamics of members of formal and informal groups in the organisation.

The term group dynamics has been interpreted in many ways. One view is that it deals with how the groups are formed and function. The other view is that groups dynamics is a state of techniques such as role playing, brain storming, leaderless groups, group dynamics, thus should be viewed in terms of the internal nature of groups, their information, structure and processes and the way they affect individual members, other groups and the organisation. This view is more prevalent.


Behaviour in Groups

Social variables influence the manner perception and judgement particularly in a group setting. Focus should be on the individual. But the group itself should be studied as a whole because the product of groups, interaction cannot be indicative of the performance of the individual outside the group. Both the composition and the behavioural history of a group are determinants of its stimuli for the individual members. The groups also determines the nature and patterns of reinforcement, the members receive in the course of their interaction with another. The group influences the behaviour of individuals in many ways such as in the form of conformity to group forms, group cohesiveness, group participation, group competition and group problem solving. These characteristics are found in both formal and informal groups.


Conformity to Group Norms

There are certain forms of the groups, which the group members are to follow: they are expected to behave in the same manner. This normative behaviour of the members helps the managers of the organisation to understand how and why an individual will behave in accordance with the group norms. Group norms perform two main functions.

First, norms help the group to achieve its goals: they bring uniformity of action towards the goals. Second, norms help the group maintain itself a group; these ensure that divisive forces in the group may be put under pressure against their behaviour.

People conform to group forms also for their own benefit. But the degree of conformity differs from member to member. Researches on this aspect of group's dynamics present the following conclusion.


1. The degree of conformity to group forms depends upon the status of the group and its members. Within a group, it has been observed that the higher the rank of a person, the more nearly his activities conform to group norms.

2. Seniority also influences the degree of the conformity. A new person may be expected to adhere more closely to norms than a senior person.

3. Pressure of conformity increases with the increase in the number of persons agreeing to the norms.

4. On applying rigid standards to evaluate the forms, non-conformity as likely to increase.


Group Cohesiveness

Group cohesiveness is a situation in which all members of the group together for a common goal, or where everyone is ready to take responsibility for group chores. The greater the group cohesiveness, the greater will be its influence on the behaviour of members. Group cohesion brings low absenteeism and high personal adjustments. Many factors bring cohesion in the group such as degree of dependency on the group, size of the group, homogeneity and stable membership, composition and outside pressure.


Participation

The effectiveness of the group is determined by the degree of participation of its members in its functioning. The more the participation, the more effective is it's functioning. Better participation results in high morale and better labor-management relationships, in addition to increased