UNIT – 4

GENERAL

MANAGEMENT

DEFINITIONS

PRODUCTION OR EFFICIENCY-ORIENTED

“Management is the art of knowing what you want

to do and then seeing that it is done in the best and

cheapest way”

- W.F.TAYLOR

“Management is the art of securing maximum

results with minimum effort so as to secure

maximum prosperity and happiness for both

employer and employee and give the public the best

possible service”

- JOHN MEE

PEOPLE-ORIENTED DEFINITIONS

“Management is the accomplishment of results

through the efforts of other people.”

- LAWRENCE APPLEY

“Management is the art of getting things done

through and with people in formally organized

groups.”

- HAROLD KOONTZ

FEATURES OF MANAGEMENT

• Existence of Objectives

• Organized Activities

• Relationship Among Resources

• Working with and Through People

• Decision-Making

IMPORTANCE OF MANAGEMENT

• Effective Utilization of Resources

• Development of Resources

• To Incorporate Innovations

• Integrating Various Interest Groups

• Stability in the Society

SCIENTIFIC MANAGEMENT

• Introduced by FREDRICK WINSLOW TAYLOR in USA in the beginning of 20th century.

• Called as the “Father of SM” & his contributions are termed as “Principles of SM”.

• 1871 – started career as an apprentice machinist & turner @ Cramp Shipyard, Philadelphia (USA).

• 1874 - Joined Midvale Steel Company(USA) as worker, later on become a machinist & supervisor.

• 1884- became the Chief Engineer of MSC.

• 1889- Quits MSC

• Completed M.E from STEVENS INSTITUTE.

• 1898 – 1901 – worked in Bethlehem Steel Company.

• Carried out experiments about how to increase the efficiency of people.

• His contributions were compiled in his book called “SCIENTIFIC MANAGEMENT”

• The word SM was coined by Louis Brandeis - 1910

• Contributions described in 2 parts :

1. Elements & tools of SM

2. Principles of SM

• Concern : Improving the operational efficiency at the shop floor level.

• Emphasis: planning, standardizing & improving human efforts @ operating level to secure Maximum O/P with Minimum I/P.

PART 1: ELEMENTS & TOOLS OF SM

❖Separation of planning & doing

- worker himself plans his work & instruments

- supervised by GANG BOSS.

❖ Functional foremanship

- 8 persons involved to direct workers.

- 4 planners ( route clerk , instructional card clerk, time & cost clerk , disciplinarian )

- 4 activators (speed boss , inspector , maintenance foreman, gang boss )

- against the principle of “UNITY OF COMMAND”

❖ Job analysis

- to find out 1 best way of doing a job.

- best mean – least movements, less time & cost

- taken up by TIME-MOTION-FATIGUE studies

❖ Standardization

- instruments/tools , period of work , amount of

work , working condition , production cost ,etc.

❖ Scientific selection & training of workers

- selection based on education, work experience,

aptitude, physical strength etc.

- more emphasis on training for more effectiveness

❖Financial incentives

- differential piece rate system highly motivating.

- suggests wages should be based on individual

performance not on the position possessed.

- wage should be fixed on accurate knowledge.

❖ Economy

- optimum utilization of resources/minimize waste.

- emphasize profit through economical activity.

- cost estimates & control.

❖ Mental revolution

PART 2 : PRINCIPLES OF SM

1. Replacing rule of thumb with science

2. Harmony in group action

3. Co-operation

4. Maximum output

5. Development of workers.

FOLLOWERS OF SM:

1. Carl George Berth – developed many mathematical

techniques for putting SM into real life practice.

2. Henry Gantt – developed graphical method of

depicting plans & managerial control.

- developed GANTT chart. PERT

3. Frank & Lillian Gilbreth – viewed problems of

workers from Social & Psychological point.

4. Edward Felene – created 20th Century Fund, a

famous RDO which still in existence.

OPPOSITION TO SM

• Took aggressive mechanical view of production

which sidelined human aspect of the workplace.

• Authoritarian approach – close & strict supervision.

• Lack of scientific standardization of work. (raised

the production norms).

• Concept of differential piece rate system, which

paved new methods of exploiting workers by

industrialists.

ADMINISTRATIVE MANAGEMENT:

• Intoduced by HENRY FAYOL.

• Also called as REAL FATHER OF MODERN

OPERATIONAL MGNT.

• His contributions are generally termed as

OPERATIONAL MANAGEMENT (OR)

ADMINISTRATIVE MANAGEMENT.

• 1916 - FAYOL’S contribution were 1st published in

the book titled “ADMINISTRATION

INDUSTRIALLE AT GENERALLE”. (in french)

• Not translated until 1929. english version in 1949.

• Purview : top management

• He used ADMINISTRATION insted of

MANAGEMENT.

• Administrative doctrines are universally applicable,

equally well in public & private affairs.

• Emphasis : POM are flexible, relative, and

applicable regardless of changing & special

conditions.

FINDINGS :

• the activities of industrial organization could be

divided into 6 groups

1. Technical – relating to production

2. Commercial – buying, selling , exchange

3. Financial – search for capital & its optimum use.

4. Security – protection of property & persons

5. Accounting – including statistics

6. Managerial – planning, oraganizing, command, co-

ordination & control

• These activities exist in every business.

• Fayol’s approach can be divided into 3 parts.

1. Managerial qualities & training

2. General principles of management

3. Elements of management

1.Managerial qualities & training

1. Physical – health ,vigour

2. Mental - ability to understand & learn, judgement,

capability

3. Moral – loyalty , dignity , initiative, firmness

4. Educational

5. Technical - specific to the function being

performed

6. Experience – arising from work.

2. GENERAL PRINCIPLES OF MANAGEMENT

• 14 principles

• MP is a fundemental truth & establishes cause –

effect relationships.

• List of MP is suggestive in nature.

• MP are very flexible & capable of being adapted to

every need.

14 PRINCIPLES OF MANAGEMENT

1. Division of work

2. Authority & responsibility

3. Disciplene – self imposed & command

4. Unity of command

5. Unity of direction

6. Subordination of individual to general interest

7. Remuneration of personnel

8. Centarlisation / Decentarlisation

9. Scalar chain

10.Order – arrangement of things & people

11. Equity

12. Stability in tenure

13. Initiative

14. Esprit de corps

ELEMENTS OF MANAGEMENT

• Mgnt elements denotes the function performed by a

manager.

• Management should be viewed as a process

consisting of 5 elements.

• PLANNING , ORGANIZING,COMMANDING,

CO-ORDINATION & CONTROLLING.

FUNCTIONS OF MANAGEMENT

1. Planning

2. Organizing

3. Staffing

4. Directing

5. Controlling

PLANNING

• Conscious determination of future course of action.

• What/when/why/how

• Includes determination of specific objectives, setting

policies & strategies, setting rules & procedures ,

preparing budgets ,etc.

• Plan may be prepared for long term (≥ 5 years),

intermediate term ( 2-5 years) & short term (1 year)

• Long term plan provides basis for short term plans.

ORGANIZING

• Dividing work into convenient tasks / duties.

• Grouping & arranging of such duties/tasks in a

logical fashion.

• Assigning persons to the job designed.

• Delegating necessary authority to the persons to

accomplish the task.

• Organizing means , organizing people,

resources,jobs,time etc., & establishing framework

within which the authorities & responsibilities are

defined.

STAFFING

• Means MANNING the various positions created by

organizing process.

• Identifying the gap b/w manpower availability &

manpower required.

• EMPLOYING THE “RIGHT PERSON” FOR THE

“RIGHT JOB” AT THE “RIGHT TIME”

• Identifying the sources from where people can be

selected, selecting people , training & developing

them, fixing financial compensation , appraising

them periodically,etc.

DIRECTING

• Directions includes communicating,motivating &

leading.

• Giving proper guidance and leading them to better

work performance.

• Motivating them to work with enthusiasm.

CONTROLLING

• Identification of actual results.

• Comparison of actual results with expected results.

• Identification of deviation b/w two.

• Identification of bottlenecks.

• Taking corrective actions to match the AR with ER.

DIFFERENT TYPES OF MANAGEMENT

1. PERSONNEL MANAGEMENT – it includes

employee selection, placement , training, transfer,

promotion, discharge, industrial relations, safety,

health & welfare services.

2. FINANCIAL MANAGEMENT – it includes

economic forecasting, costing, accounting,

budgeting, budgetary control, insurance etc.

3. PURCHASING MANAGEMENT – it includes

tendering, buying, contract work, store keeping,

store & stock control.

4. PRODUCTION MANAGEMENT - it includes

work analysis, production planning & control, routing,

scheduling, quality control, work study, etc.

5. DISTRIBUTION MANAGEMENT – it includes

marketing, merchandising, franchising, advertising,

sales promotion, sales etc.

6. TRANSPORT MANAGEMENT – it includes

transportation by rail, road, air & water, packaging,

warehousing etc.

7. DEVELOPMENT MANAGEMENT – it includes

research into materials, machines, processes etc.

8. MAINTENANCE MANAGEMENT – it includes

keeping up of buildings, equipment , estate works etc.

INDUSTRIAL OWNERSHIP

• OWNERSHIP - PROPRIETORSHIP / RIGHT /

POSSESSION

• CAPITAL is the blood for any kind of business.

• Individual ownership – capital provided by single

person. (Sole proprietorship/ single ownership)

• Partnership – capital supplied/ shared by two or

more persons.

• Joint stock company - capital supplied by many

persons in the form of shares to an institute with an

legal entity.

TYPES OF INDUSTRIAL OWNERSHIP

1. Single ownership

2. Partnership

3. Joint stock company

4. Cooperative organization

5. State & central government owned

SINGLE OWNERSHIP

• Single ownership - Business owned by one man.

• Suits good to enterprise which require little capital.

• One contributes all the original assets to start the

business.

• Maintains & controls business operation

individually

• Reaps full benefits (benefits) & fully liable for

debts.

• Examples: stationery shops, departmental stores,

medicals ,printing press, retail shops, auto repair

shops, etc.

ADVANTAGES:

• Easy to establish & does not need to complete any

legal formality.

• Simplicity.

• Capital requirement is minimal.

• Expenses are minimal at initial stages.

• Independent to take any decision. (incl.dissolving)

• Easy to operate & extremely flexible.

• Owner enjoys all the profit.

• Minimum legal restrictions.

• Secrecy can be maintained w.r.t raw materials used,

methods etc.

DISADVANTAGES:

• Owner is sole responsible for any loss / debts.

• Business cannot be successful if owner lacks

experience, ability, & has limited money.

• Raising capital for expansion is difficult.

• Limited opportunity for employees monetary reward

(profit sharing, bonuses) & promotions ,etc.

• Single ownership has a limited life.

APPLICATION:

• Suitable for businesses which do not involve high

risk of failure.

• For retail trades, service concerns, small engg. firms

PARTNERSHIP

• Combination of individual traders is called

partnership.

• Association of two or more persons in terms of

capital to invest, possess special skill & knowledge

to make existing business much more profitable.

• Mutual agreement to share profit & loss of the

business.

• Property sharing, capital sharing, skill sharing,

expertise sharing, etc. for making profit.

• Partnership agreement in writing is mandatory.

• It should cover all areas of disagreement,

authorities, duties, responsibilities of each

partner, proportion of profit/loss sharing.

• Kinds of partners:

1. Active partners

2. Sleeping partners

Both partners are responsible for debts.

• Types of partners:

1. General partnership

2. Limited partnership

GENERAL PARTNERSHIP

ADVANTAGES:

• Large capital is available to the firm.

• Firm possess much more skills, talents, expertise etc

• Partnership associates tax advantages.

• Partnership firms can borrow money easily from

banks.

• Loss sharing.

APPLICATION:

• Law firms

• Retail trades, service concerns, small engg. firms

DISADVANTAGES:

• Each partner has unlimited liability for debts.

• Danger of disagreement & distrust among partners.

• Authority being divided among partners.

• Lacks permanence & stability.

• All partners suffer because of wrong decisions taken

by one partner.

LIMITED PARTNERSHIP

• Liability is limited to the capital

• Less costly to form

• Only capital/profit/loss sharing

• No interference into the business.

• Though he invest into the business has no voice in

the management

JOINT STOCK COMPANY

• A joint stock company is an Association of

individuals, called shareholders, who join together

for profit and agree to supply capital divided into

shares that are transferable for carrying specific

business.

• A joint stock company must consists of >20 person

for carrying any business other than the banking

business.

• Submit the proposal to the Registrar of

Companies. As the registrar issues a certificate in

this connection, the company starts operating.

• Death, insolvency, disablement or lunacy of the

shareholders does not affect the joint company.

• The managing body of the joint stock company is

the Board of Directors elected by the

shareholders.

• The Board of Directors make policies; takes

decision; and runs the company efficiently.

• The liability of the members (or shareholders) of a

joint stock company is limited to that capital only

of which they hold the shares.

• Finance is raised by issuing shares, debentures, bank

loans, loans from industrial and financial

corporations.

TYPES OF JOINT STOCK COMPANY

1. Private limited company.

2. Public limited company.

PRIVATE LIMITED COMPANY

• The capital is collected from the private partners; some of them may be active while others being sleeping.

• Private limited company restricts the right to transfer shares, avoids public to take up shares or debentures.

• The number of members is between 2 and 50, excluding employee and ex-employee shareholders.

• The company need not file documents such as

consent of directors, list of directors, etc., with the

Registrar of joint Stock Companies.

• The company need not obtain from the Registrar, a

certificate of commencement of business.

• The company need not circulate the Balance

sheet, Profit and Loss account, etc., among its

members;

• It should hold its annual general meeting and place

such financial statements in the meeting.

• A private company must get its accounts audited.

• A private company has to send a certificate along

with the annual return to the Registrar of Joint

Stock Companies stating that it does not have

shareholders more than fifty excluding the employee

and ex-employee shareholders.

• A private joint stock company resembles much with

partnership and has the advantage that big capital

can be collected, than could be done so in

partnership.

PUBLIC LIMITED COMPANY

• In public limited company, the capital is collected

from the public by issuing shares having small face

value (Rs. 50, 20, 10).

• The number of shareholders should not be less than

7, but there is no limit to their maximum number.

• A public limited company has to file with the

Registrar of Joint Stock Companies, documents as

consent of the directors, list of directors, director’s

contract, etc., along with the memorandum of

association and articles of association.

• A public company has to issue a prospectus to the

public.

• It has to allot shares within 180 days from the date

of prospectus.

• It can start, only after receiving the certificate to

commence business.

• It has to hold a Statutory Meeting (legislative

meeting) and to issue a Statutory Report to all

members and also to the Registrar within a certain

period.

• There is no restriction on the transfer of shares.

• Directors of the company are subject to rotation.

• The public company must get its account audited

every year by registered auditors.

• It has to send financial statements to all members

and to the Registrar.

• It has to hold a general meeting every year.

• The managing Agent gets a fixed percentage of net

profit as remuneration.

APPLICATION OF JOINT STOCK COMPANIES

• Steel companies,

• Fertilizer factories,

• Engineering concerns, IT/ITES sectors etc.

ADVANTAGES OF JOINT STOCK COMPANIES

• A huge sum of money can be raised.

• It associates limited liability with it.

• Shares are transferable.

• Company’s life is not affected by the life (death) of

shareholders.

• Services of specialists can be obtained.

• Risk of loss is divided among many shareholders.

• The company associates with it stability, efficiency

and flexibility of management.

DISADVANTAGES OF JOINT STOCK COMPANIES

• Legal formalities is required for the formation of a joint

stock company.

• Company is managed by big shareholders only.

• People can commit frauds with the company.

• Board of directors and managers who remain familiar

with the financial position of the company may sell or

purchase shares for their personal profits.

• It is difficult to maintain secrecy as in partnership.

• The team spirit with which partnership works, is lacking

in a joint stock company.

• Divided responsibility.

COOPERATIVE ORGANISATION ( SOCIETIES)

• Cooperative organization is a kind of voluntary, democratic ownership formed by some motivated individuals for obtaining necessities of everyday life at rates less than those of the market.

• The main aim of the cooperative is to eliminate profit and provide goods and services to the members of the cooperative at cost.

• The principal behind the cooperative is that of cooperation and self-help.

• Members pay fees or buy shares of the cooperative, and profits are periodically redistributed to them.

• Each member has only one vote (unlike in joint stock companies), this avoids the concentration of control in a few hands.

• In a cooperative; there are shareholders, a board of

directors and the elected officers similar to the

corporation.

• There are periodic meetings of shareholders, also.

• Special laws deal with the formation and taxation of

cooperatives.

FORMS OF COOPERATIVE ENTERPRISES

• Consumer Cooperative: in retail trade and services.

• Producer Cooperative : for group buying and selling

such items as dairy products, grain, fruit etc.

• Cooperative farming: for more and good quality

yield from the farms.

• Cooperative housing for constructing and providing

houses to the members of the association at

relatively lesser rates.

• Cooperative credit society to provide loans to the

needy individuals.

ADVANTAGES

• Daily necessities of life can be made available at lower rates.

• It is the democratic form of ownership.

• It promotes cooperation, mutual assistance and the idea of self-help.

• The chances of large stock-holding (hoarding) and black marketing are eliminated.

• No one person can make huge profits.

• Common man is benefited by cooperatives.

• Monetary help can be secured from government.

• Goods required can be purchased directly from the manufactures and therefore can be sold at less rates.

DISADVANTAGES

• Since the members of the CS manage the whole show, they may not be competent enough to make it a good success.

• Finance being limited, specialist’s services cannot be taken.

• Conflict may arise among the members on the issue of sharing responsibility and enjoying authorities.

• Members who are in position may try to take personal advantages.

• Members being in services may not be able to devote necessary attention and adequate time for supervising the works of the cooperative enterprise.

PUBLIC SECTOR

• A public enterprise is one that is ,Owned by the state, managed by the state, (or) Owned and managed by the state.

• The sector of public enterprises is popularly known as the public sector.

• Public enterprises are controlled and operated by the Government either solely or in association with private enterprises to produce and supply goods and services required by the society.

• Public sector prevents concentration and unbalanced growth of industries.

• Public sectors are accountable in terms of their results to Parliament and State Legislature.

OBJECTIVES OF PUBLIC SECTOR

• To provide basic infrastructure facilities for the growth of economy.

• To promote rapid economic development.

• To undertake economic activity strategically important for the growth of the country

• To have balanced regional development and even dispersal of economic activity throughout the country.

• To avoid concentration of economic power in a few hands.

• To create employment opportunities on an increasing scale.

• To earn foreign exchange in order to export commodities not available in the country e.g., petroleum oil, sophisticated weapon systems etc.

• To look after well-being and welfare of public.

• To minimize exploitation of workers and consumers.

MERITS OF PUBLIC SECTOR

• Public sector helps in growth of those industries

which require huge amount of capital and which

cannot flourish under the private sector.

• Due to the absence of profit motive in the public

sector, the consumers are benefited by greater, better

and cheaper products.

• Public enterprise prevents the concentration of

wealth in the hands of a few and paves the way for

equitable distribution of wealth among different

sections of community.

• Public enterprise encourages industrial growth of under-developed regions in the country.

• Profits earned by the public sector may be used for the general welfare of the community.

• Public sector offers equitable employment opportunities to all; there is no discrimination, as may be in private sector.

• Capital, raw material, fuel, power, and transport are easily made available to them.

DEMERITS OF PUBLIC SECTOR:

• Public sector can rarely attain the efficiency of a private enterprise; wastage and inefficiency can not be reduced to a minimum.

• Due to heavy administrative expenses, state enterprises are mostly run at a loss leading to additional burden of taxation on the people.

• There is too much interference by the government and Politicians in the internal affairs of the public enterprises. As a result inefficiency increases.

• Delay in decisions is a very common phenomena in public enterprises.

• Incompetent persons may occupy high positions.

• Workers (unlike in private concerns) shirk work.

PRIVATE SECTOR

• Private sector serves personal interests and is a non-

government sector.

• Profit (rather than service) is the main objective.

• Private sector constitutes mainly consumer’s goods

industries where profit possibilities are high.

• Private sector does not undertake risky ventures or

those having low-profit margin.

• Private enterprises are run by businessmen, capital is

collected from the private partners.

MERITS

• The magnitude of profits incurred is high.

• The efficiency of the private enterprise is high.

• Wastage of material and labour is minimum.

• Decision-making is very prompt.

• There is no interference in its internal affairs by politicians or Government.

• Competent persons occupy high levels.

DEMERITS

• There is exploitation motive, the workers and the consumers may not receive fair deal.

• There is shortage of capital to expand the business.

• Private enterprise leads to concentration of wealth in the hands of a few.

• Private enterprise lead to unbalanced growth of industries.

ORGANIZATION

It is defined as the process of

• Identifying and grouping the work to be performed

• Defining and delegating responsibility and authority

• Establishing relationships for the purpose of

enabling people to work most effectively together in

accomplishing objectives.

ORGANIZATION STRUCTURE

• It is the systematic arrangement of people, working

for the organization in order to achieve predefined

goals.

• It is concerned with the establishment of positions

and relationships between positions.

• It provides an appropriate framework within which

the authorities and responsibilities are being

established between positions.

• The structure has 2 dimensions: horizontal and

vertical.

WHAT IS AN ORGANISATIONAL STRUCTURE

• The organizational structure defines the

organization's hierarchy of people and departments

as well as how information flows within the

organization.

• The organizational structure determines how and

when information is distributed as well as who

makes what decisions based on the information

available.

• How job tasks are formally divided, grouped and

coordinated.

FORMS OF ORGANISATION STRUCTURE

• The classification of organization structure is based

on the way various activities are grouped together to

create departments and units and prescribing their

relationships in the organization.

• The OS depends upon:

size of orgn

nature of product being manufactured

complexity of problems being faced

TYPES

1. Line organization structure

2. Line & staff organization structure

3. Functional organization structure

4. Divisional organization structure

5. Project organization structure

6. Matrix organization structure

7. Free form organization structure

LINE ORGANISATION STRUCTURE

• Also known as scalar, military, or vertical orgn.

• Designed in two ways

Pure Line Organization

Departmental Line Organization.

PURE LINE ORGANISATION

• Similar activities are performed at a particular level.

• Each group of activities is self-contained unit and is

able to perform the assigned activities without the

assistance of others.

PRODUCTION MANAGER

FOREMAN-A FOREMAN-B FOREMAN-C

WORKERS WORKERS WORKERS

DEPARTMENTAL LINE ORGANISATION

• Entire activities are divided into different

departments on the basis of similarity of activities.

• Each department is placed under one departmental

superintendent.

• All persons in the department are subject to control

by the department head.

• Basic objective of this form is to have uniform

control, authority, and responsibility.

CHARACTERISTIC OF LINE ORGANISATION

STRUCTURE

• Vertical Lines of authority

• Instructions flow from the top to the bottom.

• unity of command

• All persons at the same level of organization are

independent of each other

• Departmental heads are supreme

MERITS

• Simplicity

• Discipline

• Prompt & speedy decision making

• Orderly communication

• Easy supervision and control

• Economical

DEMERITS

• Lack of Specialization

• Absence of Conceptual Thinking

• Autocratic Approach

• Problems of Coordination

SUITABILITY

• Suitable to small-scale organizations where the

number of subordinates is quite small.

• The need for small organization is centralized

control, only few levels of authority, direct

interpersonal communication, and direct control and

supervision.

LINE & STAFF ORGANISATION:

• Refers to a pattern in which staff specialists advise

line managers to perform their duties.

• Staff personal renders specialist advice to the line

managers

• Staff Specialist advice are advisory in nature.

• They have the right to recommend, but have no

authority to enforce their preference on other

departments.

MERITS

• Planned Specialization

• Quality Decisions

• Prospect of Personal Growth

• Training Ground for Personnel

DEMERITS

• Lack of Well defined Authority

• Line and Staff Conflicts

SUITABILITY

• Followed in large organizations where

specialization of activities is required because it

offers ample opportunity for specialization.

• When employed in large organizations, its success

depends upon the degree of harmony that is

maintained among various departments and

personnel, the clarity in line of authority, and

interpersonal contact of executives particularly in

line and staff positions.

FUNCTIONAL ORGANISATION STRUCTURE

• Specialization by functions

• Emphasis on sub-goals

• Pyramidal growth of the organization

• Line and staff division

• Functional authority relationships among various

departments

• Limited span of management and tall structure.

DEMERITS

• Coordination of various functional foreman is

difficult.

• Difficult to maintain discipline.

SUITABILITY

• Widely used in medium & large organization having

limited number of products.

• Used in specialty organizations.

DIVISION ORGANISATION STRUCTURE

Emphasis : growth through expansion.

expansion of product line, territory.

• Also called as profit decentralization.

• Each unit is relatively self contained &

independent.

• Resource requirement vary from one unit to

other.

• Basis of divisionalisation:

Product divisionalisation

Territorial divisionalisation

Strategic business units (SBU)

PROBLEMS / DEMERITS

• Quite costly

• Lack of managerial personal

• Control system is a major problem

SUITABILITY

• Suitable for organizations having multiple

products.

• Having coverage of wide geographical area &

distinct market segments.

• Having distributed customer/consumer base.

PROJECT ORGANISATION STRUCTURE

• Project is a unique work (or) job to be accomplished

within the available/allocated time and resources.

The resources may be human (or) non-human

resources.

• A project is unique, non-repetitive activity, goal

directed, possessing definite life span and life

cycles.It is highly flexible and possess high risk and

uncertainity.

SUITABILITY

• Suitable for organizations having small number

of larger projects.

• Applicable for complex & large sized

organizations.

PROBLEMS / DEMERITS

• Very costly

• Work experience differs from project to project.

• Uncertainity & insecurity of job

• There may be conflicts among specialist.

MATRIX ORGANIZATION STRUCTURE

• Combination of project structure and functional

structure.

• It employs multiple command , related support

mechanism, associated organizational culture and

behavior.

• The project manager is not only responsible for the

resources.

• The project receives services from the functional

departments.

PLANNING PROCESS

1. Perception of Opportunities:

• It is the beginning of planning process this gives

awareness for planning process.

• Perception of opportunities includes a preliminary

look at possible opportunities and the ability to see

them clearly and completely, knowledge of where

the organisation stands in the light of its strengths

and weaknesses.

• This provides an opportunity to set the objectives in

real sense.

• The organisation tries to relate itself with the

environment

2. Establishing Objectives

• At this stage, major organizational and unit objectives are set.

• Objectives specify the results expected and indicate the end points.

• The organizational objectives should be specified in all key result areas.

• Key result areas are those which are important for organisation in achieving its objectives.

• KRA may be profitability, brand image, sales volume, R&D, etc.

• Objectives give direction to the nature of all major plans.

3. Planning premises:

• Planning premises are planning assumptions.

• It denotes the conditions under which planning activities will be undertaken.

• Planning premises are internal and external conditions.

• External conditions include political, social, technological, competitors plans and actions, governmental policies etc.

• Internal factors include organizational policies, resources and ability of the organization to withstand external pressures.

• Forecasting plays a major role in planning premises.

• The nature of planning premises differs at different levels of planning.

• At the top level, it is mostly externally focused.

• While descending the organizational hierarchy, the composition of planning premises changes from external to internal.

4. Identification of Alternatives.

• Based on the organizational objectives and planning premises, various alternatives can be identified.

• For example, if an organisation has set its objective to grow further, it can be achieved in several ways like expanding in the same field of business or product line, diversifying in other areas, joining hands with other organizations, or taking over another organisation, and so on.

• Within each category, there may be several alternatives.

• The most common problem with alternatives is to reduce the number of alternatives so that most promising ones may be taken for detailed analysis

• The planner has to reduce in preliminary examination the number of alternatives which do not meet the minimum preliminary criteria.

5. Evaluation of alternatives:

• At this stage, an attempt is made to evaluate how each

alternative contributes to the organizational objectives

in the light of its resources and constraints.

• Each alternative may have certain positive points on

one aspect but negative on others.

• Moreover, there is no certainty about the outcome of

any alternative because it is related with future and

future is not certain.

• It is affected by a large number of factors making the

evaluation work quite complex. This is the reason why

more sophisticated techniques of planning and decision-

making have been developed.

6. Choice of Alternative:

• After the evaluation of various alternatives, the most fit one is selected.

• Sometimes evaluation shows that more than one alternative is equally good. In such a case, a planner may choose more than one alternative.

• Alternative course of action is to be undertaken in future which is not constant.

• A course of action chosen keeping in view the various planning premises may not be the best one if there is change in planning premises.

• Therefore, planner must be ready with alternative, normally known as contingency plan, which can be implemented in changed.

7. Formulation of supporting plans.

• After formulating the basic plan, various plans are

derived so as to support the main plan.

• In an organisation there can be derivative plans like

planning for buying equipment, buying raw

materials, and training personnel, developing new

product, etc.

• These derivative plans are formulated to support the

main plan.

8. Establishing sequence of activities:

• After formulating basic and derivative plans, the

sequence of activities is determined so that plans are

put into action.

• Based on the plans at different levels, it can be

decided who will do what at what time.

• Budgets for various periods can be prepared to give

plans more concrete meaning for implementation.

BARRIERS TO EFFECTIVE PLANNING:

1. Difficulty of accurate premising.

2. Problems of rapid change.

3. Internal inflexibilities.

– Psychological inflexibilities.

– Policy and procedural inflexibilities

– Capital investment

4. External inflexibilities.

– Political climate

– Trade unions

– Technological change

5. Time and cost factor.

6. Failure of people in planning.

STAFFINGS

• Means MANNING the various positions created by

organizing process.

• Identifying the gap b/w manpower availability &

manpower required.

• EMPLOYING THE “RIGHT PERSON” FOR THE

“RIGHT JOB” AT THE “RIGHT TIME”

• Identifying the sources from where people can be

selected, selecting people , training & developing

them, fixing financial compensation , appraising

them periodically,etc.

DEFENITION

It is defined as the process of filling positions in the organization structure through

- identifying workforce requirements,

- inventorying the people available,

- recruitment,

- selection,

- placement,

- promotion,

- appraisal,

- compensation and

- training of needed people.

FEATURES OF STAFFING

• It is related to the employment of personnel of all

types ranging from managerial to operations.

• It includes variety of activities through which

various positions remain filled by the most suitable

personnel.

• It is performed by every manager in the

organization.

IMPORTANCE OF STAFFING

• Filling organizational positions – GLOBAL

TALENT WAR. Systematic staffing helps the

organization to fill its various positions with good

quality of personnel.

• Developing competencies – through multi skilling

and development of differential competencies using

newer training and development techniques.

• Retaining personnel – adopting many methods

having long term implications to reduce employee

turnover, especially at the managerial level.

Employee turnover are high in IT sector,

consultancy, investment banking etc.

STAFFING PROCESS

FACTORS AFFECTING STAFFING

EXTERNAL FACTORS

1. Nature and competition for human resources

2. Legal factors

3. Socio cultural factors

4. External influences

INTERNAL FACTORS

1. Organizational business plan

2. Size of the organization

3. Organizational image

4. Past practices

CONTROLLING

Controlling is determining what is being

accomplished, that is evaluating performance and if

necessary applying corrective measures so that

performance takes place according to the plan.