Principles of Management (Mca - 202)
Principles of Management (Mca - 202)
MANAGEMENT
MCA 202
SELF LEARNING MATERIAL
DIRECTORATE
OF DISTANCE EDUCATION
1
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Author:
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PRINCIPLES OF MANAGEMENT (MCA- 202)
UNIT I
Business Ethics and Social Responsibility: Concept, Shift to Ethics, Tools of Ethics.
UNIT II
Planning: Nature, Scope, Objectives and Significance of Planning, Types of Planning, Process
of Planning, Barriers to Effective Planning, Planning Premises and Forecasting, Key to
Planning, Decision Making.
UNIT III
Staffing: Concept, System Approach, Manpower Planning, Job Design, Recruitment &
Selection, Training & Development, Performance Appraisal
UNIT IV
UNIT-V
Controlling: Concept, Types of Control, Methods: Pre-control: Concurrent Control: Post-control,
An Integrated Control System, The Quality Concept Factors affecting Quality, Developing a
Quality Control System, Total Quality Control, Pre-control of Inputs, Concurrent Control of
Operations. Post Control of Outputs.
Change and Development: Model for Managing Change, Forces for Change, Need for Change,
Alternative Change Techniques, New Trends in Organisational Change.
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UNIT I
Management:
Concept
We all know that management is an art of getting things done, by others. No one excels in
this art like our mothers, which is why they are the best managers around! On a more
serious note, it has often been debated whether the study of management is an art or
science. One of the earliest scientists of management Henri Fayol has laid down 14
principles of Management. But before you learn these principles you need to first
understand the basic concept of management and its principles.
Definition of Management
Management has been defined by several theorists in their own way. Henri Fayol defined
management as, ―Management is to forecast, to plan, to organize, to command, to
coordinate and control activities of others.‖ In simple terms, management is a means
of organizing and delegating the work that needs to be done among people who can do it,
and then ensuring that said work is done diligently and timely.
You will see management in almost all walks of life. Sometimes you will be managing
things without actually realizing it. The simplest example is, being the class representative.
There are so many things a class representative has to manage. An efficient class
representative is the one who knows how to delegate duties and take command of the
situation.
14 Principles of Management
In the corporate world, management has a very crucial role to play. We have a proper
chain of command which can only function if there is efficient management in place. The
early scholars foresaw this need and came up with the principles of management. These
principles are like basic guidelines for managers.
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Key Roles in Management
Henri Fayol‘s 14 principles of Management also segregated the function of management
into five distinct roles, these roles help understand management better. They are as under:
The principles work as guidance and reference for the management on how to handle
certain situations or manage the organizational structure and chain of command.
Nature
1. Universal relevance:
Principles of management are expected to employ to all types of establishments, the
industry as well as non-industry, small as well large, private sector as well as the public
sector, production as well as the services divisions. However, the scope of their
applicability would diversify with the nature of the industry, business activity, scale of
operations etc.,
Example:
The whole work of an organisation is divided into smaller tasks and such tasks are
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assigned to different departments, groups and individuals. Such a system of division of
work is applicable in all types of organisations.
2. General rules:
The laws are the regulations to work but do not give readymade, simple clarifications to
all administrative issues. This is so because real-time business conditions are difficult
and powerful and are a consequence of many factors.
Example:
During the period of recession, the general manager may allow marketing departments
to give a heavy discount to the customers without giving due attention to financial losses
being raised by the financing department because the primacy of overall goals of the
organisation is important.
4. Contingent:
As the application of principles of management depends upon prevailing situations and
needs, so their results may not be uniform as expected.
Example:
Remuneration of employees should be just and equitable yet it may vary from person to
person depending upon various situations.
Remuneration can be dependent on:
Industrial standard.
Employer‘s paying capacity.
Contribution of employee etc.,
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5. Flexible:
The principles of management are general prescriptions not rigid. The managers can
make certain changes as per the convenience and requirement of a situation.
Example:
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(1) Providing Managers With Useful Insights Into Reality
Although the principles are in the nature of general guidelines, they are modified
and help managers to meet the changing requirements of the environment.
Example: With the rapid rise of online market sellers, offline vendors have also started
selling their goods on online platforms.
(5) Fulfilling Social Responsibility
Principles of management not only help in achieving the goals of the organisation
effectively and efficiently, but they also guide the managers to fulfil their
commitment towards its employees and society.
Example: Principles of fair remuneration and equity ensure social justice to employees
and compliance with government norms towards corporate social responsibility which
improves the company‘s image in the society.
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(6) Management Training, Education and Research
These Principles help managers to take decisions and actions in the right
manner.
Example: It is the result of such training, education, and research that Sunil Mittal could
run Airtel in a successful way.
Importance
1. Improves Understanding.
3. Role of Management.
1. Improves Understanding -
3. Role of Management -
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Management principles makes the role of managers concrete. Therefore these
principles act as ready reference to the managers to check whether their
decisions are appropriate. Besides these principles define managerial activities in
practical terms. They tell what a manager is expected to do in specific situation.
The body of management principles indicate lines along which research should
be undertaken to make management practical and more effective. The principles
guide managers in decision making and action. The researchers can examine
whether the guidelines are useful or not. Anything which makes management
research more exact & pointed will help improve management practice.
Management :
Management is considered as art and science. The art of managing begins where
Science of managing stops to make management complete.
But a modern manager can do better by using the knowledge, methods, concepts,
theories, etc. of managing at his/her workplace.
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How Management is an Art
To manage effectively, one must have not only the necessary abilities to lead but also a
set of critical skills acquired through time, experience, and practice.
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The art of managing is a personal creative attribute of the manager, which is more often
than not, enriched by education, training, experience.
The art of managing involves the conception of a vision of an orderly whole created
from chaotic parts and the communication and achievement of this vision.
Managing is the ―art of arts‖ because it organizes and uses human talent.
Practical Knowledge,
Personal Skill,
Creativity,
Goal-Oriented.
Practical Knowledge
Art requires practical knowledge, learning of theory is not sufficient. Art applies theory to
the field. Art teaches the practical application of theoretical principles.
For example-Learning how sing does not make you a musician; one must know all
composition and be able to use them.
Similarly, A person may have a degree that says he knows what a manager does but it
doesn‘t know how to apply management knowledge in real-life situations he will not be
regarded as manager.
Personal Skill
A manager will not depend on his theoretical knowledge or solution alone. he or she
must have some qualities that make him or her unique.
Creativity
An Artist‘s work is not limited to his practical knowledge. He thinks outside the box and
creates things extraordinary.
Management is also creative like any other art. Management is all about finding a new
way to be well different from others.
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Perfection through practice
Every artist becomes better through item and practice. they learn from their mistakes.
Similarly, managers become more expert as he spends more time in management
thought.
Goal-Oriented
The management process also follows the same pattern. Gathering data and facts,
analyzing them and making a decision based on analysis, are the basic functions of
the management.
Management follows a systematic method to find a possible solution for a problem. The
science underlying managing is indeed inexact or a soft science at best.
It is not as ―Science‖ as physical sciences such as chemistry or biology which deal with
non-human entities.
The inclusion of the human element in managing makes this discipline not only complex
but also debatable as pure science.
Human behavior is unpredictable; people think, act or react differently under identical
circumstances.
And so, management can never become as pure science. However, the study of the
scientific foundations of management practice can improve one‘s
Managers who attempt to manage without management science have to trust their
intuition or luck at their peril rather than their expertise or skill.
Thus, they have to turn for meaningful guidance to the accumulated knowledge of
managing.
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Theories
Organized knowledge
Practice
The essence of science is the application of the scientific method to the development of
knowledge that proceeds through the stages discussed below:
Concepts
The scientific approach requires a clear ―concepts‖ of mental images of anything formed
by generalization from particulars. Managing has concepts to deal with situations.
This leads to the development of ―principles‖ which have value in predicting what will
happen in similar circumstances. Similarly, management requires observation and
sets standards or principles according to it.
Theories
Management studies over the years developed many proved theories for making
management more realistic or scientific.
Organized knowledge
Concepts, methods, principles, theories, etc. are now the core of management.
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Practice
The theories of managing are the results of practice, and the role of such theories is to
provide a systematic grouping of interdependent concepts and principles that furnish a
framework to, or ties together significant pertinent management knowledge.
But it is to be borne in mind that concepts, methods, principles of management are not
as rigid as those of the physical sciences. They may undergo revision and change
under new sociopolitical and economic circumstances.
To be successful, managers have to know and do things effectively and efficiently. This
requires a unique combination of both science and art of managing in them.
It may, however, be said that the art of managing begins where the science of
managing stops.
Since the science of managing is imperfect, the manager must turn to the artistic
managerial ability to perform a job satisfactorily.
Thus, it may be said that managing in practice is an art but the body of knowledge,
methods, principles, etc. underlying the practice is science.
Even some people might have a different opinion regarding this matter. But as a matter
of fact, the art and science of managing are not so much conflicting as complementary.
Management As a Profession
There are various features that management and profession have in common. In other
words, since management displays features that come under the umbrella of a profession,
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it is said to be a profession. Let us dig deeper into the characteristics common to all
professions:
Management as an Art
Management as Science
Well-defined Body of knowledge
A profession has a certain basic set of knowledge that acts as instruction and can be
acquired by practice.
Restricted Entry
One cannot simply just enter into a profession. Instead, there are some eligibility criteria
like an examination which the person needs to pass in order to enter into the professional
domain. For example, in India, a person becomes a CA only after they pass the
examinations conducted by the ICAI.
Professional Association
Every profession is further the lookout of their respective associations. In simple words,
each profession is affiliated to a body, council or association that carries out function like
regulating entries, maintaining the code of conduct, grants certificates and so on. For
example, the Bar Council of India controls the activities of all lawyers.
Service Motive
Lastly, the aim of every profession is to serve the clients. This further means that a
professional is required to render committed and dedicated services to ensure fulfilment of
client‘s interests.
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Management as Profession
Management runs along the lines of a profession. Although not exactly, management
exhibits many features that ensure that it is a part of the professional universe. Let us
observe how:
ii. As discussed, a profession has restricted entry. But management does not meet this
condition in a fulfilling manner. For example, medicine requires a practising doctor.
Interestingly there are no such conditions in the managerial domain. Any person can
be called a manager in an organisation regardless of their educational qualifications.
Additionally, there is no particular degree, devoid of which, a person won‘t qualify as
a manager. Then again possession of educational knowledge from reputed
management colleges is an important aspect and desired quality.
iii. There is no single association that controls and defines the code of conduct for all
managers. Having said that, there are a number of organisations like the AIMA( All
India Management Association) that regulate the activities of their manager
members. However, there is no compulsion to be a member of any of these
organisations to be called a manager.
iv. The management section of an organisation has well-defined motives. These vary
from organisations to organisations like profit maximisation, service, quality etc.
However, these motives are dynamic. Consequently, the profit maximisation motive
of management is fast changing in favour of service.
An argument arises amidst the two correlated terms, Management and Administration.
According to various management writers, both of them are identical and can be used
conversely; the divergence exists in their use regarding distinct areas of human
activities.
Yet few authors don‘t comply with this conclusion. In the initial stage of management
evolution, both the management and the administration were treated equivalent. In
1923, ―Oliver Sheldon‖ discriminated among the two. He related administration with
decision making and management with operation function.
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At present, there are three points of view on the subject Management Vs Administration.
They are as follows:
Both are participating in various activities, though one and the others are carried out by
the same entity in the company. The administration is mainly interested in the
formulation of policies, although management is involved in the execution of the
policies.
Various famous management contributors counting Henry Feyol, George R Terry do not
recognize any diversity between the management and the administration. Both contain
similar functions, processes, and principals and chases the same targets.
2. What is management?
3. Functions of Management
4. What is Administration?
5. Functions of Administration
6. Summary
7. Conclusion
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BASIS OF
MANAGEMENT ADMINISTRATION
COMPARISON
enterprise.
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BASIS OF
MANAGEMENT ADMINISTRATION
COMPARISON
management.
concerns. sectors.
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What is Management?
The main objective of any business concern is to transform the available material goods
into superior products or services; this needs the competent and productive use of
resources to get the utmost output.
Functions of Management
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Substantial management functions can be classified into four main functions. They are
as follows:
2. Strategic planning: It focuses on long-range aims and the broad procedures for
managing the team.
What is Administration?
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Business administration is a significant area of study that comprise all business and
management activities in companies or organizations across the world. It resides the
achievements or managerial operations of these organizations where business
arrangements are made and achieved.
It holds the key to the productive business or management remits of the staff members
such as managing director, chief executive officers, company secretaries, general
manager and corporate board of directors.
For example:
1. Data input
3. Entering paper-work
The administration section of an organization deals with various range of data and
information from distinct places. The information collected is usually processed by the
administrative personnel to make it beneficial for others.
Functions of Administration
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Following are the substantial tasks or functions of the administration of an organization.
2. Summarizing the information: This manages the form of learning something and
then demonstrating it in a more compact, reduced form.
Summary
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10. Management mainly has control over business concerns, although Administration
has control in government or national sectors.
Conclusion
It can be concluded that designing and accomplishing are two major functions of
management, and all organizers perform them. It is enhanced to say that management
executes two types of functions that includes enforcement and application of such
policies.
Management Skills
Organizations of all types require competent management in order to run smoothly and
optimize the potential for profit and growth. Of course, management skills are applied to
jobs labeled as "management positions" in the organizational chart, but are also vital for
employees in many other roles.
For example, event planners need management skills to orchestrate events, secretaries
need management skills to manage office processes, and benefits specialists need
them to organize information sessions for employees.
Management skills are applied to a broad array of functions in areas like production,
finance, accounting, marketing, and human resources. Common components of
management in different arenas include: selection, supervision, motivation and
evaluation of staff, scheduling and planning of workflow, developing policies and
procedures, measuring and documenting results for a group or department, solving
problems, developing and monitoring budgets and expenditures, staying abreast of
trends in the field, collaborating with other staff and departments, and leading and
motivating employees.
Most management skills are related to six fundamental functions: planning, organizing,
coordinating, directing, leadership, and oversight.
Planning
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Individual managers may or may not be personally involved in drafting company policy
and strategy, but even those who aren‘t still must be able to plan. You might be given
certain objectives and then be responsible for developing ways to meet those
objectives. You may need to adjust or adapt someone else‘s plan to new
circumstances. In either case, you‘ll have to understand what your resources are,
develop time tables and budgets, and assign tasks and areas of responsibility.
Aspiring managers should volunteer to help their current supervisors with phases of
departmental planning in order to hone their skills.
Planning programs for professional societies is another way to develop and document
planning abilities. Mastering planning software, like NetSuite OpenAir, and project
management software, like Workfront, can prove that you're able to tap technology
that's instrumental to sound planning. College students should take on leadership
positions with campus organizations to hone their planning skills.
Analyzing Expenditures
Critical Thinking
Development, Entrepreneurialism
Microsoft Office,
Problem Solving
Strategic Planning
Strategic Thinking
Project Management
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Utilizing Planning Software
Organizing
Aspects of organization could also mean helping leaders under your guidance to
manage their subordinates well.
Accuracy
Administrative
Analytical Ability
Business Storytelling
Innovation
Logical Thinking
Logistics
Negotiating
Networking
Persuasion
Presentation
Public Speaking
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Suggesting Ways to Enhance Productivity
Technical Knowledge
Technology
Time Management
Leadership
The best managers are typically inspirational and effective leaders. They set the tone
for their areas by demonstrating—through their actions—norms for staff behavior.
Clear communication of goals and expectations is also vital. Good leaders seek input
from all stakeholders and recognize the contributions of other team members, and they
give credit where credit is due. Good leaders draw consensus on group plans whenever
feasible, and they delegate strategically to the best-qualified staff.
Delegation
Presentation
Humility
Networking
Confidence
High Energy
Clear Communication
Writing
Budgeting
Motivating Others
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Problem Solving
Persuasion
Evaluating Talent
Supervision
Charisma
Integrity
Networking
Coordinating
Managers must know what is happening, what needs to happen, and who and what are
available to accomplish assigned tasks. If someone is miscommunicating, if someone
needs help, or if a problem is being overlooked or a resource underutilized, a manager
needs to notice and correct the issue. Coordinating is the skill that lets the organization
act as a unified whole. Coordination across departments and functions is also essential
to a well-run organization that presents a unified face to constituents.
Develop a solid team orientation by close communication and cooperation with co-
workers. Seek out opportunities to collaborate with other staff and departments.
Adaptability
Collaboration
Communication
Drawing Consensus
Diplomacy
Emotional Intelligence
Empathy
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Facilitating Group Discussions
Flexibility
Honesty
Influencing
Listening
Nonverbal Communication
Patience
Punctuality
Relationship Building
Scheduling
Tactfulness
Teaching
Team Building
Team Manager
Team Player
Teamwork
Time Management
Directing is the part where you take charge and delegate (tell people what to do), give
orders, and make decisions. Someone has to do it, and that someone could be you.
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It might include anything from reviewing business models and checking for inefficiencies
to checking to make sure a project is on time and on budget. Oversight is the
maintenance phase of management.
Achieving Goals,
Conflict Management
Conflict Resolution
Decision Making
Delegation
Delivering Presentations
Division of Work
Empowerment
Engagement
Execution
Goal Setting
Hiring
Interpersonal
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Interviewing Candidates for Jobs
Leadership
Motivation
Overcoming Obstacles
Productivity
Problem Solving
Professionalism
Responsibility
Training Employees
Levels of Management
In many small business enterprises, the owner is the only member of the management
team. But, as the size of an organization increases, a more sophisticated organizational
structure is required. It is a normal practice to categorize management into three basic
levels: (1) top-level management, (2) middle-level management, and (3) supervisory or
first-level management. Following figure illustrates the levels of management. The
duties and responsibilities at these three levels of management vary from organization
to organization, depending upon the size, technology, culture, etc. prevailing in your
organization.
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The number of managerial positions at each level varies from organization to
organization. In most of the organizations, there are more positions at the first-level,
fewer in the middle, and very few at the top. Many describe this kind of an
organizational structure as a pyramid, as the managerial positions gradually decline as
one progresses towards the higher levels of management. The various activities
performed at each of these levels of management are illustrated below.
Levels of Management
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Managerial Levels and Areas
Top-Level Managers
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implementing the plans, and maintaining overall control over organizational
performance.
Top Management:
Middle Management:
Makes plans of intermediate-range and prepares long-range plans for review by top
management.
Analyzes managerial performance to determine capability and readiness for
promotion.
Establishes departmental policies.
Reviews daily and weekly reports on production or sales.
Counsels subordinates on production, personnel or other problems.
Selects and recruits personnel.
Supervisory Management:
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The Chief Executive bears the following responsibilities:
Leader:
Visionary
Decision-maker:
Formulates the mission, policies and procedures for the smooth functioning of the
organization
Devices action plans for the staff
Manager:
Board Developer:
In today‘s world, restructuring and downsizing have led to the emergence of flatter
organizations. Middle managers have been the most affected by these changes. You
will find that many management writers consider middle managers as ―excess
organizational baggage.‖ Ironically, middle managers are the most potential assets of
the organization. Many organizations have the false notion that by removing these
managers, they can restructure themselves better. To ensure continued survival of
middle managers, a number of individual and organizational actions can be undertaken.
These are listed below:
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1. Focus on important strategic issues: Middle managers should move away from the
day-to-days operations (which can be delegated to the first-line managers) and
devote their attention to the more important strategic issues.
2. Think like senior managers: They should use their extensive knowledge to deal with
more substantive issues that would lead to organizational benefit.
3. Analyze why change is needed: They must understand the underlying causes for
introducing change and how the organization should adapt itself in the light of
opportunities and threats.
4. Ensure greater participation: Middle managers have a great deal of technical
expertise and good knowledge of organizational processes. This knowledge should
be disseminated throughout the organization.
5. Manage change and people together: Middle managers should take the initiative for
implementing change in the organization. They should act as mentors for those
with lesser work experience.
6. Utilize their role as intermediaries: Middle managers can comprehend the internal
and external pressures faced by the organization. They can resolve conflicting
issues by negotiating with the parties concerned.
7. Implement the vision: Middle managers must attempt to convert top-level strategies
into workable actions. They should take up the responsibility to implement the
vision of the organization.
8. Incorporate change into the organization: Middle managers must understand how
to implement change in the organization. They should introduce work practices that
bring in innovation and ―shifts in thinking.‖
In the words of Rory Chase, Managing Director of IFS International in Bedford, ―The
new role of the middle manager embraces three key areas; team leadership, change
maker and facilitator.‖ There is no doubt that in order to survive in this rapidly changing
era, middle managers have to make themselves indispensable.
Middle-Level Managers
Due to the advent of information technology, online technical assistance has become
available to first-level managers. This has resulted in making middle-level managers
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redundant and has thus reduced the number of middle-level managers in many
organizations.
The first-line supervisor (irrespective of the formal designation ―foreman‖, ―chief clerk‖ or
―section engineer‖), can ensure that his employees perform the best. A worker‘s ability
to perform depends on the capacity of the first-line supervisor to plan, organize well.
The training that a supervisor provides to his employees will determine the worker‘s
performance. It is the responsibility of a supervisor to ensure that the workers have the
necessary materials and equipment to do the work. He should create a good working
environment for all his employees. The supervisor sets goals in accordance with the
organization‘s plans and makes sure that each worker achieves the determined targets.
For a supervisor to perform his job well, he needs to have crystal clear objectives.
These objectives must be in line with the organizational goals. He should have
adequate information about the company‘s operations, its structure, its goals and its
performance.
Finally, the job of a supervisor should give him satisfaction. He must be accorded a
status that will make him feel important. He must he in a position to direct employees
and get the management, to listen to him.
It is imperative that a supervisor‘s job is properly planned so that, over a period of time,
they can be promoted as managers. The supervisor has to assume greater
responsibilities and therefore, he has to be prepared to set objectives, to organize and
to plan. Proper organization of a supervisor‘s job will lead to conceptual and analytical
integration and will prepare him to take up larger responsibilities in future.
First-Level Managers
First-level managers are directly responsible for the performance of employees involved
in operations. They are usually called supervisors. If you are a first level manager, you
may be addressed by different names. In a manufacturing plant, you may be called a
foreman, in a research department — the technical supervisor, and in a large office —
the clerical supervisor. As a first-level manager, you implement the operational plans
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developed by middle managers and take corrective actions, when needed. You are
responsible for output variables like number of units produced, labor costs, inventory
levels, and quality control. Since you act as a link between the management and the
rest of the workforce, you often confront conflicting demands. In recent times, the power
of first-level managers have gradually decreased because of union influence, the
increasing educational level of workers, and the growing use of computers to track
many activities formerly monitored by first-level managers.
Though all managers perform all managerial functions, the time spent by individual
managers for each activity differs. The importance of managerial functions – planning,
organizing, leading and controlling, varies depending on the manager‘s level in the
organization. Following figure shows the relative time spent by managers at different
levels for each function.
From the figure, you will find that it is evident that the time spent by top-level managers
on planning and organizing is much more than that spent by lower-level managers. In
contrast, leading is substantially more important for first-level supervisors than for
managers at higher levels. Hence first-level supervisors need to spend more time in
communicating, motivating, and directing the employees involved in operations. Time
spent on controlling is similar at all three hierarchical levels. You will find that this
similarity reflects a common degree of emphasis at various levels on identifying
negative deviations and taking corrective measures.
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Summary:
1. Top Level Managers are responsible for taking major decisions for the organization
as a whole.
2. Middle Level Managers are responsible for the performance of managers at lower
levels.
3. First Level Managers are responsible for the performance of employees involved in
operations. They are usually called supervisors.
4. Time spent in carrying out managerial functions varies as per the different levels of
management.
The way organizations are managed not only determines the quality of its products and
services – but ultimately its success.
Creating a culture that is customer-focused, and collecting and studying data that
supports efforts for the customer, are critical components to the system.
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What is Total Quality Management (TQM)
8 Characteristics of TQM
1. Customer Focused
The customer dictates what the focus will be as well as the approach to achieving those
results.
But most importantly the customer determines if the efforts were successful.
For instance, organizations solicit feedback from customers about products and
services. Use what is learned from that feedback to improve the product or service.
2. Involved Employees
These front-line members of the team often hold the answers to solving problems and
improving how work gets done.
Who more than the person on the line to recognize when something is not working.
For instance, in the service industry, employees are the ones who interact with
customers and hear real-time feedback.
3. Process Oriented
Everything has a process. Whether the process to hire employees or a process to make
a cake – there are steps that lead the way.
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TQM organizations study steps in a process, fine-tune those steps, and work to
eliminate unnecessary steps that can save time and money.
For instance, use quality tools to create a visual for internal processes. Look at the
steps in the process and work to reduce or eliminate unnecessary steps.
Most organizations have several departments or areas of expertise but all have systems
that support the final delivery of the product.
Organizations that manage with TQM integrate these internal systems to create a
seamless process.
This is done by creating a culture that understands and values how quality is
determined and how it is achieved.
For instance, create training for all employees that teaches quality concepts and
reinforces why they are there – the vision and mission of the organization.
5. Strategic Approach
Businesses that operate under a TQM model, use strategy to help achieve mission
and vision.
They develop a strategic plan and use that as the cornerstone for its quality efforts and
all decision making.
Invest the time to create a mission and vision statement and use that to guide the
development of a strategic plan.
6. Continuous Improvement
These constant efforts help to ensure the organization remains competitive and meets
the expectations of key stakeholders.
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Make it part of daily practice to pay attention to how work gets done and continuously
look for ways to improve even the most insignificant tasks.
7. Data-Driven Decisions
Data drives decisions in TQM organizations. Data is collected, analyzed, and used to
improve internal operations.
Spend some time identifying the critical success factors for your organization and
create a process to collect and report data on those factors.
8. Effective Communications
Employees and customers are provided with ongoing communication and interaction
with the organization.
There are strategies that drive communication and employees are provided information
about internal changes as they become available.
Create a communication strategy and constantly look for ways to communicate with all
key stakeholders.
TQM Benefits
Organizations that use the TQM management model enjoy the benefits of:
customer loyalty
cost savings
more profitability
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improved processes
This approach can‘t help but set your organization apart from the competition.
Evolution of Management:
Early contributions
In early twentieth century, Mark Parker Follett 2 defined management in simple words
as the art of getting thing done through people. According to Koontz and Weihrich3
(2008),‘Management is the process of designing and maintaining an environment in
which individuals, working together in groups, efficiently accomplish selected aims.‖
Theories are perspectives with which people make sense of their world experiences.
Formally, a theory is a coherent group of assumptions put forth to explain the
relationship between two or more observable facts. John Clancy calls such perspectives
―invisible powers‖ to emphasize several crucial uses of theories ,the ―unseen‖ ways in
which we approach our world.
First, theories provide a staple focus for understanding what we experience. A theory
provides criteria for determining what is relevant. To Henry Ford ,a large and compliant
work force was one relevant factor as he theorised about his business. In other words
,his theory of management included, among other thing, this assumption about the
supply of labour.
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Second, theories enable us to communicate efficiently and thus move into more and
more complex relationships with other people. Imagine the frustration you would
encounter if, in dealing with other people, you always had to define even the most basic
assumptions you make about the world in which you live; Because ford and his
managers fully understood Ford‘s theory about manufacturing automobiles, they could
interact easily as they faced day-to-day challenges.
Third, theories make it possible indeed, challenge us to keep learning about our world.
By definition, theories have boundaries; there is only so much that can be covered by
any one theory. Once we are aware of this, we are better able to ask ourselves if there
are alternative way of looking at the world(especially when our theories no longer seem
to ―fit‖ our experience) and to consider the consequences of adopting alternative beliefs.
Introduction
The first know management idea were recorded in 500B.C When Sumerian traders
develop written records for government and commercial use. The application of
management is also evident in the Egyptian civilization as early as 4000-3000 B.C. The
pyramid of Egypt built with millions of stone blocks by utilising the services of people are
the testimonials of a coordinated effort on an extremely large scale .Creation of such
huge structure would have certainly required extensive planning ,decision-making,
organising men and materials and supervision.
Management and organization are products of their historical and social times and
places. Thus, we can understand the evolution of Management theory in terms of how
people have wrestled with matters of relationships at particular times in history.
People have been change shaping and reshaping organization for many centuries.
Works of several writers in the area of governance of kingdoms and man management
created a literature that assisted in the development of modern management theories.
The writers was writing about how to make organisation effective and efficient. The
early leadership and management models were provided by military, political,
45
mythological and religious organisations. some early writing that subsequently
influenced the development of managerial thought are described below.
Sun Tzu‘s The Art of War: This book on military strategy was written by Chinese general
Sun Tzu in the 16th century BC .But, the writings in the book very well been used for
managerial purposes. The book recommends that success can be archived by being
aware of utilising the organisation‘s strength and utilising them to exploit the
weaknesses of the rival or enemy. It emphasises the importance of discipline in order to
get the thing done through a coordinated group effort.
Chanakya‘s Arthashastra : This treatise, developed around third century BC, deal with
the governance of kingdom by a king or a leader while making the policies of
governance and people management. It highlights the importance of creation of
department, development of detailed job profiles and qualifications of administrations
who had to manage these departments a director. Arthashastra considerably affected
the administrative philosophy of different ruler of India for centuries.
Machiavelli‘s The Prince: This book written by Niccilo Machiavelli in 1531 as a counsel
for the leadership of Florence, Italy. Machiavelli recommended in this classic that the
end justify the mean and that a leader should use fear, not hatred, to maintain control.
Although Sun Tzu ,Chanakya and Machiavelli was trying to development a theory of
management, insights teach us an important lesson about Management. And its help to
think about management of organization.
The first textbook of management was written by J. Duncan in 1911 and the early
comprehensive theories on management appeared around 1920.The discipline of
management got a strong foundation. When Harvard University became one of the first
American universities to offered graduate degree in business management in 1908.The
curriculum for teaching management was based on the analysis of relevant real
situations in the business world.
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Different school of management thought
Scientific Management theory arose in part of from the need to increase productivity. In
the united states especially ,skilled labour was short supply at the beginning of the
twentieth century. To increase the productivity was to increase efficiency of workers.
There for ,Frederick W.Tylor, Henry L.Gantt, and Frank and Lillian Gilbreth devised the
body of principle know as scientific management theory .
Developing all workers to the fullest extent possible for their own and their
company‘s highest prosperity.
The development of a true science of management, so that the best method for
performing each task could be determined.
Taylor believed that a high division of labour was needed to produce more output, and
he was introduced a differential rate system(this meant that the workers received more
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an amount of wages per ‗piece‘ that encourage employer to pay more productive
workers at the higher rate than others that would profit both company and workers. This
method of management paid close attention to ‗time and motion ‗studies. (e.g. if it took a
worker 2 minutes to perform a task, then this could be done 30 times per hour, and 240
times in an 8 -hour day).
Henry L.Gantt worked with Taylor on several project. He believed that every workers
who finished a day‘s assigned work load would win a 50-cent bonus .After he added a
second motivation. The supervisor would earn a extra bonus for each worker who reach
the daily task, plus an extra bonus if all workers reached it .He was made individual bar
chart which show workers performance that rated and publicly and recorded on chart.
The Gilbreths
Frank B and Lillian M Gilbreths (1868-1924 and 1878-1972) made their contribution to
the scientific management movement as husband and wife team .Lillian and frank
collaborated on fatigue and motion studies and focused on ways of promoting individual
worker‘s welfare. After using the camera, they tried to find the most economical motion
of each task in order to upgrade performance and reduce fatigue.
Scientific management was concerned with increasing the productivity of the shop and
the individual worker. Classical organization theory grew out of the need to find
guideline‘s for managing such complex organisation as factories.
He is generally hailed as the founder of the classical management school. And he was
not the first to investigate managerial behaviour because he was the first to systematize
it. Fayol that sound management practice fallen into certain pattern that can be easily
identified and analysed .he was also interested in the total organization and focused on
management ,which he felt had been the most neglected of business operation.Fayol
made principles which ―most frequently had to apply ―before he believed that managers
are born ,not made ‖ .
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A wide span of control
Max weber developed a theory of bureaucratic management that stressed the need for
a strictly defined hierarchy governed by clearly defined regulation and lines of authority.
He considered the ideal organization to be a bureaucracy whose activities and
objectives were explicitly spelled out. He was also believed that technical competence
should be emphasized and that performance evaluation should be made entirely on the
basis on merit .
Mary parker Follett was among those who built on the basic framework of the classical
school .However she introduced new element, especially in the area of the human
relations and organization structure. In this, she initiated trends that would be future
developed by the emerging behavioural and management science schools.
Follett convinced that no one could become a whole person expect as a member of a
group, a person grew through their relationships with other in organisation .She belived
that the artificial distinction between managers (order givers) and subordinates(order
takers)obscured this natural patership. she was a great belived in the power of group
,where individuals could combine their diverse talents into something bigger.
The Behavioral school emerged partly because the classical approach did not achieve
sufficient production efficiency and workplace harmony. To manager‘s frustration,
people did not always follow predicted or expected patterns of behaviour. Thus there
was increased interest in helping managers deal more effectively with the ―people side‖
of their organizations. The behavioural school of management thought began late in the
scientific management, but a achieve large scale recognition in 1930‘s
Human relations management emerged in the 1920‘s and deal with the human aspects
of organization .It is frequently used as a general term to describe the way in which
managers interact with their employees. When ―employee management‖ stimulates
more and better work, organisation has effective human relationship; When morale and
efficiency deteriorate, its human relation are said to be ineffective.
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From Human Relations To The Behavioral Science Approach
Mayo and his colleagues pioneered the use of the scientific method in their studies of
people in the work environment. Later researchers, more rigorously trained in the social
science (psychology, sociology and anthropology) ,used more sophisticated research
method and became known as ―behavioural scientists‖ rather then ―human relation
theorist‘s.‖
The behavioural scientists brought two dimensions to the study of management and
organizations.
Self -actualizing people, Their work spawned new thinking about how relationships can
be beneficial arranged in organizations. They also determined that people wanted more
than ―instantaneous‖ pleasure or rewards.
Behavioural scientists applied the methods of scientific investigation to the study of how
people behaved in organization as whole entities.
At the beginning of world War II ,Great Britain desperately needed to solve number of
new ,complex problem in warfare. With survival at the sake ,the british were able to
achieve significant technological and tactical breakthroughs. When American entered
the war ,they formed what they called operational research teams, based on the
successful British model, to solve similar problems.
New Industrial technologies were being put into use and transportation and
communication were becoming more complicated. These development brought with
them a host of problem that could not be solved easily by conventional mean. Over the
years, OR procedures were formalized into what is now more generally called The
Management Science School.
The management science school gained popularity through post war phenomena are as
follows-
Conclusion
To conclude a detailed report on management evolution and its various functions, how
they help an organisation to progress in their operations. The first part shows the
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evolution of management, how and when it started. The second part tells us about the
functions of management giving a detailed explanation about how these functions differ
from each other and their importance in an organisation.
Frederick Winslow Taylor (1856-1915) is called the father of Scientific Management. His
experience from the bottom-most level in the organization gave him an opportunity to
know at first the problems of the workers. Taylor‘s principal concern was that of
increasing efficiency in production, not only to lower costs and raise profits but also to
make possible increased pay for workers through their higher productivity.
Taylor saw productivity as the answer to both higher wages and higher profits. He
believed that the application of the scientific method, instead of customs and rule of
thumb could yield this productivity without the expenditure of more human energy or
effort.
Taylor published a book entitled, The Principles of Scientific Management, in 1911. But
his ideas about scientific management are best expressed in his testimony that was
placed before a committee of the House of Representatives in 1912. Industrial problems
increased due to the advent of large scale factory systems, mass production, and
mechanization.
People needed some specific principles and methods for solving the problems they
faced. The initial impetus in the scientific management movement was Taylor. He was
more concerned with the engineering aspect and the problems of workers and
productivity-oriented wages.
It‘s not a device of any kind for securing efficiency; nor is it a bunch or group of
efficiency devices. It is not a new system of figuring costs; it is not a new scheme of
paying men; it is not a piece work system; it is not a bonus system; it is not a premium
system; it is no scheme for paying men; it is not holding a stopwatch on a man and
writing things down about him;
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It is not time study; it is not motion study, not an analysis of the movements of men; it is
not the printing and loading and unloading of a ton or two of blanks on a set of men and
saying ‗Here‘s your system; go and use it‘. It is not divided foremanship or functional
foremanship; it is not any of the devices which the average man calls to mind when
scientific management is spoken of ...‘
Now, in its essence, scientific management involves a complete mental revolution of the
part of the working man engaged in any particular establishment or industry.
This complete mental revolution focuses on the duties of the organization toward its
work, toward its fellowmen and towards its employees, and it involves an equally
complete mental revolution on the part of those on the management‘s side, which
involve the foreman, superintendent, owner of the business, board of directors, and so
on.
The great mental revolution that takes place in the mental attitude of the two parties
under scientific management is that both sides take their eyes off the division of the
surplus as an important matter and together turn their attention toward increasing the
size of the surplus, which becomes so large that it is unnecessary to quarrel over how it
should be divided.
They come to see that when they stop pulling against one another and instead both turn
and push shoulder to shoulder in the same direction, the size of the surplus created by
their joint efforts is truly appreciable.
When friendly co-operation and mutual helpfulness replace antagonism and strife, it
becomes possible for both parties to make the surplus so enormous that there is ample
room for a large increase in wages for the workmen and an equally great increase in
profits for the manufacturer.
The fundamental principles that Taylor saw underlying the scientific approach to
management may be summarized as follows:
1. Replace rule-of-thumb work methods with methods based on a scientific study of the
tasks.
2. Scientifically select, train, and develop each worker rather than passively leaving
them to train themselves.
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3. Cooperate with the workers to ensure that the scientifically developed methods are
being followed.
4. Divide work nearly equally between managers and workers, so that the managers
apply scientific management principles to planning the work, and the workers actually
perform the tasks.
Henry Fayol provided 14 principles of general management to guide the managers who
in his time didn‘t use the scientific approach of management. His theory is based on
how the management should interact with the employees. The elements of
management are planning, organizing, commanding, coordinating and controlling. He
identified six major activities which are technical, commercial, financial, accounting,
managerial and security activities.
Fayol‘s theory which is still considered applicable and reliable is used in managing the
personnel in any organization. Fayol‘s Administrative management can be understood
by the following four sections: (Mind tool editorial team)
Function/Elements Of Management
1. Planning:
Planning is forecasting the future and making a structural plan of action and
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determining the goals and objectives of the action. Fayol considers planning as
the most essential function.
2. Organizing:
Organizing is the creation of an organizational structure that brings human
resources and non-human resources together to work together.
3. Commanding:
The process of giving direction and orders by the superior to the subordinate is
known as commanding.
4. Coordinating:
There are various divisions in an organization. So, coordinating is the process of
bringing the action of all the divisions and departments and integrating their
efforts for the fulfillment of organizational goals.
5. Controlling:
Controlling means comparing the actual performance of the organization with the
desired performance level and checking if there is a need for improvement and
when a deviation is found implementing the necessary changes to improve the
performance.
Division of Industrial Activities
Henry Fayol observed the organization from a manager‘s point of view. So, he
identified six major activities in which industrial activities can be divided. They are:
1. Technical Activities:
This activity is related to the production or manufacturing of goods and services.
2. Commercial Activities:
This activity is concerned about dealing with sales, purchase, and distribution of
goods and services.
3. Financial Activities:
This activity is related to the creation of necessary capital and its optimum use for
development and growth.
4. Accounting Activities:
This activity is related to the recording of transactions and then preparing the
financial statements.
5. Managerial Activities:
This activity is considered with the elements of management which are
planning, organizing, commanding, coordinating and controlling.
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6. Security Activities:
This activity is related to the protection of people and property in an organization
by providing safe working conditions, insurance policies, etc.
Fayol has focused on the role of a manager. He believes that anyone cannot be a
manager. A manager needs some skills and qualities to manage people and resources
in an organization. The six managerial skills are:
1. Physical Qualities:
This quality is concerned with the good health, well-maintained dress and outlook
and high energy level of the manager.
2. Mental Qualities:
To become a good manager they must possess the quality to learn and
understand, judge and adapt to the problems and should have the
mental energy to focus.
3. Educational Qualities:
To become a sound manager, one needs to have a general understanding of the
subject matter of the basic functioning of the organization.
4. Moral Qualities:
To become a good manager, one needs to have a high energy level, willingness
to take responsibilities, loyal to action, tactful and feeling of dignity.
5. Technical Qualities:
One needs to have technical knowledge regarding what are the procedures to
carry out the action in an organization.
6. Experience:
Experience comes with years of practice of action. So, a good manager needs
years of experience to work smoothly and efficiently.
Principles of Administrative Management
The 14 principles of management given by H. Fayol are particularly focused on the five
management functions of an organization. These are the basic guidelines for the
management of the organization as a whole.
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Even though the principles were not created on the basis of experiments, they were
created by the experience of Henry Fayol. These principles are universal and can be
applied to any organization in any part of the world.
Fayol suggests that these principles are not rigid but they are flexible and should be
used according to the need. So it depends on the part of the manager on how they use
the above to suit the organization and to manage effectively and efficiently. The 14
guiding principles by Henry Fayol are:
1. Initiative:
An initiative is the level of freedom that an organization should provide to the
employee to carry out the plans without forcing them or ordering them. This is
related to the creation of interest and willingness in the employees by motivating
and satisfying the employees.
2. Equity:
This principle implies that all the members of the organization should be treated
equally. There should be no biases and there should be an environment of
kindness and justice.
3. Scalar Chain:
There should be a chain of superiors ranging from the top level of management
to the lower level management based on the hierarchy level. The head of
an organization is at the top of the chain. The communication flows from the top
to the bottom through this chain of authority of superiors. However, there is no
hard and fast rule regarding the process of communication through the scalar
chain.
4. Remuneration of Personnel:
There must be monetary as well as non-monetary remuneration to the
employees based on their performance level. Fayol focuses more on non-
monetary remuneration in which he believes will create bonding between the
employee and the organization. So the remuneration must be fair, reasonable
and satisfactory.
5. Unity of Direction:
According to this principle, there should be only one manager under the guidance
and plan of which the groups having the same goals and objectives should move
forward. This principle suggests that in one department or section, the division
should only get instruction from one head. This helps in coordinating the group
activity to attain a single goal.
6. Discipline:
An employee should be obedient and respectful to the authority and the
established rules and regulations of the organization. Clarity of rules, reward-
punishment system, good supervision, etc. are some ways to maintain discipline.
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But it depends on the need and policies of the organization on how to maintain
discipline.
7. Division of Work:
This principle implies that the overall action of management should be divided
into a compact job and employees should be allocated certain jobs viewing their
interests and skills. This principle helps in specialization and helps to make
the workers more effective and efficient. Division of work is important at
technical level as well as managerial level in an organization for smooth
operation.
9. Unity of Command:
An employee must get orders from only one immediate supervisor. And the
employee should be accountable to the immediate supervisor only. There should
not be other supervisors to guide the employee. This will help to clear the
confusion and will make the employee loyal to the activity.
11. Centralization:
This principle implies that the topmost level of authority should be centralized to
top-level management. There should be the delegation of power to the
subordinate but the power to make the important decisions in the organization
should remain with the top-level management.
12. Order:
This principle states that every material and manpower should be given a proper
place in the organization. The right man for the right job is essential in the
smooth running of an organization. So, management must identify tasks and put
them in proper order with the limited human and other resources.
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13. Stability of Tenure:
Any employee can work to the fullest if they have a secured job. So, an
employee must be provided with job security which will help them to be efficient.
This will also benefit the organization as it lowers the labor turnover and reduces
the cost of recruiting and training new employees.
Bureaucracy
The foremost theorist of bureaucracy is the German sociologist Max Weber (1864–
1920), who described the ideal characteristics of bureaucracies and offered an
explanation for the historical emergence of bureaucratic institutions. According to
Weber, the defining features of bureaucracy sharply distinguish it from other types of
organization based on nonlegal forms of authority. Weber observed that the advantage
of bureaucracy was that it was the most technically proficient form of organization,
possessing specialized expertise, certainty, continuity, and unity. Bureaucracy‘s
emergence as a preferred form of organization occurred with the rise of a money-based
economy (which ultimately resulted in the development of capitalism) and the attendant
need to ensure impersonal, rational-legal transactions. Instrumental organizations (e.g.,
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public-stock business firms) soon arose because their bureaucratic organization
equipped them to handle the various demands of capitalist production more efficiently
than small-scale producers.
Nevertheless, the words bureaucracy and bureaucrat are typically thought of and used
pejoratively. They convey images of red tape, excessive rules and regulations,
unimaginativeness, a lack of individual discretion, central control, and an absence of
accountability. Far from being conceived as proficient, popular contemporary portrayals
often paint bureaucracies as inefficient and lacking in adaptability. Because the
characteristics that define the organizational advantages of bureaucracy also contain
within them the possibilities of organizational dysfunction, both the flattering and
unflattering depictions of bureaucracy can be accurate. Thus, the characteristics that
make bureaucracies proficient paradoxically also may produce organizational
pathologies.
Jurisdictional competency
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responsibility by allowing them to define a problem as belonging to some other unit and
thereby leave the issue unattended. Alternatively, every unit within an organization is
apt to put a face on a problem congenial mainly to its own interests, skills, and
technologies.
Continuity
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Professionalization
Despite its virtues, professionalization also carries potential risks. Often the professional
corps of managerial experts itself becomes a covert source of power because it has
superior knowledge compared with those who are its nominal but temporary superiors.
By virtue of greater experience, mastery of detail, and organizational
and substantive knowledge, professional bureaucrats may exercise strong influence
over decisions made by their leaders. The existence of powerful bureaucrats raises
issues of accountability and responsibility, particularly in democratic systems;
bureaucrats are supposedly the agents of their leaders, but their superior knowledge of
detail can place them in a position of indispensability. In addition, although a permanent
corps of officials brings expertise and mastery of detail to decision making, it also
deepens the innate conservatism of a bureaucracy. The permanent corps is usually
skeptical of novelty because the essence of bureaucratic organization is to turn past
novelties into present routines. Professional bureaucrats, be they in the civil or private
sector, also tend to favour the organizational status quo because their investments
(e.g., training and status) are tied to it. Consequently, the more professionalized the
cadre becomes, the more likely it is to resist the intrusion of external forces.
Rules
Rules are the lifeblood of bureaucratic organization, providing a rational and continuous
basis for procedures and operations. An organization‘s files provide the inventory of
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accumulated rules. Bureaucratic decisions and—above all—procedures are grounded in
codified rules and precedents. Although most people dislike rules that inhibit them, the
existence of rules is characteristic of legal-rational authority, ensuring that decisions are
not arbitrary, that standardized procedures are not readily circumvented, and that order
is maintained. Rules are the essence of bureaucracy but are also the bane of leaders
who want to get things done their way instantly.
Rules restrain arbitrary behaviour, but they also can provide formidable roadblocks to
achievement. The accumulation of rules sometimes leads to the development of
inconsistencies, and the procedures required to change any element of the status quo
may become extraordinarily onerous as a result of the rule-driven character of
bureaucracy. One perspective holds that the strict adherence to rules restricts the ability
of a bureaucracy to adapt to new circumstances. By contrast, markets, which can
operate with very few rules, force rapid adaptation to changing circumstances. Yet,
most major business organizations are arranged in bureaucratic form because hierarchy
and delegated responsibility reduce the transaction costs of making decisions.
Summary
Thus, the most basic elements of pure bureaucratic organization are its emphasis on
procedural regularity, a hierarchical system of accountability and responsibility,
specialization of function, continuity, a legal-rational basis, and fundamental
conservatism. The emergence of capitalism and the emphasis on
standard currency transactions over and above barter systems created the need for
bureaucratic forms of organization in both the private and public sectors. However, the
critical elements of the bureaucratic form of organization also can conflict with one
another and are often at the base of criticisms that regard bureaucracies as
dysfunctional. In sum, what makes bureaucracy work also may work against it.
All forms of governance require administration, but only within the past few centuries
has the bureaucratic form become relatively common. Although Weber observed
bureaucratic forms of administration in ancient Egypt, during the later stages of
the Roman Empire, in the Roman Catholic Church, and in imperial China, the rise of the
modern nation-state was accompanied by a commensurate elevation in the status of its
administration, the bureaucratization of the administration, and the indispensability of its
permanent officialdom. The bureaucracy, in service to the crown, was
the manifestation of the state. Building the state essentially was identified with the
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increasing proficiency of its bureaucratic apparatus and the status of its permanent
officials.
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The administrative apparatus of the state in developing countries, however, rarely has
come close to achieving the impersonal, rule-based status that Weber depicted. Nor
has it generally been able to produce the level of proficiency that Weber claimed was
characteristic of bureaucracy. Often the lack of sufficient resources to pay officials in
resource-scarce societies has led to corruption and, at the very least, shirking on the job
so that officials can tend to other, more remunerative ventures. The absence of a strong
professionalized corps of officials in such settings has meant that the civil service is
often a source of patronage, allowing leaders to pay off supporters or deter the
formation of an opposition. As these countries generally lack adequate resources, the
state bureaucracy has less to extract to allow for the proficient delivery of services.
Many of the problems identified in developing countries, of course, affect even the
most affluent countries, though usually to a lesser degree. The extent to which
bureaucracy performs in accordance with the Weberian characterization is related to the
external circumstances governing its capabilities. As a consequence, when these
resources are lacking or when there is little basis for the rule of rational-legal authority,
the state bureaucracy is unable to act in ways that may make it accountable, proficient,
or rule-based. Further, when pay is low and educational resources limited, the officials
responsible for running the administrative machinery may have inadequate skills and
become susceptible to corruption and shirking. Thus, the fact that the administrative
apparatus of a state is casually referred to as ―the bureaucracy‖ (or its officials as
―bureaucrats‖) says little about how proximate to or distant from the Weberian ideal of
bureaucracy it is.
In developing countries, ideas about administrative reform often move in the direction of
the more formalistic Weberian ideal—particularly the creation of universalistic
standards, regular procedures, and accountability. By contrast, in more-affluent
countries, there is some emphasis, particularly but not exclusively in the largely English-
speaking democracies, to reduce administrative formalism associated with bureaucracy,
diminish the number of rules, and increase discretion and performance accountability
lower down in organizations. Whereas in developing countries the main need is the
reduction of corruption, in more established countries the reform motif is focused on
rapid adaptability and performance. In settings where the state bureaucracy is believed
to have been essential to the identity and performance of the state itself (e.g., France
and Germany), there is more resistance to the introduction of market criteria to evaluate
the state administrative apparatus or to disrupt prevailing patterns of civil service
recruitment and training.
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Trends In Bureaucratic Organization
The terms bureaucracy and bureaucrat are often loosely employed as interchangeable
with any form of administrative organization, however distant its pattern of behaviour
from the Weberian model. Frequently,
therefore, criticisms of bureaucracy and bureaucrats are criticisms of administrative
behaviour that departs significantly from the ideals of bureaucratic organization and the
professionalism of its corps of officials. Still, bureaucracy has been challenged by more
informal and adaptive modes of organization (e.g., markets, networks, and other less
hierarchical or rule-driven modalities of organization). As no other form of organization
allows for the regularity and accountability characterized by the bureaucratic form,
however, it is unlikely that the bureaucratic form of organization will be supplanted.
Human relations management theories were created based on the Hawthorne studies
conducted by Professor Elton Mayo.
The Hawthorne Effect is the increased motivation and productivity found in employees
when placed in a team or group setting. The human relations movement was propelled
by the Hawthorne studies. Many theorists such as McGregor, Herzberg, Vroom and
others have developed their own employee motivation beliefs and concepts. The varied
hypothesis consist of behavioral models that state the most efficient, effective and
inspiring means of inciting self motivation and high performance from employees.
Hawthorne studies
The Hawthorne studies were conducted from 1927 until 1932 by Professor Elton Mayo
at the Western Electric Hawthorne Works in Chicago. Professor Mayo examined work
conditions and productivity. The conclusion of the research led to the discovery that
relationships largely influenced productivity. Being part of a group or team affected the
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performance of each employee. The researchers dubbed the increased motivation and
productivity The Hawthorne Effect.
The human relations movement originated from Dr. Elton Mayo's Hawthorne studies.
The movement stated that personal development and growth as well as employee goal
setting are essential to effective businesses. The movement also emphasized the fact
that affirmative motivation derived from team goals and greater production resulted from
encouragement and positive reinforcement from employers.
Theory X and Theory Y were proposed by Douglas McGregor in his 1960 book, The
Human Side of Enterprise. The two theories are opposing methods by which
supervisors perceive employee motivation. Theory X states that people dislike work and
need the constant threat of job loss and financial incentives to work hard. These
workers are irresponsible and need to be controlled. Theory Y states that people are
self-motivated, responsible, creative and need to work. Theory Y has been adopted by
more progressive management intellects that follow Elton Mayo's human relations
approach.
Hierarchy of needs
According to Maslow, McGregor's Theory Y did not completely work because it ignored
the need individuals had for Theory X. Maslow used his hierarchy of needs theory to
explain human motivation. The five levels of needs according to Maslow are
physiological needs, safety needs, needs of belonging, esteem needs and self-
actualization needs. Maslow believed that people cannot fulfill the higher needs of
esteem and self actualization without fulfilling the basic physiological and safety needs
of an individual first.
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Two factor hygiene and motivational theory
Frederick Herzberg stated that hygiene factors such as quality of management, safety,
status, relationships, company, working conditions and company policies are necessary
to keep employees satisfied. Motivational factors like advancement, achievement,
recognition, job interest and responsibility are needed in order to motivate employees to
a higher performance level.
2. It considers the impact of both near and distant future on organisational activities.
Organisations constantly respond to changes in the internal and external environmental
conditions. They also act as market leaders in the dynamic, competitive environment.
2. It analyses the system at different levels and inter-relates and integrates it into a
unified set of direction. Starting from individual goals, it focuses on overall
organisational goals, synthesizes the two and converges them into global economy.
4. It considers the impact of environment on the organisation and vice versa. Interaction
of external environment with the internal environment is the most significant contribution
of systems theory.
System approach, thus, analyses the organisation as an adaptive and dynamic entity.
5. System approach synthesizes the classical and behavioural theories into a broader
framework to solve managerial problems.
1. Critics of this theory claim this as a theoretical approach to management. The way an
organisation actually works and solves problems (by applying different techniques and
methods) has no appeal in the theory.
2. Relationship amongst parts of the organisation is emphasised upon but the exact
nature of inter-dependence is not defined.
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4. System approach fails to provide uniform approach to management. Management
practices change with changes in environmental variables. No standard set of principles
apply to all types of organisations.
It has added nothing new to the study of management. Even before this approach was
introduced, managerial decisions were taken keeping in mind the environmental
variables. No specific decision-making techniques are offered to deal with specific
problems.
5. It fails to provide concepts that apply to all types of organisations. The small
organisations are less adaptive to environmental variables than large organisations. The
theory assumes that most of the organisations are big, complex and open systems. It,
thus, fails to provide a unified theory.
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Decision theory is a set of concepts, principles, tools and techniques that help the
decision maker in dealing with complex decision problems under uncertainty. More
specifically, decision theory deals with methods for determining the optimal course of
action when a number of alternatives are available and their consequences cannot be
forecasted with certainty.
According to David Lewis (1974), "decision theory (at least if we omit the frills) is not an
esoteric science, however unfamiliar it may seem to an outsider. Rather it is a
systematic exposition of the consequences of certain well-chosen platitudes about
belief, desire, preference and choice. It is the very core of our common-sense theory of
persons, dissected out and elegantly systematized".
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situations with many alternatives and many different possible consequences and to
identify a course of action consistent with the basic economic and psychological desires
of the decision maker.
1. A decision criterion
2. A list of alternatives
There are two categories of decisions theories that include normative or prescriptive
decision theory to identify the best decision to take, assuming an ideal decision maker
who is fully informed, able to compute with perfect accuracy, and fully rational. The
practical application of this prescriptive approach is called decision analysis, and aimed
at finding tools, methodologies and software to help people make better decisions. The
most systematic and comprehensive software tools developed in this way are called
decision support systems.
In contrast, positive or descriptive decision theory explain observed behaviors under the
assumption that the decision-making agents are behaving under some consistent rules.
These rules may, for instance, have a technical framework or an axiomatic framework,
integration the Von Neumann-Morgenstern axioms with behavioral desecrations of the
expected utility hypothesis, or they may explicitly give a functional form for time-
inconsistent utility functions.
3. Develop alternatives
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5. Select the best alternative
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Analysis of Decision Trees: After the tree has been drawn, it is scrutinized from right to
left. The aim of analysis is to determine the best strategy of the decision maker that
means an optimal sequence of the decisions. To analyze a decision tree, managers
must know a decision criterion, probabilities that are assigned to each event, and
revenues and costs for the decision alternatives and the chance events that occur.
There are two possibilities to how to include revenues and costs in a decision tree. One
possibility is to assign them only to terminating nodes where they are included in the
conditional value of the decision criterion associated with the decisions and events
along the path from the first part of the tree to the end. However, it can be appropriate to
assign revenues and costs to branches. This reduces the required arithmetic for
calculating the values of the decision criterion for terminating nodes and focuses
attention on the parameters for sensitivity analysis.
When analyzing a decision tree, managers must start at the end of the tree and work
backwards. They perform two kinds of calculations.
For chance event nodes managers calculate certainty equivalents related to the events
emanating from these nodes. Under the assumption that the decision maker has a
neutral attitude toward risk, certainty equivalent of uncertain outcomes can be replaced
by their expected value. At decision nodes, the alternative with the best expected value
of the decision criterion is selected.
2. The decision tree is an abstraction and simplification of the real problem. Only the
important decisions and events are included.
3. Managers cannot use decision trees if the chance event outcomes are continuous.
Instead, they must redefine the outcomes so that there is a finite set of possibilities.
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The significant result of the analysis of a decision tree is to choose the best alternative
in the first stage of the decision process. After this stage, some changes in the decision
situations can come, an additional information can be obtained, and usually, it is
essential to actualize the decision tree and to determine a new optimal strategy. This
procedure is required before every further stage.
Theoretical studies have revealed that decision theory is a formal study of rational
decision making formed largely by the joint efforts of mathematicians, philosophers,
social scientists, economists, statisticians and management scientists (Jeffrey 1992).
While decision theory has history of applications to real world problems in many
disciplines, including economics, risk analysis, business management, and theoretical
behavioral ecology, it has more recently gained acknowledgment as a beneficial
approach to conservation in the last 20 years (Maguire 1986).
Concept
Simply put, ethics involves learning what is right or wrong, and then doing the right thing
-- but "the right thing" is not nearly as straightforward as conveyed in a great deal of
business ethics literature. Most ethical dilemmas in the workplace are not simply a
matter of "Should Bob steal from Jack?" or "Should Jack lie to his boss?"
(Many ethicists assert there's always a right thing to do based on moral principle, and
others believe the right thing to do depends on the situation -- ultimately it's up to the
individual.) Many philosophers consider ethics to be the "science of conduct." Twin
Cities consultants Doug Wallace and John Pekel (of the Twin Cities-based Fulcrum
Group; 651-714-9033; e-mail at [email protected]) explain that ethics includes the
fundamental ground rules by which we live our lives. Philosophers have been
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discussing ethics for at least 2500 years, since the time of Socrates and Plato. Many
ethicists consider emerging ethical beliefs to be "state of the art" legal matters, i.e., what
becomes an ethical guideline today is often translated to a law, regulation or rule
tomorrow. Values which guide how we ought to behave are considered moral values,
e.g., values such as respect, honesty, fairness, responsibility, etc. Statements around
how these values are applied are sometimes called moral or ethical principles.
(Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)
Ethics
Value at Work ... and at Play
Why Integrity Is Never Easy
What are Values, Morals, and Ethics?
The concept has come to mean various things to various people, but generally it's
coming to know what it right or wrong in the workplace and doing what's right -- this is in
regard to effects of products/services and in relationships with stakeholders. Wallace
and Pekel explain that attention to business ethics is critical during times of fundamental
change -- times much like those faced now by businesses, both nonprofit or for-profit. In
times of fundamental change, values that were previously taken for granted are now
strongly questioned. Many of these values are no longer followed. Consequently, there
is no clear moral compass to guide leaders through complex dilemmas about what is
right or wrong. Attention to ethics in the workplace sensitizes leaders and staff to how
they should act. Perhaps most important, attention to ethics in the workplaces helps
ensure that when leaders and managers are struggling in times of crises and confusion,
they retain a strong moral compass. However, attention to business ethics provides
numerous other benefits, as well (these benefits are listed later in this document).
Note that many people react that business ethics, with its continuing attention to "doing
the right thing," only asserts the obvious ("be good," "don't lie," etc.), and so these
people don't take business ethics seriously. For many of us, these principles of the
obvious can go right out the door during times of stress. Consequently, business ethics
can be strong preventative medicine. Anyway, there are many other benefits of
managing ethics in the workplace. These benefits are explained later in this document.
(Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)
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Managing Ethics in the Workplace
Managing Ethics Programs in the Workplace
"All organizations have ethics programs, but most do not know that they do," wrote
business ethics professor Stephen Brenner in the Journal of Business Ethics (1992,
V11, pp. 391-399). "A corporate ethics program is made up of values, policies and
activities which impact the propriety of organization behaviors."
Bob Dunn, President and CEO of San Francisco-based Business for Social
Responsibility, adds: "Balancing competing values and reconciling them is a basic
purpose of an ethics management program. Business people need more practical tools
and information to understand their values and how to manage them." (Extracted
from Complete (Practical) Guide to Managing Ethics in the Workplace.)
According to Wallace, "A credo generally describes the highest values to which the
company aspires to operate. It contains the `thou shalts.' A code of ethics specifies the
ethical rules of operation. It's the `thou shalt nots." In the latter 1980s, The Conference
Board, a leading business membership organization, found that 76% of corporations
surveyed had codes of ethics.
Some business ethicists disagree that codes have any value. Usually they explain that
too much focus is put on the codes themselves, and that codes themselves are not
influential in managing ethics in the workplace. Many ethicists note that it's the
developing and continuing dialogue around the code's values that is most important.
(Extracted from Complete (Practical) Guide to Managing Ethics in the Workplace.)
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How to Write a Code of Ethics for Your Business
10 Tips for Writing an Amazing Code of Ethics
How to Write a Code of Ethics for Business
If your organization is quite large, e.g., includes several large programs or departments,
you may want to develop an overall corporate code of ethics and then a separate code
to guide each of your programs or departments. Codes should not be developed out of
the Human Resource or Legal departments alone, as is too often done. Codes are
insufficient if intended only to ensure that policies are legal. All staff must see the ethics
program being driven by top management.
Note that codes of ethics and codes of conduct may be the same in some
organizations, depending on the organization's culture and operations and on the
ultimate level of specificity in the code(s). (Extracted from Complete (Practical) Guide to
Managing Ethics in the Workplace.)
As noted earlier in this document, Doug Wallace, Twin Cities-based consultant, explains
that one knows when they have a significant ethical conflict when there is presence of
a) significant value conflicts among differing interests, b) real alternatives that are
equality justifiable, and c) significant consequences on "stakeholders" in the situation.
An ethical dilemma exists when one is faced with having to make a choice among these
alternatives.
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General Resources Regarding Social Responsibility
Lessons in Ethics from Richard Branson
Also consider
Organizational Culture
Organizational Assessments
Ethics Training
The ethics program is essentially useless unless all staff members are trained about
what it is, how it works and their roles in it. The nature of the system may invite
suspicion if not handled openly and honestly. In addition, no matter how fair and up-to-
date is a set of policies, the legal system will often interpret employee behavior (rather
than written policies) as de facto policy. Therefore, all staff must be aware of and act in
full accordance with policies and procedures (this is true, whether policies and
procedures are for ethics programs or personnel management). This full accordance
requires training about policies and procedures.
Do the Right Thing -- Ethics Training Programs Help Employees Deal With Ethical
Dilemmas
Ethics Training and Development in the Military
Does Your Ethics and Compliance Training Meet the Standard?
Teaching Right and Wrong
Ethics Training: New Needs, New Times
Shift to Ethics
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Identify major shifts in technology and ethical thinking over the last five hundred years
Explain the impact of government and self-imposed regulation on ethical standards and
practices in the United States
Besides culture, the other major influence in the development of business ethics is the
passage of time. Ethical standards do not remain fixed; they transform in response to
evolving situations. Over time, people change, technology advances, and cultural mores
(i.e., acquired culture and manners) shift. What was considered an appropriate or
accepted business practice one hundred or even fifty years ago may not carry the same
moral weight it once did. However, this does not mean ethics and moral behavior are
relative. It simply acknowledges that attitudes change in relationship to historical events
and that cultural perspective and the process of acculturation are not stagnant.
We find an example of changing cultural mores in the fashion industry, where drastic
evolution can occur even over ten years, let alone a century. The changes can be more
than simply stylistic ones. Clothing reflects people‘s view of themselves, their world, and
their values. A woman in the first half of the twentieth century might be very proud to
wear a fox stole with its head and feet intact ((Figure)). Today, many would consider
that an ethical faux pas, even as the use of fur remains common in the industry despite
active campaigns against it by organizations such as People for the Ethical Treatment
of Animals. At the same time, cosmetics manufacturers increasingly pledge not to test
their products on animals, reflecting changing awareness of animals‘ rights.
Philanthropist Anne Morgan, wife of banker and industrialist J.P. Morgan, wearing a fur
stole circa 1915. (credit: ―Anne Morgan, wearing fur stole, ca. 1915‖ by
―Elisa.rolle‖/Wikimedia Commons, Public Domain)
Bias is built into the human psyche and expressed through our social structures. For
this reason, we should avoid making snap judgments about past eras based on today‘s
standards. The challenge, of course, is to know which values are situational—that is,
although many values and ethics are relative and subjective, others are objectively true,
at least to most people. We can hardly argue in favor of slavery, for example, no matter
in which culture or historical era it was practiced. Of course, although some values
strike us as universal, the ways in which they are interpreted and applied vary over time,
so that what was once acceptable no longer is, or the reverse.
When Even Doctors Smoked
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From the 1940s to the 1970s, cigarettes were as common as water bottles are today.
Nearly everyone smoked, from judges in court to factory workers and pregnant women.
Edward Bernays, the Austrian-American founder of the field of public relations,
promoted smoking among women in a 1929 campaign in New York City in which he
marketed Lucky Strike cigarettes as ―torches of freedom‖ that would lead to equality
between men and women. However, by the late 1960s, and in the wake of the release
of the landmark Surgeon General‘s report on ―Smoking and Health‖ on January 11,
1964, it had become clear that there was a direct link between cigarette smoking and
lung cancer. Subsequent research has added heart and lung diseases, stroke, and
diabetes. Smoking has decreased in Western countries but remains well established in
the global East and South, where cigarette manufacturers actively promote the products
in markets like Brazil, China, Russia, and Singapore, especially among young people.
Critical Thinking
Thus, we acknowledge that different eras upheld different ethical standards, and that
each of these standards has had an impact on our understanding of ethics today. But
this realization raises some basic questions. First, what should we discard and what
should we keep from the past? Second, on what basis should we make this decision?
Third, is history cumulative, progressing onward and upward through time, or does it
unfold in different and more complicated ways, sometimes circling back upon itself?
The major historical periods that have shaped business ethics are the age of
mercantilism, the Industrial Revolution, the postindustrial era, the Information Age, and
the age of economic globalization, to which the rise of the Internet contributed
significantly. Each of these periods has had a different impact on ethics and what is
considered acceptable business practice. Some economists believe there may even be
a postglobalization phase arising from populist movements throughout the world that
question the benefits of free trade and call for protective measures, like import barriers
and export subsidies, to reassert national sovereignty.
In some ways, these protectionist reactions represent a return to the theories and
policies that were popular in the age of mercantilism.
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Unlike capitalism, which views wealth creation as the key to economic growth and
prosperity, mercantilism relies on the theory that global wealth is static and, therefore,
prosperity depends on extracting wealth or accumulating it from others. Under
mercantilism, from the sixteenth to the eighteenth centuries, the exploration of newly
opened markets and trade routes coincided with the impulse to colonize, producing an
ethical code that valued acculturation by means of trade and often brute force.
European powers extracted raw commodities like cotton, silk, diamonds, tea, and
tobacco from their colonies in Africa, Asia, and South America and brought them home
for production. Few questioned the practice, and the operation of business ethics
consisted mainly of protecting owners‘ interests.
During the Industrial Revolution and the postindustrial era, in the nineteenth and early
twentieth centuries, business focused on the pursuit of wealth, the expansion of
overseas markets, and the accumulation of capital. The goal was to earn as high a profit
as possible for shareholders, with little concern for outside stakeholders. Charles
Dickens (1812–1870) famously exposed the conditions of factory work and the poverty
of the working class in many of his novels, as did the American writer Upton Sinclair
(1878–1968). Although these periods witnessed extraordinary developments in science,
medicine, engineering, and technology, the state of business ethics was perhaps best
described by critics like Ida Tarbell (1857–1944), who said of industrialist John
D. Rockefeller (1839–1937) ((Figure)), ―Would you ask for scruples in an electric
dynamo?‖
Ida Tarbell (a) was a pioneer of investigative journalism and a leading ―muckraker‖ of
the Progressive Era. She is perhaps best known for her exposé of the business
practices of John D. Rockefeller (b), founder of the Standard Oil Company. (credit a:
modification of ―TARBELL, IDA M.‖ by Harris & Ewing/Library of Congress, Public
Domain; credit b: modification of ―John D. Rockefeller 1885‖ by ―DIREKTOR‖/Wikimedia
Commons, Public Domain)
With the advent of the Information and Internet ages in the late twentieth and early
twenty-first centuries, a code of professional conduct developed for the purpose of
achieving goals through strategic planning.
In the past, ethical or normative rules were imposed from above to lead people toward
right behavior, as the company defined it. Now, however, more emphasis is placed on
each person at a firm embracing ethical standards and following those dictates to arrive
at the appropriate behavior, whether at work or when off the clock.
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The creation of human resources departments (increasingly now designated as human
capital or human assets departments) is an outgrowth of this philosophy, because it
reflects a view that humans have a unique value that ought not be reduced simply to the
notion that they are instruments to be manipulated for the purposes of the organization.
Millennia earlier, Aristotle referred to ―living tools‖ in a similar but critical way.
A Matter of Time
What effect does time have on business ethics, and how is this effect achieved? If we
accept that business today has two purposes—profitability and responsibility—we might
assume that business ethics is in a much better position now than in the past to affect
conduct across industries. However, much of the transformation of business over time
has been the result of direct government intervention; one recent example is the Dodd–
Frank Wall Street Reform and Consumer Protection Act that followed the financial crisis
of 2008. Yet, despite such regulation and increased management vigilance in the form
of ethics training, compliance reporting, whistleblower programs, and audits, it is
tempting to conclude that business ethics is in worse shape than ever. The Information
Age and the Internet may even have facilitated unethical behavior by making it easier to
move large sums of money around undetected, by enabling the spread of
misinformation on a global scale, and by exposing the public to the theft and misuse of
vast stores of personal data gathered by companies as diverse as Equifax and
Facebook.
However, since the mercantile era, there has been a gradual increase in awareness of
the ethical dimension of business. As we saw in the preceding chapter, businesses and
the U.S. government have debated and litigated the role of corporate social
responsibility throughout the twentieth century, first validating the rule of shareholder
primacy in Dodge v. Ford Motor Company (1919) and then moving away from a strict
interpretation of it in Shlensky v. Wrigley (1968). In Dodge v. Ford Motor
Company (1919), the Michigan Supreme Court famously ruled that Ford had to operate
in the interests of its shareholders as opposed to its employees and managers, which
meant prioritizing profit and return on investment. This court decision was made even
though Henry Ford had said, ―My ambition is to employ still more men, to spread the
benefits of this industrial system to the greatest possible number, to help them build up
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their lives and their homes. To do this we are putting the greatest share of our profits
back in the business.‖
By mid-century and the case of Shlensky v. Wrigley (1968), the courts had given boards
of directors and management more latitude in determining how to balance the interests
of stakeholders.
This position was confirmed in the more recent case of Burwell v. Hobby Lobby (2014),
which held that corporate law does not require for-profit corporations to pursue profit at
the expense of everything else.
Governmental regulation and legal interpretations have not been the only avenues of
change over the past century. The growing influence of consumers has been another
driving force in recent attempts by businesses to self-regulate and voluntarily comply
with global ethical standards that ensure basic human rights and working conditions.
The United Nations (UN) Global Compact is one of these standards. Its mission is to
mobilize companies and stakeholders to create a world in which businesses align their
strategies and operations with a set of core principles covering human rights, labor, the
environment, and anticorruption practices. The Global Compact is a ―voluntary initiative
based on CEO commitments to implement universal sustainability principles and to
undertake partnerships in support of UN goals.‖
Of course, as a voluntary initiative, the initiative does not bind corporations and
countries to the principles outlined in it.
Read the Ten Principles of the United Nations Global Compact urging corporations to
develop a ―principled approach to doing business.‖ The principles cover human rights,
labor, the environment, and corruption.
Whenever we look at the ways in which our perception of ethical business practice
changes over time, we should note that such change is not necessarily good or bad but
rather a function of human nature and of the ways in which our views are influenced by
our environment, our culture, and the passage of time. Many of the examples discussed
thus far illustrate a gradual increase in social awareness due to the actions of individual
leaders and the historical era in which they found themselves. This does not mean that
culture is irrelevant, but that human nature exists and ethical inclination is part of that
nature. Historical conditions may allow this nature to be expressed more or less fully.
We might measure ethical standards according to the degree they allow human
compassion to direct business practice or, at least, make it easier for compassion to
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hold sway. We might then consider ethics not just a nicety but a constitutive part of
business, because it is an inherent human trait. This is a perspective Kant and Rawls
might have agreed with. Ethical thinking over time should be measured, deliberate, and
open to examination.
Summary
As a function of culture, ethics is not static but changes in each new era. Technology is
a driving force in ethical shifts, as we can see in tracing changes from the age of
mercantilism to the Industrial Revolution to the postindustrial era and the Information
Age. Some of the most successful recent efforts to advance ethical practices have
come from influences outside industry, including government regulation and consumer
pressure.
Tools of Ethics
Ethics-tools to assist individuals and groups to 'make right or good decisions'. Includes
ethics-tools for workplace and businesses, team issues and assessment.
Donna Rae Scheffert, author, is a writer and organizational consultant. She retired as a
Leadership Development Specialist from the University of Minnesota Extension in 2009.
She spent over 20 years creating leadership information, tools and training. She is the
owner of online-leadership-tools.com
It is essential that leaders include an assessment of ethics - the qualities and impacts of
their actions on others. Ethics-tools can help. ―Persons with integrity are trusted with
leadership, executing our collective values and goals and making decisions that affect
us all. They exemplify human values despite enormous pressures toward expediency
and self-interest. Such individuals who have achieved respected leadership positions
are held up as examples for all to follow.
Marcia Mentkowski
Respect Others – treat others as ends in themselves and never a means to ends,
listen closely, are tolerant of opposing points of view, make others feel competent, treat
others as worthy human beings
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Serve Others – place stakeholder‘s and follower‘s welfare foremost in their plans,
mentor and empower others, practice stewardship, act in ways that benefit others and
the greater good
Are Honest – tell the truth, represent reality as fully and completely as possible, are
sensitive to attitudes and feelings of others, are trustworthy, reward honest behavior in
the organization
Build Community – influence others for a common goal that benefits leaders and
followers, attend to the needs and demands of the community, build voluntary
followership, advance the human condition
Northouse, P.G. (2001). Leadership: Theory and practice (2nd ed.). Thousand Oaks,
CA: Sage Publications.
----Is leadership is concerned about ―doing the right thing‖ - moving toward a beneficial
end or do they do what they can 'get by with' without being caught?
---Does leadership assess why something should be done and who will benefit and who
may not?
Check out this great online collection called the Ethics-Tools Kit
It is about living and acting in ways that are consistent with principles of good
behavior.
It is also about self-restraint; not doing something simply because you have the power
to do so, not doing what you have the right to do if it is not the ―right‖ thing to do,not
doing what you want to do, even if it is within the legal limits.
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including people from many religious or faith traditions, as well as people who do not
practice a religion or faith tradition.
It is not the same as following the law. Legal systems can incorporate standards, but
standards may go well beyond legal obligations.
It refers to well-based standards of right and wrong that prescribe what humans
ought to do.
Standards impose reasonable obligations to refrain from certain behaviors; for example,
rape, murder, stealing, assault, slander and fraud.
Standards also encourage virtues; for example, honesty, caring, compassion, and
loyalty.
Standards can relate to rights; the right to privacy, the right to life, the right to freedom
from injury and other rights.
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UNIT II
Management is not a hard science. Unlike chemistry or algebra where a right answer
(often) exists, management is fluid, and subjective, and there are divergent perspectives
on how to employ its principles. But what exactly is management? Most scholars have
variations of the same definition that include a utilization of resources to achieve a
goal. Lussier (2021) defines a manager as ―the individual responsible for achieving
organizational objectives through efficient and effective utilization of resources‖ (p.
3). The problem with this definition is that it implies that a manager has to be both
efficient and effective, which eliminates the possibility of having a bad manager. Each
of us can probably contradict this definition by providing an example from our personal
past. However, this definition contains the basic elements of using resources to pursue
goals.
The Spanish Empire constructed the first global supply chain the world had ever seen
once they discovered the surfeit of precious elements such as gold, silver, and mercury
in North and South America (Aho & Lloyd, 2019). Mule trains transported these
treasures across mountain passes and jungles wherein war galleons then filled their
holds. These fleets returned to Spain traversing the natural elements (tempests and
shoals) while defending against state enemies (pirates).
At its core, this imperial supply chain used the same approach to achieve success that a
teenager might use in a playing video games. If he rallys his friends after school in a
game of Call of Duty to defeat their online opponents, he might also be considered a
manager. He uses his experience and knowledge of gameplay as well as weaponry
within the game to pursue his goal of competitive domination.
These examples demonstrate that management is multifarious, and not at all a recent
phenomenon. Yet, when we hear the term management, most of us probably conjure
an image something like that of a corporate vice president implementing a marketing
strategy to meet quarterly sales goals. The irony is that the corporate manager is
utilizing the same tools as those of the native hunter, Spanish fleet admiral, and
sophomore gamer. Management is both universal and ubiquitous in that we all use
variations of its elements.
Even if you have never stepped foot in a corporate office, or held the title of manager at
your local Dairy Queen, you have no less used the functions of management in your
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personal pursuits. A relevant example would be the process by which you manage your
personal budget.
If you answered yes to question #1, then you are already engaged in the management
function of planning. You know where your money is being spent. The same holds true
for your financial goals. If you want to leave college debt free, save for a down payment
on a house, or go on an unforgettable spring break trip, you have defined your
organizational objective! Where you put your money is a function of how you manage
your resources. This organizing function is presumably in line with your financial
goals. For example, if you want to save for a down payment, you need to actually
allocate your resources (income) to a savings account. Moreover, where your money
comes from is also the source of your organizational resources. A budget shortfall
might require you to employ the leading function of management. The essence of
leading is motivating other people to align with your plan. What do you do if you need to
pay bills, but don‘t have the money? Perhaps you ask your parents for a loan (need to
sell this idea to them), or you might need to negotiate with a co-worker to let you take on
extra shifts (show them what‘s in it for them in return), or it might be the reality that you
need to sell something to make ends meet by selling something (in which case selling
requires you to inspire someone else to see value in what you are selling). Leading
might also entail convincing someone else in your circle to get on board with your
gameplan (like a spouse, or sibling). Finally, keeping track of your expenses to ensure
solvency and pace with your goals is the core of the controlling function. Do you keep
receipts and check them against your online account expenses? Do you update your
spreadsheet after your bill automatically debits from your account? Do you get an email
notifying you have a low balance and are in risk of overdraft charges? Each of these
methods are ways to monitor your progress and decide if you need to make a change
(short term or long term).
If you reflect on this example of your personal budget, or you worked to achieve a
personal or team goal, you will likely conclude that you are already a manager. This
wide application of managerial thinking means that if you can master its principles on
your personal scale, you can then amplify its use when you need to use it on a large
scale. Get good at leading your class project, organizing your club fundraiser, or
helping your team win a conference championship, and you will later be able to magnify
the scale to lead a marketing department, or corporate merger, and even diplomatic
negotiations as a prime minister.
Mastering the four functions will allow you to apply the function of planning on a more
complex stage such as evaluating the internal and external environments of your
organization. Using this analysis you can create an effective game plan to formulate a
sustainable competitive advantage. Developing an organizing skillset will allow you to
propose a structure for your team that incorporates cross functional members and ways
of thinking. It will allow you to identify and recommend resources needed to pursue
your plan. Honing your leading skillset will afford you the capability to motivate your
organizational stakeholders to partake in your strategy, and force you to consider the
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ethical implications of your actions. Finally, implementing effective controlling allows
you to check progress towards your goals and to recommend changes if you need to
get on track.
Planning
Planning is the systematic process of making decisions about goals and activities the
organization will pursue (Bateman & Snell, 2013). To make a decision about the
direction of an organization, the planning phase must begin with analyzing the
environment. Without a solid understanding of the context, the manager would have no
basis to provide future direction. The context gives a manager a point of reference for
improvement, opportunity, and learning from past mistakes. For this reason, the
planning function should begin with analysis. This analysis should consider both the
internal factors such as culture, values, and performance of team members as well as
the external factors such as competitive environment, legal regulations, economy,
technology, social values, and demographics.
The second component of planning is to use this analysis of the environment to build
goals, activities, and objectives. For a major organization this might be the vision and
mission statement of the organization. For a smaller organization this could be a year
end, or season end goal. Some consider planning that point in your day or month that
you step away from your desk, and think about the direction of your organization. This
requires you to reflect on your organization‘s past, and determine how that impacts the
direction going forward.
Organizing
Organizing is the process of assembling and assigning the human, financial, physical,
informational, and other resources needed to achieve goals (Bateman & Snell,
2013). The core of the organizing function is leveraging the resources to align with the
determined goals. Organizing human resources means first of all attracting a labor
force that can help you pursue your goal. Within the organization, managing the human
element means assigning tasks, delegating authority, determining a structure and
hierarchy. Organizing the financial resources equates to making sure your capital is
being utilized to meet goals. If an organization decides they want to have a best-in-
class customer service team, they better being willing to spend the money to attract
people with the disposition towards serving others, and spend money on training, or a
retreat to teach the agents the skillsets they need. Marshalling physical resources
focuses on the effectiveness of where you place and how you use physical assets. An
executive chef might re-arrange a kitchen to improve process flow, food quality, or
mitigate safety risks for example. Informational resources implies a leveraging and
disseminating the organization‘s knowledge in meaningful ways to achieve
goals. Connecting employees to how they contribute to the financial bottom line is a
way of leveraging informational resources, as is using your company‘s proprietary
algorithm to predict stock prices or develop new products.
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Leading
Imagine for a minute, that you analyzed the conditions of the organization, you
determined a game plan to pursue and even directed resources to step in that
direction. You have successfully implemented the planning and organizing
functions. In this scenario, however, you did not give consideration to how your team or
organization would be involved. Do they agree with your direction? Did they have input
in the process? Do they feel valued as a team member? Do they understand their role
in a successful outcome? All of these questions are answered by the degree to which
a manager is engaged in the leading function.
Controlling
Control is installing processes to guide the team towards goals and monitoring
performance towards goals and making changes to the plan as needed (Batemen &
Snell, 2013). Control does not always mean limited what the organization can do by
having a hand in everything. We might call this micro-managing, which is control in its
extreme form. Healthy control processes involve putting systems in place to make sure
your organization is on track to meet the goals you established in the planning
process. Planning sets standards to compare against, and the control process is the
dashboard that tells whether or not you are meeting the standard. For example, a
grocery store might set a goal of reducing shrink (that‘s product lost to shoplifting,
damage). They decide that they want to reduce their shrink loss by 50%. To achieve
this plan, they will have to dedicate resources (more employees to monitor, rearrange
loading dock). You already recognize that step as the organizing function. We then
incentivize our employees by designing a bonus structure – i.e. if we collectively meet
the goal, each employee shares in the savings. If we stop there, we would have no way
of knowing if we met the goal. The control process solves this for us. The last step in
the grocery store manager‘s managerial approach is to have each department head
report their shrink loss at the end of the shift, and aggregate those in an excel
spreadsheet. In this way, the manager can see if the rearrangement of the loading dock
has reduced the number of damaged canned goods that was happening under the old
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arrangement. The manager can make changes if they see that shrink is not improving
even after hiring a greeter at the entrance.
Monitoring performance is the first step in control. After see the progress towards
goals, the next step is to make changes. In this way, the control process always leads a
manager back to the planning phase of management. There are only two outcomes to
the control process. You are making progress towards your goal, or you are digressing
in your performance. If you reach your goal, you will need to set new goals, which is the
planning function. If you are not progressing towards your goal, you need to analyze
the environment and determine why not. In this way the management functions are
related and highly dependent upon each other, especially control and planning.
To illustrate the application of the four functions of manager, consider the various
contexts in Figure 1.1. Under the personal budget, an engaged couple has decided to
save for a house after getting married. The softball coach must determine how to win a
conference championship, and the corporate manager is working on a strategy to
improve waning sales figures.
Planning:
Nature
Planning is a future course of action where one wants to reach. Depending upon your
objective
As organization is open planning too is also an open system Change in the environment
may affect the planning process
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3. Planning occurs at every level of organisation
Scope
Project scope is the part of project planning that involves determining and documenting
a list of specific project goals, deliverables, tasks, costs and deadlines. The
documentation of a project's scope, which is called a scope statement or terms of
reference, explains the boundaries of the project, establishes responsibilities for each
team member and sets up procedures for how completed work will be verified and
approved.
During the project, this documentation helps the project team remain focused and on
task. The scope statement also provides the team with guidelines for making decisions
about change requests during the project. Note that a project's scope statement should
not be confused with its charter; a project's charter simply documents that the project
exists.
Large projects naturally tend to change as they progress. If a project has been
effectively "scoped" at the beginning, then managing these changes will be easier.
When documenting a project's scope, stakeholders should be as specific as possible to
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avoid scope creep, a situation in which one or more parts of a project end up requiring
more work, time or effort because of poor planning or miscommunication.
articulates what the project entails so that all stakeholders can understand what's
involved;
provides a roadmap that managers can use to assign tasks, schedule work and
budget appropriately;
Project managers generally find that establishing project scope ensures projects are
focused and executed to expectations. The scope provides a strong foundation for
managing a project as it moves forward and helps ensure that resources aren't diverted
or wasted on out-of-scope elements.
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deliverables, when the project needs to be completed, and how much they can pay for
it. The goal is to gather and record precise and accurate information during this process,
so that the project scope effectively reflects all requirements and thus improves the
chances for project leaders to deliver products that meet stakeholder expectations on
time and on budget.
The project scope statement also establishes what is not included in its initiatives, either
implicitly or explicitly. Objectives and tasks not listed in the project scope statement
should be considered out of scope. Project managers can also list specific work that will
not be part of the project.
As such, this statement establishes the boundaries of each specific project. Project
leaders need to take those requirements and map out what should happen and in what
order those items need to occur. This generally leads to the creation of a work
breakdown structure (WBS). As the name states, the work breakdown structure breaks
down the totality of planned work into smaller portions and required tasks.
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Once the project scope statement is completed and approved, project managers can
effectively assign tasks and give their teams directions on what they each need to do to
meet the target timelines and costs.
Project managers should rely on change management processes that determine how
such requests should be evaluated while considering updates and alterations to the
project. The ability to distinguish between which requests are truly needed and which
are out of scope allows organizations to avoid scope creep. Scope creep happens when
more and more work is tacked onto projects as they're underway. Scope creep
frequently adds extra costs and unnecessary work while distracting from the objectives
and threatening the quality of the intended deliverables.
In this article we will discuss about the importance and objectives of planning in an
economy.
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Economic planning is often regarded as technique of managing an economy. When the
structure of an economy becomes complex and subject to rapid change and
transformation (due to population growth, discovery of resources, industrialisation, etc.)
some sort of advance thinking becomes necessary to resolve that complexity and to
prepare the economy for those changes. Such preparation is called planning.
Most often that not an economic plan is regarded as a programme of action. It may also
be taken to mean an instrument for regulating a free private enterprise economy. The
regulatory measures may vary from country to country.
They may leave either too much or too little a degree of freedom to private enterprise.
This may hamper the working out of the plan. Many plans leave their programmes
incomplete because they hesitate to exercise their regulatory functions. They are little
more than a list of public development projects.
Many other plans perform their regulatory functions with such seriousness and severity
that their programmes of action are completely jeopardised. In such planned economies
any sort of enterprise ceases to exist. The correct plan is one in which a comprehensive
and consistent programme of action is sought to be implemented by carefully
harnessing enterprise for the success of the plan.
It should be noted that a plan is just a programme of action, it is not a guarantee for
action. In short, a good plan is one which makes adequate provisions for and ensures
that its targets are properly fulfilled.
Objectives of Planning:
The objectives of planning are many and varied. These aims are not the same for all
countries, not are they same for the same country at all times.
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(d) An efficient utilisation of the country‘s resources for faster growth;
(e) Removal of mass poverty within a definite time limit through land reform,
employment creation, and provision of educational and medical facilities;
Importance of Planning:
The importance of planning lies in the fact that it is an instrument through which
important socio-economic objectives, unrealisable under free private enterprise, are
likely to be effectively realised.
(b) A greater degree of economic equality than was possible under free enterprise;
(c) Fuller employment opportunities for the growing labour force of a country; and
(d) Larger provisions for capital formation as one of the principal instruments for
accelerating the rate of growth.
Rather it is to be taken as the only instrument through which enterprise can spread to
non-traditional forms of economic activity.
In countries like India the most important objective of an economic plan is to bring into
being new forms of production by accelerating capital formation. This will surely raise
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the overall productivity of the economy and thus raise people‘s income by providing
them adequate employment opportunities, and thus remove the problems of mass
poverty.
Prima facie, the over-populated underdeveloped countries often suffer from capital
starvation. In other words, there is always a shortage of all types of productive capital
equipment in such countries. So most people have to depend on land. Under-
employment and unemployment are just a reflection of this.
Economists like Nurkse and Lewis believe that the only way to provide gainful
employment opportunities and better living standards to the masses is to equip them
with more capital. The accumulation of capital must proceed at a pace which would
closely correspond to the rate of population growth and productivity change.
Conclusion:
It is thus clear that the basic aim to economic planning in a backward country like India
is to achieve in different ways a more rapid of capital formation than what would have
been possible under private enterprise. ―The success of the plan‖, says Prof. D.
Bhattacharya, “is to be judged mainly by the advance it registers in respect of
capital formation as compared with the period before the plan was launched.”
In short, only planned economic development can hope to achieve a rate of growth
which is politically acceptable. The most fundamental objective of planning is to alter the
pattern of resources use and, if possible, to intensify such use in such a fashion as to
achieve certain socially desirable goals.
For an LDC like India the most important goal is the removal of mass poverty and
growing unemployment by putting resources more effectively into use. In other words,
planning must focus its attention primarily on the task of improving the pattern of
resource use, for raising incomes and improving the pattern of income distribution.
Types of Planning
The process of planning may be classified into different categories on the following
basis:
(i) Nature of Planning:
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a. Formal planning.
b. Informal planning.
b. Intermediate planning.
c. Operational planning.
(iv) Use:
a. Standing plans
b. Single-use plans.
The term formal means official and recognised. Any planning can be done officially to
be followed or implemented. Formal planning is aims to determine and objectives of
planning. It is the action that determine in advance what should be done.
Advantages:
1. Proper Cooperation among employees,
2. Unity of Action,
3. Economy,
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5. Choosing the right objectives, and
6. Future plan.
b. Informal Planning:
An informal plan is one, which is not in writing, but it is conceived in the mind of the
manager. Informal planning will be effective when the number of actions is less and
actions have to be taken in short period.
These may include plans concerning inventory planning and control, employee training,
work methods etc.
Advantages:
1. It can be easily adjustable.
3. Easy to Gauge.
Disadvantages:
1. Very short period-left over things will be more.
b. Long-Term Planning:
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Long-term planning usually converse a period of more than five years, mostly between
five and fifteen years. It deals with broader technological and competitive aspects of the
organisation as well as allocation of resources over a relatively long time period. Long-
term planning is considered as strategic planning.
Short-term planning covers the period of one year while long term planning covers 5-15
years. In between there may be medium-term plans. Usually, medium term plans are
focusing on between two and five years. These may include plan for purchase of
materials, production, labour, overhead expenses and so on.
Advantages:
1. Sufficient time to plan and implement.
2. Effective control.
Disadvantages:
1. Prediction is difficult.
2. Full of uncertainties.
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vice-presidents, General Manger etc. It is a long range planning and may cover a time
period of up to 10 years.
It basically deals with the total assessment of the organisation‘s capabilities, its
strengths and its weaknesses and an objective evaluation of the dynamic environment.
The planning also determines the direction the company will be taking in achieving
these goals.
b. Intermediate Planning:
Intermediate planning cover time frames of about 6 months to 2 years and is
contemplated by middle management, which includes functional managers, department
heads and product line mangers. They also have the task of polishing the top
managements strategic plans.
The middle management will have a critical look at the resources available and they will
determine the most effective and efficient mix of human, financial and material factors.
They refine the broad strategic plans into more workable and realistic plans.
c. Operational Planning:
Operational planning deals with only current activities. It keeps the business running.
These plans are the responsibility of the lower management and are conducted by unit
supervisors, foremen etc. These are short-range plans covering a time span from one
week to one year.
These are more specific and they determine how a specific job is to be completed in the
best possible way. Most operational plans .ire divided into functional areas such as
production, finance, marketing, personnel etc.
Thus even though planning at all levels is important, since all levels are integrated into
one, the strategic planning requires closer observation since it establishes the direction
of the organisation.
(iv) Use:
a. Standing Plan:
Standing plan is one, which is designed to be used over and over again. Objectives,
policies procedures, methods, rules and strategies are included in standing plans. Its
nature is mechanical. It helps executives to reduce their workload. Standing plan is also
called routine plan. Standing or routine plan is generally long range.
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b. Single Use Plan:
Single use plan is one, which sets a course of action for a particular set of
circumstances and is used up once the particular goal is achieved. They may include
programme, budgets, projects and schedules. It is also called specific planning. Single
use plan is short range.
(i) Forecasting.
(ii) Objectives.
(iii) Policies.
(iv) Programmes.
(v) Strategies.
(vi) Schedules.
(vii) Procedures.
(ix) Budgets.
i. Forecasting:
Forecasting becomes an integral part of the planning process. It is a prediction of future
events and conditions. It, therefore, includes both the assessment of the future and the
provision for it. It helps to reduce the uncertainties that surround management, decision
making.
ii. Objectives:
Objectives are the ends toward which activity is aimed— they are the results to be
achieved. They represent not only the end point of planning but also the end toward
which organising, staffing, leading and controlling are aimed.
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Organisation can grow without any difficulty if it has well-defined objectives. These
objectives should be clearly defined and communicated throughout the organisation.
Such objectives must be realistic.
iii. Policies:
Koonte and O‘Donnell defines “policies are general statements or undertakings
which guide or channel thinking in decision-making of subordinates.” So, policies
act as guides to thinking and action of subordinates in the organisations. It should be
clearly prescribed and understandable by all.
iv. Programmes:
It refers to the course of action of work to be carried out in proper sequence for the
purpose of achieving specific objectives.
v. Strategies:
Konnoz and Heinz Weihrich defined strategies as “a general programme of action
and deployment of resources to attain comprehensive objectives” or ‖ the
determination of the basic long-term objectives of an enterprise ―and the adoption of
courses of action and allocation of resources necessary to achieve these goals. It is
specific type of plan for achieving organisational goals.
vi. Schedules:
Fixing a time sequence for every operation is known as schedules. Normally it forms
part of programming a part of action plan.
vii. Procedures:
Procedures are plans that establish a required method of handling future activities. They
are guides to action, rather than to thinking and they detail the exact manner in which
certain activities must be accomplished. They are chronological sequences of required
actions.
viii. Rules:
Rules spell out specific required actions or non-actions, following no direction. They are
usually the simplest type of plan.
ix. Budgets:
A budget is a statement of expected results expressed in numerical term. It may be
referred to as a numberised programme. A budget may be expressed either in financial
terms or in terms of labour-hours, units of product, machine hours, or any other
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numerically measurable term. It helps the organisation to control the action by
comparing budgetary and actual results.
Process of Planning
As planning is an activity, there are certain reasonable measures for every manager to
follow:
(1) Setting Objectives
This is the primary step in the process of planning which specifies the objective
of an organisation, i.e. what an organisation wants to achieve.
Objectives are end results which the management wants to achieve by its
operations.
Objectives are set for the organisation as a whole for all departments, and then
departments set their own objectives within the framework of organisational
objectives.
Example:
A mobile phone company sets the objective to sell 2,00,000 units next year, which is
double the current sales.
(2) Developing Planning Premises
Planning is essentially focused on the future, and there are certain events which
are expected to affect the policy formation.
Such events are external in nature and affect the planning adversely if ignored.
Their understanding and fair assessment are necessary for effective planning.
Such events are the assumptions on the basis of which plans are drawn and are
known as planning premises.
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Example:
The mobile phone company has set the objective of 2,00,000 units sale on the basis of
forecast done on the premises of favourable Government policy towards digitisation of
transactions.
(3) Identifying Alternative Courses of Action
Example:
The Mobile company has many alternatives like reducing price, increasing advertising
and promotion, after sale service etc.,
(4) Evaluating Alternative Course of Action
In this step, the positive and negative aspects of each alternative need to be
evaluated in the light of objectives to be achieved.
Every alternative is evaluated in terms of lower cost, lower risks, and higher
returns, within the planning premises and within the availability of capital.
Example:
The mobile phone company will evaluate all the alternatives and check its pros and
cons.
(5) Selecting One Best Alternative
The best plan, which is the most profitable plan and with minimum negative
effects, is adopted and implemented.
In such cases, the manager‘s experience and judgement play an important role
in selecting the best alternative.
Example:
Mobile phone company selects more T.V advertisements and online marketing with
great after sales service.
(6) Implementing the Plan
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This is the step where other managerial functions come into the picture.
In this step, managers communicate the plan to the employees clearly to convert
the plans into action.
This step involves allocating the resources, organising for labour and purchase of
machinery.
Example:
Mobile phone company hires salesman on a large scale, creates T.V advertisement,
and starts online marketing activities and set up service workshops.
(7) Follow Up Action
Monitoring the plan constantly and taking feedback at regular intervals is called
follow-up.
Monitoring of plans is very important to ensure that the plans are being
implemented according to the schedule.
Regular checks and comparisons of the results with set standards are done to
ensure that objectives are achieved.
Example:
A proper feedback mechanism was developed by the mobile phone company
throughout its branches so that the actual customer response, revenue collection,
employee response, etc. could be known.
Few would argue with the concept of planning. In any activity,a plan provides a
fundamental basis for success. Marketing plans should offer exactly what is required –
optimizing the use of marketing techniques and resources in order to make the most of
marketing opportunities. However, even the most charitable of marketing managers
would view this statement as naive and unlikely to be fully achieved. If managers view
planning as ‗fine in theory‘ but failing in practice to deliver its full potential,where does it
go wrong?
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Clearly, barriers must exist to successful planning. Often,these barriers are more to do
with the human aspects of the business management.They involve people, politics,
skills and culture, to a greater degree than formal systems, methodology, and data.
Common barriers to successful planning are:
Culture : The prevailing culture may not be amenable to marketing plans.If the
fundamental principles of marketing are not accepted by the organization, any move
towards being market-led and customer orientated could be dismissed as ‗not the
way we do it‘. Often we see considerable resistance to change and gradual
regression back to old work practices.
Power and politics : All organizations are subject to internal politics. The
development of strategic planning becomes a battlefield where vested interests fight
each other‘s proposals and squabble over status and resources. This process
absorbs much management time and can result in ill-advised compromise and
unnecessary delay.
Analysis not action : Much time and energy can be wasted by the process of
analyzing data and developing rationales for action, as opposed to simply acting.
While a rigorous process is commendable, it should not displace action. This
‗paralysis-by-analysis‘ barrier tends to substitute information gathering and
processing for decision making. Perhaps surprisingly, many planning systems do not
promote action and are more concerned with reviewing progress and controlling
activity, rather than tackling strategic issues.
Resource issues : In any planning situation, the potential exists to negotiate over
resources. Indeed, a major aspect of the process is to match resources to strategic
aims. Managers must take a realistic view of the resource position and endeavour to
ensure resources are not over-committed or needlessly withheld.
Many of these barriers relate to the implementation of plans rather than the planning
process itself. However, sound management practice would advocate the inclusion of
implementation as part of the planning process. Indeed, Piercy(1997) suggests a
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multidimensional model of planning. This considers the analytical dimension, the
behavioural dimension and the organizational dimension of any plan.
Analytical dimension : Analytical tools, techniques and models are important, as
they provide a framework to tackle issues and identify/solve problems. While
formalized planning systems have the advantage of offering common (corporate-
wide) systematic approach, to be truly effective they must address behavioral and
organizational issues.
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Planning Premises and Forecasting
We have observed that establishing premises is one of the steps in the planning
process. Now let us give more details about this.
Planning premises are certain assumptions about the future on the basis of which the
plan will be ultimately formulated. Planning premises are vital to the success of planning
as they supply pertinent facts and information relating to the future such as population
trends, the general economic conditions, production costs and prices, probable
competitive behaviour, capital and material availability, governmental control and so on.
(a) Internal and external premises. Premises may exist within and without the
company. Important internal premises include forecasts, policies and programmes of
organisation, capital investment in plant and equipment, competence of management;
skill of the labour force; other resources and abilities of the organisation in the form of
machines, money and methods, and beliefs, behaviour and values of the owners and
employees of the organisation. External premises may be classified into three groups:
(a) business environment, (b) factors which influence the demand for the products of the
enterprise and (c) factors which affect the resources available to the enterprise. These
external premises may include the following:
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(b) Tangible and intangible premises. Some of the planning premises may be
tangible while some others may be intangible. Tangible premises are those which can
be quantitatively measured while intangible premises are those which being qualitative
in character cannot be so measured. Population growth, industry demand, capital and
resources invested in the organisation are all tangible premises whose quantitative
measurement is possible. On the other hand, political stability, sociological factors,
business and economic environment, attitude, philosophies and behaviour of the
owners of the organisation are all intangible premises whose quantitative measurement
is not possible.
Although these classifications can be made, at the operational level we observe the
integrated approach and all these are merged at different levels of management. The
following figures show the types of plans followed at each level.
Key to Planning
Planning is one of the most important aspects of management. A perfect plan can increase
profits to their optimum levels. When it comes to making plans, one must keep several
things in mind. These include the components of planning. Each component plays a big
role in planning.
Components of Planning
The entire process of planning consists of many aspects. These basically include
missions, objectives, policies, procedures, programmes, budgets and strategies.
Mission
This is one of the first components of planning. The mission of an organization basically
dictates its fundamental purposes. It describes what exactly it wants to achieve. The
mission may be either written or implicit from the organization‘s functioning.
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A mission statement describes who the products and customers of a business are. It
shows the direction in which the business intends to move and what it aims to achieve.
Even the basic values and beliefs of the organization are a part of this. One can also
understand its attitude towards its employees from the mission statement.
Many stakeholders of a business use its mission statement. Managers use it to evaluate
their success and set goals. On the other hand, employees use it to foster a sense of unity
and purpose. Even customers and investors use it to understand how the business intends
to work in the future.
Types of Plans
Planning Process
Concept of Forecasting
In terms of the types of objectives, they may be either individualistic or collective. They can
even be long-term and short-term depending on their duration. They can also be general
or specific in terms of their scope.
Managers of a business should lay down their objectives clearly and precisely. They must
consider their mission and values before setting their goals. Furthermore, they must
ensure that their objects for each activity are in consonance with each other.
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Policies
Policies are basically statements of understanding or course of action. They guide the
decision-making process for all activities of the organization. Consequently, they impose
limits on the scope of decisions.
For example, a company might have a policy of always paying a minimum dividend of 5%
of profits. So, when it decides to pay a dividend, the amount cannot be below 5%.
Just like the mission statement, even policies of an organization may be expressly written
or implied. Managers make policies for all activities of a business, including sales,
production, human resource, etc.
Policies should never be too rigid because that excessively limits functioning. Policy-
makers must also ensure they explain policies to employees clearly. This will prevent any
ambiguities that may arise. Policies must also change with time to suit new challenges and
circumstances.
Procedures
Procedures are some of the most important components of planning. They describe the
exact manner in which something has to be done. They basically guide actions for
activities that managers and employees perform.
Procedures also include step-by-step methods. Even rules regulating actions come within
the ambit of procedures. The planning process must ensure that procedures are always
practical. They should not be rigid and difficult to implement.
Budget
Budgets are plans that express expected results in numerical terms. Whenever an
organization expects to do something, it can make a budget to decide on its target. Most
activities, targets, and decisions require budgeting. For example, an income budget shows
expected financial results and profits.
Programme
A programme is nothing but the outline of a broad objective. It contains a series of
methods, procedures, and policies that the organization needs to implement. In other
words, it includes many other components of planning.
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For example, a business may have a diversification programme. Consequently, it will
make budgets and policies accordingly for this purpose. Planners and managers can
implement programmes like these at various levels.
Strategies
A strategy in simple words refers to minute plans of action that aim to achieve specific
requirements. Proper implementation of strategies leads to the achievement of the
requisite goals. The nature of an organization‘s values and missions will determine how it
will strategize.
Decision Making
As such, decision making process can be further exemplified in the backdrop of the
following definitions.
According to the Oxford Advanced Learner‘s Dictionary the term decision making
means - the process of deciding about something important, especially in a group of
people or in an organization.
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pertaining to the organization. Since it is an ongoing activity, decision making process
plays vital importance in the functioning of an organization. Since intellectual minds are
involved in the process of decision making, it requires solid scientific knowledge coupled
with skills and experience in addition to mental maturity.
Further, decision making process can be regarded as check and balance system
that keeps the organisation growing both in vertical and linear directions. It
means that decision making process seeks a goal. The goals are pre-set business
objectives, company missions and its vision. To achieve these goals, company may
face lot of obstacles in administrative, operational, marketing wings and operational
domains. Such problems are sorted out through comprehensive decision making
process. No decision comes as end in itself, since in may evolve new problems to solve.
When one problem is solved another arises and so on, such that decision making
process, as said earlier, is a continuous and dynamic.
A lot of time is consumed while decisions are taken. In a management setting, decision
cannot be taken abruptly. It should follow the steps such as
Since decision making process follows the above sequential steps, a lot of time is spent
in this process. This is the case with every decision taken to solve management and
administrative problems in a business setting. Though the whole process is time
consuming, the result of such process in a professional organization is magnanimous.
Organizing:
Concept
Organizing as a structure:
Organizing as a process:
Organizing in the form of a process means grouping the duties to identify and work.
People, authorization, responsibility to build relationships and coordinate activities
between members and departments It usually determines, organizes, groups and
assigns its members the task. It is a dynamic activity that can be arranged and changed
according to the needs of the company.
Organizing as a function:
Organizing is an important task after planning. The manager of the company organizes
or collects resources like manpower, money, material, machines, methods, etc., it is
necessary to take action on the track.
Organisation Theories
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Classical Organizational Theory
Contingency Theory
Contingency theory accepts that there is no universally ideal leadership style because
each organization faces unique circumstances internally and externally. In
contingency theory, productivity is a function of a manager‘s ability to adapt to
environmental changes. Managerial authority is especially important for highly volatile
industries. This allows managers the freedom to make decisions based on current
situations. The contingency theory reveals situations that require more intense focus
and takes account of unique circumstances.
Systems Theory
Organizational Structure
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responsiveness to market demands than purely functional or bureaucratic structures.
Projectized organizational structures focus on the project manager or project
management office for information and activities related to business projects. The
matrix organizational structure features vertical hierarchies of functional departments
that facilitate projects along a horizontal axis. The continual exchange of information
and energy characterizes the relationship between organizational structure and
environment.
Organizations are set up in specific ways to accomplish different goals, and the
structure of an organization can help or hinder its progress toward accomplishing
these goals. Organizations large and small can achieve higher sales and other profit
by properly matching their needs with the structure they use to operate. There are
three main types of organizational structure: functional structure, divisional structure
and a blend of the two, called matrix structure.
However, one of the drawbacks to a functional structure is that the coordination and
communication between departments can be restricted by the organizational
boundaries of having the various departments working separately.
The benefit of this structure is that needs can be met more rapidly and more
specifically, as each division can operate more or less independently for the other
divisions in the company. However, a divisional arrangement can also be
cumbersome, as communication is inhibited because employees in different divisions
are not working together. Divisional structure is costly because of its size and scope.
Small businesses can use a divisional structure on a smaller scale, having different
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offices in different parts of the city, for example, or assigning different sales teams to
handle different geographic areas.
The third main type of organizational structure, called the matrix structure, is a hybrid
of divisional and functional structure. Typically used in large multinational companies,
the matrix structure allows for the benefits of functional and divisional structures to
exist in one organization. This can create power struggles because most areas of the
company will have a dual management – a functional manager and a product or
divisional manager working at the same level and covering some of the same
managerial territory.
Also, as communication has sped up, with the advent of digital communication, the
structure that might have worked best 20 or 30 years ago, may no longer be the best
structure for your organization today. In response to these changes, some firms now
have multi-layered structural organizations: a geographical organizational structure
overall, with matrix organizational structures within each division.
Geographic organizational structures are often well-suited for very large entities,
such as automobile manufacturers, who need to locate production facilities in which
labor costs are favorable and supplies readily available, but also need support
organizations for dealerships that are located everywhere the company's autos are
sold.
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The Advantages of Geographic Organizational Structures
With geographic organizational structures, it's usually not so much that the company
has chosen this structure over other possible choices because of its inherent
advantages. It's more likely that it's the only structure that fulfills the company's basic
needs. Some disadvantages inherent in the structure may remain, and will have to be
dealt with.
In several American cities, Fiat and Alpha Romeo sales have little connection with one
another, physically or psychologically, and both are located blocks away from Dodge
Jeep Chrysler sales. Although the formal organizational structure requires American
middle-management to oversee all three divisions, long-time Dodge Jeep Chrysler
employees, who are used to selling Dodge Ram trucks, macho-looking Jeeps and
other larger vehicles, are generally uninterested in Fiats and Alphas.
As a result, although on paper it would seem that the Fiat 500e, a sassy little all-
electric vehicle, is highly salable, sales have been dismal. In a month when the
company sold 27,000 cars with the Dodge brand, they sold far less than 1,000 Fiats in
the U.S. and just a handful in Canada. It's rumored that the Fiat 500e will be
discontinued in North America. The Alpha is sometimes paired with a Fiat dealership,
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but it is often offered as a choice in a luxury car dealership that has no organizational
connection to Dodge Jeep Chrysler. At times, as in Pasadena, California, the two
organizations are competing for the same customer in the same geographic area.
Functional
Customer
Matrix
Matrix structures are often a hybrid of two different structures. For example, a
company may combine functional and customer structures to better meet the
demands of the marketplace. Matrix structures are often temporary. A small company
may use a matrix structure if it is introducing a new product for example. Marketing
and finance people will be needed to develop promotional strategies and create a
budget for the new product, respectively. However, marketing and finance people will
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need managers who have experience with specific customers. The disadvantage of a
matrix structure is dual reporting, according to "Reference for Business" online.
Employees may be reporting to two bosses, one in their department and one from the
matrix project team.
Combining Jobs:
Departmentation
Everything you need to know about the types of departmentation. The first step in
designing an organization structure is to divide whole work into a number of jobs to
ensure that no important activity is left out.
The next step is to bring together homogeneous jobs into groups and to decide their
relation to each other. This process is known as departmentation, and it involves a
decision, by the chief executive, concerning a logical division of work to be done, and
leads to the establishment of a number of manageable units.
There can be many methods of departmentation. Every enterprise chooses the
appropriate basis or method depending upon its objectives, size, etc.
1. Functional Departmentation
2. Product Departmentation
3. Geographical Departmentation
4. Customer Departmentation
5. Process or Equipment Departmentation
6. Project or Matrix Departmentation
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7. Team Structures
8. Network Structures
9. Boundaryless Organization
10. Departmentation by Committees
11. Primary Departmentation
12. Intermediate Departmentation.
The different ways in which departmentation may be carried out are:- 1. By Time 2. By
Numbers 3. By Marketing Channels.
There are certain basic methods of dividing the duties and responsibilities within an
organisational structure.
They are given below:
1. Departmentation by functions.
2. Departmentation by product or service.
3. Departmentation by regions (area or location) or territory.
4. Departmentation by customers.
5. Departmentation by process.
6. Departmentation by time.
7. Departmentation by numbers.
8. Departmentation by marketing channels.
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pivot around which effective executives develop effective and efficient organisation‖.
Advantages:
Disadvantages:
Advantages:
Disadvantages:
This method of departmentation may be suitable for a business unit which is wholly
dispersed. The business activities are grouped in area-wise and each area is in charge
of a single person. The local persons are appointed as salesmen in each area. It will
help the business unit to increase the sales. The reason is that the local person is
familiar with the local language, the culture and preferences of the customers.
Advantages:
Disadvantages:
This type of departmentation is preferred when the various needs of customers are
different in nature. For example, a bank or a financial institution may divide its loan
section into number of heads and assign them to various departments, such as – loans
to businessmen, farmers, professionals and so on. Similarly, the sales department of a
business concern could be divided into industrial goods and consumer goods. The
consumable goods could again be sub-divided into perishable and non-perishable in
nature.
Advantages:
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iv. Each section of the customer is able to get better service from the company and
helps the company to win the goodwill, of its customers.
Disadvantages:
This type of Departmentation is followed when the production activities are carried on in
many places. For example, a textile mill has many departments such as Ginning,
Spinning, Weaving, Dyeing and Printing, Packing and Sales. Each section will be in
charge of separate specialised persons.
Advantages:
The business activities are grouped together on the basis of the time of the
performance. If the work is not completed within the normal working hours, extra time
will be given to complete it after the normal working hours. Only interested persons are
requested to do the job and one person is responsible to supervise them. Whatever be
the work performed after the normal working hours, a separate department will be in
charge of this type of activity. This type of departmentation is known as departmentation
by time.
Similar types of duties are performed by small groups. Each group is controlled by a
supervisor or an executive. For example, in the Army, soldiers are grouped into squads,
battalions, companies, brigades and regiments on the basis of allotment of men to each
unit. The principles of span of management span of control or span of supervision is
used under this type of departmentation.
Span of Control
A span of control is a concept that describes the number of people that are managed by
someone. It is a chain of command notion where the number of subordinates are
properly identified to understand a manager‘s reach.
Nevertheless, when job positions are not properly designed, a confusing situation might
emerge where a person has two or more bosses. This is important to avoid since it
creates conflicts within the structure and guidelines become unclear for the subordinate.
A clear definition of the span of control allows the manager to plan, organize and divide
the work load among his team according to his work method, assigning each team
member the duties he thinks they are capable to handle, according to their skills,
knowledge and academic background.
Managers can also implement metrics to evaluate the performance of their span and
influence them to increase their productivity depending on the results obtained.
Example
Omar was recently hired as a Supply Chain Manager in a plastic bag manufacturer. It
has been a little difficult for him to perform his job correctly because the company hasn‘t
structured the department correctly. It seems that some of his team members are also
employed by other departments of the company and they have been procrastinating the
activities that Omar handles to them. This has caused a poor performance for the
Supply Chain Department.
In order to correct this, Omar asked the CEO of the company to clarify his span of
control to understand the organizational structure adequately. After the situations was
evaluated, Omar‘s department ended up with 4 team members that will work with him
only. This has increased Omar‘s department performance considerably.
Delegation of Authority
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Under the delegation of authority, the manager does not surrender his authority
completely, but only shares certain responsibility with the subordinate and delegates
that much authority which is necessary to complete that responsibility.
1. Delegation means giving power to the subordinate to act independently but within the
limits prescribed by the superior. Also, he must comply with the provisions of the
organizational policy, rules, and regulations.
2. Delegation does not mean that manager give up his authority, but certainly he shares
some authority with the subordinate essential to complete the responsibility entrusted to
him.
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4. The manager cannot delegate the authority which he himself does not possess. Also,
he can not delegate his full authority to a subordinate.
5. The delegation of authority may be oral or written, and may be specific or general.
6. The delegation is an art and must comply with all the fundamental rules of an
organization.
In an organization, dividing work among people and coordinating their activities towards a
common objective needs to be done efficiently. Authority and responsibility are two of the
most important components of a smooth-functioning business. In this article, we will talk
about authority and responsibility in detail.
Authority
Authority, in simple words, is the right way of commanding subordinates,
issuing orders and instructions, and exacting obedience from the team. It is also the right
of the manager to make decisions. Also, to act or not to act depends on how he perceives
the objectives of the organization.
He further added that the presence of leadership qualities and traits like intelligence,
experience, etc., usually, enhance authority. However, as an important key to the
manager‘s job, authority is the power to command others and decide to act or refrain from
acting to achieve the organization‘s goals.
A manager needs authority. It makes his position real and gives him the power to order his
subordinates and get them to comply. When there is a chain of superior-
subordinate relations in an organization, it is the authority which binds and provides a
basis for responsibility.
Coordination is the all-inclusive principle of organization, it must have its own principle and
foundation in Authority or the supreme coordinating power.
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Always, in every form of organization, this supreme coordinating authority must rest
somewhere, else there would be no directive for any truly coordinated effort. Without
authority, there will be no relations between subordinates and superiors and the
organization will be in chaos.
Informal Organization
Structure of Organization
Official and Personal Authority
The authority that a manager enjoys due to his position is the official authority or authority
of position. Apart from the official authority, a manager might influence the behavior of
other people in the organization.
This is the personal authority of the manager. A manager with both official and personal
authority is very effective. Authority is not unlimited power and consists of specific rights
and permissions to act for the organization in specified areas.
Responsibility
Responsibility has different meanings in management. The most common description is
the obligation on the manager to perform the task himself. The essence of responsibility is
‗obligation‘.
Anyone who accepts a task must be held responsible for its performance too. In the
context of hierarchical relations in an organization, responsibility is the obligation of a
subordinate to perform the tasks assigned.
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Therefore, responsibility is relative to the person. Also, it emanates from the subordinate-
superior relations in an organization. Hence, the manager can get the assigned duty done
by his subordinate.
Accountability
Every employee is answerable to his superior for the accomplishment of the task assigned
to him. This is accountability. When a manager delegates a task, he assigns duties and
delegates the required authority so that his subordinates can accomplish the task.
However, the process is not complete unless the subordinate is answerable to the superior
for his functioning. Therefore, authority goes downward and makes everyone accountable
for the duties assigned.
On the other hand, power is the capacity to influence the behavior of others. However, in
the real world, many managers also have the power to exact obedience from their
subordinates.
The proportion in which they are divided can vary according to the role of the manager.
While the head of a division in the Army will have a more complete combination of
authority and power, as assistant manager of a call center might not be able to use power
to that extent.
In an ideal scenario, authority and responsibility along with power and accountability are
equal to each other in every position of the organization. If the balance between them gets
disturbed, problems arise.
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For example, if an employee is given authority but does not have enough power, he can‘t
do his job effectively. This is because lacking power, he is unable to use punishments and
rewards for enforcing authority.
Even is he has equal power and authority, it is important to equate them with responsibility
and accountability. Else, he will pass the responsibility to some other employee the
moment problems start surfacing.
Organisational Design
Increased profitability
By design we‘re talking about the integration of people with core business processes,
technology and systems. A well-designed organization ensures that the form of the
organization matches its purpose or strategy, meets the challenges posed by business
realities and significantly increases the likelihood that the collective efforts of people will
be successful.
As companies grow and the challenges in the external environment become more
complex, businesses processes, structures and systems that once worked become
barriers to efficiency, customer service, employee morale and financial profitability.
Organizations that don‘t periodically renew themselves suffer from such symptoms as:
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Inefficient workflow with breakdowns and non value-added steps
Redundancies in effort (―we don‘t have time to do things right, but do have time to
do them over‖)
Fragmented work with little regard for good of the whole (Production ships bad
parts to meet their quotas)
Delays in decision-making
People don‘t have information or authority to solve problems when and where they
occur
Management, rather than the front line, is responsible for solving problems when
things go wrong
METHODOLOGY
Although adaptable to the size, complexity and needs of any organization, the design
process consists of the following steps.
As senior leaders, you come together to discuss current business results, organizational
health, environmental demands, etc. and the need to embark on such a process. You
establish a charter for the design process that includes a ―case for change,‖ desired
outcomes, scope, allocation of resources, time deadlines, participation, communications
strategy, and other parameters that will guide the project.
(At times, senior teams may go through either a strategic planning process or an
executive team development process prior to beginning a redesign initiative, depending
on how clear they are about their strategy and how well they work together as a team.)
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Assess the current state of the business
You don‘t want to begin making changes until you have a good understanding of the
current organization. Using our Transformation Model, we facilitate a comprehensive
assessment of your organization to understand how it functions, its strengths and
weaknesses, and alignment to your core ideology and business strategy. The
assessment process is astounding in the clarity it brings an organization‘s leaders and
members, not only regarding how the organization currently works but how the various
parts are interrelated, its overall state of health and, most importantly, what needs to be
done to make improvements.
The senior team (and/or others who have been invited to participate in the process),
look to the future and develop a complete set of design recommendations for the ―ideal
future.‖ At a high level, the steps in this process include the following:
Defining your basic organizing principle. (Will you organize primarily around
functions, processes, customer-types, technologies, geographies, etc.?)
Defining tasks, functions, and skills. What are the performance metrics for each
function/team? How are they evaluated and held accountable?
Determining facility, layout and equipment needs of various teams and departments
throughout the organization.
Identifying support resources (finance, sales, HR, etc.), mission, staffing, etc. and
where should these should be located.
At some point the design process morphs into transition planning as critical
implementation dates are set and specific, concrete action plans created to implement
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the new design. And a key part of this step includes communicating progress to other
members of the organization. A communications plan is developed that educates
people in what is happening. Education brings awareness, and everyone‘s inclusion
brings the beginning of commitment.
Now the task is to make the design live. People are organized into natural work groups
which receive training in the new design, team skills and start-up team building. New
work roles are learned and new relationships within and without the unit are established.
Equipment and facilities are rearranged. Reward systems, performance systems,
information sharing, decision-making and management systems are changed and
adjusted. Some of this can be accomplished quickly. Some may require more detail and
be implemented over a longer period of time.
Example:
A few years back we worked with a company within the aluminum industry. The
company recognized they were becoming bureaucratic and unresponsive to their
customers needs. Following a period of assessment of the strengths and weaknesses
of the existing organization, they went through a process of organizational redesign in
which they organized their front office functions to become more collaborative and
customer focused. The diagrams below illustrate, at a high level, this change.
Pre-design Workflow
Post-design Workflow
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The first chart illustrates the tendency of most people within organizations to think in
terms of silos and organize people according to the similarity of their functions.
The second chart illustrates how the company redefined structural boundaries to
become much more cross-functional on the front end of their business. They combined
people from a number from a number of departments into teams that took full
responsibility for managing customer orders. The company was able to improve their
total billings of a major product line by 50% and increase their margins by 25%.
Of course, this chart greatly simplifies all of the design decisions which included
improvements in workflow and system support, and the role of leaders and other
support functions in the new organization. But this gives you an idea of the kinds of
integration and improved collaboration that can result from organizational design.
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UNIT III
Staffing:
Concept
Staffing is the process of hiring eligible candidates in the organization or company for
specific positions. In management, the meaning of staffing is an operation of recruiting the
employees by evaluating their skills, knowledge and then offering them specific job roles
accordingly. Let us find out more about what is Staffing and what it entails along with
its functions and characteristics.
What is Staffing?
Definition: Staffing can be defined as one of the most important functions of management.
It involves the process of filling the vacant position of the right personnel at the right job, at
right time. Hence, everything will occur in the right manner.
It is a truth that human resource is one of the greatest for every organization because in
any organization all other resources like- money, material, machine etc. can be utilized
effectively and efficiently by the positive efforts of human resource.
Therefore it is very important that each and every person should get right position in the
organization so as to get the right job, according to their ability, talent, aptitude, and
specializations so that it will help the organization to achieve the pre-set goals in the
proper way by the 100% contribution of manpower. Thus it can be said that it is staffing is
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an essential function of every business organization. From this, we can understand what is
Staffing?
Functions of Staffing
1. The first and foremost function of staffing is to obtain qualified personnel for different
jobs position in the organization.
2. In staffing, the right person is recruited for the right jobs, therefore it leads to
maximum productivity and higher performance.
4. Job satisfaction and morale of the workers increases through the recruitment of the
right person.
Staffing Process
Learn more about the Process of Staffing here.
Importance of Staffing
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Optimum Utilization of Human Resources
The wage bill of big concerns is quite high. Also, a huge amount is spent on recruitment,
selection, training, and development of employees. To get the optimum output, the
staffing function should be performed in an efficient manner.
Characteristics of Staffing
People-Centered
Staffing can broadly view as people-centered function and therefore it is relevant for all
types of organization. It is concerned with categories of personnel from top to bottom of
the organization.
Blue collar workers (i.e., those working on the machines and engaged in loading,
unloading etc.) and white collar workers (i.e., clerical employees).
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Responsibility of Manager
Staffing is the basic function of management which involves that the manager is
continuously engaged in performing the staffing function. They are actively associated with
the recruitment, selection, training, and appraisal of his subordinates. Therefore the
activities are performed by the chief executive, departmental managers and foremen in
relation to their subordinates.
Human Skills
Staffing function is mainly concerned with different types of training and development of
human resource and therefore the managers should use human relation skill in providing
guidance and training to the subordinates. If the staffing function is performed properly,
then the human relations in the organization will be cordial and mutually performed in an
organized manner.
Continuous Function
Staffing function is to be performed continuously which is equally important for a new and
well-established organization. Since in a newly established organization, there has to be
recruitment, selection, and training of personnel. As we compare that, the organization
which is already a running organization, then at that place every manager is engaged in
various staffing activities.
Therefore, he is responsible for managing all the workers in order to get work done for the
accomplishment of the overall objectives of an organization.
System Approach
In the 1960, an approach to management appeared which try to unify the prior schools
of thought. This approach is commonly known as ‗Systems Approach‘. Its early
contributors include Ludwing Von Bertalanfty, Lawrence J. Henderson, W.G. Scott,
Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.
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One its most important characteristic is that it is composed of hierarchy of sub-systems.
That is the parts forming the major system and so on. For example, the world can be
considered-to be a system in which various national economies are sub-systems.
In turn, each national economy is composed of its various industries, each industry is
composed of firms‘ and of course a firm can be considered a system composed of sub-
systems sudi as production, marketing, finance, accounting and so on.
(ii) The various sub-systems should be studied in their inter-relationships rather, than in
isolation from each other.
(iii) An organisational system has a boundary that determines which parts are internal
and which are external.
(iv) A system does not exist in a vacuum. It receives information, material and energy
from other systems as inputs. These inputs undergo a transformation process within a
system and leave the system as output to other systems.
In the systems approach, attention is paid towards the overall effectiveness of the
system rather than the effectiveness of the sub-systems. The interdependence of the
sub-systems is taken into account. The idea of systems can be applied at an
organisational level. In Appling system concepts, organisations are taken into account
and not only the objectives and performances of different departments (sub-systems).
The systems approach is considered both general and specialised systems. The
general systems approach to management is mainly concerned with formal
organisations and the concepts are relating to technique of sociology, psychology and
philosophy. The specific management system includes the analysis of organisational
structure, information, planning and control mechanism and job design, etc.
As discussed earlier, system approach has immense possibilities, ―A system view point
may provide the impetus to unify management theory. By definitions, it could treat the
various approaches such as the process of quantitative and behavioural ones as sub-
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systems in an overall theory of management. Thus, the systems approach may succeed
where the process approach has failed to lead management out of the theory of jungle.‖
He feete that the executive must steer through by keeping a balance between
conflicting forces and events. A high order of responsible leadership makes the
executives effective. H. Simon viewed organisation as a complex system of decision-
making process.
Manpower Planning
Manpower planning may, be defined as, ―the replacement planning which analyse
labour turnover, recruitment policy, promotion, development and maintenance of
employee programmes and assess the future needs of the organization so that
sufficient number of persons may be procured well in time.‖
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organization should move from its current manpower position to its desired manpower
position.‖
―Manpower, the labour force is not only an active, deep linking and essential factor of
production, but it activates their factors of productions.‖
Edwin B. Geisler defined as, ―Manpower planning is the process, including forecasting,
developing, and controlling by which a firm ensures that it has the right number of
people and the right kind of people at the right places at the right me, doing work for
which they are economically most useful.‖
Coleman Bruce P defined as, ―Man power planning is the process of determining
manpower requirements and the leans for meeting these requirements in order to carry
out le integrated plans of the organization.‖
E.W. Velter, defines manpower planning as ―The process which management
determines how the organisation should love from its current manpower position.
Through planning le management strives to have the right number and right type of
people at the right place, at the right time doing things, which result in both the
organisation and the individual receiving maximum long hour unbenefits.‖
Edwin B. Flippo defind Manpower planning as, ―the planning, organizing, directing and
controlling of the procurement, development, compensation, integration and
maintenance of people for the purpose of contributing to organizational, individual and
social goals.‖
The following are the factors affecting manpower planning which constitute the basis of
manpower planning:
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1. Exciting Stock of Manpower:
This is the first basis of manpower planning and it is the starting point of all planning
processes. By studying the position of total stock of manpower, by dividing it into groups
on the basis of function, occupation, level of skill or qualification, we can analyse the
existing stock of manpower.
2. Wastage:
The second basis of manpower planning is wastage. For a good planning, appropriate
adjustment in the existing stock of manpower should be made for the possible wastage
of manpower caused by any foreseeable changes in the organization. Labour turnover
rate, labour stability rate and the period of active management can be studied to
analyse the wastage of manpower. All these factors should be taken into consideration
to make necessary adjustments in the requirement of personnel to plan the manpower.
We can easily measure the future requirements of manpower, after assessing the
existing stock of manpower and analysing the several factors of wastage.
b. Employment policy.
d. Manpower in future.
e. Labour productivity.
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Future manpower requirements:
b. Administrative cost
Job Design
The Job Design means outlining the task, duties, responsibilities, qualifications,
methods and relationships required to perform the given set of a job. In other words, job
design encompasses the components of the task and the interaction pattern among the
employees, with the intent to satisfy both the organizational needs and the social needs
of the jobholder.
The objective of a job design is to arrange the work in such a manner so as to reduce
the boredom and dissatisfaction among the employees, arising due to the repetitive
nature of the task.
There are several important methods and techniques that the management uses while
designing the jobs. These are:
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1. Job Simplification
2. Job Rotation
3. Job Enrichment
4. Job Enlargement
While designing the job, the following aspects are to be taken into the
consideration:
1. The foremost requirement for a job design is to define clearly the task an individual is
supposed to perform. A task is the piece of work assigned to the individual and who has
to perform it within the given time limits.
2. The management must decide on the level of motivation that is required to be enforced
on an individual to get the work completed successfully. Thus, the managers must
design the jobs that motivate his employees.
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3. The managers must decide critically on the amount of resources that needs to be
allocated to perform a particular type of a job. Thus, the efforts should be made to make
an optimum utilization of organizational resources while designing the job so that the
organization does not suffer any dilemma due to the shortage of its resources.
Thus, the job should be designed with the intent to find a fit between the job and its
performer, such that the job is performed efficiently, and the performer experiences
satisfaction while performing it and give his best efforts towards its completion.
The attraction and selection of individuals for an organization involve various HRM
activities: (1) job analyses to determine the work individuals are to perform, (2)
development and application of criteria regarding appropriate skills and abilities in the
individuals to be considered, (3) performance appraisals to assess on-the-job
performance, and (4) personnel research to ensure the reliability, validity, and relevance
of the standards used. These HRM functions constitute a center of activity for entry-
level personnel professionals.
Job Analysis: Evaluation of positions is the basis for many HRM policies and
procedures, and is a typical activity for entry-level employees. As a job analyst, you
would produce job descriptions and job specifications by defining positions in terms of
tasks and behavior and specifying the relevant personal characteristics (in education,
experience, and training) needed for the job.
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Staff Selection and Assignment: Here, you would be responsible for the hiring and
placement of employees, including recruiting, interviewing, testing, selection,
placement, promotion, transfer, and termination. Typical entry-level titles include
employment representative, employment specialist, personnel interviewer, and recruiter.
Depending on the industry and the size of the firm, the responsibilities of a recruiter
range from hiring to career counseling regarding relocation. Since the criteria for staffing
decisions are related to job evaluation and performance appraisal, recruiters must often
have extensive knowledge of all the job functions within the organization.
As a recruiter, you would meet with managers who have job vacancies to determine the
job requirements, and then decide which type of method is best to attract applicants.
Usually the choices are college recruiting, newspaper advertisements, employment
agencies, and internal job posting, as well as responding to unsolicited resumes and
"walk-ins."
After you select the most qualified applicants, you refer them to the managers who
placed the "job order." If the manager and other supervisors agree that an individual is
qualified, an offer is made, and you confirm that the applicant is aware of the general
job duties and responsibilities, pay and benefits, hours and working conditions,
company and union policies, promotion opportunities, and other job-related information.
In addition, you may maintain files for future reference of records of other applicants,
and conduct an exit interview.
Other events that you would process are internal transfers, promotions, and
terminations. In some organizations, the responsibilities of a recruiter are extended to
include other activities such as career and succession planning; determining which
skills, training, and education are needed to fill positions; and finding internal
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successors and backup replacements. A recruiter may also hold new-employee
orientation sessions and develop informational programs to familiarize employees with
key human-resource policies and procedures.
Personnel research and scanning are best done by a team to ensure thoroughness and
analysis from a variety of perspectives. Research on the current status of the labor
force, on recent legislation regarding EEO and employee rights, on new benefits
packages, and on methods of forecasting the supply and demand of human resources
can have a significant impact on HRM policies and procedures. Research teams also
monitor competitors' actions and evaluate internal programs relative to comparable
external programs to determine present and future vulnerability. Journals, seminars,
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and trade newspapers are common sources of information on recent developments. For
example, researchers will often collaborate with other HR managers in developing a
new training program or implementing an additional benefits package.
Compensation and benefits are staff-servicing areas of HRM that can function either
together or separately. The compensation analyst is responsible for coordinating the
organization's wage and salary program. The benefits analyst administers and provides
information about the range of employee benefits available, including health insurance,
retirement and pension programs, unemployment compensation, and social security.
Typical titles for entry-level compensation positions are job analyst or compensation
analyst. In this area, job analysis is a primary responsibility. As an analyst, you would
develop and apply job analysis techniques, sometimes working with analysts from other
departments. As a compensation analyst you would gather data through checklists,
position-analysis and other questionnaires, observation, and interviews, and then
investigate the job's relative position; the technical, managerial and human relations
skills required; and the nature of the problems solved. From this information you would
write a description of the position. Using the job evaluations, you would grade and price
jobs. You may also use survey data to compute wage and salary structures designed
for economic feasibility and competitiveness.
Your other duties as compensation analyst would include establishing and maintaining
manuals and controls to facilitate wage and salary administration. You would examine
company policies regarding payment of minimum wage and overtime agreements with
labor unions, and consult with labor relations staff on contract negotiations. In addition,
you would review pay policies regularly for compliance with state and federal
regulations. You would also conduct wage and salary surveys, and gather data on the
competition's wage and salary levels and structures. These activities require that you
thoroughly understand the pay system in all its elements, which can include seniority,
merit, incentives, and so forth.
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also have to coordinate other employee services, such as the cafeteria, snack bar,
health room, recreational facility, newsletter and other media, and counseling for work-
related problems. In addition, you may assist management in decision making on
possible benefits and improvements, and participate in establishing objectives by
informing management of current trends and developments in employee benefits.
If, after careful investigation, the problem does seem to require training, the personnel
manager should thoroughly assess the present level of skill and knowledge and then
define the desired level of skill and knowledge in concrete, measurable form.
After the training is completed, trainee performance can be assessed against the
objectives that were set prior to training. Training programmes should always be
evaluated, because they are costly and should be modified or discontinued if they are
not effective. The training process from start to finish is presented in Fig. 11.9.
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In most technical jobs new people with little or no experience are assigned to training
programmes that prepare them to do their jobs. In short, training supplies the skills,
knowledge and attitudes needed by individuals or groups to improve their abilities to
perform their present jobs. Even people with considerable experience in other industries
(companies) are trained up properly before they start doing a new job.
A Continuous Process:
Training is no doubt a continuous process. Training is used not only to give employees
skills or to the level necessary to perform a new job; as the jobs change or as an
employee demonstrates the need for additional skills, more training is provided.
In fact, from time to time, performance failures dictate that managers assign current
employees to training programmes to improve their job knowledge, skills and future
performance. The most fundamental point is that training prepares an organisation‘s
work force for various changes that may occur in the industry.
Companies support training programmes to get results. Top executives are usually
interested in specific things that provide greater rewards to the employee, increased
return to the shareholders and create reinvestment needs of the business.
In other words, they are interested in those things which affect the ‗bottom line‘. Training
can always be evaluated. As people improve their performance it is reflected in on-the-
job results.
Management training has become a costly exercise of late. Organisational people are
now being introduced to the latest techniques and applications such as time
management, stress management and negotiating skills and updating obsolete
managerial techniques. This, no doubt, improves overall organisational effectiveness
and prepare middle managers for advancement.
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ii. Defining training objectives:
Identify what the person should be able to do following the training programme.
Management can employ various training methods or can select from a wide variety of
methods. However, the particular technique or method used is not very important.
Training has to be matched with the needs of the organisation, the managers, the jobs
and the person being trained.
However, when the context is human relations or group decision-making, firms must
obviously use a method that allows interpersonal contact, such as role playing or case
discussion groups. Moreover, as Griffin has pointed out: ―When a physical skill is to be
learned, methods allowing practice and actual use of tools and materials are needed, as
in on-the-job training or vestibule training‖.
Other factors to consider in selecting a training method are cost, time, number of
trainees and whether the training is to be done by in-house talent or contracted to by an
outside training firm‖. Table 11.5 lists the major training methods which are normally
used by professional companies.
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A person can be trained in class room and then asked to join the work force. So during
the training period he is off the job and does not make any direct contribution to the
company.
However, the most celebrated method is on-the-job training (OJT). It is perhaps the
most widely used method. In this case the person is trained while the job is being
performed; one learns about the job by watching a fellow-worker. The trainee is taken to
the job site and instructed in work methods by the manager or by skilled (experience)
employees.
Such training is quite appropriate for relatively unskilled jobs but is not that satisfactory
when mistakes can damage machinery, hold up other operations, or cause anger to
customers. Most of these problems can be eliminated by making on-the-job training
more systematic.
The job instruction training (JFT) system, developed during World War II and refined
and modified later, attempts to do this. Basically, it involves training managers and
supervisors, who, in their turn, train the people at the shop floor level (i.e., people doing
the work).
OJT also works well for technical specialists like the computer programmers. The
various types of skills needed by these jobs require the application, of techniques to
specialised problems and training in best imparted by doing the actual work.
For many service jobs where a number of people doing the same kind of work need to
be trained such as those of bank tellers or insurance claim adjusters, programmed
instruction methods are used. This method is directed toward improving a person‘s skills
through a step-by-step sequence that is designed to build gradually the necessary work
skills by teaching one part of the job at a time.
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The final training method is modeling training. It is a form of OJT. It refers to coaching of
the employee by the supervisor. It has achieved considerable success in recent years.
People are trained by observing and practising the correct skills with their immediate
supervisor in a controlled experiment, getting insights into the behaviour that lead to
improved performance.
The most important point to be said in favour of modelling training is that it incorporates
all of the ideas an effective training programme should have.
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guidance. It also gives trainers the tools and techniques needed for teaching. The skills
that are learned can be directly applied to the job. Finally, modelling training can help
determine whether new people are suited to their jobs. Although training can never be a
substitute for good selection (getting people with good potential is always necessary),
effective training programmes like modelling should help determine where that potential
is best directed.‖
Employee Development:
Development refers to preparing an employee for the future so that he (she) can be fit
for a fairly well-defined job at a higher level. Employee development programmes get
people ready for their and the organisation‘s futures. There is an important difference
between training and development. Training is often conducted with the organisation by
internal people (e.g., the training officer).
On the other hand, employee development activities are usually carried out outside the
company by external professionals. An example of development programme is sending
a person to a management seminar or workshop conducted by a university, a
government agency, or an industry or trade association.
If the company reimburses the tuition fee for such a programme, it encourages employ-
ees (especially junior and middle level executives) to seek higher levels of formal
education.
In most progressive organisations, as one goes higher in management ladder, one gets
more and more opportunities for development programmes. Some companies offer their
executives one year paid leave to enable them to acquire management degrees such
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as MBA. Others nm their own training and development centres, staffed in part with
visiting professors and company managers.
Other development programmes are also offered by modern companies. One such
programme is job rotation. It provides the opportunity for an employee to do a variety of
jobs in a work centre or in the organisation and thus enables the person concerned to
develop an understanding of the interrelationship of activities and an overview of the
work unit or organisation.
To sum up: Training and development programmes seek to meet the organisation‘s
need for people. Both are directed toward improving the performance of individuals and,
through it, that of organisations. They reward ambition and act as incentives for a
greater security, to reach a higher level of job satisfaction and to enhance confidence
and self-esteem. Organisations that spend the time, money and effort to develop and
sponsor (or conduct) training and development programmes stand a strong chance of
being rewarded with a growing pool of talent available for greater responsibilities and
capable of better achievements.
Career counseling, advising the individual about his career possibilities and career
progression is the first major type of career development programme. It can occur at
various times, including the employment hiring interview, a career-counselling training
programme and the performance appraisal interview. This counselling is used not only
with employees whose potential is high but also with those who are likely to be devoted.
A career path is a series of jobs through which an individual will proceed if performance
remains high and organisational positions open up. Sometimes career paths involve job
rotation, moving an individual through a series of jobs temporarily so that he becomes
acquainted with the overall activities of major subsystems or the entire organisation.
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Whatever the approach, the use of career paths allows the individual to acquire the
necessary experience for future jobs.
Many large organisations now employ a human resources file, a computerized inventory
of backgrounds and skills that management uses to identify individuals capable of
performing the activities in a vacated position.
Many training programmes focus on development activities. They address issues such
as career management for women and minority group members and refresher courses
for mid career managers. Several organisations even sponsor placement programmes
for managers who are leaving the organisation.
In most instances these terminations occur not because of poor performance but
because of organisational constraints. In our placement programmes the company
provides not only career counselling but an office and salary for a specified time while
manager seeks a new position.
At present, perhaps the most popular programme that can be used for selection or
development is the assessment centre, in order to help management evaluate
candidates‘ managerial potential. The concept of an assessment centre was drawn from
the procedures of the elite Schutzstaffel (SS) guard in Germany during the 1930s.
To select the best applicants for this military force, management put the candidates
through a series of simulated exercises, group discussion sessions and extended
psychological interviews. Psychologists then evaluated a person‘s overall potential as
an SS officer.
In recent years management has used the assessment centre both as a selection
technique and a developmental programme, as its major objective is to realize person‘s
full potential within a specific organisation. Each centre should be tailored to the needs
of the organisation sponsoring it.
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Ronald Burke, William Weitzel and Tamara Weir have focused on a related issue — the
characteristics of successful appraisal and developmental interviews. Their empirical
studies have compared successful and unsuccessful interviews and they indicate that
the following characteristics are important if the subordinate is to benefit from the
appraisal or developmental interview:
An unthreatening atmosphere.
Performance Appraisal
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Relationship of Performance Appraisal and Job Analysis
Performance Appraisal relates to job analysis, in the sense that job analysis establishes
job requirement, which converts the analysis into standard, on which performance is
judged, and results in defining the basis for performance appraisal.
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Performance Appraisal Process
The figure shown above is a standard performance appraisal process that takes place
in an organization, wherein each step is important and arranged in a systematic
manner. The process is conducted periodically, usually twice a year, i.e. semi-annually
and annually called as mid-term review and annual review respectively.
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Past-oriented Methods (Also known as Traditional Methods of Performance
Appraisal)
Rating Scales
Checklists
Forced Choice
Forced Distribution
Critical Incident
Performance test and observation
Field review
Confidential Record
Essay method
Comparative Evaluation Approaches
Cost Accounting Method
Behaviorally Anchored Rating Scales
Future Oriented Methods (Also known as Modern Methods of Performance
Appraisal)
Management by objectives
Psychological Appraisal
Assessment Centres
360-Degree Feedback
720-Degree Feedback
Performance Appraisal is a part of performance management. It helps in gaining the
competitive edge, by improving the performance level of the employees working in the
organization, making rational decisions regarding hike in salaries, promotions, transfers,
discharge of the employees, reducing job dissatisfaction and employee turnover.
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Directing:
Concept
Directing is a very difficult task of management compared to all other functions because
it is concerned with the human aspect of management. When all other preparations
have been completed, the management has to begin the working of the concern.
Directing is the heart of management process. Planning, organising and staffing are
merely preparations for doing the work and work actually starts when the directing is
done. It is the directing function which initiates organised action. It ensures that
subordinates do their work as expected.
Learn about:-
1. Introduction to Directing
2. Meaning of Directing
3. Definitions
4. Concept
5. Nature
6. Features
7. Importance
8. Process
9. Function
10. Principles
11. Elements
12. Techniques
13. Roles
14. Essentials
15. Directing Activities
16. Benefits.
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activities and objectives. It is the process of telling people what to do and seeing that
they do it in the best possible manner.
(vii) To aim at infusing unity, energy, initiative and loyalty among the personnel
Management means and includes getting things done through others. For this purpose,
the factors of production are assembled in an organization. The relation between the
men and material is established through functions of management like planning,
coordinating, staffing, etc. Mere, assembly of these does not give any results.
Therefore, there is a need to direct all these. The direction is management in action.
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Meaning and Definitions:
The term direction means to show the way of performing the activities. It indicates an
action. The organization moves from assembly of resources to utilization. It is done
through issue of directions.
―Directing is the guidance, the inspiration, the leadership of men and women that
constitutes the real case of the responsibilities management.‖
Massie:
―Directing concerns the total manner in which a manager influences the action of
subordinates. It is the final actions of manager in getting other‘s act after all
preparations have been completed.‖
Scope of Direction:
Generally, the scope indicates the area covered, in this sense, the scope of direction
means where direction is needed most and more applicable. The area covered by
direction relates to:
i. Supervision.
ii. Orientation.
iii. Communication.
iv. Motivation.
v. Instruction.
vi. Leadership.
vii. Command.
1. Supervision:
It is relating to such work where observation of subordinates work is done. This exists at
all levels of management. It is direct and quick guidance to subordinates in the
performance of work. In this process, the superiors see and check whether
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subordinates are working strictly in accordance with plan, within time schedule, policies,
programs.
2. Orientation:
Every employee in the organization should have knowledge of the organization where
they are engaged. This makes them clear about the objectives, organizational set up,
authority-responsibility relationship, nature and culture of assigned work.
3. Communication:
The policies and programs decided at the top level management should be
communicated to the middle as well as bottom level management, then only those can
be implemented. Therefore, in every organization a good communication system is
established to share the ideas and works to be done by all.
4. Motivation:
This is the act of influencing others to do particular tasks. People can be motivated with
proper direction. The way the instructions and directions are given decides the
motivation level. So, motivation inspires people to work with zeal, willingness and
initiation to achieve the goals.
5. Leadership:
Always the quality of influencing and directing the subordinates determines the good
personality. A leader must be a perfect director.
6. Command:
Techniques of directing:
Direction basically stands for the specific way of issuing order. The orders should be
issued very cautiously. So that the expected results are easily extracted from
subordinates. There are three techniques adopted to direct subordinates:
A) Consultative direction:
To consult means to discuss with concerned parties before issuing orders or decisions.
It is a way in which participant‘s opinions are collected and orders are issued. During
the consultation, the possibility and workability of the order is tested.
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Advantages:
Disadvantages
The subordinates are set free to think and act in this method. The superior does not
issue orders forcibly and extract the work. The subordinates are at their liberty to take
any suitable decision.
Advantages:
Disadvantages
1. It takes away the extra time of superiors in direction. In the initial step orders are
given and they are to be reviewed with actual decisions and initiative steps of
subordinates.
2. The unskilled and uneducated employees cannot equally participate in this method.
C) Autocratic direction:
It is the one way direction. Hitler‘s style of directorship. The supervisor himself solves
the problem and issues orders to subordinates. No chance is given to subordinates to
take any initiation. They have to simply accept the orders and perform.
Advantages:
Disadvantages:
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CHARACTERISTICS OF GOOD ORDERS
Good Order:
A good order is one which creates an understanding in the minds of subordinates in the
manner in which superior wishes to share. It is a communication with instruction. There
may be some directions which may misguide the followers, such directions or orders are
not considered as the good order.
SUPERVISION:-
Introduction:
The term supervision has been derived from the Latin words ‗Super‘ means ‗Above‘ and
‗Vision‘ means ‗See‘ or ‗Observe‘ or ‗to watch‘.
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In other words, the term supervision is the act or function of overseeing something or
somebody. It includes both material things and human beings.
R.C. DAVIS:
―Supervision is the function of assuring that the work is being done in accordance with
plan and instruction.
Characteristics:-
Motivation:
Concept
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intends to give a brief overview on the most important concepts and theories of
motivation.
Direction might point the way, but effort is what establishes momentum, and persistence
determines how far the change is carried (in time as well as in magnitude of outcome).
(from Client-centered Direction) Hence, Arnold‘s 3 components are suitable to describe
the level of motivation a person or a team shows. This concept does not give any
reasons for motivation.
Intrinsic – self generated factors (responsibility, freedom to act, scope to use and
develop skills and abilities, interesting and challenging work, opportunities for
advancement) – they have a deeper and longer-term effect
All Needs theories focus on specific needs people want to satisfy. There are
several theories that explain motivation as a result of these needs.
The underlying concept is the belief that an unsatisfied need creates tension and a
state of disequilibrium. To restore balance, a goal is identified that will satisfy the
need and a behavior pathway to this goal is selected.
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People will be better motivated if their work experience satisfies their needs and
wants.
Needs theories distinguish between primary needs, such as food, sleep and other
biological needs, and secondary psychological needs that are learned and vary by
culture and by individual.
If a lower need is satisfied, it no longer motivates behavior; the next higher one
becomes dominant. (Deficit principle)
The five needs exist in a hierarchy. Higher needs only become important when
lower needs are satisfied
The theory helps managers to identify which particular needs are relevant for
employees and thus to determine appropriate motivators.
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Alderfer’s ERG Theory
Existence needs – need for material and energy exchange; basic physiological
and safety needs
Growth needs – people make creative or productive efforts for themselves; need
for personal growth and self-development; part of Maslows esteem needs and
self-fulfillment needs
On contrast to Maslow, here more than one level of needs can be relevant at the same
time. There is no hierarchy; people may for instance work to fulfill their personal growth
needs, whereas not al relatedness needs are fulfilled. (partly adapted from Management
Study Guide)
McClelland’s needs
The hierarchy of these three groups of needs may differ from individual to individual.
Hence, there are different motivators depending on a person‘s high-priority needs.
There are some factors that result in satisfaction and some factors that just prevent
dissatisfaction. According to Herzberg, the opposite of Satisfaction is No Satisfaction
and the opposite of Dissatisfaction is No Dissatisfaction.
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Motivators –
factors that really motivate people, also called satisfiers, provide intrinsic
motivation
Hygiene factors –
dissatisfiers; their absence would demotivate people, but their presence not
necessarily improves motivation; essentially describe the environment, little effect
on positive job attitudes
Examples for Hygiene factors: salary, work conditions, relationships with superios
and peers, company policy
Concerned with people‘s perceptions and the way they interpret and understand it
People will be highly motivated if they can control the means to attain their goals
Value, instrumentality (belief that if we do one thing it will lead to another), expectancy
(probability that action or effort will lead to an outcome).
Strength of expectations may be based on past experiences.
Motivation is only likely when a clearly perceived relationship exists between
performance and an outcome that is seen as a means of satisfying needs.
Porter and Lawler developed this theory into a model suggesting that there are two
factors determining the effort people put into their jobs:
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Role perceptions – what he wants to do or thinks he is required to do, good if they
correspond with the viewpoint of the organization
Motivation and performance are higher when individuals are set specific goals.
Goals have to be difficult but accepted.
Feedback on performance allows the individual to track how well he or she is doing in
relation to the goal.
Participation in goal setting is important – goals need to be agreed.
As long as they are accepted – demanding goals lead to better performance than easy
goals.
Perceptions people have about how they are being treated as compared with
others
Distributive – fairness people feel they are rewarded in accordance with their
contribution and in comparison with others
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Other theories
Behavioral theory (Skinner): behavior is learnt from experience, learning takes place
mainly through reinforcement
Role Modeling: people can be motivated if they have the chance to model their own
behavior on a ‗role model‘, i.e. someone who‘s working or leadership style serves as an
inspiration and a positive example
Motivational Issues
Often an employee knows how to perform correctly, the process is good, and all
resources are available, but for one reason or another, chooses not to do so, which
normally means it is a motivational issue. While many jobs have problems that are
inherent to the position, it is the problems that are inherent to the person that normally
cause us to loose focus from our main task of getting results. These motivational
problems could arrive from family pressures, personality conflicts, a lack of
understanding on how the behavior affects other people or process, etc.
When something breaks the psychological contract between the employee and the
organization, the leader must find out what the exact problem is by looking beyond the
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symptoms, finding a solution, focusing on the problem, and then implementing a plan of
action. One of the worst situations that a leader can get into is to get the facts wrong.
Start by collecting and documenting what the employee is not doing or should be doing,
such as tasks, special projects, reports, etc. Try to observe the employee performing
the task. Also, do not make it a witch hunt, but rather observe and record what the
employee is not doing to standards. Check past performance appraisals, previous
managers, or other leaders the employee might have worked with. Try to find out if it a
pattern or something new.
Once you know the problem, then work with the employee to solve it. Most employees
want to do a good job. It is in your best interest to work with the employee as long as
the business needs are met and it is within the bonds of the organization to do so.
Causes of problems
This motivational issue is not the fault of the employee. By providing feedback and
ensuring the feedback is consistent, you provide the means for employees to motivate
themselves to the desired behavior. For example, inconsistent feedback would be for
management to say it wants good safety practices, then frowns on workers who slow
down by complying with regulations. Or expressing that careful workmanship is needed,
but reinforces only volume of production.
Also, ensure that there is not a difference in priorities. Employees with several tasks and
projects on their plates must be clearly communicated as to what comes first when
pressed for time. With the ever increasing notion to do more with less, we must
understand that not everything can get done at once. Employees often choose the task
that they enjoy the most, rather than the task they dislike the most. And all too often that
disliked task is what needs to get performed first.
Lack of motivation
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Shift in focus
Today, its a lucky employee (or unlucky if the employee thrives on change) who does
not have her job restructured. Changing forces in the market forces changes in
organizations. When this happens, ensure that every employee gets these questions
answered:
o How has the job changed and what are the new responsibilities?
Theories of Motivation
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subordinates, and even supervisors. Put a different way, if someone is not performing
well, what could be the reason?
Job performance is viewed as a function of three factors and is expressed with the
equation below.Mitchell, T. R. (1982). Motivation: New directions for theory, research,
and practice. Academy of Management Review, 7, 80–88; Porter, L. W., & Lawler, E. E.
(1968). Managerial attitudes and performance. Homewood, IL: Dorsey Press. According
to this equation, motivation, ability, and environment are the major influences over
employee performance.
Motivation is one of the forces that lead to performance. Motivation is defined as the
desire to achieve a goal or a certain performance level, leading to goal-directed
behavior. When we refer to someone as being motivated, we mean that the person is
trying hard to accomplish a certain task. Motivation is clearly important if someone is to
perform well; however, it is not sufficient. Ability—or having the skills and knowledge
required to perform the job—is also important and is sometimes the key determinant of
effectiveness. Finally, environmental factors such as having the resources, information,
and support one needs to perform well are critical to determine performance. At
different times, one of these three factors may be the key to high performance. For
example, for an employee sweeping the floor, motivation may be the most important
factor that determines performance. In contrast, even the most motivated individual
would not be able to successfully design a house without the necessary talent involved
in building quality homes. Being motivated is not the same as being a high performer
and is not the sole reason why people perform well, but it is nevertheless a key
influence over our performance level.
So what motivates people? Why do some employees try to reach their targets and
pursue excellence while others merely show up at work and count the hours? As with
many questions involving human beings, the answer is anything but simple. Instead,
there are several theories explaining the concept of motivation. We will discuss
motivation theories under two categories: need-based theories and process theories.
It is unique to hear about a CEO who studies happiness and motivation and builds
those principles into the company‘s core values or about a company with a 5-week
training course and an offer of $2,000 to quit anytime during that 5 weeks if you feel the
company is not a good fit. Top that off with an on-site life coach who also happens to be
a chiropractor, and you are really talking about something you don‘t hear about every
day. Zappos is known as much for its 365-day return policy and free shipping as it is for
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its innovative corporate culture. Although acquired in 2009 by Amazon (NASDAQ:
AMZN), Zappos managed to move from number 23 in 2009 on Fortune magazine‘s ―100
Best Companies to Work For‖ list to 15 in 2010.
Performance is a function of motivation, ability, and the environment in which you work.
Zappos seems to be creating an environment that encourages motivation and builds
inclusiveness. The company delivers above and beyond basic workplace needs and
addresses the self-actualization needs that most individuals desire from their work
experience. CEO Tony Hsieh believes that the secret to customer loyalty is to make a
corporate culture of caring a priority. This is reflected in the company‘s 10 core values
and its emphasis on building a team and a family. During the interview process,
applicants are asked questions relating to the company‘s values, such as gauging their
own weirdness, open-mindedness, and sense of family. Although the offer to be paid to
quit during the training process has increased from its original number of $400, only 1%
of trainees take the offer. Work is structured differently at Zappos as well. For example,
there is no limit to the time customer service representatives spend on a phone call, and
they are encouraged to make personal connections with the individuals on the other end
rather than try to get rid of them.
Although Zappos has over 1,300 employees, the company has been able to maintain a
relatively flat organizational structure and prides itself on its extreme transparency. In an
exceptionally detailed and lengthy letter to employees, Hsieh spelled out what the new
partnership with Amazon would mean for the company, what would change, and more
important, what would remain the same. As a result of this type of company structure,
individuals have more freedom, which can lead to greater satisfaction.
Although Zappos pays its employees well and offers attractive benefits such as
employees receiving full health-care coverage and a compressed workweek, the desire
to work at Zappos seems to go beyond that. As Hsieh would say, happiness is the
driving force behind almost any action an individual takes. Whether your goals are for
achievement, affiliation, or simply to find an enjoyable environment in which to work,
Zappos strives to address these needs.
Case written by [citation redacted per publisher request]. Based on information from
Robischon, N. (2009, July 22). Amazon buys Zappos for $847 million. Fast Company.
Retrieved February 28, 2010, from http://www.fastcompany.com/blog/noah-
robischon/editors-desk/amazon-buys-zappos-807-million; Walker, A. (2009, March 14).
Zappos‘ Tony Hsieh on Twitter, phone calls and the pursuit of happiness. Fast
Company. Retrieved February 27, 2010, from http://www.fastcompany.com/blog/alissa-
walker/member-blog/tony-hsiehs-zapposcom; Happy feet—Inside the online shoe
utopia. (2009, September 14). New Yorker. Retrieved February 28, 2010,
from http://about.zappos.com/press-center/media-coverage/happy-feet-inside-online-
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shoe-utopia; 100 best companies to work for. (2010, February 8). Fortune. Retrieved
February 26, 2010,
from http://money.cnn.com/magazines/fortune/bestcompanies/2010/snapshots/15.html.
DISCUSSION QUESTIONS
What potential organizational changes might result from the acquisition by Amazon?
Why do you think Zappos‘ approach is not utilized more often? In other words, what are
the challenges to these techniques?
LEARNING OBJECTIVES
Explain how the ERG (existence, relatedness, growth) theory addresses the limitations
of Maslow‘s hierarchy.
Describe the differences among factors contributing to employee motivation and how
these differ from factors contributing to dissatisfaction.
Describe need for achievement, power, and affiliation, and identify how these acquired
needs affect work behavior.
Abraham Maslow is among the most prominent psychologists of the twentieth century.
His hierarchy of needs is an image familiar to most business students and managers.
The theory is based on a simple premise: Human beings have needs that are
hierarchically ranked.Maslow, A. H. (1943). A theory of human
motivation. Psychological Review, 50, 370–396; Maslow, A. H. (1954). Motivation and
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personality. New York: Harper. There are some needs that are basic to all human
beings, and in their absence nothing else matters. As we satisfy these basic needs, we
start looking to satisfy higher order needs. In other words, once a lower level need is
satisfied, it no longer serves as a motivator.
The most basic of Maslow‘s needs are physiological needs. Physiological needs refer to
the need for food, water, and other biological needs. These needs are basic because
when they are lacking, the search for them may overpower all other urges. Imagine
being very hungry. At that point, all your behavior may be directed at finding food. Once
you eat, though, the search for food ceases and the promise of food no longer serves
as a motivator. Once physiological needs are satisfied, people tend to become
concerned about safety needs. Are they free from the threat of danger, pain, or an
uncertain future? On the next level up, social needs refer to the need to bond with other
human beings, be loved, and form lasting attachments with others. In fact, attachments,
or lack of them, are associated with our health and well-being.Baumeister, R. F., &
Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a
fundamental human motivation. Psychological Bulletin, 117, 497–529. The satisfaction
of social needs makes esteem needs more salient. Esteem need refers to the desire to
be respected by one‘s peers, feel important, and be appreciated. Finally, at the highest
level of the hierarchy, the need for self-actualization refers to ―becoming all you are
capable of becoming.‖ This need manifests itself by the desire to acquire new skills,
take on new challenges, and behave in a way that will lead to the attainment of one‘s
life goals.
Maslow was a clinical psychologist, and his theory was not originally designed for work
settings. In fact, his theory was based on his observations of individuals in clinical
settings; some of the individual components of the theory found little empirical support.
One criticism relates to the order in which the needs are ranked. It is possible to
imagine that individuals who go hungry and are in fear of their lives might retain strong
bonds to others, suggesting a different order of needs. Moreover, researchers failed to
support the arguments that once a need is satisfied it no longer serves as a motivator
and that only one need is dominant at a given time.Neher, A. (1991). Maslow‘s theory of
motivation: A critique. Journal of Humanistic Psychology, 31, 89–112; Rauschenberger,
J., Schmitt, N., & Hunter, J. E. (1980). A test of the need hierarchy concept by a Markov
model of change in need strength. Administrative Science Quarterly, 25, 654–670.
Despite the lack of strong research support, Maslow‘s theory found obvious applications
in business settings. Understanding what people need gives us clues to understanding
them. The hierarchy is a systematic way of thinking about the different needs
employees may have at any given point and explains different reactions they may have
to similar treatment. An employee who is trying to satisfy esteem needs may feel
gratified when her supervisor praises an accomplishment. However, another employee
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who is trying to satisfy social needs may resent being praised by upper management in
front of peers if the praise sets the individual apart from the rest of the group.
How can an organization satisfy its employees‘ various needs? In the long run,
physiological needs may be satisfied by the person‘s paycheck, but it is important to
remember that pay may satisfy other needs such as safety and esteem as well.
Providing generous benefits that include health insurance and company-sponsored
retirement plans, as well as offering a measure of job security, will help satisfy safety
needs. Social needs may be satisfied by having a friendly environment and providing a
workplace conducive to collaboration and communication with others. Company picnics
and other social get-togethers may also be helpful if the majority of employees are
motivated primarily by social needs (but may cause resentment if they are not and if
they have to sacrifice a Sunday afternoon for a company picnic). Providing promotion
opportunities at work, recognizing a person‘s accomplishments verbally or through more
formal reward systems, and conferring job titles that communicate to the employee that
one has achieved high status within the organization are among the ways of satisfying
esteem needs. Finally, self-actualization needs may be satisfied by the provision of
development and growth opportunities on or off the job, as well as by work that is
interesting and challenging. By making the effort to satisfy the different needs of each
employee, organizations may ensure a highly motivated workforce.
ERG Theory
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career goals may regress to relatedness need and start spending more time socializing
with coworkers. The implication of this theory is that we need to recognize the multiple
needs that may be driving individuals at a given point to understand their behavior and
properly motivate them.
Two-Factor Theory
In contrast, motivators are factors that are intrinsic to the job, such as achievement,
recognition, interesting work, increased responsibilities, advancement, and growth
opportunities. According to Herzberg‘s research, motivators are the conditions that truly
encourage employees to try harder.
Sources: Based on Herzberg, F., Mausner, B., & Snyderman, B. (1959). The motivation
to work. New York: John Wiley and Sons; Herzberg, F. (1965). The motivation to work
among Finnish supervisors. Personnel Psychology, 18, 393–402.
Herzberg‘s research is far from being universally accepted.Cummings, L. L., & Elsalmi,
A. M. (1968). Empirical research on the bases and correlates of managerial
motivation. Psychological Bulletin, 70, 127–144; House, R. J., & Wigdor, L. A. (1967).
Herzberg‘s dual-factor theory of job satisfaction and motivation: A review of the
evidence and a criticism. Personnel Psychology, 20, 369–389. One criticism relates to
the primary research methodology employed when arriving at hygiene versus
motivators. When people are asked why they are satisfied, they may attribute the
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causes of satisfaction to themselves, whereas when explaining what dissatisfies them,
they may blame the situation. The classification of the factors as hygiene or motivator is
not that simple either. For example, the theory views pay as a hygiene factor. However,
pay may have symbolic value by showing employees that they are being recognized for
their contributions as well as communicating that they are advancing within the
company. Similarly, the quality of supervision or the types of relationships employees
form with their supervisors may determine whether they are assigned interesting work,
whether they are recognized for their potential, and whether they take on more
responsibilities.
Despite its limitations, the theory can be a valuable aid to managers because it points
out that improving the environment in which the job is performed goes only so far in
motivating employees. Undoubtedly, contextual factors matter because their absence
causes dissatisfaction. However, solely focusing on hygiene factors will not be enough,
and managers should also enrich jobs by giving employees opportunities for challenging
work, greater responsibilities, advancement opportunities, and a job in which their
subordinates can feel successful.
Acquired-Needs Theory
McClelland used a unique method called the Thematic Apperception Test (TAT) to
assess the dominant need.Spangler, W. D. (1992). Validity of questionnaire and TAT
measures of need for achievement: Two meta-analyses. Psychological Bulletin, 112,
140–154. This method entails presenting research subjects an ambiguous picture
asking them to write a story based on it. Take a look at the following picture. Who is this
person? What is she doing? Why is she doing it? The story you tell about the woman in
the picture would then be analyzed by trained experts. The idea is that the stories the
photo evokes would reflect how the mind works and what motivates the person.
If the story you come up with contains themes of success, meeting deadlines, or coming
up with brilliant ideas, you may be high in need for achievement. Those who have
high need for achievement have a strong need to be successful. As children, they may
be praised for their hard work, which forms the foundations of their persistence.Mueller,
C. M., & Dweck, C. S. (1998). Praise for intelligence can undermine children‘s
motivation and performance. Journal of Personality and Social Psychology, 75, 33–
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52. As adults, they are preoccupied with doing things better than they did in the past.
These individuals are constantly striving to improve their performance. They relentlessly
focus on goals, particularly stretch goals that are challenging in nature.Campbell, D. J.
(1982). Determinants of choice of goal difficulty level: A review of situational and
personality influences. Journal of Occupational Psychology, 55, 79–95. They are
particularly suited to positions such as sales, where there are explicit goals, feedback is
immediately available, and their effort often leads to success. In fact, they are more
attracted to organizations that are merit-based and reward performance rather than
seniority. They also do particularly well as entrepreneurs, scientists, and
engineers.Harrell, A. M., & Stahl, M. J. (1981). A behavioral decision theory approach
for measuring McClelland‘s trichotomy of needs. Journal of Applied Psychology, 66,
242–247; Trevis, C. S., & Certo, S. C. (2005). Spotlight on entrepreneurship. Business
Horizons, 48, 271–274; Turban, D. B., & Keon, T. L. (1993). Organizational
attractiveness: An interactionist perspective. Journal of Applied Psychology, 78, 184–
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Are individuals who are high in need for achievement effective managers? Because of
their success in lower level jobs where their individual contributions matter the most,
those with high need for achievement are often promoted to higher level
positions.McClelland, D. C., & Boyatzis, R. E. (1982). Leadership motive pattern and
long-term success in management. Journal of Applied Psychology, 67, 737–
743. However, a high need for achievement has significant disadvantages in
management positions. Management involves getting work done by motivating others.
When a salesperson is promoted to be a sales manager, the job description changes
from actively selling to recruiting, motivating, and training salespeople. Those who are
high in need for achievement may view managerial activities such as coaching,
communicating, and meeting with subordinates as a waste of time and may neglect
these aspects of their jobs. Moreover, those high in need for achievement enjoy doing
things themselves and may find it difficult to delegate any meaningful authority to their
subordinates. These individuals often micromanage, expecting others to approach tasks
a particular way, and may become overbearing bosses by expecting everyone to
display high levels of dedication.McClelland, D. C., & Burnham, D. H. (1976). Power is
the great motivator. Harvard Business Review, 25, 159–166.
If the story you created in relation to the picture you are analyzing contains elements of
making plans to be with friends or family, you may have a high need for affiliation.
Individuals who have a high need for affiliation want to be liked and accepted by others.
When given a choice, they prefer to interact with others and be with friends.Wong, M.
M., & Csikszentmihalyi, M. (1991). Affiliation motivation and daily experience: Some
issues on gender differences. Journal of Personality and Social Psychology, 60, 154–
164. Their emphasis on harmonious interpersonal relationships may be an advantage in
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jobs and occupations requiring frequent interpersonal interaction, such as a social
worker or teacher. In managerial positions, a high need for affiliation may again serve
as a disadvantage because these individuals tend to be overly concerned about how
they are perceived by others. They may find it difficult to perform some aspects of a
manager‘s job such as giving employees critical feedback or disciplining poor
performers. Thus, the work environment may be characterized by mediocrity and may
even lead to high performers leaving the team.
Finally, if your story contains elements of getting work done by influencing other people
or desiring to make an impact on the organization, you may have a high need for power.
Those with a high need for power want to influence others and control their
environment. A need for power may in fact be a destructive element in relationships with
colleagues if it takes the form of seeking and using power for one‘s own good and
prestige. However, when it manifests itself in more altruistic forms such as changing the
way things are done so that the work environment is more positive, or negotiating more
resources for one‘s department, it tends to lead to positive outcomes. In fact, the need
for power is viewed as an important trait for effectiveness in managerial and leadership
positions.McClelland, D. C., & Burnham, D. H. (1976). Power is the great
motivator. Harvard Business Review, 25, 159–166; Spangler, W. D., & House, R. J.
(1991). Presidential effectiveness and the leadership motive profile. Journal of
Personality and Social Psychology, 60, 439–455; Spreier, S. W. (2006). Leadership run
amok. Harvard Business Review, 84, 72–82.
McClelland‘s theory of acquired needs has important implications for the motivation of
employees. Managers need to understand the dominant needs of their employees to be
able to motivate them. While people who have a high need for achievement may
respond to goals, those with a high need for power may attempt to gain influence over
those they work with, and individuals high in their need for affiliation may be motivated
to gain the approval of their peers and supervisors. Finally, those who have a high drive
for success may experience difficulties in managerial positions, and making them aware
of common pitfalls may increase their effectiveness.
All motivation comes from within, whether it is triggered by rewards or endeavors that
enhance one‘s self-image or simply comes from intrinsically-motivating activities that we
engage in for no reward other than the enjoyment these activities bring us.
Realizing this makes the topic of employee motivation quite daunting for people
managers, leaders, and human resources professionals alike.
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But organizations that provide their members with meaningful, engaging work not only
contribute to the growth of their bottom line but also create a sense of vitality and
fulfillment that echoes across their organizational cultures and their employees‘
personal lives.
Before you continue, we thought you might like to download our three Goal
Achievement Exercises for free. These detailed, science-based exercises will help
you or your clients create actionable goals and master techniques to create lasting
behavior change.
Over the years, dozens of theories of motivation have been proposed, and some were
developed with workplace productivity in mind.
For better or for worse, they have shaped the landscape of our understanding of
organizational behavior and have shaped our approaches to employee motivation. We
discuss here a few of the most frequently applied theories of motivation in
organizational behavior.
Motivator factors that can motivate employees to work harder and lead to on-the-
job satisfaction that includes experiences of greater engagement in and
enjoyment of the work, feelings of recognition, and a sense of career
progression.
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Hygiene factors that can potentially lead to dissatisfaction and a lack of
motivation if they are absent like adequate compensation, effective company
policies, comprehensive benefits, or good relationships with managers and co-
workers.
Herzberg maintained that while motivator and hygiene factors both influence motivation,
they appeared to work entirely independently of each other. He found that motivator
factors increased employee satisfaction and motivation, but the absence of these
factors didn‘t necessarily cause dissatisfaction.
Likewise, the presence of hygiene factors didn‘t appear to increase satisfaction and
motivation, but their absence caused an increase in dissatisfaction. It is debatable
whether his theory would hold true today outside of blue-collar industries, particularly
with the millennials who, according to recent studies, are reportedly looking for
meaningful work and growth.
Physiological needs that must be met for a person to survive, such as food,
water, and shelter.
Safety needs that include personal and financial security and health and
wellbeing.
Esteem needs that include feelings of confidence in the self and respect from
others.
Self-actualization needs that define the desire to achieve everything one possibly
can and realizing one‘s full potential.
According to the hierarchy of needs, we must be in good health, safe, and secure with
meaningful relationships and confidence before we can reach for the realization of our
full potential.
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For a full discussion of other theories of psychological needs and the importance of
needs satisfaction, see our article on How to Motivate.
Hawthorne Effect
The Hawthorne Effect, named after a series of social experiments on the influence of
physical conditions on productivity at Western Electric‘s factory at Hawthorne, Chicago
in the 1920s and 30s, was first described by Henry Landsberger in 1950 who noticed a
tendency for some people to work harder and perform better when researchers were
observing them.
Today the Hawthorne Effect is best understood as a justification for the value of
providing employees with specific and meaningful feedback and recognition. It is
contradicted by the existence of results only workplace environments that allow
complete autonomy and is focused on performance and deliverables rather than
management of employees.
Expectancy Theory
For example, an employee may be more likely to work harder if he or she had been
promised a pay rise and thus perceived that outcome as very likely and desirable, than
if the employee had only assumed they might get one and saw the outcome as possible
but not likely or if they do not value the type of reward being offered.
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Expectancy Theory posits that three elements affect our behavioral choices:
Expectancy is the belief that our effort will result in our desired goal and is based
on our past experience and influenced by our self-confidence and our
anticipation of how difficult the goal is to achieve.
Expectancy Theory tells us that we are most motivated when we believe that we will
receive the desired reward if we hit an achievable and valued target, and are least
motivated if we do not care for the reward or do not believe that our efforts will result in
the reward.
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Three-Dimensional Theory of Attribution
Attribution Theory explains how we attach meaning to our own and other people‘s
behavior and how the characteristics of these attributions can affect future motivation.
There are several theories about attribution, but Bernard Weiner‘s Three-Dimensional
Theory of Attribution proposed that the nature of the specific attribution like bad luck or
not working hard enough was less important than the characteristics of that attribution
as perceived and experienced by the individual. According to Weiner, there are three
main characteristics of attributions that can influence how we behave in the future:
Locus of control describes a perspective about the event as caused by either an internal
or an external factor. For example, if the employee believes it was his or her fault the
project failed, because of an innate quality such as a lack of skills or ability to meet the
challenge, they may be less motivated in the future.
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Theory X and Theory Y
He divided leaders into those that believe most employees avoid work and dislike
responsibility, Theory X managers, and Theory Y managers who say that most
employees enjoy work and exert effort when they have control in the workplace.
He proposed that to motivate Theory X employees, the company needs to push and
control their staff through enforcing rules and implementing punishments.
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leaders‘ responsibility is to create a supportive environment and develop opportunities
for employees to take on responsibility and show creativity.
Theory X is heavily informed by what we know about intrinsic motivation, and the role
satisfaction of basic psychological needs plays in effective employee motivation.
Theory Z
Taking the theory X and Theory Y as a starting point, a third theory, Theory Z, was
developed by Dr. William Ouchi. The theory combines American and Japanese
management philosophies and focuses on long-term job security, consensual decision
making, slow evaluation and promotion procedures, and individual responsibility within a
group context.
Its noble goals include increasing employee loyalty to the company by providing a job
for life, focusing on the employee‘s well-being, and encourages group work and social
interaction to motivate employees in the workplace.
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Pay and Job Performance
The committee's investigation, begun in January 1990, has of necessity been fast-
paced; the legislative mandate for the federal government's current merit pay program,
called the Performance Management and Recognition System (PMRS), is coming to an
end, and widespread dissatisfaction with the system has brought about the third major
examination of merit pay procedures in the federal government since 1978. There is
renewed public debate over such issues as the pay gap between federal employees
and their private-sector equivalents, the waning prestige of federal employment,
employees' dissatisfaction over merit pay, training and development opportunities,
performance appraisal, and union opposition to merit pay (Perry and Porter, 1982; Merit
Systems Protection Board, 1988; Havemann, 1990).
During this time, too, private-sector compensation systems have been the topic of a
great deal of attention. In particular, adoption of "pay-for-performance
plans" has been highly publicized as a means for improving U.S. labor productivity.
Public policy analysts have been exploring the impact that pay for performance plans
might have on labor productivity in preparation for recommendations about national tax
incentives for these plans (Blinder, 1990). Their interest was sparked by theoretical
arguments that certain types of pay for performance plans (particularly profit-sharing)
might stabilize national employment without inflation (Weitzman, 1984). Many
employers, having already trimmed their work forces, are exploring the potential of
these plans for making their remaining work forces more productive while continuing
labor cost control (TPF & C/Towers Perrin, 1990; Wallace, 1990). Consultants,
academics, and employee advocate groups (including unions) are also beginning to
seriously discuss the effects of pay for performance plans—and to explicate the
potential downsides, in particular the high costs of organizational changes required for
effective plan implementation, and the equity problems associated with asking
employees to place a larger part of their pay at risk when they have little control over
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many factors influencing organizational outcomes. In other words, it is a time of
reassessment in the private as well as the public sector.
Amidst widespread dissatisfaction with PMRS and the current celebration of pay for
performance plans in the private sector, the question presents itself: Are there things to
be learned from private-sector organizations that can improve human resource
management in the federal bureaucracy? The government has many sources of advice
on these issues, from blue ribbon groups like the Volker Commission, to federal
employee associations, to a variety of consulting firms. Our task was to supply one
perspective to the coming policy deliberations—that is, to bring together the best
scientific evidence and knowledge derived from practice on performance appraisal and
on linking pay to performance.
The Performance Management and Recognition System, like its predecessor the Merit
Pay System, is a system of merit pay. This represents one genre in a broad spectrum of
pay plans that bear the label pay for performance.
There is an important difference in the use of the terms merit pay and pay for
performance by the government and the private sector that should be noted. In
government parlance, merit pay and pay for performance tend to be used
synonymously. In the private sector, it has become common in recent years to
distinguish between the two. The term pay for performance is closely associated with
the drive to make U.S. business more competitive; private-sector analysts use it to
designate systems in which a sizable portion of a worker's annual compensation is
partly or wholly dependent on the overall success of the firm, rather than on individual
performance. Variable pay plans include profit-sharing and gainsharing plans of all
descriptions.
In this report, we have chosen to use pay for performance generically to denote any
compensation system that links pay and performance. Subsumed under that rubric are
two distinct types of compensation systems: merit pay and variable pay.
Merit Pay
In merit pay plans, the locus of attention is individual performance. As one element in a
meritocratic personnel system, merit pay plans link pay level or annual pay increases, at
least in part, to how well the incumbent has performed on the job. Just as ability or skill
is intended to rule employee selection in such systems, so the quality of each
employee's job performance should, according to merit principles, be recognized
through the pay system.
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The most recent survey data indicates that 94 to 95 percent of private-sector companies
have merit pay programs to provide individual pay increases to their eligible ("exempt")
employees, and 71 percent of companies have merit pay programs for their nonunion
hourly employees. Performance appraisal is at the heart of merit pay plans. Although
there are numerous variations in systems labeled as merit plans, some sort of rating of
each employee's performance precedes compensation decisions. In some firms, the
rating of performance is informal, with very little committed to paper; some firms
undertake detailed job analyses, which provide the underpinnings of the appraisal
system; a majority of firms appear to base the performance appraisal on a set of goals
established by the supervisor or negotiated by the supervisor and the employee.
The typical appraisal summary format has four to five levels of performance.
Pay increases are administered via a matrix (merit grid) that uses both an employee's
performance level and position in the pay grade to determine a prespecified percentage
increase (or increase range) in base salary. The other components of the merit grid are
the organization's pay increase budget and the time between pay increases.
Merit increases usually are permanent increases, which are added into an individual
employee's salary and are funded from a central compensation group. These funds are
allocated to divisions or units as a percentage of payroll. Because merit pay increases
are added to base pay and compounded into the earning stream, they can result in
significant changes in pay levels over time.
In contrast to federal practice, most companies do not communicate their pay structure
or average pay increase percentages to their employees. Many communicate all
increases given to an individual employee as merit-related. (This is in contrast to
communicating increases as general, seniority, and merit combined.)
The merit plan tends not to be accompanied by formal "due process" mechanisms for
appealing unfavorable appraisals (unless an employee is covered by a collective
bargaining contract), but it may be accompanied by informal protections.
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It is characterized by limited training of the managers who administer the plan and
virtually no training of employees covered by the plan in the performance appraisal
process.
It is associated with relatively modest annual increases that are added into base salary.
The Hay Company reported an average increase in 1989 of approximately 5 percent
with a range of 2 to 12 percent.
Variable Pay
Variable pay plans fall into two categories, individual incentive plans and group plans.
Piece work and sales commissions are the best known of the individual incentive plans.
In recent years, a variety of group incentive plans have come into vogue. These pay
plans are specifically designed to influence aggregate organization measures. They
typically tie a significant portion of annual pay to organization-wide productivity or
financial outcomes. For example, profit-sharing plans or equity plans link individual
employee's pay to the overall fortunes of the firm as measured by some indicator of its
financial health. Hence, one important distinction between merit pay plans and group
incentive plans is that the latter base compensation decisions in whole or in part on
organizational performance rather than individual performance. In addition, the portion
of pay associated with the variable plans is usually a one-time payment, not an increase
to base pay.
Variable pay plans have taken on an importance in our report that they would otherwise
not have had, given our mandate to look at performance appraisal and merit pay,
because virtually all of the research on the effectiveness of pay for performance plans
deals with these compensation plans. The enormous difficulty of trying to link individual
performance in most jobs to productivity (the grand exception being manufacturing
piece work and sales) may have turned the attention of social scientists to system-level
indicators of effectiveness, and hence to the variable pay incentive plans.
Advocates of variable pay plans argue that their implementation can help to revitalize
organizations and control labor costs. They believe that the link between pay and
organization outcomes is likely to motivate employees to work more creatively, smarter,
harder, and as teams to achieve these outcomes. If
the outcomes are achieved, they fund sizable payouts; if they are not, employee pay in
addition to base would be small or nonexistent. In either case, the ratio of labor costs to
total costs stays about the same, making the organization more competitive.
The actual impact these variable pay plans can have on an organization's productivity
and financial competitiveness is just beginning to be seriously examined. But it is a fact
that, by design, these plans either require system changes—such as redefinition of jobs,
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creation of teams, and changes in work methods and standards as is typical in
gainsharing programs—or provide powerful monetary incentives to employees to
experiment with changes in their own jobs (individual bonus and profit-sharing plans.)
There is disagreement about whether it is the broader system changes (Deming, 1986;
Beer et al., 1990), or the presence of the variable pay plans themselves (Schuster,
1984a) that are most critical to improvements in organizational effectiveness. No one
denies, however, that broader system or context changes will influence the impact of a
variable pay plan on an organization's performance.
The potential of variable pay plans to control labor costs and improve an organization's
effectiveness has received the most attention in the press. Since such plans pay out
only when they are funded by improvements in system measures, making a larger
portion of a lower-level employee's pay dependent on them shifts management risks to
those who have little say in management decisions. The potential abuse of employee
equity with these plans is thus high.
ISSUES
With this background in mind, the committee has interpreted its charge from OPM as
requiring the investigation of whether and under what conditions performance appraisal
and merit pay can assist the federal government in regulating labor costs, managing
performance, and fostering employee equity. We interpreted the managing of
performance to include improvements in organization effectiveness, thus requiring some
examination of variable pay plans and comparisons of their intended effects with those
of merit pay plans. We broadly defined employee equity to include, not only employee
perceptions of the legitimacy and fairness of performance appraisal and merit plans, but
also incentives for managers to administer these plans equitably. By defining
expectations for performance appraisal and merit pay plans in this way, our
investigation was of necessity expanded beyond a restricted examination of the plans
themselves to include an exploration of organizational and institutional conditions under
which the plans are believed to operate best.
We ask the reader to keep in mind several caveats in reviewing this report. Most
important is that there is no commonly accepted theory of pay for performance or
performance appraisal. Therefore, we have to consider the proposition that pay for
performance plans affect performance, given certain
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We also lay no claim to making a comprehensive survey of all performance appraisal,
merit pay, and variable pay plan methods and designs used in the private and public
sectors today. We focused on predominant private sector trends and examined only five
"model" private-sector organizations more intensively.
Our committee's charge did not include an examination of the "total quality" or
"organization revitalization" movements often associated with the implementation of
variable pay plans; consequently, we draw no conclusions about them. Our review in
this area was conducted to contrast the intended effects of these plans with those of
performance appraisal and merit pay.
We have organized our investigation of the issues in the following way. In Chapter 2 we
begin by describing the history of merit principles in the federal government, the Civil
Service Reform Act of 1978, and government workers' reactions to the act and its
implementation. In Chapter 3 we summarize the nature of the evidence we examined
and the implications of our decision to use convergent findings to generate the report's
conclusions. In Chapter 4 we turn to a review of the psychometric properties and
usability of performance appraisal instruments. In Chapter 5 we review the evidence
from economics, sociology, psychology, and practice in the private sector on whether
performance appraisal and pay for performance plans can affect labor costs,
performance, and equity and what determinants or conditions are likely to influence
these effects. In Chapter 6 we summarize trends in the design, administration, and use
of performance appraisal and pay for performance plans—with a focus on the practices
of five organizations that have a long history of satisfactory performance appraisal and
merit pay programs. Our review then moves in Chapter 7 to a brief examination of the
broader organizational and institutional context in which these plans are embedded to
highlight other influential factors in both private- and public-sector organizations. In the
final chapter we present our findings and conclusions for federal policy makers.
―Quality of work life is a process (QWL) of work organisations which enables its
members at all levels to participate actively and efficiently in shaping the organisation‘s
environment, methods and outcomes.
Quality of Work-Life is a value based process, which is aimed towards meeting the twin
goals of enhanced effectiveness of the organisation and improved quality of life at work
for the employees.‖
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Quality of Work-Life is a generic phrase that covers a person‘s feelings about every
dimension of work including economic rewards and benefits, security, working
conditions, organisational and interpersonal relationships and its intrinsic meaning in a
person‘s life.
Learn about:-
3. Concept
4. Characteristics
5. Objectives
6. Elements
7. Constituents
8. Scope
9. Criteria
10. Steps
11. Factors
12. Models
13. Issues
14. Effects
15. Advantages
16. Disadvantages
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17. Approaches and Strategies to Improve QWL.
Contents:
Quality of Working Life (QWL) is a term that had been used to describe the broader job-
related experience an individual has. It has been differentiated from the broader concept
of quality of life. To some degree, this may be overly simplistic, as Elizur and Shye
concluded that quality of work performance is affected by quality of life as well as quality
of working life. However, it will be argued here that the specific attention to work-related
aspects of quality of life is valid.
Whilst quality of life has been more widely studied, quality of working life, remains
relatively unexplored and unexplained. A review of the literature reveals relatively little
on quality of working life. Where quality of working life has been explored, writers differ
in their views on its core constituents.
It is argued that the whole is greater than the sum of the parts as regards quality of
working life, and, therefore, the failure to attend to the bigger picture may lead to the
failure of interventions which tackle only one aspect. A clearer understanding of the
inter-relationship of the various facets of quality of working life offers the opportunity for
improved analysis of cause and effect in the workplace.
This consideration of quality of working life as the greater context for various factors in
the workplace, such as job satisfaction and stress, may offer opportunity for more cost-
effective interventions in the workplace. The effective targeting of stress reduction, for
example, may otherwise prove a hopeless task for employers pressured to take action
to meet governmental requirements.
Work-life balance is balancing the priorities of career goals and family goals. Career
goals include promotions, employment status, monetary earnings and the like. Family
goals include spending more time with family members for spiritual activities, pleasure
leisure, health, education and careers of family members. This concept reduces the gap
between work and family in the process of balancing the demands of both. Certain jobs
like allow work-life balance.
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Quality of Work Life – Definitions: By Some Eminent Authors like Lloyd Suttle,
Johnstorn, Alexander and Robin and a Few Others
Quality of Work Life (QWL) is an improvised HRD mechanism which attempts to design
and to develop the work environments for the employees working at all levels. It is one
of the major issues faced by the organisations. QWL is not only related to the
achievement of greater human satisfaction, but also aims at improving productivity,
adaptability and effectiveness of organisations.
QWL includes the attempts to achieve integration among the technological, human,
organisational and societal demands (the factors of work environments) so as to
maximise the benefits for enriching the human factor.
QWL is not based on any theory or any technique but it is concerned with the overall
climate of work, the impact of work on people and the organisational effectiveness. The
basic purpose is to change the work environment, which will lead towards a better QWL
and ultimately to an improved quality of life in the community/society.
Lloyd Suttle defines QWL as – ―the degree to which members of a particular
organisation are able to satisfy important personal needs through their experiences in
the organisation‖. For example, providing ample opportunities to workers to directly
participate in problem-solving and decision-making, particularly in their work related
areas is considered to be a necessary condition for greater freedom at work and leads
to self-development, self-control or self- direction, ultimately leading towards better
QWL.
Quality of Work-Life is a generic phrase that covers a person‘s feelings about every
dimension of work including economic rewards and benefits, security, working
conditions, organisational and interpersonal relationships and its intrinsic meaning in a
person‘s life. It is a process by which an organisation attempts to unleash the creative
potential of its personnel by involving them in decisions affecting their work lives.
A distinguish characteristic of the process is that its goals are not simply extrinsic
focusing on the improvement of productivity and efficiency, they are also intrinsic,
regarding what the workers see as self-fulfilling and self-enhancing ends in themselves.
The essential component of any QWL improvement programme is the existence of a
genuine opportunity for individuals or task groups at any level in the organisation to
influence their working environment.
During 1979, the American Society of Training and Development created a ‗Task Force‘
on the quality of working life, which defined the concept of quality of working life (QWL)
as follows –
―QWL is a process of work organisations which enables its members at all levels to
participate actively and efficiently in shaping the organisation‘s environment, methods
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and outcomes. It is a value based process, which is aimed towards meeting the twin
goals of enhanced effectiveness of the organisation and improved quality of life at work
for the employees.‖
Quality of Work-Life is the degree to which members of a work organisation are able to
satisfy their personal needs through their experience in the organisation. Its focus is on
the problem of creating a human work environment where employees work
cooperatively and contribute to organisational objectives. The major indicators of QWL
are job involvement, job satisfaction and productivity.
According to Johnstorn, Alexander and Robin, QWL is more than simply a concept,
means or an end.
Quality of work life is a multifaceted concept. The premise of quality of work life is
having a work environment where an employee‘s activities become more important.
This means implementing procedures or policies that make the work less routine and
more rewarding for the employee. These procedures or policies include autonomy,
recognition, belonging, progress and development and external rewards.
―QWL is an indicator of how free the society is from exploitation, injustice, inequality,
oppression and restrictions on the continuity of the growth of a man. What is most
important in India at this stage is developing consciousness among all sections of
industry i.e. workers, Unions and management. Success of any organisation much
depends upon the healthy equation amongst these three players‖. – De (1976)
(a) Ideas dealing with a body of knowledge, concepts experiences related to the nature,
meaning and structure of work.
(b) Ideas dealing with the nature and process of introducing and managing
organizational change; and
Glaser also sees QWL as a process by which all members of the organization, through
appropriate channels of communication, have some say about the design of their jobs in
particular and the work environment in general. Norton and others also view QWL as
not only improving the jobs content, but also moving towards participant management.
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The concept of QWL view work a process of interaction and joint problem solving by
working people-managers, supervisors, workers.
Morale Building
Building morale in small businesses is important because happy employees are more
productive, more likely to improve their skills and more likely to stay. If you‘re a
manager, you should actively teach employees more about your business, help them
grow professionally, give them assignments that will make them happier, work at
establishing excellent boss-employee relationships and create a workplace that fosters
friendly relationships among employees.
Significance
Working with ―great people,‖ being part of a team and having a ―good boss‖ are more
important reasons for employees staying at their workplace than fair pay, benefits and
job security, according to a Career Systems International survey. When you lose a key
person, you have to spend 70 percent to 200 percent of that individual‘s annual salary
to find a replacement, reports ―Love 'Em or Lose 'Em: Getting Good People to Stay‖.
Happy employees also sell more products to more customers.
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Function
Managers are responsible for building morale so employees perform well at their small
businesses and don't leave, according to "Love 'Em or Lose 'Em". If you're a manager,
you should meet with employees in one-on-one and group settings regularly. You need
to learn who will be happier if they're given challenging work, who the self-starters are,
who needs to be motivated, who works well with whom and the interpersonal
relationships between your employees. Listening well will help you figure out when to
give morale-boosting talks to people.
Solution
Fun is often the solution to morale problems. "Some of the most productive, successful
organizations in the world are renowned for fun," according to "Love 'Em or Lose 'Em",
which cites Southwest Airlines and CEO Herb Kelleher's penchant for silly contests with
employees. You don't need an extroverted, fun personality to foster a fun workplace.
Sometimes, just letting employees have fun will boost morale. It's important to judge
employees by their overall performance, not by whether they are always working.
Commitment
Expert Advice
Employees are the experts at boosting morale. Solicit their ideas, encourage them to
offer more advice and implement as many good ideas as possible. In their Career
Systems International, Inc. surveys, Kaye and Jordan-Evans learned about many ideas
that had concrete, morale-boosting results. One manager took employees to a volleyball
game at a local park "in the midst of a big, stressful project." Another allowed
employees to decorate their offices. A third had employees write silly poems about their
workplace.
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UNIT IV
Leadership
Management philosophy is the manager's set of personal beliefs and values about
people and work. It is something that the manager can control. Eminent social
psychologist and management researcher, Douglas McGregor, emphasized that a
manager's philosophy creates a self-fulfilling prophecy. Theory X managers treat
employees almost as children who need constant direction, while Theory Y managers
treat employees as competent adults capable of participating in work-related decisions.
These managerial philosophies then have a subsequent effect on employee behavior,
leading to the self‐fulfilling prophecy. As a result, organizational and managerial
philosophies need to be in harmony.
The character of top executives and their philosophy have an important influence
on the extent to which authority is decentralized.
Sometimes top managers are dictatorial, tolerating no interference with authority
and information they hoard. Conversely, some managers find decentralization a
means to make large business work successfully.
The number of coworkers involved within a problem‐solving or decision‐making
process reflects the manager's leadership style.
Empowerment means sharing information, rewards and power with employees
so that they are equal contributors to the organizations outcomes.
An empowered and well-guided workforce may lead to heightened productivity
and quality, reduced costs, more innovation, improved customer service, and
greater commitment from the employees of the organization.
Each business must go through the process of identifying its individual management
philosophy and continuously review and evaluate the same to see if it is aligned with its
larger purpose.
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Leadership Styles
Leadership can be stated as the ability to influence others. We may also define
leadership as the process of directing and influencing people so that they will strive
willingly and enthusiastically towards the achievement of group objectives.
Ideally, people should be encouraged to develop not only willingness to work but also
willingness to work with confidence and zeal. A leader acts to help a group achieve
objectives through the exploitation of its maximum capabilities.
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In the course of his survey of leadership theories and research, Management theorist,
Ralph Stogdill, came across innumerable definitions of leadership.
Qualities/Ingredients of Leadership
Every group of people that perform satisfactorily has somebody among them who is
more skilled than any of them in the art of leadership. Skill is a compound of at least
four major ingredients −
The ability to use power effectively and in a responsible manner.
The ability to comprehend that human beings have different motivation forces at
different times and in different situations.
The ability to inspire.
The ability to act in a manner that will develop a climate conducive to responding
and arousing motivation.
Leadership styles/types can be classified under the following categories −
Leadership Style Based on the Use of Authority
The traditional way of classifying leadership is based on the use of authority by the
leader. These are classified as –
Some autocratic leaders happen Ranges from the person Favors autonomy and
to be benevolent autocrats, who does not take action exercises minimal
willing to hear and consider without subordinates‘ control. Gives workers
subordinates‘ ideas and concurrence to the one who a high degree of
suggestions but when a decision makes decisions but independence in their
is to be made, they turn to be consults with sub-ordinates operations.
more autocratic than benevolent. before doing so.
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Leadership Continuum
Developed by Robert Blake and Jane Mouton, this approach as shown in the following
grid, has two dimensions −
Concern for people which includes such elements as provision of good working
conditions, placement of responsibility on the basis of trust rather than concern
for production.
Concern for production includes the attitudes of a supervisor toward a wide
variety of things, such as quality of staff services, work efficiency, volume and
quality of output, etc.
The bi-dimensional managerial grid identifies a range of management behavior based
on the various ways that task-oriented and employee-oriented styles (each expressed
as a continuum on a scale of 1 to 9) can interact with each other.
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Management Style 1,1 −
o Impoverished management with low concern for both people and
production.
o This is called laissez-faire management because the leader does not take
a leadership role.
o Also known as delegative leadership is a type of leadership style in which
leaders are hands-off and allow group members to make the decisions.
Management Style 1,9 −
o Country club management having high concern for employees but low
concern for production.
o These leaders predominantly use reward power to maintain discipline and
to encourage the team to accomplish its goals.
Management Style 5,5 −
o Middle of the road management with medium concern for production and
for people.
o Leaders who use this style settle for average performance and often
believe that this is the most anyone can expect.
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Management Style 9,1 −
o Authoritarian management with high concern for production but low
concern for employees exercising disciplinary pressure.
o This approach may result in high production but low people satisfaction
levels.
Management Style 9,9 −
o Democratic management with high concern for both production, and
employee morale and satisfaction.
o The leader's high interest in the needs and feelings of employees affects
productivity positively.
This theory concluded that style 9,9 is the most effective management style as this
leadership approach will, in almost all situations, result in improved performance, low
turnover and absenteeism, and high employee satisfaction.
Systems of Management
Professor Rensis Likert of Michigan University studied the patterns and styles of
managers and leaders for three decades. He suggests four styles of management,
which are the following −
Exploitative-authoritative management −
o Managers are highly autocratic, showing little trust in subordinates.
o The prime drivers are motivating people through fear and punishment.
o Managers engage in downward communication and limit decision making
to the top.
Benevolent-authoritative management −
o The manager has condescending confidence and trust in subordinates
(master-servant relationship).
o Management uses rewards and upward communication is censored or
restricted.
o The subordinates do not feel free to discuss things about the job with their
superior. Teamwork or communication is minimal and motivation is based
on a system of rewards.
Consultative management −
o Managers have substantial but not complete confidence and trust in
subordinates.
o Use rewards for motivation with occasional punishment and some
participation, usually try to make use of subordinates' ideas and opinions.
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o Communication flow is both up and down.
o Broad policy and general decisions are made at the top while allowing
specific decisions to be made at lower levels and act consultatively in
other ways.
Participative management −
o Managers have trust and confidence in subordinates.
o Responsibility is spread widely through the organizational hierarchy.
o Some amount of discussion about job-related issues take place between
the superior and subordinates.
Likert concluded that managers who applied the participative management approach to
their operations had the greatest success as leaders.
Although there are similarities between managers and leaders, the terms are not
interchangeable. Not all managers are effective leaders, and not all leaders work in a
managerial position. Ideally, though, all managers should strive to be effective leaders
for the good of the companies they work for and the employees they supervise.
Managers must create an environment where employees are aware of organizational
objectives and the specific role they play in achieving them. Leading means establishing
direction for employees and initiating the day-to-day work that is necessary to effectively
accomplish the company‘s overall objectives.
The effort it takes to lead others depends upon a number of factors: the leader‘s level of
authority, the number of employees reporting to him or her, the experience level of the
direct reports (and the leader), and other technical or hands-on responsibilities the
leader must fulfill.
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conversations.
Before asking people to complete new tasks, a manager should observe employee
behavior closely and understand the strengths and weaknesses of each person on the
team. Being familiar with each employee‘s talents, skills, and abilities will guide the
delegation process. Leaders should also know and consider the career goals and
interests of employees when delegating responsibilities.
The guidance provided by the leader should include detailed instructions and all the
information needed to successfully accomplish the task. Leaders must identify, utilize,
and coordinate the talents and skills of each employee effectively. When delegating
assignments, be sure to provide the following information:
What: Outline the task and clarify the desired result or outcome.
Who: Make assignments either to individuals or to a team. Specify who will work on
which aspect of the task or plan.
When: Set timeframes and deadlines for completing the task. Be sure to set specific
dates and times to follow up on the task‘s progress and its completion.
Why: Explain the reasons behind the assigned task and how it fits into
organizational plans and objectives.
How: Be flexible and adjust your natural management style to appropriately address
the situation. Assess the experience level of the employee and decide how detailed
your instructions need to be and how much control you need to retain over the
project.
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background, and experience by completing new tasks. Employees must be given the
freedom to learn and make mistakes while performing the task for the first time.
Managers must empower employees and give them the freedom to make decisions
within certain limits. Allowing them to exercise their independence supports creativity,
communication, collaboration, and higher productivity. It also allows employees to make
decisions and learn from their mistakes.
Influence
There‘s an extensive body of academic research which suggests there are a number of
universal cross-cultural principles underpinning influence. There‘s some debate about
how many principles there are- with numbers ranging from 3 to as many as 10. Many of
these were developed by Robert Cialdini in his book Principles of Influence.
For the purposes of this article we‘ve categorized them into five broad ones.
To be successful you don‘t need to employ all of the principles all of the time – but you
may find yourself accessing several in any influence situation.
1. The first, and perhaps most important principle, is reciprocity. When you give people
something that they perceive is of value, they want to give something back to you –
usually of the same perceived value. At its simplest if I send you a Christmas card you
feel you should send me one. This is a universal and seemingly binding rule.
2. The second principle is scarcity. People value something more if it‘s in limited
supply. They especially they like to feel they‘re getting something different that others
don‘t have – hence the attraction of ‗limited editions‘, whether it‘s stamps, prints, or
experiences. Hence also why an exclusive donor club can be attractive to supporters.
4. Fourth is contrast. In order for people to trust and value you, and what you do, you it
helps to create contrasts. These contrasts can take a number of forms – between your
opinion and that of others, or between positions or propositions, or even between
perception and reality. So if you begin by asking someone for a major gift and then drop
to a smaller, but still substantial one, that‘s using the contrast principle.
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5. Fifth is consistency. We like to adopt and maintain key positions or beliefs. Even
when there is evidence to the contrary that the position is not ‗true‘, people will often still
try to maintain their position. So we tend to look for data to justify our existing opinion.
For example, ―She couldn‘t have done that – it‘s not like her.‖
Let‘s look at each principle in more detail and explore how it can apply in more general
situations and specifically for fundraising.
1.Reciprocity
This is not simply anecdotal. Two eminent social scientists, Kuznets and Walcot, report
how a researcher set up an experiment in which he sent Christmas cards to a number
of people he did not know with a very general ‗hope you are well‘ greeting. Much to
even his astonishment almost 50% of the respondents sent back a card, often with a
warm if also slightly bland greeting. They were writing back to a stranger. Why?
Because they felt obliged to conform to the principle of reciprocity.
Fundraisers use this principle all the time. Think of the first time the famous Easter
Seals DM (direct mail) pack went out. Potential donors were sent a selection of
personalised self-adhesive return address labels as a gift with a letter asking them to
donate. The letter made it clear that the labels were a gift from the organization
regardless of whether the recipient sent a gift. (Now for those of you who aren‘t familiar
with direct mail, the usual response rate for a cold mailing is 1.7-1.8% and a warm
mailing around 2-2.2%.) However, when Easter Seals‘ response rate was compared
with DM packs that had no ‗free‘ gift, it was found that almost 20% more people had
contributed than normal. That basic model of sending DM packages with the ‗labels‘ gift
has remained constant for many years.
Recently an interesting variant in the UK has been charities sending out DM packages
that include an opinion-seeking survey and a pen- ostensibly to fill the questionnaire in.
This approach has been tested with and without the pen. The results are incredibly
clear. The inclusion of the (very) cheap pen (20cents) in the pack significantly increases
the number of people who respond to the survey, AND it also impacts on the number of
In the commercial sector we find companies offering to give free trials of goods or
services – or even giving you a free ‗no obligation‘ sample. Once accepted, there is then
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an implicit psychological contract that you should take the next step and order the
service for longer-term use or purchase a full-sized product.
The gift needn‘t be a ‗thing‘. It could be a service or some help. For example Bernard
was asked by a colleague to help out by making a speech at a conference at short
notice. The colleague offered a small fee. He refused the fee. But then was happy to
say to the grateful colleague ―I was happy to help- I‘m sure you‘d do the same for me.‖
Some months later Bernard needed a favour. Actually he needed a bigger favour than
the one he had given. But undeterred he called the colleague. And immediately got a
‗yes‘ in response to the quiz. An early small social investment can pay significant
paybacks.
It‘s not so big that people feel they are being ‗bought‘
You make it clear to the person you might want some reciprocal help at a later point
2. Scarcity
Our second principle is scarcity. By making others believe- whether it‘s really true or
not- that something is in short supply, or hard to get, or exclusive, we can make it more
desirable for them.
There are examples in ‗ordinary‘ consumer behaviour of exclusivity being used to help
reinforce the behaviour the marketer needs. Companies try to make readily available
mass consumer products appear special. Coca Cola often produces limited edition cans
for its products. These are seen as more desirable that the ‗normal‘ ones. Nike can
attract a premium for ‗short runs‘ of trainers.
China figurines or other ‗collectables‘ like those produced by Franklin Mint will sell more
quickly if promoted as a limited edition. And fine artists will often number a line of prints
as 1/500 or 57/100 or whatever. These small quantities then attract a premium.
Even if there is an absolute limit on numbers another way to create the impression of
scarcity is to empathise the time-limited nature of something. In stamp collecting first
day covers- only normally available on a specific day- attract special excitement and are
perceived to have a special value. Normally the day of issue is not central to the stamp
so it is an entirely ‗manufactured‘ frisson.
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Functions of Leaders
The functional style places more importance on behaviors that get things done rather
than assigning a formal leadership role.
1. Priority on needs
The basic notion of functional leadership is that any group will have three primary needs
These three needs are the basic building blocks that form functional leadership. When
these needs are met, goals are achieved and the organization progresses.
2. Focus on actions
The functional leadership theory has been developed after studying the behaviors of
successful leaders, and identifying the particular actions that led to successful results.
Here, the focus is more on what the leader does than on who the leader is.
3. Result oriented
In functional leadership, what matters is whether things get done. The leadership role is
fluid and the primary emphasis is on ensuring behaviors that achieve a particular result.
It isn‘t much use getting applauded on a great leadership style if nobody does anything.
The functional leadership approach maintains that it is not necessary for a group to
have only one particular member who performs all the leadership functions. The idea is
that any group member can perform these actions, which means that anyone can be the
leader. It doesn‘t matter who does what, what matters is whether the task gets done.
Therefore, the leadership role itself is quite flexible.
Under the functional leadership style where the actions of each individual matter, it is of
vital importance that each member knows exactly how he or she contributes to the
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group to achieve its goals. Everyone has to know what they‘re supposed to do, and the
leader is responsible to ensure clear understanding of each individual‘s desired
behaviors.
6. Organizing
In order for the group to effectively perform their task, the functional leader must ensure
that the group is properly organized. Not only should each member have a clear
understanding of what is expected of them, but the group itself should be properly
structured to facilitate their actions.
7. Motivation
The functional leader must ensure that every individual in the group feels sufficiently
appreciated for their efforts and actions. In the absence of motivation or clear
communication about how their actions contribute to the group‘s success, there‘s a high
chance that members might get dejected and leave the group.
8. Controlling
Functional leadership involves a great deal of controlling exactly what happens in the
team. Resources are usually limited in any situation, and the leader must control what
happens by being efficient about getting the maximum results from the available
resources.
9. Setting an example
People tend to observe their leaders and emulate their behaviors. Functional leaders
set an example by doing the things that they want their followers to do.
10. Guidance
Team members want to know how they are doing, and whether they need to change
anything. They need feedback about their jobs and how they can improve. One of the
important tasks of a functional leader is to provide appropriate guidance to all members.
The functional style assumes that leadership is defined by the behavior of the leader
and its corresponding effect on the group. Leadership is something that any individual
provides to a group to meet certain needs.
Leadership Style
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situations. It is particularly essential as in a dynamic corporate environment; lows
outweigh the highs.
In this process of guiding a team through, there are many leadership styles a leader
may choose. Here, it is not a matter of right or wrong; it is just a matter of what works
best for oneself.
These attributes play a significant role in a team's success. They help ascertain how to
communicate better, motivate your team, handle challenges, pick a management
approach, etc.
Thus, it is essential to know which leadership style suits you and your team the best.
Here are a few of the leadership style types to consider and their characteristics, along
with pros, and cons.
Leaderships Styles are how a leader guides a team through different stages. These
styles dictate how a leader implements plans, provides guidance, overlooks work, etc.
Based on different personalities and methods, there are many different styles.
In this process of guiding a team through, there are many leadership styles a leader
may choose. Here, it is not a matter of right or wrong; it is just a matter of what works
best for oneself.
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These attributes play a significant role in a team's success. They help ascertain how to
communicate better, motivate your team, handle challenges, pick a management
approach, etc.
Thus, it is essential to know which leadership style suits you and your team the best.
Here are a few of the leadership style types to consider and their characteristics, along
with pros, and cons.
Leaderships Styles are how a leader guides a team through different stages. These
styles dictate how a leader implements plans, provides guidance, overlooks work, etc.
Based on different personalities and methods, there are many different styles.
1. Transactional Leadership
2. Transformational Leadership
3. Servant Leadership
4. Democratic Leadership
5. Autocratic Leadership
7. Bureaucratic Leadership
8. Charismatic Leadership
9. Coaching Leadership
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Now, let‘s go ahead in understanding in detail about the characteristics, pros and cons.
As the name suggests, this is strictly a give and take mechanism on leadership. It is
through dishing out tasks with rewards and penalties attached to them.
This leadership style is a superb source of motivation to get things done and keep the
workforce happy at the same time. It is also an excellent way for the fair rewards and
recognition program of a company and is highly directive.
Cons:
Because this style is traditional in its set guidelines, it may halt innovation and creativity.
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This leadership style rides on the concept of transforming existing processes into
something better. Individuals following this style are always on the lookout for
innovations to bring into the business processes.
Transformational leaders inspire and empower employees to better themselves and the
company. Unlike transactional style, this promotes and gives total autonomy to let the
employees‘ creative juices flow.
The leaders of this style are great visionaries in their field. Due to their desire to seek
innovations, they are often the pioneers of the different industries.
This style relies on better workplace communication. In this form of leadership, there
occurs an impeccable example of communication. It is because this type depends on
finding better options through brainstorming and giving equal importance to all.
Transformational leadership is also an excellent way of engaging workers. It has
positive effects on employee input, career development, employee satisfaction, etc.
There is also a certain appetite for risk in this leadership style type. This is because
leaders are always on the lookout for better ways. It means going out of one's comfort
zone.
Pros:
This style encourages a high level of trust in the workforce‘s' abilities and helps them
come up with new ideas towards a common goal. Creativity is let loose in
transformational leadership.
Cons:
Since this style is always on the lookout for better ways, things may get unstable. It can
result in confusion in the processes and among employees.
The servant leadership model runs on the motto of serving others. Rather than leading
a workforce, individuals think of ways on how to make things better for their workforce.
The servant leaders operate on the idea of service first, lead later.
This style is a favorite among the workers, and works wonders for employee
morale and employee experience.
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Characteristics of Servant Leadership Style
Servant leadership always has a high degree of empathy. Their leaders can relate to
the hardships of a team and work out ways to solve it. For this matter alone, it is one of
the most favorites of all workers.
This style has a high degree of awareness toward a team. Leaders of this category are
great listeners, which gives them a better understanding of their team. It helps to lead
the group towards greater success.
Leaders of this genre can also be very persuasive at times. It is because these leaders
almost always have the approval of the team and the followers.
This leadership style is a great approach for community building within the team. Here,
leaders can bring people together towards a common goal.
Pros:
This leadership style type creates a fair increase in employee loyalty and engagement.
It also helps in strengthening the employer-employee relationship and trust among the
parties.
Cons:
A servant leadership model can be tough at times. This is because it always requires
thinking about others rather than oneself. This selfless trait of always putting others'
needs ahead of one‘s own is not easy at all times.
Just like the name suggests, this style focuses on giving a voice to everyone concerned.
An individual following this style takes into account the opinions of all those matters.
This process is put into effect regardless of the status and ranks of individuals.
This leadership style emphasizes the aspect of equality in the workplace. Followers of
this style take all inputs into account, irrespective of ranks.
There is a free flow of opinions in this management style. It acknowledges and
discusses views on all critical issues of the business.
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There is a high degree of creativity in a democratic style of management. It leads to a
healthy exchange of ideas that paves the way for new ideas and innovation.
These traits above mean that there is a scope of better engagement in the democratic
leadership style.
Pros:
Democratic leadership style promotes empowerment, creativity, participation, and
innovation in the workplace. This helps with the job satisfaction level of the employees.
Cons:
This leadership style can be lengthy at times since the decision-making process
includes the opinions of all concerned. The processes involved in getting these inputs
can also be costly at times.
In simple terms, this style is the complete opposite of the democratic leadership model.
Leaders following this regime seem to be rigid in their ways with no space for change.
Here, the individuals assume all the power to themselves and make the decisions as
they see fit.
An autocratic leader gives out instructions on the tasks a team needs to do and how.
This style limits the creativity of the working staff to try new things.
The window for creativity in this style of management is very minimal. It is because all
the decisions are made by one person in power only. This harms engagement, as well.
It provides leaders with a greater power to operate in ways they see fit. This can be
helpful in some critical situations, but this can also give rise to micromanagement.
There occurs a colossal lack of trust in this leadership style on the subordinates. It is
why the power to make all the decisions lie in the hands of the leader. This harms
employee loyalty to a vast extent.
Due to its lack of inputs from the team, this leadership style also suffers from a lack of
creativity.
Pros:
The decisions in this style take less time since it is just one person's opinion. Also,
because this model comes with clear instructions, it cuts out the chances of confusion.
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Cons:
In autocratic leadership, employees feel ignored and unheard of their opinions. This
lessens their employee engagement level.
To balance out the lack of participation, leaders in this concept provide its team with the
resources and tools needed to work well.
Cons:
If a particular team isn't well versed with itself, this model can be chaotic initially.
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7. Bureaucratic Leadership Style
This leadership style operates with a series of rigid rules. Bureaucratic leaders always
follow a specific command chain and stick to those at all times. The government of a
nation mostly follows a leadership of such form.
This management style follows a proper chain of command in its working. It helps
ensure structure in the organization.
A management approach of this sort is also very well-organized. Leaders here delegate
the tasks as per ranks for better results and accountability.
Bureaucratic leaders are very strong-minded and courageous in their approach. It is
because the organizations in these situations are pretty huge. In this scenario, it
requires a strong leader leading from the front.
Because of its rigid rules and chain of command, creativity does get lost at times.
Pros:
Bureaucratic leadership is like a well-oiled machine where it follows the same regime
everything. This eliminates confusion and maintains consistency all the way.
Cons:
A leadership style, as such, can be very rigid at times. This rigidity restricts the level of
creativity in the process.
The leaders of this style are masters of communication, persuasion with a sense of
charm. Charismatic leaders are a valuable asset in the growth of a company and facing
a crisis. By forming a deep understanding of people around, they can tilt things in their
favor easily.
The leaders of this leadership style are very confident in their approach. They rarely
have any self-doubt about their decisions and possess a very influential personality.
This leadership style also embodies excellent communication. It helps leaders be aware
of a team and find solutions to answers. This also allows the leaders of this genre to be
very persuasive in their management style.
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The charismatic leadership style also builds some of the great visionaries in the
industry. These leaders' will to look forward and derive results with their commanding
personality often sets them apart.
Employees of an organization can feel comfortable in a charismatic approach. It is
because leaders of this style are great from a worker's viewpoint. They are great
listeners, risk-takers, have an innovative approach, etc.
Pros:
Charismatic leadership promotes creativity, teamwork, employee motivation, and a
great sense of unity.
Cons:
Sometimes, leaders of this form can be self-centered and get an acknowledgment of
being shallow.
As the name suggests, this leadership style stands its ground by mentoring workers.
They are usually experts in their field of interest and are great communicators. This
makes them perfect for coaching the workers towards greatness.
Leadership Development
Leadership development refers to activities that improve the skills, abilities and
confidence of leaders. Programmes vary massively in complexity, cost and style of
teaching. Coaching and mentoring are two forms of development often used to guide
and develop leaders.
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According to Baldwin and Ford (1988), the success of leadership development is
influenced heavily by the quality of the programme, level of support and acceptance
from superiors, and the characteristics/learning style of the person being developed.
Communication:
Communication Process
We will now learn about the different elements in the process of communication.
Sender
The very foundation of communication process is laid by the person who transmits or
sends the message. He is the sender of the message which may be a thought, idea, a
picture, symbol, report or an order and postures and gestures, even a momentary
smile. The sender is therefore the initiator of the message that need to be transmitted.
After having generated the idea, information etc. the sender encodes it in such a
manner that can be well-understood by the receiver.
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Message
Message is referred to as the information conveyed by words as in speech and write-
ups, signs, pictures or symbols depending upon the situation and the nature and
importance of information desired to be sent. Message is the heart of communication. It
is the content the sender wants to covey to the receiver. It can be verbal both written
and spoken; or non-verbal i.e. pictorial or symbolic, etc.
Encoding
Encoding is putting the targeted message into appropriate medium which may be
verbal or non-verbal depending upon the situation, time, space and nature of the
message to be sent. The sender puts the message into a series of symbols, pictures or
words which will be communicated to the intended receiver. Encoding is an important
step in the communication process as wrong and inappropriate encoding may defeat
the true intent of the communication process.
Channel
Channel(s) refers to the way or mode the message flows or is transmitted through. The
message is transmitted over a channel that links the sender with the receiver. The
message may be oral or written and it may be transmitted through a memorandum, a
computer, telephone, cell phone, apps or televisions.
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Since each channel has its advantages and disadvantages, the choice of proper
selection of the channel is paramount for effective communication.
Receiver
Receiver is the person or group who the message is meant for. He may be a listener, a
reader or a viewer. Any negligence on the part of the receiver may make the
communication ineffective. The receiver needs to comprehend the message sent in the
best possible manner such that the true intent of the communication is attained. The
extent to which the receiver decodes the message depends on his/her knowledge of
the subject matter of the message, experience, trust and relationship with the sender.
The receiver is as significant a factor in communication process as the sender is. It is
the other end of the process. The receiver should be in fit condition to receive the
message, that is, he/she should have channel of communication active and should not
be preoccupied with other thoughts that might cause him/her to pay insufficient
attention to the message.
Decoding
Decoding refers to interpreting or converting the sent message into intelligible
language. It simply means comprehending the message. The receiver after receiving
the message interprets it and tries to understand it in the best possible manner.
Feedback
Feedback is the ultimate aspect of communication process. It refers to the response of
the receiver as to the message sent to him/her by the sender. Feedback is necessary
to ensure that the message has been effectively encoded, sent, decoded and
comprehended.
It is the final step of the communication process and establishes that the receiver has
received the message in its letter and spirit. In other words, the receiver has correctly
interpreted the message as it was intended by the sender. It is instrumental to make
communication effective and purposeful.
Consider the following points related to the feedback involved in the process of
communication −
It enhances the effectiveness of the communication as it permits the sender to
know the efficacy of his message.
It enables the sender to know if his/her message has been properly
comprehended.
The analysis of feedbacks helps improve future messages. Feedback, like the
message, can be verbal or nonverbal and transmitted through carefully chosen
channel of communication.
We can represent the above steps in a model as the model of communication
process.
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Types of Feedback
Kevin Eujeberry, the world famous leadership exponent mentioned the four types of
feedback. The types are as follows −
Negative Feedback or corrective comments about past behavior
Positive Feedback or affirming comments about future behavior
Negative feedforward or corrective comments about future behavior
Positive feedforward or affirming comments about future behavior
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The process of communication, however, is not as smooth or barrier-free as it seems.
From its transmission to receipt, the message may get interfered or disturbed with at
any stage by many factors which are known as barriers to effective communication.
One of the factors is poor choice of communication method. In addition to a poor
choice of communication method, other barriers to effective communication include
noise and other physical distractions, language problems, and failure to recognize
nonverbal signals. We will discuss these barriers of communication in a subsequent
chapter.
Summary
Importance of Communication
Managers devote a great part of their time in communication. They generally devote
approximately 6 hours per day in communicating. They spend great time on face to face
or telephonic communication with their superiors, subordinates, colleagues, customers
or suppliers. Managers also use Written Communication in form of letters, reports or
memos wherever oral communication is not feasible.
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Communication Flows in an Organization
1. Downward
2. Upward
3. Lateral
4. Diagonal
5. External
The subordinates also use upward communication to tell how well they have
understood the downward communication. It can also be used by the employees
to share their views and ideas and to participate in the decision-making process.
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3. Lateral / Horizontal Communication:
It is time saving.
4. Diagonal Communication:
5. External Communication:
Communication that takes place between a manager and external groups such
as - suppliers, vendors, banks, financial institutes etc. For instance - To raise
capital the Managing director would interact with the Bank Manager.
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Communication Channels
Tip
TV, radio and loud speakers all fall within the broadcast media communication channel.
These types of media should be used when addressing a mass audience. Businesses
seeking to notify customers of a new product may advertise or do promotions using a
broadcast channel. Similarly, a CEO may do a global company address by having a
television feed broadcast across global sites. When a message intended for a mass
audience can be enhanced by being presented in a visual or auditory format, a
broadcast channel should be used.
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Electronic Communications Channels
Written communication should be used when a message that does not require
interaction needs to be communicated to an employee or group. Policies, letters,
memos, manuals, notices and announcements are all messages that work well for this
channel. Recipients may follow up through an electronic or face-to-face channel if
questions arise about a written message.
Before anything meaningful can be said about the barriers that exist in effective
communication, it‘s important to have a good understanding of the kind of
communication that occurs in an organization.
Formal Communication
There are three kinds of formal communication that take place within an organization.
Vertical Communication
This is where the communication either moves downward from the executives to the
managers to the supervisors to the employees or upward from the employees all the
way to the executives. This is why it is known as vertical communication. It is an
important kind of communication, because it gives the employees an opportunity to
have a say in what happens in the business. For example, in a factory, if employees feel
like current manufacturing methods aren‘t very efficient, and have suggestions for better
methods, they could pass the word on to supervisors, who will pass it on to managers,
and so on.
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Horizontal Communication
Horizontal channels are yet another way for communication to flow in an organization.
Horizontal communication occurs when two parts of an organization which are on the
same level of communication with each other. These parts could be individuals, teams,
or entire departments.
Diagonal Communication
This kind of communication flies in the face of traditional organizational hierarchy and
ensures that employees on one level and work area can talk to employees in a different
work area on a completely different level. Employees are freely able to communicate
with other employees, without having to care about their rank or department.
Informal Communication
This kind of information is all about using channels that aren‘t typically used in formal
communication. The key word in informal communication is ―Casual." Everything is
casual and nothing follows any predetermined rules. It is used to help the members of
the organization to socialize. It is typically characterized by face to face conversations,
the use of slang, and sometimes even profanity. Such language typically occurs orally
and makes extensive use of gestures.
Verbal Communication
Verbal communication is simply communication that uses speech. It‘s all about people
talking and doesn‘t involve the written word, which falls under a different kind of
communication.
Verbal communication involves language that is understood by all the parties that are
involved. However, that doesn‘t mean that there is always understanding between the
parties. People color the information they receive in verbal communication with their
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own preconceived notions, emotions, and attitudes and so this is a barrier to effective
communication.
Non-Verbal Communication
This is a form of communication that doesn‘t use words at all. Because of its nature, it
can be quite complicated and difficult to understand. Wordless messages can be sent
by facial expression, tone of voice, posture, body language, gesture and so on.
Sometimes, silence is a form of communication and can say more than words ever will.
Because of how complex this form of communication can be, it doesn‘t have a high
success rate and requires some experience and expertise to decode.
No matter what kind of communication you are using, you will face some barriers to
effectively getting your message across to the recipient. These barriers can be
categorized into four main types of constraints to effective communication: Physical,
psychological, organizational, as well as semantic barriers.
Physical Barriers
When you choose the channel to overcome a physical barrier, you should have an
intimate understanding of the advantages and disadvantages of that communication
channel.
Psychological Barriers
This barrier is caused by the sender and the receiver, and is a result of the respective
psychological states of the communicators. Just as there can be physical distance
between communicators, so can there be psychological distance. This can cause the
communicators to filter out parts of the messages they receive or to add to the
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messages, creating misunderstandings in the process. They might not retain what they
hear, and they might not pay attention, making the communication considerably less
effective than it would otherwise have been.
Organizational Barriers
Semantic Barriers
The study of semantics is the study of symbols, signs, and their meanings, as used in
communication. Semantic barriers occur when the symbols used in a message aren‘t
well understood by the recipient or are understood in a way that is difficult from what
was intended. The figures, signs, and words used to communicate can only be
interpreted by the receiver, using the receiver's knowledge and experience; in some
situations, this process may create doubt. In other words, when the language you use in
your message isn‘t simple enough for the receiver to understand the message, then you
should that expect some misunderstandings may occur. Many people can interpret the
same message in ways that differ from each other, because the interpretations are
based on the recipients' level of education, knowledge, background, as well as on their
experience.
Commit to Listening
When communicating, those involved in the communication are too often more
concerned about what they have to say, than about what they are hearing. A focus on
active listening makes a difference and can help business communicators notice
nonverbal cues that may be conveying different messages. For instance, in a meeting, a
person who is saying, "Yes, I agree," may be shaking his head slightly, sending a mixed
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message. Being alert to these signals provides opportunities for clarification that can
lead to better understanding.
Follow Up
Barriers to Communication
Everything you need to know about the different barriers of communication. There are
many communication barriers which tend to distort the messages that pass between
sender and receiver. It leads to misunderstanding and conflict among the organisational
members.
Managers frequently cite that communication breakdown is one of their most important
problems. However, communication problems are often symptoms of more deeply
rooted problems. For example, poor planning may be the cause of uncertainty about the
direction of the firm.
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Thus, the perceptive manager will look for the causes of communication problems
instead of just dealing with the symptoms. Barriers can exist in the sender, in the
transmission of the message, in the receiver, or in the feedback.
The different barriers of communication are:-
1. Semantic Barriers
2. Psychological Barriers
3. Organisational Barriers
4. Personal Barriers
5. Mechanical Barriers
6. Status Barriers
7. Perceptual Barriers
8. Filtering of Information
9. Specialisation
10. Pressure of Time
11. Unclarified Assumption
12. Inattention.
1. Semantic barriers,
2. Psychological barriers,
3. Organisational barriers,
4. Personal barriers, and
5. Mechanical barriers.
1. Semantic Barriers:
This denotes barriers of language and symbols and their interpretation. Every language
consists of symbols used to transmit meaning from one person to another. Even the
Morse code and mathematical symbols are used in a language for communication
purpose. The barriers are from the linguistic capability of the individual involved in the
communication.
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The following are the different types of semantic barriers:
i. Poor Quality of Message:
When message is received from the superior to the subordinate, the individual receiving
it must be able to translate it to different categories of subordinates having the
constraints of level of understanding and their IQ. It does require proper interpretation of
the message received to help disseminate the information to the subordinates.
In all the messages, there are certain ideas, which need to be understood correctly. In
other words, the meaning between the lines of the message must be well-perceived by
the receiver. If it is not, there is every likelihood of the message being misunderstood
leading to confusion.
2. Psychological Barriers:
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Following are psychological barriers:
i. Premature Evaluation:
When communication passes through various hands and levels in an organisation, the
transmission of the message by various persons tends to become inaccurate or corrupt.
This happens in written as well as vocal communication. In the latter, the receiver may
not retain the message as it was transmitted to him due to poor retention capability, thus
leading to confusion at a later stage.
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vi. Failure to Communicate:
3. Organisational Barriers:
This depends upon the general organisational policy governing the communication
network of the organisation. Such policy might be a written text explaining various
aspects of communication, especially the upward, downward and lateral since it is
desirable to bring an effective communication flow in the organisation.
Normally, the information is to be passed to higher ups through proper channel. This
gets delayed while passing through the hierarchical ladder. Instructions in general for
passing messages must be given. Also, specific instructions for handling important
messages need to be explained to all in order to avoid delays.
Large organisations, where there are a number of levels in managerial posts for
communication may get distorted. This takes place due to censoring of the message
when transmitted in the upward direction; since people are usually hesitant to inform the
superiors about the adverse aspects.
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4. Personal Barriers:
i. Attitude of Superiors:
Attitude of the superiors play as vital role in the communication process; whether it is
upward or downward or in any other direction. Therefore, the attitude of superior, either
favourable or unfavourable affects the flow of communication, i.e., from superior to
subordinate and vice versa.
Superiors instruct their subordinates to follow the proper channel, while communicating.
They do not want that a subordinate bypasses them and goes direct to the next higher
authority. They always want to be in touch with the communication process, so as to
help them to know what is happening in their jurisdiction.
During emergency situation, there may be a need to bypass the superior; however, the
superior may not like it. He may prevent it and instruct the subordinates to keep him in
the picture with whatever information / message being passed to higher up, as and
when occasion arises.
A superior feels that there is no necessity to communicate him each and every matter,
as he is always preoccupied with his own work. Supervisor‘s involvement with their
subordinate is a major requirement for efficiency, which many superiors ignore due to
lack of time as an excuse.
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v. Lack of Awareness:
This happens to be a cause with subordinates not to communicate with their superiors.
Subordinates show unwillingness to convey the superior certain information; since such
part of information may have an adverse effect on them. Thus, the hesitation to
communicate takes place.
5. Mechanical Barriers:
Mechanical barriers are another group of factors putting barriers in the smooth flow of
communication.
They are:
The arrangements include proper coding and decoding facilities. This is normally carried
out through coding machines and trained staff to operate such machines. When
important information is sent under different classification, top secret, secret,
confidential, etc., adequate care has to be taken in its transmission. It should not be
leaked out to unauthorised persons. Safety and security of classified information need
to be handled by responsible staff.
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mail, etc., are required. The infrastructural facilities to accommodate these systems are
very essential for effective communication. In their absence there can be various
obstacles in the transmission of information.
There must be defined procedures for docketing of incoming and outgoing messages
properly maintained in an information centre. Also, proper arrangements to allot priority
messages like immediate, most immediate, etc., and their subsequent transmissions, if
all these are not looked into, the very purpose of communicating will be defeated.
i. Semantic barriers,
ii. Psychological barriers,
iii. Organisational barriers and
iv. Personal barriers.
i. Semantic Barriers:
Semantics is the study of right choice of words. The semantic network of sender may be
different from that of the receiver and therefore, the message may not be understood as
intended.
The word ‗profits‘ has different meaning — pre-tax profits or post-tax profits, fixed
amount of profit or rate of return.
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(a) Symbols with different meanings – A word can have different meaning in different
contexts. Wrong perception leads to communication problems.
(d) Technical Jargon – Sometimes people may not understand the actual meaning of
technical jargon or language used by specialists.
(e) Faulty translations – Sometimes mistakes may creep in if translator who is not
proficient in both English and Hindi is involved in translating the communication.
(f) Body language and gesture decoding – Communication may be wrongly perceived if
there is no match between what is said and what is expressed in body movements.
(b) Loss by transmission and poor retention – Successive transmission of the message
results in inaccurate information. Usually people cannot retain the information for long
time if they are inattentive or not interested.
These are:
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(b) Status – A status conscious manager may not allow his subordinates to express
their feelings freely.
(c) Rules and regulations – Rigid rules and cumbersome procedures may be a hurdle to
communication.
These are:
(b) Lack of confidence of superior on his subordinates – Superiors may not seek advice
or opinions of their subordinates if they do not have confidence on the competency of
their subordinates.
(d) Lack of proper incentives – Subordinates may not take initiative to communicate if
there is no motivation or incentive for communication.
(b) Consult others before communicating – A manager while making plan for
communication should encourage participation of subordinates which will ensure their
support and cooperation.
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(c) Communicate according to the needs of receiver – First of all, the understanding
level of employees should be considered and then adjustments be made in
communication by the manager.
(d) Be aware of languages, tone and content of message – Language, tone and content
of message should be so adjusted according to the situation that it is easily understood
by the receiver and stimulates them.
(e) Convey things of help and value to listeners – To get good response from the
subordinates, it should be ensured that the message relates to their interests.
(f) Ensure feedback – For success of communication, response of the listeners should
be encouraged by the manager.
(i) Be a good listener – Lot of problems can be solved due to attentive listening quality
of the manager.
Managers frequently cite that communication breakdown is one of their most important
problems. However, communication problems are often symptoms of more deeply
rooted problems. For example, poor planning may be the cause of uncertainty about the
direction of the firm.
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Specific communication barriers are discussed here:
2. Distraction
1. Physical Barriers
2. Psychological Barriers:
3. Semantics Barriers.
1. Physical Barriers:
i. Distance – When two persons are at a distance apart, one cannot hear other‘s voice
clearly. The poor person in Chennai and poor person in New-york will not contact each
other through telephone with the fear of telephone bill.
ii. Lack of time – If the superior is very much busy, then he will not have time to meet
subordinates due to lack of time.
iii. Noise – Too much noise will make men not able to hear the news.
iv. External disruptions – High Temperature and high humidity make men uneasy and
so they may not be in a good mood to get information.
2. Psychological Barriers:
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ii. In upward communication, subordinate may hesitate to tell his superior unfavorable
news, because he fears it may affect his relationship with his superior.
iii. Prejudices and biased- A worker cannot convince the biased supervisor.
ix. Fear.
3. Semantic Barriers:
Words and symbols seldom have a single meaning. Words can be conveniently
interpreted by the listener or reader. Symbols usually have a variety of meanings. We
have to choose one meaning from among the many. Faulty expressions and faulty
listening are also considered as semantic barriers.
We can see the following example for understanding the semantic barriers. Rama and
Seetha saw the pet animals when they were playing in the park. In this sentence, there
is a confusion. Who played in the ground? Whether Rama and Seetha played or
Animals played? This type of confusion will be the barrier for communication. This type
of barriers (confusion in word usage) should be avoided.
There are many communication barriers which tend to distort the messages that pass
between sender and receiver. It leads to misunderstanding and conflict among the
organisational members.
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The organisation hierarchy has a significant influence on the ability of the members of
the organisation to communicate efficiently and with ease. The information received
from top may not reach the bottom in the same shape.
Sometimes the managers divert the information meant for one person or group to
another and also color the information. If there are no effective prescribed medium to
communicate with each other‘s then there is a chance of barriers to effective
communication.
(a) Low status and high status member – The low status members communicate more
irrelevant information than high status members.
(b) High status persons appear to be restrained from communicating criticism, negative
attitudes about their own job those of lower status.
(c) Communication with high status persons – The trend to serve as a substitute for
upward locomotion on the part of low status persons who have, little or no possibility of
real upward locomotion. The organisational interaction and communication are thus
influenced by the status and the role expectations.
(d) Poor Supervision – when a supervisor suspects his subordinates or acts as a self-
appointed censor or listens his subordinates with close minds, the communication is
blocked.
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(iv) Filtering of Information:
The any attempt to alter and colour information to present a more favorable impression
is called filtering. The subordinates pass on only that information to their supervisors
which will project them in a favorable light which the superior wants to hear. This
distortion of communication becomes more sever when an employee is due for
promotion or wage increase.
(v) Specialisation:
It tends to separate people even when they work side by side. Different functions
special interests and job jargon can make people feel that they line indifferent worlds.
The sectional interest and departmental loyalty prevent employees from looking at
organisational problems in a broader perspective and prevent them from listening to
other‘s point of view.
The managers particularly those at higher work under great pressure of time and they
cannot afford to interact and communicate frequently with their subordinates. Such time
pressure can create communication problem between them.
Semantic refers to the relationship of signs to their reference. It is the study of meaning
in language. The words usually have a variety of meanings and the sender and the
receiver have to choose one meaning from among many. The Oxford English Dictionary
show an average of over 25 different meanings for each of the 500 most frequently
used words in the English language. When two individuals attach different meanings to
a word, a breakdown in communication can occur. The use of jargon can also create a
barrier to communication.
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The Pictures are visual aids worth thousand words. An organisation uses extensive use
of picture like blueprints, charts, maps, and films. A viewer may come to know the whole
story when he sees themes. Sometimes picture may create confusion in the mind of an
observer.
(x) Inattention:
Sometime the persons do not pay adequate attention to the message. They do not
listen the spoken words attentively. The communication has no impact on those who are
unwilling to listen. Inattention arises due to lack of interest, over stimulation and time
pressure.
Two-way traffic means that the effective communication system provides the liberty to
both parties management and worker to convey their ideas, facts, opinions and
thoughts etc., to other party.
This two way traffic will be advantageous to both. Sometimes one party had a bad
image of the communicator and he may carry the version of the message according to
the image of the communicator in the mind of recipient. This image can be erased
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through proper communication from the other side.
Thus, the establishment of two-way traffic will improve the morale of the workers on the
one hand because they have their say in the management and it will improve the
working of the organisation on the other hand. It is very essential to two- way
communication, i.e., down ward from the management to workers and upward from the
workers to the management. In this way, we can say that the management is composed
of two- way traffic communication.
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UNIT-V
Controlling:
Concept
Controlling is one of the important functions of a manager. In order to seek planned results
from the subordinates, a manager needs to exercise effective control over the activities of
the subordinates. In other words, the meaning of controlling function can be defined as
ensuring that activities in an organization are performed as per the plans. Controlling also
ensures that an organization‘s resources are being used effectively & efficiently for the
achievement of predetermined goals.
This process helps in the formulation of future plans in light of the problems that were
identified &, thus, helps in better planning in the future periods. So from the meaning of
controlling we understand it not only completes the management process but also
improves planning in the next cycle.
Importance of Controlling
After the meaning of control, let us see its importance. Control is an indispensable function
of management without which the controlling function in an organization cannot be
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accomplished and the best of plans which can be executed can go away. A good control
system helps an organization in the following ways:
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one another. This ensures that overall organizational objectives are accomplished in an
overall manner.
Types of Control
Management theorists and experts have devised several techniques over the years. They
often divide these techniques into two categories: traditional and modern. Traditional types
of techniques generally focus on non-scientific methods. On the other hand, modern
techniques find their sources in scientific methods which can be more accurate.
Budgetary Control
Standard Costing
Internal Audit
Break-Even Analysis
Statistical Control
Despite the emergence of modern techniques, traditional practices are still widely in use
these days. Let us discuss them one by one.
Budgetary Control
Budgeting simply means showcasing plans and expected results using numerical
information. As a corollary to this, budgetary control means controlling
regular operations of an organization for executing budgets.
A budget basically helps in understanding and expressing expected results of projects and
tasks in numerical form. For example, the amounts of sales, production output, machine
hours, etc. can be seen in budgets.
There can be several types of budgets depending on the kind of data they aim to project.
For example, a sale budget explains selling and distribution targets. Similarly, there can
also be budgets for purchase, production, capital expenditure, cash, etc.
The main aim of budgetary control is to regulate the activity of an organization using
budgeting. This process firstly requires managers to determine what objectives they wish
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to achieve from a particular activity. After that, they have to lay down the exact course of
action that they will follow for weeks and months.
Next, they will translate these expected results into monetary and numerical terms, i.e.
under a budget. Finally, managers will compare actual performances with their budgets
and take corrective measures if necessary. This is exactly how the process of budgetary
control works.
Standard Costing
Standard costing is similar to budgeting in the way that it relies on numerical figures. The
difference between the two, however, is that standard costing relies on standard and
regular/recurring costs.
Under this technique, managers record their costs and expenses for every activity and
compare them with standard costs. This controlling technique basically helps in realizing
which activity is profitable and which one is not.
Internal Audit
Another popular traditional type of control technique is internal auditing. This process
requires internal auditors to appraise themselves of the operations of an organization.
Generally, the scope of an internal audit is narrow and it relates to financial and accounting
activities. In modern times, however, managers use it to regulate several other tasks.
For example, it can also cover policies, procedures, methods, and management of an
organization. Results of such audits can, consequently, help managers take corrective
action for controlling.
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Break-Even Analysis
Break-even analysis shows the point at which a business neither earns profits nor incurs
losses. This can be in the form of sale output, production volume, the price of products,
etc.
Managers often use break-even analysis to determine the minimum level of results they
must achieve for an activity. Any number that goes below the break-even point triggers
corrective measures for control.
Statistical Control
The use of statistical tools is a great way to understand an organization‘s tasks effectively
and efficiently. They help in showing averages, percentages, and ratios using
comprehensible graphs and charts.
Managers often use pie charts and graphs to depict their sales, production, profits,
productivity, etc. Such tools have always been popular traditional control techniques.
Question: Consider the following statements and mention which traditional type of
control technique they relate to.
(4) This technique triggers corrective measures beyond a certain minimum performance
threshold.
(5) The scope of this technique was previously narrow but has become wider and diverse
these days.
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Answers:
Methods:
Types of control:
Pre-control
Pre –control system/ Feed forward controls: sometimes called preliminary or preventive
controls, attempt to identify and prevent deviations in the standards before they occur.
Per- control controls focus on human, material, and financial resources within the
organization. These controls are evident in the selection and hiring of new employees.
For example, organizations attempt to improve the likelihood that employees will
perform up to standards by identifying the necessary job skills and by using tests and
other screening devices to hire people with those skills.
Pre-control focuses on the regulation of inputs to ensure that they meet the standards
necessary for the transformation process.
Pre-control controls are desirable because they allow management to prevent problems
rather than having to cure them later. Unfortunately, these controls require timely and
accurate information that is often difficult to develop. Pre-control control also is
sometimes called preliminary control, Feed forward, preventive control, or steering
control.
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Concurrent Control
Concurrent control takes place while an activity is in progress. It involves the regulation
of ongoing activities that are part of transformation process to ensure that they conform
to organizational standards. Concurrent control is designed to ensure that employee
work activities produce the correct results.
Post-control
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An Integrated Control System
Integrated process control system of an oil field includes control systems of individual
process facilities (oil and gas production shops, formation pressure maintenance,
oil/gas transportation, well pad facilities – central oil gathering plant, operations base,
gas turbine power station, etc.)
All process control systems are independent full-function systems and are based on
solutions that enable integration of these systems into the single system of oil
production, treatment and transportation.
Main data transfer channels serve as the single basis for integration of automated
process control systems.
All subsystems of a process control system are based on common approach ensuring
uniformity of technical solutions. The systems are created on the basis of standard
hardware/software and open technologies that provide state-of-the-art solution of
automation tasks, integration with allied systems and local subsystems, scalability and
protection of investments during further operation and retrofitting.
An integrated process control system of an oil field comprises the following levels of
control:
Upper level – level of supervisory monitoring and control. This level deals with
acquisition, processing and transfer of information related to operation of all field
facilities and supervisory control performed from the central operator room of the
field. Some functions of supervisory control are carried out from the central
(remote) office of the company.
Lower level – process equipment. This level is designed for direct interaction with
the process by means of control stations and panels as well as local control
systems located in control points and equipment rooms in close proximity to the
process equipment.
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The Quality Concept Factors affecting Quality
Customer: Product quality to a buyer will refer to its appeal, functionality, durability, and
reliability of a product.
Manufacturer: Quality will be viewed as engineering, the type of raw materials used
and packaging practices used in the production of a specific good.
It is needless to say that it is essential for every company to ensure better quality
products to their consumers who pay for them and expect to receive the best-quality
products. If this satisfaction is not met, competing products may be opted for.
Conformance to standards
Quality of design
Proper storage
Safety
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Skill set, tools, and experience of labor
Storage facilities
Quality planning: Repeated efforts to discover defects and reveal the causes.
Quality control: Controlling production, carrying out repairs and warranty costs through
defect discovery and maintenance.
Quality improvement: This involves public relations and interaction with other
enterprise customer management systems and integration with other enterprises for
recognizing customer complaints reports.
Benefits of QMS
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Industrial influence on quality and standardization
QMS resources
Reducing waste
Preventing mistakes
Lowering costs
Engaging staff
ISO 9001:2015 is the most recognized and implemented quality management system
standard in the world. ISO 9001:2015 specifies the requirements for a QMS that
organizations can use to develop their own programs.
Other standards related to quality management systems include the rest of the ISO
9000 series (including ISO 9000 and ISO 9004), the ISO 14000 series (environmental
management systems), ISO 13485 (quality management systems for medical
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devices), ISO 19011 (auditing management systems), and ISO/TS 16949 (quality
management systems for automotive-related products).
Each element of a quality management system helps achieve the overall goals of
meeting the customers‘ and organization‘s requirements. Quality management systems
should address an organization‘s unique needs; however, the elements all systems
have in common include:
Quality manual
Data management
Internal processes
Improvement opportunities
Quality analysis
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Quality Management System (QMS) Principles
Before establishing a quality management system, your organization must identify and
manage various connected, multi-functional processes to help ensure customer
satisfaction. The QMS design should be influenced by the organization‘s varying
objectives, needs, and products and services provided. This structure is based largely
on the plan-do-check-act (PDCA) cycle and allows for continuous improvement to both
the product and the QMS. The basic steps to implementing a quality management
system are as follows:
1. Design
2. Build
3. Deploy
4. Control
5. Measure
6. Review
7. Improve
The design and build portions serve to develop the structure of a QMS, its processes,
and plans for implementation. Senior management should oversee this portion to
ensure the needs of the organization and the needs of its customers are a driving force
behind the systems development.
Deploy
Deployment is best served in a granular fashion by breaking each process down into
subprocesses and educating staff on documentation, education, training tools, and
metrics. Company intranets are increasingly being used to assist in the deployment of
quality management systems.
Control and measurement are two areas of establishing a QMS that are largely
accomplished through routine, systematic audits of the quality management system.
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The specifics vary greatly from organization to organization depending on size, potential
risk, and environmental impact.
Review and improve detail how the results of an audit are handled. The goals are to
determine the effectiveness and efficiency of each process toward its objectives, to
communicate these findings to the employees, and to develop new best practices and
processes based on the data collected during the audit.
The history of quality can trace its roots back centuries when craftsmen began
organizing into unions called guilds. When the Industrial Revolution came, early quality
management systems were used as standards that controlled product and process
outcomes. As more people had to work together to produce results and production
quantities grew, best practices were needed to ensure quality results.
Eventually, best practices for controlling product and process outcomes were
established and documented. These documented best practices turned into standard
practices for quality management systems.
Quality became increasingly important during World War II, for example, when bullets
made in one state had to work with rifles made in another. The armed forces initially
inspected virtually every unit of product. To simplify the process without sacrificing
safety, the military began to use quality techniques of sampling for inspection, aided by
the publication of military-specification standards and training courses in Walter
Shewhart‘s statistical process control techniques.
The importance of quality only grew after the war. The Japanese enjoyed a quality
revolution, improving their reputation for shoddy exports by fully embracing the input of
American thinkers like Joseph M. Juran and W. Edwards Deming and shifting focus
from inspection to improving all organization processes through the people who used
them. By the 1970s, the U.S. industrial sectors, such as electronics and automobiles,
had been broadsided by Japan‘s high-quality competition.
The American response to the quality revolution in Japan gave birth to the concept
of total quality management (TQM), a method for quality management that emphasized
not only statistics but approaches that embraced the entire organization.
In the late 20th century, independent organizations began producing standards to assist
in the creation and implementation of quality management systems. It is around this
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time that the phrase ―Total Quality Management‖ began to fall out of favor. Because of
the multitude of unique systems that can be applied, the term ―Quality Management
System‖ or ―QMS‖ is preferred.
At the start of the 21st century, QMS had begun to merge with the ideas of sustainability
and transparency, as these themes became increasingly important to consumer
satisfaction. The ISO 19011 audit regime deals with both quality and sustainability and
their integration into organizations.
Total Quality Control is the system which Japan has developed to implement Kaizen or
continuing improvement. Total Quality Control is a forty year plus improvement on the
teachings of Deming, Juran, Feigenbaum, and others who brought the concept of
quality to Japan. Total Quality Control is where the rubber meets the road in terms of
putting quality into place, both within the product and within the system to bring forth,
sustain, and retire the product.
The seven basic (old) tools, the seven management (new) tools, the seven product
planning tools, quality function deployment, and Taguchi methods enhance the
implementation of quality within the Total Quality Control process. In fact, the
unconscious every day use of these tools is a primary factor in the increased
competitive power of TQC over Total Quality Management, the American perception of
implementing quality. This should not be surprising if you reflect on the ascendance of
man over other species of the earth because of the ability to develop and use tools,
including language. Upon examining these tools a fundamental truth emerges. Tools do
not have to be limited to the physical, they can enhance the way we think as well. The
tools of TQC are tools to enhance the power of thought. I thus submit that two primary
measures or quality characteristics for TQM are the degree of use of these tools and the
degree of development and use of new tools for implementing quality. Where is your
organization on a larger the better scale of 0 to 10 with respect to these quality
characteristics?
In support of the above theory Asaka and Ozeki (1990) note that the
Any integrated set of the tools mentioned above is such a technique. This book does an
excellent job of describing graphs, Pareto diagrams, cause and effect diagrams, check
sheets, histograms, stratification, descriptive statistics, process capability, control
charts, scatter diagrams and correlation, affinity diagrams, relations
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diagrams, systematic diagrams, matrix diagrams, and arrow diagrams as they should be
used by "the foreman, group leaders, supervisiors, QC circle leaders, trainers, quality
managers, and other quality leaders ...."
In the foreword to Uchimaru, Okamoto, and Kurahara (1993), David Walden notes that
"TQ[C] phase-in typically progresses through three phases: awareness (recognizing the
need for TQ[C] and learning its basic principles); empowerment (learning the methods
of TQ[C] and developing skill in practicing them); and allignment (harmonizing the
business and TQ[C] goals and practices of the company)." For those skeptics of the
applicability of TQM in technical fields, this excellent case history should remove that
skepticism. For those intent on following the quality path, it will show you the way.
The Total Quality Control Bibliography below is a guide to where we need to go. The
Founders of Quality Bibliography are the thoughts of those who started it all.
Pre-control of Inputs
Fishery resources are limited. Consequently, if fishing pressure is not controlled in some
way, it will increase until at best the fishery just breaks even economically and at worst
the stock collapses through being unable to reproduce itself. Various forms of
management are possible. These are
management of the inputs and outputs to a fishery, the subject of this Chapter.
These are the limits on the total intensity of use of the gear fishers put into the
water in order to catch fish (fishing effort management or input controls) or the
limits on how much fish they can take out of the water (management of catch or
output controls). Collectively we sometimes refer to these as ―direct conservation
measures‖. This is in order to make it clear to Ministers that these measures, like
technical conservation measures, are designed to conserve fish and are not just
a way of slicing up the pie! They are essentially concerned with limiting the
proportion of fish killed each year by fishing, rather than limiting the sizes, areas
and times at which fish are captured.
Conservation of fish stocks is at the heart of the FAO Code of Conduct for Responsible
Fisheries (FAO, 1995a) because if the fish do not exist all other objectives fail (Code of
Conduct, Paragraphs 6.2, 6.3, 7.1.1 and particularly 7.2.1). Hence limiting the intensity
of fishing is a key tool of conservation (Code of Conduct, Paragraphs 7.1.8 and 7.6.1).
Consequently this chapter describes how this can be achieved by limiting inputs (fishing
effort) and outputs (catch) and explains the requirements and the advantages and
problems of these approaches to conservation.
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As defined above, input controls are restrictions put on the intensity of use of gear that
fishers use to catch fish. Most commonly these refer to restrictions on the number and
size of fishing vessels (fishing capacity controls), the amount of time fishing vessels are
allowed to fish (vessel usage controls) or the product of capacity and usage (fishing
effort controls). Often fishing effort is a useful measure of the ability of a fleet to catch a
given proportion of the fish stock each year. When fishing effort increases, all else being
equal, we would expect the proportion of fish caught to increase.
For some fisheries, vessels may deploy a variable amount of fishing gear. In these
cases the definition of fishing effort would also need to contain a factor relating to gear
usage per vessel. In principle, input controls might also refer to limits placed upon other
vital supplies of fishing such as the amount of fuel use allowed (energy conservation is
desirable, see Paragraphs 8.6.1 and 8.6.2 in the Code of Conduct) but the commonest
form of input controls are those put on the various components of fishing effort. In
simpler less mechanised fisheries input controls might relate to the number of fishing
gears deployed (e.g. the number of static fish traps) or to the number of individual
fishers allowed to fish.
Concurrent control takes place while an activity is in progress. It involves the regulation
of ongoing activities that are part of transformation process to ensure that they conform
to organizational standards. Concurrent control is designed to ensure that employee
work activities produce the correct results.
Feedback Control
This type of control focuses on the outputs of the organization after transformation is
complete. Sometimes called postaction or output control, fulfils a number of important
functions. For one thing, it often is used when feedforward and concurrent controls are
not feasible or are to costly.
Sometimes, feedback is the only viable type of control available. Moreover, feedback
has two advantages over feedforward and concurrent control. First, feedback provides
managers with meaningful information on how effective its planning effort was. If
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feedback indicates little variance between standard and actual performance, this is
evidence that planning was generally on target.
If the deviation is great, a manager can use this information when formulating new plans
to make them more effective. Second, feedback control can enhance employees
motivation.
The major drawback of this type of control is that, the time the manager has the
information and if there is significant problem the damage is already done. But for many
activities, feedback control fulfils a number important functions.
Quick navigation
Feedforward Control
Multiple Controls
Table of contents
Nature Of Control
What Is Control?
Types Of Control
Feedforward Control
Concurrent Control
Feedback Control
Multiple Controls
Managerial Approaches To Implementing Controls
Market Control
Bureaucratic Control
Clan Control
Strategic Control
The Importance Of Strategic Control
Management Control
Operating Control
Differences Between Strategic And Operational Control
Measurement:
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Analysis:
Action:
Implications For Information Systems
Implications For Controlling Formal Plans
Anthony's Perspective
Strategic Planning
Management Control
The Management Control
Management Control Of Projects
Task Control
Distinctions Between Task Control And Management Control
Promise Control
Implementation Control
Strategic Surveillance
Special Alert Control
Strategy Audits
Strategic Audits
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Assessing The Firm's Operational And Strategic Health
Measures Of Organizational Health
Strategic Audit Measurement Methods
Qualitative Organizational Measurements
The Evaluation Of Corporate Strategy
Quantitative Organizational Measurements
Kurt Lewin, a researcher and psychologist we studied earlier when we talked about
leadership styles, proposed that successful change in an organization should be
conducted in three steps: unfreezing, movement, and refreezing.
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In the ―unfreezing‖ process, the equilibrium state can be unfrozen in one of three ways.
The driving forces, which direct behavior away from the status quo, can be increase.
The restraining forces, which hinder movement from the existing equilibrium, can be
decreased. Or, managers can put a combination of the two to use.
The second part of the process, ―movement,‖ is the actual implementation of change.
New practices and policies are implemented.
In the third step, ―refreezing,‖ the newly adopted behaviors and processes are
encouraged and supported to become a part of the employees‘ routine activities.
Coaching, training and an appropriate awards system help to reinforce.
It emphasizes the importance of recognizing the need for change and being
motivated to implement it.
It acknowledges that resistance to change is inevitable.
It focuses on people as the source of change and learning.
It highlights the need to support new behaviors.
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Kotter’s Eight Step Plan for Implementing Change
John Kotter, whom we studied earlier when we talked about the difference between
managers and leaders, embellished Lewin‘s three step model into a more detailed eight
step model.
Kotter studied all of the places where failures could occur in Lewin‘s model. Kotter
recognized that several things needed to be added in:
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Kotter expanded Lewin‘s ―unfreezing‖ step with his first four recommendations. His
steps five, six, and seven correspond with Lewin‘s ―movement‖ stage and step eight is
parallel with the ―refreezing‖ process.
In accordance with a systems view, if a change impacts one area, it will have a domino
effect on the other areas.
As an example, a company may put out a new travel and entertainment policy. That
policy, a formal organizational element, has an impact on information organizational
elements, individuals and tasks. A new CEO joins and creates changes throughout the
organization, impacting items at every level.
Ultimately, though, outputs are positively impacted. The travel and entertainment policy
minimizes work processes and saves the company money. The CEO increases
shareholder value.
Action Research
Action research is a change process based on systematic collection of data and then
selection of a change action based on what the analyzed data indicate. The process of
action research consists of five steps, very similar to the scientific method:
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In the diagnosis stage, information is gathered about the problem or concerns. During
analysis, the change agent determines what information is of primary concern and
develops a plan of action, often involving those that will be impacted by the change.
Feedback includes sharing with employees what has been discovered during diagnosis
and analysis with the intent of getting their thoughts and developing action plans.
Finally, there is action. Employees and the change agent (this is a person who
champions and sees change management from start to successful finish) carry out the
actions required to solve the problem. Then, the final step is evaluation, where the
action plan‘s effectiveness is reviewed and, if necessary, tweaked for better
performance.
This approach is very problem focused, where many people approach a problem with a
more solution-centered outlook. It also minimizes resistance to change because it
involves affected employees all along the process.
Organizational Development
Remember earlier when we said that these models for change don‘t usually solve for
organizational inertia? To a certain extent, organizational development addresses that.
Organizational development is a collection of planned-change interventions, built on
humanistic-democratic values, that seeks to improve organizational effectiveness and
employee well-being.
Team building. High interaction among team members to increase trust and
openness.
Appreciative inquiry. This process seeks to identify the qualities and strengths of
an organization, on which performance improvement can be built. The inquiry
usually involves strategizing with employees on performance improvement and
―future state‖ ideals.
Crisis Management
Crisis management can be avoided by keeping the organization healthy. That is, not
allowing it to become inflexible, infusing a certain amount of conflict in order to stave off
complacency, and keeping innovation fresh by encouraging experimentation and
bringing in new people with new ideas.
Alfred North Whitehead was a philosopher and mathematician, but, with that kind of
insight on the subject of change, he could have been a CEO. Today‘s business leaders
have to worry about addressing customer needs in a fast-paced environment impacted
by social, economic, political and cultural shifts. In today‘s business environment, the
ever-looming presence of change is pretty much the only thing that stays the same.
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The problem is, no one likes change.
Organizations and their managers have to learn how to anticipate and implement
change effectively. Managers need to find ways to overcome their employees‘ natural
aversion to change, because managing change effectively can mean the difference
between staying in business and becoming irrelevant to their customers. The first step
in managing change effectively is to understand what change is and where it comes
from.
External forces are those changes that are part of an organization‘s general and
business environment. There are several kinds of external forces an organization might
face:
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Demographic. A changing work demographic might require an organizational
change in culture. For instance, Avon built and grew their business around door-
to-door cosmetic sales, with the stay-at-home wife and mother as their primary
front line employee. When more women entered the workforce in 9-to-5 jobs,
Avon had to shift gears and find new ways to get their products in front of their
customers.
Social. Changing social trends can pressure organizations into making changes.
Consumers are becoming more environmentally conscious, a trend which has
pushed fast food restaurants to replace Styrofoam containers with paper.
Manufacturers of cleaning products changed product formulas to omit phosphorus
and other environmentally threatening chemicals. Tobacco companies have
buckled under the changing image of smokers, the dangers of their products, and
some have started looking into eCigarettes and other smoking alternatives to stay
in business.
Political. Government restrictions often force change onto organizations. This can
be something as simple as a change in minimum wage for employees, or as
complex as rules and restrictions governing fair competition in business. For
instance, when the Affordable Health Care act was put into place, businesses had
to change their operations and put steps into place to confirm that all employees
had healthcare coverage to comply with the new law.
Technology. Still have your VHS player? The founder of Blockbuster wishes you
did. Technological changes can make or break a business. Whether new
technology is introduced industry-wide, as when the laser was introduced to
modern medicine, making surgeries easier and safer; or when it‘s introduced to
end users, as when consumers stopped renting videos to enjoy the cheaper, more
convenient streaming services like Netflix, organizations must change to
accommodate new technologies or suffer the consequences.
Economic. During the 2008 recession, consumers lost their jobs and cut back on
their spending. These economic downturns had a major impact on businesses.
Banks failed. General Motors and Chrysler filed for bankruptcy. Survival meant
adapting to change. Companies like Lego, who experienced stagnant U.S. sales
during this time, took the opportunity to build their markets in Europe and Asia.
Netflix realized the potential of providing in-home entertainment to families that
had cut back their entertainment budgets and grew their subscriptions by 3 million
subscribers in 2009 alone. Meanwhile, in the midst of spiking fuel prices, gas
guzzling Hummers were no longer en vogue and quietly went out of business.
Companies can also experience internal forces of change, which can often be related to
external forces, but are significant enough to be considered separately. Internal forces
of change arise from inside the organization and relate to the internal functioning of the
organization. They might include low performance, low satisfaction, conflict, or the
introduction of a new mission, new leadership.
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Need for Change
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Change management is a complex process and requires serious attention as well as
involvement from the management and people from all levels, in order to achieve a
meaningful or a progressive transformation across various levels. For being ahead in
the competitive race and gaining a winning edge, organizations have been focusing on
expansion of business worldwide, achieving excellence in processes and operations,
implementing innovations in technology and identifying/developing the right talent. The
fast changes which have taken place and the way in which this has affected the
strategies, people, policies and processes in an organization, it has become all the
more imperative that organizations clearly establish a well-defined change management
framework for realizing the strategic objectives. Change is inevitable and it can only be
managed, failing which the organizations may cease to exist.
In the era of globalization, organizations function across the cultural boundaries with
large investments in human capital as well as physical resources, give utmost
importance to technological change and innovative practices for a leadership
advantage. Business alliances like mergers, acquisitions, diversifications, takeovers and
various other collaborative ventures have become the most preferred strategic best
practices for the organizations to survive the fierce forces of competition, through
transfer of people, technology, processes and leadership. For successfully handling this
transition and converting the threats of change into opportunities, organizations must be
flexible and open for Change Management.
By improving the readiness for change, organizations can strengthen their adaptability
mechanisms and build their internal competencies for facing future uncertainties or
many such multiple change auguring situations. An organization‘s readiness for change
management influences organizational strategies and policy related decisions, as it
involves a comprehensive, well planned approach and implementation of systemic
interventions which would have an overall influence on the system, processes, people
as well as the organizational structure as a whole.
For meeting the growing demands of ever changing business operations, more dynamic
and flexible organizations have endorsed new methods of working like flexi work hours,
work from home, freelancing opportunities, virtual method of working, business
operation outsourcing and project driven operations, etc. which provide ample
opportunities to the workmen to work as per their convenience and flexibility.
For any organization, people play a very vital role in driving business excellence as they
are the most valuable assets. Hence, a change in the method of handling a job role,
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implementation of facilitating interventions and training people about the new practices
or techniques, can result in impressive results in terms of the return on investment
(ROI). How organizations manage change or respond to the business transitions largely
depend upon the adaptability of people or readiness of the people in understanding the
changes in the process and method of handling a job. Change management process
may directly affect the human resource strategies of an organization depending upon
the goals or strategies of an organization.
A well-defined change management process can help in mitigating risks related with the
people side. If this aspect is ignored, it might result in increase in the overall costs,
decline in productivity as well as employee motivation and increase in the absenteeism
level and employee attrition. Hence, it improves the overall preparedness of the
management and the decision making authorities in understanding the need for
managing change, the key processes involved in it and in understanding the operational
technicalities connected with it.
Organizational change affect the leadership thinking style and may optimize the benefits
by establishing the systems and processes in place, establishing an integrated
framework for achieving the developmental goals with the complete involvement of
people in the end to end stages of change management cycle.
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affairs to a reformed state by accepting the transition and wholeheartedly participating in
the entire process.
For some workers, change might as well be synonymous with failure and disruption.
Change management has become a discipline unto itself because organizations
encounter such resistance to change by their employees. Organizational change and
employee resistance can result in low productivity, decreased employee morale and
even work stoppage or strike if the change is significant enough to be considered
unacceptable by union workers. Small businesses have the greatest opportunities for
alternatives to organizational change, however.
Incremental Adjustments
Cross-Functional Training
Organizational changes that involve shifting employees from one position to another or
promoting a large segment of the workforce might be better accomplished through
cross-functional training and job sharing or mentoring. Assume an organization is
contemplating combining two departments, such as purchasing and warehousing.
Instead of making drastic changes such as relocating employees from one department
to the next, small businesses, in particular, should provide cross-functional training to
ensure that employees from both departments fully understand their counterparts‘
responsibilities before an organizational change that combines two separate
departments and functions.
Prototypes
Prototyping yet-to-be announced projects that will have a significant impact on the
organization is an ideal way to introduce change. Employees have a difficult time
accepting change, but if they witness positive differences that change can make, they
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are more likely to embrace the organizational change once it comes to fruition. Using a
prototype is much like a test-case. For example, if your company is transitioning to
paperless transactions, it might work well to go paperless for just one area instead of
mandating that the entire organization move to paperless transactions at once.
Trial Period
Communication
Regardless of the strategy used to influence organizational change, one factor that
should remain constant is that communication paths should be clear. Keeping
employees well-informed must be one of, if not the most important element of changing
the organization's direction or practices. Employees often are resistant to change
because they feel excluded from the plans that lead to change. Communicating openly
and frequently is key.
Organizations have entered a new era characterized by rapid, dramatic and turbulent
changes. The accelerated pace of change has transformed how work is performed by
employees in diverse organizations. Change has truly become an inherent and integral
part of organizational life.
Several emerging trends are impacting organizational life. Of these emerging trends,
five will be examined: globalization, diversity, flexibility, flat, and networks. These five
emerging trends create tensions for organizational leaders and employees as they go
through waves of changes in their organizations. These tensions present opportunities
as well as threats, and if these tensions are not managed well, they will result in
dysfunctional and dire organizational outcomes at the end of any change process.
These five trends and the specific tensions they produce are presented in Table 1.
GLOBALIZATION
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collaboration. More products and services are being consumed outside of their country
of origin than ever before as globalization brings about greater convergence in terms of
consumer tastes and preferences. Yet at the same time, in the midst of greater
convergence, there is the opposite force of divergence at work where companies have
to adapt corporate and business strategies, marketing plans, and production efforts to
local domestic markets.
To stay competitive, more organizations are embracing offshore outsourcing. Many
functions are being shifted to India, the Philippines, Malaysia, and other countries for
their low labor costs, high levels of workforce education, and technological advantages.
According to the 2002-2003 Society for Human Resource Management (SHRM)
Workplace Forecast, companies such as Ford, General Motors, and Nestle employ
more people outside of their headquarters countries than within those countries.
Almost any company, whether in manufacturing or services, can find some part of its
work that can be done off site. Forrester Research projects that 3.3 million U.S. service-
and knowledge-based jobs will be shipped overseas by the year 2015, 70 percent of
which will move to India. Communication and information sharing are occurring across
the globe in multiple languages and multiple cultures. Global competition and global
cooperation coexist in the new world economy.
One major consequence of globalization is greater mobility in international capital and
labor markets. This creates a global marketplace where there is more opportunity,
because there are more potential customers. However, there is also more competition,
as local companies have to compete with foreign companies for customers.
According to Dani Rodrik, professor of international political economy at Harvard's
Kennedy School of Government, the processes associated with the global integration of
markets for goods, services, and capital have created two sources of tensions.
First, reduced barriers to trade and investment accentuate the asymmetries between
groups that can cross international borders, and those that cannot. In the first category
are owners of capital, highly skilled workers, and many professionals. Unskilled and
semiskilled workers and most middle managers belong in the second category.
Second, globalization engenders conflicts within and between nations over domestic
norms and the social institutions that embody them. As the technology for manufactured
goods becomes standardized and diffused internationally, nations with very different
sets of values, norms, institutions, and collective preferences begin to compete head on
in markets for similar goods. Trade becomes contentious when it unleashes forces that
undermine the norms implicit in local or domestic workplace practices.
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Trends Tensions
Professor Rodrik concluded that "the most serious challenge for the world economy in
the years ahead lies in making globalization compatible with domestic social and
political stability" (Rodrik 1997, p. 2). This implies ensuring that international economic
integration does not lead to domestic social disintegration. Organizations that are
confronted with this challenge will have to manage the tension created by the global
integration versus local disintegration dilemma.
The overall picture as a consequence of globalization is one of turbulence and
uncertainty, in which a variety of contradictory processes present a wide range of both
opportunities and threats that defy established ways of doing business and working in
organizations. Integration and exclusion coexist uneasily side-by-side in organizations.
For example, many apparent dichotomies or paradoxes—competition versus
collaboration, market forces versus state intervention, global actions versus local
solutions—are losing their sharp edges as contradictory forces appear to converge and
reinforce each other in organizations across the globe. Companies that compete fiercely
in some markets form strategic alliances in others; government guidance and regulation
are required to make markets work effectively; and "think globally, act locally" has been
adopted as business strategy (or as a mantra) to deal with the challenges of doing
business in the globalized economy. As organizations transform themselves to stay
competitive, they will need to confront and resolve some, if not all, of these dichotomies
or paradoxes.
On another level, because of globalization, the fates of people living and working in
different parts of the world are becoming intertwined. Global events may have
significant local impact. September 11, 2001 has been called the "day that changed the
world". Heightened security concerns are changing expectations for people in
organizations, and the role of organizations themselves. The threat of terrorism
continues to be an ongoing concern worldwide. It has created a renewed focus on
workplace security as employees experience a heightened sense of vulnerability in the
workplace. Employee monitoring and screening are occurring more frequently. Concern
over travel for business purposes is resulting in the increased use of alternate forms of
communication such as teleconferencing and videoconferencing.
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DIVERSITY
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opposing view—that homogeneous groups are more advantageous than heterogeneous
or diverse groups in organizations.
According to the heterogenists, organizations with greater diversity have an advantage
in attracting and retaining the best available human talent. The exceptional capabilities
of women and minorities offer a rich labor pool for organizations to tap. When
organizations attract, retain, and promote maximum utilization of people from diverse
cultural backgrounds, they gain competitive advantage and sustain the highest quality of
human resources.
Organizations with greater diversity can understand and penetrate wider and enhanced
markets. Not only do these organizations embrace a diverse workforce internally, they
are better suited to serve a diverse external clientele. Organizations with greater
diversity also display higher creativity and innovation. Especially in research-oriented
and high technology organizations, the array of talents provided by a gender- and
ethnic-diverse organization becomes invaluable. Heterogeneous or diverse groups
display better problem solving ability as they are more capable of avoiding the
consequences of groupthink, compared to highly cohesive and homogeneous groups
that are more susceptible to conformity.
On the other hand, greater organizational diversity has its drawbacks. With the benefits
of diversity come organizational costs. Too much diversity can lead to dysfunctional
outcomes. Diversity increases ambiguity, complexity, and confusion. Organizations with
greater diversity may have difficulty reaching consensus and implementing solutions. In
many organizations, diversity can produce negative dynamics such as ethnocentrism,
stereotyping and cultural clashes.
The homogenists argue that homogeneous groups often outperform culturally diverse
groups, especially where there is a serious communication problem. Cross-cultural
training is necessary to enable culturally diverse groups to live up to their potential and
overcome communication difficulties. The diversity movement, according to
the homogenists, has the potential to polarize different social groups and harm
productivity while breeding cynicism and resentment, heightening intergroup frictions
and tensions, and lowering productivity, just the opposite of what managing diversity is
intended to accomplish.
The challenge therefore is for management to manage the tension produced by
heterogeneity versus homogeneity. If properly managed, organizations can reap the
benefits of greater diversity. Aside from proper management, organizations need to
learn to appreciate and value diversity before the benefits of diversity can be fully
realized. To achieve this, diversity training programs may help people in organizations
understand and value diversity.
FLEXIBILITY
Globalization and diversity trends are forcing organizations to become more flexible and
adaptable. To be able to function globally and to embrace diversity, leaders and
employees in organizations have to become more flexible and develop a wider
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repertoire of skills and strategies in working with diverse groups of people in the
workplace as well as in the marketplace.
The response to increased diversity has, in many cases, been increased organizational
flexibility. Some organizations allow workers to have very different work arrangements
(e.g. flex-time) and payment schedules. Some organizations (and workers) have found
it convenient to treat some workers as independent consultants rather than employees.
In certain occupations, advances in communication and information technologies have
enabled telecommuting —working at home via computer. One consequence of this is
the blurring of boundaries between work and home, and where and when work occurs.
The benefits of greater flexibility may be countered by the negative consequences of
working 24/7 including higher stress and burnout.
The response to increased competition, however, has resulted in a tension generated
by the demands to be flexible and yet maintain some stability as changes are
implemented in organizations. To stay competitive, organizations are constantly
changing and restructuring to increase flexibility and decrease costs. Business process
reengineering, business process out-sourcing, job redesign, and other approaches to
optimize business processes have been implemented to increase operational and
process efficiency while reducing the costs of doing business.
Changes in business and operational processes need time to stabilize for employees to
learn the new processes, become familiar with them, and be able to operate effectively
and efficiently. Yet, competitive pressures can cause organizations to go through a
series of changes without giving employees adequate time for learning and training, and
for the benefits of the change to be fully realized in the organization. This tension is
well-captured by Columbia Business School professor Eric Abrahamson in his
book, Change Without Pain (2004) in which he discussed how organizations can go
through change overload and how employees can experience change fatigue and
burnout. Professor Abrahamson proposes "creative recombination" as an alternative
approach to the highly destructive, destabilizing and painful changes caused by
"creative destruction".
FLAT
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decentralization emphasize the idea that less hierarchical organizations mirror the
efficiencies of the networks that enable them: they are faster, more resilient, more
responsive, more flexible and more innovative. Also, they argue, people who work
within decentralized organizations feel empowered and energized. They do not need to
focus on the chain of command and they do not feel constrained by it.
Organizations are caught between the opposing forces of centralization and
decentralization. They want to leverage the opportunities offered by decentralization
and create more nimble and forceful organizations, but they cannot always do so
because the forces of centralization come into play. There are obvious benefits to
centralization as control is comparatively tighter and accountability is clearer compared
to a flatter, more decentralized organizational structure.
Take the example of IT operations. The key to a centralized organization's success is its
responsiveness. If the centralized operation can be responsive to the needs of the
business, then that approach can make sense. Several companies, such as
DaimlerChrysler and PepsiCo, have migrated back to centralizing IT operations after
attempts at decentralization.
The debate over the centralization versus decentralization of operations in organizations
is an enduring one. It is an age-old battle of standardization versus autonomy, corporate
efficiency versus local effectiveness and pressure on costs and resources versus
accommodation of specific local needs.
Vacillation between centralization and decentralization is both non-productive and
unnecessary. Organizations, as they desire to become flatter, will need to be clear
about how they need to respond to the tension between centralization and
decentralization.
NETWORKS
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in ways that are faster than arms-length contracts would permit, and yet retains the
flexibility of being able to drop the relationship if needed (as opposed to performing the
function in-house). The trend towards networked organizations and structures create a
new tension between interdependence and independence. The forces of aggregation
and disaggregation throw up new challenges for organizations, for example, the use of
independent contractors, joint ventures, strategic partnerships and alliances even with
competitors.
One advantage of networks is that organizations have greater flexibility and thus they
can become more competitive in the global marketplace. Another advantage is that
organizations do not require that many resources such as employee benefits, office
space, and financing for new business ventures.
On the other hand, networks have distinct disadvantages. Organizations may find it
more difficult to control quality of goods or services as they now have to depend on their
partners in the networks to deliver the quality that is desired. Legal and contracting
expertise as well as negotiation expertise will also be important for networks. Alternative
forms of control may need to be developed to control quality. Alternative mechanisms
for coordination may also need to be developed to manage the growing constellation
and sometimes tenuous nature of other partner organizations in the network.
All the five trends and the tensions they produce result in greater organizational or
system complexity for both leaders and employees in organizations. The tensions
produced by these trends cannot be solved. They have to be managed. Effective
approaches in organizational change will involve not one strategy but many alternatives
and will require leaders and employees to develop greater resilience in confronting
these tensions.
In the beginning of the new year, my mind flies to thinking about the future of the
consulting business. Thinking back to my amazing trips to the US last year and planning
the next ones, I get inspired to list some top trends in organizational change and
structure in 2020 and beyond.
In brief, there are 7 key organizational trends that will be explored below: learning in a
business context, the emergence of AI, sensemaking as an organizational affair,
purpose-based employee involvement, the growing prevalence of continuous
development, the facilitator's role in implementing change and the transformational
nature of digitization. These seven trends all play a part in helping organizations stay at
the top of their game and ensuring change is in a meaningful direction.
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Psst - we're hosting a free webinar in October on leading transformation in the digital
era - Click here to reserve your seat!
The value of every organization is increasingly based on the ability to learn quickly.
Learning is not only a department, but it‘s also a crucial part of the work in every
unit. According to Deloitte‘s 2019 Human Capital Trends, 86% of organizations
recognize changing the way people learn at work as their biggest organizational
development challenge in 2019 and beyond.
As we are moving towards a world of more uncertainty and less predictability, there is
no time to produce formal learning programs and courses for the new emerging topics
and challenges. Learning has to happen in the flow of work.
2. The breakthrough of AI
Practical applications of machine learning and AI are finally entering the market in many
different fields. Within organizational learning and change, their power is in helping
people connect with topics and each other based on their needs and interests.
3. Sensemaking
Good facilitation practices are required to support learning on individual, team and
organizational levels.
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dialogue where the purpose is understood. Millennials are especially demanding new
ways of working.
Social media already plays a significant role in our lives. However, little use is made of
our social media experience, expertise and insight in the realm of work. Our interactions
in our personal networks differ dramatically from our interaction in work-related
contexts. This is evident in terms of transparency, for example. Continuous
communication and sharing are key to building trust in workplace communities. They
prevent disconnects based on assumptions and interpretations.
A transparent work culture makes structures and reporting less complex, as everything
is visible. It also means that we need to replace traditional management approaches
with coordination and connection. Organizational structures become obstacles to smart
ways of working if they do not adapt to people‘s ability to work together in a self-guided
manner.
The good news is that people can further develop their interaction skills if the
organization has the willingness and the necessary tools. Better and more multifaceted
ways of interaction mean better business and operations for everyone.
Instead of purchasing the perfect plan, companies want genuine changes, where the
general direction is known, but the workplace community finds its way to the final
destination together. Transformation is not about having a set goal; rather, the result is
created and shaped through learning. I wrote about transformation in an earlier article.
In order to enable learning, sensemaking and engagement the facilitator mindset and
facilitation skills are becoming highly appreciated. Facilitation is not only focusing on
one-off meetings and workshops, it‘s the way of co-creating transformation.
It means that valuing your own expertise is no longer enough. Effective facilitators go
deeper than just methods. They know how to inspire and involve people in processes
and how to handle the process respectfully. Fundamentally, they create favorable
conditions for people to become motivated and commit to their work.
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7. Digitalization is transforming even the late-blooming organizations
Digitalization can hardly be seen as a trend no more. But the harsh reality is that we‘re
in the stages where organizations unable to transform and develop are actually going
out of business. At the same time, it is true that different countries and continents are
simultaneously at very different stages of digital maturity and nevertheless doing
business together.
In the best of cases, digital ways of working give people real opportunities to participate,
and decisions are made collectively. Digitalization enables transparent, real-time
processes.
With these observations, I'm eager to hear your thoughts: how are you seeing
organization's change in the 2020s?
If you‘d also like to learn about the 8 trends that are shaping the organizational learning
landscape, you can now download your free copy of our brand new ebook ―8 ways to
Rethink Organizational Learning‖.
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