Principles of Management

PRINCIPLES OF MANAGEMENT
1. What is the nature of management, and why is it essential for organizations? Discuss the purpose and scope of management in the modern
business environment.
Management, in its most basic form, refers to the processes of planning, organizing, making decisions,
motivating, and leading human resources in an organization. Management also includes the control of a
company's information, physical, and financial resources to achieve its objectives.
Nature of Management
 Universal process- Management is a universal process that exists wherever there is a human pursuit.
The organization's goals cannot be met unless effective management is in place.
 The Production Factor- Well-trained and experienced managers are required for the efficient use of
funds and labor.
 Goal-Oriented- The primary goal of all management endeavors is to achieve the firm's objectives. The
goals must be practical and attainable.
 Supreme in Thought and Deed- Managers are supreme in thought and action because they set
attainable goals and then direct execution on all aspects of achieving them. They will require complete
assistance from middle and lower levels of management to accomplish this.
 The authority structure- The authority system consists of well-defined regulatory principles, the
regulation of proper power, and efficiency at all levels of decision-making. This is necessary so that each
self performs what is expected of him or her and reports to whom he or she is accountable.
 Profession- Managers must control managerial expertise and education, as well as adhere to a proven
code of conduct and stay informed of their human and social responsibilities.
 Process- The management method entails a variety of activities or services aimed at a specific goal.
Importance of Management
1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and organizes the resources, integrates the
resources in effective manner to achieve goals. It directs group efforts towards achievement of pre-determined goals.
By defining objective of organization clearly there would be no wastage of time, money and effort. Management converts
disorganized resources of men, machines, money etc. into useful enterprise. These resources are coordinated, directed and
controlled in such a manner that enterprise work towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical & human resources productively. This leads to efficacy
in management.
Management provides maximum utilization of scarce resources by selecting its best possible alternate use in industry from out of
various uses.
It makes use of experts, professional and these services leads to use of their skills, knowledge, and proper utilization and avoids
wastage. If employees and machines are producing its maximum there is no under employment of any resources.
3. Reduces Costs - It gets maximum results through minimum input by proper planning and by using minimum input & getting
maximum output.
Management uses physical, human and financial resources in such a manner which results in best combination. This helps in cost
reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated functions). To establish sound
organizational structure is one of the objective of management which is in tune with objective of organization and for fulfillment of
this, it establishes effective authority & responsibility relationship i.e. who is accountable to whom, who can give instructions to
whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right skills, training and qualification. All jobs should be cleared to
everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing environment. It keeps in touch with the changing
environment.
With the change is external environment, the initial co-ordination of organization must be changed. So it adapts organization to
changing demand of market/changing needs of societies. It is responsible for growth and survival of organization.
6. Essentials for Prosperity of Society - Efficient management leads to better economical production which helps in turn to increase
the welfare of people. Good management makes a difficult task easier by avoiding wastage of scarce resource.
It improves standard of living. It increases the profit which is beneficial to business and society will get maximum output at minimum
cost by creating employment opportunities which generate income in hands. Organization comes with new products and researches
beneficial for society.
PURPOSE
Managing is about achieving maximum output with minimal effort and resources. When talking about the nature of management
involves putting together human, financial, and material resources in a way that results in the maximum benefit.
2. Discuss Mintzberg's managerial roles and their significance in real-world management.
Henry Mintzberg’s Management Roles

Mintzberg pontified the types of management roles. He said that there are 10 major types of roles:
Interpersonal Roles
1. Figurehead
The figurehead represents the head of a team. As a figurehead, you ‘head’ the team. Also, the figurehead is
the representative of activities and ceremonies of the team.
2. Leader
On one hand, the managers are the figurehead of the teams. On the other hand, they have a bigger role to
play as the leader of the team. As a leader, you are expected to inspire the team. You communicate ideas
between stakeholders. You also provide support and direction to the subordinates.
3. Liaison
The word Liason comes from the French word lier which means ‘to bind.’ It signifies a binder element in
cooking. Similarly, the liaison for the team binds the team to the outside world.
Informational Roles
4. Monitor
The monitor of a team facilitates the operations. Also, they collect and process information. Therefore they
help identify the threats and opportunities. Think of the role of a real-life case of SWOT analysis.
5. Disseminator
One of the roles of a manager is to pass on the information between organizational layers. Additionally, the
manager also has to assign work and responsibilities to others.
6. Spokesperson
We have talked about the role of a disseminator. Meanwhile, managers also need to communicate outside
the organization. This comes under the role of a spokesperson.
Decisional Roles
7. Entrepreneur
Managers take on this important responsibility. An entrepreneur takes risks in return for something less
certain. Inside the organization, managers are expected to be entrepreneurial.
8. Disturbance Handler
Everything does not always works as expected. Sometimes, there are issues, problems, delays, and
unexpected errors in the systems. Also, a disturbance handler helps in overcoming these challenges.
Additionally, they foresee and mitigate the negative impact of disturbances.
9. Resource Allocator
The entity in an organization that helps in generating business output is a resource. In other words,
organizations are seen as an assemblage of interconnected resources. Managers organize these resources
into working units.
10. Negotiator
Finally, the role of a negotiator is also Mintzberg’s management role. This is a charismatic role. Negotiations
are done with internal as well as internal stakeholders. Certainly, the managers ensure a favorable outcome
in these negotiations.
Examples of Mintzberg’s Management Roles
Mintzberg’s Management Role Example of work
Figurehead Approvals of budget, plans, etc
Leader Inspiring your team to meet goals
Liaison Co-ordinate the Cross-Functional Teams

Mintzberg’s Management Role Example of work
Monitor Evaluate the daily KPI dashboard
Disseminator Inform the team about a problem with KPI and assign roles
Spokesperson Communicate the KPI issues with higher managers.
Entrepreneur Initiate and execute digital transformation
Disturbance Handler Resolve a discord between two team-members.
Resource Allocator Cut budget from a non performing asset
Negotiator Talk with the clients to ask for extention of project deadline
IMPORATNCE OF MINTZBERG'S MANAGEMENT ROLE IN REAL WORLD MANAGEMENT
 TO REGULATE BUSINEE
 FOR INNOVATIONS
 DIRECTIBG SUBORDINATES
 ATTENDING MEETING AS LIAISON
 REPRESENTING THE ORGANISTION
 TRANSMITING INFORMATION
 ANALYZING INFORMATION
 ALOOCATION OF RESOURCES
3. Elaborate on Fayol's principles of management and provide examples of their application in contemporary
organizations.
Henry Fayol, also known as the Father of Modern Management Theory, gave a new perception on the concept of
management. He introduced a general theory that can be applied to all levels of management and every department. He
envisioned maximising managerial efficiency. Today, Fayol’s theory is practised by the management to organise and
regulate the internal activities of an organisation.
Henri Fayol’s 14 Principles of Management with Examples
1. Division of Labor
The division of labour involves dividing the tasks within any organization into different teams specialized in those tasks.
Example: To explain it more straightforwardly, let’s take an example of any fast food joint like McDonald’s or Burger King.
Here, one person takes the order, the second person assembles the burger, the third prepares the fries, the fourth person
readies the drink, and the first person serves the entire order.
2. Authority and Responsibility
Fayol defines authority as “the right to give orders and obedience,” where the worker must be responsible for complying
with the order. Both authority and responsibility must be balanced. The managers should be able to ensure their tasks are
being done without fail.
Example: A company manager gives his employees the order to go to work the next day at an item exhibition. Therefore,
they are responsible for complying with the request and showing up on time at said event.
3. Discipline
The discipline principle of management follows the previous principle and depends on obedience and compliance with
established rules, that is, on behaving correctly. A culture of mutual respect must be created within teams so that
discipline doesn’t feel imposed but should be a part of the organizational flow. Good supervision forms the base of the
discipline.
Example: If the employees mentioned in the previous example arrive late or wear an inappropriate dress to the event, this
principle would not be complied with.
4. Unity of Command
There needs to be clarity on the chain of command within the teams. The unity of command means that every worker will
always receive orders from a single boss or superior to avoid the duality of information, that is, receiving two contradictory
orders and not knowing which one to obey. The unity of command will help ensure no conflicts of authority.
Example: Priya is a secretary in a small family business with two owners, Raj and Mahesh. Five minutes before the end
of his workday, Raj asks her to print some sales reports. Shortly after, Mahesh tells him she must go to the bank to
deposit some checks.
Who does Priya listen to?
This would be an example of the duality of information, and the “unity of command” principle would not be fulfilled.
5. Unity of Direction
Unity of direction suggests that all employees work towards the goal. All activities must be led by a manager responsible
for the plan. Unity of direction is dependent on good organizational skills and planning. There cannot be unity of command
without unity of direction.
Example: Production activities within a production unit should be supervised and managed by one manager, while its
marketing activities, such as advertising, pricing, policy, etc., must be directed by only one manager.
6. Subordination of Individual Interest

In any organization, the company’s interests must always be privileged over the particular interests of the owners and
employees. This is called subordination of individual interest against the company’s interest. It will always be necessary to
give more importance to what happens in the company than personal issues.
Example: Mini is responsible for meeting with a potential client for an event in a community hall on 10th August. Instead,
she used that community hall to celebrate her birthday party. This way, she not only misses out on a potential client for
her company but also puts her reputation at stake.
7. Remuneration
The salary paid to staff (remuneration) must be equitable, fair, and guaranteed for all company employees to perform the
same task.
Example: A company’s salespeople are paid a 3% commission as a sales award, but a newly hired employee is paid only
2%. In other words, this principle would not be fulfilled in this case.
It is also good to emphasize that there are still salary inequities due to gender issues, where women often earn less than
men for the same positions and responsibilities.
8. Degree of Centralization
Centralization is the concentration of power and decision-making in the top hierarchy. In this situation, there is almost no
or minor delegation of tasks or decision-making.
Example: Centralization is very common in SMEs (small and medium-sized enterprises), where the owners generally
make most of the decisions. They do not delegate them or do not involve middle-management or other employees.
9. Scalar Chain
The scalar chain principle of management suggests that hierarchy is the order in the command lines from the highest
levels. In this hierarchy, the directors and managers are at the top, the middle managers (bosses and supervisors), and
the lower-level employees. Hierarchy defines authority and responsibility.
Example: The lines of the hierarchy are evident in defence services with different degrees of importance. For instance, in
the army, the hierarchy is as follows – Field marshal, General, Lieutenant general, Major general, Brigadier, Colonel,
Lieutenant colonel, etc.
10. Order
The principle of order suggests that there should be a fixed place for everything and everyone, and everything and
everyone should be in its place. This will lead to improved productivity and efficiency.
This aligns with the scientific management theory.
Example: There is no order for tools and equipment in a company dedicated to manufacturing auto parts in the workshop.
The staff also does not have a fixed place of work assigned, and each does different tasks without an assigned role. This
example defies all the components of the principle or order.
11. Equity
In any company, consistently to achieve the employees’ loyalty, it will be necessary to treat the employees in a friendly
manner, without any preferences, and fairly. Equity is a combination of kindness and justice.
Equity also makes it essential to talk about the importance of gender equality. This means men and women can access a
position and receive the same salary.
Example: Maxine is a manager at a production workshop. She allows choosing the simplest job to an employee with
whom she plays golf on weekends, and to another colleague with whom she doesn’t get along, she allocates a more
challenging job.
Considering that Maxine is biased in her professional behaviour, the Fayol principle of equity would not be fulfilled in this
situation.
12. Stability of Tenure of Personnel

Fayol argues that it is essential to ensure that employees last a long time in their positions and avoid staff turnover as
much as possible. The idea of the stability of tenure of personnel is to inculcate a sense of job security and loyalty in the
teams so they don’t think of leaving the organization. The sense of job insecurity is directly proportional to low labour
efficiency and the high cost of training a new person to carry out their tasks.
Example: Info Edge India Limited awards its employees for their contribution after they achieve a benchmark period (five
years, ten years, and so on). This fosters loyalty toward the organization and encourages the employees to contribute
their best.
13. Initiative
Fayol defines initiative as “the ability to see a plan and ensure its success.” Extending this definition, we can add that the
initiative links to people’s ability to propose, develop or devise projects that improve current situations and the chances of
meeting the business goals with lesser costs and time.
Example: Alex is a production manager in a textile factory. He devised a plan to improve the manufacturing process to
reduce costs by 2%, thereby making an initiative towards achieving business goals more efficiently.
14. Esprit de Corps

Esprit de Corps is a French term that means “Team Spirit.” Therefore, the management should create unity, cooperation,
and team spirit among employees. Managers are responsible for fostering an environment of mutual trust, understanding,
and empathy. Working as a team will achieve more meaningful results than independently. Therefore, it will be essential
to achieve unity and harmony among employees.
Example: The best example of Esprit de Corps is in military combat units. They take pride in inspiring enthusiasm and
devotion and work together to deal with their counter units.
4. Trace the evolution of management thought from early management theorists to modern concepts. What were the key contributions
of Frederick Taylor, Henri Fayol, and Max Weber to management theory?
Pdf has been downloaded
5. Discuss the criticisms and modern applications of scientific management.
Same pdf . evolution of management.
6. Describe the types of plans used in organizations and provide examples for each; Explain the steps involved in the planning process
and the importance of effective planning.
Pdf downloaded
7. Discuss the characteristics of effective planning. How does setting clear objectives fit into this?
Same pdf as above
Assignment 2
1. Define strategic management and discuss its significance for organizations, explain the steps in the strategic management process
and the role of SWOT analysis.
Definitions:- “Strategy is the determination of the basic long term goals and objectives of an enterprise and the adoption of the course
of action and the allocation of resources necessary for carrying out these goals.” Alfrred D. Chandler.
“A strategy is a unified, comprehensive, and integrated plan that relates the strategic advantages of the firm to the challenges of the
environment. It is designed to ensure that the basic objectives of the enterprise are achieved through proper execution by the
organization.” Lawrence R. Jauch & William F. Glueck.
Importance of Strategic Management
Strategic management is important because it provides a structured approach for organizations to set goals. It makes
informed decisions, allocates resources efficiently, and adapts to changes in its external environment, ultimately leading to
sustained success and growth.
Clear Direction
Strategic management gives organisations a clear direction by defining their vision, mission, and goals. It helps align all
stakeholders towards a common purpose and provides a framework for decision-making and resource allocation.
Competitive Advantage
It enables organizations to gain a competitive edge by identifying their unique strengths, differentiating themselves from
competitors, and capitalizing on market opportunities. It helps position the organization favourably in the market and stay
ahead of industry trends.
Adaptation to Change
In today’s dynamic business environment, strategic management is crucial for organizations to adapt effectively. It
involves scanning the external environment, anticipating shifts, and formulating strategies. This is done to navigate
challenges and capitalize on emerging opportunities.
Resource Optimization
Effective strategic management ensures the optimal allocation of resources such as finances, human capital, and
technology. It helps identify strategic priority areas, maximise efficiency, and effectively utilise resources to achieve
organizational objectives.
Performance Improvement
This process enhances organizational performance by setting goals, monitoring progress, and implementing corrective
actions. It provides a framework for measuring success. It identifies areas of improvement and drives continuous growth
and innovation.
Risk Management
Strategic management involves assessing risks and uncertainties associated with various strategies and making informed
decisions to mitigate them. It helps minimise potential threats and seize opportunities while considering potential risks and
their potential impact.
Long-Term Sustainability
It emphasizes long-term sustainability by considering social, environmental, and ethical factors in decision-making. It
promotes responsible business practices, stakeholder engagement, and the creation of value that extends beyond short-
term gains.
Conclusion!!
Strategic management is a vital discipline that empowers organizations to navigate the complexities of the business world.
It involves setting clear objectives, devising effective strategies, and continuously assessing and adapting to changing
circumstances. By doing so, businesses can remain competitive, seize opportunities, and achieve long-term success.
Strategic management is not just a tool. It’s a mindset that fosters resilience and innovation, allowing organizations to
thrive in dynamic environments.
Pdf downloaded .
2. Describe various forecasting techniques and their applications in different industries.
As per Heizer and Render (2010), “Forecasting is considered art and science of estimating future events”. It is defined as an art because to improve the
correctness of forecasts, it is required to have subjective assessment along with a contemporary and historical judgment. It is also considered a science because lots
of scientific methods are used to have different numbers and further analysis is done through mathematical models to determine the correctness of the forecast.
Forecasting is the process of predicting or estimating future events based on past data and current trends. It involves analyzing historical data, identifying patterns and
trends, and using this information to make predictions about what may happen in the future. Many fields use forecasting, such as finance, economics, and business. For
example, in finance, forecasting may be used to predict stock prices or interest rates. In economics, forecasting may be used to predi ct inflation or gross domestic
product (GDP). In business, forecasting may be used to predict sales figures or customer demand. There are various techniques and methods that can be used in
forecasting, such as time series analysis, regression analysis, and machine learning algorithms, among others. These methods rely on statistical models and historical
data to make predictions about future events.
The accuracy of forecasting depends on several factors, including the quality and quantity of data used, the methods and tech niques employed, and the expertise of the
individuals making the predictions. Despite these limitations, forecasting can be a valuable tool for decision-making and planning, particularly in situations where the
future is uncertain and there is a need to anticipate and prepare for potential outcomes.
Techniques of Forecasting
Forecasting techniques are important tools for businesses and managers to make informed decisions about the future. By using these techniques, they can anticipate
future trends and make plans to succeed in the long term. Some of the techniques are explained below:
 Time Series Analysis: It is a method of analyzing data that is ordered and time-dependent, commonly used in fields such as finance, economics, engineering, and
social sciences. This method involves decomposing a historical series of data into various components, including trends, seas onal variations, cyclical variations, and
random variations. By separating the various components of a time series, we can identify underlying patterns and trends in t he data and make predictions about
future values. The trend component represents the long-term movement in the data, while the seasonal component represents regular, repeating patterns that occur
within a fixed time interval. The cyclical component represents longer -term, irregular patterns that are not tied to a fixed time interval, and the random component
represents the unpredictable, random fluctuations that are present in any time series.
 Extrapolation: It is a statistical method used to estimate values of a variable beyond the range of available data by extending or projectin g the trend observed in the
existing data. It is commonly used in fields such as economics, finance, engineering, and social sciences to predict future t rends and patterns. To perform
extrapolation various methods can be used, including linear regression, exponential smoothing, and time series analysis. The choice of method depends on the
nature of the data and the type of trend observed in the existing data.
 Regression Analysis: Regression analysis is a statistical method used to analyze the relationship between one or more independent variables and a dependent
variable. The dependent variable is the variable that we want to predict or explain, while the independent variables are the variables that we use to make the
prediction or explanation. It can be used to identify and quantify the strength of the relationship between the dependent variable and independent variables, as well
as to make predictions about future values of the dependent variable based on the values of the independent variables.
 Input-Output Analysis: Input-Output Analysis is a method of analyzing the interdependence between different sectors of an economy by examining the flows o f
goods and services between them. This method helps to measure the economic impact of changes in production, consumption, and investment in a given economy.
The fundamental principle of Input-Output Analysis is that each sector of an economy depends on other sectors for the supply of goods and services, and also
provides goods and services to other sectors. These interdependencies cr eate a network of transactions between sectors, which can be represented using an input-
output table.
 Historical Analogy: Historical analogy is a method of reasoning that involves comparing events or situations from the past with those in the pres ent or future. This
method is used to gain insights into current events or to make predictions about future events by looking at similar events o r situations in the past. The premise of
historical analogy is that history repeats itself, and that by studying past ev ents, we can gain an understanding of the factors that led to those events and how they
might play out in similar situations. For instance, political analysts may use the analogy of the rise of fascism in Europe i n the 1930s to understand the current
political climate in a particular country.
 Business Barometers: Business barometers are statistical tools used to measure and evaluate the overall health and performance of a business or in dustry. These
barometers are based on various economic indicators, such as sales figures, production data, employment rates, and consumer spending patterns. The main
purpose of a business barometer is to provide an objective and quantitative measure of the current and future state of a busi ness or industry. By analyzing these
economic indicators, business owners and managers can make informed decisions about their operations and strategies.
 Panel Consensus Method: The Panel Consensus Method is a decision-making technique that involves a group of experts sharing their opinions and experiences
on a particular topic. The goal of this method is to arrive at a consensus or agreement among the group on the best course of action. In the Panel Consensus
Method, a panel of experts is selected based on their knowledge and experience in the relevant field. The panel is presented with a problem or issue to be
addressed, and each member provides their opinion or recommendation. The panel members then discuss their opinions and try to reach a consensus on the best
course of action. It can be used in various fields, such as healthcare, business, and public policy, among others. It is particularly useful in situations where there is
no clear-cut solution to a problem, and multiple viewpoints need to be considered.
 Delphi Technique: The Delphi Technique is a decision-making process that involves a group of experts providing their opinions and insights on a particular topic or
problem. This method is designed to reach a consensus on a course of action using a structured and iterative approach. In th is, a facilitator presents a problem or
question to a group of experts, who then provide their opinions or recommendations. The facilitator collects the responses an d presents them to the group
anonymously. The experts review the responses and provide feedback, revisions, or additions to the responses. This process is repeated until a consensus is
reached.
 Morphological Analysis: Morphological Analysis is a problem-solving me thod that involves breaking down a complex problem or system into smaller
components, referred to as “morphological variables”. These variables are then analyzed to identify potential solutions or courses of action. It begins by assembling
a team of experts or stakeholders to identify the variables that contribute to the problem or syst em. These variables may be identified through brainstorming or other
techniques and may include factors such as technology, human behaviour, or environmental conditions.
Below are a few examples of different organizations that do forecasting for effective supply chain management:
 Example 1
Apple Inc., a U.S.-based multinational technology company has developed an effective and efficient global system through which it is easy to control
mostly all aspects of the supply chain i.e. from designing products to retail stores. Apple is able to enhance innovations, reduce the inventory cost, and
improve the market speed through effective communication and accurate data which is shared both upwards and downwards in the supply chain system.
Production forecasts are adjusted on daily basis during the product is in the market for sale. The same is done by tracking the demand of each store on an
hourly basis. So, forecasts are considered a strategic weapon in a technology giant like Apple.
 Example 2
Toyota which is a multinational automotive manufacturing company forecasts sophisticated cars by taking input from different sources. Their dealers are
also part of such sources for obtaining inputs. On the other hand, it is difficult to forecast the demand related to accessories like custom wheels, navigation
systems, etc. because it contains more than 1000 items and that too vary according to color and model.So, Toyota reviews the available data of vehicles
that have been manufactured and also, considers vehicle forecasts in detail to decide the demand for a future accessory. The accurate forecast results in an
effective supply chain for the company.
3. Elaborate on the steps involved in the decision-making process. How can organizations make better decisions? Explain Herbert
Simon's model of decision making and its implications for managerial decisions.
Decision making in management is the process of making a choice between two or more options. This
involves evaluating the pros and cons of various choices and choosing the best option to achieve a
desired outcome. In management, decision making is about acting in a way that meets organizational
goals and objectives.
For example, a business manager may decide to invest in marketing to attract new customers. This decision
could involve analyzing the costs, benefits, and risks involved with each possible course of action and
choosing the best course of action for the organization.
Decision Making Process in Management with Example
Let us check the decision-making process in management with examples.

1. Establishing Objectives
Establishing objectives is among the crucial decision-making steps in management. Without clear
objectives, it can be difficult to make effective decisions that will help the organization meet its goals.
Establishing objectives involves setting specific goals that need to be achieved within a certain timeframe.
For example, if you are the CEO of an e-commerce start-up with your business expanding, you would want
to hire the right employees for various roles. Firstly, you would have to establish your objectives regarding
which parts of your business you would need to hire new people.
2. Identify the Decision
The next important step in the decision-making process in management is identifying the problem that
needs to be addressed. Once the problem has been identified, the manager will gather information about
possible solutions. This may involve consulting with others, doing research, or running simulations. After
weighing the pros and cons of each option, the manager will choose the course of action that they believe
is most likely to succeed.
For example, after establishing the objectives regarding which parts of your business need new recruits,
you would have to identify the course of action with others to recruit the ideal employees for the various
job roles.
3. Gather Appropriate Information
This process of gathering information is known as information gathering. The different sources of
information that managers can use include surveys, interviews, focus groups, observation, and secondary
data sources such as articles and reports. After gathering this information, managers must then analyze it
to determine which option is best.
For example, after identifying the course of action for the new recruits, you, along with your team, have to
gather proper information about the various hiring trends and how to recruit the ideal talents.
4. Identify the Alternatives
One of the most important aspects of the decision-making process in management is identifying the
alternatives. Without knowing what your options are, it can be difficult to make an informed decision. There
are a number of different ways to identify the alternatives, but some of the most common methods include
brainstorming, research, and consultation.
For example, after gathering the appropriate information on how to recruit the ideal talents, identify what
alternatives you can offer to attract talents. Like, can you offer remote working or a hybrid working model?
5. Weigh the Evidence
When we define decision making in management One key step in this process is known as 'weighing the
evidence'. This simply means taking the time to consider all of the available information before making a
final decision. This can include things like market research, financial data, and even gut instinct. By taking
the time to weigh the evidence, managers can make better-informed decisions that are more likely to lead
to success.
For example, after identifying what alternatives you can offer to attract new recruits, consider all the
options to understand which would be the most profitable for your business. For this, you can take insights
from market research, financial data, and even gut instinct.
6. Choose Among the Alternatives
One of the most important decisions that a manager has to make is which alternative to choose. There are
multiple ways to approach this, such as by first considering all available alternatives, then assessing each
against an explicit set of criteria. Finally, choosing one alternative over another could depend on other
factors such as political considerations and the influence of stakeholders.
For example, after considering all the alternatives and research regarding hiring new recruits, choose the
alternative which is the most profitable for your business.
7. Take Action
There are many approaches to decision making, but one of the most popular is the "take action" approach.
This approach involves taking decisive action in response to a problem, without overthinking or second-
guessing yourself. While this approach can lead to quick results, it also carries the risk of making impulsive
decisions that may not be in the best interest of the company.
For example, after choosing the most profitable ways to hire new talents, take the course of action of
searching and interviewing the individuals.
8. Review the Decision
Finally, after a decision has been made, it is important to review the results and make any necessary
adjustments.
For example, after hiring the new recruits, review the whole process to see where you can make some
changes to make the process more efficient.
Techniques of Decision Making
1. SWOT Analysis
One popular decision making a step in management is known as SWOT analysis. This involves identifying
the strengths, weaknesses, opportunities, and threats associated with a particular decision. By taking all of
these factors into account, individuals can make informed and effective choices.
2. Marginal Analysis
A popular technique is known as marginal analysis. It involves weighing the costs and benefits of each
option to choose the one that will create the greatest value.
Strengths
Marginal analysis forces you to think beyond the immediate consequences of your actions. It can help you
make better decisions because you will consider how your actions affect other areas of your life.
Weaknesses
It is time-consuming. If you're trying to make a decision quickly, thinking about all the indirect costs and
benefits can slow you down. This analysis can sometimes lead to paralysis by analysis. It happens when
people get so caught up in thinking about all the possible costs and benefits that they never actually make
a decision.
Opportunities
Marginal analysis is that it can help you to identify opportunities that you might otherwise miss. It is
because the process of thinking about indirect costs and benefits helps you see the world differently.
For example, when considering whether to buy a new car, you might not immediately think about the
environmental impacts of driving. But if you consider the indirect costs and benefits of car ownership, you
might decide that buying a hybrid or an electric car is better for you and the planet.
Threats
Marginal analysis only considers the incremental changes associated with a particular decision, and it
does not take into account the other factors that may be affected by that decision. The analysis can be
misleading if not used correctly, and this is because it only considers changes in absolute terms without
taking into account the relative size of those changes.
3. Pareto Analysis
Pareto analysis is a decision-making technique that can be used to identify the most important factors in a
given situation. Named after Italian economist Vilfredo Pareto, the technique is based on the principle that
20% of the causes will produce 80% of the results.
Strengths
It is relatively simple to understand and use, meaning that it can be applied in a variety of settings with
minimal training. Pareto Analysis is an objective method - it relies on data rather than subjective opinion -
which increases its credibility in the eyes of decision-makers. The analysis is flexible and can be adapted
to a wide range of problems and organizations.
Weaknesses
It only looks at cause-and-effect relationships and does not consider other factors that may be important.
Identifying all of the possible causes of a problem can be difficult, and some causes may be more
important than others. Pareto analysis relies on statistical assumptions that may not always be accurate.
Opportunities
It can help you focus your efforts on the most promising areas. Helps you prioritize opportunities so that
you can allocate your resources more effectively. Also, it can help you track your progress over time and
make necessary adjustments to your strategy.
Threats
It is important to ensure that the data you are using is accurate and representative of the overall
population. Pareto analysis can sometimes be biased towards more extreme outcomes. This analysis does
not account for all possible factors that could impact a decision.
4. Decision Matrix
Finally, the decision matrix is a tool that can be used to compare different options side-by-side. By using
these techniques, individuals can be sure that they are making sound decisions that will lead to positive
outcomes.
Strengths
It forces you to carefully consider all of the options and to weigh each one against the criteria. It can help
ensure that you do not make a decision based on emotion or instinct. Can help prevent you from becoming
overly attached to any option, as you are forced to consider each option objectively. It can provide a clear
and concise way to communicate your decision-making process to others.
Weaknesses
One issue is that the criteria used to evaluate the options can be subjective, and it can lead to different
people coming to different conclusions based on the same data. Another potential problem is that all
options may not be known when the decision matrix is created, leading to inaccurate or incomplete
analysis.
Decision matrices can be time-consuming to create and require a significant amount of data, making them
impractical for use in situations where time is limited, or data is scarce.
Opportunities
The ability to make better decisions by organizing and ranking options.

 Ability to see the possible outcomes of each option.
 The ability to compare options side-by-side.
 Ability to quickly identify the best option.
Threats
The process of creating a matrix can be time-consuming and may require input from multiple stakeholders.
The results of a decision matrix are only as good as the data that goes into it, and the final results will be
misleading if the assumptions or inputs are inaccurate.
Decision matrices can create a false sense of precision, leading to overconfidence in the results.
Herbert A. Simon is an American economist and popular scientist who was known for his multiple contributions in the
fields of psychology, statistics and mathematics, among others. He was awarded the Nobel Prize for Economics in 1978.
He is best known for his work on corporate decision making, also called behaviorism.
The Herbert Simon Decision Making Theory first appeared in his renowned book, Administrative Behavior (1947). He
suggested that decisions were critical because if they weren’t taken on time, it’ll negatively impact an organization’s
objective. The concept can be divided into two parts—one is the decision that someone arrives at and another is the
process or actions taken. In other words, implementing a decision is as important as making that decision.
The Simon Decision Making Theory is a framework that provides a more realistic view of the world, where decisions affect
prices and outputs. The theorist argued that making a decision is making a choice between alternative courses of action.
It can even mean choosing between action and non-action. In contrast to classical theorists, Simon suggests that there is
never one best course of action or decision. It’s because one can’t have complete information about something, therefore,
there will always be a better course of action or decision.
The Decision Making Theory by Simon also considers psychological aspects that classical economists overlooked or
ignored. Internal factors such as stress and motivations, among others, limit an individual’s capacity to solve complex
problems. In short, decisions are based on bounded rationality—humans behave differently when there are risks and
uncertainty involved. At the core of the theory lies ‘satisficing’, which is a combination of satisfying and sufficing. It
suggests that one should pursue objectives or make decisions that involve minimum risks and complications as opposed
to focusing on maximizing profits.
There Are Three Stages Involved In The Decision Making Process: (pdf is also downloaded)
1. Intelligence Activity Stage

At this stage, people identify the problems in an organization and the upper management analyzes the organizational
environment to work toward a solution.
2. Design Activity Stage

In order to identify possible solutions to problems, the upper management looks for suitable strategies. They further
analyze the merits and demerits to select a particular course of action.
3. Choice Activity Stage

After making a list of alternatives, the choice activity stage begins. It critically examines and evaluates the various
consequences of all alternatives and the most suitable course of action is selected. This stage requires creativity,
judgment and quantitative analysis skills.
Exploring The Types Of Decisions
With respect to organizational decision-making, the Simon Decision Making Theory recognized two types of decisions:
1. Programmed
Programmed decision making involves those decisions that already have a plan or rule in place, which is used to
reach a solution or conclusion. They follow already established guidelines and formal patterns. For example,
managers have already made such decisions before and it’s a repetitive and routine process.
2. Non-Programmed
Contrary to programmed decision making, non-programmed decisions are ill-structured and one-time decisions.
Problems or situations that don’t have a concrete set of rules or guidelines to follow rely on non-programmed decision
making. These are complex and have long-term impact.
Whether it’s a programmed or non-programmed decision, here are effective strategies to make sound decisions at work.
 Clearly Define The Problem You Need To Solve Through Your Decision
 Always Do Your Homework And Collect Relevant Information Before Arriving At A Decision
 Evaluate Whether The Information You Gathered Addresses The Original Purpose
Herbert Simon’s Decision Making Theory also emphasized the importance of rationality. He proposed the concept of
bounded rationality, where people make decisions within certain limitations. He further supported the behavioral aspect of
organization theory as personal biases and perspectives affect the way employees make decisions.
4. Discuss the techniques for fostering creativity in decision making and problem-solving. Provide examples of how organizations
have used creative problem-solving methods to address challenges.
The Creative Problem Solving Process uses six major steps to find and implement solutions to almost any kind of problem. The six steps are:
 Define the Problem

 Perform a Gap analysis
 Generate Possible Solutions
 Evaluate Possible Solutions
 Select and Implement the Best Solution
 Follow up and Evaluate Progress
Step 1 – Define the Problem

When a problem comes to light, it may not be clear exactly what the problem is. You must understand the problem before you spend time or
money implementing a solution.
It is important to take care in defining the problem. The way that you define your problem influences the solution or solutions that are available.
You must address the true problem when continuing the creative problem solving process in order to achieve a successful solution. You may
come up with a terrific solution, but if it is a solution to the wrong problem, it will not be a success.
Problem solvers can go down the wrong path with possible solutions if they do not understand the true problem. These possible solutions often
only treat the symptoms of the problem, and not the real problem itself. You must get to the root of the problem and not only treat the symptoms.
For example, if the battery in my car is dead, I may define the problem as a dead battery. This may only be a symptom of a bigger problem. The
problem could be a bad alternator which is failing to charge my battery. If I replace the battery without addressing the alternator, I will have
addressed the symptom and the problem will remain.
Step 2 – Perform a Gap Analysis

A Gap Analysis compares the present state with your desired future state. To do this, write a statement of the situation as it currently exists. Then
you write a statement of what you would like the situation to look like. The desired state should include concrete details and should not contain any
information about possible causes or solutions. Refine the descriptions for each state until the concerns and needs identified in the present state
are addressed in the desired state.
Step 3 – Generate Possible Solutions

Generating possibilities for solutions to the defined problem comes next in the process. It is important to generate as many solutions as possible
before analyzing the solutions or trying to implement them. There are many different methods for generating solutions. Depending on your
situation, you may try brainstorming, brainwriting, or mindmapping. You may also choose to adopt a method created and popularized by Dr.
Edward de Bono called the Six Thinking Hats. More on these methods in a future post.
Step 4 – Evaluate Possible Solutions

Once you have generated a good number of possible solutions, it’s time to evaluate them for effectiveness. Consider who, what, when, where,
and how that the potential solution should meet to be an effective solution to the problem. When developing criteria that possible solutions to the
problem should meet, also consider the following:
 Ask questions such as “Wouldn’t it be nice if…” or “Wouldn’t it be terrible if…” to isolate the necessary outcome for the problem resolution.
 Think about what you want the solution to do or not do.
 Think about what values should be considered.
Use the answers to these questions as the starting point for your goals or problem-solving criteria.
Additionally, the criteria for an effective solution to the problem should consider the following:
 Timing – Is the problem urgent? What are the consequences for delaying action?
 Trend – What direction is the problem heading? Is the problem getting worse? Or does the problem have a low degree of concern when
considering the future of the circumstances?
 Impact – Is the problem serious?
Step 5 – Select and Implement the Best Solution

The next step in the process is to select one or more solutions from the possibilities. In the previous step, you will have eliminated many of the
possibilities. With a short list of possibilities, you can do a final analysis to come up with one or more of the best solutions to the problem.
In this step, you can use such decision-making tools as the Low Hanging Fruit matrix or the paired comparison analysis. We’ll discuss each of
these in a future post.
You will also need to analyze for potential problems. This is done by asking how serious and how likely any potential problems may be.
Once you have decided on the best solution, create an action plan and implement it. Your action plans should include all necessary tasks and
resources required to fully implement the proposed solution.
Step 6 – Follow up and Evaluate Progress

As part of the implementation process, you will also continue to evaluate the solution(s). It is important to be flexible and adapt the solutions as
necessary, based on the evaluation of the solution’s effectiveness at solving the problem. You may need to adjust the plan as new information
about the solution comes to light.
Here are some sample questions you can ask to evaluate the implementation of the solution:
 Does the solution solve the real problem and not just treat a symptom?
 Is the problem going to be solved permanently?
 Have all the positive and negative consequences been examined?
We’ll look a little closer at some of the steps we covered here in future posts. For now, focus on utilizing a systematic and organized approach the
next time you are faced with an issue that calls for creative problem solving.
American Water College provides online and onsite technical and management training for water and wastewater professionals. Click on the link
for more information about our Effective Utility Management training program. Or check out our Classroom Training Schedule for dates and
locations of our upcoming events. We also have a complete training library available to your organization. Click here or call us at (661) 874-1655
to find out how you can gain access to this industry specific training for your utility.
Example #1: Adapting Customer Service to Evolving Customer Expectations and Needs
The Complex Problem:
Customer service always has room for improvement, and the insurance industry is no exception. Tensions run high when receiving claims, and it is
critical that customers feel both comfortable and satisfied with the claims experience. Gore Mutual was at a standstill with a 97% customer
satisfaction rating, but the company wanted to do more. As customer expectations and needs continue to evolve, how can customer service
continue to improve?
Creative Problem Solving Methods:
In order to improve customer satisfaction, Gore Mutual first needed to understand the experiences of all relevant stakeholders in the claims
process, which included customers, brokers, and service providers. Acknowledging the role of each group in the overall claims experience would
create a clear customer journey.
Overlap led a series of engagement sessions and gathered feedback from all groups involved in the customer journey to better understand where
the journey could be improved. Methods of information gathering included in-person interviews, interactive Stakeholder Lab workshops, and
observational research of spaces, such as dispatch centres, digital platforms, contractors’ shops, and customer meetings.
This thorough approach went beyond simple satisfaction surveys to paint a detailed picture of the entire customer journey. A Journey Map, a
design tool for capturing new ways of looking at someone’s experience, was used to guide research collection.
In the end, a nuanced insights report was created to outline the current and ideal future state of navigating the claims process. With this ideal
claims journey in mind, Gore Mutual established ClaimCare, a new approach to claims processing, which included improvements such as a
Concierge for inquiries, a Mobile Response Team, and a Mobile Response Centre for catastrophes.
Example #2: Developing Inclusive Online Facilitation in the Midst of a Pandemic
The beginning of the pandemic left businesses scrambling to find inventive ways to hold in-person meetings and events. How do you create
engaging facilitation without experiencing the intangible moments that come with face-to-face, in-person connection? How do you develop online
facilitation that’s engaging and accessible to everyone in the midst of overwhelming Zoom fatigue? How do you implement technology in order to
be effective while also not alienating those who are unfamiliar or struggle with new technology?

Like many businesses, The Schlegel-UW Research Institute for Aging (RIA) was caught in the dramatic shift to online methods that occurred in the
early days of the pandemic. They knew they needed to adopt new technology in order to thrive—or even survive—but they didn’t want
engagement to suffer or for those less technologically inclined to be left behind.
Using the lens of creative problem solving and human-centred design techniques, RIA was able to translate all they previously knew about
facilitation into an adaptive and inclusive online approach. It was essential to find tools and solutions that were simple to navigate and accessible
to everyone on the RIA team, as well as those RIA works with.
Overlap provided these tools and the training required to implement online facilitation quickly and effectively while sharing insight into how to
spot unconscious bias, how to lead an accessible session, and how to apply diversity, equity, and inclusion across all online communication.
Keeping human-centred design principles top-of-mind ensured all voices were heard, and no one was left behind in the transition.
Learn more about Developing New Training for Great Online Facilitation.
Example #3: Improving the Experiences of Aging Adults
Aging is a deeply personal and challenging experience. How can caregivers better understand the experiences of older adults? Instead of grouping
every senior together, how can care be designed to meet the needs of all subgroups of aging adults? For example, newcomers, people who
identify as LGBTQ+, and people with dementia may require or prefer different methods of service.
To solve this complex problem, Overlap deployed design teams to complete high-touch, day-long ethnography as well as low-touch, three-minute
surveys to gather a wealth of data that could inform decision making. Overlap used the findings and insights to develop a thorough and wide-
ranging set of design principles for serving older adults.
A comprehensive toolkit was designed to help service providers co-design alongside older adults. The toolkit included practical, creative problem
solving techniques and guided design thinking practices to ensure everyone affected was involved in the process. In addition to the toolkit,
training was provided directly to caregivers to ensure all gaps in service and understanding were bridged.
Directly involving aging adults from all walks of life, their loved ones, and their caregivers meant the decision making process was thoroughly
informed, which enabled care to be adapted to meet the needs of all individuals.
5. What are the advantages and challenges of group decision making in organizations How can organizations improve the
effectiveness of group decision-making processes?
What is a Group?
Group is the number of individuals who come together and work to attain a common objective.
What is Decision-making?
It is a process of selecting the best solution to solve a critical problem.
Group Decision Making

Definition: Group Decision-making is a form of participative decision-making, where a group of individuals work together to solve a problem complex in nature.
The group members try to discover and test creative alternatives to solve complicated problems.
Advantages of Group Decision-making
The advantages of group decision
 A pool of Knowledge
Decision-making in a group involves many people during the process. This brings more knowledge and expertise at the time of decision-making.
 Acceptance
As the decision is taken collectively, the members easily accept the decisions.
 Variety of Alternatives
A group can generate more alternatives than individuals.
 Overall Development
Group decision-making is an interactive process in which all members share their skills and knowledge. Thus, it results in the overall development of the group
members.
 Diversity of Views
Different individuals possess different views towards a situation. Thus, there is a collection of different ideas for specific problems during decision-making.
 Balanced Decisions
Group members ascertain multiple consequences and risks associated with the idea. Hence, results in balanced decision-making.
Disadvantages of Group Decision-making
 Dominance
The group members have to agree with one or more dominating members to make a decision.
 Conflict
Disagreement among the group members may lead to conflict in the group.
 Time-Taking Process
It may take plenty of time if the group members cannot reach any suitable decision.
 Pressure
The group members may feel pressure to accept the decisions taken by others.
Techniques of Group Decision-making

Group decision-making techniques are the processes that help group leaders in idea generation regarding a business problem. The creativity and expertise of the group
members facilitate hedging risks associated with the decision.
The techniques which one can use for group decision-making are discussed in detail below:
Brainstorming
Brainstorming is a group decision-making technique developed by Alex Osborn. This technique aims to generate a pool of ideas in a judgement-free environment.
In this technique, the group manager clearly states the problem. The group members are asked to generate as many ideas as possible spontaneously.
No criticism, comments, or judgements are allowed during the process. All the ideas are recorded and evaluated by the manager later on.
Pros:
1. A list of a large number of creative ideas is created.

2. The process is carried out in a bias-free environment.
3. It results in a low cost per idea.
4. The size of the group is small, which leads to increased participation of group members.
5. As there is no restriction or judgement, quality ideas are received.
6. The idea is acceptable to all.
Cons:
1. In the end, no plan or solution is generated. Only a list of ideas is left with the manager.
2. Due to lack of closure, group members are left dissatisfied.
Delphi Technique
Delphi Technique is a group decision-making and planning process. Norman C.Dalkey and his associates at the Rand Corporation developed this technique.
In this, we obtain judgements and solutions through group members without physical interaction. Communication takes place through e-mails or other methods
via questionnaires.
The steps taken to perform Delphi Technique are as follows:

1. Delphi Question and the first enquiry
The group coordinator sends the Delphi Question and Questionnaires to the group members. Post this, they ask group members to share their ide as or solutions for
the given problem.
2. The first response
The members write their views, ideas and possible solutions. Thereafter, they send their answers to the group coordinator.
3. Analysis of first response, feedback and second enquiry
The group coordinator collects and summarises their responses. He prepares another questionnaire asking for more refined solutions, clarification, agreements &
disagreements of previous ones.
4. The second response
The group members again record their responses and send them to the coordinator.
5. Continuation of the process
This process continues until they reach a suitable solution.
Nominal Group Technique (NGT)
This decision-making technique doesn’t involve interaction among the group members. The group members are present but don’t interact with each other that is why
it is called nominal.
The group members need to write their ideas without any discussion. Their opinions are noted on a chart one by one and clarif ied without any criticism.
The steps involved in NGT are as follows:
1. The group members list their ideas silently.

2. Group members write their ideas on a chart until all the ideas are listed.
3. After that, the members collectively discuss the ideas without criticism.
4. In the end, collect a written vote from all the members.
Fish Bowling
Here the group members sit in a circle and one of the group members sits at the centre. Generally, the member seated in the centre is the decision-maker. Besides, he
suggests solutions for the problem given by the group members.
All the members will ask questions and critically evaluate the solution suggested by the person in the centre. But, the group members cannot interact with each other. After
all the views are expressed, select the ones with conses.
Electronic Meeting
It is a blend of the NGT technique and technology. In this method, the group hosts the meetings through an electronic medium.
The problem is shared with the group online, and the members submit their responses through votes. However, the vote signifies agreement or disagreement with the idea
or suggestions.
Pros:
1. The group members can be honest without any pressure.

2. It is a less time taking process.
Cons:
1. The members with good typing speed can excel compared to those with low or average typing speed.
2. Excellent ideas are not recognized.
Devils Advocacy
This technique identifies the flaws during the group decision-making process. The benefit of this technique is that it highlights every possible loophole in the solution.
It is a technique where two group members are appointed as ‘devils‘. These devils have to identify flaws in the ideas suggested by the group members. The other members
have to satisfy these devils with solutions.
Didactic Interaction
This technique is useful when the answer is to be drawn in Yes or No. Here we divide the entire group into two parts. One part suggests points favouring the decision and
the other part presents points against the decision.
The steps involved in Didactic Interaction are as follows:
1. The process begins with defining the problem/issue for which we need to take a Yes or No decision.
2. Then divide the group into two parts, one favouring Yes and the other favouring No.
3. The groups support their side of the decision while discussing.
4. Then they inter-change their sides and continue the discussion. That is to say, the members in favour of No will support the Yes ones and vice versa.
5. Mutual acceptance of both parties obtains the result of the discussion.
Also, read the difference between Group and Team.
Example of Group Decision Making

The marketing department has to decide the marketing medium for the product. The marketing manager opted for the Brainstorming technique.
He organized a group meeting and shared the objective with the members. He then asked the members to brainstorm and suggest ideas for marketing the product.
The group generated enough creative alternatives by the end of the process. The managers evaluated the ideas and selected the most suitable ones for the product.
6. Explain the concept of Management by Objectives (MBO) and its benefits in performance management.
Pdf is been downloaded
7. Discuss the concepts of organizational design and structure and their impact on an organization's effectiveness.
Organization design is a process for structuring and running organizations. It takes a holistic approach to the work done in an organization including team formations, shift
patterns, reporting, decision-making, communication methods and much more. The purpose of organization design is to help an organization excel at what it d oes and help meet its
goals. That can mean everything from a large-scale reorganization to subtle shifts in structures and systems.
Principles of Organization Design
You have one chance at organization design and it takes a lot of time and effort. If you don’t get it right, you’re not going to reap the rewards. This makes it important to know the
principles of organization design and how to move through the process correctly.
Every organization is different, of course, but they all share certain commonalities. While these 10 guiding principles may alter slightly depending on who’s applying them, they remain
a fair roadmap for leaders who are looking to recalibrate their organizations to attain some of the many benefits possible from organization design.
1. Free Yourself From the Past: The organization has to look reflectively at itself, its purpose and how changes to those foundational pillars will affect cl ients,
employees and investors. As you begin to explore changes, think about how they can differentiate you from the comp etition and how these changes will play out over the
next few years.
2. Design With Knowledge of Your DNA: In order to know what to prioritize in organizational design, step back and identify the universal building blocks of
your organization. All organizations can be divided into tangible or formal elements such as how decisions are made, how data is processed and how work is divi ded.
Businesses also have intangible or informal elements such as how people act and are inspired to contribute.
3. Fix Your Structure Last: The organizational chart of the company might seem like the logical first step, but you want to create a bridge that will carry the
organization from the old ways to the new ways. It’s a common mistake to think that you can simply jump from one structure to another. That structure is the final step
after you’ve done everything to support it and the changes it will initiate.
4. Use Your Top Talent: You make a change by empowering the people in your organization, so no matter what structural changes you plan on making, you want to
identify the strengths of your key performers and make sure they are empowered to collaborate and facilitate those changes. T he leadership team is responsible for
successful organization design.
5. Know What You Can Control: It’s important to list the constraints that are slowing you down as an organization and the sacrifices that you’re always making.
Know your limitations before any attempt to execute a new organization design. You should also be aware of the regulations, supply shortages and customer demand
that are out of your control but don’t spend too much time focusing on the things that you can change.
6. Promote Accountability: You want to keep everyone accountable for their jobs which requires transparency and clear communications, not micromanaging. This
is likely the single most important change you can make to your organization. If communication flows without obstruction and everyone is taking responsibility for their
work, the structure you design is going to work better.
7. Benchmarking Isn’t As Important As You Think: There can be problems with tracking what competitors are doing. While it can help optimize your
design and expose hidden issues, it also short-changes your unique capabilities. It’s not productive to compare your organization to others that might have a different
value proposition or capabilities. If you must benchmark, focus on select elements rather than the whole organization.
8. Organization Design Should Fit Company Purpose: Every organization is different and the right structure for your organization will likely not fit
another. When designing the organization, make sure it aligns with your purpose and is consistent across th e organization.
9. Don’t Neglect the Intangible Elements: It’s easy to focus on the tangible elements of organization design, such as decision rights and the organization
chart, but that won’t get the results you want. Instead, balance the tangible with the intangible if you want to get things done. The tangibl e is important but without
addressing how people think and act in that structure, you won’t change anything.
10. Build on Your Strengths: One of the best ways to implement successful organization design is to build on your strengths. Often the organization’s desi gn is so
far from the organization’s core values and strengths that it’s destined to fail. Make sure to find the organization’s strengths and build on that foundation.
Types of Organization Design
Just as there isn’t one type of organization, there isn’t one type of organization design. These various organizational struc tures are a framework for the organization to distinguish
power and authority, roles and responsibilities and determine how the information will flow through the organization. Let’s take a look at some of the more common organization design
structures that support organization design.
Hierarchical Structure
This is a pyramid-shared organizational chart with the CEO or manager on top and each level descending in the chain of command until the base is entry-level employees. This
defines authority, shows everyone to whom they report and clarifies the career path. However, a hierarchical structure can slow down innovation and make those at the base of the
pyramid feel as though they are outside the process.
Functional Structure
As in the hierarchical structure, those with more authority and responsibility are placed at the top of the chart and it then descends by responsibility. However, the organization is
determined by skillset and function in the company, with each department managed independently. This gives departments a sense of self-determination and the structure can be
easily scaled. But a functional structure can also create silos in the organization and block interdepartmental communications.
Horizontal or Flat Structure
The opposite of a hierarchical structure, the horizontal structure is popular with startups and other organizations in which there is not much distance between management and
employees. It encourages less supervision and more involvement from everyone in the organization. Employees feel ownership and take more responsibility. It fosters
communication and speeds the delivery of new ideas. However, there can be a lack of supervision that causes confusion and is difficult to maintain at scale.
Divisional Structure
As the name implies, each division in the organization controls its own resources as if an independent company within a larger organization. Each division has its own marketing, sales
and IT teams. The structure lends itself to larger organizations and allows them to be more flexible, quickly responding to market changes and customer needs with a customized
approach. It can also create duplicate resources, wasting time and energy. Communication can be difficult between divisions, too, leading to internal competition within the larger
organization.
Matrix Structure
This grid-like structure is great for cross-functional teams that are created to serve special projects. This structure helps connect otherwise disparate parties. The matrix structure also
helps managers easily find team members for whatever project they’re leading and provides a more dynamic view of the organization. Employees are encouraged to use their skills
beyond those applied to their original role. It can create conflicts between managers in different departments.
Team-Based Structure
As the name suggests, this structure organizes employees by teams. This is against what’s considered to be a traditional hier archical structure and is ideal for a more problem-
solving, collaborative environment where employees have more control. This can boost productivity and performance, breaking down the silo mentality in favor of more transparency. It
also allows for lateral moves throughout the organization and provides less managerial supervision. It’s a great fit for agile project management and scrum teams. It does tend to make
promotional paths less clear.
Network Structure
This structure works well for organizations that don’t have their services centralized. They work with vendors, subcontractors, freelancers, offsite locations and satellite offices. To bring
some order to this seemingly chaotic mix, a network structure helps open communications between those involved over an old-fashioned hierarchy. It visualizes the various onsite and
offsite relationships in the organization, fosters a more flexible environment and helps everyone understand t he workflow so they can collaborate more freely. It can still be complex,
though, and makes it difficult to know who has authority over what.
What is an organizational structure?
An organizational structure outlines how responsibilities and roles are assigned and grouped throughout an
organization.
1. Hierarchical org structure
Hierarchical org chart example (click on image to modify online)
The pyramid-shaped organizational chart we referred to earlier is known as a hierarchical org chart. It’s the most common type of organizational structure—the
chain of command goes from the top (e.g., the CEO or manager) down (e.g., entry-level and lower-level employees), and each employee has a supervisor.
Pros
 Better defines levels of authority and responsibility

 Shows who each person reports to or who to talk to about specific projects
 Motivates employees with clear career paths and chances for promotion
 Gives each employee a specialty
 Creates camaraderie between employees within the same department
Cons
 Can slow down innovation or important changes due to increased bureaucracy

 Can cause employees to act in the interest of their department instead of the company as a whole
 Can make lower-level employees feel like they have less ownership and can’t express their ideas for the company
2. Functional org structure
Functional org chart example (click on image to modify online)
Similar to a hierarchical organizational structure, a functional org structure starts with positions with the highest levels of responsibility at the top and goes down
from there. Primarily, though, employees are organized according to their specific skills and their corresponding function in the company. Each separate
department is managed independently.
Pros
 Allows employees to focus on their role

 Encourages specialization
 Help teams and departments feel self-determined
 Is easily scalable in any sized company
Cons
 Can create silos within an organization

 Hampers interdepartmental communication
 Obscures processes and strategies for different markets or products in a company
3. Horizontal or flat org structure
Horizontal or flat org chart example (click on image to modify online)
A horizontal or flat organizational structure fits companies with few levels between upper management and staff-level employees. Many startup businesses use a
horizontal org structure before they grow large enough to build out different departments, but some organizations maintain this structure since it encourages less
supervision and more involvement from all employees.
Pros
 Gives employees more responsibility

 Fosters more open communication
 Improves coordination and speed of implementing new ideas
Cons
 Can create confusion since employees do not have a clear supervisor to report to
 Can produce employees with more generalized skills and knowledge
 Can be difficult to maintain once the company grows beyond startup status
4. Divisional org structure
In divisional organizational structures, a company’s divisions have control over their own resources, essentially operating like their own company within the larger
organization. Each division can have its own marketing team, sales team, IT team, etc. This structure works well for large companies as it empowers the various
divisions to make decisions without everyone having to report to just a few executives.
Depending on your organization’s focus, there are a few variations to consider.
Market-based divisional org structure
Divisions are separated by market, industry, or customer type. A large consumer goods company, like Target or Walmart, might separate its durable goods
(clothing, electronics, furniture, etc.) from its food or logistics divisions.
Market-based divisional org chart example (click on image to modify online)
Product-based divisional org structure
Divisions are separated by product line. For example, a tech company might have a division dedicated to its cloud offerings, while the rest of the divisions focus on
the different software offerings—e.g., Adobe and its creative suite of Illustrator, Photoshop, InDesign, etc.
Product-based divisional org chart example (click on image to modify online)
Geographic divisional org structure
Divisions are separated by region, territories, or districts, offering more effective localization and logistics. Companies might establish satellite offices across the
country or the globe in order to stay close to their customers.
Geographical divisional org chart example (Click on image to modify online)
Pros
 Helps large companies stay flexible

 Allows for a quicker response to industry changes or customer needs
 Promotes independence, autonomy, and a customized approach
Cons
 Can easily lead to duplicate resources

 Can mean muddled or insufficient communication between the headquarters and its divisions
 Can result in a company competing with itself
5. Matrix org structure
Matrix org chart example (click on image to modify online)
A matrix organizational chart looks like a grid, and it shows cross-functional teams that form for special projects. For example, an engineer may regularly belong to
the engineering department (led by an engineering director) but work on a temporary project (led by a project manager). The matrix org chart accounts for both of
these roles and reporting relationships.
Pros
 Allows supervisors to easily choose individuals by the needs of a project

 Gives a more dynamic view of the organization
 Encourages employees to use their skills in various capacities aside from their original roles
Cons
 Presents a conflict between department managers and project managers

 Can change more frequently than other organizational chart types
6. Team-based org structure
Team-based org chart example (click on image to modify online)
It’ll come as no surprise that a team-based organizational structure groups employees according to teams—think Scrum teams or tiger teams. A team
organizational structure is meant to disrupt the traditional hierarchy, focusing more on problem-solving, cooperation, and giving employees more control.
Pros
 Increases productivity, performance, and transparency by breaking down silo mentality

 Promotes a growth mindset
 Changes the traditional career models by getting people to move laterally
 Values experience rather than seniority
 Requires minimal management
 Fits well with agile companies with Scrum or tiger teams
Cons
 Goes against many companies’ natural inclination of a purely hierarchical structure

 Might make promotional paths less clear for employees
See why forming tiger teams is a smart move for your organization.
Learn more
7. Network org structure
Network org structure example (click on image to modify online)
These days, few businesses have all their services under one roof, and juggling the multitudes of vendors, subcontractors, freelancers, offsite locations, and satellite
offices can get confusing. A network organizational structure makes sense of the spread of resources. It can also describe an internal structure that focuses more
on open communication and relationships rather than hierarchy.
Pros
 Visualizes the complex web of onsite and offsite relationships in companies

 Allows companies to be more flexible and agile
 Give more power to all employees to collaborate, take initiative, and make decisions
 Helps employees and stakeholders understand workflows and processes
Cons
 Can quickly become overly complex when dealing with lots of offsite processes
 Can make it more difficult for employees to know who has final say
Consider the needs of your organization, including the company culture that you want to develop, and choose one of these organizational structures.
8. Process-based structure
Process-based structure example (click to use template)
A process-based structure organizes employees into groups or departments based on steps of a process. The leader of the company is listed at the top, as they
oversee all processes. Each step of the process has a supervisor and employees who do work in that process. The chart reads from left to right. One process can not
begin until the process before it is completed.
Pros
 Can lead to faster and more efficient processes

 Promotes teamwork within departments and across departments
Cons
 Can lead to barriers between departments

 Can lead to miscommunication between departments, especially during handoffs
9. Circular structure
Circular org chart example (click to use template)
A circular organizational structure puts leaders of the organization at the center rather than the top so they can share information outward rather than pass it down
a chain of command. Employees in different departments are also seen as part of a larger whole rather than siloed off by department.
Pros
 Promotes the flow of information across the organization
 Promotes communication and collaboration between employees and departments
Cons
 Can cause confusion around who to report to, especially for new employees
 Can take longer to make decisions
10. Line structure
A line structure is one of the simplest organizational structures as authority flows from top to bottom. Each department is ran by a manager and works toward a
common organizational goal.
Pros
 Reporting structure is clear

 Stable environment
Cons
 Can be inflexible
 Can limit innovation and specialization
 Can lead to managers having a lot of power

Principles of Management

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Principles of Management

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PRINCIPLES OF MANAGEMENT

2. Discuss Mintzberg's managerial roles and their significance in real-world management.

Henry Mintzberg’s Management Roles

Examples of Mintzberg’s Management Roles

Mintzberg’s Management Role Example of work

Figurehead Approvals of budget, plans, etc

Leader Inspiring your team to meet goals

Liaison Co-ordinate the Cross-Functional Teams

Monitor Evaluate the daily KPI dashboard

Spokesperson Communicate the KPI issues with higher managers.

Entrepreneur Initiate and execute digital transformation

Disturbance Handler Resolve a discord between two team-members.

Resource Allocator Cut budget from a non performing asset

Henri Fayol’s 14 Principles of Management with Examples

6. Subordination of Individual Interest

12. Stability of Tenure of Personnel

14. Esprit de Corps

Pdf has been downloaded

5. Discuss the criticisms and modern applications of scientific management.

Same pdf . evolution of management.

Same pdf as above

2. Describe various forecasting techniques and their applications in different industries.

Let us check the decision-making process in management with examples.

The ability to make better decisions by organizing and ranking options.

1. Intelligence Activity Stage

2. Design Activity Stage

3. Choice Activity Stage

 Define the Problem

Step 1 – Define the Problem

Step 2 – Perform a Gap Analysis

Step 3 – Generate Possible Solutions

Step 4 – Evaluate Possible Solutions

Step 5 – Select and Implement the Best Solution

Step 6 – Follow up and Evaluate Progress

The Complex Problem:

Creative Problem Solving Methods:

Example #2: Developing Inclusive Online Facilitation in the Midst of a Pandemic

The Complex Problem:

Creative Problem Solving Methods:

Example #3: Improving the Experiences of Aging Adults

The Complex Problem:

Creative Problem Solving Methods:

Group Decision Making

Advantages of Group Decision-making

The advantages of group decision

Disadvantages of Group Decision-making

Techniques of Group Decision-making

1. A list of a large number of creative ideas is created.

The steps taken to perform Delphi Technique are as follows:

Nominal Group Technique (NGT)

The steps involved in NGT are as follows:

1. The group members list their ideas silently.

1. The group members can be honest without any pressure.

The steps involved in Didactic Interaction are as follows:

Also, read the difference between Group and Team.

Example of Group Decision Making

Pdf is been downloaded

Principles of Organization Design

Types of Organization Design

Horizontal or Flat Structure

1. Hierarchical org structure

Hierarchical org chart example (click on image to modify online)