PrinciPal of management

The Building Blocks of Organizational Success

and Leadership Excellence
Shivam Verma -BBA Students
9569541349

Principles of Business Management offers a comprehensive exploration of the

foundational concepts and practices that drive success in today’s business world.
This book provides a clear framework for understanding the essential functions of
management—planning, organizing, leading, and controlling—while also delving
into the key elements that influence modern business environments, such as
innovation, strategic decision-making, and Organizational culture.
 Principal of management Notes

Management Nature & Significance

Management
Management is the Process of getting things done Efficient aim of achieving goals
Effectively' &Efficiently.
1. Process-
Involves a Tortivene series of inter-related function.

2. Effectiveness-
Means doing the right task & achieving goals on time.

3. Efficiency-
Means doing the task correctly with minimum cost.

Effectiveness & Efficiency

Effectiveness- achieve the goal within time.
Efficiency- Optimum use of resource to achieve Source the goals.
Mgmt should be both Effective & Efficient.
Example-
Furniture Factory.

Characteristic
1) Management is Goal Oriented Process.
2) Management is all Pervasive.
3) Management is Multidimensional.
4) Management is Continuous Process.
5) Management is Group Activity.
6) Management is Dynamic Function.
7) Management is Intangible Force.
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Objective Of Management
1. Organizational Objective
Survival
Profit
Growth

2. Social Objective
Env Fridly Method OfProdn.
Employment Opportunity.
Providing basic amenities
Good Quality product.

3. Personnel Objective
Financial Need.
Social Need.
Good Working Env.

Importance Of Management
1. It helps in Achieving Group Goal.
2. It increases Efficiency.
3. It creates the Dynamic Organization.
4. It helps in Achieving Personal Objectives.
5. It helps in development of society

Nature Of Management : Both Science & Arts

Management is Science
1. Systematic Body Of knowledge.
2. Principles based on observation e c. & Experimentation.
3. Universally Valid.
Management is Arts
1. Existence of theoretical knowledge.
2. Personalised Application.
3. Based On Practice & Creativity
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Functions Of Management
1. Planning
2. Organising
3. Staffing
4. Directing
5. Controlling
Planning
Determining in advance what to do, when to do, how to do and who is going to do
it.
Setting goal in advance.
Organising
Assigning duties, Grouping tasks, establishing authority and allocating resources
required to carry out a specific plan.
Staffing
Finding the right person with the right qualification for the right position at the right
time. (HR function-Recruitment,selection, placement & training).
Directing
Process of supervising, motivating, leading, and communication with the
subordinates to achieve the organisational objectives.
Controlling
Function performance of monitoring organisational towards the attainment of
organisation goals. It involves establishes standards of performance, measuring
current performance comparing it with established , standard and taking corrective
action if deviation.
Coordination
Coordination is the force that binds all the other functions of management.
Coordination is the synchronises the process by which cess by activities which a
manager of different department toward the achievement of a common goal.Not a
separate function but it is Coordination : Essence of management.

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Coordination: Essence Of Management

Coordination is needed in all managementfunction.
Coordination is need needed at all level

Nature/Features/CharateristicsOf Coordination
1. Coordination integrates group efforts.
2. Coordination ensures unity of action.
3. Coordination is a continuous process.
4. Coordination is an all pervasive function.
5. Coordination is the responsibility of all managers.
6. Coordination is a deliberate function.
Importance Of Coordination
1. Growth in Size.
2. Specialisation.
3. Functional Differentiation

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 Principal of management Notes

Principles Of Management
POM are broad and general guidelines for decision making and behaviour of
managers.
They are not rule they ar are a guide to action.

Management Principles vs Pure Science Principles

1. Flexible. 1. Rigid in nature.
2. Have to applied creatively as they deal 2. Applied in static & absolute
with unpredictable human behaviour. manner.
3. Keep pace with changing environment. 3. Not required to keep pace
with changing environment

Management Principles Vs Management Techniques

1. Guideline to take decisions/action. 1. They are procedure involves a
series of steps.
2. Flexible. 2. Not so Flexible.

Derivation Of Principles Of Management

Derived & developed in following two step.
1. Observation
2. Experimentation

Nature/ Features/Characteristics Of Principle Of Management

1) Universally Applicable

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2) General Guidelines
3) Contingent
4) Mainly Behavioural.
5) Formed by Practice Experimentation. &
6) Flexible.

Significance/Importance Of Principle Of Management

1) Providing Managers with useful insights into reality.
2) Optimum Utilisation Of Resources & Effective Administration.
3) Scientific decisions.
4) Meeting Changing Environmental Requirement.
5)Fulfilling Responsibility. Social
6) Management Training Education & Research.

Fayol's Principles Of Management

(Contribution Of Henri Fayo)
1. Activities of an industrial organisation could be divided into six groups:
1) Technical.
2) Commercial.
3) Financial.
4) Security
5) Accounting.
6) Managerial

2. He was first to identify four function of management: Planning, Organising,

Directing & Controlling.
3. He not only identified management as a separate field of endeavour, but also
developed 14 principles, which act as guidelines for managers.

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-For his contribution, "Father Of General Management”. –

Management Principles Developed By Henri Fayol

1. Division Of Work
2. Authority & Responsibility
3. Discipline
4. Unity Of Command
5. Unity Of Direction
6. Subordination Of Individual Interest to General Interest.
7. Remuneration Of Employees
8. Centralisation & Decentralisation
9. Scalar Chain
10. Order
11. Equity
12. Stability Of Personnel
13. Initiative
14. Espirit De Crop

1. Division Of Work
Whole work must be divided into small tasks or jobs and each job must be assigned
to a trained specialist who is competent to perform it.
Division make each task sir simplier& Repetitive performance helps in gaining speed
accuracy & specialisation, increase increase in efficiency.

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For this rea reason, big reason, big firm have separate department Finance,
Marketing, Human Resource. Etc

2. Authority & Responsibility

There should be Proper Balance between authority &responsibility.
Authority is right to give orders to subordinates.
Responsibility is the duty, which subordinate is expected to perform.
Benefit-
1) Prevent misuse of authority.
2) It helps in fixing responsibility.
3) It increases confidence of the employee.
Ex- Responsibility Without authority. Foreman- 100 unit.

3. Discipline
It is the obedience to the rules and regulation of the organisation which is necessary
for systematic , working of the organisation.
Discipline must for all enterprise & for all the levels.
Ex- Senior time- Junior ?
Benefits-
Smooth & Systematic functioning of business.
Better relation between management & employee.
Better Reputation.

4. Unity Of Command
Each subordinate should receive orders and be accountable to one and only one
superior.
Dual subordination avoid as it create confusion in subordinate & conflict between
the superiors.
Benefit-
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No confusion in the mind of subordinate.

Responsibility can be easily fixed.
Better performance.
No conflict
Example- Mkt Manager, sales excutive- 10% discount, finance manager -5%.-
customer.

5. Unity Of Direction
There should be one head and one plan for group of activities having same
objectives.
It ensures unity of action & coordination and avoids unnecessary duplication of
efforts.
Benefit-
Emphasis importance of common goal.
Facilitates coordination. coordination.
Example- Tata Hotel ?, FMCG ?, automobile jewellary? etc. (there should be
separate division for all , Each division should have its own incharge, plan and
resource.

6. Subordination Of Individual Interest to General Interest.

Interest of the organisation as a whole must prevail over the interest of the
individual/ employees.
In case, interest differ It is the duty of th management to reconcile (ESOP ?) them. n.
However, if reconcilation is not possible, then general interest must supersede
individual interest.
Benefit-
1) helps in achieving goal of organisation.
2) Coordination between individual and organisational objectives.

7. Remuneration Of Employees

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Overall pay and compensation should be fair to both employees and organisation.
Fair to everybody.
Benefit-
High level of motivation.
Cordial relations between employees and management.
Improvement in commitment of employees towards organisation.
8. Centralisation & Decentralisation
There should be Proper Balance between centralisation & decentralisation in the
organisation.
Centralisation-concentration of decision- making authority whereas
Decentralisation-Evenly distribution of authority at all levels of management.
There is a need to balance subordinate involvement through decentralisation &
manager's retention of final authority through centralisation.
Degree Of C & D- Experience, ability of superior & subordinate Size of organisation.
Benefit: (Decentralisation)-
Quick- Decision at middle & operational level.
Decrease work-load of superior.
Increase in Encouragement & Motivation level of subordinate.

9. Scalar Chain
Chain of authority and communication that runs from top to bottom and should be
followed by managers and the subordinates.
Formal lines of authority from highest to lowest ranks are known as Scalar Chain.
Chain should not be violated in the normal course of formal communication.
Crucial- Unity of Command & Effective Communication.
In emergency, Fayol permitted a short cut in chain known as Gang Plank".
"Gang Plank" allows direct communication between two employees of the same
level, without following scalar chain.

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Concept of gang plank is possible only for employees of equal rank or of same level.
Ex- gang Plank cannot be established between D & F.
Pros-
1) Orderly & Smooth flow of information.
2) Clear line of authority & responsibility.
3)Better relationship between subordinate & superior.
4) Unity of Command due to no confusion of dual order.
10. Order
There should be a place for everything and everyone.
People & Material must be in suitable place at appropriate time for Maximum
Efficiency.
No Obstruction in work, increased Productivity & Efficiency.
Benefit-
Efficient use of resources, no time waste.
Smooth and systematic working of organisation.
Types Of Order-
Material Order & Social Order.

11. Equity
There should not be any discrimination among the employees on the basis of
religion, language, caste gender, belief or nationality.,
If management partial- work properly. Employee
Pros-
Improves satisfaction & motivation level among employees.
Cordial relations between employees & management.

12. Stability Of Personnel

There should be proper efforts to achieve stability & continuity of tenure of
personnel.
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Employees should be selected and appointed after due and rigorous procedure.
Once selected- minimum period.
Continuous changes will create instability and insecurity among employees and they
would tend to leave the organisation. It will also raise the cost of recruitment,
selection and training.
Benefit-
Increase Efficiency of employee Better Reputation of organisation, Less Expense on
recruitment No Wastage time & resources.

13. Initiative
Workers should be encouraged and given an opportunity to take some initiative in
making and executive the plans.
Initiative taking the first step with s self-motivation and source of strength for the
organisation.

Benefit-
Increase in mental growth & feeling of belongingness in employees.
It increase commitment of employees towards organisation through maximum
participation.

14. Espirit De Corp

Management should promote a Team Spirit of Unity and Harmony among
employees.
Especially in large organisation because otherwise objectives would be difficult to
realise and there will loss of coordination.
A manager should replace 'I' with ‘We' in his conversation to give rise to a to a spirit
of spirit of team spirit.
Benefit-
Develop an atmosphere of mutual trust.
Help in achievement of group goal.

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Cordial relationship between management and worker.

F.W Taylor & Scientific Management

Fredrick Winslow Taylor- American Mechnical Engineer.
Bethlehem Steel Company, USA- Reshaped the factory system of production.

F.W Taylor & Scientific Management Theory (Contributions Of F.W Taylor)

He was the first one to emphasis the importance of Scientific Approach managing
and enterprise istead of Hit and Trial Method.
Two important book : Shop Management & Principles Of Scientific Management.
He is known as "Father OfScientfic Management".

Scientific Management
SM refers to use of Scientific Systematic , Objective and Logical Principles and
Techniques to various managerial functions.
Application of Science for each and every element of management.
Principles Of Scientific Management
1. Science Not Rule of Thumb.
2. Harmony Not Discord.
3. Cooperation Not Individualism.
4. Development of Every Person to His or Her Greatest Efficiency and Prosperity.

1. Science Not Rule Of Thumb

There should be Scientific Study and Analysis of Each Element of a job, in order to
replace the old rule of thumb approach or hit and trial method.
Believed that there was only one best method to maximise efficiency.
Investigate the tradition method through work- study and develop the standard
method of work

2. Harmony, Not Discord

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There should be a Complete Harmony and Proper Understanding between

management and workers and they should work together for organisation goals.
To get harmonious relation,Taylor stress on Mental Revolution.
Give up the Attitude of Opposition. Build positive feeling.

3. Cooperation, Not Individualism

There should be Cooperation between management and worker instead of
Individualism.
It is extension to 'Harmony, not Discord'.
Competition should be replaced by cooperation.
Management insist on "Paternalistic Style of Management”

4. Development Of Workers To Their Greatest Efficiency And Prosperity.

Industrial efficiency depends on personnel competencies i.e efficiency of worker and
scientific management insist on development of worker.
Management should aim to develop workers to their Greatest Efficiency and
Prosperity.
Worker should provide Scientific Training.
Techniques Of Scientific Management
1) Functional Foremanship
2) Standardisation &Simplific of Work Cation
3) Method Study
4) Motion Study
5) Time Study
6)Fatigue Study
7) Differential Piece Wage Study

1.Functional Foremanship
Foreman - Lowest Ranking manager, Highest Ranking worker (Central Point).
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The task of Supervision(Worker) is divided into several Specialised Function and

Each Function is entrusted to a Specialist Foreman.
Taylor suggested Separation of Planning & Execution functions. Each function
Managed by group of 4 foreman. Total-8.
Division of factory in two department.
Planning Department & Production Department.
Extension Of " Division Of Work".

2.Standardisation & Simplification of Work

Standardisation-The process of Setting Standards for every phase of business
operation.
Ex- Standard Time can be fixed.
Simplication-To Eliminating Unnecessary varieties, sizes and grades of the product
manufactured by the organisation.
Reduce inventories, fuller utilisation of equipment, saving cost of labour, machine
cost of machine and tools.
Ex- HUL Reduced varieties of soap.

Work Study
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Work Study- Scientific Study Of Any Work.

1. Method Study
2. Time Study
3. Motion Stud tudy
4. Fatigue Study

1.Method Study
Finding 'One Best Way' of doing a job.
Critical analysis Plant layout , product design ,material handling, and work
processes.
Objective of Method study-To Minimise Cost of Production & Maximise Quality &
Satisfaction of Customers.
Ex-Plant layout (POM)

4. Motion Study
To making Thorough Analysis of various Motions being Performed by a Worker while
he is doing a particular task.
Study- body motion, find out Productive, Incidental & Unproductive movements.
Eliminate unnecessary motion.
Save Time + Productivity Increase.
Ex- Workshop, frequently use tool box, Near.
5.Time Study
A technique, which is used to determine the standard time taken by a workman of
reasonable skills and ability to perform a well defined job.
Under Time study, job is series of element, time taken to perform each element is of
work is recorded divided int & Standard Time is fixed for whole of task.
Objective of Time Study-
1) Determine Number of Worker to be employed.
2) To frame suitable Incentive Scheme.
3) To determine Labour Cost.

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6. Fatigue Study
Determining the amount and frequency of rest intervals required in completing a
task.
Worker must provided brief rief rest interval in between to enable him to regain lost
stamina.
Observing worker while performing job, worker while note down time, when their
efficiency level start falling.
Ex- MNCs Power Nap.

7.Differential Piece Wage Study

A system in which Efficient and Inefficient Workers are paid at Different Rates.
Financial incentives act as Motivators & scope of Extra Earning.
Incentive directly link with with QJA Productivity.
Two rate fixed-
Higher Wage Rate- Who produce equal to or more than the standard output.
Low Wage Rate- Who do not reach the standard.

Planning
Planning is the Process of Setting Objectives for a Given Period, Formulating Various
Courses of action to achieve them, and then Selecting the Best Possible Alternative
from among the various courses of action available.
A good planning is half work done.

Current Status (Where we are) Future Stage (Where we want to go)

Planning bridges the gap

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Planning- Main Aspect

Setting Objective for a given time period. Selecting best possible alternative.
Formulating various courses of action to achieve them.

Features/ Nature/ Characteristics Of Planning

1) It focuses on Achieving objectives.
2) It is a Primary Function of Management.
3) It is Pervasive.
4) It is Continuous.
5) It is Futuristic.
6) It involves Decision-Making.
7) It is a Mental Exercise.

Importance Of Planning
1) It Provides Directions.
2) Planning Reduces the Risks of Uncertainty.
3) Planning Reduces Overlapping and Wasteful activity
4) Planning Promotes Innovation Ideas.
5) Planning Facilitates Decision– Making.
6) Planning Establishes Standards for Controlling.
Limitations Of Planning
1) Planning leads to Rigidity.
2) Planning may Not Work in a Environment. a Dynamic
3) Planning Reduce Creativity.
4) Planning involves Huge Costs.
5) Planning is a Time- Consuming Process.

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6) Planning does Not Guarantee Success.

External Limitations Of Planning

1) Natural Calamities.
2) Changes in Government Policies.
3) Strategies of Competitors.
4) Technological Changes.
5) Changes in Fashion, etc.

Steps in Planning Process

Step 1: Setting Objective
Step 2: Developing Premises
Step 3: Identifying alternative course of action
Step 4: Evaluating Alternative course
Step 5: Selecting an alternative
Step 6: Implement the plan
Step 7: Follow- up Action

Plan & Its Types

Plan is a Document showing Detailed Scheme, Program and Strategy worked out in
Advance for fulfilling an Objective.
1. Single Use Plans
2. Standing Plans
Single Use Plans
One Time Plan which is specifically designed to achieve a Particular Goal. For
Example, Budget.
For Handling Non-Re Recurring Problem.
Plan includes Budget, Programme & Projects.

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Also known as 'Specific Plan' as they are formulated to fit the Specific Situation.

Standing Plans
The plan which is Used for Activities that occur Regularly over a period of time.
Designed for Internal Operations ons of organisation.
This plan Developed Once but is Modified from Time to Time to meet business
need.
It includes Policies, Procedures, Method & Rules.

Other Plan
There are other plans which are usually not classified as single use or standing plans.
Ex- Strategy & Objective as they are usually set by the Top Management and serve
as a guide for overall planning.
Single Single use and standing plan are part of Operational Planning Process.

Single Use Vs Standing Plan

Classification of Plan
Based on what plans seek to achieve, plan can be classified as Objective, Strategy,
Policy, Procedure, Method, Rule, Programme, budget etc.

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1. Objective
2. Strategy
3. Policy
4. Procedure
5. Budget
6. Programme
7. Rule
8. Method

1.
Objective
(Neither Single Use Plan Nor Standing Plan)
Objectives are the Ends which the Management Seeks to Achieve within a given
Time Period by its Period by its operations.
It represent the End Point of planning.
Usually set by Top Management.
It defines the future the organization Aim to Achieve.
Should be expressed in Specific Terms(Quantitative Term).
Ex- Car Company- sales 1 year - 30% increase.
Exam-crack

2.Strategy (Neither Single Plan Nor Standing Plan)

Strategy is a Comprehensive Plan for accomplishing an Organisation Objectives.
Features- Formulated by Top Management due to its relative Importance.
Formulated after considering both Internal and External Environment.
It is Dynamic and it depends on ever changing business environment.
It provides Guidelines for Thinking and Action.
Ex - Jio launch- Free Sim, Free Data.

3. Policies (Standing Plan)

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Are the General Statements that Guide Thinking or Channelise Energy towards a
particular direction.
Policies are Derived from Objectives.
Policies provide a Basis for Interpreting Strategy. They are Guide to Managerial
Action and Decision in the implementation of strategy.
Policies Pre-Decide some issue, Avoid Confusion and it becomes Easier to Resolve
Problems or issues.
Ex- Policy- Not employee person who is less than 18 year old. Ex- Legal Case- Not
Hire.

4. Procedures (Standing plan)

Chronological Sequence of various Steps to be taken in order to Perform an Activity
in an Efficient manner.
A procedure is generally Established d For Re For Repetitive Activity, SO that Same
Steps are followed, whenever that Activity is Performed.
4 Policies and Procedures are Related to each other as Procedure are steps to be
Carried out Within a broad Policy framework.
Procedure are are Rigid.
Ex- Enterprise may follow Procedure for Purchase of Goods.

5. Method (Standing plan)

Is a Prescribed Process in which a Particular Operation or an activity is performed
considering the Objective of the organisation.
Selection of Proper Method Saves Time, Money and Effort and increase efficiency.
For imparting Training to I can be adopted. employees at various levels, Different
Method can be adopted.
Should be stated in Clear and Precise Term. stated i Ex- Different method available
for Valuation of Stock- FIFO, LIFO & HIFO.

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6. Rules (Standing Plan)

Specific Statements that inform what is to be done.
Rules are Managerial Decision that certain action must or must not taken.
Rules are Rigid and Demand Strict Compliance.
Simplest plan, no compromise or change unless a policy decision is taken.
Ex-Rule- No Smoking in Factory, Time

7.Programme (Single Use Plan)

Is a Detailed Statement about a Project which outlines the Objectives, Policies,
Procedure, Rules, Tasks, Human and Physical Resources required and the Budget to
implement any course of action.
It gives a Step-By-Step Approach to guide the action necessary to reach Pre-
Determined Goal.
Ex- Production Programme, Training programme, Promotion programme,
Conference, Seminar

8.Budget (Single Use Plan)

Is a Statement of Expected Result expressed in numerical terms over a Specific
Period of time.
It is a Plan which Quantifies Future fact and Figures.
Budget is expressed in Numerical Terms, it becomes Easier to Numerical Terms
compare Actual Figures with Expected Figures and take Corrective Action
subsequently.
Budget is also a Control a Control Device.
Ex- Sales Budget Production Budget, Cash Budget Gov, Budget etc.

Classification Of Plan
1. Single Use Plan
2. Standing Plan
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3. Other Plan

Single Use Plan

1. Programme
2. Budget
Standing Plan
1. Policies
2. Rule
3. Method
4. Procedures
Other Plan
1. Strategy
2. Objectives

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Principles Of Management (Organizing)

Organising
The Process of Identifying and Grouping the work to be performed, Assigning Duties
to Job Positions and establishing Relationship for the purpose of accomplishing
Objective.
A Process which coo Coordinates Human efforts, assembles Resources and
Integrates both for achieving specified Objectives.

Steps In The Process Of Organising

Step.1 Identification and Division of work
Step.2 Departmentalisation
Step.3 Assignment of Duties
Step.4 Establishing reporting relationships

Importance Of Organising
1) Benefits of Specialisation.
2) Clarity in working relationship. GH
3) Optimum utilisation of resources.
4) Adaptation Of Change.
5) Effective Administration.
6) Development Of Personnel.
7) Expansion and growth.

Organisation Structure

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The Framework within which Managerial and Operating task are performed.
It specifies the Relationship between People, Work & Resources.
OS should also be subjected to Periodic Review to determine if modification is
required.
Good OS should be Dynamic so that it can change adjust as per situation and
business environment.

Building Structure/Organisation Structure

Organisation Structure
The Framework within which Managerial and Operating tasks are performed.
It specifies the Relationshi between People, Work & Resources.
OS should also Iso be subjected to Periodic Review to be AS determine if
modification is required.
Good OS should be Dynamic so that it can change and adjust as as per situation and
business environment.

Need For Organisation Structure

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Arises when the Business Grows beyond a certain Minimum Limit.

In case of One Man Show, OS is Not Needed .
But when the organisation grows, in order to Function Smoothly and face
Environmental Changes, necessary for an organisation to pay attention to its
structure.
Os allows Correlation and Coordination among Human, Physical and Financial
Resources and enables a business enterprise to achieve desired goal.
Ex- Retail Shop Big Bazaar

Benefit Of Organisation Structure

Ensure a Smooth Flow of Communication and Better Control over the operation of a
business enterprise.
Provides the Framework which enable the enterprise to function as an Integrated
Unit by Regulating and Coordinating the responsibilities of Individual and
Department.

How Is Organisation Structure Created ?

Deliberately designed and Planned.
It is influenced by Span Of Management.
Span Of management-Number of Subordinates that can be effectively Managed by a
Superior. (Narrow & Wide)
This determines the Level of Management in the structure.

Organisation Structure

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Types Of Organisation Structures

Depend on Nature and Types of Activities performed by an organisation.
Organisation can be classified under categories: classified

a. Functional Structure b. Divisional Structure

Functional Structure
Grouping of Jobs of Similar Nature under One Department under One Executive.
These department further divided into sections.

Managing Director
(a)Production Department (b) Purchase Department (c) Finance Department (d) Marketing Department

Advantages Of Functional Structure

1) Functional Specialisation.
2) Effective Control and coordination
3) Improves Efficiency.

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4) Avoids Duplication,
5) Ease in Training.
6) Proper Attention.

Disadvantages Of Functional Structure

1) Functional Empire.
2) Conflict Of Interest.
3) Inflexibility.
4) Difficult to hold Accountable

Divisional Structure
When job related to One Product are grouped under One Department.
Suitable for Large Organisation, which have Various Product Line.
Each department operates a Multi-Functional Unit as all necessary functions such as
Production, Purchase, Finance Marketing etc. perform together to achieve common
goal.
Each division works as a 'Profit Centre' where the Divisional Head is responsible for
the Profit or Loss of his division.

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Advantages Of Divisional Structure

Product Specialisation.
Greater Accountability.
Flexibility
Expansion and Growth

Disadvantages Of Divisional Structure

Departmental Conflicts.
Costly.
Ignores Organisational Interests.
Formal & Informal Organisation
On the basis of Relationship,
a. Formal Organisation.
b.Informal Organisation.

Formal Organisation

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Organisational structure which is Designed by the Management to accomplish a

Particular Task.
In formal Organisation, Position, Responsibility, Authority and Accountability of each
level is Clearly and Explicitly defined.
Every member is Responsible to perform a Specified Task assigned to him on the
basis of Authority Responsibility Relationship.
Structure in Formal Organisation could be Functional or Divisional.

Features Of Formal Organisation

1) Specifies the Reporting Relationship among various Job Position and the Nature
of their relationship.
2) It is mean to Achieve the Objective.
3) Formal organisation Coordinates and Integrate the Effort of various Department.
4) It is delibrately Designed by Top Management to facilitate cilitate Smooth Smooth
Functioning of the organisation.
5 It places More Emphasis on Work than Interpersonal Relationship among the
employees.

Advantages Of Formal Organisation

1) Fixation of responsibility.
2) Clarity Of Duties.
3) Unity Of Command.
4) Help full Achieving objective

Disadvantages Of Formal Organisation

1) Delay in Action.
2) Lack of initiatives.
3) Ignores Human Element

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Informal Organisation
Network of Social Relations, which Emerges on its own due to Formal Roles and
Relationship among people.
Informal Organisation Emerges from Within the Formal Organisation when people
interact beyond their officially defined roles.
Informal organisation e to Not Preplanned. It arises Frequent Contact of People with
each Others.
has No Prescribed Rules or Policies and does not have Fixed Lines of
Communication.

Features Of Informal Organisation

An IO Originates from within the Formal as a result of Social Interaction among
people.
The Standard of Behaviour evolve from Group Norms and not from officially Laid
Down Rules and Regulation.
No Specific Direction flow of information.
It emerges Spontaneously and Not Deliberately Created by the management.
It has Not Definite Structure as it is a Complex Network of Social Relationship among
members.

Advantages Of Informal Organisation

1) Faster Communication.
2) Fulfill Social Needs.
3) Helps in Achieving organisational objectives.

DisAdvantages Of Informal Organisation

1) Spread Of Rumours.
2) Resistance To Change.
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3) Pressure Of Group Norms.

Infromal Organisation cannot be Altogether Eliminated.

Informal Organisation Supplements the function of formal organisation and make it
more efficient in Achieving organisation goals.
IO also provide Useful communication Channels.
Management should Skillfully take advantage of both the formal and informal
organisation so that work continues Smoothly.

Delegation of Authority
The Process of Sharing Work with Subordinates is done through "Delegation Of
Authority".
Delegation is the Transfer of Authority from Superior to Subordinate, entrusted of
Responsibility and creation of Accountability for performance.
DOA is the Granting of authority to subordinates to operate within Prescribed Limit.
By- Theo Haimann

Manager Remain Accountable Even After Delegation

The process of delegation does not relieve the superior of his accountability.
Irrespective of the extent of delegated authority , the manager shall still be
accountable to the same extent as before delegation.
Example- Chief Accountant – Financial Statement.-Subordinate.-Bord Meeting.
Subordinate.- Board Meeting Financial.

Element/ Process Of Delegation

ELEMENTS OR PROCESS OF DELEGATION
Authority Responsibility Accountability
Element/ Process Of Delegation

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Authority- Right of an Individual to Command his Subordinates an to take action

within the Scope of his position.
Authority Orginates by virtue JA of its Position.
Authority is Restricted by Rules and Regulation of the organisation which Limit Its
Scope , However we move in the Management Hierarchy, the scope of Authority
Increases.
Responsibility.- is the Obligation of an Individual to Carry out the assigned Duties.
Subordinate is Bound to Perform the duty assigned to him by his superior.
Responsibilities flow upward.
Accountability- is the Obligation to carry out Responsibility. Being Answerable for
the final outcome.
Even After delegation of authority , Superior is Accountable if the Subordinate Fails
to perform the delegated work.
For " Authority Can Be Delegated But Accountability Cannot".

Importance Of Delegation Of Authority

1) Effective Management.
2) Employee Development.
3) Motivation Of Employees,
4) facilitation Of Growth.
5) Basis Of management Hierarchy.
6) Better Coordination.

Centralisation & Decentralisation

Concentration of Decision Making power at the Top Level.
Delegation of all Decision Making function to the Lower Levels.

Decentralisation & Centralisation

Extent to which authority and responsibility is passed to lower levels

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Centralised Organisation-if authority to take decision is retained at top levels.

Decentralised organisation-if decision making authority is widely distributed.
Centralisation of authority- Concentration of decision making power at the top level
of management.

Every Organisation Is Centralised as well as Decentralised

Absolute Centralisation or Decentralisation is not possible.
Complete Centralisation- concentration of decision making power the top level.
Complete Decentralisation- delegation of all decision making function to the lower
levels.
An organisation moves toword Decentralised decision making as it grow in size and
complexity.

NOTE
In order to Increase Effectiveness and to Improve overall functioning the
organisation must , maintain a Balance between Centralisation & Decentralisation.

Importance Of Decentralisation
1) Develops initiative among subordinates.
2) Develops Managerial talent for the future.
3) Quick Decision making.
4) Relief to Top Management.
5) Facilitates Growth.
6) Better Control.

Delegation Vs Decentralisation
Nature- Compulsory Act. Nature-Optional policy decision.
Scope- Narrow scope as it is limited to Scope- Wide Scope as it implies
the superior immediate subordinate. Extension of delegation to lowest
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level of management.
Suitability of Functional Structure
When the size of organisation is large.
When organisation has to carry aout diversified activities.
When the task requites a high degree of specialisation

Suitability of Divisional Structure

When large varieties of products are manufactured using different productive
resources.
When Organisation plans to add more departments or more line of products in
future.
When it is important to derermine profit and loss made by each product line so that
decision can be taken to expand, continue or close a particular product line.

Staffing
Manning the various Position in organisation.
Process which is concerned with Obtaining, Utilising and Maintaining a satisfactory
and Satisfied Work Force.
Not just restricted to filling the job positions. It includes a series of activities like
Manpower Planning, Recruitment, Selection, Training, Development etc.
Staffing is needed in both New and Existing organisation.

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Importance Of Staffing
1) Filling Jobs with Competent Pers Personnel.
2) Better Performance.
3) Survival & Growth.
4) Optimum Utilisation Of Human Resources.
5 ) Improves job satisfaction and moral

Staffing & Human Resource Management

Its scope is different in small and large organisation.
In Small Organisation , function of Staffing is responsibility of all managers and mana
manager perform all duties related to employee salaries, welfare etc.
In Large Organisation, a separate department called Human Resource Department'
which is specialist to manage the people.

Staffing Process
1. Estimating the manpower Requirement
2. Recruitment
3.Selection

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4. Placement & Orientation

5. Training & Development
6. Performance Appraisal
7. Promotion & Career Planning
8. Compensation.

1. Estimating the Manpower Requirement

Manpower requirement involve Forecasting and determining future need
manpower of organisation.
Two types Of Analysis-
1. Workload Analysis.
2. Workforce Analysis.

The Aim is to hav to have Right Number and Right Kind of people in the Right Place
and at Right Time.

2. Recruitment
Process of searching for prospective employees and encouraging them to apply for
the job in organisation.
Aim of recruitment to create a pool of applicants.
Internal Source & External Source.

3.Selection
Selection involves Choosing The Best Person out of the pool of prospective
candidates, developed through recruitment.
Selection done is through a process which involve steps like Preliminary Screening',
Tests etc.

4.Placement & Orientation

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Placement –To Assgning Specific jobs to the candidate, selected for appointment.
Orientation/Induction –Introducing the selected employee and familiarising him
with the Rules and Policies of the Organisation.

5. Training & Development

It involves Improving the Job Knowledge and Competence of Employees in order to
enable them to perform their Job Efficiently.
Also improve their competence for career Growth.
Either In-house training centers or tie with orhter institutions.

6. Performance Appraisal
Systematic Evaluation of Employee's Performance against Predetermined Standand
their potential for development.
The Process of performance appraisal will include Defining the Job, Appraisal
Performance and providing Feedback.

7. Promotion & Career Planning

Promotion Advancement of an employee in the Management Hierarchy.
Promotion is accompanied by Greater Job Responsibilities, More Pay, Higher Status
and Greater Pretige.

8. Compensation
Compensation all form of Pay or Reward given to the employee.
Compensation policy is Influenced by Company's Financial Strength salary offered by
Competing , Firms rule framed by Government Bargaining , , Power of trade unions
and Company Policy.
Compensation may be in form of-
1) Direct Financial Benefit.
2) Indirect Payment.

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Recruitment
Process of Searching for Prospective Employees and Encouraging them to apply for
jobs in the organisation.
It is a Positive Process as Stimulate pe people to apply for it jobs.
It Precedes the Selection Process and aims to Create a Pool of Candidate that
management can select the Most Suitable Candidate.
For this, organisation Communicates the Vacant Job Position through different
sources of recruitment.

Sources Of Recruitment

Internal Sources

Internal Sources-Making Use Of Existing Staff to fill up the vacant jobs.

Two Main Sources in this category:

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1) Parmition
1) Transfer

1. Promotion
Shifting of Employee from a Lower Level position to a Higher Level position, carrying
Higher Responsibilities Facilities, Status and Pay. ,
Example- Vacant post of Chief Accoutant can be filled through promoting Accoutant
to the position of Chief Accoutant
Promotion is a Vertical Shifting of employees.
It helps to improve the Motivation Loyalty and Satisfaction level of employees. Great
Psychological Impact.

2. Transfer
Shifting of an employee from One Job to Another one Department to Another or
from One Shift to Another without a substitute Change in Responsibilities and Status
of the employee.
Example-Transfer of Office 1 to Office 2. ant from
Transfer may Responsibilities lead to Changes in Duties and Working Condition etc.
but Not Necessarily salary. It is practically Horizontal Movement of employee.
It is also helpful in Avoiding Termination and in Removing Individual Problems and
Grievances.

Merits Of Internal Sources

1) Motivates the Employees.
2) It simplifies the process of selection and placement.
3) Through Transfer, Employee gets training.
4) No Need of induction.
5) Shifting Surplus Workforce.
6) Economical and Cheaper.

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Demerits Of Internal Sources

It Prevents Induction of Fresh Talent.
Employee may become Lethargic.
New Company Cannot Use.
Reduce the Spirit of Competition.
Reduce the Productivity.

External Sources
External Recruitment refers to Searching for the Employees from the Sources
Outside the organisation.
External Sources
1. Direct Recruitment
2. Casual Callers
3. Advertisement
4. Employment Exchange
5. Placement Agencies and Management Consultants
6. Campus Recruitment
7. Recommendations of Employees
8. Labour Contractors
9. Advertising on Television
10. Web Publishing.

1. Direct Recruitment.
Under this method, a Notice is Placed on the notice- board of the enterprise
Specifying the Details of the jobs available.
Job-seeker Assemble Outside the premises on the Specified Date and selection is is
done on the spot.
This method is suitable for Unskilled or Semi- Skilled Jobs.

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Economical Method.

2. Casual Callers
Companies generally receives Applications from job seekers at Various point of
Time.
Companies Keep as they can recruitment Database of such application provide a
Valuable Sources of recruitment.

3. Advertisement
Under this method, the advertisement is given in Newspapers, Trade and
Professional Journal along with Full Description about the job and requirement like
Qualification Remuneration etc.
It give Wider Choice and most of the Senior Positions are filled by this method.

4. Employment Exchange
Under this method, Employment exchange Run by Government are used Filling
unskilled and Semi-Skilled jobs.
Unemployed persons get themselves Registered with these exchanges.
Employment sarvice exchange a link between job seeker and employee.

5. Placement Agencies & Management Consultants

Under this method service of placement agencies , and management consultant are
used, who Undertakes total function of Recruiting and Selecting personnel On
Behalf of various organisation.
They provide Nationwide Service in matching Personnel Demand and Supply.
These agencies Compile Bio-Data of Large Number of Candidate and Recommend
Suitable Names to the employers on demand.

6.Campus Recruitment

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In this method organisation Conduct Interview in , Campuses of Various Institute

Universities and colleges, to search prospective candidate .
Popular Source of recruitment for Technical Professional and Managerial Jobs.
Big organisation maintain a Close Liaison With the Universities, vocational schools
and management institute to recruit qualified personnel for various jobs.

7. Recommendations Of Employees
Under this method, Existing Employees are Encouraged to Recommend Suitable
Persons among there friends and relative for employment.
Such applicant are likely to be good employees because the Background is
sufficiently Known.

8. Labour Contractors
Under this method, Intermediaries known as Agents or Labour Contractors are used
for Hiring Unskilled and Semi-Skilled Worked.
Contractor keep themselves in Touch with the Labour and can Provide Required
Number of Unskilled Worker at short notice.

9. Advertisement On Television
This method too Gaining Importance these days
Ex-Zee TV,
10. Web Publishing
Certain Websites/Apps are specifically designed to Provide Information about both
jon seekers and job opening.
Example- Noukari.com

Merits Of External Sources

1) Qualified Personnel.
2) Wider Choice.
3) Fresh Talent.
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4) Competitive Spirit.

Demerits/ Limitation Of External Sources

Dissatisfaction among Existing Staff.
Lengthy Process.
Costly Process.

Selection
Process of Identifying and Choosing the Best Person out of a number of prospective
candidate for a job.
Various Step are performed to eliminate the unsuitable candidate and to select the
most suitable candidate.
Negative Process
Selection is the Process of Choosing from among the Candidate from Within the
organisation or from the Outside, the Most Suitable Person for the current position
or for the future position.
-Dale Yoder

Selection Process
Preliminary Screening
Selection Tests
Employment Interview
Reference and Background Checks
Selection Decision
Medical Examination
Job Offer
Contract of Employment

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1.Preliminary Screening On basis of Preliminary screening of Application Form,

nqualified candidate are eliminated.
And other Suitable Applicants are called for the first round of interview, known as
Preliminary Interview.

2. Selection Tests
Those candidate who pass the preliminary interview are Asked To Appear for the
selection or Employment test.
Selection Test is a mechanism which aim to measure Certain Characteristics of
individual.
Some important Selection Tests are-
1) Intelligence Test Test
2) Aptitude Test
3) Personality Test
4) Trade Test
5) Interest Test

Important Test
1) Intelligence Test- imp psychological test, which measure the level of Intelligence
Quotient (IQ) of the candidate.
2) Aptitude Test- Aptitude test is conducted to determine potential of an individual
in Learning New Skills.
3) Personality Test- Personality Test is conducted to measure the personal
characteristics such as Values Values, Beliefs, Attitude, Emotional Stability, Capacity
to get along, Maturity etc.
4) Trade Test- Trade test is conducted to determine the Existing Skills of the
individual. It measure the Level of Knowledge and proficiency in the area of
professions or technical training.
5) Interest Test- Interest test is conducted to determine a Person's Area of Interest
and the kind of jobs that will satisfy him.

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Employment Interview
All those applicants who qualify the tests are called for an interview . Interview is a
Formal, Indepth Conversation conducted to evaluate the applicant's suitability for
the job.

Reference and Background Checks

A candidate is generally required to give Names, Address and Telephone Numbers of
Reference for the purpose of verifying information and gaining additional
information about him.
The aim is to check the Character Background and Social Relations of the candidate.

Selection Decision
Before making the final decision about selection, the Views and Opinion of the
concerned Manager is considered.

Medical Examination
The job Offer is Given to the conditate who is Declared fit after the medical
examination.

Job Offer
The candidate Who have Passed all the previous Hurdles, are Issues Job Offer.
Job offer is made through a Letter Of Appointment of confirm his acceptence.
The letter contain Term and Conditions of Employment Pay Scale and Other Benefits
, associated with the job.

Contract Of Employment
After the candidate accepts the job offer, a written contract of employment is Made
Between the Employer and the Candidate.
Candidate is also required to provide Certain vital Details in a form, duly
authenticated and attested by him.

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Contract of employment consist of necessary information regarding Job Title,

Duties, Responsibility, Date of Joining Pay and Allowance Hours of Work Leave Rules,
Disciplinary Rules etc.

Aspects or Components of Staffing

Recruitment Selection Training

Training & Development

Training-A Process of Increasing the Knowledge, Skill and Abilities of Employees for
doing aoing a particular job.
It's a Systematic and Continuous proces of improving skills.
Training Aim- To enable the employee to Perform present Job Better or to prepare
him for a Higher Position with increased responsibilities.
Development- Overall Growth of the employee.

Importance/Benefits Of Training & Development

To The Organisation
1. Systematic Learning
2. Increased Productivity
3. Prepare Future managers
4. Boost Morale Of Employees
5. Better Response to Fast Changing Environment

To The Employees
1. Career Growth
2. Increased earning
3. Safety Of Employees
4. High Morale

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Methods Of Training
On-The-Job Training Methods
1. Induction Training (Orientation Training)
2. Apprenticeship Programmes
3. Internship Training
Off-The-Job Training Methods
1. Vestibule Training

On-The- Job Training Methods

The method that are Applied to the Workplace, while the Employee is Actually
Working.
Learning While Doing.
Example- Apprenticeship Programme , Internship Training etc.

Off- The –Job Training methods

The methods in which training is Provided to the employee Away from his job.
Learning before Doing.
Example- Vestibule Training.

On-The-Job Training Methods

(Induction Training (Or Orientation Training)
Its a type of training given to help a New Employee in Setting Down quickly into the
job by becoming Familiar with the people the , surrounding, the job and the
business.
Such training imparted through lectures, or a Tour of various raining Imparteand or
various d department.
On-The-Job Training Methods
(2.Apprenticeship Programme)

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Under this method Trainee(Apprentice) Work under the Guidance of a Master

Worker, Who Guide and delp him in learning the job.
The trainee Spend a prescribed amount of Time remuneration in from of Stipend
during the apprenticeship period.
The method is common in Skilled Trades such as Electricians, Plumbers, Carpenters
etc.

On-The- Job Training Methods

(3.Internship Training)
It is a Joint Programme of training Between the Educational Institutions and
Business Firms, wherein students of educational institutons are sent to business
firms to Gain Practical Work Experience.
Example- Engineering students(4th Year)- Companies.
MBA - 2nd year- Companies
Medical student- Hospital.

Off-The-Job Training Methods

1. Vestibule Training
In this method training is conducted Away From the Actual Work Place.
Actual work ,ronment is Cr Created in Class Room a Duplicate Model of Workshop is
prepared Employee are trained on Dummy Model.
Suitable- Where employee required to Handle Expensive and Sophisticated
Equipments.

Directing
FUNCTIONS OF MANAGEMENT

Planning
Organising
Staffing
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Directing
Controlling

Directing
The process of Instructing, Guiding, Counselling Motivating and Leading people in
the organisation to achieve its objective.

Features / Characteristics Of Directing

1)Directing Initiates Action.
2) Directing takes place at management. every level
3) Direction is a continuous Process. on is a continuou

4)Directing F from Top to Bottom.

Importance Of Directing
1)Initiates Action.
2) Integrate Group Activity.
3) Provides Motivation.
4) Facilitate Changes.
5) Provides Stability and Balance in the Organisation.

Elements of Directing
1. Supervision
2. Motivation
3. Leadership
4. Communication.
1. Super Vision
Instructing, Guiding and Observing and subordinates at work to ensure that they are
Working As per plan and to help them in solving their work problems.

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2. Motivation
Process of Stimulating and work to accomplish desired goal.
Inner psychological force.

Motive, Motivation & Motivators

Motive-Desire, which Activates, Compels and Directs and individual to behave in the
direction of achievement of goals
Motivation- Process of of Stimulating and Inspiring people at work to accomplish
desired goals.
Motivator- Technique used to Motivate People in an organisation. Like pay, bonus,
promotion recognition, responsibility etc.

Features/Nature Of Motivation
1) Motivation is an Internal Feeling.
2) Motivation produces Goal Di Behaviour.
3) Motivation can Positive or Negative.
4) Motivation is is a Complex Process.

Maslow's Need Hierarchy Theory

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Five Levels Needs

Financial &Non Financial Incentives

Incentives all Measures/Techniques which are used to Motivate people to
contribute more efficiently.
The need of individual are Varied and Different.

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Incentives are broadly classified as:

1) Financial Incentive
2 Non-Financial Incentive.
Financial &Non Financial Incentives

Leadership
Process of Influencing the Behaviour of people towards achievement of
organisational Goal.
Leadership indicates the Ability of an Individual to maintain Good Interpersonal
Relations the ability of with Followers and Motivate them to contribute for achieving
organisational Objectives.

Features of Leadership
Leadership indicates Ability of an individual to Influence Others.
It aims to bring Change in the Behaviour of othe others.
It indicates Interpersonal Relations between leader and followers.
It is exercised to Achieve Common Goals organisation.
It is a Continuous Process.

Manger & Leader

All Manager are Leaders, but all Leaders are Not Managers.
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Manager- Formal organisation have formal authority to intuence behaviour of the

employee.
Leader - Formal Formal as we well as informal organisation.
- Only informal authority arise due to trust & faith.

Leadership Styles
It is refer to Behaviours Pattern which the leader reflects in his role as a leader.
Leadership style is the result of Philosophy Personality, Experience and Value system
of leader.
Depending on the Use of Authority, there are three basic styles of leadership.
1) Autocratic/ Authoritative Leadership.
2) Democratic/ Participative Leadership.
3) Laissez Faire or Free Rein Leadership.

1.Autocratic/ Authoritative Leadership (Leader- Centered Style)

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Under this style, the Leader Centralises All Decision Making powers and exercises
Complete Control over his subordinate.
Communication is One Way.
Autocratic leader is Dogmatic.
This leadership style is Effective in Getting Productivity in many situations like in a
factory where supervisior is responsible for production on time time and has to
ensure labour productivity.
This style of leadership also known as 'Directive Style Of Leadership'

2. Democratic /Participative Leadership

A democratic leader develops action plan and Makes Decisions in Consultation with
his subordinates.
He encourage them to Participate IN Decision making and to give suggestions in
setting goal.
The democratic leader needs to Respect The Other's Opinion and support
subordinate in performing their duties and achieving organisational objective.
This style of leadership Wins Greater Confidence, Cooperation, Loyalty and
Initiatives of the group. It Raises the Morale of the subordinates.
Democratic /Participative Leadership
Advantages-
1) Improves Morale and Job Satisfaction of employees.
2) Promotes a sense of Belongingness and Responsibility among subordinates.
3) Improve Decision -Making.
4) Reduce Labour-Turnover and Absenteeism.
Disadvantages-
1) May lead to Unnecessary Delay in Decision Making.
2 Leader may try to Evade Responsibility by passing the work to subordinates.

3. Laissez Faire Or Free Rein Leadership

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This style of leadership is known as " Laissez Faire" which means no interference in
the affair of others. (French word means do').
The followers are given High Degree of Independence and Freedom to formulate
their own objective and ways to achieve them.
Group members work on their own tasks tasks and resolve the issue themselves.
The Leader is their Only to Support Them and supply them the required information
to complete the task assigned and subordinates. This style is Effective only when
leaders are leading a Team of Highly Motivated and Skilled People, who have
produced excellent work in the past.

Communication
Term Communication is derived from the latin word 'Communis' which means
Common, which consequently implies Common Understanding.
Communication refer to the Process Exchange of Ideas, Views, Facts, Feelings etc
between Two or More Persons to reach Common Understanding.

Elements of Communication

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Channels Of Communication

Formal Communication
Official Communication taking place in the organisation.
Such communication may take place either Between Employee of Different Levels or
of Same Levels.
FC is used to communicate Official Matters, such as Orders Instructions and other
organisational , information.
The communication may Oral or Written

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Formal Communication
On the basis of direction, Formal mmunication may be classified as:
1) Vertical Communication
-Downward Communication
-Upward Communication.
2) Horizontal Communication.
3) Diagonal Communication.

Informal Communication
Communication that takes place Without Following the Formal Line of
communication.
Informal communication arises from Social Interaction.
IC is generally referred as 'Grapevine' as it spreads throughout the irapevine' as it
pevine organisation with its Branch Going out in all direction.
Ex- canteen Tea Talks. Etc.
It Spread Rapidly
Very Difficult to Detect The Source.
Sometimes informal channel are used by the manager to transmit information so as
to Know The Rection Of Subordinates.

Introduction
Communication refer to the Process Exchange of Ideas, Views, Facts, Feelings etc
between Two or More Persons to reach Common Understanding.
Formal Communication-Official Communication taking place in the organisation. FC
is used to communicate Official Matters such as Orders , Instructions and other
other organisational information.
Informal Communication - Communication that takes place Without Following the
Formal Line of communication. arises from Social Interaction. IC is generally referred
as 'Grapevine

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1.Vertical Communication (Downward Communication)

Flow of Information from Lower Level (subordinate) to Higher Level (superior) . It is
reverse of downword communication .
Purpose- To instructions communicate policies, orders, Poetc to subordinates.

1.Vertical Communication (Upward Communication)

Flow of Information from Lower Level (subordinate) to Higher Level (superior) . It is
reverse of downword communication .
Purpose- To communicate reports, suggestions, complaints etc to superior.

2.Horizontal Communicate /Lateral Communication

Flow of Information between people of different department working at the Same
Level.
To different activities of two Purpose different department.
Ex- A Production Manager may contact Store Manager to discuss issue of material.

3.Diagonal Communication
Flow of Information between persons holding Different Levels of authority in
different departments.
Purpose: To increase organisational efficiency by Speeding Up Communication
Process and cutting across departmental barriers.
Ex- Discuss about the Production Schedule between marketing manager and
production foreman.

Networks Of Formal Communication

Single Chain Networks:
Wheel Network:
Circular Network:

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Free Flow Network :

Inverted V Network:

Features Of Formal Communication

1) It takes place by following the Formal Lines of communication.
2) It is used to Official communicate order , Matter such as instruction and other
organisational information.
3) The communication may be Oral or Written.
4) It helps in Fixing Responsibility as Source of information can be located.

Merits & Demerits Of Informal Communication

1) It carries information Rapidly.
2) It may use by manager to Know the Reaction of
3) It provides Social Satisfaction Better Human Relation. and help and help in
achieveing
4) It Links even those people who Chain of command. Do Not Fall in Official
1) It is Not Authentic anthentic a message may Get Distorted as information travels
in a very unsystematic manner.
2) Difficult to Fix Responsibility as source of information is not known.
3) It may lead to Rumours.

Barriers To Communication
Communication barriers are the the factors that Obstruct The Effectiveness of
communication.
Barriers to communication - broadly grouped as:
1. Semantic Barriers
2. Personal Barriers
3. Psychological Barriers
4. Organisational Barriers

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1.Semantic Barriers
Semantic deals with the Meaning of Words and Sentences.
Semantic barriers- Problems and obstruction in the process of Encoding and
Decoding of Message into words or impressions.
Such barrier arises because of Use of Wrong Words, Faulty Use of Translations,
Different Interpretations etc.
-Badly Expressed Message.
-Symbols with different meanings.
-Faulty translations.
-Technical jargon.
-Body language and gesture decoding

2. Psycological Barriers
Barriers arise on account of Emotional or Psychological Status of the sender and
receiver of the message.
Ex- A Worried Person.
-Premature Evaluation.
-Lack Of Attention.
-Loss by transmission and Poor Retention.
-Distrust

3. Organisational Barriers
Barrier in communication which is related to Organisation Structure, Authority
Relationship, Rules and Regulation etc.
-Organisational Policy.
-Rules and Regulation.
-Status.
-complexity in Organisation Structure.
-Organisational facilities.
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4. Personal Barriers
Barriers of Communication which is related with Personal Factors of both sender
and receiver.
Fear of Challenge To Authority.
-Lack Of subordinates. Confidence of superior on his
-Unwillingness to communicate.
-Lack of proper incentives.

Controlling
Controlling
Refers to Comparison of Actual Performance with the Planned Performance and
Taking Corrective Actions, in case of deviations between actual and planned
performance.
Ex- 6 hour Study- 3 subjects Abject 2 hour each.
Ex- Car Company
Controlling Cannot Prevent Deviation. But it can Minimise them by taking actions
and decisions that reduce their recurrence.

Nature / Features / Characteristic Of Controlling

1. Controlling is Goal- Oriented Function.
2. Controlling is a Pervasive Function.
3. Controlling is Forward and Backward Looking Function. Both Forw
4. Controlling is Continuous Function.

Importance Of Controlling
1) Accomplishing Organisational Goals.
2) Judging Accuracy Of standards.( 15 hr)
3) Making Efficient use of Resources.(Time)
4) Improving employee Motivation.
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5) Ensuring Order and Discipline.

6) Facilitating Coordination in action.

Limitations Of Controlling

1) Difficulty in setting quantitative standard.

2) Little control on external factors.
3) Resistance From Employees.
4) Costly Affair.

Relationship Between Planning & Controlling

1) Controlling is blind without Planning.
2) Planning without Controlling is Meaningless.
3) Planning is Evaluation. ation. Prescriptive and Controlling is
4) Botha nar Backward- Looking as well as Forward are Bad - Looking Functions.

Controlling Process

For Analysing deviations:

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 Principal of management Notes

Two methods are used.

Critical Point Control- this, control system According t should focus on Key Result
Areas (KRAs) which are NGH , Critical to the overall performance of the organisation.
Management By Exception/ Control By Exception-In this method, manager should
give Attention to Significant Deviations, which go beyond the Permissible Limit.

Deviation
Difference Between Actual Performance & Standard Performance.
Positive deviation-
Actual Performance( 6 hr) > Standard Performance.
Negative Deviation-
Actual Performance < Standard Performance.

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