|| Jai Sri Gurudev||

Sri Adichunchanagiri Shikshana Trust®

SJB INSTITUTE OF TECHNOLOGY

An Autonomous Institution
(Affiliated to Visvesvaraya Technological University, Belagavi & Approved by AICTE, New Delhi.)
Accredited with NAAC ‘A+’ grade
No. 67, BGS Health & Education City, Dr. Vishnuvardhan Road Kengeri, Bengaluru – 560 060

Department of Mechanical Engineering

Academic Year : ODD SEM /2024-25

SEMESTER : 5TH SEMESTER
SUBJECT : INDUSTRIAL MANAGEMENT AND
ENTREPRENEURSHIP
BY
DR. H R VITALA
PROFESSOR AND HEAD
 Module 2
Organizing, Staffing,
Directing and
Controlling

Department of Mechanical Engineering,SJBIT

Organizing and Staffing: Nature and purpose of organization
Principles of organization - Types of organization - Departmentation
Committees Centralization Vs Decentralization of authority and
responsibility - Span of
control - MBO and MBE (Meaning Only) Nature and importance of
staffing--Process of Selection & Recruitment (in brief). Directing &
Controlling: Meaning and nature of directing Leadership styles,
Motivation Theories, Communication - Meaning and importance -
coordination, meaning and importance and Techniques of Co
Ordination. Meaning and steps in controlling - Essentials of a sound
control system - Methods of establishing control (in brief).

Department of Mechanical Engineering,SJBIT

 Organization
Definition 1: An organization is a social unit or human grouping deliberately
structured for the purpose of attaining specific goals - Amitai Etizoni

Definition 2: An organization as the rational coordination of the activities of a

number of people for the achievement of some common explicit purpose or
goals, through division of labour and function, and through a hierarchy of
authority and responsibility – Sechein

Definition 3: An organization is the pattern of ways in which large numbers of

people, too many to have intimate face to face contact with all others, and
engaged in a complexity of tasks, relate themselves to each other in the
conscious, systematic establishment and accomplishment of mutually agreed
purpose – Pfiffner and Sherwood

Department of Mechanical Engineering,SJBIT

 Organising
Organizing as:
 The identification and classification of required activities.
 The grouping of activities necessary for attaining objectives.
 The assignment of each group to a manager with the authority (delegation)
necessary to supervise.
 The provision for coordination horizontally (on the same or a similar
organizational level) and vertically (e.g. between corporate headqurters,
division and department) in the organization structure.

An organization structure should be designed to clarify who is to do what tasks

and who is responsible for what results in order to remove obstacle to
performance caused by confusion and uncertainty of assignment and to furnish
decision making and communication networks reflecting and supporting
enterprise objectives.
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Department of Mechanical Engineering,SJBIT

Organization implies a formalized, intentional structure of roles or
positions.

Purpose of Organization:
From a manager’s perspective, operations will be successful if a common
purpose is made clear across the organization to create a coordinated effort of
resources. Edgar Schein, a prominent organizational psychologist, identified
four key elements of an organization’s structure: common purpose,
coordinated effort, division of labor, and hierarchy of authority. Each of the
four elements represents an essential component of an effective structure.
Further, Schein proposes that these elements are instrumental in defining the
organization’s culture.

Department of Mechanical Engineering,SJBIT

Formal and Informal Organization (Types)

Department of Mechanical Engineering,SJBIT

Principles of Organization
1. Unity of Objectives/Goals
2. Specialization
3. Span of Control
4. Exception
5. Scalar Principle
6. Unity of Command
7. Delegation of Authority
8. Responsibility
9. Authority
10. Efficiency
11. Simplicity
12. Flexibility
13. Balance
14. Unity of Direction activities
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Department of Mechanical Engineering,SJBIT

 Departmentation
Grouping of activities according to the functions of an enterprise
such as production, finance, sales etc..

Department of Mechanical Engineering,SJBIT

 Committees
 A committee is a group of people who have been formally assigned
some task or some problem for their decision and /or implementation.
 Committees are often set up where new kinds of work and unfamiliar
problems seem to involve decisions., responsibilities and powers beyond
the capabilities of any one man or department.
 in modern business enterprises there is a widespread use of
committees in all areas of management and administration.

Types of Committees
1. Advisory Committee: This committee have only a
recommendatory role and cannot enforce implementation of their
advice or recommendations.
Ex: Works committee, sales committee, finance committee etc
2. Executive Committee (Plural Executives): This committee not
only take decisions but also enforce decisions and thus perform a
double role of taking a decision and ordering its execution. Ex:
Board of Directors
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3. Standing committee: This committee is formed to deal with
recurrent organizational problems.
Ex: Finance committee in a company,
Department of Mechanicalloan approval company in a
Engineering,SJBIT
Advantages and disadvantages of Committees
Advantages:
1. Committees consist of all departmental heads as members, people get an
opportunity better understand each other’s problems and to move
(cooperatively) towards organizational goals.
2. Committees provide a forum for the pooling of knowledge and experience
of many persons of different skills, ages and background. This helps in
improving the quality of decisions.
3. Committees provide an opportunity to many persons to participate in the
decision making process.
4. Committees are excellent means of transmitting information and ideas, both
upward and down ward.
5. By exposing members to different view points committees contribute
indirectly to their training and development.
6. Committees are impersonal in action and hence their decisions are generally
unbiased and are based on facts. There is no fear of a single individual
taking a biased decisions. 11

Department of Mechanical Engineering,SJBIT

Disadvantages:
1. In case of a wrong decision is taken by a Committees, no member
can be individually held responsible. This encourages irresponsibility
among the members
2. A huge amount is spent in convening meetings and giving
allowances to the members. Hence committees are an expensive form
of administration.
3. Members of coordinating committees frequently regard themselves
as appointed to protect the interest of their department rather than to
find the more appropriate solution to the problem in question.
4. As Committees consist of a large number of persons, it is difficult to
maintain secrecy regarding the decisions taken at the committee
meetings.
5. Decisions are generally arrived at on the n=basis of some
compromise among the members. Hence they are not the best
decisions.
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Department of Mechanical Engineering,SJBIT

Authority and Power

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Department of Mechanical Engineering,SJBIT

Decentralization of Authority
 Decentralization is the tendency to disperse decision-making
authority in an organized structure.
 It is a fundamental aspect of delegation, to the extent that
authority that is delegated is decentralized.

Advantages of Decentralization:
1. Relieve top management of some burden of decision-making and
forces upper level managers to let go
2. Encourages decision making and assumption of authority and
responsibility
3. Given managers more freedom and independence in decision
making
4. Aids in adaption to a fast-changing environment
5. Promotes establishment and use of broad control that may increase
motivation
6. Facilitates product diversification 14
7. Promotes development of general managers.
Department of Mechanical Engineering,SJBIT
Disadvantages of Decentralization:
1. Make it more difficult to have a uniform policies.
2. may result in loss of some control by upper level managers
3. May be limited by inadequate control technique
4. May be constrained by inadequate planning and control systems
5. can be limited by the lack of qualified managers.

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Department of Mechanical Engineering,SJBIT

Span of Management

 The term “Span of Management” is also referred to as span of control, span

of supervision, span of authority or span of responsibility.
 The Principle of the span of management states that there is a limit to
the number of subordinates a manager can effectively supervise, but the exact
number will depend on the impact of underlying factors.
 In other words, the dominant current guidelines is to look for the cause of
limited span in individual situations rather than to assume that there is a
widely applicable numerical limit.
 Determination of an appropriate span of management is important for two
reasons.
i) Span of management affects the efficient utilization of managers and the
effective performance of their subordinates. ( Narrow and wide span)
ii) there is a relationship between span of management and organizational
structure. Here, may create more communication and cost problems.
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Department of Mechanical Engineering,SJBIT

Factors governing the Span of Management

1. Ability of the Manager

2. Ability of the Employer
3. Type of work
4. well-defined authority and responsibility
5. Geographical Location
6. Sophisticated Information and control System
7. Level of Management
8. Economic consideration

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Department of Mechanical Engineering,SJBIT

Management by Objectives (MBO):
A comprehensive managerial system that integrates many key managerial
activities in a systematic manner and is consciously directed towards the
effective and efficient achievement of organizational and individual objectives

Advantages:
1. Managers are involved completely and they are generally committed to the
goals establishment and work harder to accomplish them.
2. It requires that the objectives of each department are consistent with the
overall organizational objective. This requirement ensures that people and
department do not work at cross purposes
3. It encourages a more systematic evaluation of performance.

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Department of Mechanical Engineering,SJBIT

MBO

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Department of Mechanical Engineering,SJBIT

 Staffing
Filling and keeping the positions provided for by the organization structure
filled with the right people is the staffing phase of the management
function.
Importance and need for proper staffing
Manpower Planning
Short-term manpower planning
Long-term manpower planning
Steps in the Selection Procedure:
1. Job Analysis
2. Job Description
3. Job Specification
i) Application
ii) Initial Interview
iii) Employment test: Aptitude test, intelligent test, performance test,
personality test
iv) Checking references 20
v) Physical or Medical examination.
vi) Final Interview Department of Mechanical Engineering,SJBIT
Controlling
 It means setting standards, measuring actual performance and taking
corrective action.
 It is more than mere evaluation, appraisal or correction
 It measures performance against goals and plans, indicates where
deviations exist and helps accomplishment of objectives.
 It serves to determine personal responsible for deviations to take necessary
steps to improve performance.

Controlling consists in verifying whether everything occurs in conformity

with the plan adopted, the instructions issued and the principles established –
Henry Fayol

Controlling implies measurements of accomplishment against the standard

and the correction of deviations to ensure attainment of objectives according
to plans – Koontz Donell
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Department of Mechanical Engineering,SJBIT

Necessity of Controlling
Essential steps in controlling Procedure:
1. Setting Standards
2. Checking and Reporting on Performance
3. Taking Corrective Action

Types of control
1. Physical Control 2. Financial control 3. Budgetary Control
Objectives of Controlling
1. To ensure high efficiency of the business
2. To keep proper check and control over direct and indirect expenses
3. To reframe organizational, goals, policies and objectives
4. To make sure that all the activiteis are performed according to the pre-
defined plans
5. To find the various deviations from the planned and proposed targets and
to take necessary action to it. 22

Department of Mechanical Engineering,SJBIT

Leadership
The art or process of influencing people so that they will strive willingly and
enthusiastically towards the achievement of group goals.
Functions of Leadership
For successful leadership to happen, we need two things:
a) Better understanding of human psychology i.e a basic knowledge of
group behavior, human relations and managerial skills
b) Training in applying these skills

Important functions of Leadership:

1. Integrating and directing
2. develop team spirit
3. Arbitration
4. To develop environment condusive to work
5. Acts as a healthy link between top management and the work group
6. Acts as a counselor
7. Use of power 23

8. Motivation
Department of Mechanical Engineering,SJBIT
Characteristics of Leadership
1. Leadership implies the existence of followers
2. Leadership involves a community of interest between the leader and
his followers
3. Leadership involves an unequal distribution pf authority among the
leader and group members.
4. Leadership implies that leader can influence their followers or
subordinates in addition to being able to give their followers or
subordinates legitimate directions

Theories of Leadership
1. The Trait theory
2. The Followers theory
3. The Situational theory
4. The System theory

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Department of Mechanical Engineering,SJBIT

Styles of Leadership
A leader’s typical way of functioning in the organization is often referred to as
“leadership style”. Leadership style, thus, denotes the manner in which the
leader behaves while using his power and influence in relation to the group and
the task situation.

Some of the leadership styles mentioned below

1. Authoritarian Style or autocratic style.
2. Democratic style or Participative style
3. Task centered style
4. Employee centered style
5. Critical style
6. Self Dispensing or free-rein style

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Department of Mechanical Engineering,SJBIT

Communication
Communication means the process of passing information and understaning from
one person to another.
It is an exchange of facts, ideas, opinions or emotions by two or more persons –
Newman and Summer
It is the sum of all the things one person does when he wants to create
understanding in the minds of another – Allen Louis
Importance of Communication
Purpose of Communication
Communication..
1. Needed in the recruitment process
2. Helps in orientation of employees
3. Needed to enable employees to perform their fucntions effectively
4. Needed for evaluation process
5. Helps in achieving coordination
6. Helps in decision making/process
7. It increases managerial efficiency 26

8. Promotes cooperation and industrial peace

Department of Mechanical Engineering,SJBIT
Formal Communication
1. Downward Communication
2. Upward Communication
3. Horizontal (Cross-wise) Communication

Forms of Communication
1. Oral Communication
2. Written Communication
3. Non-verbal Communication

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Department of Mechanical Engineering,SJBIT

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Department of Mechanical Engineering,SJBIT