Figure: 9.3 Selection Process a) Initial Screening This is typically where every employee selection process begins. Initial screening helps save time by weeding out unqualified applicants. Applications from different sources are scrutinized, and those that are obsolete are discarded. b) Preliminary Interview It is used to replace applicants who do not meet the organization's minimum eligibility requirements. During the preliminary interview, the candidate's abilities, academic and family history, competencies, and interests are evaluated. Final interviews are more formalized and scheduled, while preliminary interviews are less so. The applicants are given a brief overview of the business and the job description, and their knowledge of the company is tested. Screening interviews are another name for preliminary interviews. c) Filling Application Form 151 CU IDOL SELF LEARNING MATERIAL (SLM)
If an applicant passes the preliminary interview and is considered to be suitable for the position, they will be asked to complete a formal application form. Such a form is generated in such a way that it records the candidates' personal and professional information, such as age, qualifications, reason for leaving previous job, experience, and so on. d) Personal Interview The majority of employers agree that the personal interview is key. It assists them in collecting more knowledge about the future employee. It also assists them in communicating with the applicant and evaluating his communication skills, as well as his ability to withstand pressure. In certain companies, the interview is the only part of the selection process. e) References check Most application forms contain a section in which applicants must list the names of a few references. Former employers, former clients, company references, and trustworthy individuals are all examples of references. Such sources are contacted in order to obtain input on the individual in question, including his behavior, abilities, and conduct, among other things. f) Background Verification A background check reviews a person's business, criminal, and (in some cases) financial records. Employers often conduct background checks on employers or job candidates to validate information provided in a job application, verify a person's identity, or ensure that the applicant does not have a criminal history, among other items, that could pose a problem if hired. g) Final Interview A final interview is a process in which an employer interviews a prospective employee for future jobs in their business. The employer hopes to learn more about you during this process. Determine if the applicant is eligible for the role. Various types of assessments are used to assess an applicant's skills, behavior, and special qualities, among other things. For different types of work, separate tests are performed. h) Physical Examination If all goes well, the applicant will undergo a physical test to ensure that he or she is in good health and does not have any serious illnesses. 152 CU IDOL SELF LEARNING MATERIAL (SLM)
i) Job Offer After passing all of the measures, an applicant is deemed eligible for a specific job and is offered the position. If a candidate is deemed unfit for the job, they may be dropped at any time. 9.19 SUMMARY Staffing is the method of identifying, determining, putting, reviewing, and guiding individuals at work. Hiring defines the workforce criteria to fill vacant vacancies in an organization's system and chooses the best candidates for the job. Hiring is the method of making the most of an organization's human capital. The manpower preparation, recruiting, selection, and training processes are all part of the staffing process. Management's hiring role includes recruitment and selection. The discovery and production of staff and employees in the company at the moment they are needed is referred to as recruiting. The primary goal of recruiting is to create a pool of work applicants that are potentially eligible. Recruitment is the method of locating and attempting to attract job applicants capable of filling open positions. The different recruiting channels can be divided into two categories: internal and external recruitment. Selection is the method of carefully reviewing applicants who apply for positions in order to choose the most qualified candidates for the open positions. 9.20 KEYWORDS Staffing: is a managerial role that involves filling and retaining vacancies in an organization's structure. Recruitment: This applies to the process of identifying potential sources of manpower. Selection: This refers to the process of recruiting and nominating eligible applicants for different positions within an organisation. Recruitment policy: A flexible recruitment policy is needed. 153 CU IDOL SELF LEARNING MATERIAL (SLM)
Final interview: A final interview is a phase in which an employer evaluates a potential candidate for future jobs in their company. 9.21 LEARNING ACTIVITY Recruiting and Selecting Staff at Thomas Cook: Case Study According to the IRS (2007), employees are seeking to control or reduce their recruitment expenditure. In the case of travel agent Thomas Cook, the business is very cost conscious, with quite low margins, but staff turnover especially in their call centre is rather high. The measures taken by the company to reduce their costs have focused on the following: i. Making the recruitment process wholly online until the interview stage. This means that the company will accept application forms and CVs online and use email as a preferred way of communicating with candidates. It also conducts an online pre-screening process for selecting sales consultants in order to sift out unsuitable applicants at as early a stage as possible. ii. Controlling employment agency costs through the introduction of preferred supplier lists where hard-to fill or specialist post are concerned. iii. Working with two local government funded agencies that provide candidates free of charge. This is particularly appealing when the company has to recruit around 100 people a year for its call centre. One of the agencies offers potential candidates on a free-trial basis, where they can work for fifteen days with no obligations on either side. This is useful way for the organisation to judge whether an individual might prove to be a suitable employee, even though he or she may not have all the necessary experience on paper. Questions: 1. Identify other industries experiencing high staff turnover and low margins that might operate on a similarly cost-conscious basis as Thomas Cook. Investigate the recruitment and selection processes used by companies within these industries. To what extent do they replicate these methods, and how would you judge their effectiveness in terms of securing and retaining effective employees? 2. How effective are the approaches taken by Thomas Cook in promoting their brand and in securing employee commitment? What might they do to improve in both areas? 3. Compare the Thomas Cook graduate recruitment and selection process with any other organisation. What are the similarities and difference in approach? To what extent do both employees recruit for ‘fit’ or ‘skill’? ___________________________________________________________________________ ___________________________________________________________________________ 154 CU IDOL SELF LEARNING MATERIAL (SLM)
9.22 UNIT END QUESTIONS A. Descriptive Questions Short Questions 1. What is meant by Staffing? 2. Define Staffing. 3. Discuss the concept of Staffing 4. Explain the objectives of Staffing. 5. List the importance of Staffing 6. Mention the nature of Staffing. 7. Discuss the elements of Staffing 8. What is meant by Recruitment? 9. Define Recruitment. 10. Explain the importance of Recruitment. 11. What is meant by Selection? 12. Define Selection. Long Questions 1. Explain the nature of Staffing 2. Explain the importance of Staffing 3. Discuss the factors of Staffing 4. Describe the process of Staffing 5. Explain the process of Recruitment. 6. Discuss the sources of Recruitment 7. Explain the significance of Selection 8. Identify the principles of Selection 9. Describe the process of Selection B. Multiple choice Questions 1. The process involved in identifying, assessing, placing, evaluating and directing individuals at work is called as __________. 155 CU IDOL SELF LEARNING MATERIAL (SLM)
a. Staffing b. Recruitment c. Selection d. All of these 2. _______ is a science of human engineering a. Staffing b. Recruitment c. Selection d. All of these 3. _______ which is also called as Human Resource Planning. a. Recruitment b. Selection c. Manpower Planning d. Staffing 4. ______is the process of searching for prospective employees and stimulating and encouraging them to apply for jobs in the organisation. a. Recruitment b. Selection c. Manpower Planning d. Staffing 5. A _________is a list of the general tasks, or functions, and responsibilities of a position. a. Job Analysis b. Job Description c. Job Specification d. All of these 156 CU IDOL SELF LEARNING MATERIAL (SLM)
6. ________ in newspapers and journals is the most popular source of recruitment from outside. a. Jobbers b. Contractors c. Educational Institutions d. Advertising 7. _________ is an important function and it must be performed carefully. a. Recruitment b. Selection c. Staffing d. All of these Answers 1. (a) 2. (a) 3. (c) 4. (a) 5. (b) 6. (d) 7. (b) 9.23 REFERENCES Reference Books: R1, L M Prasad, “Principles and Practice of Management”, Sultan Chand & Sons, 20th Edition, New Delhi. R2 Dipak Kumar Bhattacharyya, 2016, “Recruitment and Selection: Theory and Practices”, Cengage Learning India Pvt Ltd, Noida, ISBN 9788131531600. Textbooks: T1, Anil Bhat, Arya Kumar, “Management Principles Process and Practices” Oxford Latest Edition, United Kingdom. T2, Vaneeta Raney, Veena Prasad, Booma Halpeth, Arti Sharma, Byshi Panikar, 2015, “Recruitment and Selection”, 1st Edition, Himalaya Publications, New Delhi. 157 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT 10: LEADING 158 Structure 10.0 Learning Objectives 10.1 Introduction 10.2 Delegation 10.3 Meaning and Definition 10.4 Importance of Delegation 10.5 Characteristics of Delegation 10.6 Elements of Delegation 10.7 Types of Delegation 10.8 Process of Delegation 10.9 Authority and Responsibility 10.10 Controlling-Meaning & Definition 10.11 Importance of Controlling 10.12 Process of Controlling 10.13 Types of Control Systems 10.14 Controlling Techniques 10.15 Barriers of Controlling 10.16 Requirements for Effective Control 10.17 Decision Making - Meaning & Definition 10.18 Characteristics of Decision Making 10.19 Decision Making Process 10.20 Types of Decisions 10.21 Summary 10.22 Keywords 10.23 Learning Activity 10.24 Unit End Questions 10.25 References CU IDOL SELF LEARNING MATERIAL (SLM)
10.0 LEARNING OBJECTIVES After studying this unit, students will be able to: State the concept of leading Describe the important characteristics of delegation Explain the types and process of delegation State the principles of authority and responsibility Discuss the importance of controlling Explain the types and process of controlling Describe the important characteristics of decision making Explain the types and process of decision making. 10.1 INTRODUCTION Leading entails using social and informal channels of power to motivate others to take action. If managers are good leaders, their subordinates would be encouraged to work hard to achieve organisational goals. The behavioural sciences have made important contributions to our understanding of management functions. Personality research and work attitude studies offer useful insight into how managers can lead their subordinates most efficiently. For example, according to this report, managers must first consider their subordinates' personalities, beliefs, behaviours, and emotions in order to be successful leaders. Several deferment mechanisms and activates are involved in leading. The leading processor system includes functions such as guidance, motivation, communication, and coordination. Leading also necessitates coordination. 10.2 DELEGATION Delegation is the administrative method of entrusting people with tasks and assigning them responsibilities. The Board of Directors makes all major decisions at the highest level. Chief Executive is in charge of execution. The job is assigned by the Chief Executive to departmental administrators, who then delegate authority to their subordinates. Any superior delegated authority to subordinates for the completion of a specific mission. The technique advances to the stage where actual work is done. The person who is assigned to a specific task is given the appropriate authority to accomplish it. A person's ability to supervise their subordinates has a limit. When the number of subordinates exceeds that, he will have to delegate his authority to those who will oversee 159 CU IDOL SELF LEARNING MATERIAL (SLM)
him. A manager is judged on the work he accomplishes by others rather than the work he accomplishes on his own. He assigned responsibilities and authority to his subordinates and ensured that the organization's objectives were met. 10.3 MEANING & DEFINITION The delegation of authority allows an organization's time to be focused on more critical tasks. Furthermore, it instils a sense of transparency, as well as the opportunity to develop and exercise initiative in those to whom authority has been delegated. “Delegation takes place when one person gives another the right to perform work on his behalf and in his name, and the second person accepts a corresponding duty or obligation to do what is required of him.” – O.S. Hiner. 10.4 IMPORTANCE OF DELEGATION The following are some of the advantages of delegation: Effective Management Delegation allows supervisors to take a breather by sharing their workload. As a result, managers will focus on activities that are more important. Additionally, being free of routine work allows for the pursuit of new concepts. Employee Development We delegate new roles to workers with the aid of delegation. This gives them the opportunity to work in a domain that is different from their usual routine, allowing them to learn new skills and discover secret talents. As a result, delegation promotes employee growth by allowing them to extend their scope of activity and grow. It effectively improves their long-term prospects and produces potential managers. Motivation of Employees Superiors entrust appropriate subordinates with the responsibilities that have been delegated to them through the delegation process. This has a variety of psychological advantages in addition to the growth of talent. This is because the subordinate's morale and self-esteem are boosted by the subordinate's faith and trust, which motivates him to work harder. Facilitation of Growth 160 CU IDOL SELF LEARNING MATERIAL (SLM)
As previously stated, delegation allows workers to grow and effectively teaches them to be better decision-makers and managers. It also helps in an organization's growth since it already has a skilled workforce. Management Hierarchy The superior-subordinate relationship is formed by delegation. It also has a strong impact on the reach and flow of authority. This is because who has to answer to whom is decided by authority. 10.5 CHARACTEISTICS OF DELEGATION 1. Delegation occurs when a manager delegated some of his authority to subordinates. 2. Delegation only happens when the individual delegating the authority has the authority himself, i.e., a manager must have the authority he wishes to delegate. 3. Subordinates are only given a portion of the authority. 4. A manager who delegated power has the ability to minimise, improve, or revoke it. And after delegation, he retains total control over the behaviour of his subordinates. 5. Only the power, not the responsibility, has been assigned. Delegating authority to subordinates does not allow a manager to abdicate responsibility. 10.6 ELEMENTS OF DELEGATION 1. Authority – In the sense of a business organisation, authority can be characterised as a person's ability to effectively use and distribute resources, make decisions, and issue orders in order to achieve the organization's goals. The concept of authority must be clearly defined. Both people in positions of authority should be aware of the extent of their authority and should not misuse it. The right to issue commands, instructions, and complete tasks is known as authority. The highest level of management has the most power. Authority is often passed down from the top to the bottom. It demonstrates how a superior motivates a subordinate to complete work by explicitly stating what is required of him and how he should go about completing it. Authority should be followed by a sense of transparency. Delegating power to someone else does not absolve you of liability. The person with the most power is always in charge of accountability. 2. Responsibility - Responsibility refers to a person's obligation to complete the task that has been assigned to him. An individual who is given responsibility must ensure that the tasks entrusted to him are completed. He should not provide reasons or excuses if the activities for 161 CU IDOL SELF LEARNING MATERIAL (SLM)
which he was held accountable are not completed. Responsibility without proper authority leads to a person's frustration and disappointment. From the bottom to the top, there is a chain of accountability. The middle and lower levels of management are in charge of more responsibilities. An individual who is held accountable for a job is accountable for it. If he completes the tasks as planned, he will earn appreciation. He is also liable if he does not complete tasks assigned in a timely manner. 3. Accountability – Accountability includes offering justifications for any discrepancies in actual results from the targets set. Accountability is not something that can be delegated. For example, if 'A' is given a task with appropriate authority, and 'A' delegated the task to B and asked him to ensure that the task is completed correctly, 'B' bears responsibility, but 'A' retains accountability. The highest level of management assumes the most responsibility. Being responsible entails being creative, as the person can think beyond his or her job description. In a nutshell, accountability means being responsible for the end result. Accountability is unavoidable. It stems from a sense of obligation. 10.7 TYPES OF DELEGATION General or Specific Delegation: When subordinate managers are granted authority to conduct general managerial functions such as planning, coordinating, and directing, they perform these functions and have the authority to carry out these responsibilities. The chief executive maintains overall authority and sometimes directs his or her subordinates. The specific delegation could be for a specific role or a specific mission. This role will be assigned to the production manager with a clear delegation of authority. Various departmental managers are granted clear authority to carry out their responsibilities. Formal or Informal Delegation: Organizational structure includes formal transfer of authority. When a job is assigned to an individual, he is also given the necessary authority. This form of delegation is part of the organization's daily operations. As a result of their roles, everybody is immediately granted authority. It is a formal delegation of authority when a production manager is given the authority to raise production. Informal delegation does not occur because of a person's position, but rather because of circumstances. An individual will complete a task not because it has been assigned to him, but because it is required to complete his regular work. Lateral Delegation: 162 CU IDOL SELF LEARNING MATERIAL (SLM)
When an individual is given authority to complete a mission, he may require the assistance of many people. It can take some time to receive formal assistance from these individuals. He may make indirect communication with the individuals in order to enlist their assistance in completing the task, thus reducing the time required for formal delegation. Lateral delegation refers to when power is delegated informally. Reserved Authority and Delegated Authority: Delegating all authority to subordinates can be difficult for a delegator. Reserved authority refers to the authority he holds for himself, while delegated authority refers to the authority he gives to his subordinates. Pre-Requisites for Delegation: Any boss wants to keep as much power as he or she can. Delegation downwards may be forced by the workload or circumstances. If power is not freely delegated, the desired outcomes will not be obtained. It is critical that sufficient authority be delegated downwards in order for work to be completed smoothly and efficiently. Only if the following conditions are met will the delegation process be complete. Willingness to Delegate: The ability of the superior to relinquish authority is the first condition for delegation. Delegation would be ineffective unless the superior is mentally prepared to relinquish control. If a superior is compelled to transfer power downward against his will, he will find ways to obstruct the work of the subordinate. He can keep a close eye on the subordinate to the point that every decision is made with the boss's approval, or every success is scrutinised by him. It is preferable not to transfer authority until the superior is mentally ready. Climate of Trust and Confidence: Between superiors and subordinates, there should be an atmosphere of trust and confidence. Subordinates should be granted enough opportunities or real-world work scenarios in which they can put their skills and knowledge to good use. Superiors should direct and correct them if they make any mistakes. Superiors should have confidence in their subordinates and not view them as rivals. The atmosphere of trust and confidence will encourage subordinates to learn and develop, which will aid the delegation process. Faith in Subordinates: Superiors often refuse to assign authority out of fear that subordinates would be unable to complete the task on their own. They are unsure of their subordinates' abilities and are unable 163 CU IDOL SELF LEARNING MATERIAL (SLM)
to take chances. The superior can be too self-aware of his abilities and competence, causing him to be unable to delegate authority. This style of thought and behaviour should be avoided by supervisors. They should have confidence in their subordinates and instead assist them in properly learning the job. After all, supervisors learned a lot from their superiors, and their subordinates are expected to take on more duties as well. The subordinates can learn faster and take on more responsibilities in a faith-based environment. Fear of Supervisors: Superiors often worry that once they are granted more responsibilities, their subordinates will not be able to keep up with them. This is an inferiority complex case. Superiors can have a variety of justifications for delegating authority, but fear is one of the most important factors. Superiors should resist this mindset and maintain a constructive attitude toward their subordinates. Subordinates should be encouraged to take on more duties, as this will increase their respect for supervisors and their willingness to have confidence in their subordinates and help them learn the job properly. After all, supervisors learned a lot from their superiors, and new subordinates are supposed to take on more duties as well. The subordinates can learn faster and take on more responsibilities in a faith-based community. 10.8 PROCESS OF DELEGATION The following are the steps involved in delegation: Figure: 10.1 Delegation Process 1. Allocation of duties – The delegator aims to identify the role and responsibilities of 164 CU IDOL SELF LEARNING MATERIAL (SLM)
the subordinate first. He must also determine the desired outcome from his subordinates. The first step in delegation should be to identify the mission and the anticipated outcome. 2. Granting of authority – When a superior divide and shares his authority with a subordinate, this is known as delegation of authority. As a result, every subordinate should be granted sufficient autonomy to complete the task assigned to him by his superiors. Managers at all levels delegate the authority and control that comes with their work. The separation of powers is critical for achieving positive outcomes. 3. Assigning of Responsibility and Accountability – The delegation process does not stop when subordinates are given powers. They must also be responsible for the tasks that have been allocated to them. The element or duty of a person to carry out his duties to the best of his capacity as directed by superiors is referred to as responsibility. As a result, it is this that gives authority its efficacy. Responsibility, on the other hand, is absolute and cannot be delegated. 4. Creation of accountability – Accountability, on the other hand, is the individual's responsibility to carry out his responsibilities in accordance with defined performance standards. As a result, authority is delegated, responsibility is established, and accountability is enforced. Responsibility leads to transparency, and authority leads to responsibility. As a consequence, it is crucial that each authority function be followed by an equal and opposite obligation. As a result, every manager, or delegator, must follow a method to complete the delegation process. The delegate's position is equally significant, as it entails his duty and accountability for the authority assigned to him. 10.9 AUTHORITY AND RESPONSIBILITY Authority is the ability to issue orders and have them carried out, or in other words, the ability to make decisions. Responsibility refers to the state of being accountable or responsible for any duty, trust, debt, or other obligation, or, in other words, the obligation to perform a task on time and to the best of one's ability. Authority and obligation are inextricably linked, and this theory states that they must coexist. It implies that the required authority be assigned to fulfil the obligations. There should be a match between these two for two key reasons: 165 CU IDOL SELF LEARNING MATERIAL (SLM)
For instance, if an individual is given responsibility without adequate authority, he will not be able to perform better or achieve the desired result. Second, if a person is given too much authority without being given enough responsibility, the delegated authority will be exploited in some way. This is an essential and useful management concept because if workers are not granted appropriate authority, they will be unable to execute their duties effectively, which will hinder the achievement of the organizational objective. Non-delegation of appropriate authority may also have a negative influence on management-employee relationships. Positive impacts of this principle: There would be no abuse of power. Assists in the successful and efficient completion of tasks. People should be held responsible for their acts. Achieving operational goals in a systematic and efficient manner. Consequences of violation of this principle: Abusive use of influence. Responsibilities cannot be carried out efficiently. There is no one who can be held responsible. Disputes between management and employees. 10.10 CONTROLLING – MEANING & DEFINITION Controlling is an important aspect of the management process and one of the administrative roles. Following the completion of planning, organizing, staffing, and directing, the final managerial role of controlling ensures that the tasks scheduled are completed or not. As a result, the role of controlling aids in the achievement of desired goals by planning. As a result, management must equate actual outcomes to pre-determined expectations and, if possible, take corrective measures. Any mechanism that directs action toward a set of defined goals is referred to as control. As a consequence, regulation can be used in a number of areas, including price control, distribution control, emission control, and so on. Control, on the other hand, can be described as the process of analyzing whether activities are being carried out as expected and taking corrective actions to bring them into line with the plan. As a result, the control mechanism 166 CU IDOL SELF LEARNING MATERIAL (SLM)
attempts to identify differences between expected and actual output and suggests corrective steps as appropriate. “Controlling can be defined as the process of determining what is to be accomplished, that is the standard; what is being accomplished, that is the performance; evaluating the performance; and if necessary, applying corrective measures so that the performance takes place according to plans, that is, in conformity with the standard”. – G. Terry “Controlling is the measuring and correcting of activities of subordinates to assure that events conform to plans” – Koontz & O’ Donnell. 10.11 IMPORTANCE OF CONTROLLING The following examples demonstrate the value of control: (i) Basis of Execution of Plans: Control is the only way to ensure that the preparations are carried out correctly. It monitors progress, identifies and corrects anomalies, and keeps everything on track. It is an essential part of management history. J. Beatty acknowledged that without the watchfulness and input of an effective management system, even the best-laid plans have a slim chance of succeeding. (ii) Achievement of Goals: Since the control mechanism is goal-oriented, it keeps activities on track. If something goes wrong, corrective action is taken as soon as possible. It assists in the elimination of waste and losses. (iii) Decentralisation of Authority: An efficient control structure allows delegation of authority simpler and guarantees that subordinates follow a predetermined direction of action. Managers will use the input data to see whether decisions performed at lower levels are in line with what was intended or not. (iv) Basis for Future Action: The control system offers feedback and highlights flaws in the plans. It assists in the future planning of better plans. Long-term planning is unlikely unless managers have timely access to control details. It facilitates future decision-making. (v) Orders and Disciplines: 167 CU IDOL SELF LEARNING MATERIAL (SLM)
Managers and their subordinates often make errors when following their objectives. A successful control system assists in the identification and diagnosis of issues before they become serious. It keeps subordinates in line and instils discipline in them. (vi) Promotes Coordination: It makes it easier for different departments and divisions to work together because it gives them a common path. Individuals and their actions are built with a common goal in mind. It also serves as a connection between various levels of authority. (vii) Cope with Uncertainty and Change: Organizations function in a dynamic and ever-changing world. The company should keep a close eye on such developments and react appropriately. To avoid errors from being major risks, prompt steps should be taken. (viii) Boosting the Morale of the Employees: Every employee is well aware of what he is supposed to do and the performance standards by which his performance will be measured. Employee morale is maintained at a higher level when workers have a positive outlook toward their workplace. 10.12 CONTROL PROCESS The basic control process involves mainly these steps as shown in Figure: 10.1 Figure: 10.1 Control Process a) The Establishment of Standards: Because plans are the benchmarks by which controls must be measured, the first step in the control process should logically be to complete plans. Plans may be thought of as the 168 CU IDOL SELF LEARNING MATERIAL (SLM)
benchmarks or benchmarks by which we measure real results in order to identify deviations. Examples for the standards • Profitability standards: These standards, in general, show how much profit a corporation would like to make for a certain time span, or its return on investment. • Market position standards: These standards specify the percentage of overall revenue that a business would like to have in a given market in comparison to its rivals. • Productivity standards: The focus of these standards is on how much different parts of the company can produce. • Product leadership standards: These describe what needs to be achieved in order to reach this role. • Employee attitude standards: These guidelines outline the types of behaviours that business leaders should aim to instil in their workers. • Social responsibility standards: making a meaningful contribution to society, for example. • Standards that represent the relative balance of short- and long-term objectives. b) Measurement of Performance: Performance against expectations should be measured in the future so that anomalies can be detected early and corrective action taken. Of course, the level of complexity in assessing different forms of organisational output is largely determined by the task being measured. For example, evaluating the performance of a highway maintenance worker is much more difficult than evaluating the performance of a student enrolled in a college-level management course. c) Comparing Measured Performance to Stated Standards: Once managers have a measure of organisational efficiency, the next step in the control process is to equate it to a benchmark. The level of operation developed as a model for measuring organisational performance is referred to as a norm. The performance being measured may be for the whole organisation or for particular individuals within the organisation. Standards, in essence, are the yardsticks used to measure whether an organization's output is acceptable or insufficient. d) Taking Corrective Actions: 169 CU IDOL SELF LEARNING MATERIAL (SLM)
The next step in the controlling process is to take corrective steps, if possible, after actual performance has been compared to defined performance standards. Corrective action is a managerial practise that aims to raise organisational performance to acceptable levels. In other words, corrective action is concerned with correcting operational errors that impair performance. Managers should ensure that the standards they are using were clearly defined and that their assessments of organisational success are accurate and reliable before taking any corrective action. At first glance, it appears that managers should take corrective steps to remove challenges, or causes within an organisation that serve as roadblocks to achieving organisational goals. In practise, however, pinpointing the issue causing any unfavourable organisational impact can be difficult. 10.13 TYPES OF CONTROL SYSTEMS Feed forward, concurrent, and feedback control systems are the three types of control systems available. Figure: 10.2 Types of control A). Feed forward controls: These are preventative controls that aim to predict issues and take corrective steps before they happen. For example, before going to the job site, a team leader double-checks the consistency, completeness, and dependability of their tools. B). Concurrent controls: Concurrent monitors (also known as screening controls) take place when an operation is in progress. For instance, when practising, the team leader assesses the quality or success of his members. C). Feedback controls: They keep track of what has already been done. As a result, after the results, corrections can be made. For instance, input from facilities engineers on a completed project. 170 CU IDOL SELF LEARNING MATERIAL (SLM)
10.14 CONTROLLING TECHNIQUES Techniques for controlling can be researched under: A. Traditional Techniques. B. Modern Techniques. Controlling methods used in the past include: Budgetary Control Budgetary control is one of the oldest and most commonly used control methods. “Budgetary management,” according to J. Batty, “is a mechanism that uses a plan to prepare and control all aspects of manufacturing and/or selling goods and services.” Brown and Howard include a more detailed definition: “Budgetary management is a method of cost control that involves the preparation of budgets, organising departments and assigning roles, comparing real performance to budgeted performance, and acting on results to achieve optimum profitability.” Budgetary control is a method of managerial control that involves the creation of different budgets. Thus, budgetary control follows the following steps: i) Preparation of budgets ii) Comparison of real results against budgets on a regular basis iii) Take corrective steps iv) Adjusting budgets in response to changes in circumstances Types of Budgets: Budgets are quantitative statements prepared ahead of time for a certain period of time that serve as a foundation for comparing actual results over that period. Budgets are therefore an important source of control since they provide a criterion to be reached by actual output and thus a norm by which to measure it. An organization's budget can vary depending on its design and intent. Although it is impossible to include an exhaustive list of budgets, the following are the most common types of budgets that an organisation prepares: i). Master Budget and Operating Budget 171 Master Budget: CU IDOL SELF LEARNING MATERIAL (SLM)
It is a comprehensive budget that caters to the overall organization's priorities and objectives. It is typically an amalgamation of individual budgets prepared by different organisational functional areas. It combines areas such as revenue, development, profits, properties, cash budget, and so on to provide an organization's overall status and health. Operating budgets: Operating budgets are sub-budgets created to provide specific goals to different functional departments. These budgets serve as actionable guidance and metrics. There are more complex budgets that are made for a shorter period of time, such as weekly or monthly budgets. Operating budgets may be: a. Sales budget – Provides an estimate of total sales anticipated for a specified time span, expressed in rupees and quantities. b. Production budget – Estimates the amount of output that will be generated within a given budget period. c. Material budget – Projected quantity and expense of products to be used in production. d. Direct expenditure budget – This budget estimates the form and amount of different costs associated with product repair, marketing, and delivery. e. Overhead budget – Includes an estimate of various administrative and indirect costs for a given period of time. f. Cash budget – Forecasts planned cash inflows and outflows over the budgeted period. It is ready to ensure that there is enough cash on hand to fulfil the organization's obligations. ii. Financial Budget: Financial budgets are plans for an organization's revenue and expenditures. These preparations can be made for both the long and short term. Its primary goal is to paint a picture of a company's financial health. The financial budget serves as a guide for all functional areas in determining the extent of their operations. iii. Static and Flexible Budget: 172 CU IDOL SELF LEARNING MATERIAL (SLM)
Static budget – A static budget is a collection of numbers that does not adjust through adjustments in variables like sales volume or income. These budgets are made for a specific level of operation and are mainly intended to coordinate sectional activities. Flexible budget – A flexible budget is one that adjusts in response to changes in operation or revenue levels. In other words, a flexible budget is typically planned for various levels of operations in order to show the changes that arise as revenue levels change. Zero Base Budgeting: ZBB (zero base budgeting) is a method of creating a budget from the ground up for each budgeting period. This method of budgeting is based on the assumption that each budgeting cycle is unique and should be treated as such. As a consequence, it entails making a budget from scratch. As a result, zero base budgeting can be described as a method of budgeting in which all new period expenditures are measured on the basis of existing expenses to be incurred rather than on an incremental basis. Any activity must be justified under this method, with a description of the revenue that each expense would produce for the business over a given budget period. In comparison to conventional budgeting, which assumes that past patterns or sales/expenditure will continue, zero base budgeting assumes that there are no balances to be carried forward and no pre- committed expenditures. 2. Personal Observation: One of the oldest methods of regulation is personal or direct supervision. In this process, the supervisor watches the employees and gathers first-hand information about their output, either directly or via a designated authority. This tactic is effective as a management mechanism because being watched all of the time puts psychological pressure on workers, preventing them from deviating from their job. Furthermore, this approach saves time and resources by reducing paperwork and allowing for quicker remedial action. However, such a strategy is subjective and can be influenced by the supervisor's personal bias and biases. 3. Break-Even Analysis: Break-even analysis assists in assessing the sales value at which a business is neither profitable nor losing money, i.e., the amount at which revenue exactly equals total expense. This is what is referred to as the break-even stage. Break-even analysis aids managers in determining the relationship between sales, costs, and profits. 173 CU IDOL SELF LEARNING MATERIAL (SLM)
A company may use break-even analysis to evaluate the likely profit at various levels of revenue. It enables management to determine the point at which production begins to earn a profit, or the point at which production begins to lose money. As a result, it aids in determining the proper level of development. The following diagram shows a break-even point: Figure: 10.3 Break-Even Chart The company's break-even rate, as seen in the diagram above, would be 60,000 units. An organisation can monitor and decide on the following aspects with the aid of this information: i. Ascertain that adequate supply is available to achieve the profit goal. ii. Keep an eye on production to ensure that it does not fall below 60,000 and the business begins to lose money. iii. Has the potential to manage costs at different stages of revenue. 4. Statistical Reports: A statistical report is a method of presenting numerical or quantitative data in a structured manner. Tables, graphs, comparative sheets, maps, and other types of statistical reports are 174 CU IDOL SELF LEARNING MATERIAL (SLM)
available. These reports present information in an easily digestible format that can be used to assess employee efficiency. These numeric reports are extremely useful for a variety of comparisons, including those made over time, between workers, between organisations, and so on. A data set can be used to produce a variety of meaningful interpretations, such as averages, regressions, and variances, using a variety of statistical methods and techniques. Controlling methods used today include: 1. Network Techniques (PERT and CPM): In project management, network strategies are generally used as control methods. A project is a large undertaking that consists of several interconnected, interdependent, and sequential activities. A network analysis is carried out in order to ensure the project's timely and successful completion. As a result, a network analysis helps to schedule, organise, and control different operations in order to complete the project effectively and efficiently. The following targets must be reached in order for the programmes to be completed: i. It must be done as soon as possible. ii. Resource optimization, iii. Completion at the lowest cost possible. Via the drawing and study of networks, network analysis aims to accomplish all three project objectives. A network can be described as a symbolic representation of a collection of interconnected activities that must be completed in a specific order in the shortest amount of time possible. They display interdependence among activities by representing sequential activities in the form of a single flow chart, starting with the first and ending with the last. Following diagram is a specimen of a network diagram: 175 CU IDOL SELF LEARNING MATERIAL (SLM)
Figure: 10.4 Network Diagram Most Commonly Used Network Techniques – PERT and CPM: Critical Path Method (CPM): DuPont first invented the CPM in the 1950s, and it was used in missile defence building programmes. The critical path approach is a deterministic step-by-step project management methodology that distinguishes critical and non-critical tasks in order to complete the project in the shortest time possible while avoiding operational issues and process bottlenecks. The CPM is best suited and used for projects with a large number of activities that communicate in a dynamic way and for which time and costs are known with certainty. For implementing CPM, steps to be adopted are summarised as follows: i. Split the project down into smaller tasks or activities and list them in a sequential (sequenced) order. ii. Make a flowchart or a network that shows each activity's relationship to its preceding, concurrent, and succeeding activities. iii. Decide the critical path, i.e., the most relevant path, as well as the non-critical paths for different activities. iv. Evaluate the estimated completion period for each operation, followed by the total project completion time. v. Assess the organisational versatility, i.e., the likelihood of reshuffling resources to concentrate more on critical path activities. Programme Evaluation Review Technique (PERT): 176 CU IDOL SELF LEARNING MATERIAL (SLM)
PERT is a probabilistic project management methodology. This strategy was first used in the United States Navy's preparation and control of the \"Polaris Missiles Program\" in 1957. In comparison to the critical path approach, the length of each operation in PERT is no longer a single time calculation that can be known with certainty. Time is a random variable characterised by a probability distribution and three-time estimates are given which are: i. Optimistic time estimate (t0) ii. Pessimistic time estimate (tp) iii. Most likely time estimate (tm) 2. Management Information System (MIS): A management information system (MIS) is a computer-based information system for capturing, storing, and disseminating data in the form of information required by supervisors at various levels. It assists managers in carrying out their management duties efficiently and effectively. MIS is a system that ensures that up-to-date information is transferred at the right time and at the right speed so that managers can make informed decisions. Management efficiency improves with MIS because it offers reliable, timely, and appropriate information for preparation, organisation, and control. “MIS is a systematic method of gathering timely information in a presentable manner to promote successful decision-making and execution, in order to carry out organisational operations for the purpose of achieving organisational goals,” according to Walter Kennevan.” Significance of MIS: In the recent years, the need for management information system has increased manifold due to the following reasons: i. Fosters Effective Planning – Management information systems (MIS) are extremely beneficial to an organization's planning process. By providing management with timely and reliable information, MIS can aid in the development of more accurate and timely plans. ii. Faster Communication – Using a computer-based information system and sophisticated information transfer methods, the management information system ensures that information reaches the right person at the right time. Formal communication becomes faster and more reliable with MIS. iii. Globalisation and Reducing Cultural Gap – By introducing computer-based information systems in enterprises, issues resulting from linguistic, geographical, and cultural 177 CU IDOL SELF LEARNING MATERIAL (SLM)
gaps can be minimised. Sharing information, knowledge, connecting, and forming relationships between countries is much easier with MIS. iv. Availability – Management information systems have enabled companies to be available 24 hours a day, seven days a week, all over the world. This means that a company can operate at any time and from any place, making cross-border trade simpler and more convenient. v. Cost-Effectiveness and Productivity – The MIS application helps the organisation run more efficiently and increases the knowledge available to decision-makers. Using such programmes will also assist businesses in putting a greater focus on information technology in order to achieve a competitive edge. vi. Effective Means of Control – MIS aids in the creation of a variety of reports that detail the performance of men, resources, equipment, money, and management. By providing information on idle time, labour turnover, wastages and losses, and surplus energy, MIS aids in cost control. Furthermore, MIS helps managers to easily equate real results to the standard and budgeted performance, helping them to take corrective action. 3. Ratio Analysis: Ratio analysis is a method for assessing an organization's performance by reviewing and interpreting financial statements. Financial statement absolute values do not disclose the true financial picture and are therefore unreliable for management decisions and control. Ratios aim to extract relevant significance from financial statements by forming relationships between two or more values. These ratios, as indices of actual results, often serve as a control measure by providing a baseline to which to compare. Ratio analysis, on the other hand, is not a goal in and of itself. It is merely a tool for having a deeper understanding of a company's financial strengths and weaknesses. Ratios can be seen as signs that can be used to assess an organization's financial health. Types of Ratios: i. Liquidity Ratios: These figures show a company's ability to fulfil its short-term financial obligations. These ratios assist the corporation in determining its liquidity status as well as lenders seeking short- term loans. Following are the ratios calculated in this category: (a) Current ratio (b) Quick ratio 178 CU IDOL SELF LEARNING MATERIAL (SLM)
(c) Cash ratio. ii. Profitability Ratios: As the name implies, these ratios convey information about a company's profitability. The capacity of a business to turn revenue into rupees and cash flow is referred to as profitability. Profit can be viewed in a number of ways, resulting in a variety of profitability ratios. Following are the ratios: (a) Gross profit ratio (b) Net profit ratio (c) Return on assets (d) Return on equity (e) Return on investment (f) Return on capital employed. iii. Leverage/Solvency Ratios: Solvency ratios are used to determine a company's financial health by comparing its debt to its assets and equity. If interest rates increase or market conditions worsen, a company with too much debt will not be able to handle its cash flow. The common solvency ratios are: (a) Debt to assets ratio (b) Debt equity ratio iv. Efficiency Ratios: Efficiency ratios show how effectively a business uses its resources and turns them into revenue. Turnover ratios are the most common name for these ratios. These are: (a) Asset turnover ratios (b) Inventory turnover ratio (c) Account’s receivables turnover ratio. v. Market Value Ratios: These ratios show how much value a corporation generates for its shareholders. These are ratios that equate a company's output to that of the industry. These include: (a) Price earnings ratio (b) Dividend pay-out ratio 179 CU IDOL SELF LEARNING MATERIAL (SLM)
(c) Market to book ratio (d) Dividend yield ratio. 4. Economic Value Added (EVA): Economic value added (EVA) is an internal management performance indicator of a company's financial performance centred on residual wealth, which is measured by subtracting the company's cost of capital from its operating profit on a cash basis, adjusted for taxes. EVA is also known as economic benefit, and it aims to capture a company's real economic profit. EVA is calculated with the help of the following formula: EVA = Net Operating Profit after Tax (NOPAT) – [Invested Capital x Weighted Average Cost of Capital (WACC)] The above formula shows that there are three main components to compute a company’s EVA. These are: i. NOPAT may be calculated separately or taken from the income statement of the company. ii. Invested capital refers to the funds allocated to a particular project. iii. The weighted average cost of capital (WACC) is the average rate of return a business plans to pay to its investors. A positive number indicates that an organisation has more than covered the cost of capital as a result of the EVA calculation. A negative number means that the project's profit was insufficient to cover its operating costs. Importance of EVA: Economic Value Added (EVA) is important because it is used as a measure to evaluate the viability of a company's projects and as a representation of management efficiency. The economic value equation summarises how much money a corporation made and where it came from. The aim of EVA is to shift the focus away from profit and toward wealth creation. Businesses are genuinely profitable, according to EVA, when they generate equity for their shareholders, and this is calculated in ways other than measuring net profits. 5. Market Value Added (MVA): Market value added is a statistic that calculates how much money a corporation has produced for its shareholders. Since an organization's primary goal is to increase shareholder wealth, market value added is an essential indicator for evaluating how much value a corporation has 180 CU IDOL SELF LEARNING MATERIAL (SLM)
added to its shareholders' wealth. The higher the additional consumer value, the better. MVA is the difference between the market value of a company's stock and the total capital invested. MVA is computed with the help of the following formula: MVA = Market value of the firm – Total invested capital Thus, two components are used to compute MVA, viz.: i. Market Value of the Firm: Market value of the firm comprises of two sub-components, i.e. – Market value of a firm = Market value of equity + Market value of debt. The market value of equity, also known as market capitalisation, is calculated by multiplying the number of outstanding securities by their market price. Similarly, the market value of debt is determined by multiplying the total amount of debt by the market price. ii. Total Invested Capital: It includes all bond and equity holders' overall capital investments. Undistributed gains, or deferred earnings, are also included. 10.15 BARRIERS OF CONTROLLING There are many barriers, among the most important of them: Control practises may lead to an undesirable overemphasis on short-term production rather than long-term production, which is one of the most significant barriers. Control practises will make workers more dissatisfied with their work, lowering morale. This reaction is most common when management exercises too much control. Control practises can promote report falsification. Control practises can cause organisation members' viewpoints to become too narrow for the organization's benefit. Control operations should be viewed as the control process's objectives rather than the means of implementing corrective action. 10.16 REQUIREMENTS FOR EFFECTIVE CONTROL 181 The requirements for effective control are: a) Control should be tailored to plans and positions CU IDOL SELF LEARNING MATERIAL (SLM)
This implies that all control techniques and systems must represent the plans for which they were created. This is due to the fact that each strategy, as well as each form and step of an operation, has its own distinct characteristics. b) Control must be tailored to individual managers and their responsibilities This means that controls must be customised to each manager's personality. This is because control systems and knowledge are designed to assist individual managers in performing their control functions. They would be useless if they are not of the sort that a manager can or can understand. c) Control should point up exceptions as critical points This is because controls based on the time-honoured exception principle allow managers to detect areas where their attention is needed and should be provided by focusing on deviations from expected results. However, looking at exceptions isn't enough because certain deviations from norms have no meaning and others have a lot. d) Control should be objective This is due to the fact that when controls are contextual, a manager's attitude will affect performance inaccuracy decisions. Quantitative standards, such as costs or man hours per unit, or work completion dates, are examples of objective standards. They may also be qualitative in the case of training programmes with particular characteristics or that are intended to improve personnel efficiency in a specific way. e) Control should be flexible This means that in the event of a change of plans, unexpected situations, or outsight failures, controls should continue to operate. Alternative strategies for different future scenarios will provide a lot of control versatility. f) Control should be economical This implies that the cost of control must be justified. While this requirement is straightforward, putting it into practise can be difficult. This is because it can be difficult for a manager to decide how much a system is worth or how much it costs. g) Control should lead to corrective actions Control is justified only if the indicated or observed deviations from plans are resolved by adequate preparation, arranging, guiding, and leading, since a control mechanism would be of 182 CU IDOL SELF LEARNING MATERIAL (SLM)
no value if it does not lead to corrective action. 10.17 DECISION MAKING – MEANING & DEFINITION Decision making can be described as the process of selecting a course of action from a variety of options in order to achieve a desired result. Making decisions entails weighing various options and deciding what to do and what not to do in the face of a specific situation. In this sense, decision-making entails arriving at a conclusion or final decision that can be enforced as a problem solution. Since managers are invariably confronted with some problem or another for which they must find a solution, it is said that decision-making is often needed, and Simon has pointed out that \"to make a decision is management.”. “Decision-making is the actual selection from among alternatives of a course of action.” - Koontz and O’Donnel “Decision-making is the selection based on some criteria from two or more possible alternatives.” – George R. Terry. 10.18 CHARACTERISTICS OF DECISION MAKING 1. It is the method of choosing a course of action from a range of choices. 2. Decision is the final step in a process that involves deliberation and reasoning. 3. The focal point at which plans, strategies, and goals are converted into tangible actions is decision-making. 4. Another aspect of decision-making is rationality. This rationality is made possible by the human brain's ability to learn, recall, and relate several complex factors. 5. Making a decision necessitates dedication. For two purposes, management is committed to making a decision. First, it maintains the organization's stability, and second, any decision made becomes part of the aspirations of those who work there. 6. The goal of decision-making is to find the best option that will help the company achieve its objectives. 10.19 DECISION MAKING PROCESS The decision-making process is presented in the figure below: 183 CU IDOL SELF LEARNING MATERIAL (SLM)
Figure: 10.5 Decision Making Process 1. Specific Objective: The need for decision-making stems from the need to accomplish specific goals. The assessment of whether a decision is required is the starting point in every decision-making analysis. 2. Problem Identification: A problem is a perceived need or a question that requires an answer. \"A good decision is based on the identification of the right issue,\" says Joseph L Massie. The aim of problem identification is to provide a clue to finding a potential solution if the problem is clearly and explicitly identified. If managers go through the diagnosis and review process, an issue can be clearly defined. Diagnosis: is the method of determining the cause of a problem based on its signs and symptoms. A symptom is a state or collection of states that imply the presence of a problem. Knowing the difference between what is and what should be, finding the causes of the discrepancy, and considering the problem in relation to the organization's higher goals are all part of diagnosing the real problem. Analysis: Diagnosis is the catalyst for research. An analysis of an issue necessitates: • Who will be in charge of making the decision? • What data will be required? • Where can you get the information? Managers benefit from research because it allows them to get a deeper understanding of the problem. 184 CU IDOL SELF LEARNING MATERIAL (SLM)
3. Search for Alternatives: A problem can be solved in a variety of ways, but none of them will be equally satisfying. As a result, the decision maker must seek out all of the available options in order to arrive at the most satisfactory decision outcome. A decision maker may find alternatives from a variety of sources, including: • His own personal history • Other people's habits and • Using innovative methods 4. Evaluation of Alternatives: Once the different alternatives have been identified, the next step is to test them and choose the one that better matches the criteria. /The decision maker must compare proposed alternatives to defined limits, and if one does not reach them, he will discard it. After narrowing down the options that require serious consideration, the decision maker will assess how each option will contribute to the goal that will be accomplished by implementing the decision. 5. Choice of Alternative: The assessment of different alternatives paints a straightforward picture of how each one contributes to the goals in question. The best option is selected after a comparison of the possible outcomes of different alternatives. 6. Action: Once the alternative is selected, it is put into action. The actual process of decision-making ends with the choice of an alternative through which the objectives can be achieved. 7. Results: When a decision is implemented, it produces specific outcomes. If a successful decision has been taken and executed correctly, these outcomes must match the goals, which are the starting point of the decision process. As a consequence, the outcomes indicate whether decision-making and execution are appropriate. 10.20 TYPES OF DECISIONS a) Programmed and Non-Programmed Decisions: Herbert Simon divides organisational decisions into two groups depending on the process used. They are as follows: i) Programmed decisions: Programmed decisions are routine and repetitive, and they are taken in accordance with the policies and regulations of the company. These protocols and regulations are put in place ahead of time to fix recurring concerns within the company. 185 CU IDOL SELF LEARNING MATERIAL (SLM)
Short-term effects arise from programmed actions. In most cases, they are taken at the lower levels of management. ii) Non-Programmed Decisions: Non-programmed decisions are those made in response to non-recurring issues. Non-programmed decisions are useful for solving problems that are unique or unusual and cannot be determined in advance. Since non-programmed decisions are novel and non-recurring, readymade solutions are not available. Since these are high-level decisions with long-term repercussions, they are taken by top management. b) Strategic and Tactical Decisions: Operational decisions are divided into strategic and tactical groups. i) Strategic Decisions: Basic decisions, also known as strategic decisions, are critical decisions. Strategic decisions are important choices in resource utilisation and contribution to the achievement of organisational goals. Basic or strategic decisions include things like plant location, product diversification, entering new markets, channel distribution selection, capital expenditure, and so on. ii) Tactical Decisions: Routine or tactical decisions are those that are taken on a daily basis. They are the product of strategic choices. The following are some of the characteristics of a tactical decision: Tactical decisions affect the organization's day-to-day operations and must be made regularly. The bulk of tactical actions are pre-programmed. As a result, the decision can be taken in light of these variables. Operational decisions have a short-term impact and only affect a small portion of the enterprise. Tactical decision-making authority should be transferred to lower-level managers because: first, tactical decisions have a limited and short-term effect; and second, tactical decisions have a limited and short-term impact. Second, by delegating decision-making authority to lower-level managers, higher-level managers can devote more time to strategic decisions. 10.21 SUMMARY Leading entails using social and informal channels of power to motivate others to take action. 186 CU IDOL SELF LEARNING MATERIAL (SLM)
Delegation is the hierarchical method of entrusting people with tasks and assigning them responsibilities. Authority is characterised as a person's power and right to effectively use and distribute resources. The person's responsibility is to fulfil the mission that has been assigned to him. Transparency includes describing any discrepancies in actual results from the set goals. Controlling is an integral part of the management process and one of the managerial roles. Budgetary management is a mechanism for managing and regulating all aspects of manufacturing and/or selling goods and services using a budget. Zero-base budgeting (ZBB) is a method of creating a budget from the ground up for each budgeting cycle. Break-even analysis assists in assessing the amount of revenue at which a business is neither profitable nor losing money. PERT is a probabilistic project management methodology. Decision making can be described as the process of selecting a course of action from a variety of options in order to achieve a desired result. Programmed decisions are routine and repetitive, and they are taken in compliance with the policies and regulations of the company. Non-programmed decisions are those made in response to non-recurring issues. 10.22 KEYWORDS Delegation: determines the relationship between the superior and the subordinate. Control: refers to any mechanism that directs operation against a set of predetermined objectives. Financial budgets: These are strategies for an organization's revenue and expenditures. Direct supervision: one of the earliest types of regulation. Network techniques: Network strategies are commonly used in project management as control methods. Decision-making: is the process of selecting a course of action from a collection of options. 187 CU IDOL SELF LEARNING MATERIAL (SLM)
10.23 LEARNING ACTIVITY A company ‘M’ limited is manufacturing mobile phones both for domestic Indian market as well as for export. It had enjoyed a substantial market share and also had a loyal customer following. But lately it has been experiencing problems because its targets have not been met with regard to sales and customer satisfaction. Also, mobile market in India has grown tremendously and new players have come with better technology and pricing. This is causing problems for the company. It is planning to revamp its controlling system and take other steps necessary to rectify the problems it is facing. Questions: 1. Identify the benefits the company will derive from a good control system. 2. How can the company relate its planning with control in this line of business to ensure that its plans are actually implemented, and targets attained. 3. Give the steps in the control process that the company should follow to remove the problems it is facing. 4. What techniques of control can the company use? In all the answers keep in mind the sector of business the company is in. ___________________________________________________________________________ ___________________________________________________________________________ 10.24 UNIT END QUESTIONS 188 A. Descriptive Questions Short Questions 1. What is meant by delegation? 2. Define delegation. 3. Explain the importance of delegation. 4. Discuss the characteristics of delegation. 5. Outline the elements of delegation. 6. Write short note on authority and responsibility 7. What is meant by controlling? 8. Define controlling. 9. Classify the types of control systems 10. Classify the types of budgets CU IDOL SELF LEARNING MATERIAL (SLM)
11. Write short note on breakeven point. 12. State PERT and CPM 13. Explain the barriers of controlling 14. Discuss the requirements for effective control 15. What is meant by decision making? 16. Define decision making 17. Discuss the characteristics of decision making. Long Questions 1. Classify the types of delegation 2. Explain the process of delegation 3. Explain the importance of controlling. 4. Discuss the process of controlling 5. Describe the techniques of controlling. 6. Explain the process of decision making. 7. Classify the types of decisions. B. Multiple choice Questions 1. The process whereby a manager shares his work and authority with his subordinates is________. a. Decentralisation b. Responsibility. c. Delegation. d. Decision making. 2. Controlling function finds out how far __________ deviates from standards. 189 a. Actual performance b. Improvement c. Corrective actions d. Cost CU IDOL SELF LEARNING MATERIAL (SLM)
3. Which of the following is not a process of controlling? a. Analyzing deviations b. Integrates employees’ efforts c. Taking corrective measures d. Setting performance standards 4. The selection of best alternative from many alternatives is known as__________. a. Selection. b. Decision-making. c. Organizing. d. Budgeting. 5. Deal with routing and repetitive problems is a __________. a. Programmed decision. b. Non-programmed decision. c. Major decision. d. Minor decision. 6. The decision taken by high level of management is _______________. a. Programmed decision. b. Non-programmed decision. c. Individual decision. d. Non-economic decision. Answers 1. (c) 2. (a) 3. (b) 4. (b) 5. (a) 6. (b) 10.25 REFERENCES 190 Reference Books: CU IDOL SELF LEARNING MATERIAL (SLM)
R1, L M Prasad, “Principles and Practice of Management”, Sultan Chand & Sons, 20th Edition, New Delhi. R2 Vijaykumar Kaul, “Principles and Practice of Management”, Vikas Publishing House Pvt Ltd, New Delhi. Textbooks: T1, Harold Koontz, Heinz Weihrich, A Ramachandra Aryasri, 2004, “Principles of Management”, The McGraw-Hill publishers, T2, RSN Pillai & S Kala, 2013, “Principles and Practice of Management”, S. Chand Publication, New Delhi. 191 CU IDOL SELF LEARNING MATERIAL (SLM)
UNIT 11: NATURE AND SCOPE OF 192 ORGANIZATIONAL BEHAVIOR Structure 11.0 Learning Objectives 11.1 Introduction 11.2 Evolution Of Organisational Behaviour 11.3 Definition 11.4 Nature Of Organisational Behaviour 11.5 Scope Of Organisational Behaviour 11.6 Components Of Organisational Behaviour 11.7 Significance Of Organisational Behaviour 11.8 Disciplines Contributing To Organisational Behaviour 11.9 Challenges And Opportunities Of Organisational Behaviour 11.10 Concepts Of Organisational Goals 11.11types Of Organisational Goals 11.12determination Of Organisational Goal 11.13 Summary 11.14 Keywords 11.15 Learning Activity 11.16 Unit End Questions 11.17 References 11.0 LEARNING OBJECTIVES After studying this unit, students will be able to: Describe the evolution of Organisational Behaviour Explain the nature and scope of Organisational Behaviour Discuss the components & significance of Organisational Behaviour Explain the disciplines contributing to Organisational Behaviour Identify the challenges and opportunities of Organisational Behaviour Explain the concepts of Organisational goals Identify the types & determination of Organizational goals CU IDOL SELF LEARNING MATERIAL (SLM)
11.1 INTRODUCTION The implementation of Organizational Behaviour (OB) is both interesting and daunting. It is associated with people, with a gathering of individuals who work together in communities. When situational factors are involved, the analysis becomes more challenging. The investigation of authoritative conduct focuses on a single person's usual behaviour within the organisation. In a given work situation, no two people are likely to behave in the same way. It is an administrator's consistency in dealing with a single person's normal behaviour. In human actions, there are no absolutes. It is the human variable that contributes to the benefit, so human behaviour must be investigated. As a consequence, a high degree of scepticism must be applied to the analysis. Analysts, managers, physicians, and social analysts must be mindful of an individual's credentials, expertise, social system, educational redesign, and the effects of social gatherings and other situational variables on actions. Supervisors under which a person works should be able to explain, predict, assess, and change human behaviour, which is largely dependent on the supervisor's knowledge, capacity, and experience in managing large groups of people in a variety of situations. In order to assess human actions, constructive steps must be taken. The quality method, intuitive discernment, hierarchical society, occupational structure, and workplace are all important causal experts in determining human behaviour. Circumstances and outcome relationships play a significant role in how a person is likely to behave in a given situation, as well as their impact on profit. A suitable authoritative society has the power to change individual behaviour. There are recent trends in putting a greater emphasis on authoritative development and instilling a positive conduct culture in all. It also involves fostering a sense of unity and creativity in order to achieve the authority's goals. 11.2 EVOLUTION OF ORGANISATIONAL BEHAVIOUR In the evolution of OB, there are five distinct stages: The Civil War, Research Administration, Movement for Human Relations, Hawthorne Research and The OB itself. 193 CU IDOL SELF LEARNING MATERIAL (SLM)
Only since the beginning of the 19th century have specialists in human nature attempted to map the subject's evolution. The early nineteenth century is important because it was during this period that the Industrial Revolution occurred, resulting in a complete transformation of the industrial world at the time. Industrial Revolution: Materialism, discipline, monotony, boredom, task displacement, impersonality, work interdependence, and other behavioural trends were all brought on by the Industrial Revolution. Nonetheless, the Industrial Revolution was responsible for sowing the seeds of future growth. Industry provided a surplus of goods and skills, which resulted in higher salaries, reduced working hours, and greater job satisfaction for employees. Around the year 1800, Robert Owen, a young Welsh factory owner, was one of the first to highlight the human needs of workers in this modern industrial climate. He was adamant in not hiring children under the age of eighteen. He instilled in his employees a sense of cleanliness and temperance, as well as bettering their working conditions. Owen could show in his own factory that paying equal attention to \"vital machines\" and \"inanimate machines\" paid off. He was dubbed the \"Father of Personnel Management\" because of his techniques. This hardly qualifies as modern organisational behaviour, but it is a start in the right direction. Andrew Ure's The Theory of Manufactures was published in 1835, and it included the human factor as one of the factors of development, alongside mechanical and commercial components. Ure provided staff with hot tea, medical attention, and sick leave because he believed in the value of the human element. J.N. Tata, who was closer to home at the time, took a particular interest in the well-being of his staff. In his factories, he was the first to instal humidifiers and fire sprinklers. He founded a pension fund in 1886 and started paying accident compensation in 1895. He was decades ahead of his time and light years ahead of his rivals. Empress Mills' studies demonstrated that he cared for people as well as profits. Owen, Ure, and Tata's proposals were slowly or not at all embraced, and they often devolved into a paternalistic, do-good-approach rather than a sincere understanding of the value of people at work. Scientific Management: The term \"scientific management\" conjures up memories of Taylor. He is aptly referred to as the \"Father of Scientific Management\" because he transformed large generalisations into useful tools. He was also responsible for rekindling worker enthusiasm in the early 1900s. Taylor argued for hiring the right people for the right positions, providing proper preparation, putting them in jobs that they were ideally suited for, and paying them 194 CU IDOL SELF LEARNING MATERIAL (SLM)
well. Taylor's objective was technological performance, but at the very least, management was made conscious of the value of human resources, which had previously been ignored. Taylor's main book, Principles of Scientific Management, was published in 1911. World War I heightened interest in human working conditions during that decade. Taylor's theories, especially his belief in rationalising everything and his claim that human behaviour is based on the \"rabble hypothesis,\" were criticised. The Human Relations Movement: The collapse of scientific management spawned the human relations movement, which puts a strong focus on employee collaboration and morale. People were to be considered as human beings rather than robots, with people's wishes and complaints being heard and them being involved in decisions about working conditions. The explanations for this human relations role are numerous and complex. The Great Depression, the labour movement, and the now-famous Hawthorne Studies are three of the most significant contributing factors in history. The 1929 stock market crash in America signalled the start of the Great Depression. The Depression resulted in widespread unemployment, a loss of purchasing power, the deterioration of economies, and a reduction in people's standard of living. This phenomenon occurred all over the world, not just in America. One good thing that came out of the Great Depression was that management understood that production could no longer be its primary function. In order for a business to thrive and expand, it needed marketing, finance, and personnel. Unemployment and poverty brought to the surface human challenges that administrators were now forced to recognise and deal with as a result of the Great Depression. Most managers started to cultivate a new, awakened understanding of the human dimensions of work, and personnel departments were either developed or given more focus. As a result of the Depression, human relations became more important, both indirectly and directly. Labour Movement: As a result of continued exploitation, workers realised that their own safety was in their own hands. They created influential labour unions, which had the desired impact on management. Employee relations were a concern for management, with salaries, hours of work, and working conditions attracting secondary attention. Regrettably, the human relations position was often developed for the wrong reasons. It was imposed on managers in far too many instances by labour, who threatened them with dire consequences if they did not comply. It would have been ideal if human relations had evolved 195 CU IDOL SELF LEARNING MATERIAL (SLM)
as a result of practising managers' inherent desire to better understand and provide for the wellbeing of their employees. Hawthorne Studies: Although the Depression and the labour movement were at least indirect causes of the practise of human relations, Hawthorne studies continue to dominate academic discourse on historical progress. The research elevated the study of organisational behaviour to the level of an empirical discipline. The research was conducted at the Western Electric Company's Hawthorne works in Cicero, a Chicago suburb, and is closely associated with the name Elton Mayo. Mayo was the person most responsible for performing the studies and publicising their importance as Professor of Industrial Science at the Harvard School of Business Administration. He is rightfully referred to as the \"Father of the Human Relations Movement.\" Organisational Behaviour: As a result, the human relations movement began, grew, and flourished for a long time. Unfortunately, the movement evolved so rapidly that it developed a lot of faddism and shallowness. Although implicitly attempting to influence staff, some practitioners started to emphasise the big smile, \"being good to people,\" and \"making them happy.\" Naturally, the human relations movement attracted a lot of flak. The word \"human relations\" has lost its lustre over time, but it is still used, especially at the operational level, because it is relevant. As the field progressed and became more research- based, a new word emerged to characterise it: ‘organisational behaviour.' This movement can be traced back to the late 1950s and early 1960s, according to experts. Since the 1960s, organisational behaviour has improved dramatically, though there have been several setbacks. Managers are constantly aware of the importance of human resources and are working to gain a greater understanding of people and their roles in diverse organisations and dynamic market environments. The topic, organisational behaviour, has led to this realisation. 11.3 DEFINITION “Organizational behaviour is directly concerned with the understanding, prediction, and control of human behaviour in organizations.” - Fred Luthans. \"Organizational behaviour is a field of study that investigates the impact that individuals, groups and structure have on behaviour within organization for the purpose of applying such knowledge toward improving an organization's effectiveness.\" - Stephen P. Robbins 196 CU IDOL SELF LEARNING MATERIAL (SLM)
11.4 NATURE OF ORGANIZATIONAL BEHAVIOUR Organizational behaviour is a relatively new area of research that is still emerging. In the second half of the twentieth century, it made significant progress. The following is a list of its current features. A separate field of study: Organizational behaviour is a distinct field of study. This field has seen a lot of study and analysis. However, it is still not considered a science. There is no base of fundamental principles upon which it can be founded as a science. As a consequence, rather than calling it a discipline, it would be more fitting to refer to it as an area of research. It is an applied science: whose aim is to help organisations solve problems involving human behaviour. As a consequence, applied research takes priority over fundamental research. Although most of the study can be conducted in a lab, an individual's actions cannot be studied in this way. As a result, organisational behaviour is both a science and an art form. An Interdisciplinary Approach: Organizational behaviour is basically an interdisciplinary approach to researching human behaviour in the workplace. It seeks to put together applicable expertise from related fields such as psychology, sociology, and anthropology in order to apply it to the study and analysis of organisational behaviour. A Normative Science: Organizational Behaviour is also a normative science. Although positive science focuses solely on cause-and-effect relationships, O.B. prescribes how applied research results can be applied to socially acceptable organisational objectives. As a consequence, O.B. is concerned with what is agreed by individuals and society in the sense of an organisation. It's not that O.B. isn't normative in any way. In fact, the prevalence of management theories demonstrates that O.B. is normative as well. A Humanistic and Optimistic Approach: Organizational Behaviour takes a humanistic approach to the people who work in the business. It is concerned with human thought and feeling. People have an inherent ability to be self-sufficient, imaginative, and prosperous, according to OB. It also acknowledges that if the right incentives and atmosphere are created, workers can and will achieve their full potential. The working environment has an effect on employee success. A Total System Approach: A total system approach incorporates all of the variables that influence organisational efficiency. Behavioural scientists introduced the systems approach to interpret human behaviour in the context of his or her socio-psychological framework. Man's 197 CU IDOL SELF LEARNING MATERIAL (SLM)
socio-psychological framework makes him a dynamic being, and the systems approach seeks to understand and resolve this complexity. 11.5 SCOPE OF ORGANIZATIONALBEHAVIOUR The following is a list of the types of organisational behaviour: Individual Behaviour This is where a person is examined, as the name implies. An individual's personality, desires, motivation, and attitudes are studied while they are a member of an organisation. There is one-on-one interaction to better understand and research the person and develop an opinion about them. Inter-Individual Behaviour This term is now used when workers communicate with one another. It may be with their co- workers’ social groups, their subordinates, or their senior employees. It assists in the comprehension of a person's leadership styles and qualities; if a disagreement occurs, it can be easily resolved; and group dynamics can be easily understood. Group Behaviour The creation of an association is investigated here. The structure of the company, its efficiency, and other factors may be investigated. Group activity refers to the attempts undertaken by a group to accomplish an organization's aims or goals. The activities of all members of the community are taken into consideration. 11.6 COMPONENTS/ELEMENTS OF ORGANIZATIONAL BEHAVIOUR The following are the various main elements in organisational behaviour. When people come together to achieve a goal, an organization's infrastructure is often needed. People rely on technology to complete their tasks. These elements are influenced by their surroundings. People One of the most essential and vital parts of any company is its \"PEOPLE.\" Individuals, classes, both big and small, are all included. They are the reason that the organisation of living, thought, and feeling beings exists. They accomplish goals for the good of the company. People exist to serve organisations, not organisations to serve people. People, also known as the workers, are a valuable and vulnerable resource that must be handled. The 198 CU IDOL SELF LEARNING MATERIAL (SLM)
organization's human resource officer is in charge of these services. They must deal with the following problems in order to handle them: Employees are required to complete the mission that has been assigned to them. It is essential to manage the relationship and interaction between superiors and subordinates. Teams who work together as a team are responsible for completing their tasks. They must also deal with the organization's external climate, such as consumers and the government. Structure It is known as the formal relationship between members of the management team. There are numerous positions that are necessary to complete all of the organization's activities. To present an effective job, the people must structurally relate to one another. The top level, for example, has the power to make decisions that have an impact on the work of the middle and lower levels. The following are some of the organisations' most important features: Hierarchy of Authority: The distribution of authority within an organization's status and authority enables them to have certain rights to deliver, plan, and guide lower authority, as well as the ability to punish or reward them. Division of Labour: This depicts the division of duties and the manner in which roles are distributed and assigned to various members of an organisation, which is recognised as an essential part of the social structure. Span of Control: A manager's Span of Control refers to the number of subordinates under his command. Specialization: This applies to the number of different specialties that the business conducts. Standardization: For repeated incidents and practises, standardisation is the process and standard that is practised. Formalization: This refers to the number of protocols, procedures, laws, and legislation, as well as emails, that must be written down. Centralization: This is defined as the practise of withholding a substantial amount of formal authority. Complexity: This applies to the organization's vertical and horizontal division, i.e., the organisational and departmental levels. Technology 199 CU IDOL SELF LEARNING MATERIAL (SLM)
“TECHNOLOGY” is a crucial component of every enterprise that transforms inputs and outputs. During the transformation process, it consists of physical objects, operations, and procedures, as well as information that is brought together on raw materials, labour, and capital inputs. In a manufacturing company, technology is used to produce products. It provides people with physical and economic opportunities to work with. Technologies are used in the manufacturing of computers, as well as in the development of work progress and the assembly of resources. Three categories of technology have been established: Long Linked Technology: Tasks are broken down into a series of sequential and interdependent steps, with the outputs of one unit feeding into the next. Mediating Technology: This technology connects direct and indirect paths. Intensive Technology: This involves bringing a community together to solve a specific and difficult problem. Environment Any company communicates with its internal and external environment, as well as a wider framework comprising millions of other objects. Both of these elements are mutually inclusive and exclusive, and this has become the people's way of life. It has an effect on people's attitudes and working conditions, as well as providing competition for capital and power. Interacting with other companies and the outside world helps you to access raw materials, staff, information, comparative analysis, facilities and equipment, and, most importantly, consumers who are the end users of your goods. Distributors, channel members, intermediaries, advertising firms, trade organisations, government, and retailers, among others, are all present in the organization's external environment from the manufacturing to the sale of the product. The following are the two distinct environments: Specific environment: This includes vendors, consumers, rivals, states, agencies, associations, workers, political parties, and other stakeholders. The overall climate, which includes cultural and social aspects. 11.7 SIGNIFICANCE OF ORGANIZATIONAL BEHAVIOUR 200 Skill Improvement Organizational behaviour research will help you develop your skills. CU IDOL SELF LEARNING MATERIAL (SLM)
Search
Read the Text Version
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
- 31
- 32
- 33
- 34
- 35
- 36
- 37
- 38
- 39
- 40
- 41
- 42
- 43
- 44
- 45
- 46
- 47
- 48
- 49
- 50
- 51
- 52
- 53
- 54
- 55
- 56
- 57
- 58
- 59
- 60
- 61
- 62
- 63
- 64
- 65
- 66
- 67
- 68
- 69
- 70
- 71
- 72
- 73
- 74
- 75
- 76
- 77
- 78
- 79
- 80
- 81
- 82
- 83
- 84
- 85
- 86
- 87
- 88
- 89
- 90
- 91
- 92
- 93
- 94
- 95
- 96
- 97
- 98
- 99
- 100
- 101
- 102
- 103
- 104
- 105
- 106
- 107
- 108
- 109
- 110
- 111
- 112
- 113
- 114
- 115
- 116
- 117
- 118
- 119
- 120
- 121
- 122
- 123
- 124
- 125
- 126
- 127
- 128
- 129
- 130
- 131
- 132
- 133
- 134
- 135
- 136
- 137
- 138
- 139
- 140
- 141
- 142
- 143
- 144
- 145
- 146
- 147
- 148
- 149
- 150
- 151
- 152
- 153
- 154
- 155
- 156
- 157
- 158
- 159
- 160
- 161
- 162
- 163
- 164
- 165
- 166
- 167
- 168
- 169
- 170
- 171
- 172
- 173
- 174
- 175
- 176
- 177
- 178
- 179
- 180
- 181
- 182
- 183
- 184
- 185
- 186
- 187
- 188
- 189
- 190
- 191
- 192
- 193
- 194
- 195
- 196
- 197
- 198
- 199
- 200
- 201
- 202
- 203
- 204
- 205
- 206
- 207
- 208
- 209
- 210
- 211
- 212
- 213
- 214
- 215
- 216
- 217
- 218
- 219
- 220
- 221
- 222
- 223
- 224
- 225
- 226
- 227
- 228
- 229
- 230
- 231
- 232
- 233
- 234
- 235
- 236
- 237
- 238
- 239
- 240
- 241
- 242
- 243
- 244
- 245
- 246
- 247
- 248
- 249
- 250
- 251
- 252
- 253
- 254
- 255
- 256
- 257
- 258
- 259
- 260
- 261
- 262
- 263
- 264
- 265
- 266
- 267
- 268
- 269
