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PPM – SEMESTER 1 [CCF]

INTRODUCTION

MANAGEMENT

Management is the process of coordinating and overseeing the activities of a group of

people to achieve specific goals efficiently and effectively. It involves planning, organizing, leading,
and controlling resources such as human, financial, and material resources to accomplish
objectives. In simpler terms, management is about making sure things get done the right way by
the right people, at the right time, and with the right resources. It includes tasks like decision-
making, delegation, communication, and problem-solving to keep an organization running
smoothly and successfully.

Definitions
According to Harold Koontz, “the art of getting things done through and with people in
formally organized groups.”

According to Henry Fayol, "To manage is to forecast and to plan, to organise, to command,
to coordinate

According to Peter Drucker, "Management is doing things right; leadership is doing the
right things

Features of Management

1. **Goal Orientation**: Management focuses on achieving specific objectives or goals. It

involves setting clear targets and working towards them by utilizing available resources effectively.

2. **Organizational Efficiency**: Management aims to maximize the use of resources, including

people, time, and money, to accomplish goals efficiently. It involves optimizing processes and
workflows to achieve desired outcomes with minimal waste.
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3. **Decision-Making**: Management involves making informed decisions based on available

information and considering various alternatives. It requires weighing pros and cons to choose the
best course of action for the organization.

4. **Coordination**: Management entails coordinating the efforts of different individuals or

departments within an organization. It ensures that everyone is working towards the same goals
and that activities are synchronized to achieve optimum results.

5. **Adaptability**: Management needs to adapt to changes in the internal and external

environment of the organization. It involves being flexible and responsive to shifts in technology,
market trends, or customer preferences to maintain competitiveness and sustainability.

Management is Both Art And Science Explain

Management is often described as both an art and a science because it combines elements of
creativity and practicality:

1.Art of Management: Like art, management involves creativity, intuition, and innovation.
Managers need to think outside the box, solve problems creatively, and inspire others to achieve
organizational goals. Just as an artist uses their skills to create something unique, managers use
their expertise to navigate complex situations and lead teams effectively.

2. Science of Management: On the other hand, management is also grounded in principles,

theories, and systematic approaches. It relies on data, analysis, and evidence-based practices to
make informed decisions and solve problems. Similar to how scientists use experimentation and
research to understand natural phenomena, managers use data-driven methods to improve
processes, predict outcomes, and drive organizational success.

Functions of Management

the functions of management simplified into easy points:

1. **Planning**: This involves setting goals, defining strategies, and outlining tasks to achieve
those goals. It's like creating a roadmap before starting a journey.
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2. **Organizing**: Organizing is about arranging resources such as people, materials, and

equipment in a structured manner to effectively execute plans. It's like putting together all the
necessary ingredients before cooking a meal.

3.Staffing -:Staffing refers to the process of hiring, recruiting, and managing employees within an
organization to ensure the right people are in the right roles to achieve organizational goals.

4.Directing -:Directing is the process of guiding and supervising employees to achieve

organizational objectives efficiently and effectively. It involves issuing instructions, providing
guidance, motivating, and overseeing tasks to ensure they align with the organization's goals.

4. **Controlling**: Controlling involves monitoring performance, comparing it with set standards,

and taking corrective actions if necessary. It's like adjusting the sails of a boat to stay on course
despite changing winds.

Levels of Management

The different levels of management in an organization can be broadly categorized into three main
tiers:

1. Top-Level Management: Also known as senior management or executive management,

this level comprises individuals responsible for setting the overall direction, goals, and strategies
of the organization. They make high-level decisions that affect the entire organization and are
accountable to stakeholders such as shareholders and the board of directors. Examples of top-
level managers include CEOs (Chief Executive Officer), CFOs (Chief Financial Officer), and COOs
(Chief Operating Officer).

2. Middle-Level Management: Middle management sits between top-level and lower-

level management. They translate the goals and strategies set by top management into actionable
plans for their respective departments or units. Middle managers are responsible for supervising
lower-level managers, coordinating activities, and ensuring that organizational objectives are met
within their areas of responsibility. Titles at this level may include department heads, regional
managers, or divisional managers.

3. Lower-Level Management: Also known as first-line or frontline management, this level

comprises supervisors, team leaders, and other individuals directly responsible for overseeing the
work of non-managerial employees. They are involved in day-to-day operations, ensuring that
tasks are completed efficiently and according to established procedures. Lower-level managers
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serve as a link between middle management and frontline employees, providing guidance,
support, and feedback. Examples of lower-level managers include shift supervisors, office
managers, and project managers.

PODSCORB

PODSCORB is an acronym that represents the key functions of management. Each letter stands for
a different function:

P - Planning
O - Organizing
D - Directing
S - Staffing
CO- Coordinating
R - Reporting
B- Budgeting

In essence, PODSCORB outlines the essential activities that managers perform in order to achieve
organizational goals efficiently and effectively.

Management is a Process. Explain

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Management is a process because it involves a series of interconnected activities that are

carried out systematically to achieve specific objectives. This process typically includes functions
such as planning, organizing, leading, and controlling. Each function is interconnected and builds
upon the others, forming a continuous cycle of activities aimed at accomplishing organizational
goals. Just like any process, management involves inputs (resources), processes (activities), and
outputs (results). It is ongoing and dynamic, requiring constant adaptation to changing
circumstances and environments.

Is Management a Profession?

Management can be considered as a profession but it lacks certain features that make it
completely in line with the characteristics of a profession. The following points will help
in explaining this concept.

1. Management consists of well defined and a systematic body of knowledge similar

to other professions
2. Management does not have a restricted entry

3. There is no association or a governing body that regulates the way managers

function unlike other professions like lawyers that have BAR.

Objectives of Management

The objectives of management simplified into easy points:

1. Goal Achievement: The primary objective of management is to accomplish the goals and
objectives of the organization effectively and efficiently.

2. Resource Utilization: Management aims to optimize the utilization of resources such as human
resources, financial capital, and physical assets to maximize productivity and minimize waste.

3. Stakeholder Satisfaction: Management seeks to meet the needs and expectations of

stakeholders, including employees, customers, shareholders, and the community, by providing
quality products or services and maintaining ethical standards.

4. Adaptation to Change: Management aims to adapt to changes in the internal and external
environment, such as technological advancements, market trends, and regulatory requirements,
to ensure the organization's sustainability and competitiveness.
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5. Profit Maximization: For profit-oriented organizations, management strives to generate

maximum profits while balancing risks and maintaining long-term viability.

6. Employee Development: Management aims to foster a supportive work environment that

promotes the professional growth and development of employees, leading to higher job
satisfaction and retention.

7. Innovation and Creativity: Management encourages innovation and creativity among

employees to stay ahead of competitors, drive continuous improvement, and identify new
opportunities for growth.

8. Social Responsibility: Management recognizes its responsibility to contribute positively to

society by adhering to ethical standards, promoting diversity and inclusion, and engaging in
sustainable practices.

These objectives guide the actions and decisions of managers as they work towards the overall
success of the organization.

Classical School of Management

The Classical School of Management emerged in the late 19th and early 20th centuries, focusing
on principles of organizational efficiency and productivity. Here's a brief explanation:

1. Scientific Management: This approach, pioneered by Frederick Taylor, emphasized the

scientific study of work processes to identify the most efficient methods for completing tasks. It
aimed to eliminate wasted effort and increase productivity through standardization and
specialization of labour.

2. Administrative Management: Developed by Henri Fayol, this approach focused on principles of

management applicable to all types of organizations. Fayol identified five key functions of
management: planning, organizing, commanding, coordinating, and controlling. He emphasized
the importance of hierarchical structures, division of labour, and clear lines of authority.

F.W Taylors Principle of Scientific Management

Frederick Winslow Taylor's Principles of Scientific Management can be summarized as follows:

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1. Science, Not Rule of Thumb: Replace traditional, rule-of-thumb methods with scientifically
developed ones. Managers should base decisions and techniques on systematic analysis and
experimentation.

2. Harmony, Not Discord: Foster a collaborative environment between management and workers,
ensuring that both groups share common goals and work together in harmony.

3. Cooperation, Not Individualism: Encourage cooperation between managers and workers, as

well as among workers themselves, to achieve the most efficient results.

4. Maximum Output, Not Restricted Output: Aim for maximum productivity by eliminating
inefficiencies, optimizing processes, and providing appropriate training and resources to workers.

5. Development of Each Person to Their Greatest Efficiency and Prosperity: Provide opportunities
for personal and professional development for all employees, enabling them to reach their full
potential and contribute effectively to the organization.

Merits and Demerits of Scientific Management

Merits (Advantages):

1. Increased Efficiency: Scientific Management improves productivity by identifying the most

efficient methods for completing tasks, reducing wastage of time and resources.

2.*Standardization: It promotes standardization of work processes and procedures, leading to

consistency and quality in output.

3. Specialization: Workers are trained and specialized in specific tasks, leading to higher proficiency
and skill development.

4. Clear Roles and Responsibilities: Scientific Management clarifies roles and responsibilities,
reducing confusion and conflicts within the organization.

5. Financial Incentives: By linking pay to performance, Scientific Management encourages workers

to achieve higher levels of productivity.

Demerits (Disadvantages):

1. Overemphasis on Efficiency: There may be an overemphasis on efficiency at the expense of

worker welfare and job satisfaction.
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2. Monotonous Work Specialization can lead to monotonous and repetitive tasks, resulting in
boredom and decreased motivation among workers.

3. Resistance to Change: Workers may resist changes imposed by Scientific Management, fearing
job loss or reduced autonomy.

4. Taylorism Criticisms: Criticisms of Taylorism include its mechanistic view of workers and the
assumption that monetary incentives are the primary motivator for employees.

5. Limited Applicability: Scientific Management may not be suitable for all types of work,
particularly those requiring creativity, innovation, and flexibility.

14 Principle of Management By Henri Fayol

Henri Fayol, a French mining engineer and management theorist, proposed 14 principles of
Management. These principles are guidelines for managers to effectively organize and manage
their operations. Here's a brief discussion of each principle:

1. **Division of Work**: Work should be divided among individuals and groups to ensure that
tasks are performed efficiently and specialization is maximized.

2. **Authority and Responsibility**: Managers must have the authority to give orders,
accompanied by the responsibility to ensure that tasks are completed as directed.

3. **Discipline**: Employees must obey and respect the rules and regulations established by the
organization. Discipline ensures smooth functioning and order within the workplace.

4. **Unity of Command**: Each employee should receive instructions and guidance from only
one superior to avoid confusion and conflicting instructions.

5. **Unity of Direction**: Activities within the organization should be guided by a single plan or
strategy to ensure that efforts are coordinated towards common objectives.

6. **Subordination of Individual Interests to the General Interest**: Individual interests and

desires should be subordinate to the overall goals and interests of the organization.

7. **Remuneration**: Employees should be fairly compensated for their work, balancing the
organization's financial capabilities with the need to attract and retain talent.

8. **Centralization**: The degree to which decision-making authority is concentrated at the top

of the organization should be determined based on factors such as the nature of the task, expertise
of managers, and organizational objectives.
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9. **Scalar Chain**: There should be a clear and unbroken line of authority extending from the
highest level of management to the lowest level of the organization, ensuring smooth
communication and coordination.

10. **Order**: Resources and personnel should be arranged in the most efficient manner to
facilitate the accomplishment of organizational objectives.

11. **Equity**: Managers should be fair and just in their dealings with employees, treating them
with kindness and consideration.

12. **Stability of Tenure of Personnel**: Employee turnover should be minimized to provide

stability and continuity within the organization, allowing employees to develop skills and
contribute effectively.

13. **Initiative**: Employees should be encouraged to take initiative and contribute ideas to
improve organizational processes and achieve objectives.

14. **Esprit de Corps**: Promote a sense of unity, teamwork, and camaraderie among employees
to enhance morale and productivity.

These principles provide a framework for managers to effectively organize and manage their
operations, promoting efficiency, coordination, and harmony within the organization.

Neo- Classical school of Management

The Neo-Classical School of Management, also known as the Human Relations Movement, focused
on the human aspect of organizations. It emphasized the importance of understanding human
behaviour, motivation, and social dynamics within the workplace. This school recognized that
workers are not just cogs in a machine but individuals with social and psychological needs.

1. Human Relations School (Elton Mayo) ("Hawthorne Experiment'):

In the early twentieth century Elton Mayo, professor at the Harvard University, could realise the
importance of this thought by experiments and observations in the factory of the Western Electric
Company at Hawthorne city in Chicago. These experiments and observations of Prof. Elton Mayo
are known as 'Hawthorne Experiment"

2. Human Behavioural School (Mary Parker Follet):

According to this school, performance of managerial activities in consideration of the conduct or

behaviour of working personnel is an effective and decent management. In this respect, the
contribution of Mary Parker Follet, a member of Human Behaviour School, is particularly
mentionable. Other notable propagators of this school are A. F. Maslow. F. H. Herzberg, McGregor
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Modern School of Management

The modern school of management emphasizes flexibility, innovation, and adaptability in

response to the dynamic business environment. Key figures associated with the modern school
include Peter F. Drucker and Michael Porter.

1. Peter F. Drucker:
- Drucker is often regarded as the founder of modern management theory.
- He emphasized the importance of management as a discipline and introduced concepts such
as management by objectives (MBO), decentralization, and the knowledge worker.
- Drucker stressed the significance of innovation, entrepreneurship, and the importance of
focusing on customers' needs and satisfaction.
- His ideas helped shape contemporary management practices by emphasizing the human side
of organizations and the need for managers to be socially responsible.

2. Michael Porter:
- Porter is known for his work in strategic management and competitive advantage.
- He introduced the Five Forces framework, which helps organizations analyse the competitive
forces in their industry to develop strategies for achieving sustainable competitive advantage.
- Porter also developed the concept of generic competitive strategies, including cost leadership,
differentiation, and focus, which organizations can adopt to gain a competitive edge.
- His ideas had a significant impact on business strategy, helping companies identify
opportunities for growth, navigate competitive landscapes, and create value for customers.

Mintzberg Theory

Mintzberg's theory focuses on the roles and responsibilities of managers in organizations. It

identifies ten managerial roles grouped into three categories:

1. Interpersonal Roles:
a. Figurehead: Symbolic head; performs ceremonial duties.
b. Leader: Motivates and directs subordinates.
c. Liaison: Maintains a network of contacts outside the organization.

2. Informational Roles:
a. Monitor: Seeks and receives information.
b. Disseminator: Shares information with others.
c. Spokesperson: Communicates information on behalf of the organization.

3. Decisional Roles:
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a. Entrepreneur: Initiates change and innovation.

b. Disturbance Handler: Manages unexpected events and crises.
c. Resource Allocator: Distributes resources.
d. Negotiator: Represents the organization in negotiations.

Mintzberg's theory highlights the diverse and dynamic nature of managerial work, encompassing
interpersonal, informational, and decisional roles.

Social Responsibility Management and its Significance

Social Responsibility Management refers to the ethical and moral obligations that organizations
have towards society and the environment beyond their profit-making goals. It involves
conducting business in a way that considers the well-being of stakeholders, including employees,
customers, communities, and the environment.

Significance:
1. Enhanced Reputation: Engaging in socially responsible practices can build a positive reputation
for the organization, leading to increased trust and loyalty from customers, investors, and the
community.

2. Risk Mitigation: Adhering to ethical standards and sustainable practices can reduce the risk of
legal issues, regulatory fines, and damage to the organization's reputation.

3. Employee Engagement and Retention: Employees are more likely to feel proud and motivated
when working for a socially responsible company, leading to higher morale, productivity, and
retention rates.

4. Customer Satisfaction: Consumers increasingly prefer to support businesses that demonstrate

social responsibility. Meeting ethical standards and addressing societal concerns can attract and
retain customers.

4. Community Development: Socially responsible initiatives, such as charitable giving

and community involvement, can contribute to the well-being and development of local
communities, fostering goodwill and positive relationships.
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Scientific Management

Scientific management is an approach to managing work processes that focuses on improving

efficiency and productivity by applying scientific principles and methods. It involves analyzing
tasks, standardizing processes, and incentivizing workers to increase output. In simple terms,
scientific management aims to make work more efficient by using scientific techniques to
streamline tasks and optimize performance.

Contribution of Henri Fayol

Henri Fayol, a French mining engineer, made significant contributions to the field of management
with his principles of management. In short, Fayol's contributions include:

1. Administrative Theory: Fayol introduced the concept of administrative management, which

focuses on the functions of management and the principles guiding managerial practice.

2. Principles of Management: He identified 14 principles of management, including unity of

command, division of work, authority and responsibility, discipline, and unity of direction. These
principles provide guidelines for effective management practices.

3. Functions of Management: Fayol proposed five primary functions of management: planning,

organizing, commanding, coordinating, and controlling. These functions remain fundamental to
modern management theory.

4. Scalar Chain: He introduced the scalar chain principle, emphasizing the importance of clear
communication channels and hierarchical structures within organizations.

5. Administrative Skills: Fayol emphasized the importance of managerial skills, including technical,
human, conceptual, and decision-making abilities, for effective leadership.

Contribution of Elton Mayo

Elton Mayo, an Australian psychologist, made significant contributions to the field of management,
particularly in the area of organizational behavior. Here are his contributions in short and easy
points:
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1. Hawthorne Studies: Mayo conducted the famous Hawthorne experiments at the Western
Electric Hawthorne Works in Chicago. These studies investigated the effects of work conditions,
such as lighting and breaks, on employee productivity and morale.

2. Human Relations Movement: Mayo's research at Hawthorne led to the development of the
human relations movement, which emphasized the importance of social and psychological factors
in the workplace. He highlighted the significance of interpersonal relationships, communication,
and employee satisfaction in organizational performance.

3. Informal Groups: Mayo recognized the existence and influence of informal groups within
organizations. He found that informal social interactions among workers could significantly impact
productivity and job satisfaction.

4. Importance of Feedback: Mayo stressed the importance of providing feedback and recognition
to employees. He found that acknowledgment of employees' efforts and achievements could lead
to increased motivation and improved performance.

5. Managerial Attitudes: Mayo advocated for a more participative and supportive management
style. He emphasized the role of managers in fostering a positive work environment and
addressing the social and emotional needs of employees.

Overall, Elton Mayo's work contributed to a deeper understanding of human behaviour in

organizations and emphasized the importance of considering employees' social and psychological
needs for achieving organizational effectiveness.

Distinguish Between Taylor and Fayol

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PPM – Semester 1 CCF

PLANNING [15 -20 Marks]

Meaning of Planning

Planning is deciding in advance what to do and how to do. It is one of the primary
Functions. Before doing something, the manager must form an opinion on how to
work on a specific job. Hence, planning is firmly correlated with discovery and
creativity. But the manager would first have to set goals. Planning is an essential
step what managers at all levels take.

Important Definitions

a. "Planning is deciding in advance what to do, how to do it, where to do it and who is to do it." -
Koontz and o' Donnell.

b. Planning is deciding the best alternative to perform different managerial operations for
achieving predetermined goals. - [Henry Fayol]

c. Planning is a continuous process of making present entrepreneurial decisions

systematically. - [Peter F. Drucker]

Features of Planning

1. Goal-oriented: Planning focuses on setting specific, measurable objectives that align with
the organization's mission and vision.

2. Future-oriented: It involves anticipating future trends, challenges, and opportunities to

prepare the organization for potential scenarios.

3. Systematic: Planning follows a structured approach, involving analysis, formulation,

implementation, and monitoring stages.
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4. Flexible: While plans provide a framework, they should also allow for adjustments and
revisions in response to changing circumstances.

5. Integrated: Planning integrates various organizational functions and departments to ensure

alignment and coordination towards common objectives.

6. Continuous: Planning is an ongoing process that requires regular review and adaptation to
reflect evolving goals and environmental factors.

7. Rational: It involves logical and rational decision-making based on available information and
analysis.

8. Resource allocation: Planning determines how resources such as finances, manpower, and
materials will be allocated to achieve objectives efficiently.

9. Risk management: Planning identifies potential risks and develops strategies to mitigate
them, enhancing the organization's ability to navigate uncertainties.

10. Evaluation: Planning includes mechanisms for monitoring progress, evaluating

performance, and making adjustments to improve effectiveness and efficiency.

Importance Of Planning

1. Direction: Planning provides a clear direction and purpose for the organization, ensuring
everyone works towards common goals.

2. Coordination: It facilitates coordination between different departments and teams,

preventing conflicts and promoting efficiency.

3. Resource optimization: Planning helps allocate resources effectively, minimizing waste and
maximizing productivity.

4. Risk management: By identifying potential risks and uncertainties, planning enables

organizations to proactively mitigate them.

5. Adaptability: A well-planned strategy allows organizations to adapt to changes in the

business environment more effectively.
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6. Decision-making: Planning provides a basis for informed decision-making, reducing

uncertainty and enhancing outcomes.

7. Performance evaluation: It establishes benchmarks for measuring progress and

performance, enabling continuous improvement.

8. Innovation: Planning encourages innovation and creativity by providing a structured

framework for experimentation and development.

9. Competitive advantage: Effective planning can lead to a competitive edge by anticipating

market trends and capitalizing on opportunities.

10. Long-term success: Ultimately, planning is crucial for the long-term success and
sustainability of the organization by ensuring strategic alignment and forward-thinking
management.

Objectives of Planning

The objectives of planning in management can be summarized in several key points:

1. Goal Setting: Planning aims to establish clear and specific objectives that the organization
wants to achieve within a defined timeframe.

2. Direction: It provides a sense of direction and purpose, guiding the efforts of individuals and
teams toward common goals.

3. Coordination: Planning facilitates coordination among different departments and functions

by aligning their activities with overall organizational objectives.

4. Resource Utilization: It helps in optimizing the allocation and utilization of resources such
as human capital, finances, and materials to ensure efficiency and effectiveness.

5. Risk Management: Planning identifies potential risks and uncertainties, allowing the
organization to develop strategies to mitigate them and enhance resilience.

6. Adaptability: Planning enables the organization to anticipate and adapt to changes in the
internal and external environment, ensuring agility and responsiveness.
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7. Decision Making: It provides a basis for informed decision-making by analysing alternatives

and selecting the most suitable courses of action to achieve desired outcomes.

8. Performance Evaluation: Planning sets benchmarks and performance indicators to

measure progress and evaluate the success of implemented strategies.

9. Innovation and Creativity: Planning encourages innovation and creativity by fostering a

structured approach to problem-solving and opportunity identification.

10. Stakeholder Alignment: It ensures alignment with the expectations and interests of
stakeholders, including employees, customers, investors, and the community, thus fostering
trust and support.

Advantages of Planning

Advantages of planning in management can be summarized as follows:

1. Goal Clarity: Planning helps in clearly defining organizational objectives, ensuring that all
members understand their roles and responsibilities in achieving them.

2. Coordination: It promotes better coordination and integration of activities across different

departments and functions, minimizing duplication of efforts and enhancing efficiency.

3. Resource Optimization: Planning enables the optimal allocation and utilization of resources
such as time, money, and manpower, maximizing productivity and minimizing wastage.

4. Risk Reduction: By identifying potential risks and uncertainties, planning allows

organizations to proactively develop strategies to mitigate them, thus minimizing the impact of
adverse events.

5. Flexibility: Although plans provide a roadmap, they also allow for flexibility and adaptability
to changing circumstances, ensuring that organizations can respond effectively to new
opportunities or challenges as they arise.

Limitations of Planning

Limitations of planning in management include:

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1. Rigidity: Planning can become rigid and inflexible, especially in rapidly changing
environments, making it difficult for organizations to adapt to unforeseen circumstances.

2. Time-consuming: The process of planning can be time-consuming, requiring extensive

analysis, consultation, and coordination, which may delay decision-making and
implementation.

3. Uncertainty: Despite efforts to predict the future, plans are based on assumptions and
forecasts that may not always accurately reflect reality, leading to uncertainty and potential
deviations from planned outcomes.

4. Resistance to change: Employees may resist planned changes, particularly if they perceive
them as disruptive or threatening to their interests, hindering the implementation of planned
strategies.

5. Overemphasis on planning: Excessive focus on planning may lead to neglect of other

important aspects of management, such as execution, monitoring, and adaptation,
compromising overall effectiveness.

6. Cost: Planning incurs costs in terms of time, resources, and effort, which may outweigh the
benefits, especially if plans need frequent revisions or do not yield expected results.

7. Lack of creativity: Over-reliance on predetermined plans may stifle creativity and

innovation, as individuals may feel constrained by predefined goals and strategies.

8. False sense of security: Successful planning can create a false sense of security, leading to
complacency and overlooking potential risks or opportunities that arise during implementation.

7 Elements of Planning

The seven elements of planning:

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1. **Goals**: Goals are broad statements that define the overall purpose or direction of the
organization. They provide a general framework for decision-making and guide the
establishment of more specific objectives.

2. **Objectives**: Objectives are specific, measurable targets that support the achievement of
goals. They are often formulated using the SMART criteria (Specific, Measurable, Achievable,
Relevant, Time-bound) and serve as benchmarks for evaluating performance.

3. **Policies**: Policies are guidelines or principles established by management to govern

decision-making and action within the organization. They provide a framework for consistent
and uniform behaviour and help ensure alignment with organizational goals and values.

4. **Procedures**: Procedures are step-by-step instructions or protocols that outline the

sequence of actions required to perform a specific task or process. They ensure consistency,
efficiency, and compliance with organizational standards and regulations.

5. **Budget**: A budget is a financial plan that outlines projected revenues, expenses, and
allocations of resources over a specified period. It serves as a tool for financial management,
resource allocation, and performance evaluation.

6. **Programs**: Programs are coordinated sets of activities or initiatives designed to achieve

specific objectives within a defined timeframe. They involve the allocation of resources and
coordination of efforts across different departments or functions.

7. **Strategies**: Strategies are overarching plans or approaches developed to achieve long-

term goals and objectives. They involve the identification of key actions, resources, and
competitive advantages needed to gain a competitive edge or address significant challenges in
the external environment.

Steps in Planning Process

The planning process typically involves the following steps:

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1. Establishing Objectives: Clearly define the goals and objectives the organization aims to
achieve. Objectives should be specific, measurable, achievable, relevant, and time-bound
(SMART).

2. Environmental Analysis: Assess the internal and external factors that may impact the
organization's ability to achieve its objectives. This includes analyzing strengths, weaknesses,
opportunities, and threats (SWOT analysis) as well as market trends, competitor actions, and
regulatory changes.

3. Identifying Alternatives: Generate alternative courses of action or strategies to achieve the

established objectives. This may involve brainstorming, conducting research, and evaluating
different options based on their feasibility and alignment with organizational goals.

4. Evaluation and Selection: Evaluate the potential alternatives against criteria such as
feasibility, cost-effectiveness, and potential risks. Select the most appropriate option(s) that
best align with the organization's objectives and resources.

5. Formulating Plans: Develop detailed plans outlining the specific tasks, timelines,
responsibilities, and resources required to implement the selected strategies. This may involve
developing action plans, setting budgets, and defining performance metrics.

6.i implementation: Execute the plans by assigning tasks to relevant individuals or teams,
allocating resources, and monitoring progress towards achieving the established objectives.
Effective communication and coordination are essential during this stage.

7. Monitoring and Control: Continuously monitor progress against the established plans and
objectives, identifying deviations or variances from the desired outcomes. Take corrective
actions as necessary to address issues and ensure that the organization stays on track towards
achieving its goals.

8. Review and Adjustment: Regularly review the effectiveness of the planning process and
implemented strategies. Adjust plans and objectives as needed in response to changes in the
internal or external environment, lessons learned from previous experiences, or shifts in
organizational priorities.
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Planning Premises

Planning premises refer to the assumptions or conditions about the future that are used as the
basis for developing plans. These premises include factors such as market conditions,
economic trends, technological advancements, regulatory changes, and social factors.
Planning premises help managers make informed decisions by providing a foundation for
forecasting and predicting future scenarios. They serve as the underlying assumptions upon
which plans are built, ensuring that they are realistic and relevant to the anticipated
environment in which the organization will operate.

Strategic Planning

Strategic planning is a systematic process that organizations use to define their direction and
make decisions on allocating resources to pursue their long-term goals. It involves setting
objectives, assessing the external environment and internal capabilities, identifying
opportunities and threats, formulating strategies, and allocating resources to execute those
strategies effectively. Strategic planning provides a roadmap for the organization, helping to
align activities across different departments and ensuring that efforts are focused on achieving
the organization's mission and vision.

Decision Making

Decision-making is the process of selecting a course of action from among multiple

alternatives to achieve a desired outcome or goal. It involves evaluating available options,
considering relevant information and factors, weighing potential risks and benefits, and
ultimately making a choice. Decision-making is a fundamental aspect of both personal and
organizational management, driving progress and shaping outcomes.
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Importance of Decision Making

[Features bhi pucha toh isi mein se likh dena]

1. **Achieving Goals**: Effective decision-making helps individuals and organizations to

progress towards their objectives by selecting the most appropriate actions and strategies.

2. **Problem Solving**: Decision-making enables the identification and resolution of

problems and challenges, leading to improved efficiency and effectiveness.

3. **Resource Allocation**: Decisions determine how resources such as time, money, and
manpower are allocated, ensuring optimal utilization and maximizing outcomes.

4. **Risk Management**: Decision-making involves assessing risks and uncertainties and

making informed choices to mitigate potential negative consequences.

5. **Innovation and Growth**: Decisions drive innovation by encouraging exploration of new

ideas and opportunities, fostering growth and adaptation to changing environments.

6. **Enhancing Competitiveness**: Sound decision-making gives organizations a competitive

edge by enabling them to respond quickly to market changes and capitalize on emerging trends.

7. **Building Confidence**: Making decisions and taking action builds confidence and
momentum, empowering individuals and organizations to overcome obstacles and achieve
success.

8. **Accountability and Responsibility**: Decision-making establishes accountability and

responsibility for outcomes, promoting ownership and commitment to achieving desired
results.

9. **Stakeholder Satisfaction**: Well-informed decisions consider the interests and needs of

stakeholders, fostering trust, satisfaction, and support from various parties involved.

10. **Continuous Improvement**: Decision-making facilitates learning and continuous

improvement by evaluating past decisions, identifying areas for enhancement, and adapting
strategies accordingly.
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Barriers of Effective Planning

Barriers to effective planning include:

1. Uncertainty: Planning can be hindered by unpredictable external factors, such as market

fluctuations or regulatory changes, which make forecasting and decision-making difficult.

2. Resistance to Change: Individuals or groups within the organization may resist planned
changes due to fear of the unknown, inertia, or attachment to the status quo.

3. Lack of Resources: Insufficient financial, human, or technological resources may limit the
organization's ability to develop or implement comprehensive plans.

4. Poor Communication: Inadequate communication and collaboration among stakeholders

can lead to misunderstandings, conflicting priorities, and ineffective coordination, hindering
the planning process.

5. Time Constraints: Pressing deadlines or competing priorities may result in rushed or

incomplete planning efforts, compromising the quality and thoroughness of the plans
developed.

6. Overemphasis on Formality: Excessive bureaucracy or rigid planning structures can stifle

creativity, innovation, and adaptability, making it difficult to respond effectively to changing
circumstances.

SWOT Analysis And Its Importance

SWOT analysis is a strategic planning tool used to identify an organization's internal strengths
and weaknesses, as well as external opportunities and threats. It involves examining four key
aspects:

1. Strengths: Internal factors that give the organization an advantage over others. These could
include skilled employees, strong brand reputation, or proprietary technology.

2. Weaknesses: Internal factors that may hinder the organization's performance or competitive
position. These could include lack of resources, poor infrastructure, or inefficient processes.

3. Opportunities: External factors that the organization could exploit to its advantage. These
could include market trends, emerging technologies, or changes in regulations.
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4. Threats: External factors that could pose challenges or risks to the organization's success.
These could include competitive pressures, economic downturns, or shifts in consumer
preferences.

IMPORTANCE
The importance of SWOT analysis can be summarized in five key points:

1. Strategic Planning: It helps organizations identify key internal strengths and weaknesses, as
well as external opportunities and threats, informing strategic decision-making.

2. Risk Management: SWOT analysis enables organizations to identify potential risks and
challenges, allowing them to develop strategies to mitigate these threats.

3. Resource Allocation: By assessing internal capabilities and external factors, SWOT analysis
helps organizations allocate resources more effectively, optimizing their use.

4. Competitive Advantage: It assists organizations in leveraging their strengths and

opportunities to gain a competitive edge in the market, while addressing weaknesses and
threats to maintain relevance.

5. Adaptability: SWOT analysis promotes adaptability by providing insights into changing

market conditions and internal capabilities, enabling organizations to adjust their strategies
accordingly.

Steps of Decision Making

The steps of the decision-making process can be summarized as follows:

1. Identify the Decision: Clearly define the decision to be made and its significance in
achieving organizational goals.
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2. Gather Information: Collect relevant information and data from reliable sources to
understand the problem or opportunity and evaluate potential alternatives.

3. Identify Alternatives: Generate a list of possible options or solutions to address the

decision, considering both conventional and innovative approaches.

4. Evaluate Alternatives: Assess the advantages, disadvantages, risks, and consequences

associated with each alternative to determine their feasibility and suitability.

5. Make a Decision: Select the most appropriate alternative based on the evaluation,
considering factors such as cost-effectiveness, alignment with goals, and potential outcomes.

6. Implement the Decision Develop an action plan and allocate resources to execute the
chosen alternative effectively, communicating roles and responsibilities to relevant
stakeholders.

7. Monitor and Evaluate: Continuously monitor the implementation of the decision, tracking
progress and evaluating outcomes against expected results.

8. Adjust and Adapt: If necessary, make adjustments or revisions to the decision or its
implementation based on feedback, changing circumstances, or unexpected challenges.

Techniques of Decision Making

Here are five techniques of decision-making:

1. Rational Decision Making: This method involves systematically evaluating alternatives

based on logical reasoning, weighing pros and cons, and selecting the option that maximizes
benefits and minimizes risks.

2. Intuitive Decision Making: Intuition relies on gut feelings, instincts, and past experiences to
make quick decisions without formal analysis. It can be useful when time is limited or when
dealing with familiar situations.
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3. Decision Trees: Decision trees visually represent decisions and their potential outcomes,
helping to assess risks and benefits at each stage. This technique is particularly useful for
complex decisions with multiple possible outcomes.

4. Brainstorming: Brainstorming involves generating a large number of ideas or alternatives in a

creative and open-minded environment. It encourages divergent thinking and can lead to
innovative solutions.

5. SWOT Analysis: SWOT analysis assesses an organization's strengths, weaknesses,

opportunities, and threats to inform decision-making. It helps identify internal capabilities and
external factors that may impact the decision and provides a structured framework for analysis.
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Principles of Organising

1. Clarity of Goals: Clearly define the objectives and goals to be achieved through organizing
efforts.

2. Division of Work: Divide tasks and responsibilities among individuals or groups based on
skills, expertise, and resources.

3. Hierarchy and Authority: Establish a clear hierarchy of authority to ensure accountability

and smooth communication flow.

4. Coordination: Ensure coordination among different departments or individuals to avoid

duplication of efforts and conflicts.

5. Flexibility: Organize structures and processes in a way that allows for adaptation to
changing circumstances and needs.

6. Efficiency: Strive for efficiency by optimizing resources, minimizing waste, and streamlining
processes.

7. Specialization: Encourage specialization where individuals or units focus on specific tasks

or functions to enhance productivity and expertise.

8. Unity of Command: Each employee should receive orders and be accountable to only one
superior to avoid confusion and conflicting directives.

9. Scalar Principle: Ensure a clear chain of command where authority flows from the top to the
bottom in a hierarchical order.

10. Delegation: Delegate authority and responsibility appropriately to empower employees and
distribute workload effectively.
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11. Span of Control: Maintain an optimal span of control to ensure supervisors can effectively
manage and supervise their subordinates.

12. Unity of Direction: Ensure that all activities are aligned with the overall objectives of the
organization to achieve unity of direction.

13. Balance: Strive for a balance between centralization (for control) and decentralization (for
flexibility and innovation).

14. Equity: Treat all employees fairly and provide equal opportunities for growth and
development.

Different Types of Organisational Structure

1. Line Organizational Structure

• In this structure, authority flows vertically from top to bottom.
• It's simple and easy to understand, with clear lines of command.
• Typically found in small organizations or with a centralized decision-
making process.
2. Staff Organizational Structure:
• Staff positions provide support, advice, and expertise to line positions.
• Staff members do not have direct authority over line employees but
assist in decision-making.
• Common in large organizations with specialized functions like HR, legal,
or IT departments.
3. Functional Organizational Structure:
• Employees are grouped based on their specialized functions or skills.
• Each department focuses on a specific area of expertise (e.g.,
marketing, finance, operations).
• Promotes efficiency and expertise within each function but can lead to
silos and communication barriers.
4. Divisional Organizational Structure:
• Divides the organization into semi-autonomous divisions based on
products, services, or geographic regions.
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•Each division operates as a separate entity with its own functional

departments (e.g., marketing, finance) to serve its specific market or
product line.
• Provides flexibility and responsiveness to local markets but can result in
duplication of resources.
5. Project-Based Organizational Structure:
• Organized around specific projects or initiatives rather than permanent
departments or functions.
• Team members are assembled based on their skills and expertise to
accomplish project goals.
• Offers flexibility and adaptability to changing project requirements but
can lead to resource conflicts and management challenges.
6. Matrix Organizational Structure:
• Combines elements of both functional and project-based structures.
• Employees report to both functional managers (e.g., marketing,
finance) and project managers.
• Encourages resource sharing and interdisciplinary collaboration but can
create confusion over roles and responsibilities.
7. Network Organizational Structure (New Organizational Structure):
• Based on strategic partnerships and collaborations with external
entities.
• Focuses on leveraging external resources and expertise to achieve
organizational goals.
• Offers flexibility and access to specialized resources but requires strong
relationship management skills and trust.

Departmentation

Departmentation refers to the process of grouping activities, tasks, and people into
functional units or departments within an organization based on similar functions, skills,
products, customers, or geographical locations. It involves the creation of distinct units or
divisions within the organization to facilitate specialization, coordination, and efficiency in
achieving organizational goals.

Needs-:

1. Specialization: Departmentation allows for the specialization of tasks and functions,

enabling employees to focus on specific areas of expertise.
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2. Coordination: It facilitates better coordination and communication within the

organization by grouping related activities together, reducing conflicts and promoting
efficiency.

3. Efficiency: Departmentation promotes efficiency by streamlining processes, optimizing

resource allocation, and improving decision-making within each department.

Principles of Delegation

The principles of delegation of authority include:

1. Authority with Responsibility: Delegate authority along with the

corresponding responsibility to ensure accountability.
2. Clear Communication: Clearly communicate the tasks, objectives, and
expectations to the delegate to avoid confusion.
3. Competence and Capability: Delegate tasks to individuals with the necessary
skills, knowledge, and capability to perform them effectively.
4. Proper Training and Support: Provide adequate training, resources, and
support to empower the delegate to fulfil their responsibilities.
5. Monitor and Feedback: Regularly monitor progress, provide feedback, and
offer assistance when needed to ensure successful completion of delegated
tasks.
6. Effective Control: Maintain appropriate levels of control and oversight to
prevent misuse of delegated authority and ensure alignment with
organizational objectives.
7. Flexibility and Adaptability: Delegate authority in a flexible manner that
allows for adjustments based on changing circumstances or priorities.

Centralisation

Centralization of authority refers to the concentration of decision-making power and control

within a few individuals or a central management group at the top levels of an organization. In
simple terms, it means that important decisions are made by a small group of people rather
than distributed across different levels or units within the organization. This can lead to quicker
decision-making but may also limit autonomy and creativity at lower levels of the organization.
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Difference Between Centralisation And Decentralisation

Span Of Management And Its Determinants

Span of Management:

Span of management, also known as span of control or span of supervision, refers to

the number of subordinates or employees that a manager can effectively supervise
and control. It directly impacts the organization's structure, communication channels,
and efficiency.

Determinants of Span of Management:

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1. Managerial Ability: The skills, experience, and capabilities of managers

influence their ability to effectively manage a larger or smaller number of
subordinates.
2. Nature of Work: The complexity and nature of tasks influence the span of
management. Routine tasks may allow for a larger span, while complex or
specialized tasks may require a smaller span.
3. Clarity of Communication: Effective communication channels and clarity in
instructions can enhance the span of management as managers can oversee
more subordinates without confusion.
4. Employee Competence: The competency and self-sufficiency of employees
impact the span of management. Highly skilled and self-motivated employees
may require less direct supervision, allowing for a larger span.
5. Technology and Tools: Advancements in technology and tools can
streamline processes, allowing managers to oversee a larger number of
subordinates efficiently.
6. Organizational Structure: The hierarchical structure of an organization
determines the layers of management and, consequently, the span of
management at each level.
7. Geographical Dispersion: If subordinates are geographically dispersed, it
may reduce the span of management as physical distance can hinder effective
supervision.
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PPM
CHAPTER 4 – DIRECTING AND LEADERSHIP [23 Marks]

1 Concept of Directing

Directing means giving instruction to people to do a work. But the scope of directing is
not confined only to the giving instruction. In addition to instruction, it is concerned with
guiding, supervising and motivating the employees.
" According to Koontz and O'Donnell "Directing is a complex function that includes all those
activities which are designed to encourage subordinates to work effectly and efficiently.

2. Features of Directing

The salient features of directing are

(i) Basis of starting work: Directing is the basis of starting work; because actual work begins
only when the subordinates get directions from their superiors.

(ii) Managerial function: Directing is an important function of management. Managers guide

and encourage their subordinates to work effectively and efficiently through this function.

(iii) All Pervasive function: Directing is an all-pervasive function of management; because,

the managers at all levels have to perform this function to guide their subordinates.
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(iv) Continuous function: Every manager has to guide, supervise and motivate his
subordinates continuously for achieving the organisational goals. So, directing is a
continuous function of the managers.

(v) Downward Flow: Directing flows from top to bottom. This means that every manager
can direct his immediate subordinate only.

(vi) Human factor: The purpose of directing is to influence human behaviour so that the
employees are motivated to work with their best effort. So, it is concerned with human
factor in the organisation.

3. Importance of Directing

In the context of importance of directing, we can present the following points-

(i) Basis of starting work: Directing is the basis of starting work; because the subordinates
start work only after getting direction from the superior.

(ii) Integration of Human efforts: If the efforts of different employees of an organisation are
different, it is not possible to achieve the organisational goals. Directing integrates the
efforts of all the employees of the organisation.

(iii) Means of motivation: Directing does not mean giving order only. Through directions,
superiors motivate the employees to contribute their maximum efforts towards the
achievement of organisational goals.

(iv) Balance in the organisation: The attitudes of employees working at different levels in an
organisation are different.Directing dissolves such difference in attitudes of the employees
and helps to maintain balance in the organisation.
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(v) Adjustment of changes: Every oganisation has to face several continuous changes such
as social, political, environmental and technological. Through directing, workers are
motivated to adjust such changes in the interest of the organisation.

vi) Optimum utilisation of non-human element: Directing helps in optimum utilisation of

the non-human elements through proper management of the human element.

(vii) Increase in work efficiency: Directing defines the duties of the employees. As a result of
it, they become free from hesitation regarding performance of duties and they can pay
attention with single-minded devotion in the performance of works. It increases their work
efficiency.

4. Elements of Directing

Supervision, motivation, financial and non-financial incentives, leadership and

communication are the essential elements of Directing. These are discussed below:

1. Supervision: Supervision refers to 'overseeing the work of the subordinates by their

superiors. Every manager has to supervise the works of his subordinates in order to verify
whether the subordinates are performing works according to the direction or not. Top level
managers supervise the works of middle level managers, middle level managers supervise
the works of lower level managers and lower level managers supervise the works of the
workers

II. Motivation: Motivation is the process of stimulating people to action to accomplish

desired goals. The aim of motivation is to influence the behaviour of subordinates for better
performance and achieving the desired results.

III. Financial and Non-financial Incentives: Incentive refers to monetary and non-monetary
rewards which motivate the employees to improve their performance. These incentives can
be classified into two groups; such as (a) Financial Incentives and (b) Non-financial
Incentives. These are discussed below:
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(a) Financial Incentives: The incentives which are offered in the form of money are called
Financial Incentives. For example Pay and Allowance, Bonus, Commission, Profit- sharing,
Retirement benefits (i.c., Pension, Gratuity etc.), Perquisites etc. are the examples of
Financial Incentives.

(b) Non-Financial Incentives: The incentives which are not measurable in terms of money
are called Non-financial Incentives. Status, Job security, Job enrichment, opportunity for
career advancement, recognition etc. are the examples of non-financial incentives.

IV. Leadership: Leadership is a process of influencing the behaviour of people to work

towards the achievement of organisational objectives. It plays an important role in
directing; because, the subordinates obey the direction of a manager properly only when
the manager has the capacity to provide a good leadership. So, leadership is an important
element of the directing function of management.

V. Communication: In order to achieve the desired goals, a manager has to give direction
continuously to his subordinates about what to do, how to do and when to do various
things. Thus it can be said that an effective communication is necessary between the
management and the subordinates in order to make the directing function effective.

Leadership

Leadership is the personal quality or ability by which a person can guide the others, influence their
behaviours and control their activities. Two parties are concerned with leadership, such as-Leader
and followers. The person who influences and guides the efforts and work of a group of persons, is
called a Leader. On the other hand, the persons who are guided and influenced by a leader are
called Followers.

According to Koontz and O'Donnell "Leadership is the ability of a manager to induce subordinates to
work with confidence and zeal."

In brief, we can say that Leadership is such a process by which a leader influences the behaviours
of his subordinates, guides them and controls their activities for the achievement of organisational
goals.
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Features of leadership

The salient features of leadership are-

I. Leadership is an influencing process by which a leader directs his followers towards the
achievement of pre-determined objectives..

II. Leadership is highly situational. So, every leader has to modify his approach and style of
functioning as per the demand of the situation.

III. Leadership is an authority-based process. This means that a leader should have adequate power
in order to influence the behaviour of his followers.

IV. It indicates inter-personal relationship between a leader and his followers.

V. It is a continuous process; because, an organisation comes to an end because of absence of

leader.

VI. It aims at bringing changes of behaviour of people.

VII. It is exercised to achieve the common goal of the organisation.

VIII. It is a mental process by which a leader directs his followers towards a particular goal.

Importance of Leadership

The importance of leadership are as follows

I. Source of motivation: A good leader can easily motivate his subordinates to achieve the
organisational goals. So, leadership is a source of motivation.

ii. Determination of goals and policies: A leader sets goals and policies of the organisation and
explains them to his subordinates. So, the subordinates can perform their tasks properly.

III. Directing group activities: A good leader directs the group activities in such a way so that he can
effectively get the work done by each subordinate. For this purpose, he acts as a friend, philosopher
and guide to his subordinates. So, he can easily induce the subordinates to follow his direction.

IV. Better utilisation of manpower: Effective leadership ensures better utilisation of manpower
through making proper plans, policies and programmes, because, if they are properly set, the
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subordinates can perform their duties in a systematic way which prevents idle labour in the
organisation.

V. Building Morale: High morale of the employees ensures high productivity and organisational
stability. Effective leadership develops high morale among the employees through developing good
human relations and co-operative attitudes among them. So, good leadership is indispensable to
high employee morale.

VI. Developing good human relation: Human relations represent the relation between the leader
and his subordinates. An efficient leader develops the talents of his subordinates, promotes self-
confidence in them, motivate them to work, provides an opportunity to demonstrate their ability
and he remain always in touch with them to guide them properly. In this way he creates an
environment of good human relationship which helps to increase the productivity of the
organisation.

VII. Achieving co-ordination: In order to achieve the desired goal of an organisation, a smooth co-
ordination is necessary among all the activities of the organisation. Effective leadership facilitates co-
ordination of group activities through sharing information with the group members.

VIII. Providing guidance: The role of leadership is very important for providing guidance to the
subordinates. A good leader guides his subordinates towards the achievement of organisational
goals and provides guidance to them when they face any problem.

. IX. Flexibility for changes: In order to survive in the everchanging environment, every organisation
has to welcome the changes in environment and adapt the organisational goals with that very
changes. Leadership is the only way to inform the subordinates about the need for changes.

X. Maintaining discipline: Discipline is such a source which compels the individuals to observe rules,
regulations and procedures. A good leader always maintains discipline among his subordinates. So,
all the activities of the organisation are performed systematically.

XI. Securing co-operation of the employees: Leadership creates team spirit and persuades the group
members to work unitedly and enthusiastically for the achievement organisational goals. In this way,
it develops for co-operative attitudes among the members.

Qualities of a Good Leader

(1) Physical qualities: Physical features such as height, weight, health, physical fitness etc. of a
person attract people. So, a good leader should have attractive figure.
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(ii) Intelligence: A leader should be intelligent enough to examine every problems in the right
perspective.

(iii) Knowledge: A good leader should have complete knowledge and competence about the work
performed by his group members; other than ill will not be possible for him to handle the members
properly.

(iv) Integrity: A leader should possess high level of integrity and honesty for being a role model to
others regarding the ethics and values.

(v) Communication skills: A leader should have good communication skills to make the people
understand clearly and precisely what he wants to convey.

(vi) Motivational skills: A leader should know the techniques to motivate his followers for the
achievement of the desired goals.

(vii) Self confidence: Self confidence is essential to motivate the followers and boost up their

morale. A leader can provide leadership successfully only when he has confidence on hisown
abilities. So, a good leader should have adequate self-confidence.

(vili) Sense of Responsibility: A leader should be responsible so that the followers can depended on
him.

(ix) Emotional Stability: A good leader should have a cool temperament and emotional balance; he
should not be unduly moved by emotions and sentiments.

(x) Decisiveness: A leader should have sound ability to take right decisions at the right time. Once
the decision is taken, he should stick to it than to change it frequently.

leadership styles

1. Democratic Leadership (Also called: Participative or Facilitative Leadership) This is as clear as its
name. In democratic leadership, the leaders make or break decisions democratically, based on their
team's opinion and feedback. Although it is the leader who makes the final call, every opinion
counts. This is easily one of the most effective leadership styles since it allows employees to have a
voice. The leader takes the decision in consultation with the subordinates is Democratic style of
leadership. In this leadership style, the leader makes decisions taking into account the input of all
team members, regardless of their seniority or expertise.

2. Autocratic Leadership (Authoritarian, Coercive or Commanding Leadership)

Under the autocratic leadership styles, all decision-making powers are centralized in the leader as
shown such leaders are dictators. Autocratic leadership style is known as leader centred. Autocratic
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leadership is the inverse of democratic leadership. In this leadership style, the leader makes
decisions without taking input from anyone who reports to them. In autocratic style of leadership
there is no delegation of authority.

The authority of the leader is the highest, followers obey the orders of the leader, and leader is the
central authority to take decisions are some of the characteristics of Autocratic leadership.

3. Laissez-Faire Leadership (Delegative or Hands-off Leadership Or free-rein)

The French term "laissez-faire" literally translates to "let them do." Leaders who embrace it give
nearly all authority to their employees. Decentralization of the power, authority and decision making
is the feature of Free-rein Leadership.The laissez-Faire leadersłup style is often found in younger
start-ups. In this leadership style, leaders put nearly all the decision making power in the hands of
their employees For example, a leader might not set official policies around project deadlines or
working hours for their employees.

4. Bureaucratic Leadership

This kind of leadership style goes by the books. Although leaders with this approach do listen to
employees and their opinions, they may negate or reject it, in case they go against the company's
ethos or policy.

Unlike autocratic leadership, this style might consider the input of team members. However, if that
input conflicts with existing policy the leader will likely reject it. This style of leadership is commonly
found in larger and older organizations who have successful.

Bureaucratic leadership is quick to shut down innovation and discourages new ways of thinking and
achieving ambitious goals.

Continuum leadership theory of Tannenbaum and Schmidt

The Tannenbaum and Schmidt Continuum Leadership Theory proposes a spectrum of leadership
styles based on the degree of authority and control exercised by leaders versus the amount of
freedom and decision-making given to subordinates. Here's an explanation of the theory:

1. Autocratic Leadership (Tell): At one end of the continuum is the autocratic style, where leaders
make decisions independently and impose them on subordinates with little or no input. This style is
characterized by high control and low subordinate freedom.

2. Consultative Leadership (Sell): Moving along the continuum, leaders adopt a consultative
approach where they present decisions to subordinates for feedback but ultimately retain the
authority to make final decisions. While subordinates may feel more involved, the ultimate power
still rests with the leader.
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3. Participative Leadership (Consult and Join):Further along the continuum, leaders involve
subordinates more actively in the decision-making process. Subordinates are encouraged to
contribute ideas and suggestions, and the leader integrates these inputs into the final decision-
making process. This style increases subordinate freedom and empowerment.

4. Democratic Leadership (Delegate):Near the other end of the continuum is the democratic style,
where leaders delegate decision-making authority to subordinates. Subordinates have a high degree
of freedom to make decisions within their areas of responsibility, and leaders provide support and
guidance as needed.

5. Laissez-Faire Leadership: At the extreme end of the continuum is the laissez-faire style, where
leaders provide minimal guidance or direction, giving subordinates complete freedom to make
decisions and manage tasks independently. Leaders in this style are largely hands-off, providing
resources and support but little direct involvement in decision-making.

Blake and Mounton’s Leadership Theory

Blake and Mouton's Leadership Grid, also known as the Managerial Grid, is a leadership theory
developed by Robert Blake and Jane Mouton in the 1960s. It evaluates leadership styles based on
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two behavioral dimensions: concern for people and concern for production. Here's a brief discussion
of the theory:

1. Concern for People: This dimension assesses a leader's focus on the well-being, satisfaction, and
personal development of their team members. Leaders who score high on this dimension prioritize
building relationships, fostering a supportive environment, and addressing the needs of their
followers.

2. Concern for Production: This dimension evaluates a leader's emphasis on achieving goals, tasks,
and outcomes. Leaders who score high on this dimension prioritize efficiency, productivity, and
performance. They focus on meeting deadlines, maximizing output, and delivering results.

The Leadership Grid plots these two dimensions on a 9x9 grid, creating various leadership styles:

- **Impoverished (1,1)**: Leaders with low concern for both people and production. They typically
exert minimum effort in their roles and avoid making decisions.
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- **Country Club (1,9)**: Leaders with high concern for people but low concern for production. They
prioritize creating a friendly and comfortable work environment, often at the expense of
productivity.

Produce or Perish (9,1) Leaders with high concern for production but low concern for people. They
focus solely on achieving tasks and meeting deadlines, sometimes neglecting the needs and well-
being of their team members.

Team (9,9): The ideal leadership style according to Blake and Mouton. Leaders scoring high on both
dimensions prioritize both the needs of their team members and the achievement of goals. They
strive to create a collaborative and high-performing work environment.

Middle-of-the-Road (5,5): Leaders with moderate concern for both people and production. They aim
to maintain a balance between achieving goals and maintaining satisfactory relationships with their
team.

Blake and Mouton argued that the Team leadership style is the most effective in achieving
organizational goals while fostering employee satisfaction and motivation. However, they also
acknowledged that leadership style effectiveness can vary depending on situational factors.

Likert’s System Theory

The Likert System Four Theory, also known as Rensis Likert's four systems of management, is a
conceptual framework developed by psychologist Rensis Likert in the 1960s. Likert was interested in
understanding organizational behaviour and leadership styles, particularly in the context of
management practices.

The Likert System Four Theory categorizes management styles into four main systems:

1.Exploitative-Authoritative: In this system, management relies heavily on power and coercion to

control employees. Decision-making is centralized, and communication typically flows from the top
down. There's little trust or collaboration between management and employees, leading to a
hierarchical and often fear-based work environment.

2. Benevolent-Authoritative: This system also features centralized decision-making, but

management adopts a more paternalistic approach. While employees may feel more supported
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compared to the exploitative-authoritative system, there's still a significant power imbalance.

Management may offer rewards or incentives to encourage compliance, but ultimately, authority
remains concentrated at the top.

3. Consultative: In the consultative system, management seeks input from employees on certain
decisions, but ultimate authority still rests with management. Communication flows more freely
compared to the previous two systems, and there's a moderate level of trust between management
and employees. However, employees may still feel somewhat constrained by the hierarchical
structure.

4. Participative Group: The participative group system represents the most democratic and
employee-centered approach to management. Decision-making is decentralized, with management
actively involving employees in setting goals, making decisions, and solving problems.
Communication is open and transparent, fostering a high level of trust and collaboration. Employees
feel empowered and motivated to contribute to the organization's success.

The Likert System Four Theory suggests that the effectiveness of an organization's management
style depends on the degree of employee involvement in decision-making and the level of trust and
collaboration between management and employees. Likert argued that organizations adopting a
participative group system tend to be more successful in achieving their goals and maintaining
employee satisfaction.

Trait Theory of Leadership

Trait theory of leadership suggests that certain inherent qualities or traits predispose individuals to
become effective leaders. It focuses on identifying specific characteristics such as intelligence,
confidence, decisiveness, and charisma that are believed to be common among successful leaders.
However, it oversimplifies leadership by neglecting situational factors and the importance of learned
behaviors and skills in effective leadership.

Fred Fielder’s situational leadership

Fred Fiedler's Contingency Theory of Leadership, often associated with Situational Leadership,
proposes that effective leadership depends on the interaction between the leader's style and the
situational favourableness. Fiedler categorized leadership styles as either task-oriented or
relationship-oriented, and he argued that the effectiveness of each style depends on three
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situational factors: leader-member relations, task structure, and position power. Situational
Leadership, on the other hand, is more closely associated with Paul Hersey and Kenneth Blanchard's
model, which emphasizes adapting leadership style based on the readiness or maturity level of
followers. This model suggests that leaders should adjust their directive and supportive behaviours
according to the readiness of their followers to perform a specific task. Both theories highlight the
importance of considering the context in which leadership occurs and adapting one's approach
accordingly for optimal effectiveness.
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PPM
Chapter -5
Motivation AND Co-ordination

Concept Of Motivation

Motivation is the process of stimulating people to action to accomplish desired goals. It is a

psychological force which people earn only when their needs are fulfilled. The famous psychologist,
Abraham Maslow has arranged the human needs chronologically as physiological needs, social
needs, safety needs, esteem needs and self actualisation needs. When these needs are fulfilled, only
then people are motivated.

According to W.G. Scott "Motivation means a process of stimulating people to action to accomplish
desired goals."

According to Koontz and O'Donnell "To motivate is to induce people to act in a desired manner."

In brief, we can say that-The force which urges and inspires people to work with inspiration and
enthusiasm is called Motivation.

Features of Motivation

The main features of motivation are-

I. An internal feeling: Motivation is an internal feeling like needs, desires, or urges. It is generated
within an individual. For this, it can not be observed directly. So, it is considered as a psychological
phenomenon.

II. Goal oriented behaviour: Motivation induces people to behave in such a way so that they can
achieve their goal. That is to say, it is a behavioural concept that directs human behaviour towards
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certain goals. For example, if an employee wants to earn more income, he will try to improve his
performance.

III. A continuous process: Human needs are unlimited. After satisfying one need adequately, they
feel another need. In order to satisfy these unending needs, they feel motivation continuously. So,
motivation is a continuous process.

IV. Both positive and negative: Motivation can be both positive and negative. For example,
promotion, increment, bonus, etc. create positive motivation within people and on the other hand,
demotion, stopping increment etc. create negative motivation.

V. A complex process: Different people's needs, expectations and desires are different. For this, all
the people can not be motivated in the same way. That is to say, it is not possible to make
generalisation in motivation. So, motivation is a complex process.

Importance Of Motivation

1. Best utilisation of human resources: Motivation ensures best utilisation of human resource;
because, the motivated employees feel encouragement and enthusiasm to do work with their best
effort.

II. Optimum utilisation of factor of production: Motivation ensures optimum utilisation of different
factors of production; because, the motivated employees always try to do work sincerely in order to
minimise wastage and cost of production.

III. Reduction in labour turnover: High motivation provides job satisfaction to the employees. It
makes them dutiful and committed towards the organisation. So, labour turnover and absence
reduce.

IV. Establishment of good relation: Motivation creates team spirit among the workers. So, it reduces
labour unrest and creates better relations between management and workers. That is to say,
motivation establishes good human relation in the organisation.
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V. Basis of co-operation: As motivation induces the workers to do work collectively, it develops co-
operative attitude among them. It increases both quality and quantity of production.

VI. Increase in the level of efficiency: Proper motivation satisfies the needs of employees and
provides satisfaction to them. So, they work whole-heartedly and make full use of their abilities to
raise the existing level of efficiency.

VII. Building positive attitude: The organisational goal can be achieved only when the employees
have positive attitude towards the organisation. Motivation helps to build a positive attitude among
the employees towards the organisation through suitable rewards and praise for good work.

VIII. Reduction in absenteeism : Motivation helps to reduce absenteeism by providing proper

working condition and adequate rewards. Proper motivation makes the work a source of pleasure
and encourages the employees to be presented regularly at the working place.

Maslow’s Theory Of Hierarchy of needs

Need is a very important element of motivation; because, the employees are motivated only when
their needs are fulfilled. But people do not feel all types of needs at a time. After meeting a need,
the other comes to the picture. Abraham H. Maslow, an American Psychologist has developed a
classification of human needs which is known as 'Theory of Hierarchy of needs. This theory
establishes on the basis of same assumptions. These assumptions are-

(i) People's behaviour is based on their needs.

(ii) The needs are in hierarchical order.

(iii) After meeting a lower level need, a person feels the next higher level need.

(iv) A satisfied need can no longer motivate a person; only the next higher level need can motivate
him.

On the basis of these assumptions, Maslow's theory of Hierarchy of need is discussed below:

(i) Physiological Needs: The needs which are felt by people for their survival, are called Physiological
needs. For example, the needs for food, dress, shelter, water, air etc. are the physiological needs. As
people feel these needs for their survival, they are also known as survival needs. Again, as the other
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needs do not came to the picture until these needs are fully satisfied, they are also called Basic
needs.

Safety Needs: After meeting the physiological needs upto a satisfactory level, people feel needs for
safety. So, in the hierarchy of needs, safety needs came immediately after the physiological needs.
Needs for job security, protection against dangers, safety of Property etc. are the safety needs. An
employer can satisfy safety needs of his employees through offering job security, pension, gratuity,
insurance, housing etc.

ii) Social Needs: Man is a social human being; he does not like to live in isolation. He likes to love
others and desires to get love from others. For this, people feel social needs. Social needs refer to
the needs for love, affection, friendship, social acceptance etc. People create family, relatives,
friends, clubs, association etc. for meeting these needs.

(iv) Esteem Needs: When the above three needs are satisfied, people feel esteem needs. Self-
respect, self-confidence, feeling for personal qualification, feeling for recognition etc. are concerned
with the esteem needs. These needs are satisfied through non-monetary incentives.

(v) Self-actualisation Needs: Self actualisation needs refer to the desire for the development of
personal talent. These needs are psychological and infinite because, there is no limit to
development.

Herzberg’s Theory of Motivation

The Herzberg Two-Factor Theory, also known as the Motivation-Hygiene Theory, was developed by
psychologist Frederick Herzberg in the 1950s. This theory suggests that there are two sets of factors
influencing workplace motivation and satisfaction:

1. Hygiene Factors (Dissatisfiers): These factors are related to the work environment and include
aspects such as salary, job security, working conditions, company policies, and interpersonal
relationships. When these factors are inadequate, they can lead to dissatisfaction among employees.
However, improving them typically does not result in long-term motivation; it merely prevents
dissatisfaction.

2. Motivational Factors (Satisfiers): These factors are intrinsic to the job itself and include aspects
such as recognition, achievement, responsibility, advancement opportunities, and the nature of the
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work. When these factors are present and fulfilling, they can lead to job satisfaction and intrinsic
motivation.

According to Herzberg, enhancing hygiene factors can only eliminate dissatisfaction, but it won't
necessarily motivate employees. To truly motivate employees, organizations must focus on
improving motivational factors, which involve providing opportunities for personal growth,
recognition, challenging work, and a sense of achievement.

Comparison of Maslow’s theory and Herzberg Theory

(a) IN TERMS OF MEANING: Maslow's theory is based on the concept of human needs and their
satisfaction while Herzberg's theory is based on the use of motivators which includes achievement,
recognition and opportunity for growth

(b) BASIS OF THEORY: Maslow's theory is based on the hierarchy of human needs. He identified five
sets of human needs(on priority basis) and their satisfaction in motivating employees while Herzberg
refers to hygiene factors and motivating factors in his theory. Hygiene factors are dissatisfiers while
motivating factors motivate subordinate. Hierarchical arrangement of need is not given.

(c) NATURE OF THEORY: Maslow's theory is rather simple and descriptive, the theory is based long
experience about human needs. While Herzberg's theory is more prescriptive. It suggests the
motivating factors which can be used effectively. The theory is based on actual information collected
by Herzberg after interviewing 203 engineers and accountants.

(d) APPLICABILITY OF THEORY: Maslow's theory is the most popular and widely cited theory of
motivation and has wide applicability. It is mostly applicable to poor and developing countries where
money is still a big motivating factor. While Herzberg's theory is an extension of Maslow's theory of
motivation. It is on the other hand applicable to rich and developed countries where money is less
important motivating factor. hmur

(e) DESCRIPTIVE OR PRESCRIPTIVE Maslow's theory is descriptive in nature while Herzberg's theory
is Prescriptive in nature

(f) MOTIVATORS: According to Maslow's model, any need can act as a motivator provided it is not
satisfied while Herzberg in his dual factor model, hygiene factors (lower levels) do not act as
motivators, only higher order needs(achievement, recognition, challenging work) act as motivators.
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Carrot and Stick Theory of Motivation

The Carrot and Stick theory of motivation is a motivational model based on the use of rewards
(carrots) and punishments (sticks) to induce desired behaviour. Carrots represent incentives or
rewards offered to encourage desired behaviour, while sticks represent penalties or punishments
imposed to deter undesirable behaviour. This theory operates on the principle that individuals are
motivated by the prospect of reward or the avoidance of punishment.

MC Gregor’s Theory X and Theory Y of Motivation

Douglas McGregor proposed Theory X and Theory Y in the 1960s as contrasting views on human
motivation and management.

1. Theory X: This view portrays employees as inherently lazy, lacking ambition, and avoiding work
whenever possible. According to Theory X, people need to be controlled, directed, and coerced into
performing their jobs. Managers who adhere to Theory X tend to adopt authoritarian leadership
styles, micromanage employees, and rely heavily on punishments and rewards to motivate them.
This approach often leads to low morale, resistance, and limited creativity among employees.

2. Theory Y: In contrast, Theory Y assumes that employees are inherently motivated, creative, and
enjoy work. According to Theory Y, people are not inherently lazy, but rather have the potential to
be self-motivated and responsible. Managers who subscribe to Theory Y believe in empowering
employees, providing them with opportunities for growth and development, and trusting them to
take ownership of their work. This approach fosters a positive work environment, encourages
innovation, and promotes higher levels of job satisfaction and productivity.
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Difference Between Theory X and Theory Y

Criticism of McGregor’s Theory

Criticism of McGregor's Theory X and Theory Y:

1. Oversimplification: Critics argue that the theory oversimplifies complex human behavior by
categorizing employees into only two extreme types.

2. Cultural Bias: The theory may not be universally applicable across different cultures and contexts,
as it reflects a Western perspective of motivation.

3. Lack of Empirical Evidence: Some argue that McGregor's theory lacks empirical evidence to
support its claims, making it difficult to validate its applicability in real-world settings.

4. Binary Nature: The theory presents a binary view of management styles, overlooking the
possibility of a continuum between Theory X and Theory Y approaches.

5. Managerial Bias: Critics suggest that managers may use Theory Y principles as a guise for
manipulation or exploitation, undermining its intended positive impact on employee motivation.
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Criticism of Herzberg Theory Of Motivation

Limitations of Herzberg's Theory of Motivation

(a) The two-factor theory overlooks situational variables.

(b) Herzberg assumed a correlation between satisfaction and productivity. But the research
conducted by Herzberg stressed upon satisfaction and ignored productivity.

(c) The theory's reliability is uncertain.

(d) No comprehensive measure of satisfaction was used.

(e) The two factor theory is not free from bias.

(f) The theory ignores blue-collar workers.

Concept of Coordination

Coordination is the act of organizing and synchronizing different parts or activities of a group or
organization to work together smoothly towards a common goal. It involves ensuring that everyone
understands their roles, tasks, and how they fit into the overall plan, thus promoting efficiency and
harmony in achieving objectives.

Features of Coordination

1. Harmony: Coordination ensures that different activities and efforts within an organization or
group complement each other rather than conflicting.

2. Integration: It involves bringing together various functions, tasks, and resources to work towards
achieving common objectives.

3. Communication: Effective coordination relies on clear communication channels to share

information, clarify roles, and resolve any misunderstandings or conflicts.
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4. Flexibility: Coordination allows for adaptability and adjustments in response to changes in

circumstances, goals, or priorities.

5. Efficiency: It enhances the efficiency of operations by minimizing duplication of efforts, optimizing

resource allocation, and streamlining workflows.

6. Cooperation: Coordination fosters a spirit of collaboration and teamwork among individuals or

departments, promoting mutual support and shared responsibility.

7. Continuous Process: Coordination is not a one-time activity but an ongoing process that requires
regular monitoring, evaluation, and adjustment to ensure effectiveness.

Co-ordination is the essence of management. Discuss

Coordination is indeed considered the essence of management because it plays a crucial role in
ensuring that all activities within an organization are aligned toward achieving common goals. Here's
why:

1. Integration of Efforts: Management involves coordinating various resources, such as human,

financial, and material, to achieve organizational objectives. Effective coordination ensures that
these resources are utilized efficiently and effectively.

2. Goal Alignment: Coordinating efforts helps align individual and departmental goals with
organizational objectives, ensuring that everyone works towards the same overarching goals.

3. Conflict Resolution: Management coordinates different functions and departments within an

organization, minimizing conflicts and promoting cooperation among employees and teams.

4. Enhancing Efficiency: Coordination streamlines workflows, eliminates redundancies, and

optimizes resource allocation, thereby enhancing overall organizational efficiency and productivity.
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5. Adaptability: Coordination facilitates flexibility and adaptability, enabling organizations to

respond promptly to changes in the internal and external environment.

6. Promoting Collaboration: Effective coordination fosters a culture of collaboration and teamwork,

where employees work together towards common goals, contributing to organizational success.

Principles of Coordination

The following principles help in applying the various techniques of coordination:

1. Unity of Command:

Unity of command means one boss for one subordinate. It will be difficult to achieve coordination if
one individual has to report to more than one boss. Unity of command helps in coordinating the
activities of individuals and departments. Com

2. Early Beginning:

It follows the principle of earlier the better. Managers should initiate efforts to coordinate
organisational activities right from the planning stage. If plans are implemented without
coordination in mind, it will become difficult to coordinate the organisational activities at later
stages. Well begun is half done?

3. Scalar Chain:

It refers to chain or link between top managers and lower managers. It is the hierarchy of levels
where information and instructions flow from top to bottom and suggestions and complaints flow
from bottom to top. This chain facilitates coordination as top managers pass orders and instructions
down the chain which are necessary for subordinates to work efficiently.

4. Continuity:

Coordination is a continuous process. It must be continuously carried out at all levels in every
department. It starts the moment an organisation comes into existence and continues till the
organisation exists.
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5. Span of Management:

Il refer to the number of subordinates that a manager can manage effectively. It is important to
place only as many subordinates under the direction n of one manager as can be effectively
managed by him

6. Direct Contact:

Direct or personal contact between managers and subordinates can achieve better coordination
than indirect or impersonal contact

7. Reciprocity:

It refers to interdependence of activities. Production and sales department, for example, are inter-
dependent. The more one sells, the more one needs to produce.

8. Dynamism:

There are no fixed and rigid rules for coordination. Changes in organisational environment
necessitate changes in the techniques of coordination. It is, thus, a dynamic and not static concept.
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AVISHEK JHA CLASSES

PPM
CH – CONTROLLING

Meaning of control

The meaning of controlling function can be defined as ensuring that activities in an

organization are performed as per the plans. Controlling also ensures that an
organization’s resources are being used effectively & efficiently for the achievement of
predetermined goals.

Features of Control

The main features of Control are-

(1) Continuous Process If the managers do not carry on the controlling function continuously,
the activities of the subordinates may be moved towards wrong way. So, the managers have to
carry on the controlling function continuously. For this, controlling is called a continuous
process.

(ii) All Pervasive function - an important function of the managers of each and every
department is to exercise proper control over the activities of the subordinates. For this,
controlling function is considered an all pervasive function.

(iii) Dynamism: Business environment is everchanging. So, at the time of taking any remedial
measure, the managers have to consider the existing as well as the prospective change in
situations. That is why, the controlling function can not be static, it has to be dynamic.

(iv) Forward looking: Past can never be controlled. Actually, control is exercised for attaining
the expected results in future by applying the knowledge acquired through evaluation of past
performance. So, controlling is considered a forward looking function.
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(vi) Verification Process: The main purpose of controlling is to verify whether there is any
deviation between the actual performance and the desired performance or not. So, it is a
verification process.

(vill Goal Oriented Process: The managers of an organisation exercise control over the
functions of the subordinates of that very organisation for fulfilling the organisational goals in
the best possible way, So, controlling is a goal oriented process.

(viii) Function of Last phase: The main functions of management are planning, organising,
staffing, directing and controlling. It is clear from this order of sequence that controlling is the
last phase of the functions of the functions of management.

Importance of Controlling

Controlling is an important function of the management. In the context of importance of

controlling, we can say that-

(i) Achievement of Organisational Goals: Through controlling, managers can find out the
errors and omissions of the actual performance and through rectification of them, they can
move all the activities towards the achievement of organisational goals. So, it can be said that
Controlling helps the managers to achieve the organisational goals.

(ii) Optimum utilisation of Resources: An effective controlling system helps to prevent misuse
and wastage of human, physical and financial resources. As a result of it, optimum utilisation of
those resources is ensured. So, it can be said that controlling ensures optimum utilisation of
resources.

(iii) Better Performance: If an employee makes any mistake in performing duty, the same is
detected through control. For this, every employee tries to perform his duty carefully and
sincerely. In this way, controlling creates sense of responsibility for better performance among
the employees.

(iv) Timely Supervision: Controlling provides reports and progress of work regularly. So, if there
is any errors and omissions between the actual performance and the desired performance,
problems can be detected and rectified before they became uncontrollable. In this way,
controlling helps in timely supervision.
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(v) Improvement of plans: If there is any deficiency in the existing plans, the same can be
found out through controlling. The managers improve the existing plans through removal of that
very deficiency. Again, controlling provides many useful informations on the basis of which
better plans can be formulated for future. Thus, Controlling plays an important role in the
improvement of plans.

(vi) Motivation of Employees: Controlling helps the management to identify efficient and
inefficient employees. Inefficient employees are provided necessary training so that they can
remove their weakness. As a result of it, they feel motivated in work. On the other hand, the
efficient employees are motivated through providing financial and non- financial incentives so
that they perform their duties with their best effort. Therefore, the role of controlling in the
motivation of employees is very important.

Limitations of Control

The limitations of control can be summarized succinctly:

1. **Complexity**: Controlling complex systems can be challenging due to numerous

variables and interactions, making it difficult to predict outcomes accurately.

2. **Unforeseen Factors**: Control is often limited by unforeseen external factors or events

that can disrupt planned processes or outcomes.

3. **Resource Constraints**: Limited resources such as time, money, and manpower can
restrict the extent to which control can be exercised over a system or situation.

4. **Resistance to Control**: People or elements within a system may resist control

measures, leading to inefficiencies or failures in achieving desired outcomes.

5. **Incomplete Information**: Lack of complete or accurate information about a system can

hinder effective control, leading to suboptimal decisions or outcomes.

6. Dynamic Nature Systems are often dynamic and constantly changing, making it challenging
to maintain control over time.
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Steps of Controlling

The steps of controlling can be summarized as follows:

1. **Establish Standards**: Define clear objectives, targets, or benchmarks that represent

desired outcomes or performance levels.

2. **Measure Performance**: Collect data and assess actual performance against the
established standards.

3. **Compare Performance**: Compare the measured performance with the set standards to
identify any variances or deviations.

4. **Analyze Deviations**: Investigate the reasons for deviations from the standards, including
root causes and contributing factors.

5. **Take Corrective Action**: Develop and implement corrective actions or adjustments to

address the identified deviations and bring performance back in line with the standards.

6. **Evaluate Results**: Monitor the effectiveness of the corrective actions and evaluate
whether they have successfully resolved the deviations.

7. **Provide Feedback**: Communicate feedback and information about performance levels

to relevant stakeholders, ensuring transparency and accountability.

8. **Adjust Standards**: If necessary, update or revise the standards based on the insights
gained from the controlling process to improve future performance management.
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Relation Between Planning and Control

Planning and controlling are interrelated and interdependent. Planning and controlling are
inseparable twins of management. They are interrelated and interdependent functions of
management.

Planning is the base of controlling function, as controlling involves measurement of

performance against the standards to analyse deviations and take corrective action. Thus,
controlling is impossible without planning.

Planning is a thinking process while controlling is an executive function. While planning involves
creative thinking, imagination and sound judgement, controlling ensures that such decisions
are converted into desired actions. Thus, planning is prescriptive, whereas, controlling is
evaluative.

Steps of Control

Controlling is a systematic process involving a series of steps which are as follows:

(1)Setting performance standards: The first step in the controlling process is to set the
performance standards. Standards are those criteria, on which the actual performances are
measured. These standards serve as a benchmark towards which an organization strives to
work.

(ii) Measurement of actual performance: After the establishment of standards, the next step
is measuring the actual performance with the set standards. This can be done by opting for
several methods like personal observation, sample checking, performance reports, ete.

(iii) Comparison of actual performance with standards: In this step, the actual performances
are compared with the established standards, Such comparisons reveal the deviation between
planned and actual results.

(iv) Analysing deviations: At this stage, acceptable and non-acceptable deviations are
analyzed where the following things are noticed
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(V) Critical point control. It means keeping the focus on key result areas where deviations are
not acceptable and it should be attended on a priority basis.

(vi) Management by exception: It means if a manager tries to control everything, it may end up
controlling nothing. Thus, he should first handle the significant deviations, which require his
priority

(vii) Taking corrective action: The most important step in the controlling process is taking
corrective actions. After the deviations and their causes are analysed, the task is to remove the
hurdles from the actual work plan. The purpose of this step is to bring the actual performance
up to the level of expectations by opting for corrective measures.

Various Tools of Controlling

Modern techniques of controlling are those which are of recent origin & are comparatively new
in management literature. These techniques provide a refreshingly new thinking on the ways in
which various aspects of an organization can be controlled. These include:

1. Return on Investment

Return on investment (ROI) can be defined as one of the important and useful techniques. It
provides the basics and guides for measuring whether or not invested capital has been used
effectively for generating a reasonable amount of return. ROI can be used to measure the
overall performance of an organization or of its individual departments or divisions. It can be
calculated as under- Net income before or after tax may be used for making comparisons. Total
investment includes both working as well as fixed capital invested in the business.

2. Ratio Analysis

The most commonly used ratios used by organizations can be classified into the following
categories:

(a) Liquidity ratios

(b) Solvency ratios

(c) Profitability ratios

(d) Turnover ratios

3. Responsibility Accounting
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Responsibility accounting can be defined as a system of accounting in which overall

involvement of different sections, divisions & departments of an organization are set up as
'Responsibility centers' The head of the center is responsible for achieving the target set for his
center. Responsibility centers may be of the following types:

(a) Cost center

(b) Revenue center

(c) Profit center

(d) Investment center

4. Management Audit

Management audit refers to a systematic appraisal of the overall performance of the

management of an organization. The purpose is to review the efficiency &n effectiveness of
management & to improve its performance in future periods.

5. PERT & CPM

PERT (programmed evaluation & review technique) & CPM (critical path method) are important
network techniques useful in planning & controlling. These techniques, therefore, help in
performing various functions of management like planning, scheduling & implementing time-
bound projects involving the performance of a variety of complex, diverse & interrelated
activities. Therefore, these techniques are so interrelated and deal with such factors as time
scheduling & resources allocation for these activities.