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PRINCIPAL OF MANAGEMENT

DELEGATION OF AUTHORITY AND DECENTRALISATON

Authority is the power to take decision which guides the activities of others. It is not possible for a person to discharge all the duties in an organization. In order to finish the work in time, there is need of delegation of authority and division of labor.

Definition

Hentry Fayol – Authority is the right to give orders and the powers to exact obedience. Strong – Authority is the right to command.Massie – The Formal right to exercise control.

Characteristics of Authority

1. Basis of getting things done – Authority gives the right to do things in an organization and affect the behavior of others in the organization.

2. Legitimacy – Authority implies a legal right available to superiors. This type of right arises due to the tradition followed in an organization. The right of a mnager to affect the behavior of his subordinates is given to him on the basis of an organizational hierarchy.

3. Decision Making – The manager can command to his subordinates to act or not to act. This type of decision is taken by superiors for the smooth functioning of the organization.

4. Implementation – Implementation influences the personality function of the manager who has given the authority. The subordinates should follow the instructions of the manager regarding the implementation of decisions.

Sources of Authority – For knowing the origin or sources of authority three main theories are there.

1. Formal authority theoryAccording to this theory the authority flows from top to bottom through the

structure of an organization. Here the authority flows from the general manager to his departmental manager and from him to the superintendent and so on. This is explained in the following diagram.

Board of Directors

General Manager

Sales Manager

Sales Representatives

WorkersThis method is also known as traditional theory and top down authority theory.

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In the case of public limited companies the authority is in the hand of shareholders and they are delegating authority to top level management and from them to middle level and to lower level management.

2. Acceptance of authority theoryThis theory was developed by Chester barnad. According to this theory authority

flows from the superior to subordinates whenever there is an acceptance on the part of the subordinates. The subordinates should accept the authority but there is no compulsion made by the superior. If the subordinates are not accepting the authority then the superior can’t have any authority over them. The authority of the superior will be effective only when the subordinates are accepting it and it is ineffective when they not accepting it. Some times the subordinates are accepting the orders of the subordinates with a second thought. If the subordinates are accepting the orders of the superiors without any hesitation, it is known as zone of acceptance.

Zone of acceptance will be determined by a number of factors.

1. The subordinate believes that rewards will be given to him as an appreciation of his work.

2. A subordinate thinks that he has to accept the authority in a particular situation.3. The non acceptance of authority will result in dismissed of the subordinate from

organization.4. There is no other way available than to accept the authority.5. It is the duty of the subordinate or it is the policy of the organization.6. People have confidence in the person giving orders.

3. Competence theoryThis type of authority is given to persons who have good leadership qualities. He

has the ability to convince his subordinates and to make them accept the authority.

Delegation – It is impossible for any person to execute all the work in an organization for achieving its objectives. So the superiors assign duties or responsibilities to his subordinates and also delegate necessary authorities to them.

Delegation is a process by which a superior divides his total work between himself and his subordinates in order to achieve organizational objectives.

Importance of DelegationDelegation is considered as the most important method of training subordinates.

The delegation helps the manager to concentrate on the important work of planning organizing and controlling.

In a democratic country like India people delegate their authority to the members of the legislature. The members of the legislature delegate, their authority to any of the elected leaders and who in turn delegates some of his authority to the cabinet ministers chosen by him.

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If a business unit has branches at different places the best possible way is to delegate.

Elements of DelegationThe following are the three elements of delegation.

1. Assignment of duties or responsibilitiesIf a superior has no time to complete his duties the immediately assigns a part of

his work to his immediate subordinate.

2. Delegation of AuthorityIf the work is assigned to a subordinate the it is to give him the authority to do it

by giving written proof.

3. AccountabilityAccountability means the subordinate is responsible to his immediate superior for

the work done by him. That means if the subordinate is committing any mistake he is responsible for that. But the superior is answerable to the top management for the act of the subordinate.

Principles of delegation

1. Delegation to go by results expected – Every organization have certain objectives. Both superior and subordinates are working for achieving these objectives. So before delegating authority it is the responsibility of the superiors to make it clear to the subordinates the object of this delegation and what they are expecting from them.

2. Non-Delegation of responsibility – A superior can delegate authority but not responsibility. In this case the superiors are watching the performances of the subordinates. The ultimate responsibility for the performance of subordinates remains with the superior.

3. Authority and responsibility should balance – A subordinate can discharge his duties effectively and efficiently if there is proper delegation of authority.

Authority without responsibility will make the subordinate a careless person and responsibility without authority will make the subordinate and inefficient person. So there should be a proper balance between authority and responsibility.

4. Unity of Command – The principle of unity of command insists that a subordinate get instruction from only one superior. In other words a subordinate should be assigned duties and responsibilities from only one superior and he is accountable only to the concerned supervisor.

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If a subordinate gets orders and instructions from more than one superior, it will create uncertainty and confusion with in the organization. In such a situation the subordinate will find it difficult to determine whose instruction he should do first.

5. Definition of limitation of authority – An authority only can delegate authority properly. There should be a written manual showing the authority and responsibility of superiors. This will avoid confusion.

Types of Delegation

Following are the different types of delegation.

1. General – This means giving authority to the subordinates to perform various managerial functions and exercise control over his subordinates. At the same time same persons are regulated.

2. Specific Delegation – Under specific delegation the orders and instructions are delegated to a particular person specifically. For e.g. – Personal manager may be delegated authority for selection of personal traveling of personal, placement of personal etc.

3. Written delegation – This type of delegation is made by written orders and instructions.

4. Unwritten delegation – Here authorities are delegated orally. There is no evidence available for future reference.

5. Formal delegation – The duties and authorities are clearly mentioned in the organizational structure. Production manager has given authority to make changes in production.

6. Informal delegation – In certain cases, a person has to use the authority without getting it from the top management. The reason is that he can perform his assigned duties in time.

7. Downward delegation – This means when a superior could delegate duties and authorities to his immediate subordinate. This type of delegation is followed in many organizations.

8. Accrued delegation – Under this type of delegation a subordinate can delegate his authority to his immediate authorities.

9. Sideward delegation – A person delegate authority to another person who is also in the same rank.

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Advantages of Delegation:-

1. Basis of effective functioning – For the effective smooth functioning of an organization delegation plays an important role. That means instead of doing all works by one person sharing is effective.

2. Saving of time – By allotting works to subordinates superiors are in a position to concentrate more time to important matters like planning, organizing, controlling and other activities.

3. Reduction of work – Delegation relieves the superiors from attending day to day activities. Daily activities are common in nature and it is easy for the subordinates to manage that.

4. Opportunity for development – Delegation is the best opportunity for the workers to grow. It helps the superiors to identify the effective personalities. Remember delegation is a training ground for subordinates.

5. Effective managerial supervision – As per management theory superiors have no right to compel subordinates to accept delegation. Then subordinates are responsible to their immediate superiors and the ultimate responsibility for the work is superiors. Because of these managers supervise subordinates effectively.

6. Efficient running of branches – If a business has branches they need efficient persons to manage the business. Delegation of authority is an effective way of training and developing future managerial persons.

7. Interest and Initiative – Most of the cases subordinates are ready to accept the orders of superiors and do that work effectively. In certain cases subordinates are doing work by them and take initiative personally.

8. Satisfaction to subordinates – By delegating authorities superiors are accepting the abilities of subordinates. This type of acceptance will increase subordinates confidence and their willingness to work hard.

9. Expansion and diversification of business activity – By delegation management are indirectly giving training to workers. This helps the management to identify effective and efficient subordinates. After this business units are planning for expansion and diversification because so many talented managers are now available.

Problems of delegation

A. Hesitation on the part of superiorsThe superiors are not willing to delegate their work to subordinates because

1. Perfectionism – Most of the superiors are thinking are more perfect than others. Others will not do the work perfectly if he is delegating.

2. Autocratic attitude – Some superiors prefer to retain powers in their hand. They are not ready to share limited authority with others.

3. Directions – If the superiors are not able to direct their subordinates they will not delegate.

4. Confidence – Because of the lack of confidence in their subordinates some superiors will not delegate.

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5. Avoidance of risk – After delegating the work if the subordinate is making any mistake the superior is responsible to the top level management.

6. Competition – Some times the superiors are expecting competition from their subordinates if they studying the job well.

7. Inability of the subordinates – The subordinates have any ability to accept the work, then the superiors will not delegate

8. Inability of the superior – If the superior is an inefficient person then the work method and procedures followed by him are facility. That is he is not willing to delegate.

B. Hesitation on the part of subordinates

1. Love of spoon feeding – The subordinates are getting orders and instructions from supervisors every time and that is why they are not accepting delegation.

2. Easier to task – Superior officer is close to subordinates every time and it is easy for them to clear the doubts. This is another reason for non acceptance.

3. Fear of criticism – Subordinates may fear that even for a silly mistake his superior may criticize him. This nature of superiors forced subordinates to reject delegation.

4. Lack of information or resource – A subordinate may hesitate to accept new work due to lack of information or resources.

5. Lack of self-confidence – Lack of self-confidence in a subordinate is also one of the reason for non acceptance of authority.

CENTRALIZATION

Centralization refers to a systematic reservation of authority at a central point with in the framework of the organization. Under this method all the decisions are taken by top level managements. The subordinate’s job is to carry out the orders and instructions of the top level management. According to Hentry Fayol “every thing that goes to reduce the role of subordinates is centralization”. As far as the authority is concerned in a centralized management the subordinate’s role is zero.

Advantages of Centralization

1. Facilitates personal leadership – For small and medium scale business personal leadership is more effective. If a manager is able and efficient he can easily control the activities of the organization. The main advantage of centralization is quick decision making. Truly speaking through decentralization we creating separate departments and these departments are headed by one departmental head. He is then taking the decisions of that department. This is also a type of centralization.

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2. Facilitates integration – For unification and integration of the organization unified direction is necessary. This is possible only in centralization. That means subordinates are getting orders and instructions from only one head.

3. Promotes uniformity of action – Uniformity in action is an important part of modern management. In an organization so many activities are taking place daily, buying goods, recruiting personals, advertising, planning, framing policies are some areas where uniformity is need. If you are getting orders and instructions from one head this uniformity is possible.

4. Successful handling of emergencies – Quick decision and flexibility are the main advantages of centralization. So for taking emergency decisions personal leadership is the best way. Delay in taking emergency decisions sometimes affects the organizations negatively.

DECENTRALIZATION

Decentralization is just opposite of centralization where there is no centralization of authority. Decentralization emerges from the principles of delegation. Decentralization is the pushing down of authority and power of decision making to lower levels of organization. Hentry Fayol “everything that goes to increase the importance of the subordinate’s role is decentralization.

The following are the main objectives of decentralization.

1. To relieve from the burden of work by chief executives.2. To develop managerial personals.3. To satisfy the ego of lower levels of workers and motivate them.4. To take quick and appropriate decisions.5. To reduce communication gap.

Advantages of Decentralization

1. Reduction of the burden of chief executiveDecentralization helps in reducing the burden of the top executives as they

delegate their power to their subordinates and make them free to concentrate their attention on other important matters. The efficiency and output of top executives should increase because of delegation.

2. Diversification FacilitatedDecentralization helps diversification effective. Diversification of products in

particular helps in taking the advantage of market conditions. This helps in increasing both productivity and profitability. Workers are also getting opportunity to prove their ability.

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3. Development of Managerial FacilitiesIf authorities and responsibilities are properly delegating, it is the ideal way of

training new managers. Here workers are getting an opportunity for proving their abilities and capabilities.

4. Importance to production and Marketing functionThe main objective of every business is making profit. For achieving this

production and marketing activities will show best results. Human element is involved in both so by decentralization managements are getting a chance to find out effective employees.

5. Creation of good atmosphere and development of moralsJob satisfaction is an important part of good management. If a worker likes his

job, automatically he will work hard, his efficiency and productivity will also increase by decentralization there is a feeling in the minds of the workers that managements are having confidence in them and their work.

6. Effective controlThe more the decentralization the more effective becomes the control as span of

control is reduced with every decision of decentralization.

7. Effective Co-ordinationDecentralization reduces the need of co-ordination in the enterprises a whole. By

decentralization there is scope for more co-ordination between departments.

Distinction between the 3D’sDepartmentation is a process of grouping and sub grouping.

Decentralization is a diffusion of authority within the entire enterprise and also with in a department.

Delegation is confirmation authority to a position on the basis of decentralized departmentation.

TYPES OF ORGANISATIONS

Organization is designed on the basis of division of labor and span of management. The success of an organization depends on experience and competence of the managers so business units are trying there level best to appoint persons having process track record as managers.

The normal factor which determines the forms of internal organization is size nature and scale of production. Following are the most common types of organizations.

1. Line, Military or scalar organization. 2. Functional organization.

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3. Line and staff organization.4. Committee organization.5. Project organization.6. Matrix organization7. Free form organization

Line, Military or Scalar OrganizationThis is the simplest and oldest form organization. Under this form each

department is generally a complete self contained unit. A separate person is in charge of the department and he has full control over the department certain powers are given to these departmental heads for taking decisions. They are giving instructions to their subordinates and how them they are going down wards. This is a glow of information from top to bottom. The top level people have greater decision making authority than the bottom level management it should be noted that in line organization each executive is independent of each other. They have no right to communicate each other regarding business matters. They receive orders from their immediate boss (general manger) and give orders to their subordinates. All the departmental heads are responsible to the general manager. The general manager in turn responsible to the board of directors. The board of the directors is finally responsible to the share holders. This type of organization is followed in army that is why it is also known as military organization. Under this structure authority flows from top to bottom vertically. So it is also known as line organization.

Characteristics of line Organization

Board of directors

General Manager

PurchaseManager

ProductionManager

SalesManager

FinancialManager

PurchaseAssistants

Foreman Supervisor Superintendent

Workers Workers Workers Workers

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1. It consists of direct vertical relationships.2. Authority flows from top level to bottom level.3. Departmental heads are given full freedom to control their departments.4. Existence of direct relationship between superiors and subordinates.

Advantages of line organization

1. A line organization is very easy to establish.2. There is division of authority and responsibility.3. Individual can receive orders from one superior.4. Direct communication is possible.

Disadvantages of line organization

1. Lack of specialization.2. Possibility of overloading of work.3. Lack of initiative.4. Limited communication.5. Lack of coordination.

Functional OrganizationUnder line organization a single person is in charge of all the activities of the

concerned department. Here the head of the department find it difficult to supervise all the activities efficiently in order to overcome the limitations of the line organization F.W. Taylor proposed a new type of organization called functional organization.

Under functional organization various specialist are selected and they are asked to work as supervisors. The workers are getting orders and instructions from specialists.

Characteristics of functional organization

1. The work is divided according to specialized functions.2. Authority is given to a specialist.3. The executives and supervisors discharge the responsibilities of functional

authority.4. The decisions are taken only after consultation with the functional authority

relating to his specialized area.

Advantages of functional organization

1. Benefit of specialization.2. Application of expert knowledge.3. Reducing the workload.4. Adequate supervision.5. Relief to line executives.

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Disadvantages of functional organization

1. Ineffective co-ordination.2. Lack of responsibility.3. Centralization.4. Poor administration.5. Increasing the overhead expenses.6. Over specialization.7. Complex relationship.

Line and staff organization

There are some advantages and disadvantage both in the line organization and functional organization. In order to get the advantages of line organization and functional organization a new type of organization is developed known as line and staff organization. By forming this disadvantages of line and functional organizations are avoided to considerable extent.

The line officers have authority to take decision and implement the decisions to achieve the organizational objectives. The line officers may be assisted by the staff officers while framing policies and plans and taking decisions.

The authority flows from top level to bottom through the line officers while the staff officers attached to the various departments advice the departmental heads. The staff officers do not have any authority to control any body in the organization. More than that the staff officers have no right to compel the line officers to follow the advice given by him.

Each department is headed by line officers and they are having full authority regarding planning implementing and control of workers under him with the help of staff officers. There is no connection between workers and the staff officers in any department. The worker gets orders and instructions from line officers. Hence in line and staff organization there is unity of command.

Types of staff

1. Personal staff – Means a person who assists another person in the performance of work effectively. Under such circumstances the work of line officers could not be delegated to others. The types of persons are appointed by top level management. The personal staff has no right to supervise the subordinates of line officers.

2. Specialized staff – The specialized staff officers render service to the line officers at all levels of the organizations. They gave advice to line officers with some limited provisions. These provisions are imposed by the top management.

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3. General staff assistant – They are a group of persons who are rendering service as advisors to top management in specialized matters. They are not specialized in any area but they gave advice regarding over all plans and policies.

Functions of staff officers

1. The staff officers assist the line officers in the planning of business activity.2. The board of directors frames the policies of the organization with the help of

staff officers.3. They are helping top level management for selecting training, placement and

salary fixation of top level managers.4. The staff officers give advice regarding the method of improving the product the

techniques of reducing cost of production, increasing the profit margin etc.5. Staff officers help the line officers in the

a. Execution of policies and programmer.b. Preparation of budgets.c. To solve administrative problems.

In many organizations the line officers extend their co-operation to staff officers and vice versa. This helps in the smooth running of the organization. But in certain cases conflicts may arise between staff officers and line officers. If one officer blames the other officer for any reason, that will affect the smooth functioning of the business.

Arguments by Line officers against Staff officers

1. The staff members have only theoretical knowledge but have no practical knowledge.

2. They are exceeding their authorities and trying to control subordinates.3. The staff officers are blaming line officers for any failure where they are

taking all the credits of success.4. Since the staff officers are not responsible for the results they are more

careless in their work.5. Staff officers are giving advice with out considering the whole objectives of

the business.

Arguments of Staff officers against Line officers

1. The line officers are not following their advices.2. Some line officers are completely neglecting staff officers.3. Some line officers are not ready to ask for any advice from the staff offices.4. The line officers do not exploit the full services of the staff officers.

Solution to the Conflict between line officers and staff officers

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1. Both line officers and staff officers should clearly understand the nature of relationship prevailing between them.

2. Management should advice the line officers to accept the advice of the staff officers or make it as a rule of the organization.

3. The responsibility for the activity should be fixed for both line officers and staff officers.

4. The staff officers can give full credit to line officers for the results achieved.5. If favorable results are obtained the line officers should appreciate staff officers

for their valuable advice.

Advantages of line organization

1. Specialization is possible because line officers are getting advice from specially trained staff officers.

2. The line officers are relieved from their work to a considerable extent because they are relieved from the problem of taking decisions.

3. A very good opportunity is getting to young persons to get training from specialized hand.

4. The principle of unity of command is followed in the line and staff organization. Hence there is one leader to control the workers.

Disadvantages of Line and Staff organization

1. If the authority and responsibility of Line officers and Staff officers are not clearly defined there may be confusion throughout the organization.

2. It is very difficult to control line officers when they are not obeying the advice of the staff managers.

3. The staff officers are not responsible if favorable results are not obtained.4. There Staff officers are underestimating the Line officers. They are always

thinking they are move able and efficient.5. The difference in opinion of line and staff officers will defeat the very purpose of

specialization.

Committee Organization

In modern business world all managerial tasks cannot be performed by a single person alone. At that time two or more persons are asked to perform the same managerial functions collectively. They form a committee for this. A committee is a group of persons to whom certain management functions are assigned and from whom so me advice or recommendations are expected. The duties responsibilities and authorities are fixed by the top management and the committee is accountable to the management.

Types of committee

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1. Advisory committee or problem solving committeeThis type of committee consists of persons having knowledge and experience in

different areas. They are in a position to give advises, opinions and suggestions in different important matters. Before solving a problem the problem is analyzed by the committee members from different angles and arriving at a final solution.

2. Fact Finding CommitteeThis is the most common committee formed in any organization. This is formed

only for the purpose of collecting information on a particular project.

3. Action Committee or Executives CommitteeThis committee is of permanent in nature and has the power to take and

implement decisions. For eg- Board of directors of a company.

Functions of a Committee

1. Collect the necessary information from different sources and arrange the information orderly.

2. Comparing actual and standard performance.3. Framing the policies of the organization.

Advantages of committee organization

1. The committee can take valuable decision with the help of experience and knowledge of the committee members.

2. The committee decisions are better than one. Remember the proverb, “Two heads are better than one.”

3. Committees are following a democratic principle for decision making.4. Even if a decision is opposed by one person he will accept the decisions taken by

the committee in future.

Disadvantages of a committee organization

1. If the decisions taken by the committee members are different, then there is possibility of delay in taking find decisions.

2. It is difficult to maintain the secrecy of the committee.3. In committees all members have the right to express their own views and ideas

and so there is possibility heated argument between committee members.4. It increases the administrative expenses of the organization.

Project Organization

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The project organization idea was developed after the Second World War. This organization is developed with the object of eliminating the defects of functional organization. Delay in taking decisions and lack of co-ordination are the two main defects of functional organization. Here the authority and responsibility of each project are clearing defined and applied.

Matrix Organization

There are a number of departments under matrix organization. Each department is assigned with a specified task. All departments are working with close co-operation and sharing the available resources.

Free form organization (Ad hoc)

This type of organization is formed when ever a necessity arises to form an organization. After the completion of the project these organizations will be dissolved.

The formation of a free form organization depends upon the external environment of the business. If the business is highly affected by the external environment, the free form organization will be established. The decisions taken by free form organization are without following and rules and regulations. Since these committees are organizing quickly, there are pre planned rules and regulations.

Staffing

The staffing function includes recruitment, selection, training, development, transfer, promotion and compensation of personnel.

Elements of staffing

While performing the staffing function remember the rule appoint right person to right job. The major elements are

1. Effective recruitment and selection.2. Proper classification of personnel and pay fixed for them.3. Proper placement.4. Adequate and appropriate training.5. Satisfactory and fair transfer and promotion.6. Sound relationship between management and workers.7. Adequate provision for retirement.

Recruitment

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Recruitment means the discovery of the staff members for the present and future jobs in the organization.

According to Flippo – Recruitment is the process of searching for prospective employees and stimulating them to apply for the jobs in the organization.

The success of recruitment depends upon the procedure followed by the company while recruiting members. For some jobs it is very difficult to get people. For eg- Low salary, poor working conditions etc.

Sources of Recruitment

The source of recruitment is based on the policies followed by the management. The jobs can be filled with existing employees or from outside the company.

If the company is filling a vacancy with present employees of the company it is said to be internal source of the company.

If the same job is filled up from outside candidates that is said to be the external source.

Internal Sources – Whenever a vacancy arises it can be filled by giving a promotion to the present employee of the company. It is based on the promotion policy followed by the company. In certain cases, the same cadre staff member is deputed to the job by the company. This is called transfer. This is based on the transfer policy of the company.

Advantages

1. It increases the moral among the staff members of the company.2. Giving promotion is an important motivating factor.3. Reduction in advertisement expenses, recruitment, training, test expenses.4. It increases the job security.5. Promotion gives workers job satisfaction.

Disadvantages

1. If the higher posts are filled, then there is again vacancy at lower levels.2. By promotion so many under qualified persons are appointed in the higher post.

External Sources

There are various external sources of recruitment. They are

1. Advertisement – When a company wants to inform the public that it has a vacancy they given an advertisement. The company may receive applications in

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response to the advertisement. After scrutiny of applications an interview will be conducted. In certain case a walk in interview method may be adopted by the company. Here applications are received from the candidates. The data, time and place of interview are mentioned in the advertisement. In this way a person can be recruited immediately.

2. Recommendations – Visually managements are getting two types of recommendations. One is a letter from a reliable person well known to the company outside the organization and second one is the recommendation by an existing employee.

3. Gate applicants – The educated unemployed youths are approaching company management for jobs. These candidates may not have any recommendations. Here candidates are personally approaching the appointing authority with out seeing any advertisement. If such candidates are found fit for any one vacancies at that time, the candidate is appointed

4. Employment Exchange – The candidates register there name with the employment exchange with their qualifications. The company gets a list of candidates who are having prescribed qualifications for their jobs. Out of these candidates they are selecting any one. There are two types of employment exchanges. They are private and public employment exchanges. The private employment exchange is run by a private party. They are getting fees from both the candidates and the company. The public employment exchanges are run by government. They are not demanding any commission from candidates and companies.

5. Personal Consultant – This is a separate specified agency doing the function of recruitment of the personal on behalf of the company. In other words the functions of the personal department of the company are performed by these consultants. It receives applications from the consultants, scrutinizing the applications, conducts interviews and selects the candidates. The personnel consultants receive fees from the company for his service.

6. Educational Institution – Universities, colleges and institutions are formed for conducting different type of courses. These educational institutions make arrangements for campus interview. The business concern comes to the campus of educational institutions to recruit the students. The selected students are requested to join the post after completing the course.

7. Field Trips – In these companies are sending some expert groups to cities and town for conducting interviews. Before sending them an advertisement is given mentioning the date, time and place of interview. The interview is conducted at different places.

Selection

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Selection is the process adopted by an organization to appoint adequate number of persons who are fit for the job.

Stages of selection procedure

The selection procedure is as follows.

1. Receiving and screening of applications – All candidates are requested to submit the applications in white paper or in a prescribed form. In both cases full information about the candidates should give. That is information’s about name, age, qualifications, experience etc. The same information is kept as a permanent record in the organization. If the number of applicants is more than the requirement, they may select more candidates.

2. Initial interview – This is also known as preliminary interview. The purpose of conducting this type of interview is to know whether the candidate is physically and mentally fit for the job. Some questions are asking to the candidates regarding their qualification, experience etc only a minimum time is spent for the interview. Candidates who have passed in the initial interview are called for the next selection procedure.

3. Blank application – A specific format is followed by an organization for this selection process. The nature of the format varies from job to job. Managements are using different formats because the qualification and skills required for various jobs are different.

4. Test – For knowing whether the applicants to be selected or rejected tests are conducted. Tests can be of two types. They are proficiency test and aptitude test. Proficiency tests refers to testing of the skills and abilities possessed by the candidate. Aptitude best refers to the measuring of the skills and abilities which may be developed by the applicant to perform the job in future.

5. Checking References – Some times the applicants are requested furnish references. Generally three references they are asking. They may be from educational institutions heads present employers and highly designated relatives.

6. Interview – Interview is considered as a method of personal appraisal through face to face conversation and observation. The management selects a candidate through an interview by one or more persons. The interviewing persons are experts in interview techniques and have through knowledge in different areas. Interview helps the employer to evaluate the candidate regarding his personality, smartness, intelligence, aptitude etc.

Kinds of Interview – There are different type of interview models.

a. Direct Interview – This is a face to face conversation between interviewers and interviewees. By this method employers will get an idea about the skills, character, and ability of the candidates.

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b. Indirect Interview – Here questions are not asking directly to the candidates. Instead they giving a particular topic and asking them to comment on that. The candidates have given full freedom to answer. There will be no interference from the part of the interviewer. The communication skills and personality of the candidates can be easily assessed.

c. Patterned Interview – A number of standard questions are framed well in advance which are to be part before the applicant. The answers of these questions are found while framing questions and answers are written near the questions. Then answers given by the candidates are comparing with original answer for verification.

d. Stress Interview – Under this method so many irritating and illogical questions are asking to the interviewee. If any candidate gets angry after hearing these types of questions, then that particular candidate is treated as unfit for the job.

7. Final Selection – Finally a suitable applicant is selected on the basis of performance in the above mentioned test and interview. Only the required numbers of applicants are selected by the management.

8. Medical Examination – It is also called physical examination. This is carried out for the purpose of assessing the physical fitness of the prospective employee. Most of the organizations are not following this strictly but for getting some jobs it is compulsory.

9. Placement – After completing all the formalities the applicants are placed on a probation basis. The probation period varies from job to job. The maximum probation period is two years and it may be extended to three year under extra ordinary circumstances. The new employees are observed clearly during this period. After completing probation successfully candidates are regularized.

10. Orientation – This means providing information about the organization briefly to new employees. This information is about co-workers, work place, superiors, subordinates, authorities’ responsibilities etc. Orientation program is carried out through lectures or films or by introducing personally by some one.

MANAGEMENT BY OBJECTIVES

MBO system was developed by George Odiorne of U.S.A. MBO is a management system in which each member of the organization effectively participates and involves himself this system gives full scope to the individual strength and responsibility. Under this system all managerial personals are getting an opportunity to prove themselves their abilities. Those are worked together for the attainment of organizational objective.

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Features of M.B.O – Here management is making an attempt to integrate the activities of the organization for achieving organizational objectives. Following are the process of M.B.O.

1. Defining organizational objectives – Organizational objectives are framed by the top level management. After framing they are communicating this to middle and lower levels of management. The purpose of defining organizational objective is to state why the business is started and exists. First managements are framing long term objectives and short-term like that.

2. Goals of each section – Objectives of each and every department or division are formed on the basis of overall objectives of organization. Time period for achieving this objectives are also clearly mentioned here.

3. Fixing key Result areas – This is an important element of M.B.O. KRA’s are fixed on the basis of organizational objectives. K.R.A.’s arranged on priority basis. The concept is all areas of an organization are not equally important. So find out the important areas and concentrate more managerial attention on that.

4. Setting subordinates objectives or targets – The objectives of each subordinate are fixed. It is better to fix the targets of the subordinates in quantitative units. Before fixing the objectives discuss this with subordinates. Just ask them to fix a there own targets. If the subordinates are allowed to do so they may set high standards and the chances of achieving this are also more.

5. Matching resources with objectives – Frame the objectives on the basis of availability of resources. If certain resources like technical personals, scarce raw materials are not readily available; the objective of an organization is changed accordingly. So there is a need for matching resources with objectives.

6. Periodical review meetings – The superior and subordinates should hold meetings periodically in which they discuss the progress of the objectives. They are comparing the actual and standards set and finding the differences. If there are short fails corrective actions are taken.

7. Appraisal of activities – After the expiry of the time period, there should be a discussion between superiors and subordinates. The discussion is related with subordinate’s performance and they are getting appraisal on the basis of activities done.

8. Re appraisal of objectives – Modern world is fast changing. So instead of following a particular objective make changes in objectives accordingly.

Planning

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Planning is an important part of life. All are developing different types of plans. A person whether he is engaged in business or not has framed a number of plans during his life. The plan period may be short or long.

Planning is the first and foremost function of management. According to management experts planning is the primary function and all other managerial functions are secondary.

According to Koontz and O’ Donnel “Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.”

Steps in Planning ProcessThe planning process is different from one person to another and one organization

to another commonly acceptable planning process is given below.

1. Analysis of external Environment – External environment of an organization includes socio economic conditions and political conditions prevailing in a country. Socio economic condition refers to classification of society on the basis of income, age, class, living conditions, aspirations, expectations and the like. These are uncontrollable ones, But organizations has to prepare plans according to the changing trends in the external environment.

2. Analysis of Internal Environment – This is also known as resource audit. This is an analysis of the strength and weakness of an organization. Due consideration is made on the availability of resources profitability, plant capacity, man power availability etc.

3. Determination of objectives – Determine the objectives of the organization in advance while determining the objectives prepare departmental wise objectives. This is essential because this helps each department to know their objectives and what managements are expecting from them.

4. Determining the planning premises and constraints – Planning are forward looking therefore planning is based on forecasting. Forecasting means the assumption of and the anticipation of certain events. It is the calculation of how certain factors will behave in future this is what is known as planning premises.

Generally forecasting is made in the following ways.

1. What will be the market? That is demand supply, capacity etc.2. The expectation of volume of sales.3. What is the price of the product?4. What would be the tax policy and economic policy of the government?5. The expectation of technological changes.6. How is the finance raised for expansion and modernization?

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5. Examination of alternative courses of action – We can perform one activity in different ways but a particular ways is most suitable to the organization.

6. Weighing alternative courses of action – All the alternatives are not suitable to the organization. Each one has its own strong and weak points. So there is a need for weighing all the alternatives to determine the best one.

7. Selection of the best alternative course of action – This activity is based on the weighing of various alternatives while selecting the best alternative course of action do not show any type of partiality.

8. Formulation of action programs – After allotting the course of action to different department’s action program is fixed. The action program includes fixing time limit for performance, allocation of work to individuals. This is necessary to achieve the objectives with in the specified period.

9. Determining secondary plans – Once a basic plan is developed there is need of developing secondary plans. Once a basic plan of sales is decided upon, a number of secondary plans could be prepared. Hence the secondary plan includes production schedule, purchase of plant and machinery, purchase of raw materials, selection, training and development of personnel and the like.

10. Securing participation of employees – The successful execution of any plan depends up on the extent of participation of employees. So before executing any plans try to consult it with employees.

11. Follow-up and evolution – There should be a system of follow-up. The manager should watch how the planning is being done. If any short comings it can be identified through a follow-up action and rectified then and there. Evaluate the plans continuously. It means compare actual and plans and take corrective action if there are any deviations.

Methods of Planning(Type of planning components of planning or elements of planning)

According to the usage and nature of planning the method of planning are divided in to the following categories.

1. Objective plans – Objectives are treated as basic plans. These basic plans are necessary for all types of planning operation. The entire planning activity is developed through objective plans objectives not only dominate planning activity but also play an important role in the managerial work of organizing directing and controlling.

2. Standing plans – Standing plans includes policies and procedure which are repetitive in nature. Any action may be divided in to two categories. This is repetitive and non repetitive.

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Standing plans provide guide lines for solving recurring problems. We are not using standing plans for solving special problems. For that we are using special policies for solving special problems.

3. Master plans – Master plans includes all other plans. It is a combination of different small plans applicable to different departments.

Planning Premises

Planning is prepared for the future. But the future is uncertain. So management executives are making certain assumptions about the future while preparing plans. These assumptions are not based on guess work. The assumptions are based through scientific forecasting of future events. This is known as planning premises.

Classification of planning premises

1. External Premises – External premises are lying outside the organization. For eg- economic technological, political, social and market conditions. Economic premises refers to purchasing power of customers, technological premises refers to application of latest technology, political environment refers to the policy of the government and social premises relate culture and market conditions like demand and supply.

2. Internal Premises – Internal premises are existing within the organization. Human resources material resources, machine resources, financial resources are some examples. The most important internal premises are managerial competence and skill of labor force.

3. Tangible Premises – Quantifies factors can be termed as tangible premises. Money time and units of production are some of the kinds of tangible premises. Money can be quantifies as rupees, time can be quantified as second minutes and units of production can be quantified as kilogram, liter etc.

4. Intangible Premises – Qualitative factors can be termed as intangible premises goodwill of the company, loyalty of the workers, public relations, employee moral are some kinds of intangible premises. Both tangible and intangible premises must be taken in to consideration in planning.

5. Controllable Premises – Premises which are entirely within the control of management are known as controllable premises policies, programs, procedures, rules and regulations are some examples.

6. Uncontrollable Premises – Premises which can not be controlled by management are known as uncontrollable premises. These are also taken in to

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consideration while developing plans. For eg- wars, natural calamities, human behavior etc.

7. Semi-controllable Premises – Some premises can be controlled and predicted to some extent. In other words managements have partial control over some premises. Trade union and management relations, employer employee relations superior subordinate relations, inter department relations are examples.

8. Fixed or constant premises – Some premises cannot be changed by management by taking action. They are clear definite and well understood. No used of considering this fixed plans for planning. Money, men, machine are examples.

9. Variable Premises – Some variables may be changed because of management actions. These premises play an important role in planning. Hence management should consider these premises for planning. Sales volume, production expenses are examples.

10. Foreseeable Premises – All fixed or constant premises can be treated as foreseeable premises.

11. Unforeseeable Premises – Some premises can not be controllable. These are unpredictable also. Wars. Natural calamities, consumer preferences and tastes etc.

Decision Making

Decision Making is the selection based on some criteria from two or more possible alternatives.

Decision Making Process

1. Identification of the problem.2. Diagnosing the problem.3. Collect and analyze the relevant information.4. Discovery of alternative course of action.5. Analysis the alternatives.6. Screening of alternatives.7. Selection of best alternative8. Conversions of decision in to action.9. Implementation.10. Verifying the decision.