3.1. INDUSTRIAL OWNERSHIP:
To start a business enterprise the most important thing required is the capital if the capital is provided by single individual, it is known as individual ownership, if it is supplied by two or more persons, if refers to partnership organisaiton. If it is provided by many persons in the form of show to an institute with a legal entity, it is called a joint stick company.
Types of ownership
3.1.1. Single ownership (Sole proprietorship)
Business owned by one man is called single ownership. It is called single ownership when an individual exercises and enjoys these rights in his owner interest.
eg: Printing pears, auto repair shop, wood working plant etc.
Advantages:
Simple in nature and easy to manage. Beginning a business reeds no legal formalities. Owner is free to take quick decision and speedy action.
It is easy to maintain secrets of business. Better employee employee relationship is possible. The ..........takes all the projects-no need to share. More the owner works, more benefit he reaps. It is easy to liquidate this company.
Disadvantages:
Due to limited capital, it is not possible to expand the business, even if it is profitable. Life of single ownership is limited. Employees get no extra benefit from higher benefits small time business men cannot compute with big time business men.
3.1.2.Partnership
When the capital required to finance the business become too big or when the size of the enterprises grows, a single person may wish to associate himself with more persons either for male capital or for some skills and knowledge to run the business. A partnership business is owned by two or more person (up to 20) who share the powers, responsibilities and profit according to an agreement reached among themselves.
Partnership can be formed there verbally or written agreement, but to avoid any problems at a later stage, it is better to have a written agreement. The written agreement in called partnership deed, end has to be registered under the Indian partnership Act, 1932. Thus a partnership deed enjoys legal status and helps is setting day disputes in future between the partners.
General duties of partners
(i) be faithful to each other
(ii) Give true accounts and full information
(iii) Co-operate and accommodate each other
Types of partners:
(i) Active or managing partners:
They take part in the management of activities and formulation of policies. Some tines they get salaries in additon to the normal profits as partakers.
(ii) Sleeping or silent partners:
They do not take active part in the business. They simply get their share of profit from the firm according to their investment. But they are liable fare all the company debts.
(iii) Nominal Partners:
They lend their name to enhance company’s repetition. They do not invest money and do not take any active part in the management but enjoy a small predefined share of the profit. They are not liable for company debts.
Advantages:
Formation is easy. Registration is not compulsory. Adequate capital is available for investment and expansion programs.
Work is divided and responsibility is reduced among partners.
There is less possibility of errors in decisions. Persons having different abilities and skills may come together as partners giving specialization.
Partnership business can be dissolved easily.
Disadvantages:
Each partner has unlimited liability.
It is difficult to maintain the secrets of the company.
Possibility of misunderstanding between partners is high.
A partners cannot being in another person in his place, i.e. he cannot transfer his position and assets to anybody without the consent of all other partners.
Applications:-
For small and medium size business, eg, small scale industries, warehousing, transport services, more production trading in stock market etc.
3.1.3. Joint stock company:
With the advent of factory system and consequent mass production, the individual ownership and partnership firms with their limited capital, short life span and limited managerial skill could not meet the demand of the industry. This resulted in the evolution of joint stock company in England in 1855.
The person who purchase the shares are called share holders and the highest managing body known as Board of directors is elected by the shareholders.
The companies so forced have to be registered under the Indian Companies Act, 1956.
Types of joint stock companies.
(i) Private Limited Company
(ii) Public Limited Company
(i) Private Limited Company : A private limited company is a bigger and improved version of partnership. But here the member of share holders may be upto 50 excluding the employees. The registration of the company is also compulsory according to the Indian Companies Act, 1956.
The shows can be transferred only among the members and general public cannot involved in the purchase of shares. Normally the members of such a company are friends, relatives or employees of some organization. Secret of the business can be maintained to a certain extent in such a company.
A private limited company need not obtain a business commencement certificate from the Registrar of the joint stock companies. If also need not circulate the Balance sheet, profit and loss account etc, among its members. But it has to hold an annual general meeting and place the financial statements in such a meeting.
Application
Companies like Bharati Enterprises, Bata Shoe Company, House of Khodays etc.
(ii) Public Limited Company:- A private limited Company is formed where the capital is collected from general public by issuing Shares usually having a face value like Rs.10, 20, 50,100. The minimum number of persons required to form a public limited company is 7 but but there is no limit. Companies can advertise and attract the general public to buy its shares which are transferable and can be sold to anybody at any price without any price approval. The affairs of the company are managed by a group of members called. Board of directors who are elected by the shareholders. One of the directors usually is selected as the Managing directors who has enormous powers to been the company, but is answerable to the Board of Directors. The board of directors formulates the plans and policies of the company, takes for reaching decision and generally adviser the Managing director on the administrative aspects of the company. The managing director implements these plans and policies and is in charge of the major activities of the company like production, planning and sales. He is responsible for the smooth functioning of the company.
Advantages
Large amount of capital can be raised.
Shares are transferable.
Shareholders liability is limited to the shares they hold.
It create huge employment possibilities.
Risks of losses are spread out to many shareholders.
Share holders are protected by Government restriction on the company on the company.
Business can be run efficiently by employing professionals.
Disadvantages
A great deal of legal formalities are required to start the company.
Some decisions may be delayed because they have to be approved by the Board of directors who do not meet very often.
Labour related problems are difficult to solve.
It is difficult to maintain secrets of business.
The directors may select their own men for high posts and build up their power.
Application
Companies like infosys, TISCO, L & T, Hindustan lever, Reliance are all public limited companies.
Comparison between private and public limited companies
Particulars Private Ltd., Company Public limited Company
Membership Confined to close friends Open to general public
Limits to membership Minimum : 2
Maximum : 50 Minimum : 7
Maximum : No limit
Election of director No need of statutory meeting Statutory meeting
Transfer of shares Cannot be sold Can be resold
Minimum capital Can be started with any current Minimum working capital has to be showed before starting business
Number of directors Minimum : 2 Minimum : 3
3.1.4. Public Sector
If public sector organisation is one which is owned and managed by the state or central government. In some cases the public sector enterprises are also controlled and operated in association with private enterprises. But the ultimate control remains with the government.
Types of government owned or public sector organizations
(i) Government departments:
These are wholly owned and managed by the State or Central Governments and generally provide service to the nation in various areas. They come under their respective ministries.
eg: Indian railways, P & T, JSRO, BARC, et.
(ii) Government industries:
These are wholly managed and owned by the State or Central Governments but are in the manufacturing sector. They generally manufacture and supply products to the various government owned organisations like Indian Railways, Indian Navy, KEB, Indian Army etc.
(iii) Public Sector undertakings:
Public sector undertakings are those industries which are jointly owned by the Central Government and State Government. Normally the majority of the holdings rests with Central government, while the State will be a minor partner.
(iv) Public Corporation:
A public Corporation is exactly like a public sector undertaking in its structure but is normally in the service sector instead of in the manufacturing sector.
eg: Life insurance corporation, Indian finance corporation, Indian Airlines.
Advantages of Public Sector Organizations:
(i) Profit go to the government and the society at large is benefited.
(ii) Government can afford to wait for a long time before profit is realized unlike private sectors.
(iii) Consumer interests are better safeguarded.
(iv) Service to society is the motto, not a profit.
(v) Capital, fuel, raw material, power and transport all easily made available to them.
Disadvantages:
Public Sector can never reach the efficiency of the private sector.
Government officers and politicians interfere too much in the internal affairs of the company.
Promotion in government organisation is normally on Seniority, not on merit. Therefore government servant do not workhard.
Wastage of material and labour is very high.
In complete or corrupt officials may occupy top positions.
Comparison of Private Sector and Public Sector
Sl. No. Private Sector Public Sector
1 Motto is to earn more and more profit. Only the awares are benefited Motto is social services. Profit is given secondary importance society is benefited.
2 It is owned and managed by an individual or group of individuals. It is owned and managed by State or Central government.
3 If causes concentration of wealth in the hands of a few capitalists If leads to equitable distribution of wealth & income
4 Produce more of consumer goods Produces less of consumer goods
5 Workers can be exploited. Consumers can be taken for a ride Workers and Consumers are well protected
6 Private sector doesn’t undertake risky ventures or those having low profit margin. Government has capacity to wait and withstand failures. Hence can undertake risky ventures and start low profit margin industries, for public benefit.
7 Wastage is low Wastage is high
8 Competition may be high in private sector Government has no competition in certain sector, eg: insurance
9 Job security is low Job security is high
3.1.5. Co-operative societies:
Co-operative Society is a form of collective ownership where a number of people associate together for obtaining the necessities of everybody life at a rate less than the market rate.
The members of the Society Supply the capital, manage the business and share all profits and losses. Equality, mutual trust, mutual supervision, self reliance and laid works are the five pillars of a stable and successful co-operative organisation. If continues the features of large partnership as well as some features of joint stock company. This form of ownership was first developed in Germany due to two important reasons.
(i) The poor were exploited through long working hours poor wages, bad working condition etc; by the capitalists who owned large scale industries.
(ii) Too many middlemen between the producers and end users, increased the prices of the products and reduced the profit of the produces.
Types of Co-operative Societies:
(1) Producers Co-operative Society:- They manage their own business right from production upto retail sales their eliminating the middle area. They are their own bosses and they are theirown employees. They put in hand works and learn how to work in team spirit.
eg: Milk and dairy products Co-operative Society in villages.
(2) Consumers Co-operative Society:- In this form of co-operative consumers living in a particular area come together, open a stock, buy goods directly from the manufactures and sell it at wholesale late to its members.
eg: Malleswaram Co-operative Society, Bangalore
(3) Housing Co-operative Society:- In this form of Co-operative, employees of an organisation come together, buys large plots of land at a cheap rate, convert theme into sites, and help its members to build their own houses.
eg: B.E.L. Employees Housing Co-operative Society.
(4) Co-operative Banks:- In this form of co-operative members of the general public come together, contribute capital and start a bank. The bank accepts fixed deposits, extends loan facilities and encourages entrepreneurship among its members.
eg: Sir. M. Visvesvaraya Co-operative bank.
Advantages of Co-operative Societies
Daily needs of life are available at low rates.
It is a democratic form of ownership.
Middlemen are avoided and so both produces and consumers are benefited.
Holding of stocks and blade marketing are eliminated
Once head costs are reduced because of honorary services by the members.
3.1.6. Joint sector
Joint sector refers to the enterprise owned and managed by the private sector and government / public sector undertakings. According to Duff Committee, joint sector is defined in the following way ‘Joint Sector would in one view, include units in which both public and private sector, investments have taken place and where the slates takes an active part in direction and control.
The main objectives and advantages of joint sector are.
(i) To stop the concentration of economic power.
(ii) Social control of industry
(iii) Acceleration of economic development.
(iv) Promotion of mixed economy
(v) Widening the base of entrepreneurship.
3.3. WAGES AND INCENTIVES
Characteristics of good wage payment or incentive system:-
(i) This should guarantee an adequate minimum day wage.
(ii) It must have fee consent of the workers.
(iii) It must reward the worker according to his capacity and merit.
(iv) It must be simple in its working so that may be readily understood by
workers.
(v) It must not involve heavy clerical work and thereby increase the ultimate
cost.
(vi) It should aim at increasing production without affecting quality.
(vii) The system should be fair both to employers and employers.
(viii) Incentive, bonus etc should be payable along with the wages and not pit off for future.
(ix) It should reduce wastage of material and careless use of plants, tools and equipment.
Methods of wage payment:
(a) Time or Day rate system.
(b) Straight piece work rate system.
(c) Combination of time rate and piece rate system.
(d) Incentives.
(e) Profit sharing system.
3.2.1. Time or Day rate system:-
This is the most common system found in practice. Under this system worker is paid an hourly, daily, weekly or monthly rate of wages. Thus his remuneration depends upon the number of hours for which he is employed and not upon the amount of his production.
Advantages:-
(i) The wages are fixed from the very beginning, so there is no confusion about the amount of payment.
(ii) The quality of the work can be achieved very easily.
(iii) No rough handling of machinery.
(iv) There are no difficult calculations to made
(v) The interruptions to works due to breakdown of machinery or some other part of the plant will not wake workers to suffer from the loss of wages.
Disadvantages:-
(i) The employee bears the loss resulting from slow and sluggish workers as they are paid the same wages irrespective of their output.
(ii) Strict supervision is required.
(iii) The system tends to give higher production cost.
(iv) This is not suitable in case of lazy workers.
(v) In this system, efficient workers may also become inefficient by working with inefficient workers.
Suitability:
It is suitable for factory workers such as foreman, time keepers, cleaners, engineers, store keepers, watchmen etc.
3.2.2. Straight piece work rate System:
Under this, a fixed rate of wage is paid for each piece or unit produced. Hence this system is suitable only for the worker repeats a definite operation or produces the same type of products continuously.
Advantages:
(i) This system gives every worker an opportunity to earn more by putting more efforts and at the same time output also increases.
(ii) Simple in its working and they can easily calculate their wages.
(iii) Workers are paid on their merits.
(iv) As supervision will be less, workers for more independent.
(v) Output increases and higher profit can be earned.
Disadvantages:
(i) As workers put maximum effects, their health may reduce
(ii) It will cause an increase the waste of material, because the worker will always try to obtain the maximum output.
(iii) The quality of work may be reduced.
(iv) It may cause over production and may result in losses, if there is limited demand for the product in the market.
(v) Accident due to hasty work will be more.
(vi) Mis utilisation of machinery.
3.2.3. Combination of day rate and piece rate system:
Under this system minimum weekly wages are fixed for all workers, and the minimum weekly wages are paid to him irrespective of his output during the week, provided he has worked for the fell working hours required in a week. If a worker in absent for some length or time during a week, his wages will be deducted proportionately.
The piece works system is combined with the day rate system. A job card of each worker is maintained to show the number of pieces of job completed by the worker during a weeks. Piece work rate of each job is fixed in advance. If the piece work wages earned by a worker are in excess than the time wages, the balance is paid to the worker. If the worker is short of time rate, the worker shall have to make more number of products and cover the last weeks short fall.
Advantages:
It provides incentive to workers.
Overhead costs of production are lowered.
Disadvantages:
If needs check on quality.
The entire benefit of extra payment goes to the worker.
3.2.4. Profit Sharing System:
This system has been introduced by the employees in order to encourage their employees and by means of which the workers receive a share of the profit over and above their normal wages.
Advantages:
(i) Better cooperation may be easily expected.
(ii) Reduction of supervision, results in reduction of supervision cost.
(iii) Non productive labour cost will be reduced.
Disadvantages:
(i) Efficiency of individual is not taken into account, worker, for greater and better output, non financial incentives must also be enforced and worker will also enjoy richer and filler life.
Some of the nonfinancial incentives:
(i) Personal interest and pride in work to be created in workmen.
(ii) Opportunity for quick promotions.
(iii) Opportunity for technical training in other technical organisations as well as abroad.
(iv) Perfect confidence in the management.
(v) Provisions of children welfare, medical aid etc.
(vi) Provisions of canteens.
3.2.5. Methods of financial incentive payment:
(i) Piece rate system:
Under this system piece rate for completion of the job is fixed. If a worker, completes the job earlier, he can save his time, he can make more jobs and whatever the extra money he gets for the extra work, wholly goes to him. The employee will also be benefited by the savings in overheads for the extra output.
(ii) Cent per cent premium:
In this the standard time for completion of the job is fixed and its rate of completion during this period is also fixed. Now the worker completes the job in time is not given any incentive, but those who completes the job earlier, get full payment for the time saved.
(iii) Halsey Premium Plan:
In this system, an hourly rate or daily rate is guaranteed to the workers. A standard time is also fixed for the performance of each job. If a worker saved the standard time, then he will be paid hourly rate or daily rate plus 33.33% of time saved as incentive.
In this plan, incentive goes on increasing as the output increases. Here a part of the saving goes to the worker and remaining part of the saving to the employee.
(iv) Will premium Plan:
This is similar to Halsey premium plan, but in this worker gets upto 50% of his extra output along with standard day rate.
(v) Bedaux Premium Plan:
This is also like Halsey and Will premium plans. But in this workers are given at the rate of 75% of their extra output along with standard day rate.
(vi) Rowan Premium Plan:
In this, worker is again guaranteed his daily or hourly rate, A standard time is also fixed for job. /a premium is given to workers those who saved the standard time.
In this system, the increases upto certain output but decreases in the same ratio afterwards. The worker gets maximum incentive, when he completes the tasks in half the standard time.
(vii) Emerson efficiency plan:
In this systems, premium is given to those workers who attain more than of the standard output. The standard output for the day is so decided that the average worker an complete at least of the standard output. A basic day rate is fixed irrespective of their capabilities and every worker gets atleast his standard output.
If a worker performs upto 60% of the standard output, he gets no incentive.
If a worker performs upto 80% of the standard output, he gets 10% of the day wages as incentive.
Upto 100% – 20% of the day wages as incentive.
Upto 120% – 40% of the day wages as incentive
(viii) Gantt’s task and bonus system:
In this system, a careful study of the job is made and from that study best conditions for the performance of the job are determined. On the basis of these performances standard output to a given time is set. Now if a worker completes the job in a given standard time, he receives bonus equals to 25% of the time taken. When a worker fails to produce the required output he only gets his time rate without any bonus.
(ix) Merric’s multiple piece rate system:
Merric divided the workers into three categories, namely, beginners, averages and first class workers. The higher rates are paid to those who reach the standard, second rates for those who reach 80% of the standard, and a third rate is below the 80% output.
Advantages of Incentive System:
(i) Workers are encouraged to increase production to earn more.
(ii) Workers day wages are guaranteed to all workers.
(iii) Promotes good relations between employers and employers.
(iv) Cost of supervision are reduced, as workers themselves are motivated to work hard and improve performance.
(v) A spirit of mutual co-operation and team work is created among the workers.
(vi) Help to improve discipline and good relations.
(vii) Employers are encouraged to become innovative.
3.2.6. Fringe benefits:
In addition to pay, certain benefits are also provided to all the employers of organisation. Fringe benefits do not motivate the workers, as these are offered to all the employees. These help in maintaining cordial atmosphere in the organisation.
They are classified into two categories.
(i) Legally required benefits:
a) Social security: Insurance, PF, gratuity
b) Workers compensation on accident, retrenchment etc.
c) Holidays and rest periods as per factory act.
(ii) Voluntary benefits provided by the employee
a) Additional rest periods and holidays with pay.
b) Leave including sick leaves
c) Pension plans.
d) Health insurance, medical benefits
e) Housing
f) Cultural activities. (g) Educational facilities
h) Recreational activities
(iii) The distribution will normally take place only once a year, the worker may lose interest in it.
(iv) If the efficient workers are not selected as group leaders, the efficiency of the whole group suffers.
3.2.7. Incentives:
Incentives are referred to as performance linked compensation paid to improve motivation and productivity of the employer.
Incentive is a kind of monetary reward which is closely related to the performance of a worker, resetting increasing in wages corresponding to an increase in output.
Types of incentives:
Incentives are of two types.
(i) Financial incentives.
(ii) Nonfinancial incentives.
Financial Incentives:
These are extra payment given to workers in addition to their normal wages. For examples, it an employer friends that he will be earning an extra profit of Rs. 25, if a particular work is finished in 5 hours less than the prescribed time. Now if the workman is promised an extra payment of Rs. 10. This extra payment is called incentive.
Non-Financial Incentives:
The financial incentives must be supported by the nonfinancial incentives, since only cash wages cannot help in solving the problems of industrial productivity. Inorder to create interest in a
3.2.8. Bonus system:
Bonus system is used in continuous process and assembly lines, a number of workers are required to complete the job and is not practicable to assess the effort of individual worker. So the bones system is necessary to retain the incentive payment idea.
This bonus is given to workers on the basis of profits, production or productivity.
The method of payments are of two types.
(1) Collective bonus system:
In some big industries, a collective bonus of two of more months extra salary is given to all workers, if the profits of that business year is good.
If there are good profits, the bonus will be declared after six months or at the end of the year. That amount will be payable to workers at the time of declaration.
(2) Group bonus system:
Here, each department or section is offered a separate fixed bonus. The bonus is divided between the foremen and workers. The bonus is given to foremen also, because he is responsible for increasing the output and reducing the wastage.
Bonus act, September, 1965.
It states that, every factory employing 20 or more workers must give a minimum bonus of 8.33% of the annual wages in inclusive of dearness allowance or Rs. 80 to all workers, irrespective of if has made some profit or not.
It is applicable to all factories.
Once a factory is covered by this act, it will continue do so, even if there is reduction in the workers below 20.
Workers in newly established organisations will not be eligible for for bonus for the first five years.
Minimum bonus is 8.33% of wages inclusive of dearness allowance or Rs. 80 and a maximum is 20%.
After deducting all charges, 60% of the net profit is credited to bonus fund.
If any year net profit exceeds the maximum bonus excess amount will be carried forward to the next years bonus fund. Similarly when in any year, there are no profit, the defect will be set off in the following year.
Advantages :
It ensures stability of workman. At any time the an year, worker learning the job, shall have to mass some of the bonus.
Disadvantages:
No distinction between efficient and ordinary worker because same amount is given to all workers.
No immediate incentive to workers.
Sometimes a good worker may receive only a small amount of bonus in comparison to his efforts.
3.2.9.Total Quality Management:
According to this concept quality is not the job of quality control department only but other department like sales, procurement, material handling, accounting industrial relations, design, production, for casting, marketing, stores, after sales service have also to contribute substantially. That means quality is the responsibility of all the employees, output of every department and every employee.
Cleanliness, orderliness, pentalilties, customer service, standardization of works and continuous effects for their improvement are part of TQM.
Features
Voluntary participation of work people. Needs of customers are constantly monitored to improve the products and process to meet their requirements.
Advantages of TQM:
Greater customer satisfaction fever defaults, less waste, reduced costs, improved profitability, increased productivity customer satisfaction is the most important of TQM. Customer may be external or interval TQM process involves.
TQM process involves
Effective decision making
Problem solving
Integration of quality planning. It provides all an opportunity to all employees, to directly participate in their work and take decision concerning their works.
TQM is an approach of managing for total quality, effectiveness and competitiveness and involving each and every activity and person at all levels in the orgnisation.
Requirements of TQM are
(i) Sound foundation
Philosophy, policy, culture, leadership and commitment.
(ii) Sound infrastructure:
Organisation, systems, procedure, manuals, customer involvement, training, education total employees involvement.
(iii) Use of specific tools and techniques.
Aims of TQM: Conformance to customer requirements prevention of producing bad quality, measurement of cost of quality. Produce goods and services of good quality consistently.
To predict what the customer will want one year or 5 year from now.
Ways for TQM
(i) Adopt the policy not a allow defects to occur.
(ii) Improving production and quality should be a continuous process.
More quality improves, faster will be inversed in sales, because of inverted customer satisfactory Quality repetition arts as a major element in advertising and reduce the money required on advertisement.
Sales
Quality Improvement
In fig (1), achieving quality is expensive. Defects are reduced over time only by increasing cost through extensive inspection, checking and progress chasing. Most effect concentrated on correcting failure.
In fig (2) after certain time, the cost and defects both will be minimal. Using statistical quality control methods to control the quality of products. All employees should be trained, retrained. Average refresher course. Provide proper tools to all employees. Proper communication system. Encourage productivity. Encourage effective co-ordination between departments.
Adopt customer orientation, not production. To achieve increase in profit P though increased sales a significant increase in operating costs A. While the some profit P can be increased through quality improvement by increasing operating cost B, which diminishes through time.
3.2.10.Management by objectives:
This concept was first proposed by Peter Drucker in 1954 and was improved by several others. They all felt that include to obtain the best results, the management must provide objectives from the top level management to bottom level management. The performance of all the employees are measured against their achievement off these goals, so it as who called management by results or it is a result oriented approach.
The process of MBO consists of the following steps
(1) Establish the objectives of the whole organisatin
(2) Select an appropriate orgnisational structure.
(3) Set goals fare each department
(4) Set goals to subordinates and juniors.
(5) The performance of each employee is measured against the end results.
(6) The performance of each individual is appraised by his immediate
(7) Corrective measures are taken in case of deviation at any level.
Advantages of MBO:
(i) It is based on end results
(ii) Better relationship
(iii) Co-ordination
(iv) It gives meaning and direction to people in an organisation
(v) It helps in identifying the weak links in the organisation.
(vi) Reduces wastage: It prevents wasted efforts and unnecessary expenditures. Disadvantages.
(i) Measuring the performance of individuals only with respect to the end results makes MBO too rigid and without human values.
(ii) Employees always feel insecure because they are evaluated always against the end results.
Wednesday, May 25, 2011
ORGANIZATIONAL BEHAVIOR
2.1. ORGANIZATIONAL BEHAVIOR
2.1.1.Stress
Stress is the general term applied to the pressures people feel in life.
2.1.2.Stress and performance:
For every individual there is an optimum level of stress under which he or she will perform to full capacity. If the stress experience is below this optimum level. and then the individual gets bored, the motivational level to work reaches a low point. This will results in careless mistakes this initiates absenteeism and may increase inn higher employee turn over. If the stress is too intense, again the performance will revenue.
2.1.3. Symptoms of stress
Digestive problems emotional instability, problems with steep chronic wares inability to relaxes, high blood pressure.
2.1.4. Sources of stress:
(i) Stresses related to job
If the job is monotones, dull and bulling, individual is likely to experience stress
Role ambiguity:
If the work activities are not precisely defined, there is lot of uncertainties regarding job, usually in case of managerial jobs. This produces psychological strain and dissatisfaction and leads to under utilization of resources.
Role Conflict:
Role conflict occurs when two or more persons have different and sometimes opposing expectations of a given individual.
Role overload:
When work requirements are so excessive, ie, too much work to complete, it is difficult to accomplish because of lack of skills and ability.
Role under load:
Role under load occurs when a person’s ability is underutilized so that either there is too little work or there is too little variety in the works. Leads to excessive absenteeism and lack of interest of employees in organizational activities.
Work (environmental) factors:
Noise, heat, light, termite resources, No carrier patters.
Juter personal and group factors
Conflicts, poor communication and unpleasant relationship.
Personal factors –
Family problems.
2.1.5. Stress management strategies:-
Following strategies are mainly used to reduce stress level.
(1) Individual Strategies.
(2i) Organizational Strategies
(1) Individual Strategies.
(i) Redefining and adjusting life goals:-
High expectations and failure causes stresses. So people must readjust their goals and make sure they have the ability and proper recourses to each such goals.
(ii) Social Support:
Social is the network of activities, interaction and relationships that provides on employee with the satisfaction of important needs. There are four types of support in a total work environment instrumental, informational, evaluation and emotional.
(iii) Planning one’s life
Proper planning of utilization of one resources and anticipating the events will reduce the stress to he greater extent.
(iv) Physic logical fitness:
Individuals who exercise and strengthen their endurance and cardio-vascular system are much less likely to suffer fever certain types of stress related illness.
(vi) Yoga:
Yoga stimulated nervous system. With proper body postures and controlled bridling the nerves muscular co-ordination is strengthened affecting glandular activity which is responsible for physical as well as mental health.
(vii) Meditation
Meditation involves concentration of mind from stress produced areas, Meditations highly regarded that a few organizations have established meditation rooms for their employee use.
(viii) Bio feedback
Bio feedback is a methodology designed to ate undesirable physiological responses through psychological sterilities. In this people under medical guidance learn from instrument feed back to influence symptoms of stress such as increased heart rate and severe headaches.
(2) Organizational strategies:
It is equally important for the organizatins to develop programs that will help employees reed their stress. This well help in controlling employee turnover, absenteeism and as a result productivity will improve. Some of the steps the organizations can take are.
(i) Health maintenance
Selection and placement process should be based on matching of skills, personality and work requirements.
(ii) Job enrichment: Redesigning jobs in such a manner as the use the maximum political of the employee with emphasis on employee involvement. This well help to reduce the stress caused due to monotony, routine work etc. Effective and equitable performance approval and rewashed system.
(iii) Involvement of employees in decision making.
(iv) Building team work.
2.2. MOTIVATION:
Motivation is an important factor which encourages persons to give their best performance and help in reaching enterprise goals. The mean task of management is the direct the working force in such a way so that by their collective efforts objectives of the enterprise are achieved.
Motivation is a psychological act which attracts the worker to do more work and instigates. If the workers are instigated, they will try to do more work than the standard work and earn more for themselves which increases their living standard.
Kinds of Motivation
There are two kinds of aerostation
• Positive motivation
• Negative motivation
• Positive Motivation
It means workers may be motivated to work with some facilities or by giving some prize so that he way do more work than was done previously and with less supervision.
The prize or facilities may be financial or non financial.
Financial Motivation:Giving more wages for more work.
Non financial:Appraisal of the workers work, promotion, appreciation etc.
Negative motivation:Based on punishment or fines. That means workers must be perished for wrong work or for not doing work.
Negative motivation of two kinds (These type of punishment is of two types): Financial or non financial
Financial Punishment: A cut is made in the wages of the labour
Non financial : do work for more time, reduction in the facilities of leave, etc.
Factors affecting motivation
(i) Satisfaction through achievement
(ii) advancement
(iii) Growth
(iv) Responsibility and authority
(v) Recognition
(vi) Job security
(vii) Company administration
(viii) Salary including fringe benefits
(ix) Status
(x) Interpersonal relations
(xi) Working conditions
(xii) Personal life
Motivational techniques
Every employer tries that the person working in his organisation should be highly motivated to his organisation goals. Management generally use financial and non financial motivation technique to motivate their employees.
(1) Financial motivations
There is connected directly or indirectly with money. This may be in the form of more wages and salaries, profit sharing, leave wita pay, medical reimbursements company paid insurance etc.
(2) Non financial motivations:
There are not connected with monetary rewards
Some of the most commonly used non financial motivations are.
(1) Appraisal, praise and prestige
(2) Stators
(3) Competition
(4) Delegation of authority of authority
(5) Participation Physical & mental involvement of people in decision making process.
(6) Job Security: Providing security against sickness, unemployment, old age and death.
(7) Job enlargement:- Increasing the complexity of the job
(8) Job rotation: Shifting of an employee from one job to author
(9) Job loading: making the job more interesting
(10) Job enrichment: Changing or improving a job
(11) Reinforcement
(12) Quality of work life
The quality of work life means the degree to which members of a work organisation are able to satisfy important personal needs through their experiences in the organization.
(i) Adequate & fair compensation
(ii) Safety and healthy working conditions
(iii) Security and growth opportunities
(iv) Opportunity to use and develop creating
(v) Work & family life, including fraudsters, schedule of hours of work, travel requirements, overtime requirements etc.
2.2.1. Theories of motivation
(1) Traditional or X-theory
This theory is based on traditional view in which management or authority do not trust the workers. Management considers that work, could be extractor from labour through fear, strict disciplines and rebukes, there cooperation should not be taken in management. Authority or power in thought to be superior.
Assumptions of X-theory
Most people just do not like to do work. They are lazy and try to avoid work if they can. To get work from an employee, he should have fear.
The workers are less ambitions, avoid responsibility and do not try to improve their works through interest, but always wait for instructions.
Workers want Security
Workers act on the basis of financial geed if they are paid rose wages, they will take move interest in work.
Management doesn’t give importance to labour, they think them to be an instrument of machines.
This theory has authority for superior. Theory X implies one way communication decision at top level only, minimum delegation and centralized control. This theory presents a pessimistic view.
(2) Modern theory or Y theory
Opposite to X-theory
Labour is a part of management
Theory believes that workers have self control and self direction
Assumptions of Y theory
(i) Every work is not disinfesting
(ii) They seeks responsibility if conditons are favourable.
(iii) For executive of work, it is necessary that it should be recognised. Recognition of work is a great prize.
(iv) This based on democratic principles, where everybody has equal chances.
(v) Labour can also co-operate to solve the problems of enterprise.
(vi) Management treats all personal on equal footing for advices.
(3) Theory Z (Hybrid model)
William Qucki after making a comparative study of American and Japanese management practices, suggested the adoption of & theory which represent on integration of American and Japanese practices.
Features of Japanese organisations American organisations
Life twice employment Short from employment
Slow advancement Rapid advancement
Collective decision making Personal
Group responsibilities Jadinedual
General career Specialization in carrier
Theory & represents the adoption of hybrid type of system which in corporate the straights of Japanese management.
Features if &-theory
Strong bond between company and employees
Employees participation
Mutual frust
Integrated organisation
Hearn resiyrce development
Herzburg’s motivation Hygiene theory
Frederict Herzberg developed a theory of works motivation by indicating the way to better performance through increased job satisfaction. He conducted his study on a group of 200 enginers and accountants from 11 industries from Pittsburg (U.S.A) He brews a distinction between what he called nominator and hygiene factors.
Motivations:
Factors connected with satisfactory or motivation were called as motivations, by Herzberg. They have positive power to satisfy and produce high performance. The factors are
(i) Achievement (2) Recognition
(3) Challenging work (4) Increased responsibility
(5) Advancement
Hygiene factors
Factors related to dissatisfaction were called as hygiene factors. These factors can prevent dissatisfaction. They are reacted to work environment.
These factors are
(i) Company policies and administration
(ii) Supervision
(iii) Interpersonal relation
(iv) Salary
(v) Working conditions
(vi) Slates and security
(5) Marlow’s hierarchy of needs:
Many of the psychologists believe that all motivation ultimately derives from a tension that results when one or more of the important needs are unsatisfied.
According to Maslow, human motivation is a hierarchy of five needs.
The five basic categories are psychological, safety, social, esteem needs, self actualization needs.
These needs form a hierarchy or laddle and each need becomes active or aroused when the next lower need is reasonably satisfied.
(1) Physiological needs
This is the first level in the Marlow’s hierarchy of needs. These are the basic needs anyone has eg, food, drink, shelter and rest. These are the most basic needs and the people will be motivated to fulfils them first.
(2) Safety needs
When the physiological needs are satisfied then the needs become activated. The safety needs are mainly job security, protection against danger and the need for security.
(3) Social needs include the need to be liked by others, to be wanted member, developing meaningful relationship on he job and becoming a prominent member of the informal organisation.
(4) Esteem needs
If includes, need for self respect a sense of achievement and recognition from others.
Desire for Status and prestige is an important aspect of need fore self esteem. These types of needs are rarely satisfied.
(5) Self satisfaction
This is the ultimate need which dominates a persons behavior when all lower needs are satisfied.
2.2.2. Group dynamics
The term group dynamics refers to the forces operating in groups. The study of this subject is necessary to investigate these forces and conditions modifying them. In order to fulfill their social needs, people form small group on the job itself.
Group dynamics is a social process by which people interact face to face in small groups. Group dynamics focuses a team work, where in the small member group are constantly in touch with each other and effectively contribute their ideas to accomplish a tasks. The group develops its goal clearly. Every member participates in discussions. The group creates leaders who can coordinate group efforts effectively towards the achievement of their objectives.
Group
A group is any number of people who
(i) have a common propose or objective
(ii) Interact with each other to accomplish their objective.
(iii) Are aware of one another
(iv) Perceive themselves to be part of the group.
2.2.3. Group Norms
Group norms are rules or guidelines of accepted behaviour which are established by a group and used the monitor the behaviour of its members or norm is an agreement among group membership as to how the members in a group should behave. The move an individual compiles with norms, the move one is accepting the group standards of behaviour.
Norms can be social, moral or institutional in nature. Examples of social norms include, expectations about dress, courtesies. Normal norms relate to personal obligations, righter and princilatges, and they play an important art in societal institutions such as religious, family and marriage.
Norms are firmed in matters of consequences of the group. Generally any matter of group. Generally any matter of group maintenance and group functioning relating to the achievement of the goals, is a matter of consequence to the group as a whole. The main purpose of the norms is the maintenances of the group solidarity or its self perpetuation, to that end norms are evolved governing the behaviour and relationships of members to our another. Secondly, norms are directly related to behavour, conductive to the realisation of the group goals. Thridly, norms govern the relationship of group members to considers. Finally, norms of a group apply to all members of the group.
The norms set by the group are accepted by its members. That beings about coherences in the group. The more attractive a group is the its members, the more likely they are to members of an informal norms group, by conforming to group norms, may enhance group cohesiveness, increase satisfaction and support which members relive from it.
There specific social processes being about compliance with group norms, namely group pressure, group review and enforcement.
(i) Group pressure
Individuals who nature there group membership highly and who satisfy some combination of personal needs by being a part of a group allow group pressures to influence their behaviour and performances.
(ii) Group review and enforcement
The group position on matters like production, absolutism and quality of output is communicated to individuals and they are not being followed, different approaches may be employed such as discussion between respected leaders and the deviators. If this doesn’t prove effective, more rigid corrective action as scolding, strolling the non-acceptors ridicule silent treatment, avoidance, use of rewards or incentives physical punishment like bringing and with death as the original gangs.
(iii) Personal values and norms:
The behaviour patterns of the individuals are influenced significantly by there value system. The values of the people are influenced by the events occurring around
2.2.4. Group Cohesiveness
This refers to the attractiveness which a group holds for its members, ie, each group involves participation by members through loyalty and solidarity. This concept involves the stick together characteristics of groups and their impact on group members. Cohesiveness has been defined as the resultant power of a group to think and act as a single unit in pursuit of a common objective. If is in effect the subtotal of force activity on group members. The level of cohesiveness appears to may significantly among informal groups . Some groups maybe tightly bound together by mutual support.
Groups that are highly cohesive are capable of influencing individual behaviour.
Several factors determine group cohesiveness. If may be higher when a majority of the following conditions are present.
(i) The members have a broad agreement concerning the goals and objective the uniformed group will serve. Where groups have attained pre-established goals, they are likely to be highly cohesive units.
(ii) The size of the group is sufficient for illiterates but is for large to signs personal attention. Normally the optimum size of an informal organization is form four to seven members.
(iii) There is a satisfactory level of homogeneity in social status and social background among the members.
(iv) Individual characteristics
Co-operative ness, maturity and being an accepting person-tend to develop cohesiveness and friendliness, while striving for prominence or being a suspicious, non accepting person may inhibit unity.
(v) There is a significant amount of commercials and interaction among participating members.
(vi) There should be a capable and effective leadership which effects in its role in building and maintaining group cohesion. There a cohesive group is one in which members act toward an agreed goal in which everyone assurance a position of responsibility with respect to its achievement.
2.3. MARKETING MANAGEMENT
2.3.1. Identification of product:
Identification of product is required to find out customers perfection for the products. This will enable management to make improvements that will must the requirements of customers. These will fulfill the present requirements of the market and will be more acceptable than those of competitions products.
It is also carried out to simplify product identification, by laminating those which have a limited demand or are unprofitable, to determine the method of packing that will belong best sales and to find the suitable price which may be accepted by the customers and results in handsome profits. It is important to find what characteristics the manufactures product have not reduce to know their relative advantages so that customers can be persuaded to purchase your products only.
The following questions are to be considered for product analysis.
(i) Whether the product fulfils the market requirements.
(ii) Whether the product competitive in character, performance and price.
(iii) Whether the product pursuits effect distribution.
(iv) Whether the product can be sold at handsome projects.
(v) Whether some design improvement are needed
(vi) How product can be designed to reduce cost of production in distribution, transportation and maintenance.
(vii) Whether reduction of a selling prices has effect in demand.
(viii) How repairs and replacements method can be improved.
(ix) What is the future trends of changes.
(x) What new changes and inventions are likely to occur.
(xi) What is competition offering.
2.3.2. Pricing:
The price of the product is the means whereby manufactures obtain a fair return for their labours and replace and increase their wealth and purchasing power in return for supplying the products. All business enterprise face the tasks of setting a price for their products or services. The task of is faced in the following situations.
(i) When a company makes a new per duct and it has to set price for the first time.
(ii) When circumstances such as inflation or shortages lead firm to consider initialing a price change.
(iii) When market competition initiates a price change.
(iv) When a company produces several products that have interrelated demands or costs.
Factors affecting price fixation:
(i) Fair trade laws
(ii) Nationally advertised prices and government
(iii) Desired customer clientele.
(iv) Company monopoly
(v) Manufactures suggested prices.
(vi) Type of merchandises
(vii) Nature of sales
(viii) Price living
(ix) Whether large volume with low profit or relatively small volume with high unit profit is desired.
(x) Suitable channels of distribution
(xii) Sales promotional strategy
2.3.2.1. Policy
Pricing policy can be expressed diagrammatically
1. Sales at more than average mark up
2. Average mark up sales
3. Sales at less than average mark up
4. Sales at less than cost
Figure : Pricing Policy
Assume that company has a sales of Rs.100,000 and gross margin of Rs. 45,000 it means that if has an average marks up of 45% on the total sales. This doesn’t mean that very product was marked up to 45% of sales, actually the product had more than this, and others less than this but the overall average markup reached 45% make up or gross margin represents the difference between what the shopkeeper has paid to the wholesales for getting the product and price at which he has sold the product to the customer.
2.3.2.2. Make up covers:
(1) Overturning expenses
(2) Markdowns
(3) Shortages
(4) Damaged merchandise
(5) Profits
2.3.3. Sales promotion:
Sales promotion includes those marketing activities, other than personal selling, advertising and publicity, that stimulate consumer purchasing and drake effectiveness, such as displays shows and exhibition, demonstrations, and various non-recurrent selling effects not in the ordinary confine.
The sales promotion methods are
(1) Consumer promotion:
Persuading consumers to buy, these include samples, money refund offers, prices off trading stamps, contests and competitions.
(2) Trade promotion:
Incentives to distributors, and others to hold stocks of company products. These include special discounts, buying allowance one or two fee units/bulk container, dealer competitions such as free holidays, push money etc.
(3) Sales force promotions:
Bonuses, contests, sales tallies etc for the salesmen
(4) Good public relations:
Develop goodwill and increase sales.
(5) Good customer relations:
Good customer relations are basically the result of their past transactions with the company.
(6) Display:
Displays at points of sale, using posters, bankers, placards & leaflets to attract the customers attention to the product.
(7) Product Exhibitions, demonstrations, and conferences
(8) Holding competitions and awarding prizes to winners
(9) Latest product styling and appealing product packaging
2.3.4. Channels of distribution
Producers generally do not sell their products directly to the final users. Between them and the final uses stand a number of marketing intermediaries performing a variety foundation and bearing a variety of names.
The marketing intermediaries are called channels of distributions, treads channel or marketing channels.
Distribution channels are characterized according to the number of channel levels. Commonly used channels of distribution are.
(a) Manufacture consumer
(b) Manufacturer Retailer consumer
(c) Manufacture whole sale Retailed consumer
(a) Represents a two level distribution channel
(b) Represents a three level distribution channel
(c) Represents a four level distribution channel
If can be observed from the above discussion that goods are sold either.
(1) Direct from product to consumer or
(2) From producer to consumer via a middleman.
The direct channel is very effective and profitable for goods which have a high profit margin, eg, office machinery such as photocopying mks, accounting mks, computers etc. Because more specialized or technical the product, the better is to sell if directly.
In direct selling the produce has maximum control over selling practices and policies
(2) Selling through a middleman is known as indirect distribution. This method does very well for product with a low profit margin.
Eg: Consumer goods tooth paste, face creams etc.
Middleman buys goods in bulks and these enables a producer to avoid risks connected with stocking of goods. The risk may be in the form of a fall in price or physical deterioration of the products.
Middleman keep the producer informed about the per talent market trends. Middleman such as wholesalers many tines pay immediately to the producers the price of goods and thus help producers whose financial resource are not big.
2.1.1.Stress
Stress is the general term applied to the pressures people feel in life.
2.1.2.Stress and performance:
For every individual there is an optimum level of stress under which he or she will perform to full capacity. If the stress experience is below this optimum level. and then the individual gets bored, the motivational level to work reaches a low point. This will results in careless mistakes this initiates absenteeism and may increase inn higher employee turn over. If the stress is too intense, again the performance will revenue.
2.1.3. Symptoms of stress
Digestive problems emotional instability, problems with steep chronic wares inability to relaxes, high blood pressure.
2.1.4. Sources of stress:
(i) Stresses related to job
If the job is monotones, dull and bulling, individual is likely to experience stress
Role ambiguity:
If the work activities are not precisely defined, there is lot of uncertainties regarding job, usually in case of managerial jobs. This produces psychological strain and dissatisfaction and leads to under utilization of resources.
Role Conflict:
Role conflict occurs when two or more persons have different and sometimes opposing expectations of a given individual.
Role overload:
When work requirements are so excessive, ie, too much work to complete, it is difficult to accomplish because of lack of skills and ability.
Role under load:
Role under load occurs when a person’s ability is underutilized so that either there is too little work or there is too little variety in the works. Leads to excessive absenteeism and lack of interest of employees in organizational activities.
Work (environmental) factors:
Noise, heat, light, termite resources, No carrier patters.
Juter personal and group factors
Conflicts, poor communication and unpleasant relationship.
Personal factors –
Family problems.
2.1.5. Stress management strategies:-
Following strategies are mainly used to reduce stress level.
(1) Individual Strategies.
(2i) Organizational Strategies
(1) Individual Strategies.
(i) Redefining and adjusting life goals:-
High expectations and failure causes stresses. So people must readjust their goals and make sure they have the ability and proper recourses to each such goals.
(ii) Social Support:
Social is the network of activities, interaction and relationships that provides on employee with the satisfaction of important needs. There are four types of support in a total work environment instrumental, informational, evaluation and emotional.
(iii) Planning one’s life
Proper planning of utilization of one resources and anticipating the events will reduce the stress to he greater extent.
(iv) Physic logical fitness:
Individuals who exercise and strengthen their endurance and cardio-vascular system are much less likely to suffer fever certain types of stress related illness.
(vi) Yoga:
Yoga stimulated nervous system. With proper body postures and controlled bridling the nerves muscular co-ordination is strengthened affecting glandular activity which is responsible for physical as well as mental health.
(vii) Meditation
Meditation involves concentration of mind from stress produced areas, Meditations highly regarded that a few organizations have established meditation rooms for their employee use.
(viii) Bio feedback
Bio feedback is a methodology designed to ate undesirable physiological responses through psychological sterilities. In this people under medical guidance learn from instrument feed back to influence symptoms of stress such as increased heart rate and severe headaches.
(2) Organizational strategies:
It is equally important for the organizatins to develop programs that will help employees reed their stress. This well help in controlling employee turnover, absenteeism and as a result productivity will improve. Some of the steps the organizations can take are.
(i) Health maintenance
Selection and placement process should be based on matching of skills, personality and work requirements.
(ii) Job enrichment: Redesigning jobs in such a manner as the use the maximum political of the employee with emphasis on employee involvement. This well help to reduce the stress caused due to monotony, routine work etc. Effective and equitable performance approval and rewashed system.
(iii) Involvement of employees in decision making.
(iv) Building team work.
2.2. MOTIVATION:
Motivation is an important factor which encourages persons to give their best performance and help in reaching enterprise goals. The mean task of management is the direct the working force in such a way so that by their collective efforts objectives of the enterprise are achieved.
Motivation is a psychological act which attracts the worker to do more work and instigates. If the workers are instigated, they will try to do more work than the standard work and earn more for themselves which increases their living standard.
Kinds of Motivation
There are two kinds of aerostation
• Positive motivation
• Negative motivation
• Positive Motivation
It means workers may be motivated to work with some facilities or by giving some prize so that he way do more work than was done previously and with less supervision.
The prize or facilities may be financial or non financial.
Financial Motivation:Giving more wages for more work.
Non financial:Appraisal of the workers work, promotion, appreciation etc.
Negative motivation:Based on punishment or fines. That means workers must be perished for wrong work or for not doing work.
Negative motivation of two kinds (These type of punishment is of two types): Financial or non financial
Financial Punishment: A cut is made in the wages of the labour
Non financial : do work for more time, reduction in the facilities of leave, etc.
Factors affecting motivation
(i) Satisfaction through achievement
(ii) advancement
(iii) Growth
(iv) Responsibility and authority
(v) Recognition
(vi) Job security
(vii) Company administration
(viii) Salary including fringe benefits
(ix) Status
(x) Interpersonal relations
(xi) Working conditions
(xii) Personal life
Motivational techniques
Every employer tries that the person working in his organisation should be highly motivated to his organisation goals. Management generally use financial and non financial motivation technique to motivate their employees.
(1) Financial motivations
There is connected directly or indirectly with money. This may be in the form of more wages and salaries, profit sharing, leave wita pay, medical reimbursements company paid insurance etc.
(2) Non financial motivations:
There are not connected with monetary rewards
Some of the most commonly used non financial motivations are.
(1) Appraisal, praise and prestige
(2) Stators
(3) Competition
(4) Delegation of authority of authority
(5) Participation Physical & mental involvement of people in decision making process.
(6) Job Security: Providing security against sickness, unemployment, old age and death.
(7) Job enlargement:- Increasing the complexity of the job
(8) Job rotation: Shifting of an employee from one job to author
(9) Job loading: making the job more interesting
(10) Job enrichment: Changing or improving a job
(11) Reinforcement
(12) Quality of work life
The quality of work life means the degree to which members of a work organisation are able to satisfy important personal needs through their experiences in the organization.
(i) Adequate & fair compensation
(ii) Safety and healthy working conditions
(iii) Security and growth opportunities
(iv) Opportunity to use and develop creating
(v) Work & family life, including fraudsters, schedule of hours of work, travel requirements, overtime requirements etc.
2.2.1. Theories of motivation
(1) Traditional or X-theory
This theory is based on traditional view in which management or authority do not trust the workers. Management considers that work, could be extractor from labour through fear, strict disciplines and rebukes, there cooperation should not be taken in management. Authority or power in thought to be superior.
Assumptions of X-theory
Most people just do not like to do work. They are lazy and try to avoid work if they can. To get work from an employee, he should have fear.
The workers are less ambitions, avoid responsibility and do not try to improve their works through interest, but always wait for instructions.
Workers want Security
Workers act on the basis of financial geed if they are paid rose wages, they will take move interest in work.
Management doesn’t give importance to labour, they think them to be an instrument of machines.
This theory has authority for superior. Theory X implies one way communication decision at top level only, minimum delegation and centralized control. This theory presents a pessimistic view.
(2) Modern theory or Y theory
Opposite to X-theory
Labour is a part of management
Theory believes that workers have self control and self direction
Assumptions of Y theory
(i) Every work is not disinfesting
(ii) They seeks responsibility if conditons are favourable.
(iii) For executive of work, it is necessary that it should be recognised. Recognition of work is a great prize.
(iv) This based on democratic principles, where everybody has equal chances.
(v) Labour can also co-operate to solve the problems of enterprise.
(vi) Management treats all personal on equal footing for advices.
(3) Theory Z (Hybrid model)
William Qucki after making a comparative study of American and Japanese management practices, suggested the adoption of & theory which represent on integration of American and Japanese practices.
Features of Japanese organisations American organisations
Life twice employment Short from employment
Slow advancement Rapid advancement
Collective decision making Personal
Group responsibilities Jadinedual
General career Specialization in carrier
Theory & represents the adoption of hybrid type of system which in corporate the straights of Japanese management.
Features if &-theory
Strong bond between company and employees
Employees participation
Mutual frust
Integrated organisation
Hearn resiyrce development
Herzburg’s motivation Hygiene theory
Frederict Herzberg developed a theory of works motivation by indicating the way to better performance through increased job satisfaction. He conducted his study on a group of 200 enginers and accountants from 11 industries from Pittsburg (U.S.A) He brews a distinction between what he called nominator and hygiene factors.
Motivations:
Factors connected with satisfactory or motivation were called as motivations, by Herzberg. They have positive power to satisfy and produce high performance. The factors are
(i) Achievement (2) Recognition
(3) Challenging work (4) Increased responsibility
(5) Advancement
Hygiene factors
Factors related to dissatisfaction were called as hygiene factors. These factors can prevent dissatisfaction. They are reacted to work environment.
These factors are
(i) Company policies and administration
(ii) Supervision
(iii) Interpersonal relation
(iv) Salary
(v) Working conditions
(vi) Slates and security
(5) Marlow’s hierarchy of needs:
Many of the psychologists believe that all motivation ultimately derives from a tension that results when one or more of the important needs are unsatisfied.
According to Maslow, human motivation is a hierarchy of five needs.
The five basic categories are psychological, safety, social, esteem needs, self actualization needs.
These needs form a hierarchy or laddle and each need becomes active or aroused when the next lower need is reasonably satisfied.
(1) Physiological needs
This is the first level in the Marlow’s hierarchy of needs. These are the basic needs anyone has eg, food, drink, shelter and rest. These are the most basic needs and the people will be motivated to fulfils them first.
(2) Safety needs
When the physiological needs are satisfied then the needs become activated. The safety needs are mainly job security, protection against danger and the need for security.
(3) Social needs include the need to be liked by others, to be wanted member, developing meaningful relationship on he job and becoming a prominent member of the informal organisation.
(4) Esteem needs
If includes, need for self respect a sense of achievement and recognition from others.
Desire for Status and prestige is an important aspect of need fore self esteem. These types of needs are rarely satisfied.
(5) Self satisfaction
This is the ultimate need which dominates a persons behavior when all lower needs are satisfied.
2.2.2. Group dynamics
The term group dynamics refers to the forces operating in groups. The study of this subject is necessary to investigate these forces and conditions modifying them. In order to fulfill their social needs, people form small group on the job itself.
Group dynamics is a social process by which people interact face to face in small groups. Group dynamics focuses a team work, where in the small member group are constantly in touch with each other and effectively contribute their ideas to accomplish a tasks. The group develops its goal clearly. Every member participates in discussions. The group creates leaders who can coordinate group efforts effectively towards the achievement of their objectives.
Group
A group is any number of people who
(i) have a common propose or objective
(ii) Interact with each other to accomplish their objective.
(iii) Are aware of one another
(iv) Perceive themselves to be part of the group.
2.2.3. Group Norms
Group norms are rules or guidelines of accepted behaviour which are established by a group and used the monitor the behaviour of its members or norm is an agreement among group membership as to how the members in a group should behave. The move an individual compiles with norms, the move one is accepting the group standards of behaviour.
Norms can be social, moral or institutional in nature. Examples of social norms include, expectations about dress, courtesies. Normal norms relate to personal obligations, righter and princilatges, and they play an important art in societal institutions such as religious, family and marriage.
Norms are firmed in matters of consequences of the group. Generally any matter of group. Generally any matter of group maintenance and group functioning relating to the achievement of the goals, is a matter of consequence to the group as a whole. The main purpose of the norms is the maintenances of the group solidarity or its self perpetuation, to that end norms are evolved governing the behaviour and relationships of members to our another. Secondly, norms are directly related to behavour, conductive to the realisation of the group goals. Thridly, norms govern the relationship of group members to considers. Finally, norms of a group apply to all members of the group.
The norms set by the group are accepted by its members. That beings about coherences in the group. The more attractive a group is the its members, the more likely they are to members of an informal norms group, by conforming to group norms, may enhance group cohesiveness, increase satisfaction and support which members relive from it.
There specific social processes being about compliance with group norms, namely group pressure, group review and enforcement.
(i) Group pressure
Individuals who nature there group membership highly and who satisfy some combination of personal needs by being a part of a group allow group pressures to influence their behaviour and performances.
(ii) Group review and enforcement
The group position on matters like production, absolutism and quality of output is communicated to individuals and they are not being followed, different approaches may be employed such as discussion between respected leaders and the deviators. If this doesn’t prove effective, more rigid corrective action as scolding, strolling the non-acceptors ridicule silent treatment, avoidance, use of rewards or incentives physical punishment like bringing and with death as the original gangs.
(iii) Personal values and norms:
The behaviour patterns of the individuals are influenced significantly by there value system. The values of the people are influenced by the events occurring around
2.2.4. Group Cohesiveness
This refers to the attractiveness which a group holds for its members, ie, each group involves participation by members through loyalty and solidarity. This concept involves the stick together characteristics of groups and their impact on group members. Cohesiveness has been defined as the resultant power of a group to think and act as a single unit in pursuit of a common objective. If is in effect the subtotal of force activity on group members. The level of cohesiveness appears to may significantly among informal groups . Some groups maybe tightly bound together by mutual support.
Groups that are highly cohesive are capable of influencing individual behaviour.
Several factors determine group cohesiveness. If may be higher when a majority of the following conditions are present.
(i) The members have a broad agreement concerning the goals and objective the uniformed group will serve. Where groups have attained pre-established goals, they are likely to be highly cohesive units.
(ii) The size of the group is sufficient for illiterates but is for large to signs personal attention. Normally the optimum size of an informal organization is form four to seven members.
(iii) There is a satisfactory level of homogeneity in social status and social background among the members.
(iv) Individual characteristics
Co-operative ness, maturity and being an accepting person-tend to develop cohesiveness and friendliness, while striving for prominence or being a suspicious, non accepting person may inhibit unity.
(v) There is a significant amount of commercials and interaction among participating members.
(vi) There should be a capable and effective leadership which effects in its role in building and maintaining group cohesion. There a cohesive group is one in which members act toward an agreed goal in which everyone assurance a position of responsibility with respect to its achievement.
2.3. MARKETING MANAGEMENT
2.3.1. Identification of product:
Identification of product is required to find out customers perfection for the products. This will enable management to make improvements that will must the requirements of customers. These will fulfill the present requirements of the market and will be more acceptable than those of competitions products.
It is also carried out to simplify product identification, by laminating those which have a limited demand or are unprofitable, to determine the method of packing that will belong best sales and to find the suitable price which may be accepted by the customers and results in handsome profits. It is important to find what characteristics the manufactures product have not reduce to know their relative advantages so that customers can be persuaded to purchase your products only.
The following questions are to be considered for product analysis.
(i) Whether the product fulfils the market requirements.
(ii) Whether the product competitive in character, performance and price.
(iii) Whether the product pursuits effect distribution.
(iv) Whether the product can be sold at handsome projects.
(v) Whether some design improvement are needed
(vi) How product can be designed to reduce cost of production in distribution, transportation and maintenance.
(vii) Whether reduction of a selling prices has effect in demand.
(viii) How repairs and replacements method can be improved.
(ix) What is the future trends of changes.
(x) What new changes and inventions are likely to occur.
(xi) What is competition offering.
2.3.2. Pricing:
The price of the product is the means whereby manufactures obtain a fair return for their labours and replace and increase their wealth and purchasing power in return for supplying the products. All business enterprise face the tasks of setting a price for their products or services. The task of is faced in the following situations.
(i) When a company makes a new per duct and it has to set price for the first time.
(ii) When circumstances such as inflation or shortages lead firm to consider initialing a price change.
(iii) When market competition initiates a price change.
(iv) When a company produces several products that have interrelated demands or costs.
Factors affecting price fixation:
(i) Fair trade laws
(ii) Nationally advertised prices and government
(iii) Desired customer clientele.
(iv) Company monopoly
(v) Manufactures suggested prices.
(vi) Type of merchandises
(vii) Nature of sales
(viii) Price living
(ix) Whether large volume with low profit or relatively small volume with high unit profit is desired.
(x) Suitable channels of distribution
(xii) Sales promotional strategy
2.3.2.1. Policy
Pricing policy can be expressed diagrammatically
1. Sales at more than average mark up
2. Average mark up sales
3. Sales at less than average mark up
4. Sales at less than cost
Figure : Pricing Policy
Assume that company has a sales of Rs.100,000 and gross margin of Rs. 45,000 it means that if has an average marks up of 45% on the total sales. This doesn’t mean that very product was marked up to 45% of sales, actually the product had more than this, and others less than this but the overall average markup reached 45% make up or gross margin represents the difference between what the shopkeeper has paid to the wholesales for getting the product and price at which he has sold the product to the customer.
2.3.2.2. Make up covers:
(1) Overturning expenses
(2) Markdowns
(3) Shortages
(4) Damaged merchandise
(5) Profits
2.3.3. Sales promotion:
Sales promotion includes those marketing activities, other than personal selling, advertising and publicity, that stimulate consumer purchasing and drake effectiveness, such as displays shows and exhibition, demonstrations, and various non-recurrent selling effects not in the ordinary confine.
The sales promotion methods are
(1) Consumer promotion:
Persuading consumers to buy, these include samples, money refund offers, prices off trading stamps, contests and competitions.
(2) Trade promotion:
Incentives to distributors, and others to hold stocks of company products. These include special discounts, buying allowance one or two fee units/bulk container, dealer competitions such as free holidays, push money etc.
(3) Sales force promotions:
Bonuses, contests, sales tallies etc for the salesmen
(4) Good public relations:
Develop goodwill and increase sales.
(5) Good customer relations:
Good customer relations are basically the result of their past transactions with the company.
(6) Display:
Displays at points of sale, using posters, bankers, placards & leaflets to attract the customers attention to the product.
(7) Product Exhibitions, demonstrations, and conferences
(8) Holding competitions and awarding prizes to winners
(9) Latest product styling and appealing product packaging
2.3.4. Channels of distribution
Producers generally do not sell their products directly to the final users. Between them and the final uses stand a number of marketing intermediaries performing a variety foundation and bearing a variety of names.
The marketing intermediaries are called channels of distributions, treads channel or marketing channels.
Distribution channels are characterized according to the number of channel levels. Commonly used channels of distribution are.
(a) Manufacture consumer
(b) Manufacturer Retailer consumer
(c) Manufacture whole sale Retailed consumer
(a) Represents a two level distribution channel
(b) Represents a three level distribution channel
(c) Represents a four level distribution channel
If can be observed from the above discussion that goods are sold either.
(1) Direct from product to consumer or
(2) From producer to consumer via a middleman.
The direct channel is very effective and profitable for goods which have a high profit margin, eg, office machinery such as photocopying mks, accounting mks, computers etc. Because more specialized or technical the product, the better is to sell if directly.
In direct selling the produce has maximum control over selling practices and policies
(2) Selling through a middleman is known as indirect distribution. This method does very well for product with a low profit margin.
Eg: Consumer goods tooth paste, face creams etc.
Middleman buys goods in bulks and these enables a producer to avoid risks connected with stocking of goods. The risk may be in the form of a fall in price or physical deterioration of the products.
Middleman keep the producer informed about the per talent market trends. Middleman such as wholesalers many tines pay immediately to the producers the price of goods and thus help producers whose financial resource are not big.
FUNCTIONS OF MANAGEMENT
1.1. FUNCTIONS OF MANAGEMENT
According to Henry Fayol, the father of principles of management described various functions of management as
i. Forecasting and planning
ii. Organising
iii. Commanding
iv. Co-ordinating
v. Controlling
1.1.1. Planning
Planning is the process of establishing goals. Planning helps to ensure the effective utilization of resources. It is the process of selecting mission and objectives and the actions the achieve them. It ends with decision making, which is choosing the best alternative from the available future course of action. It is the process of thinking before doing. It is performed by managers at all levels. As a part of planning, the manager has to ensure that everyone in his team understands the groups’ purposes and objectives and also the method to achieve them. For this purpose, he has to design an environment for the effective performance of individuals, working together in groups.
If the group effect is to be effective, people must know what they are expected to accomplish. This is the function of planning.
1.1.1.1.Steps in Planning
Plans may be major or minor. Minor plans are simple and easily made. Making major plans require a detailed action plan. The steps are.
i. Bring aware of Opportunities
It is not a part of planning; processes, it proceeds planning is identifying in light of type of market, competition, what customers want, our strengths and weaknesses. The manager should ensure that problem they wish to solve, why and know what they expert to gain.
ii. Establishing Objectives:
The second step is to establish objectives for the enterprise and then for each subordinate works unit.
iii. Developing Premises are assumptions about the environment in which the plan is to be premises is forecasting in terms of
i. What kinds of market will there be
ii. What volume of sales
iii. What products
iv. What prices
v. What costs
vi. What wage later
vii. What new plants
viii. What tax ratios and policies
What policies with respect to dividends.
What political or social environment.
What are the long term trends.
4. Determining alternative Courses
Search and examine alternative courses of action
5. Evaluating alternative courses:
After seeking out alternative courses and examining their strong and weeks points, the next step is to evaluate the alternatives by weighing them in the light of premises and goals.
6. Selecting a course
Planning ends with decision making.
7. Formulating derivative plans.
For supporting the base plan, the derivative plans are essential.
For eg:- Searching for good business location, fixing up the rent for a good building.
8. Numerating plans by budgeting.
After selecting the plan and decision, the final step in the express them interms of budgets.
1.1.1.2.Types of plans:
1. Repeated use plan:-
These plans are used again and again.
i. Purpose or mission:
It is the basic function of an enterprise
ii. Objectives: - These are the ends toward which and activity is aimed and they organisation strives hard to achieve them.
iii. Strategies: - These are general programmes of action and deployment of resources to attain comprehensive objectives. They are usually formulated by the top level management to meet the challenges of the competitions.
iv. Policies:- They are general statements or understandings that guide or channel thinking in decision making. It exists in all levels of the organisation.
v. Procedures:- They are plans that establish a required method of handling future activities. They detail the exact manner in which particular activities must be established.
vi. Rules: - They are usually the simplest type of plan. Rules are specific required actions, allowing no discretion. It may or may not be a part of procedure.
2. Single use plans:-
They are used to meet for a particular situation.
i. Programmes: - Programmes are instructions in a deal and logical manner to perform a particular task. It helps to explain how to carryout a particular operation. These programmes are not used again.
ii. Projects
iii. Budgets:- It is a statement expected results expressed in members ie., expressed in terms of labour hours, financial terms, units of product, machine hours etc. These may be sales budget, material budget, production budget, personnel budget and cash budget etc.
3. Kinds of enterprise plans:-
i. Divisional plans: These are the plans for individual division in an enterprise.
ii. Functional Plans: Separate plans are drawn for each of the functional departments. These should match with the organisation plan.
iii. Regional plans: These are concerned with the activities of each region
or zone.
iv. Corporate plans: These are plans prepared for the enterprise as a whole.
4. Time Plans
i. Short term plan: For one year
ii. Long term: For more than five years
1.1.2. Organizing: It is the process of ensuring that all tasks necessary to accomplish goals are assigned to the people who can do them best.
The process of organization involves: The division of the work into component activities i.e., divide the total work load logically and comfortably. The division of work simplifies the task, so it improves the productivity. Each person becomes expect in a certain job.
1.1.3. Staffing: It is the process of filling positions in the organization structure. It involves the following activities.
i. Forecasting the number of personal required
ii. Decide their qualification which is required.
iii. Recruitment and selection
iv. Training and development of employees
v. Performance evaluation of employees.
vi. Decision making in terms of the issues like promotion, demotion, transfer etc.
vii. Prepare compensation package plan.
viii. Maintaining personnel accounts.
1.1.4. Directing: Directing is the process by which actual performance of the subordinates is guided towards common goals of the enterprise.
The process of directing involves.
i. Providing effective leadership
ii. Giving instructions to subordinates. That is guiding them to do their works so that the work done by them is as per the plans established.
Directing process involves
1. Leadership
2. Communication
3. Motivation
4. Supervision
1.1.4.1. Leadership
It is the quality of the behaviour of the persons whereby, they inspire confidence and trust in them subordinates get maximum cooperation from them and guide their activities in organised effect.
The functions of a leader may be creating, organising, planning, motivating, communicating, controlling etc.
He has to do the following functions also.
arbitrating, suggesting, supplying objectives, catalyzing, providing security, representing, inspiring, praising.
1.1.4.2. Communications:-
Communication is the means by which people are linked together in an organisation to achieve a common purpose. Communication is essential for the actual functioning of enterprises. Although communication applies to all phases of managing, it is particularly important in the function of leading.
Communication is essential because.
i. It helps to establish the goals of an enterprising
ii. Develop plans
iii. Organise human and other resources in the most effective and efficient way
iv. Control performance.
Planning Organising Staffing Leading Controlling
Communication
External environment
• Customers
• Suppliers
• Stockholders
• Governments
• Community
• Others
The figure shows the purpose and functions of communication. Communication not only facilitates the managerial functions but also relates an enterprise to its external environment. In an effective organisation, the communication flows in various directions downward, upward and crosswise.
The figure shown below, describe the information flow in an organisation.
Downward:-
Downward communication flows from people at higher levels to those at lower levels in the organizational hierarchy.
Upward Communication:-
From subordinates to superior, There may be response to order, opinions, attitude, ideas, suggestions, complaints, grievances & rumours etc.
Crosswise Communication:-
This is the horizontal flow of information among the people on the same or similar organisational levels, and the diagonal flow, among persons at different levels.
For effective communication, it should be simple very , adequacy and it should have consistency.
1.1.4.3. Motivating:-
Motivating is one of the key factors for successful management of any enterprise. It is the mental preparation of an individual to do a specific job.
There are two kinds of motivation.
(1) Positive motivation
Motivating the person by giving more facilities to improve their works, or giving some prize. This is done by giving more wages for more works, appraisal of workers’ work, promotion, appreciation etc are non financial positive motivation.
(ii) Negative motivation
If a worker is not doing his work well, he must be punished through giving more works, or by reducing the facilities ie the facilities of leave etc.
Motivational techniques are
(i) Give due credit to workers for their works.
(ii) Fair wages, incentives, and fringe benefits.
(iii) Promote healthy competition
(iv) Improve working conditions
(v) Promote interpersonal relationship
(vi) Provide opportunities for growth and promotion
The above said techniques are called positive motivation techniques.
Negative motivation techniques are fines, demotions, discharge etc.
1.1.4.4. Supervision
It means observing the subordinates at work, what they are doing, is according to the plan and policies of the organisation, whether they are keeping time schedule and help them in solving problems.
This is the duty of the down level managers to supervise workers in basic operations so they are called supervisors.
Functions of supervisors are
(i) Planning the work
(ii) Issuing orders
(iii) Providing guidance or leadership
(iv) Controlling output
(v) Motivate and maintain records
(vi) Liaison between management and workers.
1.1.5. Co-ordinating:-
It is clearly arrangement of group efforts to provide unity of action. This is achieved through
(i) Clear cut objectives
(ii) Clear cut authority, responsibility for every subordinates, so that he knows his specific duties and objectives.
(iii) Effective communication between the executive and his subordinates, supervisors and workers.
(iv) Good human relations.
(v) Co-operation.
(vi) Assigning people to tasks.
(vii) Defining responsibilities
(viii) Delegation of authority
(ix) Establishment of structural relationship to co-ordination. It is the process of integrating the activities of separate departments in order to get organizational goals effectively.
1.1.6. Controlling:-
Measuring and correcting of activities of subordinates to ensure that events conform to plans. Measuring the performance of individuals against goals or plans and shows any negative deviation exists, corrective actions are taken.
Controlling involves:-
(i) Continuous observation of operations performed in an environment to identify the problems.
(ii) Selection of the best of the mode of control.
(iii) Comparison of the performance with standards.
(iv) Pointing the deviation.
(v) Find out the exact reason for deviations.
(vi) Initiation and implementation of corrective action.
The control aids are, budget, special reports, internal audit, personnel observations etc.
1.2. TYPES OF ORGANISATIONS
The structure of an organisation vary from one industry to another depending on a number of factors like
(i) Size of the organisation
(ii) Nature of the product being manufactured.
(iii) Complexity of the problems being faced.
The main types of organisation structures are
(i) Line, military or Scalar organisation.
(ii) Functional organisation
(iii) Line and staff organisation
(iv) Product or project organisation or Departmentation
(v) Matrix or grid organisation
(vi) Committee organisation
1.2.1. Line, military or scalar organisation:-
This type of organisation is also known as departmental or military type of organisation. This type of organisation was evolved by owner. Managers of small factories and workshops in England in the beginning of 19th century. Here the authority flows directly from top to bottom i.e., from general manager level down to the workers level. The business activities are divided into three groups, namely finance (accounts), production and sales. Each of these departments is divided into small sections. Each departmental head is sole control over his section and has full authority to select his labour, staff, purchase of raw materials, stores and to set the standards of output etc.
In this organisation, the flow of authority moves from top to bottom in vertical lines, therefore it is also called line or scalar organisation.
Advantages
(i) Simple :- Simple and easy to understand
(ii) Flexible:- Easy to expand and contract.
(iii) Clear cut division of authority:- The authorities and responsibilities of every position is alone and precise. There are no conflicts and shifting of responsibilities between any two positions.
(iv) Quick decision and speedy action:- The entire management is in the hands of one man namely the GM. Hence quick decision and speedy actions are possible.
(v) Strong in discipline:- Since the duties and responsibilities are clearly defined, the employees rarely commit mistakes or blunders fearing disciplinary action.
Disadvantages
(i) Overload of work:-
There is an overload of work for few executives and the success of the enterprise depend on their ability.
(ii) Lack of specialization:-
This type of organisation neglects specialists at higher levels when an executive has to perform different types of duties.
(iii) Scope for favouritism:- As the departmental heads have lots of authority, they may indulge in favouritism.
(iv) Lack of growth:- In this type of organisation, the top executives are seldom replaced their retarding the growth of lower level employees.
(v) Unsuitable for large concern:- It is suitable only for small concerns.
Applications of line organisation.:-
Line organisation are suitable for:-
(i) Small enterprises with few activities and which are free from complexities.
eg:- small job shops, restaurants
(ii) Automatic and continuous process industries such as paper, sugar, textile etc.
(iii) Where the work is routine
eg:- small refineries
1.2.2. Functional organization:-
Functional organization is one where the workers consult specialists in various areas to carry out their work instead of referring to only one boss. In this type, there are actually eight foremen, four of them located on the shop floor and the remaining four in the office. Each foreman guides the workers in his areas of specialization and all of them have direct and equal authority over workers. F.W. Taylor (father of scientific management) was suggested functional organisation.
Fig. Functional organization chart.
(i) Route clerk :- He is in charge of issuing work orders and routing the job.
(ii) Instruction clerk:- He instructs job related specifications to the workers
(iii) Time & Cost clerk:- He keeps records of time taken by workers to carry out their jobs and costs related to the job.
(iv) Disciplinarian :- He maintains personal records of the workers and suggests disciplinary action against them when their is disobedience.
(v) Gang boss:- He is in charge of all work pieces up to the time.
(vi) Speed boss :- His job is to ensure that for each work piece the proper cutting tool is used, cut is started at the right place and the optimum speed, feed and depth of cut are being employed.
(vii) Repair boss :- He is responsible for the repair and maintenance of equipment and machinery.
(viii) Inspector:- He inspects the quality of finished work and is responsible for the quality of the outgoing products.
Advantages
(i) Specialization:
Since foreman is responsible for only one function, he can perform his duties in a better manner and the result is better production rate at an improved quality lend.
(ii) Cost reduction:-
For every operation expect guidance is there, wastage of materials, man and machine hours are reduced. This helps in reducing once all costs.
(iii) Mass production
This type of origin helps mass production through standardization & specialization
(iv) No need for all round execution
There is no pressure for the origin to look for all round executives.
Disadvantages
(i) In Discipline
Since the workers receive instructions from too many people, it leads to confusion as to whom they should follow.
(ii) Fixing of responsibility
It is very difficult to fix up the responsibility to any one foreman incase something goes evening.
(iii) Killes the initiative of workers:
Workers are not given opportunity to show initiative talents and skills, because specialized guidance is always available.
(iv) Personal relationship
There is always friction between persons of equal ranks because of overlapping authority.
1.2.3. Line and staff organisation:-
A line and staff organisation. is an extension often line organization where additional executives known as staff assist the line executives to carry out their jobs.
If the firm is of size, managers cannot give careful attention to every aspect of management. While line executive are busy with direct tasks like production or sales, staff executives investigate research, second and advise the mangers. While the line maintains discipline and stability, staff provides expert information and helps to improve overall efficiency. While the staff are thinkers, the line are actually doers.
Advantages
(i) Expect advice from staff executives.
(ii) Line executives are relieved to a good extent of their loads.
(iii) Well defined authority and responsibility as well as specialization.
Less wastage:-
There will be less wastage of materials man & mechanical hours.
Improved quality:- Three is allowed improvement in quality.
Disadvantages
(i) Product cost will increase because of high salaries paid to staff executives.
(ii) Chances of misinterpretation
(iii) Chances of friction between line and staff executives
(iv) Loss of initiative: If the line executives start depending for much on staff executives they may end up losing their initiative.
(v) Application:- Preferred for medium and larges scale industries, automobile industries.
Figure: Line & Staff organizational chart
1.2.4. Span of Control
It is the number of subordinates which are directly under their superiors. The number of subordinates, over whom control is to be exercised, should be reasonable. As, too small number well lead to non utilization of full time and energy of the manager while large number well lead to difficulty in exercising proper control. An ideal number of subordinates for superior authority is 4.
Factors determining span of control
Proper span of control is determined on the basis of circumstances. Source of the circumstances affecting the span all as follows:
(i) Nature of work:
When the work in of routine and standardized native, greater span of control can be kept.
(ii) Define responsibility
In organization where responsibilities of supervisors are definite and clear and the plans and policies are clear, and easily understandable at different levels, officers can control a wide span. But where the policies all responsibilities all not clear officers need more time for giving the clarifications to their sub-ordinates and will also require more time in discussions and in delivering the problems. Hence in such cases span of control in required to be kept smaller.
(iii) Capacity of person involved
While deciding the span of control for an organization, it is necessary to consider the capacity and ability to control their subordinates, ability to make decisions, tactfulness, experience, quality of leadership, grasping power and power of command.
1.2.5. Delegation
The need for delegation arises mainly from natural limitations of the human being. Following are some of the limitations which compel for delegation.
(i) The tasks involved in management all too large for any one particular person because of large amount of responsibilities, mental energy etc.
(ii) Modern business involves skill in different fields which one person cannot have.
(iii) Large scale business have branches or waits speed once several places. Delegation is very essential for running those branches situated for way from head office.
(iv) By delegating authority and responsibility, highest authority is relieved and he is face to take decisions in more complicated affairs and he can devote more time for the development and planning work.
Guidelines of delegation
(i) Establish the goals
While to establish the task for a subordinate it is necessary that his objects must be stated clearly, his duties must be specified so that he must be clear in mind as to what he has to perform.
(ii) Define the authority and responsibilities
A subordinate must be delegated with sufficient authority and responsibility. If subordinate has less authority that that desired, he has to refer the case to his boss again and again and the work will thus be delayed and he cannot be held responsible. Similarly if he is delegated with more authority, there are chances for misuse of authority.
(iii) Motivate subordinates:
Delegation is useful if an atmosphere for its exists in the concern. Atmosphere for delegation includes from work, mutual confidence etc.
(iv) Provides Proper check and control
Delegates must exercise people control over his subordinates after delegation, to see that the goals fixed by him are adhered to properly as regards to quantity, quality and time is concerned and authority delegated him are properly utilised.
(v) Provide propel training:
Proper training can be given to the subordinate to explain his duties, authorities and responsibilities and he may be trained to tackle different problems arising in course of discharging his duties and in using that authority.
According to Henry Fayol, the father of principles of management described various functions of management as
i. Forecasting and planning
ii. Organising
iii. Commanding
iv. Co-ordinating
v. Controlling
1.1.1. Planning
Planning is the process of establishing goals. Planning helps to ensure the effective utilization of resources. It is the process of selecting mission and objectives and the actions the achieve them. It ends with decision making, which is choosing the best alternative from the available future course of action. It is the process of thinking before doing. It is performed by managers at all levels. As a part of planning, the manager has to ensure that everyone in his team understands the groups’ purposes and objectives and also the method to achieve them. For this purpose, he has to design an environment for the effective performance of individuals, working together in groups.
If the group effect is to be effective, people must know what they are expected to accomplish. This is the function of planning.
1.1.1.1.Steps in Planning
Plans may be major or minor. Minor plans are simple and easily made. Making major plans require a detailed action plan. The steps are.
i. Bring aware of Opportunities
It is not a part of planning; processes, it proceeds planning is identifying in light of type of market, competition, what customers want, our strengths and weaknesses. The manager should ensure that problem they wish to solve, why and know what they expert to gain.
ii. Establishing Objectives:
The second step is to establish objectives for the enterprise and then for each subordinate works unit.
iii. Developing Premises are assumptions about the environment in which the plan is to be premises is forecasting in terms of
i. What kinds of market will there be
ii. What volume of sales
iii. What products
iv. What prices
v. What costs
vi. What wage later
vii. What new plants
viii. What tax ratios and policies
What policies with respect to dividends.
What political or social environment.
What are the long term trends.
4. Determining alternative Courses
Search and examine alternative courses of action
5. Evaluating alternative courses:
After seeking out alternative courses and examining their strong and weeks points, the next step is to evaluate the alternatives by weighing them in the light of premises and goals.
6. Selecting a course
Planning ends with decision making.
7. Formulating derivative plans.
For supporting the base plan, the derivative plans are essential.
For eg:- Searching for good business location, fixing up the rent for a good building.
8. Numerating plans by budgeting.
After selecting the plan and decision, the final step in the express them interms of budgets.
1.1.1.2.Types of plans:
1. Repeated use plan:-
These plans are used again and again.
i. Purpose or mission:
It is the basic function of an enterprise
ii. Objectives: - These are the ends toward which and activity is aimed and they organisation strives hard to achieve them.
iii. Strategies: - These are general programmes of action and deployment of resources to attain comprehensive objectives. They are usually formulated by the top level management to meet the challenges of the competitions.
iv. Policies:- They are general statements or understandings that guide or channel thinking in decision making. It exists in all levels of the organisation.
v. Procedures:- They are plans that establish a required method of handling future activities. They detail the exact manner in which particular activities must be established.
vi. Rules: - They are usually the simplest type of plan. Rules are specific required actions, allowing no discretion. It may or may not be a part of procedure.
2. Single use plans:-
They are used to meet for a particular situation.
i. Programmes: - Programmes are instructions in a deal and logical manner to perform a particular task. It helps to explain how to carryout a particular operation. These programmes are not used again.
ii. Projects
iii. Budgets:- It is a statement expected results expressed in members ie., expressed in terms of labour hours, financial terms, units of product, machine hours etc. These may be sales budget, material budget, production budget, personnel budget and cash budget etc.
3. Kinds of enterprise plans:-
i. Divisional plans: These are the plans for individual division in an enterprise.
ii. Functional Plans: Separate plans are drawn for each of the functional departments. These should match with the organisation plan.
iii. Regional plans: These are concerned with the activities of each region
or zone.
iv. Corporate plans: These are plans prepared for the enterprise as a whole.
4. Time Plans
i. Short term plan: For one year
ii. Long term: For more than five years
1.1.2. Organizing: It is the process of ensuring that all tasks necessary to accomplish goals are assigned to the people who can do them best.
The process of organization involves: The division of the work into component activities i.e., divide the total work load logically and comfortably. The division of work simplifies the task, so it improves the productivity. Each person becomes expect in a certain job.
1.1.3. Staffing: It is the process of filling positions in the organization structure. It involves the following activities.
i. Forecasting the number of personal required
ii. Decide their qualification which is required.
iii. Recruitment and selection
iv. Training and development of employees
v. Performance evaluation of employees.
vi. Decision making in terms of the issues like promotion, demotion, transfer etc.
vii. Prepare compensation package plan.
viii. Maintaining personnel accounts.
1.1.4. Directing: Directing is the process by which actual performance of the subordinates is guided towards common goals of the enterprise.
The process of directing involves.
i. Providing effective leadership
ii. Giving instructions to subordinates. That is guiding them to do their works so that the work done by them is as per the plans established.
Directing process involves
1. Leadership
2. Communication
3. Motivation
4. Supervision
1.1.4.1. Leadership
It is the quality of the behaviour of the persons whereby, they inspire confidence and trust in them subordinates get maximum cooperation from them and guide their activities in organised effect.
The functions of a leader may be creating, organising, planning, motivating, communicating, controlling etc.
He has to do the following functions also.
arbitrating, suggesting, supplying objectives, catalyzing, providing security, representing, inspiring, praising.
1.1.4.2. Communications:-
Communication is the means by which people are linked together in an organisation to achieve a common purpose. Communication is essential for the actual functioning of enterprises. Although communication applies to all phases of managing, it is particularly important in the function of leading.
Communication is essential because.
i. It helps to establish the goals of an enterprising
ii. Develop plans
iii. Organise human and other resources in the most effective and efficient way
iv. Control performance.
Planning Organising Staffing Leading Controlling
Communication
External environment
• Customers
• Suppliers
• Stockholders
• Governments
• Community
• Others
The figure shows the purpose and functions of communication. Communication not only facilitates the managerial functions but also relates an enterprise to its external environment. In an effective organisation, the communication flows in various directions downward, upward and crosswise.
The figure shown below, describe the information flow in an organisation.
Downward:-
Downward communication flows from people at higher levels to those at lower levels in the organizational hierarchy.
Upward Communication:-
From subordinates to superior, There may be response to order, opinions, attitude, ideas, suggestions, complaints, grievances & rumours etc.
Crosswise Communication:-
This is the horizontal flow of information among the people on the same or similar organisational levels, and the diagonal flow, among persons at different levels.
For effective communication, it should be simple very , adequacy and it should have consistency.
1.1.4.3. Motivating:-
Motivating is one of the key factors for successful management of any enterprise. It is the mental preparation of an individual to do a specific job.
There are two kinds of motivation.
(1) Positive motivation
Motivating the person by giving more facilities to improve their works, or giving some prize. This is done by giving more wages for more works, appraisal of workers’ work, promotion, appreciation etc are non financial positive motivation.
(ii) Negative motivation
If a worker is not doing his work well, he must be punished through giving more works, or by reducing the facilities ie the facilities of leave etc.
Motivational techniques are
(i) Give due credit to workers for their works.
(ii) Fair wages, incentives, and fringe benefits.
(iii) Promote healthy competition
(iv) Improve working conditions
(v) Promote interpersonal relationship
(vi) Provide opportunities for growth and promotion
The above said techniques are called positive motivation techniques.
Negative motivation techniques are fines, demotions, discharge etc.
1.1.4.4. Supervision
It means observing the subordinates at work, what they are doing, is according to the plan and policies of the organisation, whether they are keeping time schedule and help them in solving problems.
This is the duty of the down level managers to supervise workers in basic operations so they are called supervisors.
Functions of supervisors are
(i) Planning the work
(ii) Issuing orders
(iii) Providing guidance or leadership
(iv) Controlling output
(v) Motivate and maintain records
(vi) Liaison between management and workers.
1.1.5. Co-ordinating:-
It is clearly arrangement of group efforts to provide unity of action. This is achieved through
(i) Clear cut objectives
(ii) Clear cut authority, responsibility for every subordinates, so that he knows his specific duties and objectives.
(iii) Effective communication between the executive and his subordinates, supervisors and workers.
(iv) Good human relations.
(v) Co-operation.
(vi) Assigning people to tasks.
(vii) Defining responsibilities
(viii) Delegation of authority
(ix) Establishment of structural relationship to co-ordination. It is the process of integrating the activities of separate departments in order to get organizational goals effectively.
1.1.6. Controlling:-
Measuring and correcting of activities of subordinates to ensure that events conform to plans. Measuring the performance of individuals against goals or plans and shows any negative deviation exists, corrective actions are taken.
Controlling involves:-
(i) Continuous observation of operations performed in an environment to identify the problems.
(ii) Selection of the best of the mode of control.
(iii) Comparison of the performance with standards.
(iv) Pointing the deviation.
(v) Find out the exact reason for deviations.
(vi) Initiation and implementation of corrective action.
The control aids are, budget, special reports, internal audit, personnel observations etc.
1.2. TYPES OF ORGANISATIONS
The structure of an organisation vary from one industry to another depending on a number of factors like
(i) Size of the organisation
(ii) Nature of the product being manufactured.
(iii) Complexity of the problems being faced.
The main types of organisation structures are
(i) Line, military or Scalar organisation.
(ii) Functional organisation
(iii) Line and staff organisation
(iv) Product or project organisation or Departmentation
(v) Matrix or grid organisation
(vi) Committee organisation
1.2.1. Line, military or scalar organisation:-
This type of organisation is also known as departmental or military type of organisation. This type of organisation was evolved by owner. Managers of small factories and workshops in England in the beginning of 19th century. Here the authority flows directly from top to bottom i.e., from general manager level down to the workers level. The business activities are divided into three groups, namely finance (accounts), production and sales. Each of these departments is divided into small sections. Each departmental head is sole control over his section and has full authority to select his labour, staff, purchase of raw materials, stores and to set the standards of output etc.
In this organisation, the flow of authority moves from top to bottom in vertical lines, therefore it is also called line or scalar organisation.
Advantages
(i) Simple :- Simple and easy to understand
(ii) Flexible:- Easy to expand and contract.
(iii) Clear cut division of authority:- The authorities and responsibilities of every position is alone and precise. There are no conflicts and shifting of responsibilities between any two positions.
(iv) Quick decision and speedy action:- The entire management is in the hands of one man namely the GM. Hence quick decision and speedy actions are possible.
(v) Strong in discipline:- Since the duties and responsibilities are clearly defined, the employees rarely commit mistakes or blunders fearing disciplinary action.
Disadvantages
(i) Overload of work:-
There is an overload of work for few executives and the success of the enterprise depend on their ability.
(ii) Lack of specialization:-
This type of organisation neglects specialists at higher levels when an executive has to perform different types of duties.
(iii) Scope for favouritism:- As the departmental heads have lots of authority, they may indulge in favouritism.
(iv) Lack of growth:- In this type of organisation, the top executives are seldom replaced their retarding the growth of lower level employees.
(v) Unsuitable for large concern:- It is suitable only for small concerns.
Applications of line organisation.:-
Line organisation are suitable for:-
(i) Small enterprises with few activities and which are free from complexities.
eg:- small job shops, restaurants
(ii) Automatic and continuous process industries such as paper, sugar, textile etc.
(iii) Where the work is routine
eg:- small refineries
1.2.2. Functional organization:-
Functional organization is one where the workers consult specialists in various areas to carry out their work instead of referring to only one boss. In this type, there are actually eight foremen, four of them located on the shop floor and the remaining four in the office. Each foreman guides the workers in his areas of specialization and all of them have direct and equal authority over workers. F.W. Taylor (father of scientific management) was suggested functional organisation.
Fig. Functional organization chart.
(i) Route clerk :- He is in charge of issuing work orders and routing the job.
(ii) Instruction clerk:- He instructs job related specifications to the workers
(iii) Time & Cost clerk:- He keeps records of time taken by workers to carry out their jobs and costs related to the job.
(iv) Disciplinarian :- He maintains personal records of the workers and suggests disciplinary action against them when their is disobedience.
(v) Gang boss:- He is in charge of all work pieces up to the time.
(vi) Speed boss :- His job is to ensure that for each work piece the proper cutting tool is used, cut is started at the right place and the optimum speed, feed and depth of cut are being employed.
(vii) Repair boss :- He is responsible for the repair and maintenance of equipment and machinery.
(viii) Inspector:- He inspects the quality of finished work and is responsible for the quality of the outgoing products.
Advantages
(i) Specialization:
Since foreman is responsible for only one function, he can perform his duties in a better manner and the result is better production rate at an improved quality lend.
(ii) Cost reduction:-
For every operation expect guidance is there, wastage of materials, man and machine hours are reduced. This helps in reducing once all costs.
(iii) Mass production
This type of origin helps mass production through standardization & specialization
(iv) No need for all round execution
There is no pressure for the origin to look for all round executives.
Disadvantages
(i) In Discipline
Since the workers receive instructions from too many people, it leads to confusion as to whom they should follow.
(ii) Fixing of responsibility
It is very difficult to fix up the responsibility to any one foreman incase something goes evening.
(iii) Killes the initiative of workers:
Workers are not given opportunity to show initiative talents and skills, because specialized guidance is always available.
(iv) Personal relationship
There is always friction between persons of equal ranks because of overlapping authority.
1.2.3. Line and staff organisation:-
A line and staff organisation. is an extension often line organization where additional executives known as staff assist the line executives to carry out their jobs.
If the firm is of size, managers cannot give careful attention to every aspect of management. While line executive are busy with direct tasks like production or sales, staff executives investigate research, second and advise the mangers. While the line maintains discipline and stability, staff provides expert information and helps to improve overall efficiency. While the staff are thinkers, the line are actually doers.
Advantages
(i) Expect advice from staff executives.
(ii) Line executives are relieved to a good extent of their loads.
(iii) Well defined authority and responsibility as well as specialization.
Less wastage:-
There will be less wastage of materials man & mechanical hours.
Improved quality:- Three is allowed improvement in quality.
Disadvantages
(i) Product cost will increase because of high salaries paid to staff executives.
(ii) Chances of misinterpretation
(iii) Chances of friction between line and staff executives
(iv) Loss of initiative: If the line executives start depending for much on staff executives they may end up losing their initiative.
(v) Application:- Preferred for medium and larges scale industries, automobile industries.
Figure: Line & Staff organizational chart
1.2.4. Span of Control
It is the number of subordinates which are directly under their superiors. The number of subordinates, over whom control is to be exercised, should be reasonable. As, too small number well lead to non utilization of full time and energy of the manager while large number well lead to difficulty in exercising proper control. An ideal number of subordinates for superior authority is 4.
Factors determining span of control
Proper span of control is determined on the basis of circumstances. Source of the circumstances affecting the span all as follows:
(i) Nature of work:
When the work in of routine and standardized native, greater span of control can be kept.
(ii) Define responsibility
In organization where responsibilities of supervisors are definite and clear and the plans and policies are clear, and easily understandable at different levels, officers can control a wide span. But where the policies all responsibilities all not clear officers need more time for giving the clarifications to their sub-ordinates and will also require more time in discussions and in delivering the problems. Hence in such cases span of control in required to be kept smaller.
(iii) Capacity of person involved
While deciding the span of control for an organization, it is necessary to consider the capacity and ability to control their subordinates, ability to make decisions, tactfulness, experience, quality of leadership, grasping power and power of command.
1.2.5. Delegation
The need for delegation arises mainly from natural limitations of the human being. Following are some of the limitations which compel for delegation.
(i) The tasks involved in management all too large for any one particular person because of large amount of responsibilities, mental energy etc.
(ii) Modern business involves skill in different fields which one person cannot have.
(iii) Large scale business have branches or waits speed once several places. Delegation is very essential for running those branches situated for way from head office.
(iv) By delegating authority and responsibility, highest authority is relieved and he is face to take decisions in more complicated affairs and he can devote more time for the development and planning work.
Guidelines of delegation
(i) Establish the goals
While to establish the task for a subordinate it is necessary that his objects must be stated clearly, his duties must be specified so that he must be clear in mind as to what he has to perform.
(ii) Define the authority and responsibilities
A subordinate must be delegated with sufficient authority and responsibility. If subordinate has less authority that that desired, he has to refer the case to his boss again and again and the work will thus be delayed and he cannot be held responsible. Similarly if he is delegated with more authority, there are chances for misuse of authority.
(iii) Motivate subordinates:
Delegation is useful if an atmosphere for its exists in the concern. Atmosphere for delegation includes from work, mutual confidence etc.
(iv) Provides Proper check and control
Delegates must exercise people control over his subordinates after delegation, to see that the goals fixed by him are adhered to properly as regards to quantity, quality and time is concerned and authority delegated him are properly utilised.
(v) Provide propel training:
Proper training can be given to the subordinate to explain his duties, authorities and responsibilities and he may be trained to tackle different problems arising in course of discharging his duties and in using that authority.
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