UNIT 1

CONCEPT AND NATURE OFMANAGEMENT

9.1 INTRODUCTION
It is a famous saying that “The success of an organisation is totally dependent upon the
management of the organisation.” It means that any organisation irrespective of its objective does
not achieve greatness overnight rather it is the hard work of the management. Management is
essential for all types of organization, such as public sector, private sector, govt. department, hotel,
hospital, hostels and educational institutes, etc.
To simplify we can divide management as:

Management

T
Manage Men for 'Tactics'

Men & With Proper

To Manage
Resources Technique

9.2 DEFINITION OF MANAGEMNT

 The conventional definition of management is “getting work done through people, but real
management is developing people through work”- Agha Hasan Abedi.
 Hicks define management as “the process of getting things done by and through others”.
 Massie defines management as “the process by which cooperative group directs actions toward
common goals. This process involves techniques by which a distinguishable group of people
(managers) co-ordinates activities of other people; managers seldom actually perform the
activities themselves”.
 Koontz and O’Donnell state that management means getting things done through and with
people”.
 According to George Terry, “Management is a distinct process performed to determine and
accomplish stated objectives by the use of human beings and other resources.”
 Henry Fayol, the pioneer of Administrative Management viewed management as a process
consisting of five functions which every manager performs, “To manage is to forecast and plan,
 to organize, to command, to co-ordinate, and to control.” Though modern authors do not
consider co-ordination as a separate function of management, but the essence of managing.
 Peter Drucker, a modern exponent of management thoughts goes a step further and considers
management “as an essential, a distinct and a leading institution” which has a pivotal position in
social history.
 Drucker says “Management, which is the organ of society specifically charged with making
resources productive, therefore reflects the basic spirit of the modern age.”
 Lawrence Appley has written that “Management has been defined in very simple terms as ‘getting
things done through the efforts of other people’ and that function breaks down into at least two
major responsibilities, one of which is planning, the other control.”
 Management has been called “the art of getting things done through people” (Mary Parker
Follettt).
 The modern concept of management considers management is the process of utilisation of
human resources and physical resources in such a manner that organisational objectives are
achieved effectively and efficiently.
 We may define management as a process by which responsible people (managers) in an
organization get things done through the efforts of other people in grouped activities.
9.3 MANAGEMNT – SCIENCE, ART, PROFESSION

Science is a systematised body of knowledge relating to a particular field of enquiry. It contains

concepts, hypotheses, theories, experimentation and principles to explain cause and effect
relationship between two or more factors. The following characteristics should be recognised as a
science.
1. Universally Accepted Principles: Scientific principles represent basic truth about a particular
field. These principles may be applied at any time at any place. Management also contains some
fundamental principles which can be applied universally like the Principle of Unity of Command
i.e., one man, one boss. This principle is applicable to all type of organization whether profit
making or not.
2. Experimentation & Observation: Scientific principles are derived through scientific
investigation & researching i.e., they are based on logic. Management principles are also based on
scientific enquiry & observation. They have been developed through experiments & practical
experiences of
large number of managers, e.g., it is observed that fair remuneration to personal helps in creating a
satisfied work force.
3. Cause & Effect Relationship: Principles of science lay down cause and effect relationship
between various variables. For example, when metals are heated, they are expended.
The same goes for management as it also establishes cause and effect relationship. For example,
lack of unity among the employees will result in chaos.
4. Test of Validity & Predictability: Validity of scientific principles can be tested anywhere at any
time. Each time these tests will give same result.
Moreover, future events can be predicted with reasonable accuracy by using
scientific principles. E.g., principle of unity of command can be tested by comparing two persons –
one having single boss and one having multiple bosses. The performance of 1st person will be
better than 2nd.
Art signifies the application of knowledge and personal skills to bring about desired results. Art has
the following features:
1. Practical Knowledge: Every art requires practical knowledge therefore learning of theory is not
sufficient. It is very important to know practical application of theoretical principles. E.g., A
manager can never be successful just by obtaining degree or diploma in management; he must
have also known how to apply various principles in real situations, by functioning as a manager.
2. Personal Skill: Although theoretical base may be same for every artist, but each one has his own
style and approach towards his job. That is why the level of success and quality of performance
differs from one person to another. E.g., Every manager has his own way of managing things based
on his knowledge, experience and personality, that is why some managers are known as good
managers whereas others as bad.
3. Creativity: Every artist has an element of creativity in himself. That is why he aims at producing
something that has never existed before which requires combination of intelligence &
imagination. Management is also creative in nature like any other art. It combines human and non-
human resources in a useful way so as to achieve desired results. It tries to produce sweet desert
by adding different ingredients in an efficient manner.
4. Perfection Through Practice: Every artist becomes more and more proficient through constant
practice. Similarly, managers learn through an art of trial and error initially but application of
management principles over the years makes them perfect in the job of managing.
5. Goal-Oriented: Every art is result oriented as it seeks to achieve concrete results. In the same
manner, management is also directed towards accomplishment of pre-determined goals.
Managers use various resources like men, money, material, machinery & methods to help in the
growth of an organization.

Management is both an art and a science. The above-mentioned points clearly reveal that
management combines features of both science as well as art. It is considered as a science
because it has an organized body of knowledge which contains certain universal truth. It is called
an art because managing requires certain skills which are personal possessions of managers.
Science provides the knowledge & art deals with the application of knowledge and skills.

Any specialized activity becomes a profession provided it satisfies the following characteristics:
 There must be a systematized body of knowledge which is used either in instructing, advising or
guiding others.
 Existence of a formal method and system for teaching and training
people with that knowledge and skill.
 A scope for creating posts of consultants for that skill.
 Existence of a code of conduct among such professional men
 Eagerness to respond to the requirements of man.

By closely studying the position of management we find that it does not satisfy all the
characteristics in full although attempts are going on to develop it into a fully-fledged profession.
 9.4 LEVELS OF MANAGEMNT
To perform activities in an organisation employee are given necessary authority and responsibility.
This distribution of authority results in creation of chain of authority. This chain is divided into
three levels which result in creation of three levels of management which are as follows:
1. Top Level Management 2. Middle Level Management 3. Lower-Level Management
Top-level management of a company consists of the board of directors, chief executive officer,
managing director or the general manager.
 Operative level consists of middle level and lower management.
 Lower-level management includes supervisor and foreman.
9.5 MANAGEMNT PRINCIPLES
Management Principles are general guidelines that must be implemented by the managers at all
levels of the organisation. Over the years, management thinkers have developed different
theories and principles from their experiments and experiences. In recent times, management has
become a more scientific discipline of study having certain standardized principles and practices.
The following is a breakdown of the evolution of management thought during its developmental
period:
 Early management approaches which are represented by scientific management, the
administrative management theory and the human relations movement.
 Modern management approaches which are represented by scientific management, the
administrative/management science approach, the systems approach and the contingency
approach.

Henry Fayol a mining engineer also known as “Father of Management Studies and Thoughts” is
the innovator of comprehensive thinking on the philosophy of management. Fayol focused on
several principles that could be used by managers to co-ordinate the internal activities of
organizations.
Fayol’s 14 Principles of Management
1. Division of Work: Division of work is necessary to enjoy the benefits of specialization.
2. Authority and Responsibility: Authority means the power to give orders and to ask for obedience.
Responsibility means the sense of dutifulness which is correlated with authority. There must be
equality between the two.
3. Discipline: The three requisites are necessary for maintaining discipline – (a) good supervisors,
(b) clear and fair agreements and (c) proper application of sanctions or penalties.
4. Unity of Command: It means that one individual employee must receive orders from one
individual superior only.
5. Unity of Direction: One and same objective for the whole unit of organization and for that there
should be one leadership and one plan.
6. Subordination of Individual Interest to General Interest: Individual or group interest must be
surrendered to general interest.
7. Remuneration: Remuneration should be fair to both the employees and the employer.
8. Centralization: By centralization there is optimum utilization of the available resources.
9. Scalar Chain: It is the chain of superior existing from the highest authority to the lowest ranks.
10.Order: It means that inside an organization there should be a place for everything and
everything in its place.
11. Equity: Equity refers to fair and just treatment to employees.
12.Stability of Tenure of Personnel: An employee needs time to get himself accustomed to a line
of work and then he can show his ability.
13.Initiative: The initiative of the personnel must be promoted at every level even by sacrifice of
pride by the managers.
14. Esprit de Corps: Teamwork is essential for the success of an organization.

Fredrick Winslow Taylor also known as “Father of Scientific Management”, was

the first to prove that scientific methodology can be applied to the field of
management. A scientific process consists of observation, analysis,
experimentation and generalization. Taylor wanted to introduce these elements
into management also to establish a causal relationship between efforts and
results.

 Rule of thumb to be replaced by rule of science to improve the standard of performance.

 There should be perfect harmony among the activities of different individuals and not discord.
 An atmosphere of perfect cooperation among different workers has to be created for mutual
interest sublimating personal interests.
 Production has to be maximized and not restricted output.
 There should be encouragement to greatest efficiency and prosperity of every individual, both
employer and employees.
 Proper selection and training of workers.
 Equitable division of work and responsibility between the management and the employees.
Criticisms of Scientific Principles of Management
 It deals with factory management only.
 Separation of planning from doing is a misleading concept.
 It lays too much emphasis on engineering side ignoring the importance of human aspect in
production.
 Functional foremanship is not a direct improvement on the concept of line theory of organization.
 He considered human elements as devices of a machine.
 It created condition of industrial monocracy.
 It creates unfair distribution of benefits between the employers and the employees.
 It is doubtful whether standard of work can be really measured.
 It is antisocial because it is aimed at efficient workers only.
 It is not possible to find out ‘one best way’ to do a job. What is true for one may not be true for
another.
 It is not really scientific management but scientific approach to management.
According to German Scientist, Max Weber, a bureaucracy is a highly structured,
formalized and impersonal organization. He believed that an organization should
have a defined hierarchical structure governed by a clearly defined rules,
regulations and lines of authority. Weber’s ideal bureaucracy possesses the
following distinct characteristics:
 Specialization of Labour  Formal Rules & Regulations
 Impersonality in Application of Rules.  Well Defined Hierarchy
Bureaucratic structures evolved from traditional structures with the following changes:
 Jurisdictional areas are clearly specified; activities are distributed as official duties unlike
traditional form where duties delegated by leader and changed at any time.
 Organization follows hierarchical principle such that subordinates follow orders of superiors,
but have right of appeal.
 Abstract rules govern decisions and actions. Rules are stable, in-depth, and can be learned.
Decisions are recorded in permanent files (in traditional forms few obvious rules or written
records).
 Means of production or administration belong to office. Personal property separated from
office property.
 Officials are selected on basis of technical qualifications and compensated by salary.
 Employment by the organization is a career. The official is a full-time employee and looks
forward to a life-long career. After a trial period they get tenure of position and are protected
from uninformed dismissal.
Principles of Bureaucratic Management
1. Formal Hierarchical Structure: Each level controls the level below and is controlled by the level
above. A formal hierarchy is the basis of central planning and centralized decision making.
2. Management by Rules: Controlling by rules allows decisions made at high levels to be executed
consistently by all lower levels.
3. Organization by Functional Specialty: Work is to be done by specialists, and people are
organized into units based on the type of work they do or skills they have.
4. An “up-focused” or “in-focused” Mission: If the mission is described as “up-focused,” then the
organization’s purpose is to serve the stockholders, the board, or whatever agency empowered it.
If the mission is to serve the organization itself, and those within it, e.g., to produce high profits,
to gain market share, or to produce a cash stream, then the mission is described as “in-focused.”
5. Purposely Impersonal: The idea is to treat all employees equally and customers equally, and
not be influenced by individual differences.
6. Employment Based on Technical Qualifications: Selection and Promotion is based on Technical
qualifications.
Criticisms of Bureaucratic Principles of Management
 Too much emphasis on rules and regulations. Which leads to rigidity and inflexibility.
 No importance is given to informal groups.
 Bureaucracy involves a lot of paper work. This results in lot of wastage of time, effort and money.
 There will be unnecessary delay in decision-making due to formalities and rules.
 Bureaucratic model may be suitable for government organisations. But it is not suitable for
business organisations because of delay in decision making and inflexibility in procedures.
 Dedication and commitment of the employees are ignored. As only technical qualifications of
the employees are given importance for promotion and transfers.
 There is difficulty in coordination and communication.
 There is limited scope for Human Resource (HR).
9.6 MANAGEMNT PROCESS
Management is the process of planning, organising, leading and controlling the efforts of
organisation members and of using all other organisational resources to achieve stated
organisational goals. The functions of management are interdependent and interrelated. The
process of management involves five distinct functions namely:
1. Planning: Planning involves precisely determining the objectives, i.e., deciding in advance
what is to be done, when it is to be done, and how it is to be done.
2. Organising: It refers to the identification of activities and creation of departments. Thus, it
also leads to creation of authority and responsibility relationships throughout the enterprise.
3. Staffing: Staffing involves manpower planning, employment of personnel through recruitment
and selection, placement, induction, orientation, training, development, performance
appraisal, industrial relations etc.
4. Leading: Leading is a crucial activity which every manager has to perform for directing the
people under him towards accomplishment of common goals. It includes communication,
supervision, motivation etc.
5. Controlling: It involves setting standards of performance, comparing actual performance
against these standards, identifying derivation and taking corrective actions to ensure that
activities are carried but in conformity with the plans. Thus, control is a comparison and
verification process.
9.7 PLANNING
Planning is an important function of management. Planning is an activity by which managers
analyse present conditions to determine ways of reaching a desired future state. Planning is both
an organisational necessity and a managerial responsibility. Through planning, organizations
choose goals based on estimates or forecasts of the future. Concern for future is intensified by the
fact of relentless, unremitting change. The purpose of planning, in the words of Dalton
McFarland,
is twofold: to determine appropriate goals, and to prepare for adoptive and innovative change.

Planning is an intellectual process, the conscious determination of course of action, basing of

decisions on purpose, facts and considered estimates (Harold Koontz and Cyril O’Donnell).
According to George Terry, “Planning is the foundation of most successful actions of all
enterprises”. Planning is defined as the activity by which managers analyse present conditions to
determine ways of reaching a desired future stage. It embodies the skills of anticipation,
influencing, and controlling
the nature and direction of change. (Dalton McFarland).
In planning, the manager must be able to manipulate abstract ideas and anticipate the impact of
the many possible outcomes as they affect the enterprise as a whole (Theo Haimann).
 1. Primary Function of Management: Planning is the primary or the first function of the
management process. No other function can be executed by the manager without performing
planning function because objectives are set up in planning and other functions depend on the
objectives only.
2. Goal Oriented: Planning is aimed at defining the organisational goals and design appropriate
action plans in order to achieve these goals.
3. Intellectual Process: Planning is an intellectual process which requires higher thinking
capabilities and intelligence.
4. Pervasive: Planning is pervasive as it is needed at all the levels and types of the organisation.
5. Continuous Function: In order to keep the organization as a going concern, it is essential that
planning must be done continuously, also one has to be in touch with the changes in the
business environment.
6. Involves Choice: Planning involves choice among different alternatives courses of action. If
there is only a single objective, policy, programme or procedure, perhaps then there is no need
for planning.
7. Concerned with the Accomplishment of Organisational Objectives: Planning is aimed at
setting group goals and organisational goals rather than concentrating on individual goals.

1. Inaccuracy: Formulation of future plans on the basis of wrong forecasts may not lead to the
desired results as planning does not give guarantee success.
2. Time-consuming: It is time consuming and it involves energy and mobilization of different
kinds of resources to evaluate different alternatives and select the best one.
3. Rigidity: Once plans are made to decide the future course of action the manager may not be in
a position to change them. Following pre-decided plan when circumstances are changed may
not bring positive results for the organization.
4. Costly: Planning is costly because it requires money, time and information.
5. Prevents Innovation: Planning demands total commitment to written policies, procedures,
rules etc. It restricts a manager unnecessarily to defined areas.
6. Uncertainty: It is not true that if a plan has worked successfully in past, it will bring success in
future also as there are so many unknown factors which may lead to failure of plan in future.
A sudden change in technology, competition, rules & regulations, ethical and social changes
can reduce the effectiveness of the planning.

 Make plans simple and easy to understand. When the plan itself is complicated, it invites is
understandings among the members of organization.
 Be selective in the plan. Successful managers never try to cover too much territory.
 Plan should meet the needs of those who implement it.
 A plan should be thorough; it should not omit any function or overlook any necessary details.
At the same time, controversial statements should be avoided/ignored.
According to Gary Dessler, to plan effectively the managers should consider the following points:
1. Develop Accurate Forecasts: Forecasting can be made accurate by educating the forecasting
users in the art of relating the forecasting techniques to practical problems and also
encouraging the people who are entrusted with the forecasting job to look into the
informational needs of managers.
2. Gain Acceptance for the Plan: It is necessary to secure the acceptance and commitment from
them. This can be done by soliciting the subordinate’s participation in the planning process itself.
3. Plan Must be Sound One: To increase the efficiency of plans, managers are advised to follow
an open-system approach where they recognize and pay concentration to the complex
environment in which their organisation is functioning, apart from judging pros & cons of a
plan.
4. Develop an Effective Planning Organisation: Planning involves answers to several questions.
The solution for these questions requires a blueprint for planning and a ‘planning organisation’
as such.
5. Be Objective: The managers should, not hesitate to verify the truth behind the pessimistic
notions or beliefs. To see that planning is successful, managers must be objective.
6. Measure Firm’s Market Value: One of the primary responsibilities of a manager is to measure
the total market and see that the organization’s share in the market is as large as possible. For
this the manager should estimate the firm’s share in the market.
7. Decide in Advance the Criteria for Abandonin g a Project: A plan should always include a
specification, agreed on in advance for abandoning the plan. Managers should least hesitate in
disconnecting the unproductive connections in the product/ project structure.
8. Set up a Monitoring System: Plans should preferably be subjective to regular appraisal and
review. Every plan should be refined and restructured on the basis of accurate and timely
information.
9. Revise the Long-term Plans Every Year: Management should review long-term plans annually
so as to match external opportunities with organisational resources in a proper way. By
reviewing the progress made on the plan, the reasons for under performance or over-
performance can be found out.
10. Fit the Plan to the Situation: These days planning has become situational. A change in any part
of the environment must be sensed and appropriate strategy must be determined to cope with
the change”.

1. Analysis of Opportunities: Planning starts with analysing the opportunities in the external
business environment as well as within the organization.
2. Establishing Objectives: The next step in planning process involves establishing objectives for
the whole organization, and for the different departments. Organisational objectives provide
direction to the major plans
3. Determining Planning Premises: Planning premises refer to making assumptions regarding
the future. Premises are the base on which plans are made. It is a kind of forecast made
keeping in view existing plans and any past information about various policies.
4. Identifying Alternatives: Different possible alternatives need to be identified in order to
achieve a particular objective, since there may be diverse ways in which a particular goal can
be accomplished.
5. Evaluation of Alternatives: Alternatives needs to be evaluated in the light of goals. Those are
to be achieved considering the various constraints and uncertainties that exist.
6. Selection of the Best Alternative: The choice of the best alternative, i.e., the selection of the
most appropriate course of action. Sometimes two or more contingency plans are kept as a
backup considering the unpredictability of the future.
7. Implementing the Plan: Implementation or execution means putting the plan into action.
Managers need to consider a series of important decisions during implementation of the
actions stated in the plan.
8. Reviewing the Plan: Reviewing the plan time-to-time helps managers to assess the effectiveness
of the plan. A system of thorough review can help in detecting derivations from the set plans
and remedial measures can be taken accordingly.

1. Top-down Approach: As the name indicates, top management takes the initiative in
formulating major objectives, strategies, policies and derivative plans in comprehensive
manner and communities them down the line to middle and supervisory management levels
for translating them into performance results. Managers other than those at top levels have
little role in planning; they have only to concentrate on implementation and day-to-day
control.
2. Bottom-up Approach: This is a reversal of the above approach in the sense that the plan
proposals originate at the supervisory management level, travel up the management hierarchy
in a step-by-step manner and reach the top management level for review and approval. In this
approach top management generally refrains from giving any guidelines to lower
management levels on what to plan and how.
3. Composite Approach: Here the top management provides broad parameters and guidelines to
line executives at middle and lower management levels, allows the needed flexibility and
support to formulate tentative plans, which are reviewed and finalized by top management in
consultation with all the managers at the appropriate levels. The approach is useful to evolve
corporate-wide plans also, which partly draw inspiration from the planning ideas and
perspectives generated at the lower level.
4. Team Approach: In the approach, the task of planning is delegated to a select team of
managers, whether they are line managers or staff experts. The team functions under the
leadership of the chief executive. It does not finalize plans as such but initiates the planning
process, identifies the areas of problems and opportunities, examines the internal and external
environment, collects information, solicits ideas and formulates tentative proposals for
consideration by the chief executive. The team is used by the later as his brains trust; it may
even be asked to monitor the progress of plans and review performance.

Standing Plans
Standing plans are the plans which are used repeatedly in similar situations. A standing plan is
used again and again over a long period of time. It acts as a guide for thinking and action. A
standing plan is standing answer to recurring problems and it is of permanent nature. Standing
plans simplify the decision-making process as they decide in advance what and how of a variety of
operations. They make it possible for managers to spend their most creative efforts on single use
plans. Standing plans are essential for smooth operations. Objectives, policies, procedures and
rules are important standing plans.
 Single Use Plans
A single use plan is used once and then it is discarded. It is designed to fit the demands of a
specific situation or goal and is ‘used up’ when the goal is achieved or the situation is over. A
single use plan is used for a short period of time. Budgets, schedules, projects etc. are the
examples of single use plans. Standing plans are prepared for repetitive activities while single use
plans are meant for non-repetitive activities.

Planning premises are a set of assumptions that are derived from forecasting the future. It is a logical
and systematic estimate of the future factors that can affect planning. Planning premises provide
a background against which the estimated events take place. The effectiveness of planning to a great
extent depends on how accurately the premises are developed from out of the forecasting data.
Establishing planning premises is a critical element in the planning phase, which ensures that all
managers in the organization are in sync with each other.
Planning premises can be categorized into three heads —
Internal and External Premises: The premises which exist within the boundaries of the business
are internal premises. These include sales forecast, cash flows, capital budgeting, marketing mix,
competence of the managerial personnel etc. External premises on the other hand, exist outside
the boundaries of business comprising of economic, social, political, technological conditions in
the economy.
Controllable, Semi-controllable and Uncontrollable Premises: The premise which can be
controlled by the management are known as controllable premises, these include the internal
policies, credit policies, investment plans, research projects, rules etc. which are within the
jurisdiction of management. Semi-controllable premises are those over which the management
has some control. For examples union management relations, firm’s share in the market, market
strategies, labour turnover etc. Those premises which cannot be controlled by the management of
an organization come under uncontrollable premises. For example, natural calamities, wars, strike,
innovations, emergency legislation etc.
Tangible and Intangible Premises: Any premise which can be quantitatively measured is a
tangible premise. These premises can be quantified in terms of time, money, and units of
production. Intangible premises on the other hand, cannot be quantified such as public relations,
employee morale, reputation of the firm, competitive strength of the firm, etc.
9.8 ORGANISING
Organizing is defined as the dividing and subdividing up of duties and responsibilities which are
necessary for any purpose and arranging them in groups which are assigned to individual. In the
words of Koontz and O’Donnell “Organizing involves the establishment of an internal structure of
roles through determination and enumeration of activities required to achieve the goals of an
enterprise and each part of it; the grouping of these activities, the assignment of such groups of
activities to manager,
the delegation of authority to carry them out, and provision for coordination of authority and
informational relationships horizontally and vertically, in the organization structure”.
Thus, organizing function consists of dividing work among groups and individuals and providing
for the required coordination between individual and group activities. Organizing is the
managerial
 function that deals with the allotment of duties, co-ordination of tasks, delegation of authority,
sharing of responsibility etc.

1. Identifying the Work: The first step in the organizing process is to identify the work to be
performed in the organisational unit. Every organisation is created deliberately to achieve some
predetermined objectives. It is absolutely essential to identify the work to be performed to
achieve the goals. Work must be divided and distributed because no one individual can perform
the total work in an organisation single handed. Identification and classification of work enables
managers to concentrate on important activities, avoiding the unnecessary duplications,
overlapping and wastage of effort.
2. Grouping the Work: Dividing work is the essence of organizing function. After making the
vision, similar activities shall be grouped together in order to provide for a smooth flow of
work. Departments and divisions are created in an organisation based on the principle of
similarity and relatedness of the activities performed. Depending on the size of the organisation,
there could be several departments for every separate function.
3. Establishing Formal Reporting Relationships: One of the steps in organizing function is to
establish formal reporting relationships among individual members in the enterprise. After
establishing these formal relationships, it would be possible to know the details relating to the
work. Establishment of formal reporting system should pave way for assigning the duties and
responsibilities to individual in a definite fashion.
4. Providing for Measurement, Evaluation and Control: Organising function involves providing the
basis for measurement, evaluation and control of the activities. It should establish signposts and
control points in the organisation so that the performance of individuals and groups can be
measured evaluated, and controlled at periodical intervals.
5. Delegating Authority: A worker may not be able to perform tasks without any authority. While
assigning duties the manager should clearly specify authority and responsibility limits.
6. Coordination: While performing the organizing function, the manager should see that all the
activities are properly coordinated and there exists no conflicts. Both individuals and groups
may come in conflict while performing their respective duties or functions in the organisation.
While organizing the functions, the manager should see that all the departments function as a
coordinated unit.
9.9 STAFFING
Staffing is defined as the process of obtaining and maintaining the capable and competent people
to fill all positions from top to operative level. In the words of Dalton McFarland staffing is the
function by which managers build an organisation through the recruitment, selection, development
of individuals as capable employees. According to Koontz and O’Donnell staffing is the executive
function which involves recruitment, selection, compensating,
training, promotion, retirement of subordinate managers. Weirich define staffing as “filling and
keeping filled, positions in the organization structure”. Thus, staffing is concerned with the
placement, growth and development of all those members of the organization whose function is
to get things done through the efforts of other individuals.
 It facilitates competent and qualified people to take various positions the organisation;
 It enhances productivity by placing right persons on the right jobs;
 It helps in estimating the future staffing requirements;
 It helps development of people through various training and development programs;
 It helps the organisation to make the best use of existing workforce;
 It ensures adequate remuneration of workforce;
 It results in high employee morale and job satisfaction;
 It makes the top management aware of the requirements of manpower arising from transfer,
promotion, turnover, retirement, death etc. of the present employees.

Staffing process is concerned with providing the organisation with the right number of people at
the right place, and at the right time so that the organisation would be able to achieve its goals
effectively. Just one wrong decision in the process would prove to be costly to the entire
enterprise. A wrong placement in the organisation would adversely affect the productivity of the
organisation as a whole. Staffing process involves the following steps.
1. Manpower Planning: Manpower planning also known as human resource planning is “a
process of determining and assuring that the organisation will have an adequate number of
qualified persons, available at the proper times, performing jobs which meet the needs of the
entire enterprise and which provide satisfaction for the individuals involved” (Dale S. Beach).
Manpower planning consists of the following steps: -
 Determination of the organisational objectives;
 Determination of the skills and expertise required to achieve the organisational objectives;
 Estimating the additional human resource requirements in the light of the organisation’s
current human resources;
 Developing action plans to meet the anticipated human resource needs.
2. Recruitment: Recruitment involves seeking and attracting people from which qualified
candidates for job vacancies can be selected.
3. Selection: It involves choosing the best candidates who meet the qualifications and
requirements of the job.
4. Placement & Induction: Placement refers to assigning rank and responsibility to an
individual, identifying him with a particular job. If the person adjusts to the job and continues
to perform per expectations, it means that the candidate is properly placed. Induction refers
to the introduction of a person to the job and the organisation so that the employee
develops a sense of pride in the organisation and commitment to the job. Proper induction
would enable the employee to get off to a good start and to develop his overall effectiveness
on the job and enhance his potential.
5. Training: It refers to the process of increasing the knowledge and skill set of an employee for
doing a particular job. The objective of training is to achieve a change in the overall personality
of the trained employees.
Internal Sources
The internal sources include the employees on the payroll. People from within are generally
promoted whenever any vacancy arises. By reviewing the personnel records and skills the manager
would be in a position to know the suitable candidates for the vacant position. Transfers, promotions
of employees are the basic internal sources of recruitment. Further, employee’s friends and
relatives are also given a chance to serve the organisation, if any new vacancy arises.
Advantages of Internal Sources of Recruitment
 Recruitment from within encourages the employees to work efficiently to reach top positions;
 The organisations would be able to choose the right people for the vacant positions on the
basis of the track records of the employees;
 Employees need little training as they know the major operations and functions of the
organisation which saves the time and cost of the organisation;
 Internal recruitment improves the morale of the employees as they are sure that they would be
preferred over the outsiders for higher positions.
Disadvantages of Internal Sources of Recruitment
 In the long run it is not a healthy sign for the organisation to rely on the existing employees. It
discourages new blood from entering into the organisation. The organisation may be deprived
of young talent that flows into the industry.
 The internal sources of recruitment promote favouritism. Workers may be recruited not
because of their suitability for the jobs but because they may maintain good relations with the
top management.
 The skills of existing employees may become obsolete and the organisation may have to resort
the external recruitment inevitably.
 One universally accepted disadvantage of internal recruitment is the Peter Principle which
states that people are promoted until they finally reach to the level of incompetence.
External Sources
Recruitment from external sources is done when either the existing employees are inadequate to
occupy the vacant positions or they are not properly qualified and skilled enough to occupy the
positions, or they are unfit either by virtue of their age or specialization.
The important external sources of recruitment include —
1. Employment Exchanges: Employment exchanges run by government are regarded as a potential
source of recruitment especially for unskilled, semiskilled and skilled operative jobs.
2. Advertisement: Advertisement in newspapers or trade and professional journals is another
popular source of recruitment especially for the senior positions to lower-middle level positions.
3. Educational Institutions: Recruitment through educational institutions is also known as campus
placements.
4. Employee walk-ins: It is commonly found that some people send spontaneous applications to
the organisations. Organisation, can consider these applicants for the positions if they find
necessary.
5. Employee Referrals: Some organisations prefer using employees as the source of recruitment.
They maintain informal system of recruitment where word-of-mouth would do when compared to
formal system of organisation.
6. Miscellaneous: Among other methods of recruitment, ‘gate hiring’ is the most popular one in
which people are hired at the factory gate itself.
Advantages of External Sources of Recruitment
 Organisations can choose from wider range under the external source of recruitment. The
number of applicants would be very large and the organisation can choose the better candidates
carefully after weighing the pros and cons of all the candidates.
 Organisations can avoid biasness by following the external sources of recruitment. As there is
no scope for subjective judgment and selection of the candidates.
Disadvantages of External Sources of Recruitment
 Personnel chosen from external sources may be demoralizing for the existing employees when
they come to know that organizations are considering the outsiders for filling up the top
positions.
 External sources of recruitment are quite costly to the enterprise. Firms have to spend heavily
on advertisements and sometimes the response from the potential candidates may be
disappointing.

The most crucial stage in staffing process is the selection. Because any error in selection may
prove to be costly to the organisation. This explains the reason why selection has occupied a place
of prominence in the management literature. Selection is a process of rejection and hence it is
called a negative process. It divides the people into two categories viz. those who would be
selected and those who would be rejected. A manager should exercise special skill in selecting the
candidates. The process of selecting the candidates for employment in organisations is a long-
process. It consists of the following steps:
1. Blank Application: Every candidate is required to fill up a blank application which provides a
written record of the candidate’s qualifications, etc. It is a traditional widely accepted device for
eliciting information from the prospective applicants to enable the management to make proper
selection of the candidates. A blank application is a personal history questionnaire.
2. Preliminary Interview: To eliminate the unsuitable candidates in the very beginning preliminary
interviews of brief duration are conducted. A majority of the applicants would be rejected in this
stage. If the applicant is eliminated at this very stage, organisation would be saving from the
expenses of processing the candidate further. Even the unsuitable candidate would save himself
from the trouble of passing through the long selection procedure.
3. Employment Tests: To match the individual’s mental and physical characteristics with the job
appropriately, employment tests are essential. Here, intelligent tests, aptitude tests, proficiency
tests, personality tests, tests of interests & hobbies and psychological tests etc. are included.
4. Final Interviews: To assess the candidate’s strengths and weaknesses for the position final
interviews are conducted. A careful assessment of the candidate is made in the personal interview
with the candidate. Apart from finding out the suitability of the candidate, the face- to-face interview
also provides an opportunity to the interviewer to know more about the candidate. At the same
time, the candidate would also be in a position to know about the terms and conditions of his
employment, organisational policies and the employer-employee relations etc.
5. Background Investigation: Normally, in every resume the candidate is asked to mention the
name of references. A referee is potentiality an important source of information about the
stability, integrity, and personality of the candidate. Before a candidate is finally selected,
organisations prefer to contact the references to dig up into the candidate’s past history, past
employment, financial condition, police record, personal reputation etc. which will be helpful in
verifying the claim of the person.
6. Medical Examination: The pre-employment physical examination in terms of medical test of a
candidate is an important step in the selection process. This examination isolates the medically
unfit people from the rest.
7. Final Selection and Placement: If a candidate has cleared all hurdles in the selection procedure
he is formally appointed and letter appointment is given to that effect. In the letter of
appointment will be stated the terms and conditions of employment such as pay scale, period of
probation, starting salary, allowance and other perquisites, etc.

One of the important managerial activities in modern organisation is the training and development
programmes. It is common that organisation first recruits and select the employees and provide
them some of training to increase their versatility, knowledge, adaptability skills so that the jobs they
perform becomes appreciable. Training is the systematic acquisition of knowledge, skills, rules,
and attitudes that have specific or narrow applicability to a limited set of situations in a specific
job environment. Training constitutes significant part of organisation’s investment in human
resources. Every training programme is aimed at fulfilling the following purposes.
 To improve the health of workers;
 To increase the productivity of workforce;
 To improve overall organisational climate.
 To promote the safety of workers on the job;
 To prevent the obsolescence of employees at work;
 To improve the quality lot products being manufactured;
 To help an organisation to fulfil its future personnel needs;
 To maintain personal growth of employees in the enterprise;
According to O. Jeff Harris “Training of any kind should have as its objective the redirection or
improvement of behaviour so that the performance of the trainee becomes more useful and
production for himself and for the organisation of which he is a part. Training normally
concentrates on the improvement of either operative skills interpersonal skills, or decision-making
skills, or a combination of all these skills”.
Operative skills are required for the successful completion of a given task. Interpersonal skills are
related to the maintenance of successful relationship between peers and subordinates. Decision-
making skills are related to the problem identification and prescribing an appropriate solution.
Methods of Training
On-the-job Training
Actually, training begins the first day when an employee starts his job. Every employee learns a lot
on the job. On -the -job training is normally given by the superior or supervisor. One notable
feature is that there is no artificial location. Everything is a reality. Methods of on-the-job training
are:
 Coaching
 Vestibule Training
 Job Rotation
 Self-improvement Programmes
 Apprenticeship Training
Merits of on-the-job Training
 Trainee learns on actual working environment rather than on artificial environment.
 Trainee observes the rules and regulations being followed in day-to-day organizational life.
 Additional personnel are not required for training the employees when on-the-job method of
training is used. Therefore, there is a budgeted method of training.
Demerits of on-the-job Training
 Since there is no direction under which the trainee learns while performing job, there would be
disorganized learning on the part of the trainee.
 Sometimes, inexperienced handling of machines and tools by the trainees may result in massive
losses to the organisation. Which would be costly to the enterprise as such.
 It affects the flow of work.
 Sometimes it becomes very difficult for the trainee to work as well as learn.
In spite of these limitations, on-the-job training is considered suitable to supervisors, operatives,
and lower-level executives.
Off-the-job Training
As the name itself indicates, off-the-job training refers to training conducted away from the actual
work setting. Some of the popular methods of off-the-job training are:
 Lectures and Classroom Instruction  Role Playing
 The Conference Method  Case Studies
 Group Discussions  T-group Training (or sensitivity training)
Merits of Off-the-Job Training
 This type of training gets employees away from their work environment to a place where their
frustrations and bustle of work are eliminated. This more relaxed environment can help
employees to absorb more information as they feel less under pressure to perform.
 Can be a source to supply the latest information, current trends, skills and techniques for
example latest computer software or computerized technologies or innovative administrative
procedures. These new skills can be brought back and utilized within the company.
 Experts in their field would cover these courses, and this would mean that training for staff
members would be taught to a realistic standard.
 As the courses are held externally, company would not have to incur additional costs for extra
equipment or additional space.
 Sending an employee on a course could help to make an employee feel more valued as they
would feel as if they are receiving quality training.
 This would allow employees to network and perhaps drum-up business.
Demerits of Off-the-Job Training
 The overall cost could prove quite expensive.
 There is no guarantee that sufficient skills of knowledge will be transferred.
 The different learning speeds of individual may create difficulties in training process.
 Not all the learners will be starting at the same knowledge or skill level and there is a risk that
those starting at the lowest levels, may be lost from the start.

After a candidate is selected for a particular job in an organisation what needs to be done is to
induct him in his new job. Placement and induction represent the last stage in the staffing process.
Orientation involves the introduction of new employees to the enterprise, its functional tasks
and people. Large firms usually conduct a formal orientation programme which is conducted
usually by
 the HR Department. Orientation acts as a function of organizational socialization serving three main
purposes:
 Acquisition of work skills and abilities,
 Adoption of appropriate role behaviour
 adjustment to the norms and values of the work group.
Placement, on the other hand may be defined as ‘determination of the job to which an accepted
candidate is to be assigned, and his assignment to that job. A proper placement is instrumental in
reducing employee turnover, absenteeism and boosts employee morale. Here, the selected
candidate is given a copy of the policies, procedures and rules and regulations of the enterprise in
question. The candidate will be given a complete and clear-cut description of the nature of job
assigned to him, to whom he is accountable, who are accountable to him etc. Thus, the employee
will come to know the exact authority-responsibility-accountability relationships.
9.10 LEADING
In the words of Richard Daft “Leading is the use of influence to motivate employees to achieve
organizational goals”. Managers must be able to make employees want to participate in achieving
an organization’s goals. Three components make up the leading functions:
 Motivating employees
 Influencing employees
 Forming effective groups.
The leading process helps the organization move toward goal attainment.
9.11 CONTROL
Control can be defined as comparison of actual performance with the planned performance. If
there is any difference then find the reasons for such difference and take corrective measures to
stop those reasons. In the words of Anthony, control is “the process by which managers assure that
recourses are obtained and used effectively and efficiently in the accomplishment of the
organisational objectives”. Control function is closely
connected to planning. In fact, control is an effective counterpart to planning. Planning and control
are so entangled that it becomes almost impossible to determine where one leaves off and when
the other begin. Planning without controls are apt to hollow hopes.

1. Setting-up of Standards: The first step in control process is the establishment of standards
against which the actual performance is measured. Fred Lufthansa contends that “standards are
used to control the objectives, objectives are used to control goals, and goals are used to
control purpose”. Before setting standards, managers take necessary steps such as studying the
work characteristics, setting the acceptable levels of goal performance etc. Further, a manager
should see that standards are not rigid, rather they are rationally flexible.
2. Measurement of Performance: After setting-up of standards, the performance of the
employees is measured by evaluating the actual work done by the employees. Measurement of
performance is particularly difficult for less technical tasks.
3. Comparing the Actual Performance with Standards: The comparison may reveal some
deviations from the standards established. In very rare occasions only actual performance
matches perfectly
 with the standards. While comparing the actual performance with the standards, a manager
should see that the deviation does not go beyond an acceptable range.
4. Taking Corrective Actions: If the actual result is far from the desired result (whether the
deviation is positive or negative) corrective action must be taken. If there is a negative deviation
an enquiry should be made as to why actual results were not meeting the standards. If there is
positive deviation, it does not mean that the performance is very good. The positive deviation
may be due to substandard being fixed. This too calls for corrective action. A manager has to
assess the causes of deviation and take necessary corrective actions such as: -
 Re-setting the Standards  Reallocation of Duties to Employees
 Providing Motivation to Employees  Changing the Organisation Structure
 Training and Selecting the Employees.

What to Control?
In any organisation managers have to decide in advance the area or points of activity which need
to be controlled these are to be selected based on their importance in relation to the whole
activity and desired results. This leads us to examine two concepts: Critical Point Control and
Control of Exception.
1. Critical Point Control: In a simple operating system, all aspects of the activity can be watched
and controlled in a close manner. But as a system becomes more complex, it may not be
possible to control each and every aspect of the activities. In such cases controls have to be
selective to some Key Result Areas (KRAs). Key Result Areas are those which have impact on
whole organisation, any deviation in these areas must be addressed on priority basis.
2. Control by Exception: Also known as ‘management by exception’, means that managers at
each level should pay attention to only exceptional and significant deviations from planned
results. Managers should not waste his time and energy in finding solutions for minor
deviations rather he should concentrate on removing deviations of high degree. The idea
behind the principle is that “a manger who try to control everything may ed up controlling
nothing”.

1. Feedback Control: Feedback control involves gathering information about the past activity to
evaluate that information, and taking steps to improve similar activities in the future.
Feedback control is historical in nature and is also known as ‘post control’. In other words, it
permits the manager to use information on past performance to bring future performance in
line with planned objectives and standards. Post control helps in testing validity and
appropriateness of standards. To make post-control more meaningful and effective, analysis of
post-performance is required to be made as quickly as possible and control reports should
have been submitted to the manager without loss of time.
2. Concurrent Control: It is known as ‘real time’ or ‘steering’ control. It is concerned with the
adjustment of performance before any major damage is done. For example, the driver of a
car adjusts its steering continuously depending upon the direction of destination, obstacles and
other factors. In a factory, control chart is an example of concurrent control. Concurrent
control occurs while an activity is still taking place.
3. Feed Forward Control: Feed forward control also known as ‘preliminary’ or ‘preventive’
control involves identifying and preventing problems in an organisation before they occur.
For example, let’s imagine the emergency room of a hospital. The emergency room requires
many
 different employees and medical tools to properly treat patients. In order to avoid problems
that may occur in the emergency room, it is important that the management of the hospital
must hire the right people, inspect and test equipment regularly to manage any medical
emergency that may come their way.

 There should be a match between the type of function and the system of control at all levels
of the organisation.
 The control system should be sensitive enough to point out deviations from plans immediately
so that corrective action can be initiated with little loss of time and before any damage is
caused.
 The control system should be flexible and forward looking just like the planning system, to
enable the organisation and its sub-systems to adapt and adjust their goals and the means of
reaching them in turn with the change in the environment.
 The control system should focus on strategic and key activity areas or points which are critical
to overall performance.
 The control system should enable managers to utilize their time and talent most effectively by
concentrating on major or exceptional deviations from plans.
 The control system should be economical to operate; economy need not however be
exercised at the cost of effectiveness. Sometimes, a simple inexpensive control system may
match with expensive, highly sophisticated one in terms of effectiveness.
 The control system should give due importance to factors which cannot be controlled but
which can affect the performance of employees.
 The control system should be designed to measure and evaluate the diverse dimensions of
performance of individuals and activity areas, giving appropriate weightage to all the relevant
variables having a bearing on performance: qualitative variables or factors deserve to be taken
into consideration, while evaluating performance.
 Finally, the control system should be understandable to those whose performance is sought to
be regulated. The requirements of control system should be communicated in a simple and
straightforward manner to those who are to abide by the system.

1. Principles of Assurance of Objective: The task of control is to ensure that plans succeed by
detecting deviations from plans and furnishing a basis for taking action to correct deviations.
2. Principle of Future-directed Controls: The more a control system is based on feed forward
managers have more opportunities to observe undesirable deviations from plans before they occur
and to take action in time to prevent them. Control, like planning, should ideally be forward-
looking, because of time lags in the system of information feedback. Hence control should be
directed towards the future by formulating proper information, forecasting, early warning and rapid
response mechanisms.
3. Principle of Control Responsibility: The primary responsibility for the exercise of control rests
with the manager. There is unity of planning and control in each managerial position.
4. Principle of Efficiency of Control: Control techniques and approaches are efficient if they detect
and lighten the nature and causes of deviations from plans with a minimum of costs or other
uninvited consequences. The results of control should be worth their costs both in monetary and
human terms.
5. Principle of Direct Control: Higher the quality of manager would ensure higher the quality of
decision making and action behaviour.
6. Principle of Reflection of Plans: The more the plans are clear, complete and integrated, and the
more the controls are designed to reflect such plans, the more effectively controls will serve the
needs of managers. Clear, complete and integrated plans facilitate better control.
7. Principle of Organisational Suitability: Responsibility for execution of plans and for correction of
deviations must be pinpointed clearly in the organisational structure.
8. Principle of Individuality of Control: The more that control techniques and information are
understandable to individual managers who must utilise them for results, the more they will be
actually, used and the more they will result in effective control. Control techniques should be
tailored to the personality and orientations of managers; at least they should be intelligible to
them and within their power of understanding.
9. Principle of Standards: Effective controls require unbiassed, accurate and suitable standards.
Measurement of performance by reference to standards should be verifiable, specific and simple.
Standards should earn the respect of people who have to abide by them.
10. Principle of Critical Point Control: Effective control requires attention to those factors critical
to appraising performance against an individual plan. Managers should concentrate on salient
features of performance in selective areas, picked up as of strategic importance.
11. Principle of Exception: This principle suggests that managers should concentrate on significant
deviations, both positive and negative, from plans.
12. Principle of Flexibility of Control: If controls are to remain effective, despite failure or
unforeseen changes of plans, flexibility is required in their design. Since plans have to be flexible to
order to be effective, control has also to be flexible.
13. Principle of Action: Control is justified only if indicated or experienced deviations from plans
are corrected through appropriate functions. The principle affirms the essential unity of
management.

1. Budgetary Control: “Budgets are formal quantitative statements of the resources allocated for
the execution of activities over a given period of time, and include information about projected
income, expenditure and profits.” Budgets are useful as tools of control to the extent that they,
permit, monitoring, measurement, evaluation, regulation and correction of enterprise activity
along desired pre determinate directions. The essential elements of budgetary control are as
follows:
 Division of goals into sub goals of the various operating units which are further operationalised
as standards of performance, and targets of achievement over a short period of time frame.
 Determination of the volume of resources required to achieve the operational goals.
 Accord of general sanction for the acquisition and allocation of budgetary resources to various
activity units over the budgetary period.
 Delegation of necessary authority and fixing up of accountability for the planned performance
standards and targets, among the various executive positions.
 Establishment of appropriate system for monitoring, measuring and evaluating the pace and
quality of operations on a continuous basis. This includes initiation of required measures to ensure
that actual performance is in conformity with budgeted performance. Deviations and variances
are analysed and remedial measures are taken to set them right.
2. Financial Statements: The annual financial statements of enterprises i.e., Trading and Profit and
Loss Account and Balance Sheet are powerful tools of control. They represent the financial
dimension of enterprise operations at periodic intervals of time. Managers could analyse the
financial statements of the previous period to know the dynamics of revenue generation and
frequency of expenditure along with the trends of changes in the liabilities, assets and net worth of
the enterprise. For future forecasting projected financial statements may also be prepared on the
basis of plans of the enterprise and these could also be used to monitor financial transactions
which take place in the enterprise.
3. Break-even Analysis: Also known as Cost-Volume Profit analysis, is a tool of control to evaluate
the behaviour of costs, revenues and profits at various levels. It enables management to
understand the amount of profit that can be expected from various operations, the appropriate
volume of operations needed to obtain a target level of profit, and the impact of changes in
product prices and costs on the volume of operations and profitability. Break-even graphs can be
prepared by using the available or projected data of fixed and variable costs and sales of the
enterprise. Break-even analysis is adopted as a tool of profit planning. It is thus a technique of both
planning and control.
4. Management Information System (MIS): MIS can be helpful to managers in carrying out the
planning, controlling and operational functions by gathering storing and converting data into useful
information. MIS incorporates, historical, current and projected information. It provides
information in summary or detailed form as needed by managers. It provides information for all
types of decision whether strategic, administrative and operational. It enables managers to
improve the quality of their decisions and to organize their day-to-day functioning in general. It
adds to the alertness, awareness and intelligence of managers by supplying information in the
form of progress and review reports on on-going activity. Another role of MIS is to provide only
that much information as called for by managers specifically for purposes of decision making. This
means that the question of information overload does not arise and only ideal information is
provided. The information is also updated on a continuous basis so as to make it more relevant.
MIS avoids furnishing of overlapping information as it will create confusion in the minds of
managers.
5. Management Audit: A systematic evaluation of the functioning, performance and effectiveness
of management of an organisation is known as management audit. It is an independent
assessment of an organization’s management by an outside firm. Depending on the preferences
of the top- level management audit may cover various aspects of the organisation. A few major
areas which could be exposed to the search lights of management audit are listed as follows:
 Formulation of organisational objectives, strategies, policies and programmes of action and the
manner in which they are pursued, as also the extent of success achieved.
 Design and operation of organisational structures of roles, activities and relationships.
 The manner and efficiency with which resources and assets are mobilised, developed, allocated,
utilised and safeguarded, including the human resources.
 Design and functioning of various systems and operations within the organisation.
 The manner in which the management team anticipates and sizes up external environmental
elements and designs appropriate adaptive strategies to cope with them.
 The internal organisational climate - to what extent it is favourable for co-operation, harmony,
creativity, productivity and satisfaction.
 The quality of managerial decisions, their soundness, timeliness and effectiveness.
 9.12 COMMUNICATION
The term communication is derived from the Latin word ‘communis’ which means “common”.
Communication is a process of passing information, ideas and understanding from one person
to another. Communication of ideas establishes a common ground for understanding the people
in organisations. Communication is vital for all managerial actions. Communication is the blood
vessel of an organisation through
which the decisions and instructions of the management flow down to the lowest levels. According
to Dalton McFarland “Communication is the process of meaningful interaction among human beings.
More specifically, it is the process by which meanings are perceived and understandings are
reached among human beings”. Simply, communication is the act of making one’s ideas and
opinions known to others.

 Communication is very important for the proper and efficient operation of a business or an
organization unit.
 Communication helps in the exchange of thoughts and information which strengthens unity and
increases coordination among employees.
 The procedure of delegation and decentralization of activities or powers, which is possible only
through effective communication.
 Communication plays an important role in maintaining public relations.
 Communication is important for management to ensure proper execution. It is because of
communication that management achieves its objectives on time.

1. The Sender: Sender is the person who sends the message. The communication process begins
immediately when the idea comes in the mind of sender.
2. Message: The message is what a communicator is communicating. Without this, there is no
communication. The message sent by the person should be stated in clear and unambiguous
terms.
3. Encoding: The second important element in the communication process is encoding. Encoding
involves the selection of language in which the message is to be given. The medium of expression
may be speaking, writing, signalling, gesturing, physical contacting, handshake, hitting etc.
Encoding should be done in such a way that the receiver may correctly understand the message
communicated to him.
4. Medium: It is the way through which the encoded message is transmitted to the receiver. It
may be face-to-face, telephonic, group meetings, computers, policy statements, production
schedules, and sales forecasts etc. Sometimes, nonverbal media such as facial expressions, body
language, tone of voice, gesturing etc., are also used.
5. Decoding: It involves interpretation of the message by the receiver. Interpretation of message
largely depends on the perception, past experience and attitudes of the receiver.
6. The Receiver: Receiver is the person who receives the communication and understands the
message.
7. Feedback: It is the receiver’s response on the idea conveyed by the sender. Feedback is an
essential to check that no falsification between the intended message and received message exists.
8. Noise: It is a disturbance that tends to obstruct the smooth flow of communication and reduces
the clarity of the message. It may be the result of poor network, in attention of the receiver etc.

Communication may be of several types. On the basis of relationship between the parties
communicating each other, the communication may be formal or informal. On the basis of flow of
direction, communication can be downward, upward or horizontal. On the basis of medium
communication may be verbal or written.
Formal and Informal Communication
Formal communication is the official message that is communicated by a manager by virtue of his
position in the organisation structure. On the other hand, communication is said to be informal
when it grown up spontaneously from personal and group interests.
Downward, Upward and Horizontal Communication
When communication flows from top to bottom it is called downward communication, when it
flows from bottom to up it is named as upward communication. Lateral or horizontal
communication refers to the flow of communication between various departments or people on
the same level in an organisation.
Verbal and Written Communication
Two methods of communicating a message may be verbal or written. Popular forms of verbal
(oral) communication include face-to-face talks, formal group discussions, and grapevine.
Whereas, written communication is a formal method of putting the orders, instructions, and
reports in writing. It creates a record of evidence.

1. Filtering: Filtering refers to sender manipulating information so it will be seen more

favourably by the receiver. Sometimes the information is filtered by the sender himself. If a
manager filters the information by hiding some meaning and disclosing in such a fashion that
the information is appealing to the employee, then he is filtering the message deliberately.
2. Perception: Different people may have different perceptions depending upon their needs,
social environment, level of education and other cultural and personal temperaments.
Everyone interprets, evaluates the information received form his point of view. Lack of
uniformity in perception or understanding is a great barrier to communication.
3. Language: Communication is said to be poor and distorted if the message is not properly
expressed. When information is worded in a manner not understandable to the receiver it is
quite likely that the message may be misunderstood.
4. Semantic Barrier: Sometimes the words used in the message may have two or more
meanings. The sender might use in one sense whereas the receiver may take another meaning
and in this way the purpose of communication is lost.
5. Emotions: Emotions of both the sender and receiver influence the message that is transmitted
and received. The receiver is likely to take into account the emotion of the sender and
interpret the information accordingly. Extreme emotions such as joy or depression have
probability of hindering the effectiveness of communication.
6. Information Overload: When managers furnish the heavy information to subordinates, they
become unable to distinguish between important and unimportant and this way the entire
exercise of communicating would be redundant and wasteful.
 7. Non-verbal Cues: They are very important sources of hindering the message especially when
these cues are inconsistent with the message. Normally, the receiver expects some consistency
in the non-verbal cues with the message being transmitted.
8. Time Pressures: Often in organization the targets have to be achieved within a specified time
period, the failure of which has adverse consequences. In a rapidity to meet deadlines, the
formal channels of communication are shortened, or messages are partially given, thus
hampering effective communication.

 Effective Listening.  Understand the non-verbal cues.

 Simplifying Language.  Regulate the Flow of Information.
 Fostering Interpersonal Trust.  Have feedback, both verbal and non-verbal.
 See the emotions do not cloud and distort the message.
9.13 CO-ORDINATION
“Coordination is the process whereby an executive develops an orderly pattern of group effort
among his subordinates and secures unity of action in the pursuit of common purpose”.
Coordination is the effort to ensure a smooth interplay of the functions and forces of all the
different component parts of an organisation so that its purpose will be realised with a minimum of
friction and a maximum of collaborative effectiveness. “It makes diverse elements and sub- systems
of an organisation to work harmoniously towards the realisation of common objectives”.
Coordination is a sensible and balanced process of pulling together the different parts of an
organization and unifying them into a team to achieve predetermined goals in an effective manner.
According to Henry Fayol, “To coordinate is to harmonise all the activities of a concern so as to
facilitate its working and its success. In a well-
coordinated enterprise, each department or division works in harmony with others and is fully
informed of its role in the organisation. The working schedules of various departments are
constantly tuned to circumstances.”
Coordination is the orderly synchronization of efforts of the subordinates to provide the proper
amount, timing and quality of execution so that their unified efforts lead to the stated objective,
namely the common purpose of the enterprise. It involves blending the activities of different
individuals and groups for the achievement of common objectives.

 Coordination is the essence of management. It is inherent in managerial job and embodied in all
the functions of management.
 Coordination is the basic responsibility of management and it can be achieved through the
managerial functions. No manager can evade or avoid this responsibility.
 Coordination does not arise spontaneously or by force. It is the result of conscious and
concerted action by management. It cannot be left to chance.
 The heart of coordination is the unity of purpose which involves fixing the time and manner of
performing various activities,
 Coordination is a continuous process. It is also a dynamic process involving give and take.
 Coordination is required in group efforts, not in individual effort. It involves the orderly
arrangement of group efforts. There is no need for coordination when an individual works in
isolation without affecting anyone’s functioning.
 Coordination recognises the diversity and interdependence of organisational systems and the
need for fusion and synthesis of efforts.

1. Principle of Early Stage: According to this principle, coordination must start at an early stage in
the management process. It must start during the planning stage. This will result in making the
best plans and implementing these plans with success.
2. Principle of Continuity: According to this principle, coordination must be a continuous process.
It must not be a one-time activity. The process of coordination must begin when the organisation
starts, and it must continue until the organisation exists.
3. Principle of Direct Contact: According to this principle, all managers must have a Direct Contact
with their subordinates. This will result in good relations between the manager and their
subordinates. This is because direct contact helps to avoid misunderstandings, misinterpretations
and disputes between managers and subordinates.
4. Principle of Reciprocal Relations: The decisions and actions of all the people (i.e., of all
managers and employees) and departments of the organisation are inter-related. So, the decisions
and actions of one person or department will affect all other persons and departments in the
organisation. Therefore, before taking any decision or action all managers must first find out the
effect of that decision or action on other persons and departments in the organisation. This is
called the Principle of Reciprocal Relations. Co-ordination will be successful only if this principle is
followed properly.
5. Principle of Effective Communication: Co-ordination will be successful only in the presence of
an effective communication. Good communication must be present between all departments,
within employees themselves and even between managers and their subordinates.
6. Principle of Clarity of Objectives: Co-ordination will be successful only if the organisation has set
its clear objectives. Everyone in the organisation must know the objectives very clearly. No one
must have any doubts about the objectives of the organisation. Clear objectives can be achieved
easily and quickly.
9.14 DIRECTING
Directing involves issuing orders to subordinates and supervise how these orders are carried out
by them, and if necessary, motivate the employees for higher performance and hence to the
accomplishment of the organisational objectives effectively. According to Joseph Massie
“directing concerns the total manner in which a manager influences the actions of subordinates.
It is the final action of a manager in getting orders to act after all preparations have been
completed.”

Direction is an essential managerial function because it deals with human resources and suggests
ways of improving the performance by the employees in an enterprise. Direction is aimed at
maintaining harmony among employees and groups in an organisation. It is the process around
which all other management functions revolve. The individual goals and organisational objectives
are integrated only through directing function. This integration is achieved through the elements of
direction viz communication, motivation, leadership, and supervision.
1. Harmony of Objectives: One very important principle of direction is to harmonise the
objectives or goals of individuals with that of the enterprise. A manager should foster the
sense of belonging to the organisation among individuals and groups and see that the
members identify themselves with the organisation. Goal incongruence may lead to
ineffectiveness and inefficiency.
2. Unity of Command: Another sound principle of direction is that the subordinates should receive
orders from one and only one superior or boss. Presence of dual subordination unavoidably
brings chaos and disorder. For achieving efficiency, unity of direction should be strictly
followed.
3. Direct Supervision: When manager is directly involved in supervising the employees he comes
into personal contact with the employees, especially in the work- related areas, a sense of
belonging gets developed in the minds of employees which escalates the morale and makes
sub- ordinate happy. Direct supervision also ensures quick feedback of necessary information;
the manager would get first-hand information from the employees.
4. Appropriate Leadership Style: Leadership is a process of influencing the employees in the
work environment. A manager should exhibit appropriate leadership style to direct the
employees to achieve the organisational goals effectively. Leadership style is a function, of
characteristics of leader, characteristics of subordinates, and the situation.
5. Motivational Techniques: One of the principles of effective direction states that the manager
should motivate the employees by employing some motivational techniques so that
theproductivity and the quality produced by the employee increases.
6. Follow Up: The last, but not least important, principle of direction is ‘follow-up’ because without
such a follow up, it is quite likely that the subordinates just receive orders and do not follow
them at all.