PRINCIPLE OF MANAGEMENT

EMBA Program
DISTANCE LEARNING ASSIGNMENT

PRINCIPLE OF MANAGEMENT
Quarter: Winter 2015,
Deadline for Submission of Assignment: February 5, 2015
Attempt all questions given below. Your answers should not be copied, word-forword, from the textbook. You may use the terms, concepts, examples from the
textbook, but these must be written as your own, independent expression.
1. Define Management and explain basic management functions.
2. Describe the concept of an MBO in the context of management and explain

four different strategies of TOWS matrix.

3. What is meant by span of management and explain the factors that
influence the span of management.
4. List categories of departmentation and explain departmentation by functions.
5. Describe in details the term line, staff and functional authority.
6. What are the critical factors in effective organizing?
7. Explain the Adams Equity theory of motivation.
8. List types of leadership approaches and explain Autocratic Approach.
9. Describe briefly the reasons for using committees and groups
10. Write a detailed note on the basic control process and also describe the

requirement for establishing effective control.

PRINCIPLE OF MANAGEMENT

Question # 1: Define management and explain basic management

functions?
Answer:
Management
Management is a process of designing and maintaining and environment
in which individual working together in groups efficiently to accomplish
the selected aims.
This can be elaborated as:
1. As managers people carry out the managerial functions of planning
organizing staffing and controlling
2. Management applies to any kind of organization
3. It applies to manager at all organizational levels
4. The aim of all the managers is the same to create a surplus
5. Managing is concerned with productivity which applies effectiveness
and sffeicienlty
Function of management
Researcher and managers have found that the analysis of management is
facilitated by a useful and clear organization of knowledge. Management
is therefore breaking into five managerial functions.
Managerial functions are as follows:
1.
2.
3.
4.
5.

Planning
Organizing
Staffing
Leading
Controlling

The framework of management is

used and tested for number of
decades. The emphasis onstudy of
management
functions
is
on
mangers and task that pertain to
designing an internal environment
for
performance
with
an
organization. As to mangers one
cannot perfom the and operate the
enter business enterprise.

Planning

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The word planning incorporates both ideas: It means determining the

organization's goals and defining the means for achieving them. Planning
allows managers the opportunity to adjust to the environment instead of
merely reacting to it. Planning increases the possibility of survival in
business by actively anticipating and managing the risks that may occur
in the future.
Planning is the function of management that involves setting objectives
and determining a course of action for achieving those objectives.
Planning requires that managers be aware of environmental conditions
facing their organization and forecast future conditions. It also requires
that managers be good decision makers.
Planning is a process consisting of several steps. The process begins
with environmental scanning which simply means that planners must be
aware of the critical contingencies facing their organization in terms of
economic conditions, their competitors, and their customers. Planners
must then attempt to forecast future conditions. These forecasts form the
basis for planning.
Planners must establish objectives, which are statements of what needs to
be achieved and when. Planners must then identify alternative courses of
action for achieving objectives. After evaluating the various alternatives,
planners must make decisions about the best courses of action for
achieving objectives. They must then formulate necessary steps and
ensure

effective

implementation

of

plans.

Finally,

planners

must

constantly evaluate the success of their plans and take corrective action
when necessary.
There are many different types of plans and planning
1. Starategic Planning
2. Tactical Planning
3. Operational Planning

Organizing

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Organizing is the function of management that involves developing an

organizational structure and allocating human resources to ensure the
accomplishment of objectives. The structure of the organization is the
framework within which effort is coordinated. The structure is usually
represented

by

an

organization

chart,

which

provides

graphic

representation of the chain of command within an organization. Decisions

made about the structure of an organization are generally referred to
as organizational design decisions.
Organizing also involves the design of individual jobs within the
organization.

Decisions

must

be

made

about

the

duties

and

responsibilities of individual jobs, as well as the manner in which the

duties should be carried out. Decisions made about the nature of jobs
within the organization are generally called job design decisions.
Organizing at the level of the organization involves deciding how best to
departmentalize, or cluster, jobs into departments to coordinate effort
effectively. There are many different ways to departmentalize, including
organizing by function, product, geography, or customer. Many larger
organizations use multiple methods of departmentalization.

Staffing
Staffing is the process by which an organization creates a pool of
applicants and makes a choice from that pool to provide the right person
at the right place at the right time to increase the organizational
effectiveness.
The staffing function follows the planning and organizing function. It
is a continuous process. This function includes recruitment, selection,
training, development, transfer, promotion and compensation of
personnel.
The major elements of staffing are as follows
Effective recruitment and selection.
Proper classification of personnel and pay fixed for them.
Proper placement.

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Adequate and appropriate training for development.

Satisfactory and fair transfer & promotion.
Sound relationship between management and workers.
Adequate provision for retirement.

Leadership
Over the years the philosophical terms "management" and "leadership"
have been used both as synonyms and with clearly differentiated
meanings. Debate is fairly common about whether the use of these terms
should be restricted and generally reflects an awareness of the distinction
made by Burns (1978) between "transactional" leadership (characterized
by emphasis on procedures, contingent reward, management by
exception) and "transformational" leadership (characterized by charisma,
personal relationships, creativity). Management is often associated with
the former and leadership with the latter.
Leaders who demonstrate persistence, tenacity, determination, and
synergistic communication skills will bring out the same qualities in their
groups. Good leaders use their own inner mentors to energize their team
and organizations and lead a team to achieve success.
In contrast to individual leadership, some organizations have adopted
group leadership. In this situation, more than one person provides
direction to the group as a whole. Some organizations have taken this
approach in hopes of increasing creativity, reducing costs, or downsizing.
Others may see the traditional leadership of a boss as costing too much in
team performance. In some situations, the team members best able to
handle any given phase of the project become the temporary leaders.
Additionally, staff experiences energy and success when each team
member has access to elevated levels of empowerment.
Leadership style is a leader's approach towards providing direction,
implementing plans, and motivating people. It is the result of the
philosophy, personality, and experience of the leader. Rhetoric specialists
have also developed models for understanding leadership
Different situations call for different leadership styles. In an emergency,
when there is little time to reach an agreement and where a designated
authority has significantly more experience or expertise than the rest of
the team, an autocratic leadership style may be most effective. However,
in a highly motivated and aligned team, with a homogeneous level of
expertise, a more democratic or laissez-faire style may be more effective.
The leadership style adopted should be the one that most effectively

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achieves the objectives of the group while balancing the interests of its
individual members.

Controlling Meaning & Nature

Control, it is the last function of any management. The controlling function
will be unnecessary to the management if other function of management
are performed properly.
According to Knootz & ODonnell, Controlling is the measurement
of accomplishment against the standards and the correction of deviations
to assure attainment of objectives according to plans.
G.R.Terry state that Controlling is determining what is being
accomplished, that is, evaluating the performance and if necessary,
applying corrective measure so that the performance takes place
according to plans.
Henry Fayol, Control consists in verifying whether everything
occurs in conformity, is with the plans adopted the instructions issued and
principles established. It has for its object to point out weaknesses and
errors in order to rectify them and prevent recurrence.
According to Mc Farland, The presence in a business of that force
which guides it to a pre-determined objective by means of pre-determined
policies and decisions.
The main scopes of control are as follows
a)
b)
c)
d)
e)
f)

Control over organization.

Control over policies of the concern.
Control over production.
Control over public relations.
Control over research & development.
Control over tools & equipment.

Characteristics of Control are

1.
2.
3.
4.
5.
6.
7.

Control is a continuous process.

It is a management process.
It is embedded in each level of organizational hierarchy.
It is forward looking.
It is closely linked with planning.
It is a tool for achieving organizational activities.
Control is an end process.

This study is about individuals, groups/teams and organizations, and the

management of them, people behavior, and the impacts on organizational

PRINCIPLE OF MANAGEMENT

effectiveness. Behavior is analyzed to determine what impedes,

maintains, and advances organizations, in terms of profitability and
competitiveness. It also provides an overview of the major elements of
organizational behavior including: motivation, perception, communication,
group dynamics, leadership, structure, culture, and environment.

PRINCIPLE OF MANAGEMENT

Question # 2: describe the concept of an MBO in the context of

management and explain the strategies of TOWX matrix?
Answer:
Management By Objectives:
Management by objectives (MBO), also known as management by
results (MBR), is a process of defining objectives within an organization so
that management and employees agree to the objectives and understand
what they need to do in the organization in order to achieve them. The
term "management by objectives" was first popularized by Peter
Drucker in his 1954 book The Practice of Management
One of the most interesting developments in management during the
latter part of this century has been the development of the concept of
Management by Objectives (MBO). As the organizations grew more
complex both in organizational structure as well as the extent of
operations the need for more sophisticated techniques of management
arose.
The main concern of management is to produce the desired results
effectively and efficiently. This has been the focus of the evolution of
management approaches and techniques.
In the context of the simple managerial situation of yesterdays, when the
level of technology was low and the organisational complexities were nonexistent, sophisticated techniques were not needed. But with the rapid
development of technology at all levels, with organization pyramids
becoming larger and more complex and with the separation of ownership
and management, new situations have emerged which demand different
responses.
It is now recognized that when the managers cease to be risk bearers, it
becomes necessary to devise some means to increase their stake in the
output of organization. The system of Management by Objectives (MBO) is
designed to achieve that
Advantages:
MBO programs continually emphasize what should be done in an
organization to achieve organizational goals.
MBO process secures employee commitment to attaining
organizational goals.
Disadvantages:

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The development of objectives can be time consuming, leaving both

managers and employees less time in which to do their actual work.
The elaborate written goals, careful communication of goals, and
detailed performance evaluation required in an MBO program
increase the volume of paperwork in an organization.

TOWS Matrix
Heinz Weihrich has developed a matrix called TOWS matrix by comparing
strengths and weaknesses of organization with that of market
opportunities and threats
It has been criticized that after conducting the SWOT Analysis managers
frequently fail to successfully deal with the strategic choices that the
outcomes demand.
TOWS Matrix while using the same inputs (Threats, Opportunities,
Weakness and Strengths) reorganizes them and integrates them more
fully into the strategic planning process.
The matrix is outlined below:

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PRINCIPLE OF MANAGEMENT

Question # 3: What is meant by Span of management and

explain the factor that influence the span of management?
Answer:
Span Of Management
Span of management means the number of people managed efficiently by
a single officer in an organization. This is also called span of management,
span of authority, span of supervision, span of authority, span of
responsibility or levels of organization. This principle is based on the
principle of relationship.
Span of control refers to the maximum numbers effectively
supervised by a single individual. The number of members may be
increased or decreased according to the nature of work done by the
subordinate or the ability of the supervision. In the administration area,
under one executive, nearly four of five subordinates may work. The span
of control enables the smooth functioning of the organization.
The term span literally means the space the between two supports
of a structure, e.g. the space between two pillars of a bridge. The space
between two pillars should be neither too large nor to small. If it is too
large, the bridge may collapse and if is too small, it will enhance its cost.
When this word is applied to management, it refers to the number of
subordinates a manager or a supervisor can supervise, manage or control
effectively and effectively.
Therefore, span of supervision refer to the optimum number of
subordinates that a manager or supervisor can manage or control
effectively.
An organization is characterized by the presence of a number of
levels and departments. But more the levels are created more will be the
administrative cost due to additional staff required and more will be the
difficulty to be encountered in communication and controlling.
This is basically the problem of deciding the number of subordinates
to report directly to each manager. According to this principle there is a
limit of the number of subordinates that each managers can effectively
supervise.
Basically there are two types of span of management
1.
Narrow span of management It leads to many level in heresy
system in organization situation. Narrow span also effect employees moral
adversely.

PRINCIPLE OF MANAGEMENT

2.
Wide span of management Wide spans of management leads to flat
organization in which manager have a developing skill and experience of
knowledge.

Factors influencing Span of Control

Important factors influencing the determination of proper span of
control/supervision management are: 1. nature of work 2. ability of the
supervisor 3. competence of the subordinates 4. ability of staff services 5.
availability of time and energy with the supervisor 6. delegation of
authority 7. degree of decentralization 8. planning required by the
supervisor 9. use of objective standards and 10. territorial contiguity of
functions supervised!
1. Nature of work:
The span of control greatly depends upon the nature of activities and
problems faced by the supervisor, which in turn will depend on nature and
size of production. In case the supervisor carries routine type of job under
set guidelines, he need not devote much time on the workers under him.
As the job is repetitive in nature, span of supervision or control can be
larger. In other words, a supervisor can control more workers under him.
On the other hand, in case of complex and complicated jobs it would be
difficult for the supervisor to control large number of workers effectively.
The span of control will be narrow in such cases.
2. Ability of the supervisor:
The ability and skill of the supervisor greatly affects determination of
span. A highly qualified and experienced supervisor with specialised
knowledge and technical skill will be able to undertake effectively a larger
span than a supervisor who is not well qualified and experienced.
3. Competence of the subordinates:
The span of control supervision is also greatly affected by the quality of
the subordinates to be supervised by the supervisor. If subordinates are
by and large experienced, hard working and well versed in their jobs, the
supervisor can manage large number of workers and span can be more.
The supervisor can rely on the performance of the workers and he need
not guide them time and again once instructions are issued to them.
If the staff under the control of supervisor is inexperienced and inefficient
(say comprising of new comers), the subordinates would refer to the
supervisor every now and then for clarifications and guidance. The span of
control in such a case will be narrow.

PRINCIPLE OF MANAGEMENT

4. Ability of staff services:

The term staff means the appointment of experts in the line organisation
for guiding, advising, and expert opinion to the line officers. The
supervisor or line superior is greatly benefited and relieved by the staff
advice. He can manage large number of subordinates and the span will be
large. If staff services are not available, lesser number of subordinates
should be put under the control of one supervisor which will lead to
narrow span
5. Availability of time and energy with the supervisor:
The availability of time with the supervisor will depend upon the type of
the problems, simple or complex, tackled by him and he has to do many
other things like preparation of reports and planning. If he is busy in these
complexities, he will not be able to manage large number of subordinates.
Here the span of control will be narrow.
6. Delegation of authority:
In an enterprise which is effectively organised and structured,
management is able to influence and minimise the frequency and severity
of superior- subordinate relationships and thus increase its span. An
organisation poorly conceived consumes disproportionate time of the
manager in counselling and guidance of the subordinates
An important symptom of inefficient organisation influencing span of
control is to be found in ambiguous or inadequate authority delegation. If
subordinate is not clear about what he is expected to do or is called upon
to do something beyond the scope of his authority, he will make more
demand on the senior manager and hence operate to reduce his span.
Where subordinates are delegated authority sufficient to carry out the
assigned duties and their authorities are clearly defined, properly trained
subordinates will considerably reduce the time and attention of the senior
and thus help to increase his span.
7. Degree of decentralization:
If a manager is to make many decisions himself, he will have less time to
spare from supervising the work of his subordinate and thus must operate
with a narrow span. On the other hand, an executive operating under
decentralized set-up is relieved of much of the burden of making
programmed decisions and hence can afford to supervise relatively a
larger number of subordinates.
8. Planning required by the supervisor:

PRINCIPLE OF MANAGEMENT

This factor refers to the importance, complexity and time to be spent by

the executive in reviewing the objectives, programming the actions and
deciding about a number of policy matters. As the importance, complexity
and time required of the manager in performing his planning function
increases, it will be more prudent to reduce the number of subordinates
reporting to him.
9. Use of objective standards
Supervising the subordinates requires that management must know how
far plans are being followed and to what extent their performance tends to
deviate from plans. He can know the deviations either by personal
observation or through use of objective standards. In the latter case,
manager is saved of many time-consuming relationships and can
concentrate on points of strategic importance thus widening his span of
control.

Question # 4: List categories of departmentation and explain

departmentation by functions
Answer:
Introduction
Organizations are formed when a group of individuals unite to accomplish
a specific goal. They are responsible for creating a work environment that
best utilizes resources such as people, tasks and technology. But, in order
to meet this objective, they will need to create an organizational structure
or design. Organizational structure and design include work specialization,
departmentalization, chain of command, span of control, centralization
and
decentralization
and
common
organizational
designs.
Departmentalization is discussed here.
Meaning of departmentation
Grouping of activities is an essential step in designing an organisational
structure. Grouping of activities into departments or other homogeneous
unit
is
known
as
departmentation.
Departmentation
or
departmentalisation is the process of grouping tasks into jobs, the
combining of jobs into effective work groups and the combining of groups
into identifiable groups or departments.

PRINCIPLE OF MANAGEMENT

Need and importance

The basic purpose of departmentation is to make the size of each
departmental unit manageable and to secure advantages of
specialization. It is necessary on the account of following reasons
Specialization: Departmentation enables an organization to avail the
benefits of specialisation.
Expansion: One manager can supervise and direct only a few
subordinates.
Autonomy: Departmentation results in the division of enterprise into
semi-autonomous units.
Fixation of responsibilities: Departmentation enables each person to
know the specific part he is to play in the total organization.
Appraisal: Appraisal of managerial performance becomes easier
when specific tasks are assigned to specific personnel.
Managerial
development:
Departmentation
facilitates
communication, coordination and control.
Administrative control: Departmentation is a means of dividing the
large and complex organization into small and flexible
administrative units.
Functional departmentation:
Functional Departmentalization groups jobs by the functions that they
perform. Hence each major or basic function is organized as a separate
department. The basic or organic functions are the functions the
performance of which is vital and essential to the survival of the
organization. For example, key functions of a manufacturing company
include production, purchasing, marketing, accounting, and personnel.
The functions of a hospital include surgery, psychiatry, nursing,
housekeeping, and billing.
If necessary, a major function may be divided into minor or sub-functions.
A production departments activities may classify into quality control,
processing of materials and repairs and maintenance. The process of
functional differentiation can continue as long as there exists a sound
basis for further differentiation. It is the widely used basis for grouping
activities and exists almost in every organization at some level.
List of departentation:
1.
2.
3.
4.

Departmentation
Departmentation
Departmentation
Departmentation

by
by
by
by

Enterprise
Territory or geography
Customer Group
Product

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ENTERPRISE DEPARTMENTATION
A method for separating the activities performed within an organization
into groups differentiated by the function they perform. For example, a
business employing functional departmentalization would tend to group
together workers that perform a particular function, such as accounting,
that differs substantially from the tasks performed by other staff
members.

TERRITORIAL
Organizations
find

DEPARTMENTATION
that

are

spread over a wide area may

advantages
in
organizing
along
geographic lines so
that all the activities
performed
in
a
region are managed
together.
Bank,
insurance
companies,
transport
companies,
distribution agencies
are examples of such enterprises. The activities are divided into zones,
divisions and branches. It is obviously not possible for one functional
manager to manage efficiently such widely separated activities this makes
it necessary to appoint regional managers for different regions.

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CUSTOMER DEPARTMENTATION
An organization may find it advantageous to organize according to the
types of customers it serves. For example, a distribution company that
sells to consumers, government clients, large businesses, and small
businesses may decide to base its primary divisions on these different
markets. Its personnel can then become proficient in meeting the needs of
these different
customers.
This
figure
depicts
an
organization
grouped
by
customers
and

markets.

PRODUCT DEPARTMENTATION
Product Departmentalization jobs are grouped by product line in which
each major product area is placed under the authority of a manager whom
is responsible for all aspects of the product line. It is useful when product
expansion and diversification, manufacturing and marketing characteristic
of the product are of primary significance. It is generally employed when
the product line is relatively complex and diverse requiring specialized

PRINCIPLE OF MANAGEMENT

knowledge and a great deal of capital is required for plant and equipment.
A I company with diversified product line may have the following divisions

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Question # 5: Describe in detail the term Line, staff and

functional Authority.
Answer:
Organizational structure involves, in addition to task organizational
boundary considerations, the designation of jobs within an organization
and the relationships among those jobs. There are numerous ways to
structure jobs within an organization, but two of the most basic forms
include simple line structures and line-and-staff structures.
In a line organization, top management has complete control, and the
chain of command is clear and simple. Examples of line organizations are
small businesses in which the top manager, often the owner, is positioned
at the top of the organizational structure and has clear "lines" of
distinction between him and his subordinates.
The line-and-staff organization combines the line organization with staff
departments that support and advise line departments. Most medium and
large-sized firms exhibit line-and-staff organizational structures. The
distinguishing characteristic between simple line organizations and lineand-staff organizations is the multiple layers of management within lineand-staff organizations. The following sections refer primarily to line-andstaff structures, although the advantages and disadvantages discussed
apply to both types of organizational structures.
Several advantages and disadvantages are present within a line-and-staff
organization. An advantage of a line-and-staff organization is the
availability of technical specialists. Staff experts in specific areas are
incorporated into the formal chain of command. A disadvantage of a lineand-staff organization is conflict between line and staff personnel.

LINE-AND-STAFF POSITIONS
A wide variety of positions exist within a line-and-staff organization. Some
positions are primary to the company's mission, whereas others are
secondaryn the form of support and indirect contribution. Although
positions within a line-and-staff organization can be differentiated in
several ways, the simplest approach classifies them as being either line or
staff.
A line position is directly involved in the day-to-day operations of the
organization, such as producing or selling a product or service. Line
positions are occupied by line personnel and line managers. Line
personnel carry out the primary activities of a business and are
considered essential to the basic functioning of the organization.

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Line managers make the majority of the decisions and direct line
personnel to achieve company goals. An example of a line manager is a
marketing executive.
Line-and-Staff Organization
Although a marketing executive does not actually produce the product or
service, he or she directly contributes to the firm's overall objectives
through market forecasting and generating product or service demand.
Therefore, line positions, whether they are personnel or managers,
engage in activities that are functionally and directly related to the
principal workflow of an organization.
Staff positions serve the organization by indirectly supporting line
functions. Staff positions consist of staff personnel and staff managers.
Staff personnel use their technical expertise to assist line personnel and
aid top management in various business activities. Staff managers provide
support, advice, and knowledge to other individuals in the chain of
command.
Although staff managers are not part of the chain of command related to
direct production of products or services, they do have authority over
personnel. An example of a staff manager is a legal adviser. He or she
does not actively engage in profit-making activities, but does provide legal
support to those who do. Therefore, staff positions, whether personnel or
managers, engage in activities that are supportive to line personnel.

LINE-AND-STAFF AUTHORITY
Authority within a line-and-staff organization can be differentiated. Three
types of authority are present: line, staff, and functional. Line authority is
the right to carry out assignments and exact performance from other
individuals.

LINE AUTHORITY.
Line authority flows down the chain of command. For example, line
authority gives a production supervisor the right to direct an employee to
operate a particular machine, and it gives the vice president of finance
the right to request a certain report from a department head. Therefore,
line authority gives an individual a certain degree of power relating to the
performance of an organizational task.
Two important clarifications should be considered, however, when
discussing line authority: (1) line authority does not ensure effective
performance, and (2) line authority is not restricted to line personnel. The
head of a staff department has line authority over his or her employees by
virtue of authority relationships between the department head and his or
her directly-reporting employees.

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STAFF AUTHORITY.
Staff authority is the right to advise or counsel those with line authority.
For example, human resource department employees help other
departments by selecting and developing a qualified workforce. A quality
control manager aids a production manager by determining the
acceptable quality level of products or services at a manufacturing
company, initiating quality programs, and carrying out statistical analysis
to ensure compliance with quality standards. Therefore, staff authority
gives staff personnel the right to offer advice in an effort to improve line
operations.

FUNCTIONAL AUTHORITY.
Functional authority is referred to as limited line authority. It gives a staff
person power over a particular function, such as safety or accounting.
Usually, functional authority is given to specific staff personnel with
expertise in a certain area. For example, members of an accounting
department might have authority to request documents they need to
prepare financial reports, or a human resource manager might have
authority to ensure that all departments are complying with equal
employment opportunity laws. Functional authority is a special type of
authority for staff personnel, which must be designated by top
management.

LINE-AND-STAFF CONFLICT
Due to different positions and types of authority within a line-and-staff
organization, conflict between line and staff personnel is almost
inevitable. Although minimal conflict due to differences in viewpoints is
natural, conflict on the part of line and staff personnel can disrupt an
entire organization. There are many reasons for conflict. Poor human
relations, overlapping authority and responsibility, and misuse of staff
personnel by top management are all primary reasons for feelings of
resentment between line and staff personnel. This resentment can result
in various departments viewing the organization from a narrow stance
instead of looking at the organization as a whole.
Fortunately, there are several ways to minimize conflict. One way is to
integrate line and staff personnel into a work team. The success of the
work team depends on how well each group can work together in efforts
to increase productivity and performance. Another solution is to ensure
that the areas of responsibility and authority of both line and staff
personnel are clearly defined. With clearly defined lines of authority and
responsibility, each group may better understand their role in the
organization. A third way to minimize conflict is to hold both line and staff
personnel accountable for the results of their own activities. In other
words, line personnel should not be entirely responsible for poor
performance resulting from staff personnel advice.

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Line-and-staff organizations combine the direct flow of authority present

within a line organization with staff departments that offer support and
advice. A clear chain of command is a consistent characteristic among
line-and-staff organizational structures. Problems of conflict may arise, but
organizations that clearly delineate responsibility can help minimize such
conflict.

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Question # 6: What are the critical factors in effective organizing?

Answer:
Organization Efficiency
Organizational efficiency is the organization's degree of success in using
the least possible inputs in order to produce the highest possible outputs.
Organizational efficiency is gauged using a number of quantitative figures
such as production costs and production times because it is too broad of a
concept to be encapsulated in a single figure.

Avoiding Mistakes in Organizing by Planning

Lack of design in an organization is illogical, cruel, wasteful and
inefficient.
Planning for the IdealThe search for an ideal organization to reflect
enterprise goals under given circumstances is impetus to planning. The
ultimate form established, like all other plans, seldom remains unchanged,
and continuous remolding of the ideal plan is normally necessary.
Nevertheless, an ideal organization plan constitutes a standard, and by
comparing the present structure with it, enterprise leaders know what
changes should be made when possible. An organizer must always be
careful not to be blinded by popular notions in organizing, because what
may work in one company may not work in another.
Modification for Human Factor
If available personnel do not fit into the ideal structure and cannot or
should not be pushed aside, the only choice is to modify the structure to
fit individual capabilities, attitudes, or limitations. Although modification
may seem like organizing around people, in this case one is first
organizing around the goals to be met and activities to be undertaken and
only then making modification for the human factor.
Advantage of Organization Planning
Planning the organization structure helps determine future personnel need
and required training programs. Furthermore organization planning can
disclose weakness such as, duplication of effort, unclear lines of authority,
and overlong lines of communication.

Avoiding Organizational Inflexibility

One basic advantage of organization planning is the avoidance of
organizational inflexibility. An effective organization must have the ability

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to adapt to a changing environment and meet new contingencies. This

resistance to change can cause considerable loss of efficiency in
organizations.
Avoiding inflexibility through Reorganization
Although reorganization is intended to respond to changes in the
enterprise environment, there may be other compelling reasons for
reorganization.
1. Change in operations caused by the acquisition or sale of major
properties, change in product line or marketing method, business cycle,
competitive influences, new production techniques, labor union policy,
government regulatory and fiscal policy.
2. Moreover, a new chief executive officer and new vice presidents and
department head are likely to have some definite organizational ideas of
their own.
3. Furthermore, reorganization may be caused by demonstrated
deficiencies in an existing structure. Some of these arise from organization
weaknesses: excessive spans of management and committees, lack of
union policy, slow decision making, failure to accomplish objectives,
inability to meet schedules, excessive cost or break down of financial
control.
The need for readjustment and changeIn addition to pressing reasons for
reorganization, there is a certain need for moderate and continuing
readjustment merely to keep he structure from becoming stagnant.

Making Staff Work Effective

The line-staff problem is not only one of the most difficult that the
organizations face but also the source of an extraordinarily large amount
of inefficiency. Solving this problem requires great managerial skills,
careful attention to principles, and patient teaching of personnel.
Understanding Authority Relationships Managers must understand the
nature of authority relationships if they want to solve the problems of line
and staff. As long as the managers regard line and staff as groups of
people or grouping activities, confusion will result. The line relationship
involves making decisions and acting on them. The staff relationship, on
the other hand, implies the right to assist and counsel. In short line may
tell, but staff must sell.
Making Lines Listen to Staff

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Line managers should be encouraged or required to consult with the staff.

Enterprises would do well to adopt the practice of compulsory staff
assistance wherein the line must listen to staff.
Keeping Staff Informed
Many criticisms arise because staff assistants are not kept informed on
matters within their field.
Requiring Completed Staff Work
Many staff persons overlook the fact that in order to be most helpful, their
recommendations should be complete enough to make possible a simple
positive or negative answer by a line manager. Staff assistants should be
problem solvers and not problem creator. Completed staff work implies
presentation of a clear recommendation based on full consideration of
problem, clearance with persons importantly affected. Should a
recommendation be accepted, through staff work provides line managers
with the machinery to put in into effect. People in staff positions who learn
to do these things can find themselves highly valued and appreciated.
Making Staff Work as a Way or Organizational Life
Wherever staff is used, its responsibility is to develop and maintain a
climate of favorable personal relations. A staff assistant should not
attempt to assume credit for an idea. Not only is this a sure way of
alienating line teammates who do not like being shown up by staff
assistant, but operating managers who accept ideas actually bear
responsibility for the implementation of the proposals. Companies also
employ the outside assistance of professional firms.

Avoiding Conflicts by Clarification

A major reason for conflict in organizations is that people do not
understand their assignments and those of their co-workers. No matter
how well conceived an organization structure may be, people must
understand it to make it work. Understanding is aided materially by the
proper use of organization charts, accurate job descriptions, the spelling
out of authority and informational relationships and the introduction of
specific goals for specific positions.
Organization Charts
Every organization structure, even a poor one, can be charted.
Advantages of Organization Charts: Though it is arguable that, charts
tends to make people overly conscious of being superiors or inferiors, tend

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to destroy team feeling also, if an organization is left uncharted, it can be

changed more easily, organization charting is required because of
essential reporting relationships. Without charting is like, preparing a way
for politics, intrigue, frustration, buck-passing, lack of co-ordination,
duplicated effort, vague policy, uncertain decision making, and other
evidences of organizational inefficiency. Since a chart maps lines of
decision-making authority, sometimes merely charting any organization
can show inconsistencies and complexities and lead to their correction.
Limitation of Organization Charts:
A chart shows only formal authority relationships and omits the many
significant informal and informational relationships. It does not show how
much authority exists at any point in the structure. Many time managers
hesitate or neglect or redraft charts, forgetting that organization
structures are dynamic and that charts should not be allowed to become
obsolete. Another difficulty is that individuals may confuse authority
relationship with status (salary and bonus levels).
Position Description
Every managerial position should be defined. A good position description
informs every one of the incumbents responsibilities. It must states the
basic function of the position, the major end-result areas for which the
manager is responsible, and the reporting relationships involved.
Description also clarifies the positions authority, and it states the set of
verifiable objectives for the end-result areas. Its benefits include analyzing
jobs, duties and responsibilities, identification of areas of neglecting or
overlapping duties. Also benefits include the guidance they provide in
training the new managers, in drawing up candidate requirements, and in
setting up salary levels. Finally it is a means of control over the
organization. It gives standards against which to judge a position is
necessary and, if so, what its organizational level and exact location in the
structure should be.

Ensure Understanding of Organization

All members of an enterprise must understand the structure of their
organization in order for that structure to work.
Teaching the Nature of Organizing
A well written organization manual containing a statement of
organization philosophy, programs, charts and an outline of job
descriptions goes far towards making organizing understandable.

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The Grapevine
Informal organization tends to exist when members of a formal
organization know one another well enough to pass on information
sometimes only gossip that is some way connected with the enterprise.
Since all forms of informal organization serve essential human
communication needs, the grapevine is inevitable and valuable.
Advantages Informal Organization brings a kind of cohesiveness to formal
organization. Many managers, understanding this fact, consciously use
informal organizations as channels of communication and molders of
employee moral.

Promoting an Appropriate Organization Culture

The effectiveness of an organization is also influenced by the organization
culture, which affects the way the managerial functions of planning,
organizing, staffing, leading and controlling are carried out.
Defining Organization Culture
Culture is general pattern of behavior, shared beliefs, and values that
members have in common. Culture can be inferred from what people say,
do, and think within an organizational setting. It involves the learning and
transmitting of knowledge, beliefs, and patterns of behavior over a period
of time, which means that an organization culture is fairly stable and does
not change fast. It often sets the tone for the company and establishes
implied rules for the way people should behave. Many slogans give a
general idea of what a particular company stands for. Influence of the
Leader on Organization Culture

PRINCIPLE OF MANAGEMENT

Question # 7: Explain the Adams Equity Theory of Motivation?

Answer:
Definition of Equity Theory
In 1963, John Stacey Adams introduced the idea that fairness and equity
are key components of a motivated individual. Equity theory is based in
the idea that individuals are motivated by fairness, and if they identify
inequities in the input/output ratios of themselves and their referent
group, they will seek to adjust their input to reach their perceived equity.
Adams' suggested that the higher an individual's perception of equity, the
more motivated they will be, and vice versa - if someone perceives an
unfair environment, they will be demotivated.
Examples of Equity Theory
The easiest way to see the equity theory at work, and probably the most
common way it does impact employees, is when colleagues compare the
work they do to someone else that gets paid more than them. Equity
theory is at play anytime employees say things like 'John gets paid a lot
more than me, but doesn't do nearly as much work' or 'I get paid a lot less
than Jane, but this place couldn't operate without me!' In each of those
situations, someone is comparing their own effort-to-compensation ratio
to someone else's and is losing motivation in the process.

Equity Theory

PRINCIPLE OF MANAGEMENT

As per the equity theory of J. Stacey Adams, people are motivated by their
beliefs about the reward structure as being fair or unfair, relative to the
inputs. People have a tendency to use subjective judgment to balance the
outcomes and inputs in the relationship for comparisons between different
individuals Accordingly :

If people feel that they are not equally rewarded they either reduce the
quantity or quality of work or migrate to some other organization.
However, if people perceive that they are rewarded higher, they may be
motivated to work harder.
How to Apply the Adams' Equity Theory
It is important to also consider the Adams' Equity Theory factors when
striving to improve an employee's job satisfaction, motivation level, etc.,
and what can be done to promote higher levels of each.
To do this, consider the balance or imbalance that currently exists
between your employee's inputs and outputs, as follows:
Inputs typically include:

PRINCIPLE OF MANAGEMENT

Effort.
Loyalty.
Hard work.
Commitment.
Skill.
Ability.
Adaptability.
Flexibility.
Tolerance.
Determination.
Enthusiasm.
Trust in superiors.
Support of colleagues.
Personal sacrifice.

Outputs typically include:

Financial rewards (such as salary, benefits, perks).

Intangibles that typically include:
Recognition.
Reputation.
Responsibility.
Sense of achievement.
Praise.
Sense of advancement/growth.

Job security.
While obviously many of these points can't be quantified and perfectly
compared, the theory argues that managers should seek to find a fair
balance between the inputs that an employee gives, and the outputs
received.

PRINCIPLE OF MANAGEMENT

Question # 8: List the types of Leadership approaches and

explain Autocratic Approach
Answer:
Leadership has been described as "a process of social influence in which a
person can enlist the aid and support of others in the accomplishment of a
common task. For example, some understand a leader simply as
somebody whom people follow, or as somebody who guides or directs
others, while others define leadership as "organizing a group of people to
achieve a common goal".
My knowledge about leadership says that leadership is the ability to
influence a group towards the achievement of a goal or goals. All human
attempts desire a unifying and motivating force for victory and that
driving potency is finally traced to worthy leadership. Similarly it is worth
noting that every one of us sometimes, in some capacity, or somewhere is
a leader, because almost every person have sometimes somewhere,
somehow played a leading role in his life.
Leadership is about influencing and molding people, their thoughts, their
preferences, their priorities, towards the goal. Everyone has an
independent brain, to judge, to prefer, to accept, dealing with a number of
such diversified brains and leading them towards a common goal without
using any unfair power or unethical actions is the actual leadership. A
leaders personality, behavior, character should be flawless. He influences
people not only by words of mouth but also by language of actions. People
will follow the one, who follows himself and there is no difference in his
words and acts.
Key factors need and are found in leaders as
1.
2.
3.
4.

Being Positive
Approaches the team with a focus on Listening
Compromise
Approaching Decision making

Types of Leadership approaches:

1.
2.
3.
4.

Trait Appraoch
Charismatic leadership Approach
Situational or Contigency Leadership
Transactional or Transformational Appraoch

Autocratic Approach:
The autocratic leadership style is best used in situations where control is
necessary, often where there is little margin for error. When conditions are

PRINCIPLE OF MANAGEMENT

dangerous, rigid rules can keep people out of harms way. Many times, the
subordinate staff is inexperienced or unfamiliar with the type of work and
heavy oversight is necessary.
Rigid organizations often use this style. It has been known to be very
paternalistic, and in highly-professional, independent minded teams, it
can lead to resentment and strained morale.
Good fits for Autocratic Leadership:
Military
Manufacturing
Construction
How to be effective with this position:
Its easy to see the immediate goal of this type of leadership: use your
expertise to get the job done. Make sure that everyone is exactly where
they need to be and doing their job, while the important tasks are handled
quickly and correctly.
In many ways this is the oldest leadership style, dating back to the early
empires. Its very intuitive to tell people what needs to be done by when.
It is difficult balancing the use of authority with the morale of the team.
Too much direct scrutiny will make your subordinates miserable, and being
too heavy handed will squelch all group input. Being an effective
autocratic leader means being very intentional about when and how
demands are made of the team.
Here are some things to keep in mind to be an effective when acting as an
autocratic leader:
Respect your Subordinates:
Its easy to end up as rigid as the rules you are trying to enforce. Its
important that you stay fair and acknowledge that everyone brings
something to the table, even if they dont call the shots. Making
subordinates realize they are respected keeps moral up and resentment
low; every functional team is built on a foundation of mutual respect.
Explain the rules:
Your people know they have to follow procedure, but it helps them do a
better job if they know why.
Be consistent:

PRINCIPLE OF MANAGEMENT

If your role in the team is to enforce the company line, you have to make
sure you do so consistently and fairly. Its easy to respect someone
objective, but hard to trust someone who applies policy differently in
similar circumstances.
Educate before you enforce:
Having everyone understand your expectations up front will mean less
surprises down the road. Being above board from the outset prevents a lot
of miscommunications and misunderstandings.
Listen, even if you dont change:
We all want to feel like our opinions are appreciated, even if they arent
going to lead to immediate change and being a leader means that your
team will want to bring their opinions to you. Its important to be clear
that they are heard, no matter the outcome.

Benefits of Autocratic Leadership

Autocratic leadership can be beneficial in some instances, such as when
decisions need to be made quickly without consulting with a large group
of people. Some projects require strong leadership in order to get things
accomplished quickly and efficiently.
Have you ever worked with a group of students or co-workers on a project
that got derailed by poor organization, a lack of leadership, and an
inability to set deadlines? If so, chances are that your grade or job
performance suffered as a result. In such situations, a strong leader who
utilizes an autocratic style can take charge of the group, assign tasks to
different members, and establish solid deadlines for projects to be
finished.
In situations that are particularly stressful, such as during military
conflicts, group members may actually prefer an autocratic style. It allows
members of the group to focus on performing specific tasks without
worrying about making complex decisions. This also allows group
members to become highly skilled at performing certain duties, which can
be beneficial to the group.

Downsides of Autocratic Leadership

While autocratic leadership can be beneficial at times, there are also
many instances where this leadership style can be problematic. People

PRINCIPLE OF MANAGEMENT

who abuse an autocratic leadership style are often viewed as bossy,

controlling, and dictatorial, which can lead to resentment among group
members.
Because autocratic leaders make decisions without consulting the group,
people in the group may dislike that they are unable to contribute ideas.
Researchers have also found that autocratic leadership often results in a
lack of creative solutions to problems, which can ultimately hurt the
performance of the group.While autocratic leadership does have some
potential pitfalls, leaders can learn to use elements of this style wisely. For
example, an autocratic style can be used effectively in situations where
the leader is the most knowledgeable member of the group or has access
to information that other members of the group do not.

PRINCIPLE OF MANAGEMENT

Question # 9: Describe briefly the reason for using Committees

and Groups
Answer:
here are widespread uses of committee and also some strong reasons for
using committee; the more important ones are discussed below:
Reasons for Using Committee
1. Superior Judgment: The most important reason for the use of
committee is to arrive at a superior judgment through group deliberations.
It is increasingly being recognized that most problems of modern business
require more experience, knowledge, and judgment than any individual
possesses. Committees may help the clarification of problems and
development of new ideas. Group interactions through committees have
been found to be especially enlightening in policy matters. In complex
business situations, however, group interactions may be superior to
individual judgment.
2. Motivations through participation: Membership of committees permits
wider participation in decision-making. There are people who seem to be
against every move unless they have been previously consulted.
Committee membership may help improve the situation. Persons who take
part in decision-making through committee membership usually feel more
enthusiastic about accepting and executing it.
3. Avoiding concentration of authority in a single person: The use of
committee can help avoid concentration of authority in a single person.
There may also be a committee to make recommendations on a problem
because the manager does not wish to take full responsibility for making a
decision. Major financial and capital investment policies are also often
developed by committees, partly because of unwillingness to give a single
individual complete authority to make each important decision.
4. Sharing and transmitting of information: Another reason for using
committee is sharing and transmitting information. All the members of a
committee can learn about a project or problem simultaneously.
Moreover, decisions and instructions can be received uniformly with
opportunities for clarification. This may help avoid misunderstanding and
save time.
5. Achieving co-ordination: Committees are very useful for co-ordinating
activities among various organizational units. The dynamics of modern
organizations place a heavy burden on the mangers to integrate plans and

PRINCIPLE OF MANAGEMENT

activities. Committees can help a lot in this direction by co-ordinating

plans and policies as well as their implementation.
6. Representation of interested groups: Committees are often formed with
membership from different interested groups. Members of board of
directors are often selected on the basis of groups interested in the
company and, perhaps more often, on the basis of groups in which the
company has an interest. When top executives have internal problems
involving, for example, heads of various departments, they may choose
committee members in such a way as to give these departments
representation.
7. Delaying or avoiding action: It is well known that committees are often
appointed by mangers when they want to delay or avoid action. At times,
committee members are chosen in a way aimed at delaying action.
Careful mangers know that one of the surest ways to delay the handling of
a problem, and even to postpone a decision indefinitely, is to appoint a
committee to study the matter.

PRINCIPLE OF MANAGEMENT

Question # 10: Write a detailed note on the basic control process

and also describe the requirement for establishing effective
control.
Answer:
The Basic Control Process
The Basic Control Process: Control techniques and systems are essentially
the same for controlling cash, office procedures, morale, product quality,
and anything else. The basic control process, wherever it is found and
whatever is being controlled, involves three steps:
Establishing standards
Measuring performance against these standards, and
Correcting variations from standards and plans.

1. Establishment of Standards:
Because plans are the yardsticks against which managers devise controls,
the first step in the control process logically would be to establish plans.
However, since plans vary in detail and complexity, and since managers
cannot usually watch everything, special standards are established.
Standards are simply criteria of performance. They are the selected points
in an entire planning program at which measures of performance are
made so that managers can receive signals about how things are going
and thus do not have to watch every step in the execution of plans.
There are many kinds of standards. Among the best are verifiable goals or
objectives, as suggested in the discussion of managing by objectives. You
will learn more about standards later, especially those that point out
deviations at critical points.
2. Measurement of Performance:
Although such measurement is not always practicable, the measurement
of performance against standards should ideally be done on a forwardlooking basis so that deviations may be detected in advance of their
occurrence and avoided by appropriate actions. The alert, forward-looking
manager can sometimes predict departures from standards. In the
absence of such ability, however, deviations should be disclosed as early
as possible.
3. Correction of Deviations:

PRINCIPLE OF MANAGEMENT

Standards should reflect the various positions in an organization structure.

If performance is measured accordingly, it is easier to correct deviations.
Managers know exactly where, in the assignment of individual or groups
duties, the corrective measures must be applied.
Correction of deviations is the point at which control can be seen as a part
of whole system of management and can be related to the other
managerial functions. Managers may correct deviations by redrawing their
plans or by modifying their goals. (This is an exercise of the principle of
navigational change.) Or they may correct deviations by exercising their
organzing function through reassignment or clarification of duties. They
may correct, also, by additional staffing, by better selection and training
of subordinates, or by that ultimate restaffing measure-firing. Another way
is to correct through better leading-fuller explanation of the job or more
effective leadership.
Requirements of Effective Controls
1. Focus on Objectives and Needs
The effective control system should emphasis attainment of organizational
objectives and therefore it should be designed in accordance with
practical needs of the enterprise. For example, the marketing department
may use pre-controls for introduction of new products into the market, and
current control for specific advertisements. Similarly, more sophisticated
and broad ranging controls may be developed for production managers
than for a shop floor supervisor. Thus, controls should be tailored to plans
and positions.
2. Prompt Indicator
An ideal control system could detect and report significant deviation as
promptly as possible so that necessary corrective action may be taken
adequately in time. This needs an efficient system of appraisal and flow of
information. Rapid reporting of variations of the core of control.
3. Forward Looking
Control should be future-oriented, marketing valuable forecasts to the
managers so that they become aware of the problems likely to confront
them in the future.
4. Understandable and Economical
Control tools and techniques adopted should be such as are clearly
understandable by the managers. They must know all the details and
critical points in the control device as well as its usefulness. If developed

PRINCIPLE OF MANAGEMENT

and complex statistical and mathematical techniques are adopted, then

proper training should be imparted to the persons who are supposed to
execute such control system. Besides the control system should be worth
its costs. Expensive and elaborate control system will not suit, for example
to small enterprise.
5. Control by Functions and Factor
Control should emphasis function, such as production, marketing, finance,
human resources, etc it should also focus on four factors, quality,
quantity, time use and costs. Not one but multiple controls should be
adopted.
6. Strategic Points Control
Every detail or thing is not be controlled in order to save time, cost and
effort. Certain strategic or vital points in the functioning of an enterprise
must be identified and appropriate control devices should be designed
and imposed at those stages. Thus, only critical, major deviations should
be attended to and control should concentrate on exceptional problems
only. Control should be selective and concentrate on key result areas of
the company.
7. Flexible
It means that the control system should be able to accommodate such
modifications or revisions as are made necessary in the wake of rapidly
changing and complex organizational environment. Control must not
become ends in themselves. They must be suited to the environment in
which an organisation finds itself. Flexibility in control system is generally
achieved by the use of alternative plans or flexible budgets.
8. Objective
To the maximum possible extent, controls, i.e., standards of performance
should be objective (unbiased) and specific. For this purpose control
measures should be verifiable or quantified. Standards should be
determined based on facts and participation.
9. Indicative as well as Suggestive
Controls should not only be able to point to the deviations, but they
should also suggest corrective action that is supposed to check the
recurrence of variations or problems in future.
10. Correct Action at Correct Time

PRINCIPLE OF MANAGEMENT

A significant test of the effectiveness of a control system is whether

correct action is taken at correct time.
11. Attention to Human Factor or Emphasis on Self-Control Aspect
It is said that excess control causes corruption. Control system should be
designed is such a way, as it does not arouse negative reactions among
organizational people. Good controls are designed to develop positive
feelings in the members by focusing on work and not on worker. It
facilities creative action within properly laid down limits. The aim of
control should be to create self-control among members. For this purpose,
the tendency over the years has been toward such techniques as
participative budgeting and human resources accounting.