Allama Iqbal Open University

Management Theory and Practice

Assignment No. 2
Name: Komal Javaria
Level: BBA(4 Years)
Semester: 5th(spring)2023
Registered I.D: 21PLR03149
Course Code: 8419
QUESTION NO. 1
Explain how goal-setting and reinforcement theories explain employee motivation?
ANSWER
(i) Goal-Setting Theory:
Goal-setting theory is one of the most influential and practical theories of motivation. In fact, in a
survey of organizational behavior scholars, it has been rated as the most important out of 73 theories. The
theory has been supported in over 1,000 studies with employees ranging from blue-collar workers to
research-and-development employees, and there is strong support that setting goals is related to
performance improvements. According to one estimate, goal setting improves performance at least 10%–
25%. Based on this evidence, thousands of companies around the world are using goal setting in some
form, including Coca Cola Company, PricewaterhouseCoopers International Ltd., Nike Inc., Intel
Corporation, and Microsoft Corporation, to name a few.
(ii) Motivate Employees:
(a) Setting SMART Goals:
The mere presence of a goal does not motivate individuals. Think about New Year’s resolutions
that we made but failed to keep. Maybe we decided that we should lose some weight but then never put a
concrete plan in action. Maybe we decided that we would read more but didn’t. Why did our goal fail?

SMART goals help people achieve results.

 Accumulating research evidence indicates that effective goals are SMART. A SMART goal is a
goal that is specific, measurable, aggressive, realistic, and time-bound.

(b) Specific and Measurable:

Effective goals are specific and measurable. For example, “increasing sales to a region by 10%” is
a specific goal, whereas deciding to “delight customers” is not specific or measurable. When goals are
specific, performance tends to be higher. Why? If goals are not specific and measurable, how would you
know whether you have reached the goal? A wide distribution of performance levels could potentially be
acceptable. For the same reason, “doing your best” is not an effective goal, because it is not measurable
and does not give you a specific target.

Certain aspects of performance are easier to quantify. For example, it is relatively easy to set
specific goals for productivity, sales, number of defects, or turnover rates. However, not everything that is
easy to measure should be measured. Moreover, some of the most important elements of someone’s
performance may not be easily quantifiable (such as employee or customer satisfaction). So how do you
set specific and measurable goals for these soft targets? Even though some effort will be involved, metrics
such as satisfaction can and should be quantified. For example, you could design a survey for employees
and customers to track satisfaction ratings from year to year.

(c) Aggressive:

This may sound counterintuitive, but effective goals are difficult, not easy. Aggressive goals are
also called stretch goals. According to a Hay Group study, one factor that distinguishes companies that
are ranked as “Most Admired Companies” in Fortune magazine is that they set more difficult goals.
People with difficult goals outperform those with easier goals. Why? Easy goals do not provide a
challenge. When goals are aggressive and require people to work harder or smarter, performance tends to
be dramatically higher. Research shows that people who have a high level of self-efficacy and people who
have a high need for achievement tend to set more difficult goals for themselves.

(d) Realistic:

While goals should be difficult, they should also be based in reality. In other words, if a goal is
viewed as impossible to reach, it will not have any motivational value. In fact, setting impossible goals
and then punishing people for not reaching these goals is cruel and will demotivate employees.

(e) Time-Bound:

The goal should contain a statement regarding when the proposed performance level will be
reached. For example, “increasing sales to a region by 10%” is not a time-bound goal, because there is no
time limit. Adding a limiter such as “by December of the current fiscal year” gives employees a sense of
time urgency.
 Here is a sample SMART goal: Wal-Mart Stores Inc. recently set a goal to eliminate 25% of the solid
waste from U.S. stores by the year 2009. This goal meets all the conditions of being SMART as long as
25% is a difficult yet realistic goal. Even though it seems like a simple concept, in reality many goals that
are set within organizations may not be SMART. For example, Microsoft recently conducted an audit of
its goal setting and performance review system and found that only about 40% of the goals were specific
and measurable.

(iii) Why Do SMART Goals Motivate?

There are at least four reasons why goals motivate. First, goals give us direction. When we have
a goal of reducing shipment of defective products by 5% by September, we know that we should direct
our energy toward defects. The goal tells us what to focus on. For this reason, goals should be set
carefully. Giving employees goals that are not aligned with company goals will be a problem, because
goals will direct employees’ energies to a certain end. Second, goals energize people and tell them not to
stop until the goal is accomplished. If you set goals for yourself such as “I will have a break from reading
this textbook when I finish reading this section,” you will not give up until you reach the end of the
section. Even if you feel tired along the way, having this specific goal will urge you to move forward.
Third, having a goal provides a challenge. When people have goals and proceed to reach them, they feel a
sense of accomplishment. Finally, SMART goals urge people to think outside the box and rethink how
they are working. If the goal is not very difficult, it only motivates people to work faster or longer. If a
goal is substantially difficult, merely working faster or longer will not get you the results. Instead, you
will need to rethink the way you usually work and devise a creative way of working. It has been argued
that this method resulted in designers and engineers in Japan inventing the bullet train. Having a goal that
went beyond the speed capabilities of traditional trains prevented engineers from making minor
improvements and inspired them to come up with a radically different concept (Kerr & Landauer, 2004).

SMART goals motivate for a variety of reasons.

(a) When Are Goals More Effective?

Even when goals are SMART, they are not always equally effective. Sometimes, goal setting
produces more dramatic effects compared to other methods. At least three conditions that contribute to
effectiveness have been identified.

(b) Feedback:

To be more effective, employees should receive feedback on the progress they are making toward
goal accomplishment. Providing employees with quantitative figures about their sales, defects, or other
metrics is useful for feedback purposes.

© Ability:

Employees should have the skills, knowledge, and abilities to reach their goals. In fact, when
employees are lacking the necessary abilities, setting specific outcome goals has been shown to lead to
lower levels of performance. People are likely to feel helpless when they lack the abilities to reach a goal,
and furthermore, having specific outcome goals prevents them from focusing on learning activities. In
these situations, setting goals about learning may be a better idea. For example, instead of setting a goal
related to increasing sales, the goal could be identifying three methods of getting better acquainted with
customers.

(d) Goal Commitment:

SMART goals are more likely to be effective if employees are committed to the goal. As a
testament to the importance of goal commitment, Microsoft actually calls employee goals
“commitments”. Goal commitment refers to the degree to which a person is dedicated to reaching the
goal. What makes people dedicated or committed to a goal? It has been proposed that making goals
public may increase commitment to the goal, because it creates accountability to peers. When individuals
have a supportive and trust-based relationship with managers, goal commitment tends to be higher. When
employees participate in goal setting, goal commitment may be higher. Last, but not least, rewarding
people for their goal accomplishment may increase commitment to future goals.

(e) Are There Downsides to Goal Setting?

 Potential Downsides of Goal Setting

As with any management technique, there may be some downsides to goal setting. First, as
mentioned earlier, setting goals for specific outcomes may hamper employee performance if employees
are lacking skills and abilities needed to reach the goals. In these situations, setting goals for behaviors
and learning may be more effective than setting goals for outcomes. Second, goal setting may prevent
employees from adapting and changing their behaviors in response to unforeseen threats. For example,
one study found that when teams had difficult goals and employees within the team had high levels of
performance expectations, teams had difficulty adapting to unforeseen circumstances (LePine, 2005).
Third, goals focus employee attention on the activities that are measured. This focus may lead to
sacrificing other important elements of performance. If goals are set for production numbers, quality may
suffer. As a result, it is important to set goals touching on all critical aspects of performance. Finally, an
aggressive pursuit of goals may lead to unethical behaviors. If employees are rewarded for goal
accomplishment but there are no rewards for coming very close to reaching the goal, employees may be
tempted to cheat.

(f) Ensuring Goal Alignment through Management by Objectives (MBO):

Goals direct employee attention toward a common end. Therefore, it is crucial for individual goals
to support team goals and team goals to support company goals. A systematic approach to ensure that
individual and organizational goals are aligned is Management by Objectives (MBO). First suggested by
Peter Drucker (Greenwood, 1981; Muczyk & Reimann, 1989; Reif & Bassford, 1975), MBO involves the
following process:

1. Setting companywide goals derived from corporate strategy

2. Determining team- and department-level goals
3. Collaboratively setting individual-level goals that are aligned with corporate strategy
4. Developing an action plan
5. Periodically reviewing performance and revising goals
A review of the literature shows that 68 out of the 70 studies conducted on this topic displayed
performance gains as a result of MBO implementation (Rodgers & Hunter, 1991). It also seems that top
management commitment to the process is the key to successful implementation of MBO programs
(Rodgers, Hunter, & Rogers, 1993). Even though formal MBO programs have fallen out of favor since
the 1980s, the idea of linking employee goals to corporate-wide goals is a powerful idea that benefits
organizations.
(iv) Reinforcement Theories:
Reinforcement theory is the process of shaping behavior by controlling the consequences of the
behavior. In reinforcement theory a combination of rewards and/or punishments is used to reinforce
desired behavior or extinguish unwanted behavior. Any behavior that elicits a consequence is
called operant behavior, because the individual operates on his or her environment. Reinforcement theory
concentrates on the relationship between the operant behavior and the associated consequences, and is
sometimes referred to as operant conditioning.

BACKGROUND AND DEVELOPMENT OF REINFORCEMENT THEORY

Behavioral theories of learning and motivation focus on the effect that the consequences of past behavior
have on future behavior. This is in contrast to classical conditioning, which focuses on responses that are
triggered by stimuli in an almost automatic fashion. Reinforcement theory suggests that individuals can
choose from several responses to a given stimulus, and that individuals will generally select the response
that has been associated with positive outcomes in the past. E.L. Thorndike articulated this idea in 1911,
in what has come to be known as the law of effect. The law of effect basically states that, all other things
being equal, responses to stimuli that are followed by satisfaction will be strengthened, but responses that
are followed by discomfort will be weakened.
B.F. Skinner was a key contributor to the development of modern ideas about reinforcement theory.
Skinner argued that the internal needs and drives of individuals can be ignored because people learn to
exhibit certain behaviors based on what happens to them as a result of their behavior. This school of
thought has been termed the behaviorist, or radical behaviorist, school.
REINFORCEMENT, PUNISHMENT, AND EXTINCTION
The most important principle of reinforcement theory is, of course, reinforcement. Generally speaking,
there are two types of reinforcement: positive and negative. Positive reinforcement results when the
occurrence of a valued behavioral consequence has the effect of strengthening the probability of the
behavior being repeated. The specific behavioral consequence is called a reinforcer. An example of
positive reinforcement might be a salesperson that exerts extra effort to meet a sales quota (behavior) and
is then rewarded with a bonus (positive reinforcer). The administration of the positive reinforcer should
make it more likely that the salesperson will continue to exert the necessary effort in the future.
Negative reinforcement results when an undesirable behavioral consequence is withheld, with the effect
of strengthening the probability of the behavior being repeated. Negative reinforcement is often confused
with punishment, but they are not the same. Punishment attempts to decrease the probability of specific
behaviors; negative reinforcement attempts to increase desired behavior. Thus, both positive and negative
reinforcement have the effect of increasing the probability that a particular behavior will be learned and
repeated. An example of negative reinforcement might be a salesperson that exerts effort to increase sales
in his or her sales territory (behavior), which is followed by a decision not to reassign the salesperson to
an undesirable sales route (negative reinforcer). The administration of the negative reinforcer should
make it more likely that the salesperson will continue to exert the necessary effort in the future.
As mentioned above, punishment attempts to decrease the probability of specific behaviors being
exhibited. Punishment is the administration of an undesirable behavioral consequence in order to reduce
the occurrence of the unwanted behavior. Punishment is one of the more commonly used reinforcement-
theory strategies, but many learning experts suggest that it should be used only if positive and negative
reinforcement cannot be used or have previously failed, because of the potentially negative side effects of
punishment. An example of punishment might be demoting an employee who does not meet performance
goals or suspending an employee without pay for violating work rules.
Extinction is similar to punishment in that its purpose is to reduce unwanted behavior. The process of
extinction begins when a valued behavioral consequence is withheld in order to decrease the probability
that a learned behavior will continue. Over time, this is likely to result in the ceasing of that behavior.
Extinction may alternately serve to reduce a wanted behavior, such as when a positive reinforcer is no
longer offered when a desirable behavior occurs. For example, if an employee is continually praised for
the promptness in which he completes his work for several months, but receives no praise in subsequent
months for such behavior, his desirable behaviors may diminish. Thus, to avoid unwanted extinction,
managers may have to continue to offer positive behavioral consequences.
SCHEDULES OF REINFORCEMENT
The timing of the behavioral consequences that follow a given behavior is called the reinforcement
schedule. Basically, there are two broad types of reinforcement schedules: continuous and intermittent. If
a behavior is reinforced each time it occurs, it is called continuous reinforcement. Research suggests that
continuous reinforcement is the fastest way to establish new behaviors or to eliminate undesired
behaviors. However, this type of reinforcement is generally not practical in an organizational setting.
Therefore, intermittent schedules are usually employed. Intermittent reinforcement means that each
instance of a desired behavior is not reinforced. There are at least four types of intermittent reinforcement
schedules: fixed interval, fixed ratio, variable interval, and variable ratio.
Fixed interval schedules of reinforcement occur when desired behaviors are reinforced after set periods of
time. The simplest example of a fixed interval schedule is a weekly paycheck. A fixed interval schedule
of reinforcement does not appear to be a particularly strong way to elicit desired behavior, and behavior
learned in this way may be subject to rapid extinction. The fixed ratio schedule of reinforcement applies
the reinforcer after a set number of occurrences of the desired behaviors. One organizational example of
this schedule is a sales commission based on number of units sold. Like the fixed interval schedule, the
fixed ratio schedule may not produce consistent, long-lasting, behavioral change.
Variable interval reinforcement schedules are employed when desired behaviors are reinforced after
varying periods of time. Examples of variable interval schedules would be special recognition for
successful performance and promotions to higher-level positions. This reinforcement schedule appears to
elicit desired behavioral change that is resistant to extinction.
Finally, the variable ratio reinforcement schedule applies the reinforcer after a number of desired
behaviors have occurred, with the number changing from situation to situation. The most common
example of this reinforcement schedule is the slot machine in a casino, in which a different and unknown
number of desired behaviors (i.e., feeding a quarter into the machine) is required before the reward (i.e., a
jackpot) is realized. Organizational examples of variable ratio schedules are bonuses or special awards
that are applied after varying numbers of desired behaviors occur. Variable ratio schedules appear to
produce desired behavioral change that is consistent and very resistant to extinction.
REINFORCEMENT THEORY APPLIED TO ORGANIZATIONAL SETTINGS
Probably the best-known application of the principles of reinforcement theory to organizational settings is
called behavioral modification, or behavioral contingency management. Typically, a behavioral
modification program consists of four steps:

1. Specifying the desired behavior as objectively as possible.

 2. Measuring the current incidence of desired behavior.
3. Providing behavioral consequences that reinforce desired behavior.
4. Determining the effectiveness of the program by systematically assessing behavioral change.

Reinforcement theory is an important explanation of how people learn behavior. It is often applied to
organizational settings in the context of a behavioral modification program. Although the assumptions of
reinforcement theory are often criticized, its principles continue to offer important insights into individual
learning and motivation.

QUESTION NO. 2
Explain the barriers to effective interpersonal communication. Also explain the ways to overcome those
barriers.
ANSWER
What Is The Meaning Of Interpersonal Barriers?

Communication is one of the most essential workplace skills in the modern professional world.
Whether it’s spoken or written, communication helps employees and managers convey important
messages, updates and information.

Information sharing is key at work, especially when it’s a high-stakes environment. Whether it’s
managers communicating with employees, peer-to-peer communication or group meetings, there’s a lot at
stake. Employers need to establish proper controls and a positive environment to encourage smooth and
easy communication.

But what happens when communication channels are disrupted because of how employees get along with
each other?

Barriers to effective interpersonal communication occur when employees are too afraid to reach out
to their team leaders or if open communication isn’t encouraged. Relationships that help employees get
the work done also impact communication. For instance, if two employees don’t see eye to eye, they’ll
likely avoid communicating with each other. In this case, if they have to work on a project or send a
memo to each other, they can take days or completely overlook this. This can cause the turnaround time
on a project to be longer than ideal.

Interpersonal barriers are very common in the workplace. New recruits may be too shy to participate in
important meetings. There can be managers who dominate the conversation, discouraging others from
speaking at all. The reason might be a person’s individual qualities or the general environment in an
organization. Leaders need to be mindful of establishing protocols that support an open and honest
communication network.
Communication barriers can hamper the way organizations do business. From affecting day-to-day
business to larger operations, interpersonal barriers can be potent. It’s important to recognize and correct
them in a timely manner.

Common Interpersonal Barriers to Communication

There are several barriers to communication that include technological, organizational and emotional
barriers. Each of these can impact how communication occurs in the workplace. Whether it’s a colleague
who’s difficult to get along with or a manager who doesn’t follow an open-door policy, communication
can be hampered quite easily.

Examples of interpersonal barriers in communication are:

1. Excessive Technical Jargon

If the manager in the product team is sharing an email with a sales associate, the use of jargon can make
the messaging incomprehensible. It can also create a wall between the two employees. The sales associate
may find it hard to express their confusion while the product manager might assume the message was
successfully sent. The message eventually gets lost in translation with no one seeking clarification or
acknowledging it. Jargon can act as a roadblock to effective communication.

2. Lack Of Trust Among Team Members

Team building is important for a successful organization. However, a lack of trust in teams can create
interpersonal barriers in communication. For instance, if employees don’t trust their peers to deliver the
work, they’ll prefer doing it themselves. Delegation also comes with a slice of trust and responsibility.
Teams need to have the right mindset and approach to collaboration if they want to improve
communication. If there are conflicts between team members, they need to be resolved in a timely way.
This can save organizations a lot of trouble.

3. Lack Of Active Listening Skills

Communication isn’t just speaking or writing well. A critical aspect of effective communication is active
listening. It means listening well enough to engage in an interesting conversation, asking follow-up
questions and registering what the speaker has to say. Lack of active listening skills can cause a rift
among employees. For instance, if someone’s sharing their ideas but no one’s paying attention, it can
offend them. This can even deter them from participating or speaking up in future meetings or events.

4. Absence of Control over the External Environment

Between the speaker and listener or the sender and receiver of a message, there are several factors that
can impair communication. The external environment is dynamic. If one employee is in the office while
the other is at home, it can affect interpersonal communication. The person working from home may be
unavailable for a meeting or the person in office may have too much background noise.

5. Filtering Messages across Levels and Functions

The kind of organizational structure in an office can impact communication in many ways. For instance,
if it’s a hierarchical work environment, employees may be reluctant to reach out to their seniors. They
may only be taking directions instead of collaborating or working together with everyone. This can cause
them to avoid group meetings and calls. They can even be too shy to present their ideas and opinions.

Interpersonal barriers, if not addressed, can affect the way organizations function. Good communication
is critical in giving employees feedback, setting goals and sharing the organization’s vision. Interpersonal
communication barriers have the ability to significantly disrupt the workflow.
How to Overcome Interpersonal Barriers to Communication

Barriers to communication can be countered and fixed with proper training and development efforts. The
modern workplace dictates the need for a fully-functioning growth-led employee learning journey. New
employees with a year of experience or experienced ones with ten years of experience can benefit from an
in-depth learning path that helps them improve their communication and collaboration skills.

Here are some ways to overcome interpersonal barriers:

1. Communication Skill Development

Employees are always learning on the job. Even if they’re skilled at what they do, there’s always a
learning curve. Similarly, communication skills can also be developed and improved with proper training.
Organizations can sign their teams up for online skills training programs. These can help them identify
their strengths and weaknesses, improve areas they need more work on and practice communication drills
to overcome barriers.

2. Team Building Initiatives

Interpersonal relationships are the lifeblood of any thriving organization. Employees who get along are
far more effective in achieving larger goals. Team building is the key to creating this collaborative and
interpersonal environment. Group activities, social events and cross-functional work opportunities are
some ways organizations can encourage teamwork. This will help teams overcome interpersonal barriers
of communication.

3. Establishing Proper Channels of Communication

Another way communication barriers can be overcome is by establishing proper channels of

communication. Some employees may be more active on email while others may use informal messaging
to communicate important information. A streamlined, singular communication platform can help
employees stay updated. Shared calendars can also help employees update each other on what needs to be
done, the progress of work and request for support, if needed. Tracking and recording essential
information is essential to revisit historical data. This also makes everyone feel like a part of the team.

4. Implementing Regular Feedback Cycles

Interpersonal skills between a senior and junior can be improved with regular feedback systems. For
instance, a manager may have some feedback for their employee. The way they deliver their feedback is
more important than the feedback itself. A regular feedback cycle helps both employees and managers
talk about work, what needs improvement and what was done well. Appreciation in the workplace goes a
long way in encouraging employees to stick around. It’ll in turn help managers build rapport with their
teams, improve interpersonal relationships. If there’s trust and support added to a feedback cycle, it can
turn things around for workplace communication.
 Organizations have a responsibility toward their employees just as much as employees have a
responsibility toward their employer. A nurturing and healthy work environment is what employees need
to thrive. For this, overcoming interpersonal barriers to communication is of the essence. So, how can
organizations invest their resources in employee development?

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QUESTION NO. 3
Describe the three common communication networks.
ANSWER
(i) Vertical Network:
This is a kind of a formal network. So consequently it is suitable for communications between
different levels of employees. For example a higher ranking manager and a lower-ranking official.

This network thus enables two-way communication wherein immediate feedback is a common practice.
This is a direct link between the employees and their subordinates and thus the chance of miscommunication
is very low.

(ii) Chain Network:

A company or the organization is like a platoon. It has its leader at the front and the troop following right
behind. For communications that are for the more than two nodes or more than two levels of employees, we
can employ this method of communication.

Here the network traces a chain of command. This may start with a senior or a high ranking employee or a
manager, who hands it over to the next level and so on. For example, the communication starts from a C E O
and trickles down to the employees of a lower level.

The C E O may pass the information on to the managers who will pass it to the lower levels without
alteration. Notice that the message which generates at the higher level has to trickle down to the lowest level
without any alteration.
Since in this communication, a large number of nodes or repetition points may be involved, there is a great
chance of error and miscommunication.

In addition to this, the chain network is very time consuming and often results in messages that are not
understood by at least some people in the chain.

(iii) Circuit Network:

In this type of network, two people or nodes will communicate with each other continuously. One of
the nodes will produce messages and the other a feedback to the messages. The communication is thus two
people communicating with each other, sending messages and feedbacks and thus forming a loop or a circuit.

This circuit or loop is what we call the circuit network. Usually, the two people that are interacting via this
form of networks are of the same hierarchical level. This is different from the Vertical Network where the
feedback and the messages are two-way communication.

QUESTION NO. 4

Explain the nature and importance of control. Also describe three steps in control process.

ANSWER

Meaning of Controlling:

Controlling is one of the managerial functions and it is an important element of the management
process. After the planning, organising, staffing and directing have been carried out, the final
managerial function of controlling assures that the activities planned are being accomplished or not.

So the function of controlling helps to achieve the desired goals by planning. Management must,
therefore, compare actual results with pre-determined standards and take corrective action of
necessary.

Control can be defined as the process of analysing whether actions are being taken as planned and
taking corrective actions to make these to confirm to planning.

According to E.F.L. Brech:

“controlling is checking performance against predetermined standards contained in the plans with a
view to ensuring adequate progress and satisfactory performance.”

Ernest. Dale defines as “the modern concept of control envisages system that not only provides a
historical record of what has happened and provides data that enable the chief executive or the
departmental head to take corrective steps if he finds he is on the wrong track.”
The managerial function of controlling is defined by Koontz and O’Donnell,” as the measurement
and correction to the performance of activities of subordinates in order to make sure that enterprise
objectives and the plans devised to attain them are being accomplished.”?

George R. Terry defined “controlling is determining what is being accomplished, that is

evaluating the performance and, if necessary, applying corrected measures so that the
performance takes place according to plans.”

Management control is the process by which managers assure that resources are obtained and used
effectively and efficiently in the accomplishment of the organisation’s objectives. Further, it is
defined as the process by which managers in the organisation assure that activities and efforts are
producing the desired objectives in the organisation. These definitions imply three main points
about management control.

First, management control is a process of some inter-related and sequential steps, secondly,
management control in the organisation aims at effectiveness and efficiency in the acquisition and
utilisation of resources such as money, materials, machinery and manpower. Thirdly, management
control in the organisation is designed to further objectives of the organisation.

Nature of Controlling:

Based on the above definitions the following natures or characteristics of controlling can be
presented below:

1. Control is a Function of Management:

Actually control is a follow-up action to the other functions of management performed by managers
to control the activities assigned to them in the organisation.

2. Control is Based on Planning:

Control is designed to evaluate actual performance against predetermined standards set-up in the
organisation. Plans serve as the standards of desired performance. Planning sets the course in the
organisation and control ensures action according to the chosen course of action in the organisation.

Unless one knows what he wants to achieve in the organisation, he cannot say whether he has done
right or wrong in the organisation. Control is said to be the Last step in management process but
really speaking it begins with the setting up a plan in the organisation. Control implies the existence
of plans or standards in the organisation.

3. Control is a Dynamic Process:

It involves continuous review of standards of performance and results in corrective action, which
may lead to changes in other functions of management.

4. Information is the Guide to Control:

Control depends upon the information regarding actual performance. Accurate and timely
availability of feedback is essential for effective control action. An efficient system of reporting is
required for a sound control system. This requires continuing monitoring and review of operations.

5. The Essence of Control is Action:

The performance of control is achieved only when corrective action is taken on the basis of
feedback information. It is only action, which adjust performance to predetermined standards
whenever deviations occur. A good system of control facilities timely action so that there is
minimum waste of time and energy.

6. It is a Continuous Activity:

Control is not a one-step process but a continuous process. It involves constant revision and analysis
of standards resulting from the deviations between actual and planned performance.

7. Delegation is the key to Control:

An executive can take corrective action only when he has been delegated necessary authority for it.
A person has authority to control these functions for which he is directly accountable. Moreover,
control becomes necessary when authority is delegated because the delegator remains responsible
for the duty. Control standards help a manger expand his span of management.

8. Control Aims at Future:

Control involves the comparison between actual and standards. So corrective action is designed to
improve performance in future.

9. Control is a Universal Function of Management:

Control is a basic or primary function of management. Every manager has to exercise control over
the subordinates’ performance, no manager can get things done without the process of controlling.
Once a plan becomes operational, follow-up action is required to measure progress, to uncover
deficiencies and to take corrective actions.

Therefore, control is an essential managerial function at every level. The process of management is
incomplete without controlling.

10. Controlling is Positive:

The function of controlling is positive. It is to make things happen i.e. to achieve the goal with
instead constraints, or by means of the planned activities. Controlling should never be viewed as
being negative in character.

Principles of Controlling:

The followings are the principles of controlling:

1. Objectives:

Controls must positively contribute to the achievement of group goals by promptly and accurately
detecting deviations from plans with a view to making corrective action possible.

2. Interdependence of Plans and Controls:

The principles of interdependence states that more the plans are clear, complete and integrated, and
the more that controls are designed to reflect such plans, the more effectively controls will serve the
need of managers.

3. Control Responsibility:

According to this principle, the primary responsibility for the exercise of controls rests in the
manager charged with the performance of the particular plans involved.

4. Principal of Controls being in Conformity to Organisation Pattern:

Controls must be designed so as to reflect the character and structure of plans. If the organisation is
clear and responsibility for work done is well defined, control becomes more effective and it is
simple to isolated persons responsible for deviations.

5. Efficiency of Controls:

Control techniques and approaches are effectively detect deviations from plans and make possible
corrective actions with the minimum of unsought consequences.

6. Future-oriented Controls:

It stresses that controls should be forward looking. Effective controls should be aimed at preventing
present and future deviations from plans.

7. Individuality of Controls:

Control should be designed to meet the individual requirements of managers in the organisation.
Although some control techniques and information can be utilised in the same form by various types
of enterprises and managers as a general rule controls should be tailored to meet the specific
requirements.

8. Strategic Point Control:

Effective and efficient control requires that attention to be given to those factors which are strategic
to the appraisal of performance.

9. The Exception Principle:

The exception principles whereby exceptions to the standards are notified, should be adopted. Note
must be taken of the varying nature of exceptions, as “small” exceptions in certain areas may be of
greater significance than ‘larger’ exceptions elsewhere.

10. Principal of Review:

The control system should be reviewed periodically. The review exercise may take some or all the
points emphasised in the above stated principles. Besides, flexibility and economical nature or
controls, should not be lost sight of while reviewing controls.

The Factors to be Considered in the Significance of Controlling:

The following factors, which are common to all organisational situations:

1. Size of Business:

As the organisations grow in size and diversity, they become increasingly complex to manage and
hence the need for an efficient system of controls which is required to coordinate activities and
accomplish integration.

2. Uncertainty:

Control forms a basis for future action. Today’s world of rapid and sometimes unpredictable
changes makes the future very uncertain. This makes planning very difficult. Hence, control points
are necessary to check the progress of activities and plans and make the necessary and constructive
adjustments so as to accommodate any environmental changes.

3. Decentralization Trends:

The current trends in decentralization have brought the decision making authority at lower level
management while accountability for results remains with the upper management. Controls serve the
purpose of monitoring and ensuring performance results while delegating authority to subordinates.

4. Control is Vital for Morale:

Workers are happier when things are under control. People make mistakes. Intuitive decisions can
result in errors of judgments, especially when there are so many variables involved. Such wrong
decisions can result in lowering of morale. Control techniques reduce the chances of errors in
judgment thus making the organisational environment more stable. which is morale boosting.

Aims of Controlling:

The aims of controlling are listed as follows:

1. To find out the progress of the work—the work already completed and the work in progress.

2. To compare the actual performance of the work at different stages with the particulars indicated
in the plans and policies.
3. To ascertain the time within which the work is completed.

4. To verify quantity and testing quality of the products.

5. To know the delays or interruptions, if any, in the performance of work and trace the cause of
such delay or breakdown.

6. To see that causes of delay are eradicated and operations are suitably re-scheduled.

7. To ensure that variations in the contents and methodology of work are remedied by appropriate
adjustments.

8. To assess the cost of materials and labour used and ensure that direct costs and indirect costs do
not exceed the budget provisions.

9. To pinpoint the responsibility on individuals at different levels for slackness, indifference, or

negligence, if any in the expected levels of performance.

10. To evaluate the value of the work performed and recognize the contributions of the staff towards
realisation of the goals of the enterprise.

11. To maintain discipline and morale in the organisation.

Benefits of Controlling:

Following are the advantages of an effective s system of control:

1. Control provides the basis for future action in the organisation. Control will reduce the chances of
mistakes being repeated in future by suggesting preventive methods.

2. Control facilities decision making in the organization. The process of control is complete only
when corrective measures are taken in the organization. This requires taking a right decision as to
what type of follow up action is to be taken while controlling.

3. An effective system of control facilities decentralization of authority only when corrective

measures are taken. This requires taking a right decision as to what type of follow up action is to be
taken regarding control.

4. Control and planning go hand in hand in the organisation. Control is the only means to ensure
that the plans are being implemented in real sense and not some other else. Control points out the
shortcomings of not only planning but also other functions of management such as organising,
staffing and directing in the organisation.

5. The existence of a control system has a positive impact on the behavior of the employees in the
organisation. They are cautious when performing the duties in the organization and they know that
their supervisors in the organisation are observing them.
 6. Control helps in coordination of the activities of the various departments in the organisation of
the enterprise by providing them unity of direction.

Limitations of Controlling:

A control system may be faced with the following limitations:

1. An organisation cannot control the external factors such as government policy, technological
changes, fashion changes etc.

2. Control is an expensive process because sufficient attention has to be paid to observe the
performance of the subordinates in the organisation. This requires an expenditure of a lot of time
and effort to be made.

3. Control system loses its effectiveness in the organisation when standards of performance cannot
be defined in quantitative terms. For example, it is very difficult to measure human behavior and
employee morale in the organization.

4. The effectiveness of control mainly depends on the acceptance of subordinates in the

organisation. They may resist control because they may feel that it will reduce or curtail their
freedom while in duty. It also loses its significance when it is not possible to fix the accountability
of the subordinates.

QUESTION NO. 5

What are the managerial implications of a borderless organization?

ANSWER

(i) Borderless Organization:

A borderless organization is one that operates across geographic boundaries and empowers its employees
to be creative and flexible. Some of the managerial implications of a borderless organization are:

 The need to be aware of the laws, politics and culture of the country in which they work.
 The need to respect employees’ cultural beliefs and practices.
 The difficulty in controlling the organization.
 The challenge of openness and transparency in a global environment.

A borderless organization is an unprecedentedly large portion of a system or entity that is not

controlled by one person, group, or organization. There are many theories about what a borderless
organization should be and what it can do, but unless the entire system is combined into one entity, it
remains a separate entity.

This has several implications for the people in the system, as well as for the surrounding systems. People
in a border-free environment feel more comfortable and reliable than people in an under ordered
environment. People who are comfortable and reliable earn more money than people who don’t trust the
system.
The presence of regulations also increase when there is a lack of control from one side to another. When
there is no regulation, there is room for everyone to improve their product or service to meet market
demands and raise their standards.

(ii) Reduced geographic boundaries:

Another way that an open, borderless organization can gain competitiveness is by eliminating or
reducing geographic boundaries. By having no boundaries, there is more room for expansion and
creativity. This allows other regions to learn the open source community and its techniques, eliminating a
perceived advantage in local knowledge.

It also reduces exposure to regulatory requirements and conflicts, both of which can decrease your
company’s overall quality of service. With no borders to close, department heads can operate in a more
free-flowing manner. They can make decisions without being told whether they are right or wrong,
which can lead to better quality of service (QoS).

Another benefit of non-geographic boundaries is that they help prevent favoritism and mobbing. When
team members or department heads feel as though they are being treated differently based on their area
of expertise, this can lead to internal conflict.

(iii) Reduced functional boundaries:

A borderless organization is more open to new ideas and ways to do business, which can be a good
and a harmful thing. When there is only one way to do something, it can be hard to drive innovation.
Because no one entity or company controls the innovation process, it can be difficult to know when
changes should come or if they should come.

 For example, in healthcare, where almost every phase of medicine uses different protocols and
standards, there are many adoption cycles for new technologies and available treatments.
 As a company grows larger, the need for internal communication becomes more of a
communication between regions or groups instead of people traveling between them. This can
become a problem of communication overflow instead of insufficiency.
 A large organization can also have internal conflict that is not being seen by the outside world.
Because there are no functional boundaries in a borderless organization, this type of conflict is
not being addressed.

(iv) Reducing behavioral boundaries:

There is a flip side to the boundary-reducing effects of a borderless organization. When

boundaries are high, it can make people feel like they have to stick to them at all costs. This can be a
positive thing! People enjoy being told what to do and they like being supervised. If you like having total
control over people, this job is for you.

There are some consequences to not having boundaries in an organization. These include wasted
time and money, feelings of unreality and contamination, poor quality customer service, and increased
chances of injustice. This was possible because the employees did not have to fight against these
conventional behaviors.
(v) The disappearance of the manager:

One of the most pronounced features of a large organization is its borderless nature. All
departments, teams, and functions are represented, and influential members are recruited from all over the
organization. This is intentional to give each department an opportunity to experiment and advance their
interests without being limited to only those things that happen within their silo.

At this stage in development, there’s no clear leader or team responsible for everything in the
organization. This allows each department to develop a reputation for quality work and gain more
credibility when they deliver.

By not having a leader who decides what projects get funding and what doesn’t, it allows individuals to
be more independent. As they are, many organizations have been growing at a rapid rate.

(vi) Become a leader, not a manager:

We’ve laid out some key insights for a borderless organization in this article, but you don’t create a
leader without a manager. The greatest leaders are not necessarily the most experienced managers. A
leader is someone who can get others to follow and trust him or her to lead.

That doesn’t mean no one else should be trusted to make decisions, it just means that the leader should
not be a person who is in charge of leading. As we said before, a leader is someone who can get others to
follow and trust him or her to lead. That doesn’t mean no one else should be trusted to lead, it just means
that the person in charge should not be in the position of leading.

The person who leads is usually in the position of managing rather than leading. Managing is asking
others what they want and seeing if they believe they can implement it. When there is no other individual
in this role, it is a role of a manager.

(vii) Embrace chaos:

As an organization, we often focus too rigidly and strictly on existing rules and expectations. This is a
good rule-based organization can mean the difference between success and failure. However, when the
expectations are more flexible, it creates more room for error. When there are no expectations, there is no
stress.

A world of opportunity opens up to your employees as they can choose to follow their passions and create
great work. You lose the staid voices that tell your employees what needs to be done and how to do it, but
instead you have freedom-minded individuals who feel compelled to experiment with new ideas and
methods. This can be a scary concept for an employer to consider.

(viii) Make chaos discipline:

One of the most significant implications of a borderless organization is how to handle chaos. A tightly
controlled organization can be very restrictive about what it allows into its system.
For instance, in an organization where roles are defined clearly, people can be put into positions that they
would not otherwise apply to others.

In a tightly controlled organization, people cannot just apply what they want to people else and see
results. They must use the system they have applied before with more clearness or complexity reduced.

The importance of control in a chaos-disciplined environment has been discussed at length, and there
have been several notable cases where chaos has been controlled and discipline has been lost due to lack
of control.

(ix) Give up control for engagement:

Having a borderless organization is great for engagement, and it can make a world of difference for your
business. It lets people from all over the world connect, learn, and contribute to the team. However, if
you want to be successful in this system, you need to relinquish control. You have to trust your team
members and their creativity to find solutions to problems. This can be difficult when you are the leader
and you have no way of knowing what will happen or who will respond. As a leader, you have two
options: give up control or engage your team. If you choose the second option, read on! Give up control
means that you do not feel like the leader and that you do not have any power over the team. We call this
self-effacing leadership.