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and its vision. To achieve these goals, company may face lot of obstacles in administrative,
operational, marketing wings and operational domains. Such problems are sorted out
through comprehensive decision making process. No decision comes as end in itself, since
in may evolve new problems to solve. When one problem is solved another arises and so on,
such that decision making process, as said earlier, is a continuous and dynamic.
A lot of time is consumed while decisions are taken. In a management setting, decision
cannot be taken abruptly. It should follow the steps such as
1. Defining the problem
2. Gathering information and collecting data
3. Developing and weighing the options
4. Choosing best possible option
5. Plan and execute
6. Take follow up action
Since decision making process follows the above sequential steps, a lot of time is spent in
this process. This is the case with every decision taken to solve management and
administrative problems in a business setting. Though the whole process is time consuming,
the result of such process in a professional organization is magnanimous.
ORGANISING
Meaning and Definition
The process of organizing involves establishing an intentional structure of roles for the staff
at all levels of hierarchy in the organization. It is the function of identifying the required
activities, grouping them into jobs, assigning jobs to various position holders, and creating a
network of relationship, so that the required functions are performed in a co-ordinated
manner, leading to the accomplishment of desired goals.
According to Koonts O Donnel. “Organizing involves the grouping of activities necessary to
accomplish goals and plans, the assignment of these activities to appropriate departments,
and the provision of authority delegation and Co-ordination.”
According to GR Terry, “Organizing is the establishing of effective behavioral relationship
among persons so that they may work together effectively and gain personal satisfaction in
doing selected tasks under given environmental conditions for the purpose of achieving
some goal or objectives.”
Steps in Organizing
The logical sequence of steps in organizing is mentioned below:-

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1. Establishing objectives
2. Designing Plans and Policies
3. Identifying specific activities
4. Grouping activities according to available resources
5. Delegating the authority necessary to perform the activities.
6. Tying the groups together through authority relationship and communication.

Functions of Organisation
The following are the important functions of organization

1. Determination of activities:- It includes the deciding and division of various

activities required to achieve the objectives of the organization. The entire work is
divided into various parts and sub parts.
2. Grouping of activities :- Here, identical activities are grouped under one
department.
3. Allotment of duties to specified persons:- For the effective performance, the
grouped activities are allotted to specified persons.
4. Delegation of authority:- Assignment of duties should be followed by delegation of
authority. It is difficult to perform the duties effectively, if there is no authority to
do it.
5. Defining relationship:- When a group of person is working together for a common
goal, it is necessary to define the relationship among them in clear terms.
6. Co- ordination of various activities:- The delegated authority and responsibility
should be co-ordinated by a responsible person.
Principles of Organisation
The following are the important Principles to be followed by management for the
success of an organization.
1. Principle of definition: - It says that, it is necessary to define and fix the duties,
responsibilities and authority of each work. In addition to that the organizational
relationship of each worker with others should be clearly defined.
2. Principles of Objectives:- The objectives of different departs should be geared to
achieve the main objective of the organization.

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3. Division of work:- A work should be assigned to a person according to his

educational qualifications, experience, skill and interest. It will result in attaining
specialization in a particular area.
4. Principles of continuity: It is essential that there should be a re operation of
objectives, re adjustment of plants and provision of opportunities for the
development of future management. This process is taken over by every
organization periodically.
5. Principles of Span of Control: This principles determines the number of
subordinates a superior can effectively manage.
6. Principles of Exception: Here, all the routine decisions are taken by the
subordinates; senior managers will only deal with exceptional matters. It is known
as management by exception.
7. Principles of flexibility: The organizational set up should be flexible to adjust to the
changing environment of business.
8. Principles of Unity of Direction: All departmental goals are tuned to achieve
common goal. So there should be co-ordination of all the activities.
9. Principles of Balance: There are several units functioning separately under on
organizational set up. So, it is essential that the sequence of work should be arranged
scientifically.
10. The scalar principle: It says that each and every person should know who is his
superior and to whom he is answerable.
11. Principle of efficiency: The work should be completed with minimum members, in
less time, with minimum resources and with the right time.
12. Delegation of Authority: Authority should be delegated to the subordinate for the
successful completion of assigned job.
13. Principles of responsibility: Each person is responsible for the work completed by
him. So the responsibility of the subordinates should be clearly defined.
14. Principles of Uniformity: The work distribution should be in such a manner that
there should be an equal status and equal authority and powers among the same line
officers.
15. Simplicity and Accountability: The structures of the organization should be simple
and the higher authorities are accountable for the acts of their subordinates

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Classification of Organization
1. Formal Organisation: It is an organizational structure which clearly defines the duties,
responsibilities, authority and relationship as prescribed by the top management. It
represents the classification of activities within the enterprise, indicate who reports to
whom and explains the vertical flow of communications which connects the chief
executive to the ordinary workers.
2. Informal Organisation: It is an organizational structure which establishes the
relationship on the basis of the likes and dislikes of officers without considering the rules,
regulations and procedures. The friendship, mutual understanding and confidence are some
of the reasons for existing informal organization.

Differences between formal and informal Organisation:

Formal Organisation Informal Organisation

1.It is created deliberately 1. It is spontaneous.
2.Authority flows from top to bottom 2. Informal authority flows from top to
bottom or horizontally.
3. It arises from man’s quest for social
satisfaction
3.It is created for technological purpose 4. There is no such permanent nature and
stability
5. It gives importance to people and their
relationship.
4.It is permanent and stable 6. It arises due to social interaction of
people
7. No such written rules and duties.

5.It gives importance to terms of authority

and function.
6. It arises due to delegation of authority 8. Informal organisation tends to remain
smaller.

7.Duties and responsibilities of workers are

given in writing
8. Formal organization may grow to
maximum size

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Organisation Structure
Organisation is designed on the basis of principles of division of labor and span of
management. The success of the organization depends upon the competence and efficiency
of the officers. It is necessary to chalk out line of authority among the people working in an
organization.
Types of Organizational Structure
A brief explanation of the important types of organizations is given below:-
Line Organisation
Under Line organization, each department is generally a complete self contained unit. In
this type of organization, the line authority flows from top to bottom vertically. It clearly
identifies authority, responsibility and accountability at each level, departmental heads are
given full freedom to control their department. This type of organization is followed in the
army on the same pattern. So, it is also called military organization.

Features of Line organization

1. It consist of vertical direct relationship
2. Authority flows from top to bottom
3. Operations of this system is very easy.
4. It facilitate to know from whom one should get orders and to who one should give
orders
5. Existence of direct relationship between superior and subordinates
6. The superior will take decisions within the scope of his authority.
Line and Staff Organisation

In this type of organization Line officers have authority to take decisions and implement
them, but the staff officers will assist them while taking decisions. The function of staff
officers are only an advising one. They should advise and help line managers to take proper
decisions. In the fast developing industrial world, the line officers are not in a position to
acquire all the technical knowledge, which are necessary for taking right decisions. That gap
may be bridged with the help of staff officers. The staff officers may be experts in a
particular field.

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Features of Line and Staff Organisation

1. Authority flows from top to bottom
2. Line Officers will takes decisions on the basis of suggestions given by staff officers
3. Staff officers have no power to take decisions and no control over subordinates.
4. The workers get the instructions only from the line officers
Advantages of Line and Staff Organisation:
1. A line officer can take sound decisions on the basis of proper advice from the staff
officer.
2. The work load of line officers would be reduced to some extent,
3. It promote the efficient functioning of the line officers
4. The principles of unity of command are followed in the line and staff organization.
5. A very good opportunity is made available to the young person to get training.
6. It facilitates the workers to work faster and better.
7. It enables the organization to effectively utilize the staff officer’s experience and
advice.

Disadvantages of Line and Staff Organisation

1. If the powers of authority is not clearly defined, it will lead to confusion though out
the organization.
2. The line officers may reject the advice from staff officers without assigning any
reason.
3. The staff officers may under estimate the powers of line officers.
4. The staff officers are not involved in the actual implementation of the programme.
5. The staff officers are not responsible if favorable results are not obtained.
6. The difference of opinion between line officers and staff officers will defeat the very
purpose of specialization.
7. The line officers may misunderstand the advice given by staff officers.
Functional Organisation
In this type of organizations, specialists are appointed in top position through out the
organization. Various activities of the enterprise are classified according to functions
and functional heads will give directions related to his functions. Workers, under
functional organization, receive instructions from various specialists.

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Characteristics of Functional Organisation

1. The work is divided according to specified functions.
2. Authority is given to specialists to give orders and instructions in relation to specific
functions.
3. The decision is taken only after making consultations with the functional authority
relating to his specialized area.
4. The executives and supervisors discharge the responsibilities of functional authority.
Advantages of Functional Organisation
The following points will explain the benefits of functional organization.
1. Benefit of specialization:- In this type of organization, each work is performed by a
specialist. It helps to enhance the efficiency of the organization.
2. Reducing work load: Each person is expected to look after only one type of work.
It reduces the unnecessary work allotted to them.
3. Relief to line executives: Under functional organization, the instructions are given
by the specialists directly to the actual workers. Hence, the line executives do not
have any problem regarding the routine work.
4. Mass production: Large scale production can be achieved with the help of
specialization and standardization.
5. Flexibility: Any change in the organization can be introduced without any difficulty.

DELEGATION OF AUTHORITY
Authority
It is the power to make decisions which guide the actions of others. In other words, it is the
power to give orders and make sure that these orders are obeyed. In order to finish the
work in time, there is a need to delegate authority and follow the principles of division of
labour.
According to Koonts and O’Donnell, “ Authority is the power ot command others to act or
not to act in a manner deemed by the possessor of the authority to further enterprise or
departmental purposes.”
According to Luis Allen,”It is the sum of powers and rights entered to make possible the
performance of the work delegated.”
Responsibility

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It is the obligation to do something. In other words, it is the obligation to perform the tasks,
functions, or assignments of the organization. The essence of responsibility is obligation. If
a person is entrusted with any work, he should be held responsible for the work that he
completes
According to Davis, ”Responsibility is the obligation of individual to perform the assigned
duties to the best of his ability under the direction of his executive leader.”
In the words of Theo Haimann,” Responsibility is the obligation of subordinates to perform
the duty as required by his superior.”
Delegation of Authority
Delegation is a process which enables a person to assign a work to others with adequate
authority to do it. The authority can be delegated but not the responsibility. Delegation of
authority is considered to be one of the most important methods of training subordinates and
building morals. It is acknowledged that delegation of authority is one of the surerest and
best methods of getting better results.
Principles of Delegation
The following are the important principles of delegation.
1. Delegation to go by results: The superiors should clearly know what he expects from
the subordinates before delegation of authority. It should be noted that the objective of
the organization are to be accomplished in time.
2. Non-delegation of responsibility: Assigning duties does not mean delegation of
responsibilities. A superior can delegate authority but not responsibility.
3. Parity of authority and responsibility: Responsibility without authority will make a
person an inefficient one. So there should be a proper balance between authority and
responsibility.
4. Unity of command: A subordinate should be assigned duties and responsibilities only
by one superior and he is accountable only to the concerned superior.
5. Definition of limitation of authority: There should be a written manual which help a
person to understand the authority in right direction.
Steps in Successful Delegation Process
The following steps will help the successful delegation of authority.
1. Deciding the goals to be achieved: The purpose of delegation is to enable efficient
accomplishment of organizational objectives. If it is not clearly defined, the subordinate
may hesitate to accept the authority.

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2. Establishment of definite responsibility: The authority and responsibility of each

subordinate should be clear in terms. It helps to avoid duplication of authority.
3. Determining what to delegate: This will necessitate the evaluation of the capacity of
the individual and needs of the organization.
4. Training: Subordinate should be properly trained in handling delegated work.
5. Control system: There should be a suitable control system to keep a careful watch over
the performance of the subordinates.
Types of Delegation
A brief explanation of the different types of delegation is given below:
1. General delegation: It means granting authority to the subordinate to perform
various managerial functions and exercise control over them.
2. Specific delegation: Here, orders or instructions are delegated to a particular person
specifically.
3. Written delegation: When authority is delegated in written words it is known as
written delegation.
4. Unwritten delegation: If authority is delegated on the basis of custom or usage etc,
it is known as unwritten delegation.
5. Formal delegation: If duties and authority are shown in the organizational structure
of the enterprise, then it is called formal delegation.
6. Informal delegation: If a person exercising authority without getting it from the
top management in order to perform his assigned duties, it is a case of informal
delegation.
7. Downward delegation: It is a case where the superior delegate duties and authority
to his immediate sub ordinate.
8. Sideward delegation: A person delegate authority to another person who is also in
the same rank as he is in the organization.

CENTRALISATION AND DECENTRALISATION

Centralization: It means concentration of decision making authority at the top level
management. All the decision are taken by the top management without delegating to the
subordinate. As far as a big organization is concerned, it is not possible to run the
organization for long period without delegating the authority.

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Decentralization: In decentralization, each section has its own workers to perform activities
within the department. According to Allen,” Decentralisation refers to the systematic efforts to
delegate to the lowest levels all authority except that which can only be exercised at central point.”
Advantages of Decentralization
1. It saves the time of top executive and give relief to the top executive
2. Decentralisation gives the subordinates the freedom to act and make some decisions.
It gives him a feeling of status and recognition.
3. It helps to coordinate the activities of the organization in a better way.
4. It helps to take prompt and quick action at the earliest.
5. It is a best devise to develop future business executives
Disadvantages of Decentralisaiton
1. It is suitable only to a big business enterprise.
2. It creates problem of co-ordination among various levels
3. There is a chance to miss the uniformity in policies and procedures.
Span of Control
Span of management or Span of control means the number of people managed efficiently by
a single officer in an organization. It is an accepted truth that large number of subordinates
cannot be supervised and their efforts coordinated effectively by a single executive. Only
limited numbers of persons are allocated to the executive for dividing the work. The limit of
number of members for span of control may be increased or decreased according to the
levels of management. According to Urwick, the ideal number of subordinates is four in
case of higher level management and eight to twelve in case of lower level management.

Factors affecting the span of Control

The following are some of the factors which influence the span of control.
1. Nature of work: If the works are repetitive in nature, the supervisor can control a
large number of subordinates and vice versa.
2. Leadership qualities of the supervisor: If the supervisor has more skill and
capacity to control the subordinates, the span of management may be increase and
vice-versa.
3. Capacity of the subordinates: If the subordinates have enough talent to perform
the work assigned to them, the manager or the supervisor can control more number
of subordinates.

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Module III
STAFFING, DIRECTING AND CONTROLLING

STAFFING
Staffing may be defined as a process of recruiting and equipping the people to handle
various positions and perform assigned tasks in line with the structure and the overall goals
of the organisation. It is the managerial function which involves managing the organisation
structure through proper and effective selection, appraisal and development of the personnel
to fill the roles assigned to the employers/workforce.
According to Theo Haimann “ Staffing pertains to recruitment, selection, development and
compensation of subordinates .”
In the words of Benjamin, “It is the process involved in identifying, assessing, placing,
evaluating, and directing individuals at work place.”

Staffing Process:
The following specific activities are included in the staffing process.
1. Identification of areas of specialization to match the nature and mandate of the
organisation.
2. Estimation of the future manpower requirements
3. Recruitment
4. Selection and Placement
5. Performance Appraisal
6. Placing and Training

Factors affecting staffing

External Factors:
There are various external factors that affect the staffing process and organization has no
control over these factors.
Nature of competition for Human Resources: - In India there is a cut throat competition
among organization for hiring managerial talents both fresh and experienced, computer
professionals etc. Companies are making campus recruitments and students from reputed
institutes like IIMs are being placed on very high packages. Companies are amending

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changes to retain their good employees and offering a good working environment and
salaries.
Legal factors: - There are various legal provisions which affect the staffing policies of an
organization. Various acts which provide restrictions to free recruitment are Child Labour
Act 1986, Employment Exchange (compulsory notification of vacancies) Act 1959and
Mines Act 1952. Also some provisions regarding compulsory employment of certain
categories like OBC, SC/ST affects the staffing policies of an organization.
Socio-culture Factors: - Various socio-culture factors affect the staffing process due to
which certain jobs are to be given to certain categories of people like our culture prevent the
women to be employed on in manufacturing operations involving physical exertion.
External influences:- There are various other elements which exert pressure on
organization like political pressure to employ local people or pressure from business
contacts.
Internal Factors: -
Size of Organization: - Small organization cannot have same staffing practices which a
large organization may have; it may not be able to attract highly talented staff. Even if it
tries to do so it may increase the staffing cost.
Organizational Business Plan: - Organizational business plan directly affect the staffing
function because it determines the type of personal that may be required in future. On the
basis of business plan growing organization may need more staff in the future and declining
organization will have to shunt out its staff and stagnating organization will work for
retaining its staff. Staffing strategies may be different for these organizations.
Organizational Image: - organization image also affects the staffing practices.
Organizational image depends upon facilities to staff for training
and development promotional policies, working conditions and compensation incentives etc.
if all these factors are positive then organization will attract more candidates
Staffing Function
Staffing function involves Man power planning, Recruitment, Selection, Training and
Development and Performance Appraisal.

Man Power Planning

Planning of man power resources is a major managerial Responsibility to ensure adequate
supply of personnel at the right time both in terms of their quality, quantity and aptitude
Man power planning, which is also called HR Planning consists of putting right number of

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people at the right place, right time doing the right things for which they are suited for the
achievement of goals of the Organisation.
Man power planning is carried out in a set of procedures. The procedure is as follows:
a. Analyse the current man power inventory
b. Marketing future man power forecasts
c. Developing employment programme
d. Design training programme.

According to Geisler,” Man power planning is the process including forecasting,

developing, implementing and controlling – by which a firm ensures that it has the right
number of people and right king of people, at the right place, at the right time, doing
things for which they are economically most suitable.”

Features of Man power Planning:

1. It involves determination of future needs of man power.
2. It deals with effective utilization of manpower.
3. It is a process for ensuring the availability of right people in the organisation.
4. It relates to establishing job specifications.
5. It give emphasis on better working conditions.

Man power Planning Process

The various steps of manpower planning can be identified as follows:-

1. Projecting Manpower requirement:- The first step in Manpower planning is to

forecast organization structure that will meet the future needs of the organisation.
Most of the organisations change over the period of time in terms of expansion of
business, change in the nature of business etc such changes require changes in the
composition of man power.

2. Job Analysis: It is a systematic study of jobs to know the nature and characteristics
ofo people to be employed in different kinds of job. It give a clue about type of

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personnel required. It provides information about the nature of job, and the
qualifications that are desirable in the job holder. It includes:-
Job description:- It is a detailed study of job to know the nature and characteristics
of the people in different kinds of job. It prescribes the nature of job to be
performed, relationship with other jobs, purpose of the job etc. The job description
statement is helpful in the process of selection, training, performance appraisal and
job evaluation.
Job specification:- The result of the job analysis is written in a statement known as job
description. Job specification refers to the summary of the personal characteristics
required for the job. It describes the type of person required in terms of qualification,
experience , aptitude etc.
The basic difference between job description and specification is that the former
describes the details of the job, which latter describes the requirements of the person
performing the job.
3. Man power inventory: It is not simply counting of heads presently available in
organisation, but cataloguing of their present and future potentialities and aptitudes.
This process involves four steps.
1. Determination of personnel to be inventories.
2. Cataloguing of factual information on each individual.
3. Detailed study of those individuals who have potential for development.

4. Identification of Gap between availability and Required man power:- Now the
organisation is in a position to determine the actual needs of personnel and their
availability. While determining the future requirement, we have to consider the loss of
personnel due to quits, discharge, mutually agreed release, death, retirement etc. After
identifying the gap between the available and required man power, it should be filled up
by recruitment and selection.

RECRUITMENT AND SELECTION

Recruitment
Recruitment is the process of finding the apt candidate and inducing them to apply for the
job in an organisation. The success of any recruitment depends upon the procedure followed
by the company while recruiting the members.

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According to McFarland, “The term recruitment applies to the process of attracting potential
employees of the company.”
In the words of Edwin B Flippo, ”It is the process of searching for prospective employees
and stimulating them to apply for the job in the organisation.”

Sources of Recruitment
Sources of recruitment may be external or internal.
External sources: - It includes
a. Advertisement
b. Employment agencies
i. Public Employment Exchanges
ii. Pvt. Employment agencies
c. Campus recruitment
d. Deputation
e. Employee recommendations
f. Labour unions
g. Gate Hiring
h. Un solicited applications
i. Jobbers and Contractors
j. Walk in interviews

Advantages of External Sources:

1. Wider Option: - The HR manager will get wider choice in selection of candidate.
2. New Outlook: - It will bring some fresh air and a new approach to the problem.
3. Wide experience: If the new candidate has experience in various fields, the
company can get the benefit of the Candidates experience.
Disadvantages
1. It is an expensive way of selecting employees
2. Lack of co-operation from the existing employees
3. It is a time consuming process
4. In this case there is a danger of non adjustment

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Internal Sources: It includes

1. Transfers
2. Promotion and Demotion

Merits of Internal Sources

1. It is economical in all respect
2. It requires lesser time
3. It helps to improve the morale of the employees
4. It is a more accurate and reliable source
5. It induces the staff members to work hard
6. It helps to derive job satisfaction
7. There is no need of any industrial training

Demerits of internal Sources

1. Limited options
2. No fresh air into the organisation.
3. Chances of reducing productivity by way of frequent transfers.

Selection
It is the process adopted by an organisation to select adequate number of persons who are
fit for the job. Selection procedure starts with the end of recruitment. Since it is a
process of rejecting the application of a candidate who is not suitable for the job,
selection is described as negative process.

Steps/Stages of Selection Process

Generally, the selection procedure has the following stages:
1. Receiving and screening of Applications: Prospective employees have to fill up Some
sort of application form. After getting the filled application form, the
personneldepartment will screen the application. Based on the screening of application,
only those candidates are called for further process of selection who are found to be
meeting the job standards of theorganization.

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2. Preliminary interview: - The object of conducting this interview is to know whether

the applicant is physically and mentally fit for the job.
3. Blank application: The applicants who were selected at preliminary interview are
required to fill up a blank application form. It is basically a printed form used to
collect the individual bio data of the candidate.
4. Tests: The test is conducted by the organization for the purpose of knowing more
about the applicants to be selected or rejected. There are mainly two tests.
Proficiency test and aptitude test. Proficiency test refers to the testing of skills and
abilities possessed by the candidate. Aptitude test refers to measuring the skills and
abilities which may be developed by the applicant to perform the job in future.
5. Interviews: It is considered as a method of personal appraisal through a face to face
conversation and observation. Interview helps the employer to evaluate the candidate
regarding the personality, smartness, intelligence, attitude etc.
There are different types of interviews are used by different organizations, like Direct
interview, Indirect interview, Patterned interview, Stress interview, Systematic in
depth interview, group interview etc.
6. Checking references: Sometimes, the applicants are requested to furnish references.
The applicants may include the name and address of present educational institutions
or respected or reputed persons in his locality. The information furnished in the
application is checked from these persons.
7. Medical Examinations: This is carried out for the purpose of assessing physical
fitness of the prospective employees.
8. Final Selection: A suitable applicant is selected on the basis of performance in the above
mentioned tests and interviews. Only the required number of applicants is selected by the
management.
9. Placement: Here a position is assigned to an individual where he can use all his
efforts consistent with the requirement of his total working group and then he will get
job satisfaction.

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Differences between Recruitment and Selection

Basis Recruitment Selection

Meaning It is an activity of establishing It is a process of picking up more competent

contact between employers and and suitable employees.
applicants.

Objectives It encourages large number of It attempts at rejecting unsuitable candidates

candidates for a job

Process It is a simple process It is comparatively a complicated process

Approach It is a positive approach It is a negative approach

Sequence It precedes selection It follows recruitment

Time consuming Less time is required More time is required

Training
It refers to a Programme that facilitates an employee to perform the job effectively through
acquiring increased knowledge and skills.
According to Edwin B Flippo,” Training is the act of increasing the knowledge and skills
of an employee for doing a particular job.”
Types of Training
The training may be of
I. On the Job Training
II. Off the Job Training
I. On the Job Training: It refers to the learning while actually performing a particular
work or job. This type of training is more suitable to every type of employees. It
includes:
a. On specific job training
b. Rotation of position /job rotation
c. Special projects
d. Apprenticeship training
II. Off the Job Training: Under this method, a trainee is removed from his normal
working place and spends his full time for training purpose in any other place. It includes:
a. Special course and lectures
b. Conference
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