APS College of Engineering,

(Affiliated to Visvesvaraya Technological University and Approved by AICTE, NAAC Accredited)

Somanahalli, Kanakapura Main Road, Bengaluru-560116

Department of Electronics and Communication Engineering

Subject Name: Technological Innovation Management and Entrepreneurship

Subject Name: 21EC61
Semester : 6th
Academic Year: EVEN 2023-2024
Module-2

Faculty Name: Dr. Naik D C

Assistant Professor,
 Module-2
• Organizing and Staffing: Organization-Meaning, Characteristics,
Process of Organizing, Principles of Organizing, Span of Management
(meaning and importance only), Departmentalization-Process
Departmentalization, Purpose Departmentalization ,Committees–
Meaning, Types of Committees.
• Staffing-Need and Importance, Recruitment and Selection Process.
• Directing and Controlling: Meaning and Requirements of Effective
Direction, Giving Orders; Motivation-Nature of Motivation,
Motivation Theories (Maslow’s Need-Hierarchy Theory and
Herzberg’s Two Factor Theory); Communication – Meaning,
Importance and Purposes of Communication (Text 1).
Organizing
• Organizing is the grouping of activities necessary to attain objectives, the
assignment of each grouping to a manager with authority necessary to supervise
it.
• Its provision for coordination horizontally and vertically in the enterprise
structure.
• An organization should be designed to clarify who is to do what and who is
responsible for what results, to remove obstacles to the performance caused by
confusion and uncertainty of assignment.
• Organization provides the structure, the frame on which the management of the
enterprise is based.
• It can also be defined as “a vehicle moving the management efforts through the
management team, with the help of the enterprise resources, to the
accomplishment of the goals or plans.”
Purpose of an organization
The basic purpose of having organization is to formulate a frame or structure of an
enterprise with a view to fulfil the enterprise tasks.
1. Establishes the pattern of relationship by giving duties and responsibilities to an
individual or group.
2. Demonstrates the authority, responsibility and duties of each individual or
group.
3. It tells each manager where his accountability lies and, who (below him) are in
his sphere of command.
4. Provides adequate communication
5. Coordinates or integrates (through organization charts) and controls the
activities of individuals or groups to achieve common objectives or objectives
of the enterprise.
Characteristics of an Organisation
An attempt to synthesize some important definitions indicates that every
organisation has:
1. a purpose, goal or goals are the task of planning,
2. a clear concept of the major duties or activities required to achieve the purpose,
3. classification of activities into jobs, and
4. establishment of relationships between these jobs in order to ensure
coordination. This is achieved through division of labour and delegation of
authority.
A group of organisations sharing a common profile of characteristics is called an
organisational configuration.
Typology of Organisations
• To the untrained eye, all organisations appear alike. But this is not so. Every
organisation has certain unique combination of the above characteristics which
distinguish it from all other organisations.
• Blau and Scott group organisations into four categories
1. Organisations which benefit their owners. All business and industrial
organisations fall in this category. Achievement is their dominant motive.
2. Organisations which benefit their members. A wide class of unions,
cooperatives and clubs come under this category. Affiliation is their dominant
motive.
3. Organisations which benefit their clients. Examples are insurance companies,
private schools, etc. Extension is their dominant motive.
4. Organisations which benefit the whole society (commonweal organisations)
such as governmental departments, the armed services and the police. Control is
their dominant motive. Different motives account for different types of
PROCESS OF ORGANISING
• Organising means designing the organisation structure. In performing the organising
function, the manager differentiates and integrates the activities of his organisation.
• By differentiation is meant the process of de-partmentalisation or segmentation of
activities on the basis of some homogeneity.
• Integration is the process of achieving unity of effort among the various departments.
• We can describe this differentiation and integration in terms of a seven-step
procedure.
1. Consideration of Objectives
2. Deciding Organisational Boundaries
3. Grouping Similar Activities into Positions and Department
4. Inter-departmental Relations Assessment and Key Department Identification
5. Determining Levels for Various Types of Decisions
6. Span of Control Determination
7. Making Arrangements for Coordination
1. Consideration of Objectives:
• Objectives determine the various activities which need to be performed and the
type of organisation which needs to be built for this purpose.
• Thus, the organisation of an enterprise that intends to diversify its products or to
expand into other regions of the country can never be the same as that of the
enterprise that intends to confine its operations to a single territory or to
manufacture a single product.
2. Deciding Organisational Boundaries:
• This means making manufacture-versus-buy choices for different goods and
services and choices about strategic alliances with other firms.
• Also choices have to be made about the extent to which the different parts of the
organisation interact directly with the outside environment.
• Overall, these choices define the boundaries of the organisation and how it
interacts with its environment.
3. Grouping Similar Activities into Positions and Department

• The next step is to group all closely related and similar activities into
departments and sections.

• For example activities of a manufacturing concern may be grouped into such

departments as production, marketing. financing and personnel.

4. Inter-departmental Relations Assessment and Key Department

Identification

• The next step is an analysis of the contributions which each department makes
downward, upward and sideways to decide its relative status.

• It is necessary to know key departments, i.e., those which are rendering key
activities, essential for the fulfilment of goals.
5. Determining Levels for Various Types of Decisions
• After deciding the relative importance of various departments, the levels at which
various major and minor decisions are to be made must be determined.
• Each firm must decide for itself as to how much decentralisation of authority and
responsibility it wants to have.
6. Span of Control Determination
• The next step to be taken in designing a structure is to determine the number of
subordinates who should report directly to each executive.
• The narrower the span, the taller would be the structure with several levels of
management.
7. Making Arrangements for Coordination
• A direct consequence of departmentalisation is the need to coordinate the
independent activities of the members of the organisations.
PRINCIPLES OF ORGANISING
1. Objectives
2. Specialisation
3. Span of Control
4. Management by Exception Principle
5. Scalar Principle
6. Unity of Command
7. Delegation
8. Responsibility
9. Authority
10. Efficiency
11. Simplicity
12. Flexibility
13. Balance
14. Unity of Direction
15. Personal Ability
1. Objectives: The objectives of the enterprise influence the organisation structure
and hence the objectives of the enterprise should first be clearly defined. Then
every part of the organisation should be geared to the achievement of these
objectives.
2. Specialisation: Effective organisation must promote specialisation. The
activities of the enterprise should be grouped according to functions and assigned
to persons according to their specialisation.
3. Span of Control : As there is a limit to the number of persons that can be
supervised effectively by one boss, the span of control should be as far as possible,
the minimum. That means, an executive should he asked to supervise a reasonable
number of subordinates only say six.
4. Management by Exception Principle
• As the executives at the higher levels have limited time, only exceptionally
complex problems should be referred to them and routine matters should be dealt
with by the subordinates at lower levels.
5. Scalar Principle: This principle is sometimes known as the "chain of
command".
• The line of authority from the chief executive at the top to the first-line
supervisor at the bottom must be clearly defined.
• The principle simply states that an organisation is a hierarchy.
• The importance and usefulness of the principle is evident whenever the line is
severed.
6. Unity of Command: Each subordinate should have only one superior whose
command he has to obey.
• Multiple subordination must be avoided, for it causes uneasiness, disorder,
indiscipline and undermining of authority.
7. Delegation: Proper authority should be delegated at the lower levels of
organisation also. The authority delegated should be equal to responsibility, i.e.
each manager should have enough authority to accomplish the task assigned to
him.
8. Responsibility: The superior should be held responsible for the acts of his
subordinates. No superior should be allowed to avoid responsibility by delegating
authority to his subordinates.
9. Authority: The authority is the tool by which a manager is able to accomplish
the desired objective. Hence, the authority of each manager must be clearly
defined. Further, the authority should be equal to responsibility.
10. Efficiency: The organisation structure should enable the enterprise to function
efficiently and accomplish its objectives with the lowest possible cost.
11. Simplicity: The organisation structure should be as simple as possible and the
organisation levels should, as far possible, be minimum.
12. Flexibility: The organisation should be adaptable to changing circumstances
and permit corrections of demonstrated deficiencies in the existing structure
without dislocation and disruption of the basic design.
13. Balance: There should be a reasonable balance in the size of various
departments, between centralisation and decentralisation, between the principle of
span of control and the short chain of command, and among all types of factors
such as human, technical and financial.
14. Unity of Direction: There should be one objective and one plan for a group of
activities having the same objective. Unity of direction facilitates unification and
coordination of activities at various levels.
15. Personal Ability: As people constitute an organisation, there is need for proper
selection, placement and training of staff. Further, the organisation structure must
ensure optimum use of human resources and must make possible the training and
testing of tomorrow's top managers.
16. Acceptability: The structure of the organisation should be acceptable to the
people who constitute it. Two things generally happen if people oppose the
structure: it is modified gradually by the people, or it is used ineffectively.
SPAN OF MANAGEMENT
Meaning and Importance
• The term "span of management" is also referred to as span of control, span of
supervision, span of authority or span of responsibility. It indicates the number
of subordinates who report directly to a manager.
• Determination of an appropriate span of management is important for two
reasons.
• First, span of management affects the efficient utilisation of managers and the
effective performance of their subordinates.
• Second, there is a relationship between span of management and organisation
structure. A narrow span of management results in a "tall" organisation with
many levels of supervision between top management and the lowest
organisational levels.
DEPARTMENTALISATION OR THE SUPERSTRUCTURE OF
AN ORGANISATION
• The horizontal differentiation of tasks or activities into discrete segments is
called departmentalisation.
• The superstructure of an organisation is one important step of building an
organisation.
• The aim is to take advantage of the division of labour and specialisation up to
a certain limit.
• There are several bases for deparimentalisation, each of which is suitable for
particular corporate sizes, stratgies and purposes.
• Most bases conveniently fall into one of two categories which March and
Simes es, refer to as process deparmentalisation and purpose
departmentalisation.
PROCESS DEPARTMENATALISATION
There are two widely used and internally oriented arrangements for dividing work
by process
Business or Organisational Functions
• Departmentalisation is here done on the basis of a thorough and careful activities
of function analysis.
• Each major activity or function of the enterprise is grouped into a department.
• For example, there may be production, finance and marketing departments in a
manufacturing company or underwriting and claims departments in an insurance
company or design department in a women's dress industry or forest management
in paper manufacturing industry.
Advantages
1. It is a simple form of grouping activities for small organisations which
manufacture only a single or a limited number of closely related products
or render only a limited number of services. Everybody in this form of
organisation understands his own task and feels highly secure both in his
work and in his relationships.
2. It promotes excellence in performance because of development of
expertise in only a narrow range of skills.
3. It promotes economies of scale. Producing all products in a single plant,
for instance, enables the organisation to acquire the latest and most scale
intensive machinery. Constructing only one facility instead of a separate
facility for each product line reduces duplication and waste.
Drawbacks
1. It sometimes combines dissimilar jobs in single departments creating an
under-organised enterprise with too many committees to make decisions.
2. Each manager thinks only in terms of his own departmental goals and
does not think in terms of the company as a whole.
3. It does not offer a good training ground for the overall development of a
manager. The manager gains expertise in handling problems of his
particular department only. Careers are normally defined on the basis of
experience within the function.
4. It does not offer a good training ground for the overall development of a
manager. The manager gains expertise in handling problems of his
particular department only. Careers are normally defined on the basis of
experience within the function.
5. It is unsuitable for organisations which are large in size or complexity or
work under uncertain environment.
6. In this form procedures are overly complicated, wasteful and time-
consuming—a weakness sometimes called "organisational arthritis". The
structure is rigid and resists adaptation.
7. In this form because of "common pot" accounting it is difficult to judge
whether the activities of a particular department are worth their cost.
Technology
• Departmentalisation is here done on the basis of several discrete stages in
the process or technologies involved in the manufacture of a product.
• Thus a concern engaged in the production of vegetable oil may have
separate departments for crushing, refining and finishing.
• Similarly, a cotton textile mill may have separate departments for ginning,
spinning, weaving, dyeing and printing, and packing and sales.
• Whenever work that would otherwise be done in several different locations
in an enterprise is done in one place because of the special equipment used,
departmentalisation by process is involved.
Advantages
1. It facilitates the use of heavy and costly equipment in an efficient manner.
There is very little chance for the equipment remaining idle or under-
utilised because there is no duplication of the same.

2. It follows the principle of specialisation each department is engaged in

doing a special type of work. This increases efficiency of people in their
particular phase of business.

3. It is suitable for organisations which are engaged in the manufacture of

those products which involve a number of processes.
Drawbacks
1. In technology departmentalisation workers tend to feel less responsible for the
whole product.
2. It does not provide good training ground and opportunity for the overall
development of managerial talent.
3. When the technology is sequential, a breakdown in one department slows the
work of all other departments, the dependent departments generally become
hostile to other departments, and they express their resentment either by
complaining directly about other departments or by passing on inferior work to
their successive departments.
4. It is difficult to compare the performance of different technology-based
departments, except in some notional way.
5. Scheduling the movement of work from department to department on each
other becomes somewhat complex.
PURPOSE DEPARTMENTALISATION
Depending upon the purpose of activity the departmentalisation is done.
a) Product based: departmentalisation is used when each product in an enterprise
requires separate raw materials, technology, marketing, etc. Each department is
handling separate product line.
b) Customer based: departmentalisation is used when the enterprise is serving,
different types of customers.
c) Territory based: departmentalisation is used when the departments are formed on
the basis of geographical regions.
d) Division based: departmentalisation is used when each grouping is having an
autonomy in regard to its product line and functional operations.
e) Time based: departmentalisation is done on the basis of timing of performance of
the activities. It is mostly used in production function of the enterprise.
f) Combined base: is used in many organisations at different levels of organisation.
For instance, in some organisations at the top level - product base; at the middle level
- territory base; and at the lower level - function base is used.
a. Product Based
• Under this method, for each major product, a separate self-contained department is
created and is put under the charge of a manager who may also be made
responsible for producing a profit of a given magnitude.
• Product departmentalisation is the logical pattern to follow when each product
requires raw materials, manufacturing technology, and marketing methods that are
markedly different from those used by other products in the organisation.
Advantages
• This form leads to continuous and undivided attention to the product.
• This forms enables top management to compare the performance of different
products and invest more resources in profitable products and withdraw resources
from unprofitable ones.
• In this form, since the responsibility for each product’s performance is entrusted to
a particular departmental head, he is better motivated for improving his
performance.
Drawbacks
1. There is duplication of staff and facilities. Extra expenditure is incurred in
maintaining a sales force for each product line. Employment of a large number
of managerial personnel is required. Equipment in each product department
may not be used fully.
2. The department may drift away from overall organisational goal.
b. Customers
• An enterprise may be divided into a number of departments on the basis of the
customers that it services.
• One big advantage of this form is that it ensures full attention to major customer
groups which have a very different set of criteria governing their decisions to
purchase
• A big automobile servicing enterprise may have separate departments for
servicing cars, heavy vehicles and scooters.
• Educational institution may have separate departments for day, evening and
correspondence courses to impart education to full-time students, locally
employed students and outstation students, respectively.
Disadvantages of this form are that
i. it may result in under-utilisation of resources and facilities in some
departments; and
ii. there may be duplication of facilities.
c. Regions, Territory or Location
• When several production or marketing units of an organisation are
geographically dispersed in various locations, it is logical to
departmentalise those units on a geographical basis.
• A hotel chain, for example, might decide to establish geographical divisions and
make one officer responsible for the operation of all the hotels within his division.
• The Indian Railways are departmentalised on this basis. Northern Railways, Wester
Railways, Southern Railways, Eastern Railways, Central Railways, etc., are
departments in this sense.
Advantages
1. It motivates each regional head to achieve high performance.
2. It provides each regional head an opportunity to adapt to his local situation and
customer need with speed and accuracy.
3. It affords valuable top-management training and experience to middle-level
executives.
4. It enables the organisation to take advantage of locational factors, such as
availability of raw materials, labour, market, etc.
5. It enables the organisation to compare regional performances and invest more
resources in profitable regions and withdraw resources from unprofitable ones.
Drawbacks
1. It gives rise to duplication of various activities. Many routine and service
functions performed by all the regional units can be performed centrally by the
head office very economically.
2. Various regional units may become so engrossed in short-run competition
among themselves that they may forget the overall interest of the total
organisation.
d. Division (Free-form Organisation)
• It should be remembered that when large, multi-product companies segment
themselves into several independent profit centres on the basis of product,
territory or customers, these units are called divisions or free-form organisations.
• Since each division is much smaller than the whole company, the problems
created by functionalisation are only reduced to a more manageable size but they
are not completely eliminated because individual divisions themselves have
functional structures.
e. Time
• In departmentalisation by time, activities are grouped on the basis of timing of
their performance.

• For example, as a small machine shop grows in size, its owner has the choice of
either adding extra shifts or renting two more shops.

• Generally, departmentalisation by time is found in the production function of the

enterprise.

f. Combined Base
• The different bases of departmentalisation we have discussed suggest possibilities
for dealing with specific problems.
Advantages
1. Combination of all necessary inputs at one place reduces problems of
communication and coordination.
2. Flexibility in organising resources around the priorities of individual customers
creates the ability to innovate around specific customer needs.
3. Stress on optimisation of the total project eliminates chances of suboptimisation
of goals. The success of a project is frequently measured by a company's ability
to complete it on time and within budget..
4. Assignment of specific jobs to employees makes passing of buck difficult.
5. Change of projects promotes the intellectual growth and development of
employees.
6. Team members have a functional home when they are not needed on a project.
Drawbacks
It lowers members" loyalty to the project because of the following factors!
• Some highly professional employees who prefer to be associated with their
technical peers do not want to work on multidisciplinary projects.
• They have no other motivation besides the pay cheque.
• They are often worried about loss of employment when the project ends or
getting another project involving work at a lower level or not returning to the old
job with the parent department.
• They fear becoming professionally obsolete if they go on repeating the same task
over a period of time without keeping up with technological advances.
Following are some suggestions for removing the above drawbacks:
1. There should be a challenging career system that gives strong support and
recognition to professional advancement.
2. There must be a provision for a dual promotional hierarchy with suitable
job titles.
3. There should be highly competitive salary scales and some system of
reward within the project.
4. There should be a performance appraisal system different from the one
which is common in classical organisations.
5. Employees should be trained in interpersonal skills and should be
inspired by a shared vision of the project's purpose and goals.
COMMITTEES
• A committee is a group of people who have been formally assigned some task or
some problem for their decision and/or implementation.
• Committees are often set up for group participation when we have:
i. a recurring problem which the same group of people should confer about at
regular intervals; or
ii. a major problem that can be resolved only after a series of discussions with a
group whose work is closely interrelated. For most other situations which may
be essentially individual functions.
• Committees can be broadly classified into advisory committees and executive
committees.
• Whenever committees are vested with staff authority they are known as advisory
committees.
• Some of the usual advisory committees formed in business enterprises are: works
• The Board of Directors of a company is an example of an executive committee.

• Committees may also be classified as standing committees and ad hoc task

forces.

• Standing or permanent committees are formed to deal with recurrent

organisational problems. Typical standing committees may be the finance
committee in a company, or the loan approval committee in a bank, or the
admission committee in a college.

• Ad hoc task forces, as their very name suggests, have a short duration. They are
dissolved after the task is over, or the problem is solved. The members are
chosen for their skills and experience.
Advantages
1. Where committees consist of all departmental heads as members, people get an
opportunity to better understand each other’s problems and to move towards
organisational goals.
2. Committees provide a forum for the pooling of knowledge and experience of
many persons of different skills, ages and backgrounds.
3. Committees provide an opportunity to many persons to participate in the
decision-making process. As the members of a committee participate in
discussions and decisions, they also take interest in implementing their decisions.
4. Committees are excellent means of transmitting information and ideas, both
upward and downward.
5. By exposing members to different viewpoints, committees contribute indirectly
to their training and development.
6. Committees are impersonal in action and hence their decisions are generally
unbiased and are based on facts. There is no fear of a single individual taking a
Weaknesses
1. It is said that committees keep minutes and waste hours. One of the best
administrative procedures to delay action is to say, "Let us set up a committee to
study this matter." Almost without exception it takes longer to get action from a
committee than from an individual manager.
2. In case a wrong decision is taken by a committee, no member can be individually
held responsible.
3. A huge amount is spent in convening meetings and giving allowances to the
members. Hence, committees are an expensive form of administration.
4. Members of coordinating committees frequently regard themselves as appointed
to protect the interest of their departments rather than to find the more appropriate
solution to the problem in question.
5. Decisions are generally arrived at on the basis of some compromise among the
members.
6. As committees consist of a large number of persons, it is difficult to maintain
Suggestions for Making Committees Effective
1. The number of members on a committee should not be very large.
2. A committee's authority should be carefully spelled out, and its activities correctly
chosen and closely defined. The authority of each member should also fit the decision
area.
3. The members of a committee should enjoy approximately equal formal status so that
they interact with each other freely.
4. The members should give precedence to organisational interests over departmental
interests and should be prepared in advance on issues to be discussed in the meeting.
5. The chairman of the committee should plan and conduct the meeting with firmness
and fairness.
6. It is useful to take careful minutes of the meeting, circulate them in draft for correction
and then have the final copy approved by the committee.
7. The work of the committee should be periodically reviewed to determine if it is
working effectively, in terms of the purpose for which it was established, and whether
that purpose is still valid.
Staffing
• It is important to have a good organisation structure, but it is even more important to
fill the jobs with the right people.
• A company may be successful with an organisation structure that is very far from the
best, but it will never be able to get of the ground if the people who run it and those
who do the actual work are incapable.
• Filling and keeping the positions provided for by the organisation structure filled with
the right people is the staffing phase of the management function. It includes several
sub-functions:
1. Recruitment, or getting applicants for the jobs as they open up.
2. Selection of the best qualified from those who seek the jobs.
3. Training those who need further instructions to perform their work effectively or to
qualify for promotions.
4. Performance appraisal, since it serves as the basis for job change or promotion.
5. Administration of compensation plans, since it is an important factor in both getting
and holding qualified people.
Importance And Need For Proper Staffing
• A business cannot be successful for any length of time unless it is capable of
bringing in and developing the right kind of people.
• There are a number of advantages of proper and efficient staffing. These are as
under
1. It helps in discovering talented and competent workers and developing them to
move up the corporate ladder
2. It ensures greater production by putting the right man in the right job.
3. It helps to avoid a sudden disruption of an enterprise's production run by
indicating shortages of personnel, if any, in advance.
4. It helps to prevent under-utilisation of personnel through overmanning and the
resultant high labour cost and low profit margins.
5. It provides information to management for the internal succession of
managerial personnel in the event of an unanticipated turnover.
RECRUITMENT
• Once the requirement of manpower is known, the process of recruitment starts.
• It can be defined as the process of identifying the sources for prospective
candidates and to stimulate them to apply for the jobs.
• In other words, recruitment is the generating of applications or applicants for
specific positions.
• The management should have a proper plan of recruitment regarding the quantity
and quality of personnel required and the time when it is needed.
• The process of recruitment and the cost involved in it depends on the size of the
undertaking and the types of persons to be recruited.
• In the case of small concerns the process of recruitment is simple and
inexpensive, while in the case of large concerns the process is complicated and
ex-pensive particularly if technical and managerial personnel are to be recruited.
Sources of Recruitment
• The sources of recruitment can be broadly classified into two categories: internal
and external.
• Internal sources refer to the present working force of a company. Vacancies other
than at the lowest level may be filled by selecting individuals from amongst the
existing employees of the company.
• Among the more commonly used external sources are the following:
1. Re-employing former employees: Former employees who have been laid-off
or have left for personal reasons may be re-employed. These people may
require less initial training than that needed by total strangers to the enterprise.
2. Friends and relatives of present employees: Some industries with a record of
good personnel relations encourage their employees to recommend their friends
and relatives for appointment in the concern where they are employed.
3. Applicants at the gate: Unemployed persons who call at the gates of the
factories are interviewed by the factory representative and those who are found
suitable for the existing vacancies are selected. This is an important source in
countries where there is a lot of unemployment.
4. College and technical institutions: Many big companies remain in touch with
the colleges and technical institutions from where young and talented persons may
be recruited.
5. Employment exchanges: An employment exchange is an office set up by the
government for bringing together those men who are in search of employment and
those employers who are looking for men.
6. Advertising the vacancy: One more source that is tapped by the companies is
advertising the vacancy in leading papers. This source may be used in case the
company requires the services of persons possessing certain special skills or if there
is an acute shortage of labour force.
7. Labour unions In companies with strong labour unions, persons are sometimes
Evaluation of Alternative Sources
• A company cannot fill all its vacancies from one single source. It must carefully
combine some of these sources, weighing their cost and flexibility, the quality of men
they supply, and their effect on the present workforce.
• Following are some of the measures which can be used to assess how good or how poor
various sources have proved to be:
1. Time lag between requisition and placement.
2. Recruitment ratio, that is, the number of persons actually hired, per 100 applicants.
3. Employee attitude studies to discover the reactions of present employees to both
external and internal recruiting.
4. Correlation between different sources of recruitment and factors of success on the job.
5. Data on turnover, grievances, and disciplinary action, tabulated according to different
sources of recruitment to throw light on the relative merits of each source.
6. Gross cost per hire. This is arrived at by dividing the total cost of recruitment by the
number of individuals hired
Internal vs External Sources of Recruitment
• From the point of view of its impact on motivation, recruitment from external
sources is not desirable, particularly when an adequate number of qualified
persons is already available inside the organisation.

• Similarly, if the management wants its workers to improve their prospects by

participating effectively in the company's programmes and in the process of
production, it is desirable to follow a policy of recruitment from within.

• On the other hand, when the internal candidates are too advanced in age, it may
become imperative for the management to tap outside sources for recruitment.

• If the management feels that this originality and initiative can be had only by
recruiting people from outside, it will naturally not like to recruit people from
Advantages and Disadvantages of Internal Recruitment
Some of the advantages of internal recruitment are as under:
1. A sense of security develops among the employees.

2. Employees remain loyal to the organisation.

3. People recruited from within the organisation do not need induction training.

4. Labour turnover is reduced

5. Employees in the lower ranks are encouraged to look forward to rising to

higher position in the concern.

6. People are motivated to become efficient.

7. Valuable contacts with major suppliers and customers remain intact.

8. A better employer-employee relationship is established.

Disadvantages
The method of internal recruitment suffers from certain disadvantages. These are:

1. This method limits the choice of selection to the few candidates available
within the enterprise.

2. It may encourage favouritism and nepotism.

3. It may lead to "inbreeding", resulting in promotion of people who have

developed a respect for the tradition and who have no new ideas of their own. It
is generally the new blood which brings in new ideas.

4. If a concern is extending its activities into new lines, internal candidates may
prove unsuitable for new positions. This may involve extra expenditure in
imparting necessary training to them.
Advantages and Disadvantages of External Recruitment
Advantages Some of the advantages of making recruitment from outside sources
are as follows:
1. Under this method, new blood brings with it a fresh outlook, originality and
new ideas. Old habits are the concern becomes more dynamic.
2. The field of choice becomes very wide. Hence there is the possibility of
selecting people with rich and varied experience.
Disadvantages This method also suffers from certain disadvantages.
3. If a concern makes recruitment from external sources, its employees generally
feel frustrated and their morale is adversely affected.
4. The present employees may lose their sense of security and become disloyal to
the employer.
5. There is a greater turnover of labour.
6. There is deterioration in the employer-employee relationship, resulting in
SELECTION
• Under recruitment the manager identifies the sources for prospective candidates and
stimulates them to apply for various openings in his organisation, under selection he
compares their qualifications with the requirements of a job and eliminates all those
who do not stand up to this comparison.
• There are several advantages of a proper selection procedure. As the employees are
placed in the jobs for which they are best suited, they derive maximum job
satisfaction and reap maximum wages.
• The following is an example of a popular sequence of steps:
1. Application blank
2. . Initial interview of the candidate
3. Employment tests
4. Checking references
5. Physical or medical examination
1. Application blank
• Filling of the "application blank" by the candidate is the first step in the process
of selection. In this form, the applicant gives relevant personal data such as his
qualification, specialisation, experience, firms in which he has worked, etc.
• The application blanks are carefully scrutinised by the company with reference to
the specifications prescribed for the jobs to decide the applicants who are to be
called for interview.
2. Initial interview
• Those who are selected for interview on the basis of particulars furnished in the
application blank are called for initial interview by the company.
• This interview, according to Mandell is the most important means of evaluating
the poise or appearance of the candidate.
• It is also used for establishing a friendly relationship between the candidate and
the company and for obtaining additional information or clarification on the
information already on the application blank.
3. Employment tests
• For further assessment of candidate's nature and abilities, some tests are used in
the selection procedure.
• Psychologists and other experts have developed certain tests by which a
candidate's particular traits or abilities, his likes and dislikes, his intelligence,
manual dexterity, his capacity to learn and to benefit from training, his
adaptability, etc. can be estimated.
There are several types of tests that are used in selection procedure. The more
commonly used are:
i) Aptitude test This test measures the applicant's capacity to learn the skill
required for a job. It helps in finding out whether a candidate is suitable for a
clerical or a mechanical job.
• His test helps in assessing before training as to how well the candidate will
perform on a job after he is given the necessary training.
ii) Interest test: This is used to find out the type of work in which the candidate
has an interest.
• An interest test only indicates the interest of a candidate for a particular job.
• It does not reveal his ability to do it.
iii) Intelligence test This test is used to find out the candidate's intelligence. By
using this test, the candidate's mental alertness, reasoning ability, power of
understanding, etc. are judged.
iv) Trade or performance or achievement or job-specific test This test is used to
measure the candidate's level of knowledge and skill in the particular job in which
he will be appointed, in case he is finally selected. It may be of 3 types:
(a) Performance work sample test
(b) Written work sample test
(c) In-basket test.
• In the performance work sample test, the candidate is asked to do a simple
operation which is a part of, or similar to his proposed job.
• In the written work sample test, the candidate is required to give answers to
various questions in writing.
• In-basket test is a type of simulation applicable to management performance. It
consists of an assortment of items such as a manager might find in an in-basket-
letters, reports, memoranda, notes and related materials.
v Personality test is used to measure those characteristics of a candidate which
constitute his personality, e.g. self-confidence, temperament, initiative, judgement,
dominance, integrity, original-ity, etc.
• Personality tests are very important in the selection process, particularly in the case
of appointments to the posts of supervisors and higher executives.
• In a personality test, the candidate may be asked to answer a series of questions and
from his response, his personality may be judged or in some special test situations,
the candidate's reaction may be assessed, or the candidate may be asked to grade his
4. Checking references
• If the candidate has been found satisfactory at the interview and if his
performance is good in employment or proficiency tests, the employer
would like to get some important personal details about the candidate, such
as his character, past history, background, etc. verified from the people
mentioned in the application.

• For this purpose, the employer may also contact his friends residing in the
locality where the candidate is residing or he may contact the present or
former employers of the candidate.
5. Physical or medical examination
Physical or medical examination is another step in the selection procedure. The
objectives of this examination are:
(i) to check the physical fitness of the applicant for the job applied for;
(ii) to protect the company against the unwarranted claims for compensation under
certain legislative enactments, such as Workmen's Compensation Act; and
(iii) to prevent communicable diseases entering the business concern.
6. Final interview
This interview is conducted for those who are ultimately selected for employment.
In this interview, the selected candidates are given an idea about their future
prospects within the organisation.
Communication
• Communication has been variously defined by a number of writers.
According to Newman and Summer, ' it is an exchange of facts, ideas,
opinions or emotions by two or more persons.

• Simply stated, communication means the process of passing information

and understanding from one person to another.

• In short, communication is not merely transmission of information from

one person to another but also correct interpretation and understanding of
the information.
PURPOSES OF COMMUNICATION
• Communication is needed in the recruitment process to persuade potential
employees of the merits of working for the enterprise. The recruits are told about the
company's organisation structure, its policies and practices.
• Communication is needed in the area of orientation to make people acquainted with
peers, superiors and with company's rules and regulations.
• Communication is needed to enable employees to perform their functions effectively.
• Communication is needed to acquaint the subordinates with the evaluation of their
contribution to enterprise activity.
• Communication is needed to teach employees about personal safety on the job.
• Communication is of vital importance in projecting the image of an enterprise in the
society.
• The amount of support which an enterprise receives from its social environment is
affected by the information which elite groups and the wider public have acquired
about its goals, activities and accomplishments.
• Communication helps the manager in his decision process.
• Communication helps in achieving coordination. In a large organisation, working on
the basis of division of labour and specialisation, there is need for coordination
among its component parts. This can be achieved only through communication.
• A good communication system is the basis of all interdependent activities which we
find being carried out in different departments of an organisation.
• By providing information to each unit about the relevant activities of others, a good
system of communication makes the interdependence of each unit acceptable to it.
• Communication is an effective way to build support for change. It alters employees'
perception of the forces which surround them.
• Communication increases managerial efficiency. It is said that the world of modem
management is the world of communication and the success of a manager in the
performance of his duties depends on his ability to communicate.
• To provide the information and understanding necessary for group effort (i.e. the
skill to work); and
FORMAL COMMUNICATION
• Much of the communication in an organisation is what we call formal
communication. It flows in formally established channels and is concerned with
work-related matters.
• All orders, instructions and decisions are communicated to the subordinates
through this channel.
• Formal communications flow in four directions: downward, upward, laterally
between departments and between the organisation and the external environment.
Downward Communications
• Communications which flow from superiors to the subordinates are known as
downward communications.
• These communications are the medium through which the superior:
1. directs the efforts of his subordinates;
2. communicates the rationale for the job;
3. defines the relation of the job with the goals of the organisation and of other
sub-groups;
4. tells the subordinates what is expected of them, what resources are available,
how well they are doing, etc.; and
5. administers reward and punishment.
• Besides the now universal application of communication technology such as e-
mail, there can be several media of downward communication such as written
orders, poster and bulletin boards, company periodicals and handbooks,
information racks, loudspeakers, grapevine, annual reports, group meetings and
the labour union.
• In Japan, the media extensively used for downward communication are
KANBAN and Morning Meetings.
• Kanban means display of information through signboards, charts, graphs, etc.
• Morning meetings of workers are held before the start of the day's work and
during tea-breaks generally for 5 to 10 minutes.
Upward Communications
• Communications which flow from the subordinates to superiors are called
upward communications.
• These communications generally act as a feedback.
• There can be several media of upward communication, such as face-to-face
contacts, group meetings, grievance procedure, use of gripe boxes, opinion
surveys, letter to the editor of the company's periodical, called "house organ",
an open-door policy, exit interviews, e-mail, and so on.
Horizontal Communications
• These are also known as lateral, interactive or cross-wise communications.
• The production foreman and the maintenance foreman communicate directly
without going through their managers.
Important purposes of horizontal or interactive communications are as follows:

1. Task coordination The department heads may meet monthly to discuss

how each department is contributing to achieve overall goals.

2. Problem solving The members of a department may assemble to discuss

how they will handle a threatened budget cut; they may employ
brainstorming techniques.

3. Information sharing The members of one department may meet the

members of another department to give them some new data.

4. Conflict resolution The members of two departments may meet to discuss

any conflict between them.
External Communications
• These are proactive, consistent and ongoing communications with external
agencies, like current and potential customers, government departments,
competitors, trade unions, financial institutions, raw material suppliers, etc.
• These communications aim at building the company's image and influencing
policies and decisions in company's favour.
FORMS OF COMMUNICATION
Broadly speaking, there can be three forms of communication: oral, written and
non-verbal.
Oral Communication
In oral or verbal communication, information is given directly, either face to face
or through a telephone or intercom system. Generally, in meetings, lectures,
interviews, conferences, etc., the communication is oral.
Some of the merits of oral Oral communication, however,
communication are: suffers from certain limitations. These
(a) It is a time and money saving are:
device. a) It is not useful where the parties
(b) As there is an element of personal
are very far from each other, even
touch, it is comparatively more
beyond telephonic range.
effective. b) It is not suitable for lengthy
communications.
(c) Doubts can be clarified on the spot
c) There is no permanent record of
and the communication can be
communication.
understood easily.
d) It is especially affected by
(d) Important points may be previous attitudes of the parties.
emphasised through body e) If the communicator is poor in
language. vocal expression, oral
(e) The effects of communication can communications are likely to be
be easily measured. misunderstood and misinterpreted
Written Communication
Written communication, which is always in black and white can take the form of a
report, statement, circular, note, manual, handbook, letter, memo, standard
condensed language or company lingo, etc.
Some of the merits of written Some of the disadvantages of written
communication are as follows: communication are as follows:
(a) It is suitable for lengthy (a) There is a greater chance of the
communications. communication being misunderstood.
(b) If the parties are far from each other, (b) It is very time consuming.
even beyond telephonic range, written (c) There is no scope for face to face
communication is the only way out. discussion.
(c) It can be kept as a permanent record and (d) It is difficult to maintain secrecy about
at times be referred to as evidence. the matter communicated.
(d) There are fewer chances of missing out (e) It suffers from a lack of flexibility.
a point. (f) Poorly written messages followed by
(e) Written communication serves as a solid numerous clarifications both written
base for taking action against a and oral, may lead to a lot of
subordinate who disobeys it. confusion.
Non-verbal Communication
• All of us constantly send clues about our feelings— not by what we say, but by
what we do (both action and lack of action).

• Since we communicate by action and lack of action, we communicate all the

time at work, Whether we intend to or not.

• Three important forms of non-verbal communication are body language

(example facial expression, posture, gestures, etc.), time (example being late or
early), and space (example, how close one gets during a conversation or seating
arrangements in a committee meeting).

• Sometimes, the tone of voice (genuine or fake), laughing and yawning and
environmental context, called paralanguage may also become the part of
Directing and Controlling:
• The manager must stimulate action by giving direction to his subordinates
through orders and also supervise their work to ensure that the plans and policies
achieve the desired actions and results.
• It is also called management-in-action.
• Direction means issuance of orders and leading and motivating subordinates as
they go about executing orders.
• Without the issuance of orders, without leading and motivating subordinates,
nothing, or at best very little, can be accomplished.
• According to Haimann, "Directing consists of the process and techniques utilised
in issuing instructions and making certain that operations are carried on as
originally planned.
• According to Koontz and O'Donnell, "Direction is the interpersonal aspect of
managing by which subordinates are led to understand and contribute effectively
REQUIREMENTS OF EFFECTIVE DIRECTION
Direction is one of the most complex functions of management which can be
learned and perfected only through long experience.
a. Harmony of Objectives
• An organisation functions best when the goals of its members are in complete
harmony with and complementary to the goals of the organisation.
• But in directing subordinates he must take advantage of individual motives to
gain group goals. In other words, he must direct the subordinates in such a way
that they perceive their personal goals to be in harmony with enterprise
objectives.
• Thus, for example, if employees are told to work hard so that the company's
profits may increase, they probably will not. But if they are told to do so in their
own interest (e.g., to receive additional bonus or promotion) they are more likely
to work hard.
b. Unity of Command
• This principle implies that the subordinates should receive orders and
instructions from one superior only.
• The violation of this principle may lead to conflicting orders, divided loyalties
and decreased personal responsibility for results.
• Another reason why this principle should not be violated is that the immediate
boss is the only person who knows best about the nature of his subordinates and
about their responses to different motivation techniques.
c. Direct Supervision
• Every superior must maintain face-to-face direct contact with his subordinates.
• Direct supervision boosts the morale of employees, increases their loyalty and
provides them with immediate feedback on how well they are doing.
d. Efficient Communication
• It is through communication that the superior gives orders, allocates jobs, explains
duties and ensures performance.
• Efficient communication is a two-way process. It not only enables the superior to know
how his subordinates feel but also helps the subordinates to know how the company
feels on a number of issues concerning them.
• In communication, comprehension is more important than the content. How much
information is correctly understood by the subordinates is more important than what is
said and how it is said. This can be ensured only if the manager makes provision for a
proper feedback.
e. Follow-through
• Direction is not only telling subordinates what they should do but also seeing that they
do it in the desired way.
• The manager should, therefore, follow through the whole performance of his
subordinates not merely to keep a check on their activities but to help them in their act,
to show them where their deficiency, if any, lies and to revise their direction if it needs
GIVING ORDERS
• The order is a device employed by a line manager in directing his immediate
subordinates to start an activity, stop it and modify it.
• To some men the matter of giving orders and having them obeyed seems a very simple
affair but the fact is that it is surrounded by many difficulties.
• Mary Parker Follett lays down the following principles which should be followed in
giving orders:
1. The attitude necessary for the carrying out of an order should be prepared in
advance. People will obey an order only if it appeals to their habit patterns.
Therefore, before giving orders, it should be considered how to form the habits
which will ensure their execution.
2. Face-to-face suggestions are preferable to long-distance orders.
3. An order should be depersonalised and made an integral part of a given situation so
that the question of someone giving and someone receiving does not come up. Thus
the task of the manager is to make the subordinates perceive the need of the hour so
that the situation communicates its own message to them.
Chester Barnard lays down four conditions which make an order acceptable. These
are:
1. Order should be clear and complete;
2. Order should be compatible with the purpose of the organisation;
3. Order should be compatible with the employee's personal interest; and
4. Order should be operationally feasible.
Orders may be communicated verbally or in writing. Written orders are appropriate
when
5. the subject is important;
6. several individuals are affected;
7. many details are involved;
8. considerable time will pass before the work is completed; and
9. there is geographical distance between the order-giver and the recipient.
MOTIVATION
• Technically, the term motivation can be traced to the Latin word movere, which
means "to move". This meaning is evident when we remember that a manager
gets work done through others.
• If there is any one key to "getting work done through others", it is his ability to
move other people in the right direction day after day.
• Motivation, therefore, concerns those dynamic processes which produce a goal-
directed behaviour.
• So, what controls human behaviour and gives direction to it is not the goal or the
incentive but the need.
• We can show the motivation process by means of a diagram.

Figure: Motivation Process

Nature of Motivation
• Motivation is not an easily observed phenomenon.
• We observe an individual's actions and then interpret his observed behaviour in
terms of underlying motivation.
The following points reveal the complexities involved in understanding true
motivation:
1. Individuals differ in their motives: The viewpoint (called "monistic
approach") that there is only one“ economic drive" which determines
behaviour is untenable.
• This means that there is no single motive that determines how all workers will
react to the same job and, therefore, there can be no single strategy that will keep
motivation and productivity high for everyone everywhere.
• The manager has to deal with human diversity.
2. Sometimes the individual himself is unaware of his motive: Freud uncovered
this phenomenon while analysing his critical patients.

3. Motives change: Hierarchy of motives of each individual called "structure" is

not fixed. It changes from time to time. An individual's primary motive today may
not be primary tomorrow, even though he may continue to behave in the same way.

4. Motives are expressed differently: The ways in which motives are eventually
translated into actions also vary considerably between one individual and another.

• One individual with a strong security motive may play it safe and avoid
accepting responsibility for fear of failing and being fired.

• Another individual with the same security motive may seek out responsibility for
fear of being fired for low performance.
5. Motives are complex It is difficult to explain and predict the behaviour of
workers.

• The introduction of an apparently favourable motivational device may not

necessarily achieve the desired ends if it brings opposing motives into play.

• In a factory, when blue-green lighting was introduced to reduce eye strain, the
output of men workers increased but that of women workers decreased.

• On investigation it was found that the latter disliked the change in lighting
because they felt that the new type of lighting had made them look 'simply
ghastly‘

6. Multiple motives make the choice of goals difficult for an individual:

Motives do not exist one at a time. This is hardly the case. The fact is that multiple
Motivation Theories
There is no shortage of motivation theories. We can classify them under three broad
heads:
1. Content theories: The content theories tell us what motivates an individual.
They throw light on the various needs and incentives which cause behaviour.
1. Maslow's Need Hierarchy Theory
2. Alderfer's ERG Theory
3. Herzberg's Two-Factor Theory
4. McClelland's Achievement Theory
2. Process theories: The process theories, on the other hand, answer the question
how behaviour is caused.
1. Victor Vroom's Expectancy Theory 2. Adam's Equity Theory
3. Reinforcement theory: Reinforcement theory explains the ways in which
behaviour is learned, shaped or modified.
Maslow's Need-Hierarchy Theory
• All people have a variety of needs. At any given time, some of these needs are
satisfied and others are unsatisfied.
• An unsatisfied need is the starting point in the motivation process.
• It begins the chain of events leading to behaviour. When a person has an
unsatisfied need, he or she attempts to identify something that will satisfy the
need. This is called a goal.
• Once a goal has been identified, the person takes action to reach that goal and
thereby satisfy the need.
• According to A.H. Maslow, needs are arranged in a hierarchy or a ladder of five
successive categories,
• Physiological needs are at the lowest level, followed by security, social, esteem,
and self-fulfilment needs.
• Physiological needs are those which arise out of the basic physiology of life, for
example, the need for food, water, air, etc. These needs must be at least partially
satisfied for continued survival.
• Security needs are the needs to feel both economically secure and
psychologically secure. The former include protection from arbitrary lay-off and
dismissal, disaster, and avoidance of the unexpected.
• The latter relates to a man's confidence that he will be able to deal with the
problems that might confront him in future.
• Social needs are needs to associate with other people and be accepted by them;
to love and be loved.
• At base, they point to the fact that man finds a satisfaction in association with
others and feels a real deprivation when it is not possible.
• Egoistic or esteem needs are those which relate to respect and prestige. A need
for dominance may be thought of as one of the egoistic needs.
• These are of two types: self-esteem and esteem from others.
• Self-fulfilment needs are needs for realising one's potential.
• These include the need for realising one's capabilities to the fullest—for
accomplishing what one is capable of accomplishing, for becoming what one is
capable of becoming.
• A musician must make music, an artist must paint, a poet must write if he is to be
ultimately happy.
• This need is also called need for self-realisation or self-actualisation.
• This term, first coined by Kurt Goldstein, refers to a person's motivation to
transform his perception of self into reality.
• According to Maslow, people attempt to satisfy their physical needs first. As long
as these needs are unsatisfied, they dominate behaviour. As they become
reasonably satisfied, however, they lose their motivational power and the next
level of needs, security needs, becomes the dominant motivational force.
• This process continues up the need hierarchy. As each level of needs becomes
relatively satisfied, the next higher level becomes dominant.
Herzberg's Two-Factor Theory
• In his original study also called the Pittsburgh studies, Herzberg and his
associates interviewed 200 engineers and accountants.
• They asked them to think of times when they felt especially good and times
when they felt especially bad about their jobs.
• The engineers and accountants were then asked to describe the factors that led to
these particular feelings.
• When talking about especially bad times, the engineers and accountants brought
up things like unfair company policies, poor relationship with their boss and co-
workers, and low pay.
• In contrast, when asked about good job experiences, they generally did not
mention these factors. Instead, they talked about recognition they had received
for a well-done job, or the opportunity their jobs gave them for personal growth
and development.
• According to Herzberg, the absence of certain job factors tends to make workers
dissatisfied.

• However, the presence of these same factors in themselves does not produce high
levels of motivation.

• They merely help avoid dissatisfaction and the problems it creates, such as
absenteeism, turnover and grievances.

• Herzberg called these factors maintenance or hygiene factors since they are
necessary to maintain a reasonable level of satisfaction to serve as a take-off
point for motivation.
He concluded that there were ten maintenance factors, namely:
1. Fair company policies and administration
2. A supervisor who knows the work
3. A good relationship with one's supervisor
4. A good relationship with one's peers.
5. A good relationship with one's subordinates
6. A fair salary
7. Job security
8. Personal life
9. Good working conditions
10. Status, i.e. relative ranking that a person holds in a group
• As the list indicates, the motivators are job-centred; they relate directly to
the content of the job itself.
• To build high levels of motivation, a different set of factors is necessary.
• However, if these factors are not present, they do not in themselves lead to
strong dissatisfaction.
• Herzberg called these the motivators or satisfiers. These are six in
number:
1. Opportunity to accomplish something significant
2. Recognition for significant accomplishments
3. Chance for advancement
4. Opportunity to grow and develop on the job
5. Chance for increased responsibility
6. The job itself
In contrast, maintenance factors relate more to the conditions and
environment in which the work is done.
• These two groups of factors are respectively also known as intrinsic and
extrinsic rewards.
• Intrinsic rewards are so called because they are internally generated by the task
itself and are not tangible and visible to others.
• Extrinsic rewards are distributed by other people and are tangible and visible to
others.
• For example, a person who wins a sales contest receives the prize which is an
extrinsic reward. At the same time, however, winning in a competitive situation
may be more powerful, yet be an internal reward.
• Although an individual's orientation as a motivation seeker or a maintenance
seeker is fairly permanent, it can be influenced by his environment.
• Thus, in an environment of achievement, responsibility, growth, and recognition,
a maintenance seeker tends to behave like, and acquires the values of a
motivation seeker.
• According to Herzberg, this does not motivate a worker because the mere
increase in the size of his task does not make it more interesting.
• Job enrichment makes a job more interesting by increasing its planning and
controlling contents and reducing its doing content.
This can be accomplished in several ways, such as by:
a) eliminating a layer of supervision,
b) increasing worker's autonomy and authority (e.g., when to start and stop work,
when to have a break, to plan work, to assign priorities, to decide work
methods, to solve important problems independently, and so on),
c) giving direct feedback to the workers without the supervisors coming in
between. Workers feel more happy when they receive comments from the
clients directly, and
d) introducing new and more difficult tasks not previously handled, providing the
opportunity for the worker's psychological growth.