The concept of management has acquired special significance in the present competitive and complex business world.

Efficient and purposeful management is absolutely essential for the survival of a business unit. Management concept is comprehensive and covers all aspects of business. In simple words, management means utilizing available resources in the best possible manner and also for achieving well defined objectives. It is a distinct and dynamic process involving use of different resources for achieving well defined objectives. The resources are: men, money, materials, machines, methods and markets. These are the six basic inputs in management process (six M's of management) and the output is in the form of achievement of objectives. It is the end result of inputs and is available through efficient management process. The term 'management' is used extensively in business. It is the core or life giving element in business. We expect that a business unit should be managed efficiently. This is precisely what is done in management. Management is essential for the conduct of business activity in an orderly manner. It is a vital function concerned with all aspects of working of an enterprise. Meaning of Management According to Theo Heimann, management has three different meanings, viz., 1. Management as a Noun: refers to a Group of Managers. 2. Management as a Process: refers to the Functions of Management i.e. Planning, Organizing, Directing, Controlling, etc. 3. Management as a Discipline: refers to the Subject of Management. Management is an individual or a group of individuals that accept responsibilities to run an organization. They Plan, Organize, Direct and Control all the essential activities of the organization. Management does not do the work themselves. They motivate others to do the work and co-ordinate (i.e. bring together) all the work for achieving the objectives of the organization. Management brings together all Six Ms i.e. Men and Women, Money, Machines, Materials, Methods and Markets. They use these resources for achieving the objectives of the organization such as high sales, maximum profits, business expansion, etc. Definitions of Management 1. According to George R. Terry, "Management is a distinct process consisting of planning, organizing, actuating and controlling, performed to determine and accomplish stated objectives by the use of human beings and other resources". 2. According to Henry Fayola, "To manage is to forecast and to plan, to organize, to command, to coordinate and to control". 3. According to Peter Drucker, "Management is a multi-purpose organ that manages business and manages managers and manages workers and work". 4. According to Harold Koontz, "Management is the art of getting things done through and with people in formally organized groups. 5. According to Mary Parker Fallett, "Management is the art of getting things done through people". Features of Management The nature, main characteristics or features of management are :1. Continuous and never ending process

Management is a Process. It includes four main functions, viz., Planning, Organising, Directing and Controlling. The manager has to Plan and Organise all the activities. He had to give proper Directions to his subordinates. He also has to Control all the activities. The manager has to perform these functions continuously. Therefore, management is a continuous and never ending process. 2. Getting things done through people The managers do not do the work themselves. They get the work done through the workers. The workers should not be treated like slaves. They should not be tricked, threatened or forced to do the work. A favourable work environment should be created and maintained. 3. Result oriented science and art Management is result oriented because it gives a lot of importance to "Results". Examples of Results like, increase in market share, increase in profits, etc. Management always wants to get the best results at all times. 4. Multidisciplinary in nature Management has to get the work done through people. It has to manage people. This is a very difficult job because different people have different emotions, feelings, aspirations, etc. Similarly, the same person may have different emotions at different times. So, management is a very complex job. Therefore, management uses knowledge from many different subjects such as Economics, Information Technology, Psychology, Sociology, etc. Therefore, it is multidisciplinary in nature. 5. A group and not an individual activity Management is not an individual activity. It is a group activity. It uses group (employees) efforts to achieve group (owners) objectives. It tries to satisfy the needs and wants of a group (consumers). Nowadays, importance is given to the team (group) and not to individuals. 6. Follows established principles or rules Management follows established principles, such as division of work, discipline, unity of command, etc. These principles help to prevent and solve the problems in the organisation. 7. Aided but not replaced by computers Now a days, all managers use computers. Computers help the managers to take accurate decisions. However, computers can only help management. Computers cannot replace management. This is because management takes the final responsibility. Thus Management is aided (helped) but not replaced by computers. 8. Situational in nature Management makes plans, policies and decisions according to the situation. It changes its style according to the situation. It uses different plans, policies, decisions and styles for different situations. The manager first studies the full present situation. Then he draws conclusions about the situation. Then he makes plans, decisions, etc., which are best for the present situation. This is called Situational Management. 9. Need not be an ownership In small organisations, management and ownership are one and the same. However, in large organisations, management is separate from ownership. The managers are highly qualified professionals who are hired from outside. The owners are the shareholders of the company. 10. Both an art and science

Management is result-oriented. Therefore, it is an Art. Management conducts continuous research. Thus, it is also a Science. 11. Management is all pervasive Management is necessary for running a business. It is also essential for running business, educational, charitable and religious institutions. Management is a must for all activities, and therefore, it is all pervasive. 12. Management is intangible Management is intangible, i.e. it cannot be seen and touched, but it can be felt and realised by its results. The success or failure of management can be judged only by its results. If there is good discipline, good productivity, good profits, etc., then the management is successful and vice-versa. 13. Use a professional approach in work Managers use a professional approach for getting the work done from their subordinates. They delegate (i.e. give) authority to their subordinates. They ask their subordinates to give suggestions for improving their work. They also encourage subordinates to take the initiative. Initiative means to do the right thing at the right time without being guided or helped by the superior. 14. Management is dynamic in nature Management is dynamic in nature. That is, management is creative and innovative. An organisation will survive and succeed only if it is dynamic. It must continuously bring in new and creative ideas, new products, new product features, new ads, new marketing techniques, etc.

IMPORTANCE OF MANAGEMENT (i) Achievement of group goals: A human group consists of several persons, each specialising in doing a part of the total task. Each person may be working efficiently, but the group as a whole cannot realize its objectives unless there is mutual cooperation8 t Management. Principles and Practices and coordination among the members of the group. Management creates teamwork and coordination in the group. Here conciles the objectives of the group with those of its members so that each one of them is motivated to make his best contribution towards the accomplishment of group goals. Managers provide in spiring leadership to keep the members of the group working hard. (ii) Optimum utilisation of resources: Managers forecast the need for materials, machinery,money and manpower. They ensure that the organisation has adequate resources and at the same time does not have idle resources. They create and maintain an environment conducive to highest productivity. Managers make sure that workers know their jobs well and use the most efficient

methods of work. They provide training and guidance to employeers so that they can make the best use of the available resources. (iii) Minimisation of cost: In the modern era of cut-throat competition no business can succeed unless it is able to supply the required goods and services at the lowest possible cost per unit. Management directs day-to-day operations in such a manner that all wastage and extravagance are avoided. By reducing costs and improving efficiency, managers enable an enterprise to be competent to face competitors and earn profits. (iv) Survival and growth: Modern business operates in a rapidly changing environment. An enterprise has to adapt itself to the changing demands of the market and society. Management keeps in touch with the existing business environment and draws its predictions about the trends in future. It takes steps in advance to meet the challenges of changing environment. Changes in business environment create risks as well as opportunities. Managers enable the enterprise to minimize the risks and maximize the benefits of opportunities. In this way, managers facilitate the Continuity and prosperity of business. (v) Generation of employment: By setting up and expanding business enterprises, managers create jobs for the people. People earn their livelihood by working in these organisations. Managers also create such an environment that people working in enterprise can get job satisfaction and happiness. In this way managers help to satisfy the economic and social needs of the employees. Meaning of Management Process The term management is explained in different ways. For example, it is said that management is what management does. Here, management is explained with reference to its basic functions which include planning, organising, coordinating and controlling. Similarly, management is described as a process which involves various elements. Management process is a continuous one and is run by the managers functioning at different levels. Management is now recognised as a distinct process in which managers plan, organise, lead, motivate and control human efforts in order to achieve well defined goals. In fact, process means a series of activities/operations undertaken/conducted for achieving a specific objective. Process is a systematic way of doing things. For example, in a factory there is a production process. Similarly, in the management process, resources and human efforts are used in an orderly manner for achieving specific objectives. The management process suggests functions to be performed by the managers. Definition of Management Process 1. According to D. E. McFarland, "Management is the distinct process by which the managers create, direct, maintain and operate purposive organisation through systematic, co-coordinated and cooperative human efforts. 2. According to Gemp R. Terry, "Management is a distinct process consisting of planning, organisisng, actuating, and controlling, performed to determine and accomplish objectives by the use of people and other resources". Functions of Management The essential elements/components of Management Process are four. 1.Planning 2.Organising

3.Directing and 4.Controlling. We may add some more elements in the management process. Such elements are:1.Motivating 2.Co-coordinating 3.Staffing and 4.Communicating. The elements in the management process are actually the basic functions of management these functions constitute the management process in practice. Management process is in fact, management in practice. This process suggests what a manager is supposed to, do or the basic functions that he has to perform while managing the job assigned to him. Luther Gullic gave a new formula to suggest the elements of Management Process i.e. basic functions of management. According to him, management process may be indicated by the word "PODSCORB. Here, P' states for 'planning'. "O" for 'organising', "D" for 'directing', "S" for 'Staffing', "CO" for 'Coordinating, "R" for 'Reporting' and "B" for 'Budgeting'. Gullic coined the word "PODSCORB" to suggest seven functions of management. The following figures show the management process and the elements involved:

Elements of Management Process 1. Planning: Planning is the primary function of management. It involves determination of a course of action to achieve desired results/objectives. Planning is the starting point of management process and all other functions of management are related to and dependent on planning function. Planning is the key to success, stability and prosperity in business. It acts as a tool for solving the problems of a business unit. Planning plays a pivotal role in business management It helps to visualize the future problems and keeps management ready with possible solutions. 2. Organising: Organising is next to planning. It means to bring the resources (men, materials, machines, etc.) together and use them properly for achieving the objectives. Organisation is a process as well as it is a structure. Organising means arranging ways

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and means for the execution of a business plan. It provides suitable administrative structure and facilitates execution of proposed plan. Organising involves different aspects such as departmentation, span of control delegation of authority, establishment of superior-subordinate relationship and provision of mechanism for co-ordination of various business activities. Staffing: Staffing refers to manpower required for the execution of a business plan. Staffing, as managerial function, involves recruitment, selection, appraisal, remuneration and development of managerial personnel. The need of staffing arises in the initial period and also from time to time for replacement and also along with the expansion and diversification of business activities. Every business unit needs efficient, stable and cooperative staff for the management of business activities. Manpower is the most important asset of a business unit. In many organisations, manpower planning and development activities are entrusted to personnel manager or HRD manager. 'Right man for the right job' is the basic principle in staffing. Directing (Leading): Directing as a managerial function, deals with guiding and instructing people to do the work in the right manner. Directing/leading is the responsibility of managers at all levels. They have to work as leaders of their subordinates. Clear plans and sound organisation set the stage but it requires a manager to direct and lead his men for achieving the objectives. Directing function is quite comprehensive. It involves Directing as well as raising the morale of subordinates. It also involves communicating, leading and motivating. Leadership is essential on the part of managers for achieving organisational objectives. Coordinating: Effective coordination and also integration of activities of different departments are essential for orderly working of an Organisation. This suggests the importance of coordinating as management function. A manager must coordinate the work for which he is accountable. Co-ordination is rightly treated as the essence of management. It may be treated as an independent function or as a part of organisms function. Coordination is essential at all levels of management. It gives one clear-cut direction to the activities of individuals and departments. It also avoids misdirection and wastages and brings unity of action in the Organisation. Co-ordination will not come automatically or on its own Special efforts are necessary on the part of managers for achieving such coordination. Controlling: Controlling is an important function of management. It is necessary in the case of individuals and departments so as to avoid wrong actions and activities. Controlling involves three broad aspects: (a) establishing standards of performance, (b) measuring work in progress and interpreting results achieved, and (c) taking corrective actions, if required. Business plans do not give positive results automatically. Managers have to exercise effective control in order to bring success to a business plan. Control is closely linked with other managerial functions. It is rightly treated as the soul of management process. It is true that without planning there will be nothing to control It is equally true that without control planning will be only an academic exercise Controlling is a continuous activity of a supervisory nature. Motivating: Motivating is one managerial function in which a manager motivates his men to give their best to the Organisation. It means to encourage people to take more

interest and initiative in the work assigned. Organisations prosper when the employees are motivated through special efforts including provision of facilities and incentives. Motivation is actually inspiring and encouraging people to work more and contribute more to achieve organisational objectives. It is a psychological process of great significance. 8. Communicating: Communication (written or oral) is necessary for the exchange of facts, opinions, ideas and information between individuals and departments. In an organisation, communication is useful for giving information, guidance and instructions. Managers should be good communicators. They have to use major portion of their time on communication in order to direct, motivate and co-ordinate activities of their subordinates. People think and act collectively through communication. According to Louis Allen, "Communication involves a systematic and continuing process of telling, listening and understanding". F. W. Taylor's Scientific Management Theory

Frederick Winslow Taylor (1856-1915) is the father of Scientific Management.

Image Credits Cristianmillos_0526. Scientific Management tries to increase productivity by increasing efficiency and wages of the workers. It finds out the best method for performing each job. It selects employees by using Scientific Selection Procedures. It provides Scientific Training and Development to the employees. It believes in having a close co-operation between management and employees. It

uses Division of Labour. It tries to produce maximum output by fixing Performance Standards for each job and by having a Differential Piece-Rate System for payment of wages.

Principles of Scientific Management

Techniques / Contributions / Principles of Scientific Management Theory :-

1. Performance Standards

F.W. Taylor found out that there were no scientific performance standards. No one knew exactly how much work a worker should do in one hour or in one day. The work was fixed assuming rule of thumb or the amount of work done by an average worker. Taylor introduced Time and Motion Studies to fix performance standards. He fixed performance standards for time, cost, and quality of work, which lead to uniformity of work. As a result, the efficiency of the workers could be compared with each other.

2. Differential Piece Rate System

Taylor observed that workers did as little work as possible. He felt that under existing wage system, an efficient worker gained nothing extra. So, Taylor used the differential piece (unit) rate system. Under differential piece rate system, a standard output was first fixed. Then two wage rates were fixed as follows :1. Low wage rate was fixed for those workers who did not produce the standard output. 2. Higher wage rate was fixed for those workers who produced the standard output or who produced more than the standard output. Differential piece-rate system can be explained with following example :The standard output for a day is 10 units. The wage rate for producing less than 10 units is $ 5 per unit, and for producing 10 or more units is $ 8 per unit. If Mr. X produces 7 units, and Mr. Y produces 12 units, then their wages will be as follows :Mr. X's wage is 7 x 5 = $ 35 Mr. Y's wage is 12 x 8 = $ 96 Because of this system, the inefficient workers will try to improve their efficiency, and the efficient workers will be motivated to maintain or improve their production capacity.

3. Functional Foremanship

Taylor started "Functional Foremanship". Here, 8 foremen (lower level manager or supervisor) are required to supervise the workers. This is because one foremen cannot be an expert in all the functions. Taylor's functional foremanship consists of two groups of supervisors :1. At the Planning Level or Office Level. 2. At the Doing Level or Factory Level. (a) At the Planning Level :-

Taylor separated planning from doing. At the planning level there were four supervisors. They are :1. Time and Cost Clerk : This boss prepares the standard time for completing the work and cost of doing that work. 2. Route Clerk : This boss makes the exact route (way) through which each product has to travel from a raw-material to a finished product. 3. Discipline Clerk : This boss looks after the discipline and absenteeism problems in the organisation. 4. Instruction Card Clerk : The boss gives instructions about how to do a particular work. (b) At the Doing Level :-

At the doing level there were also four supervisors. They are :1. Gang Boss : He is responsible for setting up the machines and tools and for direct supervision of workers. 2. Speed Boss : He is responsible for maintaining a proper speed of work. 3. Repair Boss : He is responsible for the repairs and maintenance of machines. 4. Inspector Boss : He is responsible for maintaining the quality of production. 4. Mental Revolution

Taylor introduced the concept of "Mental Revolution". He said that the management and workers should have a positive attitude towards each other. This will result in close cooperation between them. This will increase productivity and profits.

5. Time Study

Time study means to record the time taken for doing each part of a job. The full job is first observed and analysed. Then it is divided into different elements (parts). Later the time taken for doing each part of the job is recorded. This is done by using a stop clock. Time study

helps the management to know exactly how much time it will take to do a particular job. This helps the management to fix the amount of work to be done by each worker in one hour or in one day. That is, management can fix a standard output of work for a certain period of time. Taylor advised all managers to do time study. This will prevent the workers from passing time, working slowly and doing less work. Time study helps to increase the productivity of the organisation.

6. Fatigue and Motion Study

Frank and Lillian Gilbreth (Husband and Wife) introduced fatigue and motion studies. Fatigue and motion studies find out and remove unnecessary and wasteful movements while doing the job. According to the Gilbreths, fatigue (tiredness) and motion (movements or actions) are interlinked. Every motion that is removed will reduce fatigue. Using cameras, they studied workers (masons) doing common jobs like bricklaying. They found that the workers do many wasted motions while doing their work. This resulted in fatigue. So, the Gilbreths asked the workers to stop all unnecessary motions and to do only the motions which were necessary for doing the job. They reduced the bricklayers' motions from 18 to 5. This also reduced the fatigue of the bricklayers. Therefore, productivity of workers increased.

7. Gantt Charts Henry Gantt invented the Gantt chart. This chart shows the planned work and the completed work at each stage of production. It also shows the time taken to do the work. Gantt chart is the basis for following two concepts :1. The Critical Path Method (CPM), and 2. The Program Evaluation Review Technique (PERT). Taylor's Scientific Management is criticised on the following main grounds :-

1. Exploitation of Workers

Taylor's Scientific Management put unnecessary pressures on the employees to perform the work faster. Importance was given to productivity and profitability. This resulted in exploitation of the employees. Therefore, many employees joined trade unions. This also resulted in mistrust between management and employees.

2. Problem of Unity of Command

Taylor used functional foremanship. So, the workers have to report to eight bosses. This breaks the principle of unity of command, where the workers have to report to only one boss. Lack of unity of command can create confusion and chaos in the organisation.

3. Mechanical Approach

Taylor's approach was a mechanical approach. He gave too much importance to efficiency. He did not consider the human element. Taylor considered workers as robots, which could speed up the work at any cost.

4. Problem of Separation of Planning from Doing

Taylor said to separate planning from doing. In reality, we cannot separate planning from doing. The planners should also be engaged in doing, then only they will be able to make realistic plans for the organisation.

5. Individualistic Approach Taylor's scientific management gives too much importance to individual performance and not to group performance. However, the success of an organisation depends not only on individual performance of workers, but also on group performance of workers. 6. Wrong Assumptions Taylor assumed that workers are motivated only by financial gains. However, in reality, workers are motivated not financial incentives but also by social needs and personal egos. 7. Narrow Application Taylor's scientific management has narrow application. It can be applied only when the performance of the workers can be measured quantitatively. It can be applied only for factories where the performance can be measured quantitatively. It cannot be used in the service sector because in this sector the performance of a person cannot be measured quantitatively. Principle of management Henri Fayol, a French industrialist, is now recognised as the Father of Modern Management. In year 1916 Fayol wrote a book entitled "Industrial and General Administration". In this book, he gave the 14 Principles of Management. These 14 principles of management are universally accepted and used even today. According to Henri Fayol, all managers must follow these 14 principles.

Henri Fayol's 14 Principles of Management are briefly explained below. 1. Division of Work The full work of the organisation should be divided among individuals and departments. This is because a division of work leads to specialisation, and specialisation increases efficiency, and efficiency improves the productivity and profitability of the organisation. 2. Discipline Discipline means a respect for the rules and regulation of the organisation. Discipline may be Self-discipline, or it may be Enforced discipline. Self-discipline is the best discipline. However, if there is no self-discipline, then discipline should be enforced through penalties, fines, etc. No organisation can survive without discipline. 3. Authority and responsibility According to Henri Fayol, there should be a balance between Authority (Power) and Responsibility (Duties). Authority must be equal to Responsibility. If the authority is more than responsibility then chances are that a manager may misuse it. If responsibility is more than authority then he may feel frustrated. 4. Subordination of Individual Interest to General Interest In an organisation, there are two types of interest, viz., the individual interest of the employees, and the general interest of the organisation. The individual interest should be given less importance, while the general interest should be given most importance. If not, the organisation will collapse. 5. Remuneration Remuneration is the price for services received. If an organisation wants efficient employees and best performance, then it should have a good remuneration policy. This policy should give maximum satisfaction to both employer and employees. It should include both financial and non-financial incentives. 6. Centralisation In centralisation, the authority is concentrated only in few hands. However, in decentralisation, the authority is distributed to all the levels of management. No organisation can be completely centralised or decentralised. If there is complete centralisation, then the subordinates will have no authority (power) to carry out their responsibility (duties). Similarly, if there is complete decentralisation, then the superior will have no authority to control the organisation. Therefore, there should be a balance between centralisation and decentralisation. 7. Order There should be an Order for Things and People in the organisation. Order for things is called Material Order. Order for people is called Social Order. Material Order refers to "a place for everything and everything in its place." Social Order refers to the selection of the "right man in the right place". There must be orderly placement of the resources such as Men and Women, Money, Materials, etc. Misplacement will lead to misuse and disorder. 8. Equity

The managers should use the equity while dealing with the employees. Equity is a combination of kindness and justice. Equity creates loyalty and devotion in the employees. 9. Initiative Management should encourage initiative. That is, they should encourage the employees to make their own plans and to execute these plans. This is because an initiative gives satisfaction to the employees and brings success to the organisation. 10. Esprit De Corps Esprit de Corps means "Team Spirit". Therefore, the management should create unity, cooperation and team-spirit among the employees. They should avoid the divide and rule policy. 11. Stability of Tenure An employee needs time to learn his job and to become efficient. Therefore, he should be given time to become efficient. When he becomes efficient, he should be made permanent. In other words, the employees should have job security. 12. Unity of Direction All activities which have the same objective must be directed by one manager, and he must use one plan. This is called Unity of Direction. For example, all marketing activities such as advertising, sales promotion, pricing policy, etc., must be directed by only one manager. He must use only one plan for all the marketing activities. 13. Scalar Chain Scalar Chain is a line of authority. This line joins all the members (managers and employees) from top to bottom. Every member must know who is his superior. He must also know who is his subordinate. Scalar Chain is necessary for good communication. Scalar Chain must not be broken in norm circumstances. However, if quick action is necessary, then this chain can be broken. This is done using "Gang Plank" / "Bridge" / "Direct Contact". Scalar Chain is shown in diagram below with Gang plank as dotted line FP.

The Scalar Chain is shown by a double ladder A to G and A to Q. A is the head of the organisation. B and L are the next level, and so on. If quick action is necessary, then a "Gang Plank" "FP" is made. Now F and P can contact each other directly but they should inform E and O about their decisions. 14. Unity of Command According to this principle, a subordinate (employee) must have only one superior (boss or manager). A subordinate must receive orders from only one superior. In other words, a subordinate must report to only one superior. According to Fayol, if one subordinate receives orders from more than one superior then there will be disorder. This will affect the discipline, efficiency, productivity and profitability of the organisation.

Unity of Command is a very important principle of management. This principle is based on the rule "Too many cooks spoil the soup."

The Human Relations Movement began with the Hawthorne Experiments. They were conducted at Western Electrical Works in USA, b/w 1924-1932.

Four Parts of Hawthorne Studies / Experiments

Image Credits Harvard Business School.

Part I - Illumination Experiments (1924-27) These experiments were performed to find out the effect of different levels of illumination (lighting) on productivity of labour. The brightness of the light was increased and decreased to find out the effect on the productivity of the test group. Surprisingly, the productivity increased even when the level of illumination was decreased. It was concluded that factors other than light were also important.

Part II - Relay Assembly Test Room Study (1927-1929) Under these test two small groups of six female telephone relay assemblers were selected. Each group was kept in separate rooms. From time to time, changes were made in working hours, rest periods, lunch breaks, etc. They were allowed to choose their own rest periods and to give suggestions. Output increased in both the control rooms. It was concluded that social relationship among workers, participation in decision-making, etc. had a greater effect on productivity than working conditions.

Part III - Mass Interviewing Programme (1928-1930) 21,000 employees were interviewed over a period of three years to find out reasons for increased productivity. It was concluded that productivity can be increased if workers are allowed to talk freely about matters that are important to them.

Part IV - Bank Wiring Observation Room Experiment (1932) A group of 14 male workers in the bank wiring room were placed under observation for six months. A worker's pay depended on the performance of the group as a whole. The researchers thought that the efficient workers would put pressure on the less efficient workers to complete the work. However, it was found that the group established its own standards of output, and social pressure was used to achieve the standards of output.

Conclusions of Hawthorne Studies / Experiments

The conclusions derived from the Hawthorne Studies were as follows :1. The social and psychological factors are responsible for workers' productivity and job satisfaction. Only good physical working conditions are not enough to increase productivity. 2. The informal relations among workers influence the workers' behaviour and performance more than the formal relations in the organisation. 3. Employees will perform better if they are allowed to participate in decision-making affecting their interests. 4. Employees will also work more efficiently, when they believe that the management is interested in their welfare. 5. When employees are treated with respect and dignity, their performance will improve. 6. Financial incentives alone cannot increase the performance. Social and Psychological needs must also be satisfied in order to increase productivity. 7. Good communication between the superiors and subordinates can improve the relations and the productivity of the subordinates. 8. Special attention and freedom to express their views will improve the performance of the workers.

Criticism of Hawthorne Studies / Experiments

The Hawthorne Experiments are mainly criticised on the following grounds :1. Lacks Validity : The Hawthorne experiments were conducted under controlled situations. These findings will not work in real setting. The workers under observation knew about the experiments. Therefore, they may have improved their performance only for the experiments.

2. More Importance to Human Aspects : The Hawthorne experiments gives too much importance to human aspects. Human aspects alone cannot improve production. Production also depends on technological and other factors. 3. More Emphasis on Group Decision-making : The Hawthorne experiments placed too much emphasis on group decision-making. In real situation, individual decisionmaking cannot be totally neglected especially when quick decisions are required and there is no time to consult others. 4. Over Importance to Freedom of Workers : The Hawthorne experiments gives a lot of importance to freedom of the workers. It does not give importance to the constructive role of the supervisors. In reality too much of freedom to the workers can lower down their performance or productivity.

Maslow's Hierarchy of Needs Theory

It was in 1943 a Psychologist Mr. Abraham Harold Maslow suggested hisTheory of Human Motivation. His theory is one popular and extensively cited theory of motivation. Maslow's theory is based on the Hierarchy of Human Needs. According to Maslow, human behavior is related to his needs. It is adjusted as per the nature of needs to be satisfied. In hierarchy of needs theory, Maslow identified five types / sets of human need arranged in a hierarchy of their importance and priority. He concluded that when one set of needs is satisfied, it ceases to be a motivating factor. Thereafter, the next set of needs in the hierarchy order takes its place. These needs in hierarchy can be compared to a pyramid. At the lowest level, there will be first set of needs which can be described as basic needs and are universal in character. This will be followed by other sets of needs.

Assumptions in Hierarchy of Needs Theory

Maslow's Assumptions in Hierarchy of Needs Theory are :1. Man is a wanting being, i.e. his wants are growing continuously even when some wants are satisfied. Human needs are of varied and diversified nature. They can be arranged in a hierarchy of importance progressing from a lower to a higher order of needs. 2. Needs have a definite hierarchy of importance. As soon as needs on a lower level are fulfilled, those on the next level will emerge and demand satisfaction. This suggests that bread (food) is essential and is a primary need of every individual. According to Maslow, "Man lives by bread alone when there is no bread." However, he feels the other needs when his physiological needs are fulfilled. In brief, bread is important but man does not live by bread alone. There are other needs (security / safety, social, esteem and self actualisation which influence behavior of people (employees) to work. This is the basic feature of Maslow's need hierarchy. Attention to all human needs is essential for motivation of employees. Attention to the provision of bread alone is not adequate for motivating employees. Bread can act as motivating factor when there is no bread but when it is available, its use as motivator comes to an end. Here, other motivators (e.g. security of job, social status, etc.) will have to be introduced for motivating employees. Attention to other needs such as security needs, social needs, esteem needs and self actualisation needs is equally important and essential for the motivation of different categories of employees. Maslow, in his theory, has referred to different needs and suggested that attention needs to be given to all such needs as attention to physiological needs alone is not adequate for motivating employees. According to Maslow, "Man does not live by bread alone". This conclusion of Maslow is a practical reality and needs to be given adequate attention while motivating employees. 3. A satisfied need does not act as a motivator. 4. As one need is satisfied, another replaces it.

Maslow's Pyramid of Human Needs

Maslow's Pyramid of Human Needs is shown in the following diagram.

The Maslow's Pyramid of Human Needs is explained below :1. Physiological Needs : Physiological needs are the basic needs for sustaining human life. These needs include food, shelter, clothing, rest, air, water, sleep and sexual satisfaction. These basic human needs (also called biological needs) lie at the lowest level in the hierarchy of needs as they have priority over all other needs. These needs cannot be postponed for long. Unless and until these basic physiological needs are satisfied to the required extent, other needs do not motivate an employee. A hungry person, for example, is just not in a position to think of anything else except his hunger or food. According to Maslow, 'man lives by bread alone,' when there is no bread. The management attempts to meet such physiological needs through fair wages. 2. Security / Safety Needs : These are the needs connected with the psychological fear of loss of job, property, natural calamities or hazards, etc. An employee wants protection from such types of fear. He prefers adequate safety or security in this regard i.e. protection from physical danger, security of job, pension for old age, insurance cover for life, etc. The safety needs come after meeting the physiological needs. Such physiological needs lose their motivational potential when they are satisfied. As a result, safety needs replace them. They begin to manifest themselves and dominate human behavior. Safety needs act as motivational forces only if they are unsatisfied. 3. Social Needs : An employee is a human being is rightly treated as a social animal. He desires to stay in group. He feels that he should belong to one or the other group and the member of the group should accept him with love and affection. Every person desires to be affiliated to such groups. This is treated as basic social need of an individual. He also feels that he should be loved by the other members. He needs friends and interaction with his friends and superiors of the group such as fellow employees or superiors. Social needs occupy third position in the hierarchy of needs.

4. Esteem Needs : This category of needs include the need to be respected by others, need to be appreciated by others, need to have power and finally prestigious position. Once the previous needs are satisfied, a person feels to be held in esteem both by himself and also by others. Thus, esteem needs are two fold in nature. Self esteem needs include those for self confidence, self-respect, competence, etc. The second groups of esteem needs are those related to one's status, reputation, recognition and appreciation by others. This is a type of personal ego which needs to be satisfied. The Organisation can satisfy this need (ego) by giving recognition to the good work of employees. Esteem needs do not assume the motivational properties unless the previous needs are satisfied. 5. Self-actualisation Needs : This is the highest among the needs in the hierarchy of needs advocated by Maslow. Self actualisation is the desire to become what one is capable of becoming. It is a 'growth' need. A worker must work efficiently if he is to be ultimately happy. Here, a person feels that he should accomplish something in his fife. He want to utilise his potentials to the maximum extent and desires to become what one is capable of becoming. A person desires to have challenges and achieves something special in his life or in the area of his specialization. Though every one is capable of self-actualization, many do not reach this stage. This need is fully satisfied rarely.

Limitations of Hierarchy of Needs Theory

Maslow's theory of motivation (Hierarchy of Needs Theory) is very popular all over the world and provides guidelines to managers / managements for motivating employees. However, Maslow's theory has many limitations. Limitations of Maslow's Hierarchy of Needs Theory are noted below :1. Maslow's theory is over simplified and is based on human needs only. There is lack of direct cause and effect relationship between need and behavior. 2. The theory has to refer to other motivating factors like expectations, experience and perception. 3. Needs of all employees are not uniform. Many are satisfied only with physiological needs and security of employment. 4. The pattern of hierarchy of needs as suggested by Maslow may not be applicable uniformly to all categories of employees. 5. Maslow's assumption of 'need hierarchy' does not hold good in the present age as each person has plenty of needs to be satisfied, which may not necessarily follow Maslow's need hierarchy. 6. Maslow's theory is widely accepted but there is little empirical evidence to support it. It is largely tentative and untested. His writings are more philosophical than scientific.

Importance of Hierarchy of Needs Theory

Although Maslow's Hierarchy of Needs Theory has been criticised on above grounds, still it holds many advantages or merits. It helps the managers to understand the behaviour of their employees. It also helps the managers to provide the right financial and non-financial motivation to their employees. This overall helps to increase the efficiency, productivity and profitability of the organisation. Frederick Herzberg Theory of Human Motivation

Frederick Herzberg's theory of motivation is also called 'Two Factor Theory', 'Dual Factor Theory' and 'Hygiene / Maintenance Theory of Motivation'. This theory is based on the information collected by him and his associates (in the USA in 1959) by interviewing two hundred engineers and accountants. The information collected relates to the attitude of people towards work. This attitude towards work depends on two sets of factors namely hygiene or maintenance factors and the motivating factors.

2. Hygiene Factors of Two Factor Theory

According to Frederick Herzberg, the Hygiene Factors do little contribution to provide job satisfaction. He called them "dissatisfiers' as their absence cause dissatisfaction but their presence is not motivating but only prevent dissatisfaction. The hygiene factors meet man's

needs to avoid unpleasantness but do not motivate them to take more interest in the work. Hygiene factors (when provided) create a favorable environment for motivation and prevents job dissatisfaction. They are not an intrinsic part of a job, but they are related to the conditions under which a job is performed. When employer is unable to provide enough of these factors to his employees, there will be job dissatisfaction. However, if they are provided, they will not necessarily act as motivators. They will just lead employees to experience no job dissatisfaction. Such hygiene factors are as noted below. Hygiene / Maintenance Factors are :1. Company's Policies and Administration, 2. Supervision, 3. Working Conditions, 4. Interpersonal Relations with superiors and other subordinates, 5. Salary, 6. Job Security, 7. Status, 8. Personal Life, and 9. Employee Benefits. 3. Motivating Factors of Two Factor Theory

Motivating Factors act as forces of job satisfaction. They create positive and a longer lasting effect on employees performance and are related to work itself. Adequate provision of such factors called are 'Satisfiers'. They make people happy with their jobs because they serve man's basic needs for psychological growth. In addition, they also motivate employees in their work. Such factors are five and are called motivators by Herzberg. The motivating factors are: Motivating Factors are :1. Achievement, 2. Recognition for Accomplishment, 3. Increased Responsibility, 4. Opportunity for Growth and Development, and 5. Creative and Challenging Work. Motivating factors motivate subordinates to take more interest in the work. They raise efficiency and productivity of employees. According to Frederick Herzberg, motivating factors are essential in order to provide job satisfaction and in order to maintain a high level of job performance. Employees will not have job satisfaction if the motivating factors are not provided in sufficient quality by the employer.

According to Frederick Herzberg, these two sets of factors are quite independent of each other. It may be noted that hygiene factors, when satisfied, tend to eliminate dissatisfaction but do not motivate an individual employee for better performance. The motivating factors will permit an individual to grow and develop in a natural way. In brief, hygiene factors affect an individual's willingness to work while motivating factors affect his ability and efficiency to work. This theory can be compared to Maslow's theory of human needs as both the theories refer to needs and their role in motivation. In addition, the assumptions in both the theories are identical. Frederick Herzberg's theory has many limitations. They are related to research methodology used, empirical validity and assumptions in the theory. His theory is criticized on many grounds. Many have found the theory to be an oversimplification. Despite such criticism, Herzberg's two factor theory has made a significant contribution towards improving manager's basic understanding of human behaviour. His theory is simple to grasp, based on some empirical data and guides managers to improve employee motivation. Herzberg provided stimulus to other researchers to develop alternative theories of motivation.

4. Compare Maslow and Herzberg Theory

Distinction between Maslow and Herzberg's Theory of Motivation.

Douglas McGregor's - Theory of Motivation

The eminent psychologist Douglas McGregor has given his theory of motivation called Theory X and Theory Y. He first presented his theory in a classic article titled 'The Human Side of Enterprise'. He treated traditional approach to management as 'Theory X' and the professional approach to management as 'Theory Y'. His theory refers to two sets of employees based on the perception of human nature. Here, theory X and theory Y are two sets of assumptions about the nature of employees. His theory is based on human behavior.

2. Theory X.

Theory X is based on traditional assumptions about people (employees). Here, the conventional approach of management is used as a base. It suggests the following features of an average human being/employee (assumptions about human nature):

2.1 Assumptions of Theory X.

1. The average human being is inherently lazy by nature and desires to work as little as possible. He dislikes the work and will like to avoid it, if he can. 2. He avoids accepting responsibility and prefers to be led or directed by some other. 3. He is self-centered and indifferent to organizational needs. 4. He has little ambition, dislikes responsibility, prefers to be led but wants security. 5. He is not very intelligent and lacks creativity in solving organizational problems. 6. He by nature resists to change of any type. In the case of such employees, self-motivation is just not possible. They will work only when there is constant supervision on them. A manager has to persuade, punish or reward such workers in order to achieve organizational goals.

3. Theory Y.

Theory Y is based on modern or progressive or professional approach. Here, the assumptions about people i.e. employees are quite different.

3.1 Assumptions of Theory Y.

1. Work is as natural as play, provided the work environment is favorable. Work may act as a source of satisfaction or punishment. An average man is not really against doing work. 2. People can be self-directed and creative at work if they are motivated properly. 3. Self-control on the part of people is useful for achieving organizational goal. External control and threats of punishment alone do not bring out efforts towards organizational objectives. 4. People have capacity to exercise imagination and creativity.

5. People are not by nature passive or resistant to organizational needs. They have become so as a result of experience in organisations. 6. An average human being learns under proper conditions. He is also willing to accept responsibility. 7. The intellectual capacity of an average human being is utilised partially under the conditions of modern industrial life.

The term 'Organisation' is derived from the word 'organism' which means a structure of body divided into parts that are held together by a fabric of relationship as one organic whole. In an enterprise, many managers and employees work together for achieving common objectives. It is the organisation structure which binds them together and brings proper adjustment and coordination in their work. The division of work and authority and the establishment of relationship among individuals or groups are possible due to the organisation structure. In simple words, organizing means arranging the ways and means for the execution of business plan. It is the creation of administrative set-up for the execution of the plan. It suggests the framework within which the management functions. The term organisation suggests a functional group working together for achieving common purposes/objectives. Organisation provides mechanism for integrated and co-operative action by two or more persons with a view to implementing any plan. Organisation facilitates efficient administration, direction and control. It avoids wastage of raw materials and human efforts. Every management has to establish its own organisation structure for efficient conduct of business activities There are different structures which can be given to an organisation. They include line, functional and so on. An organisation deals with a number of elements which defines the relationships between the members of a group. It is concerned with the channels of communication and lines of authority. It also defines the degree of authority and responsibility of each person in the organisation. In short, organisation clarifies relationships and provides a framework within which all managerial actions take place. Organisation involves the following aspects:a. Identifying the activities required to achieve organizational objectives. b. Grouping up of these activities into workable units (Departmentation). c. Assigning duties and responsibilities to subordinates in order to achieve the tasks assigned. d. Delegating authority necessary and useful for the accomplishment of tasks assigned. e. Establishing superior-subordinate relationship. f. Providing a system of co-ordination for integrating the activities of individuals and departments.

2. Definitions of Organisation

1. An Organisation has been defined by E. F. L. Breach as "a system of structural interpersonal relationships. In it, individuals are differentiated in terms of authority, status and roles with the result that personal interaction is prescribed, and anticipated reactions between individuals tend to occur while ambiguity and spontaneity are decreased". 2. According to Louis A. Allen, Organisation is "the process of identification and grouping the work to be performed, defining and delegating responsibility and authority and establishing relationships for the purpose of enabling people to work most effectively together in accomplishing objectives". 3. James Mooney defines organisation as "the form of every human association for attainment of a common purpose".

3. Importance of Organisation

1. Ensures optimum utilisation of human resources: Every enterprise appoints employees for the conduct of various business activities and operations. They are given the work according to their qualifications and experience. Organisation ensures that every individual. Is placed on the job for which he is best suited. 2. Facilitates coordination: It acts as a means of bringing coordination and integration among the activities of individuals and departments of the enterprise. It establishes clear-cut relationships between operating departments and brings proper balance in their activities. 3. Facilitates division of work: Different departments are created for division of work, specialization and orderly working of the enterprise. Similarly, delegation relieves top level managers from routine duties. 4. Ensures growth, expansion and diversification: Sound Organisation structure facilitates expansion/diversification of an enterprise. Organisation structure has inbuilt capacity to absorb additional activities and also effective control on them. A business enterprise brings diversification in its activities within the framework of its Organisation. 5. Stimulates creativity: Organisation provides training and self-development facilities to managers and subordinates through delegation and departmentation. It also encourages initiative and creative thinking on the part of managers and others. 6. Facilitates administration: Effective administration of business will not be possible without the support of sound organisation structure. Delegation, departmentation and decentralisation are the tools for effective administration. 7. Determines optimum use of technology: Sound Organisation structure provides opportunities to make optimum use of technology. It facilitates proper maintenance of equipment and also meets high cost of installation.

8. Determines individual responsibility: Responsibility is an obligation to perform an assigned work. In a sound Organisation, the manager finds it easy to pinpoint individual responsibility when the work is spoilt.

4. Organization As A Structure

The term organisation can be studied as a structure and also as a process. In a static sense, organisation is a structure. A group of people functions within this structure and try to accomplish certain objectives. Organisation is a structure for the conduct of business activities efficiently. In the words of Kast and Rosenzweig, "structure is the established pattern of relationships among the component parts of the organisation". In this sense, Organisation structure refers to the network of relationships among individuals and positions in an Organisation.

5. Organization Structure Suggests Its Framework

Just as human beings have skeletons that define their parameters likewise organisations have structures that define their parameters. While preparing an architectural plan, an architect considers different factors such as space, cost, time, special features and resources. In the same way, a manager is expected to take into account factors such as channels of communication, before designing Organisation structure. Organisation structure specifies which individuals will work as subordinates to which superiors. It defines the interpersonal relationships that should exist between individuals and work. Such invisible framework is intended to promote co-ordination in the functions and activities of members of the group. Because of specific assignments of authority and responsibility, each person will look after his part of pre-established plans in proper relation to the parts of others in the group. Organisation suggests the structure within which people associate for the attainment of an objective

6. Organisation As A structure - Implies 4 Elements

a. Intentionally created: In order to attain specific goals, Organisation structure is deliberately created which converts resources (of management) into a productive enterprise. b. Provides framework: Organisation structure usually takes the shape of a pyramid. Once established, it acts as a framework that can either constrain or facilitate managerial actions. c. Use of Chart: In an Organisation, the structural relationships are normally shown through Organisation charts. These charts indicate the intended final relationships at a given time. d. Provides formal picture: Organisation structure may be horizontal or vertical. The horizontal aspects display basic departmentalization and vertical aspects display creation of hierarchy of superiors and subordinates.

7. Principles of Organisation / Organising

There are some principles which are common to all organisations that are established in a classical form i.e. the form where there is hierarchy of authority and responsibility and it flows downwards. The principles of Organisation offer guidance for the creation of a sound, efficient and effective Organisation structure. In other words, these principles are the sound criteria for efficient organising. They ensure smooth and orderly working of a business enterprise. Principles of organising are not given in a serial order by any authority on management. Management thinkers (Henry Fayol, F. W. Taylor, U. L Urwick and others) have laid down certain statements regarding organising function of management. Such statements are treated as principles of organisation. Well accepted principles of organisation/organising are as explained below. 1. Unity of Objectives: Objectives of the enterprise influence the Organisation structure and hence the objectives of the enterprise should first be decided clearly and firmly. In addition, there should be unity among the objectives decided. This gives clear direction to the whole Organisation and it will be geared for the achievement of such objectives. The Organisation acts as a tool for achieving the objectives. The objectives may be divided into departmental objectives and organizational objectives. There should be unity of objectives as such unity gives one clear direction to the whole Organisation. In addition, objectives should be made clear to all concerned persons so as to enable them to do their best to achieve the objectives. 2. Division of Work and Specialization: Division of work leads to specialization. Every department of an Organisation should be given specialized functions. This will raise

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the overall efficiency and quality of work of an Organisation. At the same time, specialization and departmentation should not have any adverse effect on the total integrated system. Coordination must be established among the departments and activities. Specialization is necessary for raising the efficiency of the whole Organisation structure. The functions given to each department should be preferably only of one category. Employees should be assigned duties to different departments as per their qualifications, qualities and so on. Delegation of Authority: There should be proper delegation of authored in every Organisation, particularly in large organisations. The basic idea behind delegation is to see that decision-making power is placed at a proper place. Delegation should go to the lower levels of management. Every one should be given authority which is adequate to accomplish the task assigned to him. Delegation is useful for getting the things done through others. A successful manager normally does not perform the jobs by himself. He delegates the authority and responsibility to his subordinates. He also motivates his subordinates and see that they take initiative, work efficiently and contribute for achieving organizational objectives. Coordination: Organisation involves division of work and departmentation. This naturally suggests the need of proper coordination among the departments and efforts of people working in an Organisation. Due to coordination one clear-cut direction is given to people/ departments and efforts will not be wasted or misdirected. Coordination also brings integration in the basic functions of management. The principle of coordination is important as it facilitates achievement of overall objectives of a business Organisation. It also brings unity of action in the Organisation. Coordination will not be available automatically. For this, working relationships need to be established within the Organisation. Unity of Command: Unity of command principle suggests that each subordinate should have only one superior whose command he has to obey. Dual subordination is undesirable as it leads to confusion, disorder, uneasiness and indiscipline. An employee should not have more than one boss to whom he has to report and also function as per his orders and instructions. Reportiing to more than one boss leads to confusion. Flexibility: According to the principle of flexibility, the Organisation structure should be flexible and not rigid. Such structure is adaptable to changing situations and permits expansion or replacement without any serious dislocation and disruption. There should be an in-built arrangement to facilitate growth and expansion of an enterprise. Simplicity: The Organisation structure should be simple for clear understanding of employees. The structure should be easy to manage. Internal communication will be easy due to simplicity of Organisation. The Organisation structure should be simple as far as possible. The levels of management should also be limited. Span of Control: The span of control, as far as possible, should be small and fair. This means a manager should not be asked to keep supervision on large number of subordinates. The span of control should be narrow and manageable. It should be properly balanced.

9. Scalar Principle (Chain of Command): The principle of chain of command suggests that the line of authority from the chief executive to the first line of superior should be clearly defined. The line of authority should be properly defined so as to avoid any confusion as regards the line of authority. This principle suggests that as far as possible, the chain of authority should be short and should not be broken. 10. Exception Principle: The executives at the higher level are busy in important matters and have limited time for the study of routine administrative matters. It is not desirable to take routine matters to the top level managers frequently. Very crucial and exceptionally complex problems should be referred to the top executives and routine matters should be dealt with by the junior executives at the lower levels. Moreover, time of top executives is saved. They can use their time for dealing with more important and complex problems. 11. Authority and Responsibility: Authority acts as a powerful tool by which a manager can achieve a desired objective. Authority of every manager should be clearly defined. Moreover, it should be adequate to discharge the responsibilities assigned. The superior should be held responsible for the acts of his subordinates. He cannot run away from the responsibility simply by delegating authority to his subordinates. In fact, the responsibility of the superior for the acts of his subordinates is absolute. 12. Efficiency: The Organisation structure should enable the enterprise to function efficiently. This will enable the enterprise to accomplish its objectives quickly and also at the lowest cost. For this, the structure introduced should be suitable to the nature, size, activities etc. of the Organisation. A suitable Organisation structure ensures full and purposeful utilisation of available human and material resources and ensures efficiency. 13. Proper Balance: Proper balance is necessary in different aspects of the Organisation. This means there should be reasonable balance in the size and functions of departments, centralisation and decentralisation of the Organisation, span of control, chain of command and finally in between human and material resources. This principle of balance suggests that the top management should see that the vertical and horizontal dimensions of the Organisation are fairly balanced. 14. Separation of line and staff functions: Line functions should be separated from the staff functions even when they are supplementary in character. Line functions are directly connected with operations while staff functions are auxiliary to the line functions. These functions should be coordinated when necessary but normally they should be kept separate.

8. Types Of Organisation Structure

Organisation structure is defined as "The logical arrangement of task and the network of relationships and roles among the various positions established to carry out the activities necessary to achieve the predetermined objectives of business". Internal Organisation

structure constitutes the arteries and veins through which the blood of work flows in the body of Organisation. Internal Organisation structures can be broadly classified into the following types/forms: 1. Line Organisation structure. 2. Functional Organisation structure. 3. Line and staff Organisation structure. 4. Product Organisation structure. 5. Committee and Matrix Organisation structure.

8.1 Line Organisation Structure

Line Organisation (also called Military/Scalar Organisation) is the oldest and the simplest form of internal Organisation structure. It was first developed by the Roman army and later adopted by armies all over the world. Factory owners also used line Organisation structure in its purest form in the nineteenth century in England. In the line Organisation, the line of authority moves directly from the top level to the lowest level in a step-by-step manner. It is straight and vertical. The top-level management takes all major decisions and issues directions for actual execution. The general manager, for example, issues order to various departmental managers. Thereafter, the departmental manager issues instructions to works manager. The works manager will issue instructions to foreman. In this manner, the orders and instructions will be issued to the workers working at the lowest level. Thus authority moves downward and also step-by-step. The responsibility, on the other hand, moves in the upward direction. Line Organisation structure is given in the following chart:

8.1.1 Advantages of Line Organisation Structure

1. Simplicity: Line Organisation structure is easy to understand and follow by superiors and subordinates. It is simple and clear as regards authority and accountability. 2. Prompt decisions: Line Organisation facilitates prompt decision-making at all levels as the authority given is clear and complete. 3. Discipline: It brings discipline in the Organisation due to unity of command, delegation of authority and direct accountability. 4. Economical: Line Organisation is economical as experts are not appointed. 5. Attraction to talented persons: Line Organisation brings out talented workers and develops in them quality of leadership. It offers opportunities of self-development to employees. 6. Quick communication, high efficiency, flexibility and high employee morale are some more advantages of line Organisation structure.

8.1.2 Limitations of Line Organisation Structure

1. Heavy burden on line executives: The line executives are given too many duties and responsibilities. Even the quality of the decisions of executives may suffer due to heavy burden of duties and responsibilities.

2. Non-availability of services of experts: There is absence of skilled experts in line organisation. Expert assistance is not available promptly when needed by line executives. 3. Favoritism: There is wide scope for favoritism and nepotism in the line organisation. Leadership of departmental executive is autocratic due to heavy concentration of powers. He may favour some employees at the cost of others. 4. Too much dependence on limited executives: In the line organisation, all powers are concentrated in the hands of a few executives. Naturally, the success and stability of the entire organisation depends on their personal skill, initiative and interest. Special difficulties arise when one executive is to be transferred/replaced/promoted. 5. Rigidity: There is rigidity in the working of line organisation. 6. Delays in communication, limited freedom to employees and unsuitability to modern large business units are some more demerits of line Organisation.

8.2 Functional Organisation Structure

F.W.Taylor, founder of scientific management, conceived the functional Organisation structure. According to him, it is unscientific to overload a foramen with the entire responsibility of running a department. He introduced a system of functional foremanship in his Organisation. In his functional foremanship, there will be eight specialists' foremen who will be required to guide, direct and control the work. Workers at the plant level will have to follow the instructions of all these eight specialists called bosses. In the functional Organisation suggested by F.W.Taylor, the job of management is divided according to specialization. As a result, functional departments are created. For example, the personnel department will look after the recruitment, selection, training, wage payment, etc. of all persons of the Organisation. Similar will be the position of other departments like production, sales, etc. The scope of work of the department is limited but the area of authority is unlimited. In the functional Organisation structure, there will be separation of planning of work and execution of the plan prepared. The basis of division is the function and naturally the Organisation structure created will be called "Functional Organisation". In the functional foremanship, there will be eight specialists/functional heads called bosses. Out of eight bosses, four bosses will be at the planning level and the remaining four will be at the slop floor level.

8.2.1 Foremen At Planning Level (Planning Dept.)

1. Time and Cost Clerk: He is concerned with preparing standard time for the completion of certain piece of work and compiling the cost of that work.

2. Instruction Card Clerk: He lays down the exact method of doing the work. He specifies the tools to be used for conducting the production and also gives other instructions on the instruction cards prepared by him. 3. Route Clerk: The route clerk lays down the exact route through which each and every piece of work should move through various stages till completion. He decides the production schedule and the sequence of steps by which the production process is to move. 4. Shop Disciplinarian: He is concerned with the discipline, insubordination, violation of rules of discipline and absenteeism. All cases relating to these matters will be managed by the shop disciplinarian.

8.2.2 Foremen At Shop Floor Level (Shop Floor)

1. Gang Boss: He assembles and sets up various machines; and tools for a particular piece of work. He is in-charge of assembling line of production. 2. Speed Boss: He is concerned with the speeding of machines used for production. He keeps proper speed of the machines and see that workers complete the production work as per the schedule time. 3. Repair Boss: The repair boss looks after the proper maintenance of machines, tools and equipments required during the production process. 4. Inspector: The inspector controls quality of the products by keeping adequate check/control when the production work is in progress. The functional Organisation structure is given in the following chart:-

8.2.3 Merits of Functional Organisation Structure

1. Facilitates specialization: Functional Organisation structure facilitates division of work and specialization. Each boss has specialized knowledge of his functional area. He is in a better position to guide and help the workers. 2. Benefits of large-scale operations: Functional Organisation offers the benefit of economy of large-scale operation. In this Organisation, one administrative unit manufactures all products. The available machinery, equipment and facilities are used fully for large-scale production. 3. Facilitates effective coordination: Functional Organisation facilitates effective coordination within the function. This is possible as one boss is in-charge of a particular function and he looks after all activities, which come within that function. 4. Operational flexibility: Functional Organisation possesses operational flexibility. Necessary changes can be introduced easily to suit the needs of the situation without any adverse effect on the efficiency. 5. Ensures effective supervision: Functional Organisation facilitates effective supervision by the functional heads and foremen. Due to specialization, they concentrate on the specific functional area and also keep effective supervision on their subordinates.

8.2.4 Demerits of Functional Organisation Structure

1. Absence of unity of command: Unity of command is absent in the functional Organisation as each worker gets orders and instructions from several bosses. 2. Fixing responsibility is difficult: In functional Organisation, responsibility is difficult to fix on a specific person. This is because the responsibility itself is divided among many. 3. Unsuitable to non-manufacturing activities: Functional Organisation can be introduced in the case of manufacturing activities. However, its application to nonmanufacturing activities such as marketing, etc. has not been successful. 4. Costly: Functional Organisation is costly, as more specialists are required to be appointed. 5. Creates confusion among workers: Functional Organisation is based on specialization as function is taken as a base for dividing the work. The authority is overlapping the responsibility is divided. This confuses workers. 6. Conflicts among foremen, delays in decision-making and limited discipline within the departments are some more demerits of functional Organisation.

9. Line and Staff Organisation Structure

In the line and staff Organisation, line executives and staff (specialists) are combined together. The line executives are 'doers' whereas staff refers to experts and act as 'thinkers'. The following chart shows line and staff Organisation structure:

The line executives are concerned with the execution of plans and Policies. They do their best to achieve the organizational objectives. The staff concentrates their attention on research and planning activities. They are experts and conduct advisory functions. Staff specialists are regarded as 'thinkers" while execution function is given to line executives who are "doers". The staff is supportive to line. The staff specialists offer guidance and cooperation to line executives for achieving organizational objectives. This reduces the burden of functions on the line executives and raises overall efficiency of the Organisation. For avoiding the conflicts between line and staff, there should be clear demarcation between the line and staff functions. This avoids overlapping of functions and possible conflicts. In short, the line and staff functions are different but are supportive and can give positive results if adjusted properly i.e. by avoiding the conflicts. They suggest/recommend but have no power to command the line executive. However, their advice is normally accepted because of their status in the Organisation. According to Louis Allen, "Line refers to those positions and elements of the Organisation, which have the responsibility and authority and are accountable for accomplishment of primary objectives. Staff elements are those which have responsibility and authority for providing advice and service to the line in attainment of objectives".

9.1 Characteristics of Line and Staff Organisation

1. Planning and execution: There are two aspects of administration in this Organisation, viz., planning and execution. 2. Combining line and staff: Planning function is entrusted to staff specialists who are 'thinkers' while execution function is given to line executives who are 'doers'. The staff is supportive to line.

3. Role of authority: The line managers have authority to take decisions as they are concerned with actual production. The staff officers lack such authority. 4. Guidance from staff: The staff provides guidance and advice to line executives when asked for. Moreover, line executives may or may not act as per the guidance offered. 5. Exercising control: The staff manager has authority over subordinates working in his department. 6. Scope for specialization: There is wide scope for specialization in this Organisation as planning work is given to staff and execution work is given to line executives. 7. Possibility of conflicts: Conflicts between line and staff executives are quite common in this Organisation but can be minimized through special measures. 8. Suitability: Line and staff Organisation structure is suitable to large-scale business activities.

9.2 Merits of Line and Staff Organisation

1. Less burden on executives: Line executives get the assistance of staff specialists.This reduces the burden of tine executives. This raises overall efficiency and facilitates the growth and expansion of an enterprise. 2. Services of experts available: The benefits of services of experts are provided to line managers. Highly qualified experts are appointed and they offer guidance to line executives. 3. Sound decision-making: Line and staff Organisation facilitates sound management decisions because of the services of experts and specialists. The decisions are also taken in a democratic method i.e. in consultation with the experts. 4. Limited tension on line managers: The pressure of work of line bosses is brought down as they are concerned only with production management. 5. Benefits of specialization: There is division of work and specialization in this Organisation. Naturally, the benefits of division of work and specialization are easily available. 6. Training opportunities to employees: Better opportunities of advancement are provided to workers. The scope for learning and training for promotions are available.

9.3 Demerits of Line and Staff Organisation

1. Delay in decision-making: The process of decision-making is delayed, as line executives have to consult staff experts before finalizing the decisions. The decisions of line managers are likely to be delayed due to this lengthy procedure. 2. Buck passing among executives: The line bosses are concerned with actual execution of work. However, they depend on staff experts for guidance. If something goes

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wrong, the attempt is made to pass on the blame by one party to the other. Thus, there is shifting of responsibility or buck-passing. Conflicts between line and staff executives: In this Organisation, quarrels and conflicts between line managers and staff specialists are quite common. The line managers are generally not interested in the advice offered by experts. Secondly, specialists feel that the line bosses lack knowledge of new ideas. Such conflicts lead to bitterness. Costly Organisation: Line and staff Organisation is a costly Organisation as the line executives are supported by highly paid staff executives who are experts. All this adds to the overhead expenses and the cost of production increases. Complicated operation: This Organisation is too complicated in actual operation because of dual authority, division of functions and too much dependence on staff. The unity of command principle is violated. Internal discipline is affected adversely: The internal discipline is likely to be affected adversely due to decentralisation and division of loyalty of subordinates.

9.4 Conflict between Line and Staff Managers

One serious problem in the line and staff Organisation is the possible conflict between the line executives and staff specialists. Line executives have complaints against staff officers and staff officers have complaints against line executives.

9.5 Conflict between Line and Staff Executives.

9.6 Arguments of Line Executives against Staff Managers / Officers

1. Dilution of authority: Line executives argue that the introduction of staff managers dilutes their authority and also leads to interference in their work. They feel that their jobs become less important. 2. Stealing show: Line managers feel that the staff executives tend to steal show for the work that turns out to be successful. On the other hand, when things go wrong, they alone have to face the blame and criticism. 3. Lacks practical knowledge: Line executives argue that staff executives are not familiar with the situation where actual work is carried out. The services offered by the staff executives are rather theoretical and not practical. 4. Lacks human skills: Line executives argue that staff managers with human relations skills are rarely available. Staff presents matters mechanically. 5. Domination of staff managers: Line executives argue that staff managers always feel that they are superior as regards education and skills. They dominate line executives. This is treated as unwanted interference. 6. Easy access to top management: The staff managers work at the head office and have easy access to top level management. They try to show their superiority to top level management by making new plans and suggestions which may not be acceptable to line executives. The top management feels that the line executives are incompetent due to which the services of staff officers are required. This is a source of agony for line managers. 7. Stress on paper work: The staff executives are engaged in the paper work. In addition, they need information and various details from the line executives. As a result, there is increase in the paper work of line executives, which they resent.

9.7 Arguments of Staff Managers against Line Executives

1. Resistance to new plans and ideas: According to staff managers, the line managers usually oppose/resist new plans/ideas. They treat this as interference in their routine work. A staff manager is a professional critic. He suggests modifications, which are useful, but the suggestions are opposed as unnecessary interference. This leads to conflicts. 2. Inadequate support from line executives: Staff managers argue that line Managers do not take benefit of their services. Their services are used only as a measure of last resort. 3. Inadequate scope for the use of authority: Staff managers argue that line managers do not give importance to suggestions given by them. This reduces the scope of activities of staff managers. Moreover, the suggestions of staff managers are not binding on line executives and this affects their importance and contribution. 4. Lack of support from top management: Staff managers also feel that they do not get full support from the top management. The top management is more concerned with regular production. As a result, it gives better treatment to line bosses.

5. Limited cooperation from line executives: Staff managers argue that line executives adopt negative approach towards them even when both are working in the same Organisation with identical objectives. Line executives do not take the advice/suggestions of staff managers in the right spirit. They reject suggestions on the ground that they are not practicable even without giving fair trail. This indicates limited co-operation from line executives. 6. Supply of inadequate information: Staff managers argue that line executives do not approach them well in advance with all necessary details of the problems faced by them. They do not supply relevant information but want the solution quickly. If solution is suggested within the time limit, it is again rejected on the ground that it is not workable. This leads to dissatisfaction and conflicts. 7. Absence of authority: Staff managers feel frustrated as they offer suggestions for solving the problem through hard work and also by using their skills and experience. However, they do not have commanding authority to execute their suggestions. Matrix Organisation - Meaning

Matrix Organisation was introduced in USA in the early 1960's. It was used to solve management problems in the Aerospace industry. Matrix Organisation is a combination of two or more organisation structures. For example, Functional Organisation and Project Organisation. The organisation is divided into different functions, e.g. Purchase, Production, R & D, etc. Each function has a Functional (Departmental) Manager, e.g. Purchase Manager, Production Manager, etc. The organisation is also divided on the basis of projects e.g. Project A, Project B, etc. Each project has a Project Manager e.g. Project A Manager, Project B Manager, etc. The employee has to work under two authorities (bosses). The authority of the Functional Manager flows downwards while the authority of the Project Manager flows across (side wards). So, the authority flows downwards and across. Therefore, it is called "Matrix Organisation". An example of matrix organisation is shown in the following diagram:-

Features of Matrix Organisation

The pecularities or characteristics or features of a matrix organisation are:1. Hybrid Structure : Matrix organisation is a hybrid structure. This is so, because it is a combination of two or more organisation structures. It combines functional organisation with a project organisation. Therefore, it has the merits and demerits of both these organisation structures. 2. Functional Manager : The Functional Manager has authority over the technical (functional) aspects of the project. The responsibilities of functional manager are:i. He decides how to do the work. ii. He distributes the project work among his subordinates. iii. He looks after the operational aspects. 3. Project Manager : The Project manager has authority over the administrative aspects of the project. He has full authority over the financial and physical resources which he can use for completing the project. The responsibilities of project manager are:i. He decides what to do. ii. He is responsible for scheduling the project work. iii. He co-ordinates the activities of the different functional members. iv. He evaluates the project performance. 4. Problem of Unity of Command : In a matrix organisation, there is a problem of the unity of command. This is so, because the subordinates receive orders from two bosses viz., the Project Manager and the Functional Manager. This will result in confusion, disorder, indiscipline, inefficiency, etc. All this will reduce the productivity and profitability of the project. 5. Specialisation : In a Matrix organisation, there is a specialisation. The project manager concentrates on the administrative aspects of the project while the functional manager concentrates on the technical aspects of the project. 6. Suitability : Matrix organisation is suitable for multi-project organisations. It is mainly used by large construction companies, that construct huge residential and commercial projects in different places at the same time. Each project is looked after (handled) by a project manager. He is supported by many functional managers and employees of the company.

Advantages of Matrix Organisation

The benefits or merits or advantages of a matrix organisation are:1. Sound Decisions : In a Matrix Organisation, all decisions are taken by experts. Therefore, the decision are very good. 2. Development of Skills : It helps the employees to widen their skills. Marketing people can learn about finance, Finance people can learn about marketing, etc. 3. Top Management can concentrate on Strategic Planning : The Top Managers can spend more time on strategic planning. They can delegate all the routine, repetitive and less important work to the project managers. 4. Responds to Changes in Environment : Matrix Organisation responds to the negative changes in the environment. This is because it takes quick decisions. 5. Specialisation : In a matrix organisation, there is a specialization. The functional managers concentrate on the technical matters while the Project Manager concentrates on the administrative matters of the project. 6. Optimum Utilisation of Resources : In the matrix organisation, many projects are run at the same time. Therefore, it makes optimum use of the human and physical resources. There is no wastage of resources in a matrix organisation. 7. Motivation : In a matrix organisation, the employees work as a team. So, they are motivated to perform better. 8. Higher Efficiency : The Matrix organisation results in a higher efficiency. It gives high returns at lower costs.

Limitations of Matrix Organisation

The demerits or disadvantages or limitations of a matrix organisation are:1. Increase in Work Load : In a matrix organisation, work load is very high. The managers and employees not only have to do their regular work, but also have to manage other additional works like attending numerous meetings, etc. 2. High Operational Cost : In a matrix organisation, the operational cost is very high. This is because it involves a lot of paperwork, reports, meetings, etc. 3. Absence of Unity of Command : In a matrix organisation, there is no unity of command. This is because, each subordinate has two bosses, viz., Functional Manager and Project Manager. 4. Difficulty of Balance : In a matrix organisation, it is not easy to balance the administrative and technical matters. It is also difficult to balance the authority and responsibilities of the project manager and functional manager. 5. Power Struggle : In a matrix organisation, there may be a power struggle between the project manager and the functional manager. Each one looks after his own interest, which causes conflicts. 6. Morale : In a matrix organisation, the morale of the employees is very low. This is because they work on different projects at different times. 7. Complexity : Matrix organisation is very complex and the most difficult type of organisation.

8. Shifting of Responsibility : If the project fails, the project manager may shift the responsibility on the functional manager. That is, he will blame the functional manager for the failure. Meaning of Delegation of Authority

Delegation of authority is one vital organizational process. It is inevitable along with the expansion and growth of a business enterprise. Delegation means assigning of certain responsibilities along with the necessary authority by a superior to his subordinate managers. Delegation does not mean surrender of authority by the higher level manager. It only means transfer of certain responsibilities to subordinates and giving them the necessary authority, which is necessary to discharge the responsibility properly. Delegation is quite common in all aspects of life including business. Even in the college, the principal delegates some of his authority to the vice-principal.

In delegation, an attempt is being made to have meaningful participation and cooperation from the subordinates for achieving certain well-defined results. Due to delegation, the routine responsibilities of the superior are reduced. As a result, he concentrates on more urgent and important matters. Secondly, due to delegation, subordinate becomes responsible for certain functions transferred to him. Delegation is a tool, which a superior manager uses for sharing his work with the subordinates and thereby raising his efficiency.

Delegation is not a process of abdication. The person who delegates does not divorce himself from the responsibility and authority with which he is entrusted. He remains accountable for the overall performance and also for the performance of his subordinates. Delegation is needed when the volume of work to be done is in excess of an individual's physical and mental capacity.

Delegation involves the following three basic elements:

a. Assignment of duties to subordinates, b. Granting of authority to enable the subordinates to perform the duties assigned, and c. Creation of obligation on the part of subordinate to perform duties in an orderly manner.

Definitions of Delegation of Authority

i. ii.

iii.

According to F.C. Moore, "Delegation means assigning work to the others and giving them authority to do so." According to O. S. Miner, "Delegation takes place when one person gives another the right to perform work on his behalf and in his name and the second person accepts a corresponding duty or obligation to do that is required of him." According to Louis Allen, "Delegation is the dynamics of management, it is the process a manager follows in dividing the work assigned to him so that he performs that part which only he, because of his unique organizational placement, can perform effectively, and so that he can get others to help him with what remains."

Objectives of Delegation of Authority

1. To reduce the excessive burden on the superiors i.e., executives and managers functioning at different levels. 2. To provide opportunities of growth and self development to junior executives. 3. To create a team of experienced and matured managers for the Organisation. It acts as a technique of management and human resource development. 4. To improve individual as well as overall efficiency of the Organisation.

Process of Delegation of Authority

Delegation process involves four distinct stages. The process of delegation moves through these stages. The following figure shows the stages in the process of delegation of authority.

Four Stages In Process of Delegation of Authority

(A) Assignment of duties to subordinates Before delegating, the delegator has to decide precisely the duties which are to be delegated to the subordinate or a group of subordinates. The authority is delegated accordingly and the subordinate is told what is expected from him. The usual practice is to list the functions to be performed by the subordinate. If necessary, targets to be achieved by the subordinate are also spelt out. Subordinates may be assigned tasks either in terms of activities or results. The manager (delegator) must communicate clearly his expectations. Competent and responsible employees may be given general guidelines about what needs to be accomplished. Their less competent and responsible counter-parts need more specific guidelines. In brief, in the first stage of delegation process, duties are assigned to the subordinate.

(B) Transfer of authority to perform the duty In the second stage of delegation process, the authority is granted by the delegator to his subordinate (delegate). Authority must be delegated strictly to perform the assigned duty. The performance of duties suffers serious setback when required authority is not delegated along with the duty. In brief, the transfer of authority should be adequate considering the duties assigned to the subordinate.

(C) Acceptance of the assignment In this third stage of delegation process, the subordinate/delegate has to accept or reject the task assigned to him in the first stage along with the authority given in the second stage. If the delegates refuse, the delegator has to make fresh plan of delegation or may consider some other subordinate who is capable and is willing to accept the assignment. On the other hand, the process of delegation will move to the fourth and the last stage, if the first delegates accept the assignment of work accompanying the authority.

(D) Creation of Obligation / Accountability / Responsibility

The fourth stage in the, delegation of authority is the creation of obligation on the part of the subordinate to perform duties assigned to him in a satisfactory manner by using the authority given. When subordinate accepts a task and the authority is given, an obligation is created. He has to perform the assigned task by using the authority granted to him. A subordinate is also responsible/accountable for completing the assigned work. He is held answerable to a superior for the satisfactory performance of that work assigned. The delegator has to help his subordinate as and when necessary as he is responsible to his superior/organisation.

Advantages / Importance of Delegation of Authority

1. Relieves manager for more challenging jobs : Delegation makes it possible for the managers to distribute their workload to others. Thus, managers are relieved of routine work and they can concentrate on higher functions of management like planning, organising, controlling, etc. 2. Leads to motivation of subordinates : Subordinates are encouraged to give their best at work when they have authority with responsibility. They take more initiative and interest in the work and are also careful and cautious in their work. Delegation leads to motivation of employees and manpower development. 3. Facilitates efficiency and quick actions : Delegation saves time enabling tile subordinates to deal with the problems promptly. They can take the decisions quickly within their authority. It is not necessary to go to the superiors for routine matters. This raises the overall efficiency in an Organisation and offers better results in terms of production, turnover and profit. 4. Improves employee morale : Delegation raises the morale of subordinates as they are given duties and supporting authority. They feel that they are responsible employees. The attitude and outlook of subordinates towards work assigned becomes more constructive. 5. Develops team spirit : Due to delegation, effective communication develops between the superiors and subordinates. The subordinates are answerable to superiors and the superiors are responsible for the performance of subordinates. This brings better relations and team spirit among the superiors and subordinates 6. Maintains cordial relationships : The superiors trust subordinates and give them necessary authority. The subordinates accept their accountability and this develops cordial superior-subordinate relationships. 7. Facilitates management development : Delegation acts as a training ground for management development. It gives opportunity to subordinates to learn, to grow and to develop new qualities and skills. It builds up a reservoir of executives, which can be used as and when required. Delegation creates managers and not mere messengers. The advantages of delegation will not be available easily and automatically. They will be available only when the process of delegation moves smoothly. Problems may develop, if the delegation is not introduced with proper planning and in proper spirit. For example, the authority given to subordinate is inadequate or the subordinate is not competent to discharge

the responsibilities assigned or the superior fails to monitor the whole process of delegation effectively. In all such cases, the delegation will be ineffective and the expected advantages will not be available to the Organisation and also to concerned parties. Obstacles / Barriers to Effective Delegation of Authority

(A) Obstacles / Barriers on the Part of Manager / Superior / Delegator

1. Unwillingness of the manager to delegate authority : Some superiors/managers tend to think that they can do the job better when they themselves handle the job. The attitude that 'I can do it better myself' on the part of superior acts as an obstacle to delegation. Some managers (superiors) who are autocratic and power worshippers feel that delegation will lead to reduction of their influence in the Organisation. A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him (manager) and may be promoted. 2. Fear of competition : A manager may feel that if he has a competent subordinate and if he delegates authority to the subordinate, quite likely he will outshine him. Fear of subordinate's excellence may come in the way of delegation. 3. Lack of confidence in subordinates : A manager may hesitate to delegate authority, if he feels that his subordinate is not competent to deal with the problem and take decisions. Even fear of losing control over the subordinates acts as an obstacle to delegation. In addition, fear of being exposed due to personal shortcomings may act as an obstacle in the process of delegation. 4. Lack of ability to direct : Sometimes, a manager may experience difficulty in directing the efforts of his subordinates because of his inability to identify and communicate the essential features of his long-range plans and programmes. 5. Absence of controls that warn of coming troubles : An Organisation might not have developed the controlling techniques to know in advance the serious problems lying ahead. It may happen due to concentration of power in the hands of few people. As a result, manager may resist delegation. 6. Conservative and cautious temperament of the manager : If a manager has a conservative and over-cautious approach, there will be psychological barrier in the way of delegation. A manager avoids delegation as he feels that something may go wrong even when the instructions given are clear and the subordinates are reliable. 7. Desire to dominate subordinates : Managers (Superiors) normally, have a desire to dominate the subordinates functioning under their control. They feel that their domination will reduce if the powers are delegated to subordinates. They also feel that due to delegation, the subordinates will know their managerial deficiencies. In order to maintain their superior status and in order to dominate the subordinates, they avoid delegation itself.

(B) Obstacles / Barriers on the Part of Subordinates ( Why Subordinates Resist Delegation? )

1. Too much dependence on the manager for decisions : Some subordinates avoid responsibility even when the superior/manager is prepared to delegate authority. They want the manager to tackle problems and take decisions. A subordinate who is not confident about his performance/ability will certainly try to shirk responsibility even though his superior is prepared to delegate functions and authority. 2. Fear of criticism : Subordinates express unwillingness to accept delegated authority because of the fear of criticism in the case of mistakes. They fear that they may be criticized by others if they commit mistakes. Such subordinates have the following feeling in their mind, "Why should I stick my neck out for my boss?" 3. Lack of information : A subordinate may hesitate to accept a new assignment, when he knows that necessary information to perform the job is not likely to be made available to him. He is reluctant to accept delegated functions and authority as he feels that he will not be able to perform well due to inadequate information available. 4. Absence of positive incentives : Positive incentives like recognition of work and rewards go a long way in building up the morale of subordinates. In the absence of such incentives in the form of recognition, appreciation or monetary benefit, a subordinate may not be prepared to accept delegation of authority. 5. Absence of self-confidence : A subordinate may lack self-confidence about his ability to take quick and correct decisions. He may not like to accept new challenging functions as he lacks self-confidence. Thus, lack of self-confidence on the part of subordinates is one obstacle which comes in the way of delegation of authority. 6. Difficulty in decision-making : A subordinate may not have the skill and the expertise to take quick and correct decisions. He prefers to go to his superior (boss) and ask for his guidance or opinion. Such psychology acts as a cause for non-acceptance of delegation. A subordinate avoids delegation due to such mental tension or inferiority complex. 7. Poor superior-subordinate relations : Absence of cordial relations in between the superior and the subordinates hampers the process ofdelegation of authority. The attitude of the superior towards subordinate may not be friendly but hostile. There may be undue interference in the work assigned to the subordinate. Even the good work of subordinate may not be appreciated by the superior. Such situation creates unfavorable attitude of subordinate towards delegation. He avoids delegation as and when offered. 8. Undue interference by superior : A superior should not interfere in the duties delegated to the subordinate. He may offer guidance as and when asked for. Some superiors interfere in the work of his subordinate and try to control him often and again. In the absence of legitimate freedom, the subordinate becomes uneasy and prefers to remain away from the process of delegation. 9. Fear of being exposed : Some subordinates may have inferiority complex. They feel that they have limited capacity to accept the challenges which are bound to come out

to delegation. They feel that their inability to deal with new problems will be exposed due to delegation. This fear acts as an obstacle to delegation.

Principles of Effective Delegation of Authority

1. Knowledge of Objectives : Before delegating authority, the subordinates should be made to understand their duties and responsibilities. In addition, knowledge of objectives and policies of the enterprise should be provided to them. This will enable them to discharge their roles purposefully in the process of delegation. 2. Parity of Authority and Responsibility : This principle of delegation suggests that when authority is delegated, it should be commensurate with the responsibility of the subordinate. In fact, the authority and responsibility should be made clear to the subordinate so that he will know what he is expected to do within the powers assigned to them. There should be proper balance/parity or co-existence between the authority and responsibility. A subordinate will not function efficiently, if authority given to him is inadequate. On the other hand, if the excess authority is given, he may misuse the same. For avoiding this, the subordinates who are assigned duties should be given necessary/ adequate authority enables them to carry out their duties. 3. Unity of Command : This principle of delegation suggests that everyone should have only one boss. A subordinate should get orders and instructions from one superior and should be made accountable to one superior only. This means 'no subordinate should be held accountable to more than one superior'. When a subordinate is asked to report to more than one boss, it leads to confusion and conflict. Unity of command also removes overlapping and duplication of work. In the absence of unity of command, there will be confusion and difficulty in fixing accountability. 4. The Scalar Principle : The scalar principle of delegation maintains that there should be clear and direct lines of authority in the Organisation, running from the top to the bottom. The subordinate should know who delegates authority to him and to whom he should contact for matters beyond his authority. They (subordinates) should also know what is expected from them. This principle justifies establishment of the hierarchical structure within the Organisation. 5. Clarity of Delegation : The principle of clarity of delegation suggests that while delegating authority to subordinates, they should be made to understand the limits of authority so that they know the area of their operation and the extent of freedom of action available to them. Such clarity guides subordinates while performing their jobs. 6. Absoluteness of Responsibility : This principle of delegation suggests that it is only the authority which is delegated and not the responsibility.The responsibility is absolute and remains with the superior. He cannot run away from the same even after delegation. Even when the manager delegates authority to his subordinate, he remains fully accountable to his superiors because responsibility cannot be divided between a superior and his subordinate. No superior can delegate responsibilities for the acts of his subordinates. He is responsible for the acts and omissions of his subordinates.

7. Use of Exception Principle : This principle of delegation indicates that when authority is delegated, it is expected that the subordinate will exercise his own judgment and take decisions within the purview of his authority. He is to be given adequate freedom to operate within his authority even at the cost of mistakes. He should refer the problems to the top level management only when he is unable to take decisions. Unnecessary interference in the work of delegates should be avoided. This normal rule can be given up under exceptional circumstances. Here, the superior can interfere in the work of his subordinate and even withdraw the delegated duties and authority. The superior takes this decision under exceptional circumstances. 8. Completeness of Delegation : This principle of delegation suggests that there should be completeness in the process of delegation. The process of delegation should be taken to its logical end. Otherwise, there will be confusion of authority and accountability. 9. Effective Communication Support System : This principle suggests that there should be continuous flow of information between the superior and the subordinates with a view to furnishing relevant information to subordinate for decision-making. This helps him to take proper decisions and also to interpret properly the authority delegated to him. Delegation system may not work smoothly in the absence of effective communication between the superior and subordinates. 10. Reward for Effective Delegation : This principle suggests that effective delegation and successful assumption of authority should be rewarded. This will facilitate fuller delegation and effective assumption of authority within the Organisation. Reward for effective delegation will provide favorable environmental climate for its fair introduction. Decentralisation of authority is another concept closely related to centralisation. The delegation of authority by an individual manager is closely related to organizations Decentralisation of authority.

Decentralisation of authority means conscious/systematic effort to bring dispersal (spreading) of decision making power to the lower levels of the Organisation. In decentralisation, only

broad powers will be reserved at the top level. Such powers include power to plan, organise, direct and control and maximum powers will delegated to the authority at the lower level. Decentralisation is just opposite to centralisation. Under centralisation, authority is mostly concentrated at the top level management. Centralisation and decentralisation are mutually dependent. In a large Organisation, the process of centralisation and decentralisation co-exist and reinforce each other. Decentralisation is a natural development when the Organisation grows large and complex. Here, centralisation of management is neither possible nor desirable. The only practical solution is to divide the Organisation into decision-making units and giving the powers to take routine types of decisions in regard to the functioning of those units. This is decentralisation in practice. In decentralisation, systematic efforts are being made to delegate to the lowest levels all authority except that which can only be exercised at the central points. Decentralisation is delegation not from one individual to another but delegation to all units in an Organisation. A company is said to be highly decentralized, when the delegation is company-wide in all functions and divisions of the company and also for a wide range of authorities and responsibilities. Decentralisation is different from centralisation as in centralisation, the decision making power is in the hands of one person only. We observe such centralisation in sole trading concerns. It is also noted that centralisation is one feature of traditional management in India while decentralisation is a normal practice under professional management.

Definitions of Decentralisation

According to Henry Fayol, "Everything that goes to increase the importance of the subordinates role is decentralisation, everything that goes to reduce it is centralisation." According to Louis Allen, "decentralisation refers to the systematic effort to delegate to the lowest levels all authority except that which can only be exercised at central point." This definition makes it clear that even in decentralisation, delegation to the lowest levels is not complete as the basic functions in the management process are centralized.

Advantages / Importance of Decentralization

1. Decentralisation helps to improve the quality of decisions/decision-making at the top level management : Decentralisation of authority among other executives at all levels in the Organisation relieves the top executive of the excessive burden saving his valuable time, which he can devote to more important and long-term problems. This is bound to improve the quality of his decisions regarding such problems. 2. Decentralisation facilitates diversification of activities : It is a matter of common experience that an Organisation with departmentation on the basis of products

3.

4.

5.

6.

facilitates diversification of products or market even when the authority is centralized. Decentralisation takes this process a step further. Managers of semi-autonomous product divisions are able to utilise their skills and experienced judgment. This has a bearing on their products and the market. The enterprise also attains maximum possible growth. Decentralisation is beneficial when new product lines or new activities are introduced in an Organisation. Such policy creates self sufficient units under overall co-ordination of top level management. Decentralisation encourages development of managerial personnel : Most companies find lack of managerial talent as a limiting factor in their growth. A company cannot expand effectively beyond the scope and abilities of its managerial personnel. Capable managers, however, can be developed only by giving managerial jobs to suitable persons and delegating them the authority to make important decisions. Such wide exposure gives them opportunity to grow and to have self development for higher positions. The more talented and capable persons will learn and improve and qualify themselves for higher managerial positions. Only a decentralized Organisation can offer such opportunities to future managers without involving additional expenditure. A decentralized Organisation also allows its managers adequate freedom to try new ideas, methods or techniques. In brief, decentralisation creates a team of competent managers at the disposal of the company. Decentralisation improves motivation : Research conducted by social scientists has proved that the Organisation structure itself exercises some influence on the motivation of the people working within it. An Organisation structure which facilitates delegation, communication and participation also provides greater motivation to its managers for higher productivity. Decentralized Organisation structure is most favorable for raising the morale and motivation of subordinates which is visible through better work performance. Decentralisation makes decision-making quicker and better : Since decisions do not have to be referred up through the hierarchy, quicker and better decisions at lower levels can be taken. Divisional heads are motivated to make such decisions that will create the maximum profit because they are held responsible for the effect of their decisions on profits. Thus decentralisation facilitates quick and result-oriented decisions by concerned persons. Decentralisation provides opportunity to learn by doing : Decentralisation provides a positive climate where there is freedom to make decisions, freedom to use judgment and freedom to act. It gives practical training to middle level managers and facilitates management development at the enterprise level.

Limitations of Decentralization

1. Decentralisation may lead to the problem of co-ordination at the level of an enterprise as the decision-making authority is not concentrated.

2. Decentralisation may lead to inconsistencies (i.e. absence of uniformity) at the Organisation level. For example, uniform policies or procedures may not be followed for the same type of work in different divisions. 3. Decentralisation is costly as it raises administrative expenses on account of requirement of trained personnel to accept authority at lower levels. Even the services of such highly paid manpower may not be utilised fully, particularly in small organisations. 4. Introduction of decentralisation may be difficult or may not be practicable in small concerns where product lines are not broad enough for the creation of autonomous units for administrative purposes. 5. Decentralisation creates special problems particularly when the enterprise is facing number of uncertainties or emergency situations. The decision-making process gets delayed and even correct decisions as per the changing situations may not be possible.