Business Communication English

BUSINESS COMMUNICATION
AND MANAGEMENT
UNITS
CONTENTS
PAGE NO
II
KINDS OF BUSINESS LETTERS
37
III
NATURE AND SCOPE OF

MANAGEMENT
90
IV
ORGANISATION
129
STAFFING
162
PAPER - IV -Main
BUSINESS COMMUNICATION AND MANAGEMENT
UNIT - I
Business Communication - Meaning - Objectives Effective Business Letter - Sources of Communication - Layout
of Business Letter - Kinds of Business Letter.
UNIT - II
Various Types of Business Letter - Letter of Enquiry Order and Complaints - Circular - Status Enquiry - Collection
Letter - Bank Correspondence - Company Correspondence Correspondence with Shareholders.
UNIT - III
Nature and Scope of Management - Functions of
Management - Scientific Management - Planning - Importance
of Planning - Forecasting.
UNIT - IV
Organisation - Nature and Importance - Leading - Nature
and Purpose of Directing - Controlling - Co-ordination Meaning and Types of Control.
UNIT - V
Nature and Purpose of Staffing - Manpower Planning Recruitments - Selection - Placement and Induction, Benefits,
Scope, Types and Methods of Training.
BLOCK PLAN (CONTENT)

UNIT I BUSINESS COMMUNICATION
1:0
Introduction
1:1
Meaning
1:2
Objectives of communication
1:3
Communication Process
1:4
Channels or Types of Communication.
1:5
Barriers to Communication
1:6
Essentials of Effective Business letter
1:7
The Layout and Design of a Business Letter
1:8
Kinds of Business Letters
UNIT II KINDS OF BUSINESS LETTERS
2:1
Letter of Inquiry and Reply
2:2
Orders-Their Execution and Cancellation
2.3
Claim, Complaints and Settlement of Accounts
2.4
Circular Letters
2:5
Status Inquiries
2:6
Collection Letter
2:7
Banking Correspondence
2:8
Correspondence of a Company Secretary
UNIT III NATURE AND SCOPE OF MANAGEMENT
3:1
Management
3:2
Planning
3:3
Forecasting
UNIT IV ORGANIZATION
4:1
Organization
4:2
Leadership
4:3
Directing
4:4
Controlling
4:5
Co ordination
UNIT V STAFFING
5:1
Staffing
5:2
Manpower planning
5:3
Recruitment
5:4
Selection procedure
5:5
Placement
5:6
Induction
5:7
Training
3
BLOCK INTRODUCTION
We are in the block of course Four - Business
Communication and Management. In this block we will discuss
about the concept of Business Communication, Kinds of Business
Letters, Business Management, Organisation and Staffing.
In the first unit you are going to learn about Business
Communication, process of communication, types of
communication and barriers to communication.
In the second unit we are going to discuss about the kinds of
business letters like Letter of Inquiry and Reply, Orders-Their
Execution and Cancellation, Claim, Complaints and Settlement of
Accounts, Circular Letters, Status Inquiries, Collection Letter,
Banking Correspondence, Correspondence of a Company

Secretary.
In the third unit you will get the clear idea about management,
planning and forecasting.
In the fourth unit of this block you are going to explore about
organisation. We deal about directing, controlling and co-ordination.
In the fifth unit you will acquire the knowledge on the area
of staffing. This chapter contains recuritment, selection, placement,
induction and training.
UNIT I BUSINESS COMMUNICATION

UNIT STRUCTURE
1:0 Introduction
1:1 Meaning
1:2 Objectives of communication
1:3 Communication Process
1:4 Channels or Types of Communication.
1:5 Barriers to Communication
1:6 Essentials of Effective Business letter
1:7 The Layout and Design of a Business Letter
1:8 Kinds of Business Letters
SELF- ASSESSMENT QUESTIONS: I

1:9 Summary
Unit Questions
Recommendations for further readings
Answers of Self-Assessment Questions
UNIT - I
1:0 INTRODUCTION
The word Communication is derived from the Latin
word communico which means To share. It is the act of
sharing or imparting a share of anything. In its vital sense, it
means a sharing of ideas and feelings in a mood of mutual
understanding. It is a two-way process in which a speaker
must have a listener to share the experience.
Communication is the tool with which we exercise
influence on others, bring about changes in the attitudes and
views of our associates, motivate them and establish and
maintain relations with them. Without communication there
would not be any interaction between persons. Hence, there
cannot be a Government or society without
communication.
The ability of communication depends upon the
advancement of the society he lives. Among human beings,
the more civilized and
advance groups have higher communication ability than the less
advanced groups. It is
found that about 75% of the effective hours of a man is being
spent on communication i.e., speaking, writing, listening, reading etc.
1:1 Meaning
Communication is the act of influencing and inducing
others to interpret an idea in the manner intended by the
speaker or writer. Communication is an exchange of facts,
ideas, opinions or emotions by two or more persons. It is the
process by which information is transmitted between
individuals and/or organisations so that an understanding
6
response results. We shall now see some of the important

definitions given by eminent authorities on the subject.
Definition
Definition of W.H.Newman and C.F.Summer Jr
Communication is a exchange of facts, ideas, opinions or
emotions by two or more persons.
Definition of Fred G.Meyer.
According to Fred G.Meyer, Communication is the
intercourse by words, letters or messages, intercourse of
thoughts or opinions. It is the act of making ones ideas and
opinions known to others.
1:2 Objectives of communication
Communication is a process through which different
persons are connected to each other in such a manner to
achieve a common objective. Without communication, group
activity is impossible. It helps the members to co-ordinate
with each other, exchange their ideas and thereby to make
progress.
1.
Information:
One of the important objectives of communication is

passing or receiving information about a particular fact or
circumstance. Every organisation whether a small or large, a
complex or a simple require information which is required to
be communicated. Top-level management personnel require
complete, accurate and precise information to plan and
organise. Employees become very efficient and responsible
if they know well about the various aspects of an
enterprise. It can be done either through spoken or written
language or by using any other system of signs. Information
required for daily work can be given orally. If large groups
have to be informed, a meeting may be called.
7
Information that are required for the organisation are

normally obtained from the sources like old files, personal
observation, Radio, TV, Cinema, Newspapers, Periodicals,
Pamphlets, Government publications, Chambers of
Commerce, meetings, seminars and conferences, personal
interviews with people, questionnaire and trade fairs and
exhibitions.
2.
Advice:
Advice is also a kind of information. It means opinion

given as to the action to be taken. Advice is normally given to
a person either to influence his opinion or his behaviour. It
may prove helpful, but it may also lead to disaster. So to make
advice effective, while offering advice, the adviser should keep
the following points in mind:
1. Advice should be related to aspecific piece of
work.
2. It should meet the needs of the recipient.
3. It should not make the recipient to feel inferior.
4. The adviser should make the recipient to feel that
he is being advised for his own betterment.
3.
Order:
Order is an authoritative communication. Orders are

absolutely necessary for any organisation irrespective of its
nature and size. It a directive to somebody, normally a
subordinate, to do something, to alter the course of something
he has already done, or not to do something. An order to be
effective1. Should be clear and complete,
2. Should be given in a friendly manner,
3. Its execution should be possible.
8
4.
Suggestion:
The term suggestion means proposing something for

acceptance or rejection. Communication is used to convey
suggestion or ideas. This is being constantly done in all human
groups. Someone or the other is making suggestions and other
react to them . This happens in any social group like a family,
office, factory, State, Nation etc. Effective communication
promotes the acceptance and trial of good suggestions.
Subordinates normally give suggestions. This is because, they
are the ones who are actually involved in the work and have
a better understanding of the shortcomings and can make
useful suggestions for improvements. That is why, in big
concerns suggestions are collected at regular intervals by
means of a suggestion box. Such suggestions are known as
upward communication.
5.
Persuasion:
Including, compelling or promoting a person to act

mostly in a positive way is known as persuasion. Persuasion
is an important
objective of communication. Management
try to persuade their workers to put in their best effort; sellers
persuade their customers to buy etc. It takes place through
some kind of communication. Persuasion is more easily done
by a
person who-enjoys respect and confidence of those
whom he wishes to persuade. However, if persuasion is to be
effective, they must not be conscious of being persuaded.
6. Education:
Education involves imparting instruction, character
building, enriching mental faculties, giving training to human
beings etc. It aims at widening the knowledge and
improving skills. It is carried on at various levels of
management namely, top level, employees level and at the
level of outside public. Employees are trained essentially by
communication. All education takes place by means of
communication.
9
7.
Warning:
Warning is a forceful means of communication. It may

be given orally or in writing. Very often, we come across
notices like No smoking, Beware of dogs, Danger etc.
These are some warnings or cautions. In offices and factories,
higher officials give warnings to their
subordinates, by
issue of memos.
8.
Motivation:
Inspiring the interest in their job in the minds of the

employees in known as motivation. If the people are
adequately motivated, they will have high morale and this will
be low if the level of motivation is low. Low morale is the
basic cause for indiscipline. Motivation determines the
behaviour of a person to a greater extent. In motivation,
employees are motivated in such a manner to work willingly
and eagerly. A motivated worker does not need much
supervision.
9.
Counseling:
Counseling is done by a man of greater skill or

knowledge on some specific subject and he offers his counsel
without any personal interest. Companies, which are interested in their employees welfare, have centres to counsel their
employees. It is very much similar to giving advice. However,
there are some differences between the two also. They arei)
Counseling is objective and impersonal,

whereas advice is personal touch.
ii)
Counsel is almost professional, whereas

advice is not so, and
iii).
Counsel is eagerly sought, whereas advice

is very often unwelcome.
10
10.
Morale Boosting:
Morale is the term usually applied to armed forces

during war time and to sports and athletic teams. It refers to
team spirit and co-operation of people for a common purpose.
Its importance has been realised by the management only
recently. The management feels that if the morale is high,
production would be higher and on the other hand if it were
low, the production would also be low. It is already stated
that motivation and morale are inter-connected and dependant
on each other. If the workers are highly motivated, morale is
also said to be high. On the other hand, if the degree of
motivation is low, the morale is also said to be low.
11.
Appreciation:
Praising of initiative, good effort and work by

employees is known as appreciation. It is very useful for
creating a good attitude. It may be conveyed orally or in
writing. If given publicity, it will have better effect.
1:3 COMMUNICATION PROCESS
Communication is a process whereby one person or one
group conveys some information to another person or to
another social group. Communication is a social process for
exchanging information and establishing understanding
between two or more parties. Conceptually, communication
is seen as a two-way process by which people communicate
with one another. The sender, who creates a message designed
to elicit a specific response from the receiver, initiates
communication. The receiver interprets the message according
to his own understanding and sends a message back to the
sender. If the purpose of the sender and the response of the
receiver are inconsistent, the communication process will fail,
and the sender may wish to initiate the process again with
some modifications to the message. Thus, the nature of
communication is considered as a continuous, inter-personal
process.
11
As shown in the following figure, the sender of the

communication starts with and idea to be shared with the
receiver. Using a set of encoding skills, the sender translates
the idea into a transmittable message. Employing encoding
skills, the receiver converts the idea into a feedback message
to the sender. The sender now uses decoding skills to translate
the feedback and compares that with the original idea. The
sender determines whether the message was properly received
and understood. Often, understanding is not achieved and the
sender must try again. The communication process often
breaks down because the process is replete with barriers to
communication.
1:4 CHANNELS OR TYPES OF COMMUNICATION.
Types of communication can be discussed under the
following two broad heads.
1. On the basis of organisational structure:
1. Formal Communication, and
2. Informal Communication.
2. On the basis of media used:
1. Written Communication, and
2. Oral Communication
1.
Organisational Structure
On the basis of organisational structure,

communication can be further classified into two namely,
1.
2.
Formal Communication, and

Informal Communication
We shall now describe them briefly.

1.
Formal Communication:
Formal communication takes place via formal channels

of the organisational structure established by the management.
These channels are deliberately created for regulating the
communication flow and to link various parts of the
12
organisation. They are helpful for performing functions like

planning, decision-making, co-ordination and control. In a
formal communication system, matters with regard to who
should communicate, what, when and how to be
communicated and to whom to be communicated are all clearly
defined. The formal organisation chart describes the formal
lines of authority, power, responsibility and accountability
of organisational members. All these relationships involve
communication. Formal communications are in writing. There
are three forms of formal communication namely
1. Downward,
2. Upward, and
3. Horizontal.
1.
Downward Communication:
Communication is said to be downward when it moves

from the top to the bottom. Downward channels are used for
passing on managerial decisions, plans, policies and
programmes to subordinates down the line for their
understanding and implementation. Downward
communications are used by the superiors to convey their
orders,
instructions and directions to their subordinates.
In the words of D.Katz and R.L.Kahn, the purpose of
downward communication are to1.
Give job instructions.
2.
Create an understanding of the work and

its relations with other tasks.
3.
Inform about procedures.
4.
Inform subordinates about their

performance.
5.
Indoctrinate the workers to

organisational goals.
13
However, downward communication suffers from

certain drawbacks. They are..
1.
It develops an authoritative atmosphere

that might be detrimental to morale.
2.
As information passes through the

various levels of hierarchy, it might be
distorted, misinterpreted etc.,
2. Upward Communication:
Communication is said to be upward when it flows from
the subordinates to the top management. Upward
communication is used by subordinates for transmitting
information, ideas, views and requests to their superiors on
matters relating to their jobs, responsibilities etc.,. Upward
communications are also used to convey views, suggestions,
grievances and problems of subordinates to their superiors.
It enables the subordinates to communicate to the superiors
the progress of the work and response to the work assigned to
them. Upward communication may be oral or written. It also
enables the management to know he extent to which the subordinates understand the policies and programmes of the organisation.
3. Horizontal Communication:
Communication is horizontal when it flows between
individuals at the same operational level i.e.,. between two
departmental heads. The
purpose of the horizontal
communication is to enable managers and others of the same
rank to interact on important matters, to exchange information and co-ordinate their activities without referring all
matters to the top level management.
14
2. Informal Communication
Informal Communication is free from all the formalities
of formal communication. It is based on the informal
relationship among the members of the organisation. Informal
communication is usually oral and may be conveyed by a
simple gesture, glance, nod or smile. The informal relationship
that supplements the formal organisational relationship is
referred to as the grapevine. According to H.Koontz and
ODonnel,
the grapevine, of course, thrives on information not
openly available to the entire group, whether because it is
regarded as confidential, or because formal lines of communication are inadequate to disperse it, or because it is of
the kind that would never be formally disclosed.
Informal communications are made by members of the
organisation to transfer information both on the matters of
task related and non-task related. These communications are
free from any trappings of authority and status differentials.
Informal communications often serve as supplement to formal
communications. Managers and others may sometimes pass
on information informally which they would not like to
transfer formally for strategic and practical reasons.
II.
Media Used:
On the basis of media used, communication can be

classified into four namely
1.
Oral communication
2.
Written Communication
3.
Non-verbal Communication and
4.
Audio-Visual Communication
15
1. Oral Communication
Oral communication refers to face to face
communication. It offers interchange of ideas at the personnel
level. There can be questions and answers . The sender and
receiver of the message are in direct contact. If the listener does
not understand the message, he can ask for a clarification or
raise questions and get the answers. If matters are to be conveyed
within an organisation, oral communication is considered as the
best as well as the cheapest method of communication.
Especially, it is of vital importance in handling difficult or
complicated situations.
Merits of Oral Communication
Merits of oral communication are as follows:
1.
It is economical when compared to written
communication.
2.
It is more flexible and can be effectively
combined with gesture and other expressions.
3.
It is more effective on account of direct
contact between the communicator and
communicatee.
4.
It leads to better understanding because
response to the message can be obtained on
the spot, and doubts, clarifications etc. Can
also be removed quickly.
5.
It is faster and saves time.
Demerits of Oral Communication
Oral communication has certain demerits. They are:
1.
It is not suitable in cases where the message
is long and complicated, when the audience
is large and when there is no need for
interaction.
2.
It does not provide any record for future
reference.
16
3.
4.
5.
2.
It is time consuming and costly.

It cannot be used as a communication media
where people scattered over a wide area.
It can be irritating and wasteful when the
persons involved are poor in talking skills.
Written Communication
Written communication, on the other hand, is very wide

in its scope and covers entire paper work relating to all kinds of
transactions, agreements, proposals etc,. Infact, the main work
of any office is written communication. Written communication
though has a place inside the organisation, it is of paramount
importance in conveying messages to the external world. Though
modern devices such as telephone etc. have lessened the
dependence on writing, it still serves as the main channel for all
the business transactions. This is because, a written communication can carry assurance of transactions, confirm the dealing
and form a reliable record for future reference. Besides, it is
the cheapest method of contacting the external world. Hence,
it saves money as well as time. Moreover, people place more
reliance in pen than in the tongue.
Merits of Written Communication:
There are certain obvious advantages in written
communication.
1.
2.
3.
4.
5.
Letters or written communications can be kept

as a legal record.
They can be retained for purpose of future
reference.
They are formulated more carefully than oral
communication.
They can save money and time.
The written communication is used for all
practical purposes in every organisation.
17
Limitations of Written Communication:

A written communication, though has many points to its
credit, is not an unmixed blessing. It too has certain definite
limitations. It is not suitable under all circumstances. The
following are the situations in which a written communication
is unsuitable.
1. Complicated Matters:
Complicated or difficult matters cannot be handled
through written communication.
2. Confidential Matters :
Confidential matters cannot be reduced to writing
3. Instructions and Clarifications:
Instructions to a subordinate cab be best given orally
than in
writhing. If the subordinate seeks any clarification,
he can get it at once.
4. Assessing the Reaction:
The reaction of the receiver can be best assessed only in a
face to face communication.
5. For Expressing the Feelings:
When two persons are talking, many matters can be said
expressly. But many matters are left unsaid or said by
implication i.e. understood. This is impossible through a written
communication.
3. Non-verbal Communication
All the communication that occurs in between the people
in an organisation may not be spoken, heard, written or read. In
other words, all the communication is not verbal. Some may be
non-verbal i. e. unwritten and unspoken. The most 5 important
aspect in communication is to hear what is nt being said.
Sometimes , the non-verbal message also helps in carrying a
18
verbal message. E.g. smiling while greeting your colleague.

Mostly, non-verbal messages are spontaneous. However, it does
not mean that they are less important. Then on-verbal communication includes the pitch and tone of the voices, body
movement, physical appearance, time, touch, space and territory.
The common types of non-verbal communication in business
are detailed as shown below.
1.Body Movement:
Body movement as a media of communication can be
discussed under three heads namely,
(i)
Facial expression,
(ii) Gestures, and
(iii) Body stance.
i) Facial Expression:
Successful communicators use facial expression as a very
effective media of communication. The most expressive part of
human body is face-especially eyes. Eye contact and eye
movements tell a lot about a person. Hence, normally receiver
of oral communication give much attention to facial expression
while receiving the message. This is because it will give a lot
of information about the inner feelings of the communicatee,
which cant be understood otherwise. However, if a subordinate
committed a serious mistake , executive may show anger on his
face. If this is the case the subordinates may feel very bad and
act indifferently. So most of the executives now -a - days learnt
to scold the subordinate with a feeling of concern for him. This
type of approach motivates the subordinates to improve their
work performance.
ii) Gestures:
Gesture is a motion of the body or limbs. It is an action
intended to express the idea of feeling or to enforce an argument.
Gesture includes hand and upper body movements. They
provide a lot of important information to face- to - face
conversations. They are used to reinforce your verbal message.
19
iii) Body stance:

Body stance is another form of non-other communication.
It includes posture of standing, placement of arms and legs,
distribution of weight etc. By seeing the standing position of a
person, one can understand whether he is interested in the talk
or feel very bore etc. For example, leaning slightly towards the
communicator would be taken as a sign of interest and
involvement in the talk, whereas leaning back might be taken as
a sign of boredom.
2. Physical Appearance:
Physical appearance of a person is important for creating
a good impression. This is because attractive people tend to be
seen as more intelligent and more likeable than unattractive
people are. So they can earn more. One can not change all of
his physical features. Some are changeable and others not.
However, understanding the importance of physical appearance
can help any body to emphasise their strong points.
Ones clothing, Jewellery, furnishings at home and office
provide information about their value, taste, status, age etc.
Hence, we should give due weightage to these aspects also to
get a good appearance.
3. Voice Qualities:
No one speaks in single tone i.e. in an unvaried pitch of
the voice. Voice qualities include volume, speed, pitch, tone,
and accent. They carry both intentional as well as unintentional
messages.
Based on the pitch of the voice, the circumstance when it
was conveyed etc., same sentence might carry different meanings.
For e. g. while answering the question who was late? Say you
were late, the
emphasis is given to the word you i.e. the
answer here is you for the question who was late? Whereas while
responding to the other persons denial of being late say you
20
were late, emphasis is given to were. However ,while stressing

how late the person was, say you were late emphasis is given
to the word late.
4. Space and Territory:
Different types of communication occur at different
distances. Competent communicators determine their own
personal space needs and those of others. They make the
necessary adjustments to facilitate achieving his objective while
communicating with people who prefer more or less space.
Edward T. Hall in his work, The Hidden Dimension has
stated that the psychologists have identified four zones within
which people interact.
i)
Intimate Zone:
Intimate zone extends from physical contact to about 18

inches where all your body movements occur. This is the area
in which you move throughout the day. It is an area normally
reserved for close, intimate interactions. Business associates
typically enter this space infrequently and only briefly perhaps
to shake hands or pat someone on the back
ii)
Personal Zone:
This Zone, extending from 18 inches to about 4 feet, is
where conversation with close friends and colleagues takes place.
Unlike inter action in the intimate zone, normal talking is the
frequent in the personal zone. Some, but not a great deal of,
business interaction occurs here. For example, business launches
typically occur in this zone.
.
iii) Social Zone:
Social zone extends from 4 feet to 12 feet. This is the
zone where most business exchanges occur. Informal business
conferences and staff meetings occur within this space.
21
iv)
Public Zone :
The public zone extends from 12 feet to as far as the eye
can see and the ear can hear. This is the most formal zone, and
the least significant interactions occur here. Because of the great
distance, communication in the public zone is often one way, as
from a speaker to a large audience.
4.
Audio- visual communication
Audio-visual communication uses the methods that

are seen and heard. It makes use of short films, slides, video
tapes, telecasts etc. Examples are small advertisement films, or
documentary films related to social issues etc. Screened just
before the main picture.
Audio-visual communication combines both sight and
sound to attract the attention of the communicatee. If it is of
only visual communication, people may just casually look at it
and forget afterwards. But if audio is also combined with visual
aids, the message conveyed will be retained much longer than
through other media. It is most suitable for mass publicity, propaganda and mass education.
1:5 BARRIERS TO COMMUNICATION
Communications fail due to various reasons.
Sometimes,
subordinates may not be receptive. Sometimes,
the superiors lack in their expression. Besides, some other
barriers may also come into operation. The various barriers to
communication can be discussed as below.
1.
Perception:
An individuals view of reality is known as perception.

Two individuals do not see things exactly alike. People differ
greatly in the way they perceive things and events. Even a single
individual has different perceptual styles depending on time and
circumstances.
22
Hodgetts say that, the senders meaning and the

receivers interaction are not always identical, but it is not
necessary that they be so. This is the basic barrier to
communication.
2.
Semantic or Language Barriers:
Language serves as the basis for the communication. It is

the medium through which views are conveyed. Sender should
select the words and construct the sentences carefully. Words
that are used to convey messages have several meanings. The
sender selects the words as per his own frame of reference and
which he thinks will convey the meaning he proposes to
communicate. On the other hand, the receiver reads or listens to
the message and interprets it within his own frame of reference.
As people vary in their experience, knowledge of the language
etc., there is a possibility of semantic distortions. Thus, semantic
difficulties come in the way of clear understanding.
3.
Perfunctory Attention:
If receiver pays very little attention to the message,

communication in the sense of transfer of information and
understanding will fail. When the employee is pre-occupied with
a number of problems, sender faces such problem. In this case,
employee should be made to keep away his problems and listen
to the message. If this is not done, he cannot proceed the
communication further.
4.
Status:
One of the basic barriers to communication arises due to

status relationship that exits in every organisation. The superior
subordinate relationships in the organisational structure inhabit
free movement of information and understanding, exchange of
ideas, views etc.. Generally those who receive communication
judge the sender and naturally senders status has its own weight.
For e.g., any communication received from the management is
viewed as troublesome by trade unions; any message from
workers will be discounted by management etc.
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5.
Resistance to Change:
Generally, people resist changes. Resistance to changes

will be strong when the proposed change is great. Managers
should take all possible steps to overcome such resistance to
change. One method of overcoming resistance is explaining
the subordinates as to how they will be benefited by such changes.
6.
Organisational Structure:
Effective communication depends greatly sound

organisational structure. If the organisational policies, rules and
procedures are not clear, smooth flow of communication cannot
be ensured. If the organisational structure has several layers of
management, it may result in delay and distortion in
communication. Lack of facilities that ensures effective
communication is another barrier that comes in the way of clear
understanding.
7.
Premature Evaluation:
Premature evaluation refers to a tendency of forming a

judgement before listening to the message fully. Premature
evaluation misrepresents the message. Thus, it acts as a barrier
to effective communication.
8.
Emotional Attitude:
Emotional attitude of the parties involved in the exchange

of information is another barrier to effective communication.
When an individual is emotional, he may not be able to know
the frame of mind of other person.
9.
Failure to communicate:
Failure to communicate is a pervasive barrier to

communication. The communicator may be lazy or it may be
assumed that everything is known to all. Sometimes, failure to
communicate may also arise from an intention to embarrass the
receiver or from complexes like superiority, inferiority or due
to status difference, Communication also has no impact on those
who are not willing to listen / read the message.
24
10.
Other Barriers:
Other barriers include faulty translation, badly expressed

messages, loss by transmission, lack of attention, unclarified
assumption, inadequate adjustment period and communication
distrust.
1:6 ESSENTIALS OF EFFECTIVE BUSINESS LETTER
All type of business letter must confirm to certain well
recognised principles and should possess certain essential
qualities. Business letters devoid of universally accepted
requisites will prove ineffective.
The essential of a business letter can be analysed under
the following heads.
(i)
The structure of a business letter.
The structure of a business letter refers to the proper

arrangement of the various parts or the different elements of
a business letter. To give the letter the right look and to ensure
clarity and convenience, the letter should consist of the following components.
1.
The Heading.
2.
The Date.
3.
The Inside Address.
4.
The Salutation.
5.
The Body of the letter.
6.
The complimentary Close.
7.
The Signature.
Each of these part has a definite place and position in
all business letters.
1.
The Heading
Almost all business firms use printed letterheads for their

correspondence. Generally, the name and the address are
printed on the top of the letterhead but it frequently gives
25
other particulars such as the description of business, the telephone number, the telegraphic address, the telex number, Fax
number, E-mail address etc. The letterhead of the large concern
may give the addresses of its branches and that of a branch
may give the address of its head office. To give a balanced
appearance to the letter, nearly one fifth of the total space
should normally be used for the heading .
RANJAN PUBLICATIONS,
17, Aminjikarai, R.S.N
Telephone :28 64 89 36
E-mail: ranjan@gmail.co
2.
The date
This gives the date of the month and the year. It appears
on the right hand side of the letterhead about five spaces below
the heading. Some letterheads contain a printed line
indicating where the date should be typed. In England, the
usual method of indicating the date is to state it in original
numbers such as Ist March 2000. In U.S.A., it is usual to state
the numbers of month before the date in cardinal numbers
e.g. March 1, 2000. Some people omit the comma after the
date and the full stop after the year, but it is generally
considered correct to use them.
The practice of writing the date as 1-3-2008 or 1/3/2008
should be avoided because it would give rise to errors,
particularly in foreign correspondence. For example, in U.S.A.
1/3/2008 would been January 3rd, 2008 while in England and
in other Common Wealth Countries it would mean as 1st
March 2008.
26
3.
The Inside Address
This gives the name and full address of the person, firm
or company to whom the letter is written. It is one of the
essential ingredients of the physical make up of the business
letter. It is generally typed two lines below the date line and
above the salutation on the left-hand margin of the letterhead.
Importance of Inside Address
The typing of inside address is highly useful in many
ways. They are:
4.
1.
This will provide the despatch clerk all the

particulars that are necessary for writing
the address on the envelope.
2.
If window type envelops are used, the inside

address is a must.
3.
Since it is also imprinted on the office copy

of the letter, it will be easy to identify the
number and the nature of the letters sent out
to specified parties.
The Salutation
The salutation is the similar to greeting like good

morning, good day, good afternoon etc. used by us in
social life. It is written about three spaces below the inside
address.
The form of salutation depends on the personal relation
between the writer and the address as well as upon the letters
rank or position.
The following are the usual forms used in business letters.
Sir, Dear Sir, Dear Sirs, Gentlemen, Dear Mr. Raveen,
Madam, Mesdames etc.
27
5.
The Body of The Letter
This is the most important part of the letter. The ultimate

object of a business letter is to convey a message. The body
of the letter contains the principal message to be conveyed to
the other party. Hence the other parts, though necessary, are
only subordinates to the body of the letter. It is no exaggeration
to say that the whole of this book deals with the writing of the
body of different types of letters. Therefore, the writer should
take utmost care to set out the matter clearly. The matter
should be properly arranged and presented in a logical manner.
In this connection, Mr.L.Gartside suggests the
following points which the reader should always bear in his
mind.
1.
2.
3.
6.
Write simply, clearly, politely, grammatically

and to the point.
Paragraph correctly confining each
paragraph to one topic.
Avoid stereo typed phrases and commercials.
The Complementary Close or Subscription
The complementary close is merely a courteous leave

taking. In other words, it is merely a polite way of ending a
letter. It is like the salutation, conventional in form and
meaning. A letter without a close or an appropriate close is
vulgar and ineffective.
The complementary close is written three spaces below
the last line of the body of the letter and just above the
signature.
7.
The signature
The signature follows immediately after the

complementary close. It is usually written in black ink.
Facsimiles can be used only in case of circular letters.
28
Since the letter binds the signatory, the signature has

assumed great importance. A person may sign in different
letters in different
capacities. Therefore, the signatory
should clearly indicate the capacity in which he signs. For
instance, if the person signs in his individual capacity, his
signature does not bid the firm.
If he signs as a representative of the firm, he is not
personally liable. Therefore, care should be taken while
signing the letter.
1:7
THE LAY-OUT AND DESIGN OF A BUSINESS

LETTER
The overall arrangement and appearance of the different

parts of a letter is called its
lay-out. It refers to the
arrangement of the various parts of a finished letter and to the
neatness and spacing of the written matter.
With the advent of computers in almost all offices, the
computer itself does the job of a suitable format and alignment
proportionate to the matter therein were the conventional layout refers to(i) Arrangement of a letter proper on paper.
The arrangement of the typed area on the sheet of paper
should look good. As a rule, the body of the letter is expected
to start two spaces below the salutation and end two spaces
above complimentary close. The body should be aligned on
the right hand side with the first line of the inside address of
the person to whom the letter is written.
(ii) Margins.
The right hand and left hand margins should be of nearly
equal width, even though the former may be a little wider
than the latter. The margin should not be less than an inch
wide, in any case. However, an inch and a half is generally
29
preferred. The margins on the sides should be about 2/3rd as

wide as those at the top and the bottom in order to see that the
letter looks well spaced.
(iii) Spacing.
It is better to use single spacing between the lines, with
double spacing between the paragraphs. However, if the letter
is short, double-spacing may be used throughout, with the
first line of each paragraph indented to indicate the necessary
divisions.
(iv) Forms of Indentions.
We come across four ways in which letters are typed
and indented. (a) Block or straight edged form; (b) Indented
or stepped-inform; (c) Semi-blocked or combination form; (d)
Hanging indention form. Of these the first three are more
popular than the last.
(a) Block or Straight-Edged Form
It is the most popular form used at present. Indention
is avoided. The introductory address, salutation and body
paragraphs are aligned right from between the paragraphs
which are indented.
This is the most symmetic form. It saves time for the
typist as there is no need to shift the carriage of the typewriter
too often.
(b)
Semi-Block or Combination Form
This form of lay-out is combination of the Block and

Indented forms. The heading and the inside address are in
Block form while the initial line of each paragraph of the text
is indented five to ten spaces. This enables to identify clearly
the separated paragraphs of the letter.
30
Both these forms are usually accompanied by open

punctuation, i.e., no terminal marks punctuate the lines of the
heading and those of the inside address.
(c)
Indented or Stepped-in Form
Here the lines of the inside address and the opening

line of each paragraph begin a few spaces away from the
margin. The lines of the inside address are indented five
spaces to the right of the first letter of the preceding line above.
Close punctuation is adopted in this form. There is a mark of
punctuation for each line of the inside address.
The full-stops are marked at the end of the last line of the
letter-head and the inside address. The intervening lines of
both are followed by commas.
(d)
Hanging Indention Form
In this form the inside address and the salutation are

typed in BlockForm. The first-line of each paragraph in the
body of the letter commences right at the left-hand margin
but the subsequent lines are indented five or more spaces.
Single spacing is used between the lines with double spacing
between the paragraphs. This form is not much used.
However, it is favoured in sales letters to draw the attention
of the customers. It is suitable for letters of a very informal
character that can stand novelty.
1:8 KINDS OF BUSINESS LETTERS
In every business concern, Letters have to be
drafted and sent to the customers on various occasions.
Therefore, business letters depending on the occasion in which
they are sent can be classified as under;
1.
2.
3.
Letters of inquiry seeking information about the

required grades and replies.
Offers and acceptance.
Orders and their execution
31
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
Credit and status enquiry

Claims and adjustments.
Collection letters.
Circular letters.
Sales letters.
Banking correspondence
Insurance correspondence
Export and import correspondence
Agency correspondence
Transport correspondence
Secretarial correspondence
Correspondence with the Government
Public relations letters.
The above classification is purely a matter of convenience. The techniques of drafting these letters will be
discussed in subsequent chapters.
32
SELF- ASSESSMENT QUESTIONS

Answer the following questions
1.
Communication is an exchange of __________ by two

or more persons.
2
Face - to - face Communication becomes more effective
if accompanied with appropriate body language.
True / False
3. Match the following
1. Written communication
- a. accurate
2. Oral communication
- b. Permanent record
3. Information must be
- c. Immediate feed back
1:9 SUMMARY
Communication is a process whereby one person or one
group conveys some information to another person or to
another social group. Formal communication takes place via
formal channels of the organisational structure established
by the management. Informal Communication is free from all
the formalities of formal communication. Communications fail
due to various reasons is called barriers to communication. The
essential of a business letter is to be analyses throughly in the
end portion of this chpater.
UNIT QUESTIONS
1.
Define communication.
2.
What are the objectives of communication?
3.
What are the process of Business Communication?
4.
Name the various methods of business communication.
5.
What are the advantages and disadvantages of oral,
written communication?
6.
State the main barriers to communication.
7.
Is communication essential to business?
8.
List out the kinds of business letters.
9.
Explain the layout of good Business letter.
10. Explain the various essential of a good business letter.
33
RECOMMENDATION FOR FURTHER READINGS

1.
2.
3.
4.
Business communication - M.S. Ramesh,

CC.Palkan shethi,
Madhumati,
Business communication
& Customer Relations - Dr. C. B. Gupta
Business communication - Kathiresan & P.R. Radha
Essentials of Business
communication
- Rajendra pal,
J.S.Korcahalli
ANSWERS OF SELF- ASSESSMENTS QUESTIONS:

1. Facts, ideas, opinions, or emotions.
2. True
3. 1-b, 2-c, 3-a
34
UNIT II KINDS OF BUSINESS LETTERS

UNIT STRUCTURE UNIT II
2:0
Introduction
2:1
Letter of Inquiry and Reply
2:1:1 Replies to Inquiries

2:2
Orders-Their Execution and Cancellation
2:2:1 Acknowledgement and Execution of orders

2:2:2 Refusal or Cancellation of Order.
2.3
Claim, Complaints and Settlement of Accounts
2:3:1 The Art of Drafting Letters of Claims and Complaints

2:3:2 Hints on Writing a Letter of Claim or Complaint
2:3:3 Settlement of Accounts (Remittance Letters)
2.4
Circular Letters
2:4:0 Introduction
2:4:1 Objectives of Circular Letter
2:4:2 Situation for Writing a Circular Letter
2:4:3 Special Hints on drafting Circular Letter
2:5
Status Inquiries
2:5:1 Hints on giving Replies to Status Inquiries

2:5:2 Steps in the Status Enquiry Correspondence
2:6
Collection Letter
2:6:0 Introduction
2:6:1 Guiding principles for collection
2:6:2 Hints on the drafting of collection letters
2:6:3 Stages in Collections
35
2:7
2:7:0
2:7:1
2:7:2
2:7:3
2:8
Banking Correspondence
Introduction
Banking Letters
Elements of a Good banking correspondence
Types of banking correspondence
Correspondence of a Company Secretary
2:8:0 Introduction
2:8:1 Classification of Secretarial Correspondence

2:9
Summary
Unit Questions
36
UNIT - II
KINDS OF BUSINESS LETTERS
2:0 INTRODUCTION
Business correspondence extremely diverse.
There is a variety of correspondence that modern businessman
has to deal with within his business routine. It is very difficult
to classify the business letters or to give an exhaustive list of
the kind of letters a businessman has to write because different
situations call for different approaches. Hence, attempt is
made, in this book only to show a few common forms of letters
under each class and deal with some of the important types
included in it.
2:1
LETTER OF INQUIRY AND REPLY
i) Traders send letters of inquiry very frequently when

1.
2.
3.
4.
The goods they require are of a kind which

they do not regularly buy and they do not
know the current price.
They want to ensure that they have been
receiving goods at the advantageous
terms.
They want to discover better sources of
supply, or
They want to tap new lines of business.
ii) While drafting such letters you should1.

2.
3.
Describe carefully the kind and quality of

goods required.
Give an idea of the probable size of the orer.
State clearly, the special form of packing etc.
desired, if any.
37
4.
5.
6.
7.
8.
State how the name of the supplier was

obtained, details of your business, whether
the probable purchase should be for cash
or on credit and give references if you want
to make credit purchase (particularly when
the enquiry is addressed to a firm which no
previous transaction have been made).
Refer to the advertisement, if it is a first
enquiry made in response to an
advertisement.
Request for lowest quotations together with
an assurance of business.
Enquire regarding the time required for
delivery, terms of payment, discounts etc.,
and find out whether insurance and delivery
charges are to be included in the quotations,
if the enquiry is made from a foreign
supplier.
Give an idea about the size and frequency
of future orders, the volume of business
expected and the reasons for an optimistic
outlook, if the enquiry is made to get
concessional price for large or regular
orders, or to obtain sole-selling agency for
a region or country.
The letters of enquiry should be brief and to the

point. The opening and closing sentences should be simple
and short.
iii) Watch the following opening sentences:
(i)
(ii)
Will you please send us sample of...

Please quote your lowest prices for the
following items/goods.
38
(iii) Please send us your latest catalogue and price

list of ...
(iv) Will you please let us know the terms and
conditions....
iv) Closing sentences:
(i)
(ii)
Will you please reply at your earliest?

We are ready to cover all our requirements
through you, should your prices and terms
prove satisfactory.
(iii) Please treat our inquiry as urgent.
2:1:1 REPLIES TO INQUIRIES
The reply to an inquiry may take three forms:
(i) A letter answering the inquiry and referring
to the catalogue, or samples.
(ii) A letter containing a quotation.
(iii) A letter enclosing a quotation on a separate
paper or form.
The nature of the reply will, therefore, vary depending
upon the circumstances. No hard and fast rule can be
prescribed in this regard.
However, the specimen letters that follow may guide
you.
39
LETTERS OF ENQUIRY AND REPLY

Letter No. 1. Request for catalogue.
MODERN CRACKERS,
P16, Raju Naidu Street,
Paris Corner,
CHENNAI - 600 031
Phone : 28712536,
e-mail : morfire@yahoo.co.in
Date : 22nd June, 2008.
To
The Sunshine Fire Works,
36-Thiurmayam Road
Sivakasi - 21
Dear Sirs,
Sub :
Request for latest catalogue and price list
Please send us a copy of your latest catalogue and

price-list and let us know your best terms for wholesale
buyers.
Thanking you.
Yours faithfully,
For Modern Crackers.
40
Letter No. 2 : Replay to letter No. 1.

THE SUNSHINE FIRE WORKS
36-Thiurmayam Road,
Sivakasi - 21
Cell No. 9994588033,
Ph.No. 239 245.
e-mail: thesunshine@hotmail.co
To,
The Modern Crackers,
16, Raju Naidu Street,
Paris Corner,
Chennai - 600 031
Sub : Catalogue and Price-list
Dear Sirs,
We thank you for your letter dated June 22, and
have pleasure in sending you a copy of our latest
catalogue and price-list.
We need hardly add that behind every The Sunshine
Fireworks is our reputation of 75 years as makers of
quality crackers and all other fire items, especially
designed for children.
Our list of prices is subject to a trade discount of
30% and an additional commission of 5% in case your
purchase from us exceed Rs. 1,00,000.
We trust that you will take advantageof these
terms.
Yours faithfully,
for The Sunshine Fireworks.
Manager
41
2:2
ORDERS-THEIR EXECUTION AND

CANCELLATION
An offer that is accepted is followed by an order. The

letter accepting a seller s offer is called a Letter of
Acceptance. Many times, the letter of acceptance itself
constitutes an order and is sufficient to complete the
transaction. However, a formal order may also be sent. An
order may also be placed, without any previous enquiry or
offer, i.e., on the basis of printed catalogues or advertisements.
Great care is necessary in the drafting of orders :
(i)
(ii)
to ensure its efficient handling, and

to eliminate all doubts resulting in the loss of time
and sometimes even the market.
Hence, a businessman writing an order should:

1.
2.
3.
4.
5.
Give full and correct particulars of the quality,

size, colour, etc.
Be precise in stating quantities. State
whether a part of the goods you have
ordered may be sent, should it prove
impossible to supply the whole quantity
within the time stipulated by you.
Indicate clearly the type of packing required.
Mention the price and terms on which the
goods are being ordered to avoid
misunderstanding. Mention the mode of transport,
whether by steamer, goods train, passenger train,
parcel post etc.
Indicate clearly the address to which the
goods are to be delivered if the place of
delivery is other than the address of the buyer
given in the order.
42
6.
Give necessary instructions if your intention

is that the seller should insure the goods
ordered. Give special instructions for
packing, insurance, payment of customs duty
etc., at the end of the letter.
Other Hints
If only a few things are ordered, you can specify
the details in the body of the letter itself. But mention the
details at the foot of the letter or on a separate sheet when a
large number or variety of goods are required.
Order Forms
Printed order forms that are perforated, numbered
and kept in serial order in Order Books are generally used by
big business houses. The person placing the order fills in the
necessary particulars. The order is generally made out in
triplicate. The original is sent to the seller. The first copy is
field and the other copy is sent to the receiving department
for checking the items of goods on arrival. Thus, the order
forms save time and labour and facilitate quick filing and serve
as a ready reference.
43
LETTER NO. 1: An order for the Supply of Timber.
DEVAN WOOD MART

16, Developed plot,
Industrial Estate, Guindy,
CHENNAI - 600 032
Phone : 22254850,
e-mail : dewomart@sobha.co.in
Date : 14th March, 2008.
To
The Manager,
Sai Saw Mills,
Tuticorin.
Dear Sirs,
Sub
: Order for timber
Thank you very much for your letter dated February

26, 2008 quoting price for 800 loads of teak now lying
in the Commercial Docks, which I accept, and you can
draw on me for the amount named at three months,
delivering half of the timber at my wharf at your earliest
convenience.
I will give you instructions shortly regarding the
reminder.
Yours faithfully,
44
2:2:1ACKNOWLEDGEMENTAND EXECUTION OF ORDERS

Hints. While drafting the letter of acknowledgement and
confirmation (acceptance) of an order, you should (i)
(ii)
convey your thanks for the order placed;

refer to the number and date of the order
letter; and
(iii) specify (although it is a repetition) the key

points like the description and the quantity
of the goods ordered, terms and conditions
relating to delivery and payment etc.,
End the letter by soliciting further orders. Make a
reference to the total number of invoices enclosed to avoid
the possibility of being mislaid or improperly field rendering
quick reference very difficult.
You need not confirm the order, if the order is executed
at once. Where the order cannot be executed owing to some
problem or defect like(a) the lack of correct and clear information
relating to the terms of delivery and payment,
(b) modification of the terms of offer;
(c) exhaustion of stocks;
(d) offering substitutes; and
(e) extension of time of delivery etc.,
You should point out such problem or defect in the letter
of acknowledgement and confirm the order when(a) the requirement is fulfilled;
(b) the defect is corrected; or
(c) the problem is solved.
Word the letter tactfully and with due courtesy. For
instance, if a delay in execution is anticipated owing to the
insufficiency of stocks, persuade the customer to give his
consent for a delivery at a later date (after some time).
Likewise, offer some substitutes, if any.
45
Letter 1.
Letter regretting inability to execute order owing to
exhaustion of stock and offering substitutes.
VARSHINI CLOTH STORES

Ph...................
Fax.................
48, Kelambakkam,
Vandalur main road,
Mambakkam,
Chennai - 600048
May 21, 2008.
To
M/s. K.V.P. Textiles,
728 - Dr. Nanjappan Road,
Gandhipuram,Coimbatore.
Sirs.
Sub : Inability to execute your order
We thank you for your order V215 dated May 12,
2008 for 150 metres of each of the sample patterns
enclosed with your letter. These patterns were imported
by us three years ago and they have been completely sold
out. We are, therefore, sending you samples of the latest
designs of imported cloth and shall be glad to receive
your order for them.
As our stock of some of these designs are very limited,
please order your requirements within 7 days from this
date. Needless to say, your orders will always receive
our prompt and careful attention.
Thank you.
Yours faithfully,
.............................
46
Letter 2. A letter confirming only a part of the order.
Nitin Electronics
Ph ................
E-mail .....................
25-A Wing,
Vakola Bridge, Santacruz (E),
Mumbai - 55
22nd June, 2008
Sub : Execution of your order in part

We thank you for your order of 18th June. We
shall be pleased to supply you items 1 to 14 at the prices
mentioned by you. As regards the remaining six items,
we are sorry that we are unable to accept your prices.
We enclose a proforma invoice showing the lowest prices
that we shall charge you for these remaining items and
on receiving your confirmation we shall at once despatch
the goods.
As you have instructed us to send all the goods
in one lot, we are withholding the execution of the first
part of the order till we hear from you. In case you require
the goods very urgently, please wire acceptance of our
prices to enable us to despatch the goods immediately.
Thank you.
Yours faithfully,
...................
47
2:2:2 REFUSAL OR CANCELLATION OF ORDER.

REFUSAL
A business house may have to refuse or decline an order
under unavoidable circumstances like-(i)
an order received directly from a retailer
of a particular locality where a retail selling
agency
has already been granted to a
dealer of that locality;
(ii)
unsound financial position of the customer;

and
(iii) sudden bankruptcy of the customer etc.,

While drafting letters of Refusal, a businessman should
(i)
state the reasons for declining the order

politely and direct the customer to
t h e nearest retail agent (in the first case);
(ii) refuse the order under some other reason /
pretext (in the second and third case); and
(iii) suggest a few alternative, if any, to please
the customer.
CANCELLATION.
An order placed already may have to be cancelled under
certain unforeseen circumstances, provided
(i)
the order is a recent one;
(ii) the manufacture of goods has not been taken
in hand; or
(iii) the dealer has not yet despatched the goods.
After deciding to cancel and while drafting a letter of
cancellation of an order the businessman must communicate
the decision immediately to the supplier, preferably by
a telegram followed by a letter; and point out clearly the
actual reason for cancellation particularly when the decision
was taken owing to inordinate delay in its execution.
48
Letter No. 1. A letter of refusal expressing inability to

execute an order.
NRT TIME ZONE

Ph......................
Fax ...................
E-mail ..............
Opp. Canara Bank,

Vakola Bridge,
Mumbai.
To
Standard Watch Company,
Kempegowda Road,
Bangalore.
Dear Sirs,
Sub : Inability to execute your order on the stipulated
date
We thank you very much for your order of 2nd
February for 2008 Clickwel Wall Clocks for delivery
by 5th March, 2008.
We greatly appreciate your interest in clocks and wish
we were in a position to accept your order. But as we
have already in hand several pending orders, which will
keep our factory busy for a long time, it will not be
possible for us to book your order, even if you were good
enough to extend the date of delivery by several months.
To cope with the increasing demand for Jupiter clocks
we have ordered a new plant from Japan and it is likely
to be installed next May.
We are very sorry for our inability to serve you at
present, but look forward to the time when we shall be
able to attend to your order. We will keep in touch with
you.
Thank you,
Yours faithfully,
per pro.N.R.I Time Zone,
N.R. Narayanan, Manager.
49
Letter No. 2 : A letter cancelling order for undue delay.

J.K. MILLS
Ph.................
E-mail :..........................
28, Periagoundanpalayam,
Beema Nagar,
Pollachi road,
Coimbatore..
Date : 5th May, 2008
M/s Asif Mohamed & Brothers,

Mysore-7
Dear Sirs,
sub: Cancellation of the Order
We had placed an order with you on 4th April, 2008.
for 10 dozens of Royal Banians to be delivered on 4th
May, 2008 But till now we have received neither the
goods any letter from you.
As the time of delivery expired long ago we are
compelled to cancel the order, and to refuse them the
goods arrive we are sorry.
Yours faithfully,
Ezilarasan,
Manager
50
2.3
CLAIMS, COMPLAINTS AND SETTLEMENT OF

ACCOUNTS
Errors very frequently occur even in the best managed

business houses, because to err is human. The moment any
discrepancy or mistake is discovered by any trader, he must
immediately bring it to the notice of the supplier by writing a
letter of complaint or clam. Instead of unnecessarily entering
into a dispute, the supplier should honourably try his best to
setttle the matter amicably, if the defects are proved.
Occasions giving room for a claims or complaint are
many and varied in nature and hence it is very difficult to
enumerate all of them in full. However, the following are the
most important causes that give rise to claims and complaints
that are mostly made by buyers :
(i)
inordinate delay in the execution of the order.
(ii)
variance in the quality and quantity of the

goods supplied as against those ordered.
(iii) supply of wrong goods or goods of inferior
quality.
(iv) d e l i v e r y o f d a m a g e d g o o d s o w i n g t o
defective packing
(v) v a r i a n c e i n t h e t e r m s a n d c o n d i t i o n s
relating to the payment and delivery etc.,
2:3:1 The Art of Drafting Letters of Claims and Complaints
A trader must be extraordinarily careful while drafting
a letter of claim or complaint in a satisfactory manner because
such letters are generally drafted in a mood of dissatisfaction
or anger. Successful drafting of claim and complaint letters
call for great tact, politeness, sympathy and patience, in order
to avoid unnecessary bitterness, long and tedious disputes and
legal proceedings over patty issues.
51
2:3:2 Hints on Writing a Letter of Claim or Complaint

The letter should be :
1.
fair and temperate but not apologetic;
2.
based only on facts without imputation;
3.
friendly and courteous letters prove more

effective than a letter breathing fury and
threats in gaining the co-operation of the
reader;
4.
complete, furnishing all the details

considered very necessary to adjust what
is wrong (like the date of the original
transaction, the order number or the invoice
number, the list or description of goods etc.,);
5.
definite and reasonable in its request for

redress; that is, it should make a concrete
suggestion for redress; and
6.
brief in the statements relating to the

inconvenience suffered by the customer
because of the error.
If any complaint proves to be unfounded or unjustified,

the buyer should not hesitate to acknowledge his error and
apologise.
52
Letter No. 1 : A letter complaining the despatch of defective

goods.
ARUNACHALA EDUCATIONAL
CHARITABLE TRUST
Goyal Complex,
Chennai Road,
Thiruvannamalai.
April Ist, 2008
To
M/s. Mathi Publication,
117- Maduai Main Road,
Palakkarai,
Trichy.
Dear Sirs,
Sub : Defective and damaged books
Thank you very much for the despatch of 16 books
on Business Communication sent to us as per our order
No. MBH/71/7 DATED March 28, 2008. On going
through these books we found that one of the copies sent
by you is incomplete as pages 45 to 64 (20 pages) are
missing while another copy is badly damaged.
Will you please let us know immediately whether we
should send them back so that you may replace by defect
free copies?
Thank you.
Yours faithfully,
.......................................
For Arunachala Educational Charitable Trust
Manokaranr,
Trustee.
53
2:3:3 SETTLEMENT OF ACCOUNTS

(REMITTANCE LETTERS)
After receiving the goods ordered, the buyer should not
only acknowledge their receipt (unless the goods are sent with
a delivery note) but also arrange remittance of the amount
due to the seller. The mode of payment depends upon the
arrangement between the buyer and the seller. The possible
arrangements are :
(i)
C.O.D. (prompt cash remittance after the

receipt of goods).
(ii)
Credit for a certain period (whose payment

is to be made within the specified
period by cash, or cheque of by
acceptance of a Bill of Exchange).
The cost of remittance is generally borne by the debtor

who remits, excepting in a few special cases where the creditor
may bear. It is easy to effect payments by transferring the
amount from the buyers account to that of the seller, if both
are having their own separate bank accounts. Remittances
against periodical statements of accounts received by the
debtor from the creditor are generally arranged when there
are regular dealings between them.
The Letters of Remittance should be written with
special care and accuracy as they involve matters relating to
payment of money.
54
Letter No. 1: Letter acknowledging receipt of goods and

informing remittance by cheque.
PALAVAN PALACE
Ph........................
Fax......................
E-mail.................
East Coast Road

Mahabalipuram - 28
May 3, 2008..
To
M/s. Rohini Enterprises,
Mysore.
Dear Sirs,
Sub : A cheque for Rs. 2250/The Camel Hair Rugs invoiced by you on April 30,
2008. have arrived and are satisfactory. We enclose a
cheque for Rs. 2.250 (Rupees two thousand two hundred
fifty only) in full settlement of the amount of your invoice.
The cheque No. Is ............ of corporation Bank.
Please acknowledge receipt and credit us with the
amount.
Thank you.
Yours faithfully,
...........................
55
2.4 CIRCULAR LETTERS

2:4:0 Introduction
In the course of business, occasions may arise
when it becomes necessary to notify all the customers about
certain fundamental changes in the firms policy, constitution,
place of business etc. In those circumstances, the facts are
communicated to a large number of customers through circular
letters. A circular letter can be defined as a letter containing
a formal message addressed to a large number of customers.
Since the message to be conveyed is the same, the circulars
are generally printed or cyclostyled leaving space for inside
address.
The names and addresses are incorporated or typed on
the space provided. Thus, a circular letter is a letter of which
many copies are prepared and sent to a number of customers.
2:4:1 Objectives of Circular Letter
There are four objectives of writing circular letters.
They are the following.
1.
To obtain publicity for a cause, a campaign

or a productintroduced.
2.
To make the reader interested in their

contents.
3.
To i m p r e s s t h e r e a d e r w i t h f a c t s a n d
information about the firm, its policy etc.
4.
To gain the confidence of the reader.
2:4:2 Situation for Writing a Circular Letter

Circular letters are usually written in the following
occasions :
1.
2.
Establishment of a new business.

Admission of a partner
56
3.
4.
5.
6.
7.
8.
9.
Change in the address of the place of business

Death or retirement of a partner
Purchase of a business.
Obtaining an agency.
Price reduction and clearance sales.
Conversion of partnership into a company.
Introduction or arrival of new products or new
schemes.
2:4:3 Special Hints on drafting Circular Letter

Circular letter is a constructive force. To make it more
effective, different strategies should be adopted for different
occasions. Therefore, the task before the writer is not an easy
one. The following points are to be borne in mind while
drafting circular letters.
1.
Establishment of a New Business:
A circular letter announcing the establishment of a new

business should touch the following matters.
1.
Name of the firm, address and the nature of

its business.
2.
Date of opening of the business firm.
3.
The knowledge of the proprietor, his

experience and reputation.
4.
A reference that the goods of high quality

are being offered at competitive prices.
5.
The capital at the disposal-exact amount

however, should not be disclosed.
6.
An invitation for a trial order and a

suggestion that the result would be
satisfactory.
57
2.
Admission of a Partner:
A letter of this type should touch the following points.
3.
1.
Circumstances that led to the admission

of the partner, expansion of business etc.,
2.
The name of the incoming partner.
3.
His business experience, knowledge and

ability.
4.
An appreciation about his assistance and

how it shall help the firm to satisfy
customers wants more effectively.
5.
An expression of thanks to the customers for

their patronage in the past and a courteous
request for its continuance in future.
Change in the Address:

This letter should highlight the following.
1.
2.
3.
4.
4.
The reasons the promoted the firm to shift

to new premises.
The relative superiority of the new premises.
The address of the new premises.
An explanation how the new location shall
be conducive toefficiency in manufacture or
distribution.
Retirement or Death of a Partner:

The letter should include the following points.
1.
An announcement of the fact either death or

retirement with regret and so appreciation
with reference to his service.
2.
An assurance that the business shall be

continued on the same lines as before
58
5.
3.
In case of retirement, specify the reasons

that led to his retirement.
4.
A note that the reconstituted firm is

adequately financed, deficiencies have
been adjusted by contribution from the
remaining partners.
5.
If the name of firm is changed, the new

name should be communicated.
Purchase of a Business:
The letter can be drafted on similar lines

suggested for circularis announcing the establishment of a
business. In addition to them, the following points should be
included:
6.
1.
An announcement of the fact and the name

under which the business shall be conducted
in future.
2.
If the firm has been successful in the past,

a reference that the traditions shall be
preserved.
Obtaining an Agency:
Drafting a letter to announce the obtaining of an

agency cells for special skill and care. It should cover the
following points.
1.
The details of the agency obtained.
2.
Comparative merits and advantages of the
goods or services entrusted under the
agency.
3.
If the product offered is unknown in the
locality, a reference to the excellence of
the product and fairness of its prices.
4.
An invitation for a trial order and an
assurance that the result would
be satisfactory.
59
7.
Price Reduction or Clearance Sales:
A price reduction or clearance sales is generally

advertised in newspapers or by posters and handbills. But, at
times, businessmen can announce them by means of the
circular letters as well. The comparative advantage of a
circular letter over the other means of advertising are the
following.
1.
A letter can be addressed to a special class

or a selected number of persons and is less
likely to be overlooked.
2.
The product can be more fully explained

or described in a letter then in a
advertisement.
3.
A letter unlike an advertisement can

be kept by the recipient in his file for
future reference.
While drafting circulares of this type, the following

points must be touched.
1.
The nature and date of the sale and the most
attractive features of the offer.
2.
An invitation to the customer to visit the

shop.
3.
Range and variety of the products offered

under clearance sales. However,
care should be taken to remove
t h e impression that they are only for
the fortunate few.
4.
If the reduction in price is really great, the

actual price should be quoted.Both the
original prices and the reduced p r i c e s
should be given, so that the customer
c a n m a k e comparison of the reduction.
60
8.
Conversion of Partnership into a Limited Company

1.
An expression of the expansion of the

firms business and the consequent need
for more capital.
2.
An assurance that their quality shall suit the

customers needs and tastes.
3.
The competitive return of the prices, terms

etc.,
This type of circulares is purely sales letters, which aim

sales promotion. Therefore, the principles for drafting sales
letters are equally applicable to these letters also.
61
SPECIMEN CIRCULAR LETTERS

Letter 1.
Establishment of a New Business

K.S. PAPER MART
48, T.H. Road,
Chennai - 600 005.
10th May 2008.
Dear Sir,
We are pleased to inform you that on 20th May
2008, we shall be opening a retail paper stores, under
the style K.S. Paper Mart at the above address, where
you may rely on receiving high-quality paper at
competitive prices.
The capital at our disposal is sufficient to
enable us to honour our obligations and to lay in stocks
different varieties to satisfy the most exacting
requirements.
We hope that a trial order would win your
further custom. An opportunity to prove the truth of
this claim would be greatly appreciated.
Yours faithfully,
K.S. Paper Mart,
K. Sridhar
J. Sundar
Partners.
62
Letter 2. Admission of a Partner

RATHNA ELECTRICALS
15, Netaji Road,
Coimbatore - 641 001
15th May 2008.
Dear Sir,
We are pleased to inform you that we have this day
admitted into partnership Mr. K. Ranjit, who has for many
years been associated with our business in various
responsible positions.
We are confident the Mr. K. Ranjit will exert every
effort to further the interest of our firm and we trust that
you will continue to favour us with your valued custom.
Yours faithfully,
Rathna Eletricals,
N. Poaghavan
Managing Partners.
63
Letter 3. The Change of Address

ARUNA MACHINE TOOLS (P) LIMITED
No. 10, Industrial estate,
Madras Main Road,
Madurai - 625 001.
10th May 2008
Dear Sirs,
The steady growth of our business has made essential
an early move to a larger premises. Our old factory has
rapidly become unable to cope efficiently with the
increased demands of both old and new customers and
to ensure satisfactory service, a large area at the above
address has been acquired.
The site is particularly good one in the heart of
a large Industrial estate within the easy reach of the
railway and the road transport difficulties are thus
reduced to minimum and early deliveries are ensured.
The new factory offers great scope for
mechanization and a resulting increase in both the
quantity and quality of our output is confidently expected.
Transitional periods, as you know will give rise to
considerable difficulty. We trust that you will in the
circumstances allow us a certain amount of latitude. As
the factory will be ready for production within a for night,
we can assure you of the prompt delivery of all goods
ordered newt week.
We take this opportunity of expressing our
thanks for your confidence in the past, and we hope that
the improvements we shall introduce will lead even to
more business.
Yours faithfully,
For Aruna Machine Tools (P) Ltd.,
V.M.P. Renganathan
General Partners.
64
2:5
STATUS INQUIRIES
Goods may be sold for cash or credit. When they

are sold for cash the deal ends there. But when they are sold
on credit; it is necessary to know the trustworthiness of the
customers. Hence the Credit Sales play a vital part in the
growth of any business.As business on credit invariably carries
an element of risk of non-payment businessmen always make
enquiries regarding the financial standing, reputation,
credit-worthiness and above all the character of the new
customers before entertaining credit deals with
them. Such information relating to the status of Credit
Customers can be obtained from all or any of the following
sources:
(i)
Business acquaintances of the prepositive

credit customer;
(ii) Credit Information Agencies (also called
Mercantile Inquiry Agencies); and
(iii) Banks.
(i)
Trade References
Usually an order for goods or application for an

appointment or an Agency from an unknown person will
contain Trade References, i.e., the names of firms or
individuals to whom inquiries about his standing may be
addressed. If the order or application does not give any
reference, a request to furnish the same must be made very
tactfully by careful wordings.
The business friends of a prospective customer who is
in need of credit facility or an agent who wants agency may
supply the required information free of charge.
The firm giving credit or a job or an agency should take
care to see that the persons whose names are given as
references are themselves reliable, by making use of several
sources of information and checking them against one another
before a final favourable decision is taken.
65
(ii)
Credit Inquiry Agencies
Information Bureaux supply reliable information

regarding the status and standing of any person of firm,
professionally, according to a fixed scale of charges.
Such information can also be had from Chambers of
Commerce and Trade Associations.
(iii) Bank References
As a Banker will answer Status inquiries only from
another banker, the business house making the inquiry must
address it to its own banker and ask him to obtain the required
information from the banker whose reference the prospective
customer or agent has given.
2:5:1 Hints on giving Replies to Status Inquiries
1.
2.
Make it as brief as possible, but let it be clear

and adequate.
State only on the basis of your personal
knowledge and experience of the
correspondent and not on hearsay.
3.
Do not specify the amount up to which it

would be safe to grant credit unless the
inquirer is very particular about it.
4.
Express the unfavourable opinion with

extreme care and tact, the best way out is
to state that you are unable to express any
opinion about the person about whose status
the inquiry is made. Avoid mentioning the
name of the firm, if it is necessary to give
some unfavourable opinion.
5.
Always make it clear that (i)
You are in no way responsible for the

information you give;
66
(ii)
the matter should be treated

private and strictly confidential;
and
(iii) you should not to be quoted
2:5:2 Steps in the Status Enquiry Correspondence
1.
Seller / Dealer
2.
Customer
3.
Seller
4.
Trade Ref.
5.
Bank Ref.
6.
Seller
to Customer - asking for his

Trade and Bank Reference.
to seller - furnishing his Trade
and Bank Reference.
to (i) Trade Reference
to (ii) Bank Reference
to Seller giving Favourable or
Unfavourable Reply.
to Seller giving Favourable
Unfavourable Reply.
to customer executing refusing
to execute the order.
67
Letter No. 1: A letter asking for reference.

SIDDHARTA FURNITURE WORKS
110, Subash Road, Shimoga - 6.
Phone No.......................
Fax ...................
E-mail ..............
March 4, 20....
To
Messrs Shankar Rao & Brothers,
4, Gurumurthy Street,
Hassan - 5
Dear Sirs,
Sub : Your Trade and Bank References
Thank you for your order of March 1, 20 .....
We are glad to inform you that it is having our attention.
It has been a regular practice of our firm to ask for a few
trade references, while opening an account for the first
time. As we did not have the pleasure of doing business
with you earlier, you would be helping us a lot if you
could send us, at your earliest, the names of two or three
business houses of standing.
Yours faithfully,
For Siddharth Furniture Works
68
Letter No.2: A letter by the customer furnishing his code

and Bank References.
SHANKAR RAO & BROS.

4, Gurumurthy Street,
Hassan-5
Ph......................
Fax ...................
E-mail ..............
March 8, 20....
M/s Siddharth Furniture Works

110, Subash Road,
Shimoga-5
Dear Sirs,
Sub : Our Trade and Bank References
As required by you we are furnishing below our Trade
and Bank references with whom we have been having
business transactions since last fifteen years.
Trade Reference -
Varum & Sons

Shop No. 10, Majestic
Circle,
Bangalore- 560002.
Bank Reference -
Corporation Bank of Orbit

Yard, Hubli-2.
Kindly complete the formations and execute our order

at your earliest.
Thank you,
Yours faithfully,
.....................
69
2:6
COLLECTION LETTER
2:6:0 Introduction
Credit is incidental to trade. No businessman can
survive in this competitive business world without extending
credit to his customers. When credit is given to the customer,
the problem of collection shall naturally arise. The
businessman cannot realise the real profit on a sale until he
collects the amounts involved in it. In other words, profit
will remain as a mere obstruction if collections of credit sales
are unduly delayed or result in large amounts of bad debts.
Timely collection is also very important from the point
of working capital position of the firm. Prompt collection
releases the funds locked in debtors accounts and ensures a
steady flow of working capital and facilitates further business.
If uncleared even to continue his business unless he is
financially sound. It is, therefore, rightly remarked that a
good collection record is one of the essentials for success
A collection letter is also called a Dun. A Dun is a
special notice sent to draw the immediate and special attention
of the debtor. The word Dun is derived from the Middle
English word Dunnen, which means to make a loud noise,
i.e., each successive collection letter has greater force and
pressure than the previous one. A dun means an importunate
(persistent) creditor or bill collector. To dun means to
importune for payment of debt. Therefore, Dunning letters
or Collection letters refer to a series of letters written again
and again for the settlement of account.
2:6:1 Guiding principles for collection
The purpose of collection is to collect the amount when
they are due. No firm can afford to allow its customers to
take undue liberty with the credit facilities given to them. At
the same time, undue pressure shall irritate the customers and
even lead to a loss of valuable customers. It is, therefore, a
70
delicate task and similar to the task of walking on a wire or a

rope where the walker should maintain a balance. While
collecting the dues also the businessman should strike a
balance between leniency and firmness.
But no hard and fast rule can be laid down for
formulating collection policies. The collection procedure
tends to very with individual circumstance, nature of the
customers, their past records, the possible difficulties they
are facing. The collection policy, in spite of the minor
variations required, should be governed by two cardinal
principles. They are :
1.
2.
3.
4.
Prompt customers.
Good but slow payers
Good but unable to pay because of
u n a v o i d a b l e circumstances.
Fraudulent or reckless customers.
2:6:2 Hints on the drafting of collection letters

1.
Draft the Collection Letter after a careful understanding
of the peculiar nature of the customer, the way in which he
has handled his account and his present condition etc.,
There are different types of customer such as:
1.
2.
3.
4.
5.
2.
3.
4.
Honest.
Dishonest
Negligent
Miserly
Aggrieved (those who are in financial difficulties).
Assume that the customer will pay (if you consider the
customer hopeless, he may take advantage of this).
Do not be apologetic (in requesting payment from your
customer, you are asking no favour).
Make straightforward request for payment.
71
5.
See that the tone of a collection letter is courteous

and friendly but firm.
6.
Leave the way open for the debtor to pay with good
grace.
7.
Never send it on postcard.
8.
Apply the highest pressure only at the time when the

customers business is at its highest peak.
9.
Leave an interval of a weak or two between two

collection letters.
10.
Avoid as far as possible threats (or legal action) because 1)
it is confession of the deplorably inefficiency

of the collection epartment;
2)
it is expensive;
3)
it leads to a slow and tedious process; and
4)
it will result in loss of customers. However,

when a threat is made, see that the same is
carried out, whatever might be the
consequences.
2:6:3 Stages in Collections

The stages in the collection process are well
established. The collection letters are usually written in a
series. In each successive letter, the tone becomes stronger
and sent out at intervals varying with the type of credit risk
and the amount involved. Even for a fourth grade customer
who is fraudulent, all the successive stage should be passed.
In other words, even after knowing a debtor as reckless, the
creditor should not resort to the final stage of warning at the
beginning itself. The following are the routine stages in the
collection process.
72
I.
II.
III.
IV.
V.
VI.
Sending Statement of Account

Reminders
Stronger Reminders.
Inquiry and Discussion
Appeal and Urgency.
Demand and Warning.
Stage I - Sending Statement of Account

The actual collection correspondence starts from the
stage of sending reminders, because sending a statement of
account is the duty of the creditor. A statement of Account is
a copy of the customers account in the sellers ledger showing
the balance to be paid as on a particular date. It serves as a
simple reminder to the debtor that he owes a particular amount
on the date of the statement or letter. It does not make any
request for payment. If the first letter remains unrepaid, a
reminder is sent pointing out the possibility of an oversight
or loss of the document. A duplicate statement of account
accompanies the second letter. These two letters are mere
statements. The second letter is also known as a casual
reminder.
Prompt payers will generally pay as soon as the first
statement of account is received or the casual reminder is
received by them. Others, however, will not settle the due.
State II- Sending Reminders
If the first two letters remain unanswered, a third
reminder becomes necessary. In this letter, the creditor asks
for payment of the amount politely, but not firmly. There is
nothing to be gained at this stage by firmness. The debtors
failure to pay may be either deliberate or accidental. If
deliberate, firm action can be taken later. If accidental, firm
action would humiliate the customer, and thus reduce the
creditors chance of obtaining further business.
73
Stage III - Stronger Reminders

Even if the third letter fails to bring the desired response,
a stronger reminder is needed. In this letter, the debtor should
be asked to pay the amount by a particular date. This letter is
also called limiting date reminder.
However in this letter also, do not express any doubt
about the customers intention or capacity or do not use any
threatening words.
State IV- Inquiry and Discussion
If the reminders do not bring any response from the
defaulting customer, the creditor has to take up a different
course to get things done. It is yet too early to give up the
hope of collecting the amount due. But it is really desirable
for the creditor to know the legitimate reason for the delay.
Therefore, he should write to the debtor asking him why the
payment is with held. The debtor may have various difficulties
- from his customers both personal and business like slow
collection, slack of business, weak financial position etc., In
any case, efforts should be made to get a reply from him or
the debtor may be invited to his place for discussion in an
attempt to solve the problem. If he replies, he may be offered
necessary assistance to overcome his difficulties and payment
in part or whole or a definite agreement for payment may be
received from him.
Stage V - Appeal and Urgency
Letter now depends upon the debtors response to the
previous letter. If the customer is good but unable to meet his
commitment due to certain difficulties, he will certainly reply
to the previous letter. Only reckless customers who fail to
reply should be dealt with in this stage. His silence is a clear
indication that the debtor wants to avoid payment and urgent
action is necessary to realise the
74
dues. A strongly worded letter is to be sent at this stage. The

theme of the letter should be an appeal to the debtors sense
of fairness and credit rating and how it will be affected by his
attitude. This approach often proves effective and is called
the Golden Rule Approach.
Stage VI - Demand and Warning
The correspondence now reaches the final stage. Now
it is more important to collect the money rather than to retain
the customer. This letter should use fear as its motivating
force. The letter should consist of a brief statement that unless
payment is received by a certain date- usually within five or
ten days, his case shall be passed on to the lawyers. The tone
of the letter should clearly indicate that the creditor intends
to go through with the necessary action.
75
Letter No. 1
SRIRAM MOTOR & CYCLE COMPANY
115, Big Street,
Chennai - 600 005.
10th January 2008.
To
M/s. Bharath Motor and Cycle Mart,
21, Big Bazaar Street,
Trichy - 620 001.
Dear Sir,
We enclose a statement of account made up to 31st
October 1999. You will see that there is a balance of Rs.
15,000/- in our favour.
Yours faithfully,
For Sriram Motor & Cycle Company,
R. Sankar
Managing Partner.
Encl. : Statement of Account
Note : The statement of account was made up to 31st
October 1999. Two months credit is allowed. Hence the
debtor is to repay the due on 1st January itself. Sense he
has not paid even after the expiry of ten days, a statement
of account along with the letter is sent. It should be
noted that the letter contains no request for payment.
76
2:7
BANKING CORRESPONDENCE
2:7:0 Introduction
Banks as we all know are intimately connected with
business and industry. They are, in a way, business houses,
which supply, sell or rent finance for business; that is to say,
they deal in credit. Originally, the functions of the bankers
were very few. With the passage of time, bankers began to
perform a number of functions which are novel in nature.
Therefore, the bank is an indispensable institution in the
modern society.
2:7:1 Banking Letters
In performing these services, the banker has to
correspond with a number of persons. The reputation of a
banker is judged not only by the efficiency of his services but
also by the appearance of the passbook and his
correspondence. That is why tactful, courteous and precise
letters go a long way in building up a bankers name.
2:7:2 Elements of a Good banking correspondence
The essential elements of a good banking
correspondence are secrecy, style, tact, courtesy and clearness.
1.
Secrecy :
Bankers deal only with money matters and secrecy in

many matters is the first thing that a client expects from his
banker. Except in cases of enquiry from fellow bankers, a
clients account and its details are treated as absolutely secret
and are never revealed to any other person.
77
Absolute secrecy about the state of a customers account

is the basic guarantee in bank dealings. Even when an enquiry
is made by another bank, the reply should be very brief and to
the point. The customers credit should not be injured in any
way.
2.
Style (Brevity and Conciseness)
Good Style in bank letters is brevity and conciseness
because the customers are businessmen and they have no time
to waste on superfluous reading. The banker should not be
too impersonal or formal in his letters.
3.
Tact and Courtesy
Tact and courtesy are of paramount importance in

banking letters. It is very easy to level allegations against a
customer and thereby to lose his account. Courtesy is
particularly very important while writing about overdrawn
accounts and while asking for additional security. Similarly
when a request for overdraft is to be refused, the language
should be diplomatic so that the customer takes no offence.
4.
Clarity
Clarity in bank letters must be considered as a basic

necessity. The matter should be learn and precise and there
should be no ambiguity. However, clearness should never be
sacrificed for the sake of brevity. All unnecessary details
should be avoided. If opinions are expressed, they should
not be loose opinions or mere surmises; options lead to
decisions and hence they must be backed by actual facts.
Besides, the bank letters should also possess all the
essential qualities of a business letter. The You Attitude
must be present in all the letters.
78
2:7:3 Types of banking correspondence

Banking correspondence can be broadly classified as
follows:
1.
2.
1.
Form letters.
Individual letters.
Form Letters
Bankers usually use a number of form letters with a set

text of the matter. They have a fixed phraseology meant to be
used on different occasions in the course of business
operations of the bank. They are printed with some blanks
left, to be filled in by the customers or by bank officials at the
time of transacting any deal. For example, account opening
forms, loan applications, credit reports etc. are all standardised
in their contents. They are generally prepared by legal experts
and are suitably designed in physical appearance, tone and
appropriateness of the message to be conveyed. These letters
reduce the cost of correspondence by economising on time
for dictation, transcription and handling. However, they are
used only when the intimation or communication is of a routine
nature and when no special or persuasive emphasis is
necessary.
2.
Individual Letters
Individual letter, in this context, refers to each letter

which is individually written in each case depending on the
subject concerned and sent to others. Therefore, they are not
standardised letters like form letters. Individual letters can
be again classified into three kinds namely,
1.
2.
3.
Letters between the bankers and their clients

Letters from one bank to another
Letters between the head office and the branch
office.
79
1.
Letters between the Banker and the Customers:

These comprise of
(i) Letters from the banker to the customer, and
(ii) Letters from the customer to the banker.
1)
Letters from Banker to Customers
The most important and crucial part of banker s

correspondence consists in communication with the customers.
They include answering inquiries by customers, complying
with the standing instructions of the customers, handling
complaints of the customers regarding dishonour of their
cheques, wrong statement of accounts, debits of bank charges
etc. Besides answering requests for overdrafts, bank loans
etc., there are also other occasions when correspondence is
conducted with the customers.
2)
Letters from the Customers to the Banker
These mainly consist of requests for opening accounts,

enquiries about the interest rats, status enquiries, application
for loans and overdrafts, standing instructions regarding
making payments etc.,
2.
Letters between One Banker to another
These relate to status enquiries, negotiations of bill

exchange, clearance of cheques etc., Here technical terms
normally used in the banking business can be freely used but
should not be used in letters to the customers.
3.
Letters between Head office and Branch Offices

These consist of
1. Letters from Head office to the Branch office, and
2. Letters from Branch Office to the Head Office.
1)
Letters from Head Office to Branch Office

These include letters from the Head office to the
Branch, which deal with matters of administration, and convey
80
the decisions and policy of the head office to its net work of
branches. The Head Office should serve as a model for the
branches to follow both as regards to its mode of
administration and its methods of correspondence. Therefore,
the letters from the Head Office to the Branch should serve as
a model in all those qualities such as accuracy, clearness,
courtesy etc. They should be drafted carefully and precisely.
2)
Letters from the Branch Office to the Head Office :

Letters from branches to the head office generally
consist of :
1.
Various monthly, quarterly, half-yearly or

annual reports submitted by the branch
manager. These are only factual reports and
generally form letters.
2.
Reports from branch managers giving

suggestions for further development of
business in the branch.
3.
Letters recommending appointment of staff,

promotion and transfer.
4.
Letters containing the date of advances

granted to the customers.
5.
Letters which explain some unconventional

decisions.
81
Letter No. 1 : A letter requesting a Banker to open an

account.
VASANTH KULKARNI & COMPANY
61, 5th Main, Vijayanagar, Bangalore,
Ph.........................
E-mail..................
May 17,
200....
Dear Sir,
Sub : Request for opening an account
I am desirous of opening a current account with you.
I have sent your printed application form duly filled in
with specimens of may signature and the letters of
introduction from one of your customers, Shri N. Guru,
Proprietor Madhu Sweet Mart through my personal
assistant, Miss N. Maya, who will pay a sum of Rs. 5000
(Rupees five thousand only) as initial deposit.
Kindly send with her a cheque book containing 25
leaves, a Pass Book and paying-in-slip book for purposes
of remittances.
Thank you,
Yours faithfully,
Vasanth Kulkarni,
Proprietor.
82
2:8 CORRESPONDENCE OF A COMPANY

SECRETARY
2:8:0 Introduction
The term Secretary is derived from the Latin word
Secetarius which means a confidential officer i.e., an officer
to whom confidential matters can be entrusted. In those days,
the term was solely applied only to those officers who
conducted the correspondence of the King. The profession
Secretary is, thus, as old as the man. It has also been said that
the man of action always needed a man of the pen to record
his deeds. With the passage of time, the office of the secretary
assumed more importance. Modern times, the duties and
functions have become so wide and varied that a modern
secretary does no longer resembles his ancient counter part.
Today he is not only appointed by Kings and Governments to
conduct confidential correspondence but also even appointed
by prominent persons in various fields (viz. Politicians,
Members of Parliament, Authors, Doctors, business Magnets
etc.,). Secretaries are also appointed by trading and nontrading institutions. He is even more indispensable to
organisations such as charitable and educational institutions,
sports clubs, religious bodies and professional associations.
Thus, the Secretary is almost an indispensable person in all
walks of life.
2:8:1 Classification of Secretarial Correspondence
1. Correspondence with the Directors
The secretary, being the servant of the Board, should
contact the directors frequently. As he meets the directors
personally during the board meeting, he is not required to
carry eunuch correspondence with them. However, the
secretary will have to correspond with the directors when :
1.
The notice of the Board Meeting is to be sent

83
2.
A particular information is to be
conveyed under the instructions of the
Chairman or in response to an enquiry
from a director.
3.
A director, who is absent from a Board

meeting, asks for a report of its proceedings.
4.
A director proposes in writing that a

particular matter should be included in the
agenda and the Chairman asks the
secretary to write a letter to the director
persuading him not to insist to include such
matter in the agenda.
5.
A director proposes some cause of action,

which is not in the interest of the
c o m p a n y, o r w h i c h i s i l l e g a l a n d t h e
Chairman asks the secretary to point out this
to the director.
The last two occasions are really embarrassing and so

the secretary should be very tactful in drafting these letters.
Precautions to be taken by the Secretary
The secretary in all his letters to the directors should be
very careful and observe the following precautions.
1.
2.
3.
Maintain a polite and impartial attitude so

as to influence the director to take the right
line.
Word them very carefully and tactfully
without forgetting that he is their
subordinates.
Avoid giving any offence to the directors.
The Manager
Vijayaanagar Bank Ltd.,
Vijayanagar,
Bangalore-5600014.
84
2.
Correspondence with the Shareholders
The secretary, although, basically a servant of the Board

of Directors, he is also in sense servant to the shareholders
who are the real owners of the company. Therefore, he owes
the highest courtesy and consideration to them. At the same
time, he can conduct his correspondence with them with
authority. Because secretary has to answer many secret or
unwanted request made by shareholders, his reply should not
only be polite and courteous but also be firm.
The correspondence of the secretary with shareholders
usually relates to the following matters.
1.
Complaints relating to low or unsatisfactory

dividend.
2.
Late or non-issue of notices relating to the

meetings, issue of a fresh share
certificate, lodgment of transfer deeds,
transfer and transmission.
3.
Notice and circulares relating to the change

of address of the company or schemes of
reconstruction, reorganisation etc., or any
other change in the structure of the company.
4.
Request for inspection of books and registers

etc.,
5.
Letters in response to complaints and special

requests made in writing by the
shareholders.
Precautions to be taken by the Secretary

Since the secretary speaks for the company, he must
take special care to see that his letters create a good image for
the company. He should not do anything that could lower the
companys reputation. Therefore, the following precautions
are necessary.
85
1.
For an unwarranted request the reply

should be firm but polite.
2.
If an advance information is sought

which is strictly confidential and cannot
be revealed, the secretary should not
disclose such information in the interests of
the company
3.
In case of any refusal, the tone should not

be blunt but should be polite and firm.
4.
Lengthy and protracted arguments should be

avoided.
5.
Legitimate and reasonable requests should

be complied with immediately.
86
1. CORRESPONDENCE WITH THE DIRECTORS

1. Letter requesting a Director to attend a Board Meeting
TAMILNADU CHEMICALS LTD.,
28, Peters Road,
Royapettah,
Chennai - 600 014.
23rd May 2008.
Mr. N. Narayanasamy,
4, Eldams Road,
Coimbatore - 641 001.
Dear Sir,
You are probably aware that an important item of the
companys policy is on the agenda for the next Board
meeting. Nearly thirty percent of our plant capacity is
idle and this leads to huge and unwarranted overhead
expenses.
Ways and means for utilising this spare capacity will
be discussed at the next meeting. A new chemical factory,
Mumbai Chemicals Co. Private Ltd., has approached us
with an offer to manufacture a few of their products in
our Plant. The only point difficult to decide is whether
to allow a rival firm to expand its business by using our
factory to manufacture is products.
As this item has crucial importance, your opinion will
be of immense value in arriving at a decision.
I have been asked by the Chairman, therefore, to
request you to make it convenient to attend the next
meeting of the Board of Directors, where this item will
be on the agenda.
Yours faithfully,
K. Prabbakaran
Secretary.
87

1
2.
A collection letter is also called a __________

The general meeting can be called only by giving to
every mem ber not less than _________________days
notice.
3.
The secretary of a company occupies an important
position in the administrative work.
True / False
2:9 SUMMARY
In this chapter we learn about kinds of business letters
and an attempt is made to show a few common forms of letters
under each class and deal with some of the important types
included in it. The specimen letters that follow in this book
will guide you forever. Successful drafting of claim and
complaint letters lead in right way of communication. A
collection letter is also called a Dun. It refers to a series of
letters written again and again for the settlement of account.
Modern times, the duties and functions of a secretary should
conduct confidential correspondence with persons in various
fields.
UNIT QUESTIONS
1.
2.
3.
4.
5.
What are trade enquiries?

Write a letter from the Bombay stores limited, to the
Bharath press, asking for quotation for the printing of
their catalogue 20,000 copies, copy enclosed.
List out the various contents of an order letter.
Write a short note on a) Execution of an order
b) Cancellation of an order
Mrs. Bala A Co. placed an order for 200/2 kg.Tins of
Everyday Milk powder at the price quoted, and agree to
consider the price as exeptional.
88
6.
7.
8.
9.
10.
11.
You have placed an order for 500 double fold ladies

umbrellas with stag mark umbrella company, Madras.
Saying that the goods are required for rainly seasons and
must be delivered before 31st october. Write a
letter cancelling the order as the goods were not delivered
in time.
What is meant by circular letter? what are its objectives?
What is status Inquiries? What are the steps to be followed
by writing status Enquiry correspondence?
What is collection letter? Briefly explain the guiding
principles for collection.
Draft a suitable reply to the manager of a firm who has
expressed a desire to open a current account with your
bank.
Write a note on the various types of Secretarial
correspondence.

1.
Business communication - M.S. Ramesh,
CC. Palkan shethi, Madhumati,
2.
Business communication & Customer Relations
Dr. C. B. Gupta
3.
Business communication - Kathiresan & P.R. Radha
4.
Essentials of Business communication - Rajendra pal,
J.S. Korcahalli
ANSWERS OF SELF- ASSESSMENT QUESTIONS:
1.
Dun.
2.
21 days
3.
True.
89
UNIT III NATURE AND SCOPE OF MANAGEMENT

UNIT STRUCTURE
3:1
Management
3:1:0
3:1:1
3:1:2
3:1:3
3:1:4
3:1:5
3:1:6
3:1:7
3:1:8
3:1:9
3:1:10
3:2
3:2:1
3:2:2
3:2:3
3:2:4
3:3
3:3:1
3:3:2
3:3:3
Introduction
Definition of Management
Management as an art
Management as science
The Management Process
Management Levels
Functions of various level managers
Tailor and scientific management
Principles of Scientific Management
Managerial Qualities and Training
Principles of Management
Planning
Planning Defined
Objectives and Importance of Planning
Steps in Planning
Types of Plans
Forecasting
Meaning and Nature of Forecasting
Importance of Forecasting
Limitations of Forecasting

3:4 Summary
Unit Questions
90
UNIT - III
NATURE AND SCOPE OF MANAGEMENT
3:1 MANAGEMENT
3:1:0 INTRODUCTION
Human beings, from the very beginning of their
existence have engaged themselves in the activities which have
provided them better way of living. When the people found
it difficult to perform the various activities alone, they sought
co-operation of others which later on took the shape of
organisations. With technological innovations, greater degree
of specialisation and division of labour were needed which
also resulted in the larger number of individuals working
together and getting the collective objectives through their
integrated efforts. However, in this process an agency to
integrate these efforts was needed and that gave rise to
management.
Gradual but steady development of society required the
development of this
agency-management. Today, at every
place where we talk of getting things done through collective
effort, we find management. In fact, the future of the society
depends upon the efficiency of management. That is why we
find that the pace of management development is faster than
other branches of skill and disciplines. Hence, the study of
management is an important facet of human life.
3:1:1 Definition of Management
Management can be defined as a field of study as
a team or class of people, and as a process. Management as a
field of study includes management principles, techniques,
functions, and problems. This approach, however, fails to
give the correct nature of management. Management as a
team includes individuals who perform the managerial
activities in the organisation, and the actions performed by
them come under managerial activities, However who are the
91
managers and what are these activities that should be treated

as managerial activities are hard to identify unless some yard
sticks are prescribed. This becomes more difficult specially
when those performing managerial roles bear different titles
in the organisations. Much of those problems can be solved
if management is defined as a process. That is why most of
the authors take management as a process while defining it.
In studying management as a process, various
managerial activities are taken as a basis for defining
management. There are two ways of identifying managerial
activities-inductive and deductive. Inductive methods refers
to empirical study, and various activities performed by various
managers can be taken as base for defining management.
Thus, management is what manager does. This approach,
however, suffers from two serious limitations. First, there is
a problem of identifying the managers in the organisation
because of different nomenclature. Second, there is problem
if identifying because sometimes they also perform
nonmanagerial or operative. There are various persons who
are responsible for actual operation while another class of
persons may be engaged with the functions of getting things
done by others. This latter function is called managerial
function-which comprises of planning, organising, staffing,
directing and controlling. Generally as we go high in the
organisation, we find that degree of managerial functions
increases. Thus, management can be defined as the process
of getting things done by and in co-operation with others.
3:1:2 Management as an art
Art consists in the exercise of know how or systematic
skills for the effective accomplishment of concrete results.
Every art is practical in that the proof of the practitioners
competence lies in the tangible results that he can show. Since
all art is concerned with the creation of objects or events it is
called creative. Let us apply all these features of art to
management.
92
In the first place, the process of management does

involve the use of know-how or skills. A person may
sometimes be able to manage well by institution but he may
not succeed in every situation unless he has those social skills
which a necessary for the exercise of leadership and those
technical skills and knowledge which will be necessary for
correct decision making on various aspects of the work of an
organisation.
Secondly, the process of managements is directed
towards the accomplishment of concrete results. Projects have
to be completed, sales targets have to be hit, production levels
have to be attained, a proper rate of return on investment is to
be secured, the distribution of the product has to be arranged
for different territories, and peace and harmony have to be
maintained in relations with labour. These as some of the
concrete ends for the accomplishment of which management
has to strive.
Thirdly, good management is effective management.
Unless the exercise of management results in the effective
relation of organizational goals, it is not considered successful.
It is very much like saying that the proof of pudding lies in
eating.
Fourthly, management is creative in the sense that it is
the function of creating or producing situations or objects.
Fifthly, and this is another feature of most arts,
management is personalised in the sense that every manager
has his own approach to problems. The practice of
management calls for the exercise of judgement, perception,
and flexibility and these very from one practitioner of
management to another. Not every manager is equally good
at his job. One needs to be an adept in the art of management
to do credit to ones job.
93
3:1:3 Management as science

Science is organised theoretical knowledge
empirically derived, critically tested and generalised into
theories, laws and principles. The real use of science in the
world of practice lies in the predictive power of its
generalizations. By finding out cause and effect relationships,
correlations and functional associations (Y is a function of X
when the value of Y changes with change in the value of X),
the scientist is able to say, even if with a certain degree of
probability, how a particular phenomenon will behave under
certain specific conditions. For example, a manager may know
from the general experience of managers that the expense of
advertisement is generally accompanied by an increase in
sales. It is on the strength of this knowledge that he will go in
for increased investment in advertisement effort in his bid to
boost up sales.
So far as management is concerned it does satisfy
the basic characteristics of science, too. Management is
coming up as a body of organised and systematised knowledge
comprising general principles. The principles of management
represent a distillation of the experience of practising
managers and are, therefore empirically derived. Research in
the field of management goes on and the established principles
are being scrutinised, confirmed or rejected, revised, and
replaced by more correct and precise generalisations. This,
in other words, means that management as a body of
knowledge is based on critical examination of the known
truths. And, in any case, students of management do possess
knowledge about the basic variables or factors in any business
situation with the help of which they can anticipate the effect
of certain factors or a certain course of action. But, with all
this management is at best an inexact or a soft science the
practice of which seems to be ahead of the theory. It is an
interdisciplinary science drawing freely upon various other
disciplines like economics, mathematics, anthropology,
Psychology, sociology, and in some ways even on eugenics
94
(science of heredity and physics. Basically, however, it is

concerned with the direction of human effort and the
accomplishment of work and, as such, deserves to be placed
in the category of social sciences.
It is obvious, then, that management is both an art and
a science. The science of management provides certain general
principles which can guide managers in their professional
effort. The art of management consists in tackling every
situation in an effective manner. The practising manager in
like a carpenter who has to cut, refashion and combine the
wood of principles to meet the specific situation faced by him.
It the present body of knowledge does not provide the solution
to his problems, he will try to find out new solutions and new
factors and may thus add to the science of management. The
science of management draws nurture from the practice of
managements as an and the art of management is guided by
the science of management.
3:1:4 The Management Process
It is easier to understand something as complex as
manangement when it is described as a series of separate, parts
of functions, that make up a whole process. Descriptions of
this kind, known as models, have been used by students and
practitioners of management for decades. A model is a
simplification of the real world used a model without
identifying it as such-when we said earlier that the major
management activities were planning, organizing, staffing,
leading, and controlling. This model of management was
developed at the end of the nineteenth century and is still use
today.
95
1. PLANNING
Plans give the organization its objectives and set up the
best procedure for reaching them. In addition, plans become
the guides by which (1) the organization obtains and commits
the resources required to reach its objectives, (2) members of
the organization carry on activities consistent with the chose
objectives and procedures, and (3) progress toward me
objectives is monitored and measured, so that, corrective
action can be taken if progress is unsatisfactory.
The first step in planning is the selection of goals for
the organization. Then objectives are established for the
submits of the organization its divisions, departments, and so
on. Once the objectives are determined, programs are
established for achieving them in a systematic manner. Of
course, in selecting objectives and developing programs, the
manager considers their feasibility and whether they will be
acceptable to take organizationss managers and employees.
Plans made by top management for the organisation as
a whole may cover periods as long as five or ten years. In a
large organization, such as a multinational energy corporation,
those plans may involve commitments of crores of rupees.
Planning at the lower levels, by middle or first line managers,
covers much shorter periods. Such plans may be for the next
days work, for example, or for a two hour meeting to take
place in a week.
2. ORGANIZING
Once managers have established objectives and
developed plans for or programs to reach them, they must
design and staff an organization able to carry out those
programs successfully. Different objectives will require
different kinds of organizations. For example, an organization
that aims to develop computer software will have to be far
96
different from one that wants to manufacture blue jeans;

Production a standardized product like blue jeans requires
efficient assembly the techniques, whereas writing computer
programs requires teams of professionals-systems analysts,
software engineers, and operators. Although they must interact
effectively, such people cannot be organized on an assembly
line basis. It is clear, then that managers must have the ability
to determine what type of organization will be needed
to accomplish a given set of objectives. And they must have
they ability to develop (and later to lead) that type of
organization.
3. STAFFING
Staffing involves manning the positions created by
organisation process. This process includes inventory,
appraising, and selecting candidates for positions, fixing
financial compensation training and developing them to
discharge organisational functions effectively. There is a
controversy whether staffing is a function to be performed by
all managers in the organisation because there is a specialised
personnel department in each organisation. The answer is
simple. Staffing function is complicated agency known as
personal department. For example, keeping inventory of the
personnel, advertising for jobs, calling candidates for selection
process, etc., are assigned to personnel department but the
manager of the department in which a person works or is
expected to work is always interested and involved in staffing
in the context of that person. The manager performs the duties
of job analysis, job description, appraisal of efficiency, etc.,
which come under the staffing function.
4. LEADING
After plans have been made, structure of the
organization has been determined, and the staff has been
recruited and trained, the next step is to arrange for movement
toward the organizations defined objectives. The function
97
can be called by various names: leading, directing, motivating,

actuating, and others. But whatever the name used to identify
it, this function, involves getting the members of the
organization to perform in ways that will help it achieve its
established objectives.
Whereas planning and organizing deal with the more
abstract aspects of the management process, the activity of
leading is very concrete; it involves working directly with
people.
5. CONTROLLING
Finally, the manager must ensure that the actions of the
organizations members do in fact move the organization
toward its stated goals. This is the controlling function of
management, and it involves four main elements.
(1)
Establishing standards of performance.
(2)
Measuring current performance and

comparing it a gainst the established
standards.
(3)
Detecting deviations from standard goal in

order to make corrections before a sequence
of activities is completed.
(4)
Taking action to correct performance that

does not meet those standards.
Though the controlling function, the manager can

keep the organization on its chosen track, keeping it from
straying from its specified goals.
A manager has to perform these functions in the
organization whatever the level of manager or the objective
of the organization is. Koontz O donnel I have observed
Acting in their managerial capacity presidents, department
98
heads foremen supervisors, college deans, and heads of

government agencies all do the same thing. The question of
which management function is most important has often been
raised. No one of the managerial functions is more important
than the others, the mix of the functions will vary from task
to task but they are all important and necessary in
accomplishing any organizational goal.
3:1:5 Management Levels
(a)
First line Managers:
The lowest level in an organizational which individuals

are responsible for the work of others is called first line or
first level management. First line managers direct operating
employees only; they do not supervise other managers.
Examples of first-line managers are the foreman or
production supervisor in a research department, and the
clerical supervisor in a large office. First-level managers are
often called supervisors.
(b)
Middle Managers:
The terms middle management can include more than

one level in an organization. Middle managers direct the
activities of lower-level managers and sometimes also those
of operating employees. Middle manager s principal
responsibilities are to direct the activities that implement their
organizations policies and to balance the demands of their
superiors with the capacities of their subordinates.
(c)
Top managers :
Composed of a comparatively small group of executives,

TOP MANAGEMENT is responsible for the overall
management of the organization. It establishes operating
policies and guides the organizations interactions with its
environment. Typical titles of top managers Chief executive
officer, President, and Senior Vice President, Actual titles
vary from one organization to another and are not always a
99
reliable guide to membership in the highest management

classification.
3:1:6 Functions of various level managers
The Management functions are universal which
suggests that the manager at all levels have to perform all the
functions of planning, organising, staffing directing and
controlling. This is, in a broad sense,true, but the emphasis
varies on a particular functions with the change of management
level. For example, a top level manager is involved more in
policy formulation rather than the control functions and
supervisor may put more emphasis on control. These
difference in the emphasis of various functions at different
levels require different characteristics and qualities in
managers.
TOP MANAGEMENT
Top management in an organisation consists of
shareholders, board directors, and the chief executive. The
chief executive may be called by various names - Managing
Director, Director- General, President, Chief Executive
Officer, etc., Top management is responsible for overall
management of the organisation and performs all such
functions necessary for this. These functions may be classified
into three parts:
(i)
Overall Management.
This includes determination of organisational goals and

objectives. Overall planning, organising, staffing directing,
and controlling. It integrates the entire organisation, maintain
balance between specialised interests within the organisation,
and accommodates it to the external environment.
(ii)
Overall Operations.
This includes the overall execution of plans and

designing organisation structure for the same. Coordination
among various functionaries at this level becomes very
important.
100
(iii) Overall Relationship.

This requires maintaing relationship among different
individuals in the organisation and maintaining organisational
relationship with external environment- Government, trade
associations, suppliers, financial institutions, etc.,
MIDDLE MANAGEMENT
This groups comes between top management and
supervisory management. According to Files, middle
managers have pressures from three corners: (i) Top
management forces them to act i.e. accordance with its
policies, direction, and guidance. (ii) Lower management
puts pressure over them for accepting and accommodating its
ideas and views (iii) Middle managers themselves are
interrelated and they expect greater co-operation and working
facilities. These managers have to function in these pressures.
There is little uniformity in middle managers because of their
own levels in various organisations. Thus, a small organisation
may not have middle management group, but a large one has
several levels of middle managers. This suggests that as an
organization grows, most new levels are added among middle
management. However, a generalization can be achieved in
various functions of this group. These functions are following:
(i)
To execute various functions of the organisation
so that top management gets enough time for integrating
overall functioning of the organisation.
(ii) To co-operate among themselves, with top
management and w i t h s u p e r v i s o r s s o t h e m a n a g e
organisation functions without any impediment
(iii) To integrate various parts of the organisation:
(iv) To develop and train employees in the
organization for better functioning and for filling future
vacancies:
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(v) To develop and inculcate feeling among

e m p l o y e e s f o r subordination of individual goals to
organisational goals.
SUPERVISORY MANAGEMENT
Supervision is often limped conveniently in with
all other levels in managerial hierarchy and discussed as part
of leadership. In fact, the term supervision traditionally used
to refer to the activity dealing with instructing, guiding, and
inspiring human begins toward greater levels of performance.
From this point of view, it is synonymous to leadership which
is common for all levels of management. However, we are
restricting this term here to denote the specific level of
management in an organization. This level is referred to as
supervisors, the first level managers in the organisation. The
term supervisor includes types of foreman and junior
executives below middle management level.
Their various functions of a supervisor may be described
as below :
(i)
To s u p e r v i s e a n d c o n t r o l e m p l o y e e s
functioning
(ii)
Planning the activities of his section,

classifying and assigningjobs to workers;
(iii) Guiding workers about work procedure:

(iv) Managing and arranging the necessary
materials, tools, etc., for workers;
(v)
Providing on-the job training to workers;
(vi)
Maintenance of machinery, tools, etc.,
(vii) Giving advice to management about working

environment;
(viii) Solving problems of workers:
102
(ix)
Communicating the problems of workers,

which are to solved at his level:
(x)
Maintaining discipline among workers,

developing in them right approach for work;
and
Maintaining good human relations.
(xi)
3:1:7 Tailor and scientific management

Taylor and other contributories, notably Frank Gilbreth
and Lilian Gilbreth, Henry Gant, Emersion, investigated the
effective use of human beings in industrial organisations. They
studied primarily the use of human beings as adjuncts to
machines in performance of routine tasks. The area of human
behaviour in organisations investigated by them was quite
narrow, and the theories of human behaviour in this approach
encompass primarily physiological variable. This is because
of the historical accidents of their positions and training in
the industry and the type of problems they faced then.
F.W. Taylor is know as the father of scientific
management. He has defined scientific management as the
art of knowing exactly what you want men to do and them
seeing that how they do it in the best and cheapest way.
Taylor was born in Pennsylvania, U.S.A. in 1856.
During his early youth, he attended schools, is France and
Germany and travelled considerably. However, he could not
continue this studies and in 1874 he went to work at the
midvale Steel Company as a labourer as it was difficult to get
machinist job. There he rose within six years as the Chief
engineer of the company. Meanwhile, he obtained graduation
in Physics and Mathematics from Harvard University and later
of Master of Engineering (M.E) from Stevenbes Institute;
U.S.A. In 1898, Taylor was employed but the Nedthlehem.
Steel Company to increase output of one of the larger machine
shope, which had been a serious production bottleneck. Here
103
he worked up to 1901 and after is retirement he devoted

his time in writing and developing scientific management.
Most of his experiment were carried on in these two
organisations.
With these experiments, Taylor was busy in managing
activities also. He perceived several new functions of
managers, According to him these were:
1.
Replacing rule-of thump methods

with scientific determination of each
element of a mans job.
2.
Scientific selection, and training of

workmen;
3.
Co-operation of management and labour to

accomplish work in accordance with
scientific method; and
4.
A more equal division of responsibility

between managers and workers.
Taylor has emphasised that these are the mechanisms

of management and the mechanisms of management must not
be mistaken for its essence, or underlying philosophy. Taylor
also adopted differential piece-rate plan to motivate workers
for higher efficiency. According to this plan, high was rates
were provided to workers achieving less than standard work
with no guarantee of minimum wage. Taylor, on the basis of
his experiments and experiences, published the following
articles:
1.
A Piece Rte System 1895
2.
Shop Management 1903
3.
On the Art of Cutting 1906
Later, he integrated his ideas in his classic, The
Principles of Scientific Management which was published
in 1911. The analysis of whole contribution of Taylor many
now be presented in the form of principles of scientific
management as below.:104
3:1:8 Principles of Scientific Management

1.
Separation of Planning and Doing :
Before Taylors scientific management, a workers

himself used to decide how he had to work and what
instruments were necessary. Thus, he planned his work also,
and there was gang boss to supervise his work. Taylor has
emphasised that planning function should be given to
specialists.
2.
Functional Foremanship :
Taylor has evolved functional foremanship to supervise
and giving various directions. In this system eight persons
are involved to direct the activities of workers. Out of these,
four persons (i) route clerk, (ii) instruction card clerk. (iii)
time and cost clerk and (iv) disciplinarian are related with
planning function and the remaining four (a) speed boss, (b)
inspector, (c) maintenance foreman, and (d) gang boss are
concerned with operating function. This is totally against the
principle of unity of command.
3.
Job Analysis :
There is one best way of doing a on which requires least

movement, consequently less time and cost. In every industry,
this way should be determined which involves time, motion
and fatigue study.
(i)
Time Study :
Time study involves the determination of time a

movement takes to complete. The movement which takes
minimum time is the best. This helps in determining fair work
for a particular period.
(ii)
Motion Study :
Motion study involves the study of movements in parts

105
which are involved in doing a job and thereby eliminating the

wasteful movements and performing only necessary
movements. This helps in reducing the fatigue of workers.
(iii) Fatigue study :
This indicates that the workers feel fatigued after putting
in work for a certain period and they are not able to do the
work at their full capacity. Thus, they should be provided
appropriate rest at appropriate levels. The fatigue study shows
the time and frequency of rest.
4.
Standardisation :
Standardisation is to be maintained in respect of

instruments and tools, period of work, amount of work,
working condition, cost of production, etc., These should be
fixed in advance and on the basis of various experiments.
5.
Scientific Selection and training :
Selection of workers should be on scientific basis, and

their education, experience, aptitude, physical, strength etc.,
should be adequately considered. A workers should be given
work for which he is physically and technically most suitable.
Training should be provided to workers to make them more
efficient.
6.
Financial incentives :
Workers can be motivated by financial incentives. If

provisions exists to earn higher wages by putting higher
efficiency, workers will put more work. Taylor himself applied
differential piece-raise-system which is of a highly motivating
nature, the wage should be based on individual performance
and on the position which he occupies. The rates should be
fixed on accurate knowledge and not on estimates.
106
7.
Economy :
While applying scientific management not only

scientific and technical aspects should be considered but
adequate consideration should be given to profit and economy.
For this purpose techniques of cost estimates and control
should be adopted.
8.
Bilateral mental revolution :
Scientific management depends upon the co-operation

between the management and the workers. For this cooperation, there should be a mental change in both parties
and from conflict to co-operation. Taylor feels that it is the
most important factor in executing scientific management.
Taylor was primarily concerned with problem at the
operative level, and did not emphasise managerial organisation
and processes. It was Henry Fayol who, for the first time,
studies the functions and principles of management in a
systematic manner. Besides notable contributions have been
made by Oliver Sheldon, Haldance, Luther, Gullick, Mooney
and Reiley, Urwick, and many others. These theories viewed
the central problem has been one where there must be
identification of tasks necessary for achieving the general
purpose of the organization and of the grouping to take place
to fulfil these functions most effectively.
Perhaps, the real father of modern operational
management theory is Henry Fayal. He was a French mining
engineer, who after obtaining engineering degree joined a
French coal firm as technicians in 1880. He after became its
chief executive and retired in 1918 from the firm. UP to his
death (December, 1925) he was engaged in French managerial
revolutions. In 1916, he published his famous book in French
language Administration industrielle as Generable. It was
printed several times in French, but its English translation
was available only in 1929, much after his death, and very
107
few people copies were made available outside, and very few
people copies were made available outside Great Britain. In
fact in the U.S.A. Where most of the management were
contributions were made, very few people knew about
the contributions of Fayol for many years. His work for
general readers was made available only in 1949 as General
And Industrial Administration.
Fayol observed the organisational functioning from
managers point of view. He found that all activities of the
organization could be divided into six groups.
1.
2.
3.
4.
5.
6.
Technical relating to production:

Commercial (buying, selling, and exchange.):
Financial (search for capital and its optimum use);
Security (Protection of property and person);
Accounting (including, statistics) and
Managerial (planning, organisation, command,
coordination and control)
He points out that these activities exists in every

organisation. He further observes that first activities are well
known to a manager and consequently had devoted most of
his book to analyse managerial activities. Fayol has divided
his approach of studying management in three parts:
(i)
managerial qualities and training,
(ii) general principles of management,
(iii) elements of management.
3:1:9 Managerial Qualities and Training
Henry Fayal was the first person to identify the various
qualities for a manager. According to him these qualities are
(i)
physical (health, vigour, and address):
(ii)
mental (ability to understand and learn,

judgement, mental vigour, and adaptability):
108
(iii) moral (energy, fitness, initiative, loyalty,

tact and dignity);
(iv)
educational (acquaintance with matters

related to general functioning);
(v)
technical (acquaintance with functions being

performed and
(vi)
experience (arising from the work).
3:1:10
Principles of Management
Fayol has given the fourteen principles of

management. According to him, the list is not exhaustive,
but he had tried to describe only those which he had
emphasised flexibility in these. According to him, There is
noting rigid or absolute in management affairs, it is all a
question of proportion-therefore principles are flexible and
capable of adoption to every need. It is a matter of knowing
how to make use of them, which is difficult art requiring
intelligence, experience, and proportions These principles
are as follows:
1.
Divisions of Work :
Fayol has advocated division of work to take the

advantage of specialization. According to him, specialization
belongs to the natural order. The workers always works on
the same matters manager concerned always with the same
matters, acquire an ability, sureness, and accuracy which
increase their output. Each change of work brings in it training
and adaptations which reduces output, thus division of work
can be applied at all levels in the organization. However he
has recognized the limitations of division of work and has
advocated that experience and sense of proportion will decide
the extent to which division of work can be utilized fruitfully.
109
2.
Authority and Responsibility :
The authority and responsibility are related, with the

latter-the corollary of the former and arising from the former.
He finds authority as a continuation of official and personal
factors. Official authority is derived from the managers
position and personal authority is derived from intelligence,
experience, moral worth, past services etc., Responsibility
arises out of assigning the work.
3.
Discipline :
All the personal serving in the organisation should be

disciplined. Discipline is obedience, application, energy
behaviour, and outward mark of respect shown by employees,
Discipline can be classified into two types; self-imposed
discipline and command discipline stems for a recognised
authority and utilises deferents to secure compliance with a
desired action, which is expressed by established customs,
rules and regulations. The ultimate strength of command
discipline likes in its certainty of application. Fayol observes,
that, discipline is what leaders make it. Experience and fact
on the part of manager are put to the proof in the choice and
degree of sanctions to be
used, such as remonstrances, warnings, fines, and suspensions,
demotion, dismissal, Individual people attendant
circumstances must be taken into account.
4.
Unity of Command :
Unity of command means a person in the organisation

should receive orders from only one superior, the more
completely and individual has a reporting relationship to a
single superior, the less the then problem of conflict in
instructions and the greater the feeling of personal
responsibility for results. The principle of unity of command
is useful in the clarification of authority-responsibility
relationships. Fayol has considered it very important for
organisational efficiency. He goes on writing, should it (unity
110
of command) be violated, authority is undermined, discipline

is in jeopardy, order disturbed and stability threatened. This
rule seems fundamental to me and so I have it to the rank of a
principle.
5.
Unity of Direction :
Unity of direction means one unit and one plan.

According to this principle, each group of activities with same
objectives must have one head and one plan. The unity of
direction is different from unity of command in the sense that
former is concerned with the functioning of body corporate,
the latter is concerned with personnel at all level. Fayol writes
that, unity of direction (one unit, one plan) must not be
confused with the unity of command (one employee should
have orders from one superior only). Unity of direction is
provided for by sound organisation of the body corporate,
unity of command turns on the functioning of the personnel.
Unity of command cannot exist without unity direction, but
does not flow from it.
6.
Subordination of Individual Interest to General

Interest :
Command interest is above the individual interest and

when there is conflict between these two, the common interest
must prevail. However, factors like ambition, laziness,
weakness etc., tend to reduce the importance of general
interest.
7.
Remuneration of Personnel :
Remuneration and methods of payment should be fair

and provide maximum possible satisfaction to employees and
employers.
111
8.
Centralisation :
Everything which goes to increase the importance of

the subordinates role is decentralisation. Everything which
goes to reduce it is centralisation. Without using the term
centralisation, of authority Fayol refers to the extent to which
authority is centralised or decentralised. This pattern is
determined by individual circumstances and should be based
on optimum utilisation of all faculties of the personnel.
9.
Scalar Chain :
There should be a scalar chain of authority and

communication ranging from the highest top to the lowest
positions. It suggests that each communication going up or
coming down must flow through each position in the line of
authority. It can be short-circuit only in special circumstances
when its rigid following would be detrimental to the
organisation. For this purpose, Fayol has suggested
gangplank which is used to prevent the scalar chain from
bogging down action, his gang-plank can be presented as
follows:
A is the top man having immediate subordinate
B and L. In turn, B and L are having immediate subordinates
C and M. This continues up to the level of G and Q. Ordinarily
the communication must follow from A to B to C to D and so
on. It means if any communication is going from F to P, it
will flow from F to E reaching A via D,C,B and coming down
to P via L, N, and O. Fayol suggest that this system takes
time and can be substituted by grand-plank without weakening
the chain of command. It would only be necessary for the
superiors of F and P to deal in a few hours with some question
or other which via the scalar chain would pass though twenty
transmissions, inconvenience people, involve masses of paper,
lose weeks or month, to get to a conclusion less satisfactory
than the one which could have been obtained
via direct contact.
112
10.
Order :
This is a principle relating to the arrangement of things

and people. In material order, there should be a place for
everything and everything should be on its place. Similarly
in social order, management of right man should be in the
right job.
11.
Equity :
Equity is the combination of justice and kindness. The

application of equity requires good sense, experience, and
good nature for soliciting loyalty and devotion from
subordinates.
12.
Stability of Tenure :
Stability of tenure is essential to get employee

accustomed to new work and succeeding in doing it well.
Unnecessary turnover is both the cause and effect of bad
management.
13.
Initiative :
Initiative is concerned with thinking out and execution

of a plan. Initiative increases zeal and energy on the part of
human beings. Managers should secure as much initiative as
possible from the subordinates.
14.
Esprit de corps :
This is the principle of union is strength and extension

of unity of command for establishing team work. Proper
communication is important in obtaining it. By Urwick in
Proper perspective in the following words:
The work of Taylor and Fayol was, of course,
essentially complementary. They both realized that the
problem of personnel and its management at all levels is the
key to industrial success. Both applied scientific method
113
to this problem, that Taylor worked primarily on the operative

level from the bottom of the industrial hierarchy upwards,
while Fayol concentrated on the Managing Director and
worker downwards, was merely a reflection of their very
different careers. But Fayols capacity of his intellectual
integrity and generosity of spirit. They gave France a unified
management body more than twenty years before the same
idea began to be realised by Great Britain.
3:2 PLANNING
Management functions, as pointed out earlier, are
classified as planning, organising, staffing, directing and
controlling. Planning function of management precedes
others. Without setting the goals to be reached and line of
actions to be followed, there is nothing to organise, to direct
or to control in the organisation. However, this should not
lead on to hold the view that planning is an isolated activity
required only at the beginning. This is a continuous and
unending process to keep the organisation as a going concern
and other functions are also performed simultaneously.
3:2:1 Planning Defined
Planning involves the determination of future
course of action, that is why an action, what is to be done,
how to be done and when to be done. The answers to all such
constitute the planning function. Why an action at all is to be
undertaken reveals that action has some objectives and targets
which are decided at the initial stage. What actions are to be
taken correlate actions with objectives, how and when to be
done generates policy, programme, procedure, budgeting and
other related elements. Planning bridges he gap from where
we are to where we want to go. It makes possible for things
to occur which would otherwise not happen. Thus, it provided
base for further managerial functions.
On the basis of the various definitions, following
characteristics of planning can be identified.
114
1. Planning is closely associated with the goals of the

organization. As such, in the planning process, organisational
goals play an important part. Those goals might be implicitly
or explicit; however well-defined goals lead to efficiency in
planning.
2. Planning is primarily concerned with looking in to
the future. It requires forecasting of future situation in which
organisation has to function. Accurate forecasting leads to
correct decisions about future course of action.
3. Planning involves selection of the best alternative.
This means that there are several alternatives for achieving
the organisational objectives, however, all of them are not
equally applicable and suitable to the organisation.
4. Planning is comprehensive and includes every course
of action in the organization, it may occur at the organisational,
or at the level of a supervisor. However, its scope and
importance increase at successively higher levels.
5. Planning is an interdependent process. It co-ordinates
the activities of various departments, sections, and subsections.
6. Planning is flexible as it is based on future conditions
which are always dynamic. As such, an adjustment is needed
between the various factors and planning.
Planning is every managers job : Before managers can
organize, lead or control, they must make the plans that give
purpose and direction to the organisation-deciding what needs
to be done, when and how it needs to do done, and who is to
do it. Plant Managers must plan how their facilities are going
to be used, how many of what products to make, and when to
make them. Marketing managers must plan how to introduce
products, what distribution channels to use, and how to price
the products. Even financial managers must plan how to
structure the debt and equity of the firm and how to budget
and spend resource.
115
The need for planning exists at all levels and

actually increases at higher level, where it has the greatest
potential impact on the organizations success. Upper level
managers generally devote most of their planning time to the
distant future and the strategies of the entire organisation;
managers at lower levels plan mainly for their own sub and
for the shorter term. Variations in planning responsibilities
depend also on the organisations size and purpose and on the
managers specific function or activity. Thus a multinational
company would be more concerned with planning of the
distant future than would a local retailer since its operations
around the world may well be more complex. Some
organisations say, mining companies, airlines, the Department
of Defence must take long-range commitments because of their
particular purposes and objectives. On the other hand, a book
store might concentrate on seasonal or annual goals. Still
other types of organisations must strike a balance between
short-and long term planning responsibilities. For example,
because of frequently changing styles, dress manufacturers
might make only short-range plans for personnel selection
and improvement of production techniques and capacity. It
is improvement of production techniques and capacity, it is
important, therefore, for managers to understand the roles of
both long-range and short-term planning in the overall
planning scheme.
3:2:2 Objectives and Importance of Planning
All the managerial actions depend on planning.
It provides a guideline to all functions. Moreover, when all
the functions are performed to give a certain result, this is
compared with the planned result to ensure that organisational
objectives are being achieved. Better planning ensures better
utilization of the organisation resources. Thus, it is not only
important from an organisations point of view, but also to
the society as a whole. In an organisation, planning is
important in the following manner.
116
1.
To Offset Uncertainty and Change :
Future is always full of uncertainties and changes. The

organisation has to function in these uncertainties and
changing conditions. However, some of the uncertainties and
changes can be predicted on the basis of forecast. Thus,
planning foresees the future and makes provisions for it there
by giving an added strength to the organisation for continuous
growth and steady prosperity.
2.
To Focus Attention on Objectives :
Planning depends upon the objectives of the

organisation. All the activities are performed to achieve these
objectives. However, planning means these objectives help
in providing guidelines for the individuals in the organisation.
3.
To help in Coordination :
Though all the managerial functions lead to the

coordination in the various units of the organisation, it stars
at the planning stage. Well-considered overall plans unify
interdepartmental activities and consequently restrict the area
of freedom in the development of purely departmental plans.
Thus, various department work in accordance with the overall
plan and harmony is achieved. It can be said the if
coordination is the essence of management planning is the
base for it.
4.
To Gain Economy in Operation :
Planning minimises costs because of the emphasis on

efficient operation and consistency. In fact, planning involves
the selection of most profitable course of action the would
lead to the best result at the least costs. But providing
consistency and balance in the efforts, planning introduces
continuous and even flow of work without any friction or loss
of energy.
117
5.
To help in Control :
Control involves the measurement of

accomplishment of even against plans and the correction of
deviation to assure attainment of objectives according to plans.
It is exercised in the context of planning which expresses the
goals and targets in quantitative forms which are comparable
with the actual achievements. Thus, the efficient of a
department or an individual can be ascertained and corrective
action taken for higher efficiency.
6.
To increase Organisational Effectiveness :
Mere efficiency in the organisation is not important,

but it should lead to effectiveness. This implies that
organisational resources are utilised for accomplishing
objectives which include efficiency also. Through planning
and control, organizational effectiveness is measured in the
context of the stated objectives and further actions may be
taken in this direction.
3:2:3 Steps in Planning
Planning in a business enterprise generally calls for the
following steps on the part of a manager.
(i)
Recognition of the need for action :
This means that the manager must first identify the

problem or opportunity that calls for planning and action.
(ii)
Establishment of clear-cut objectives :
As the second step, the manager has to lay down in the

rearrest possible terms his objective keeping in view his
strengths and limitations.
(iii) Building the premises for planning :
This involved the collection and insemination of
the facts and figures necessary for planning the future course
118
of an enterprises or a part of it. Forecasting is, thus, an

important step in planning. A forecast is a picture of the future
based on inference from the known facts. A business enterprise
will need to forecast its markets, sales, prices, product costs
and wages rates taking into account projections of taxies,
population, literacy, economic development etc., before it can
venture to formulate plans for the future.
(iv)
Identifying alternative courses of action :
The next step in the planning process is to search

for and examine alternative courses of action. The strengths
and weaknesses of the alternative courses of action also need
to be examined by the manger at this stage.
(v)
Evaluation of alternative course :
The manager has to compare the strong points and the

limitations of the alternatives identified at the last stage in
the light of premises and goals. Since there are so many
complex variables connected with each goal and each possible
plan, the process of comparative evaluation is extremely
difficult. Ultimately, the choice will depend upon what is
determined as most critical factor from the point of view of
the objectives of the enterprises.
(vi)
Choice of a course of action :
This is the point of final decisions - making after which

the manager adopts a particular course of action as his plan.
Sometimes, a manager may decide upon more than one plan
at the same time.
3:2:4 Types of Plans
Plans have may functions in an organisations; they
provide the objectives to be met by plans at the lower level;
they provide the means for achieving the objectives set in the
plans of the next higher level; and serve as vehicles for
communication among organisational members.
119
There are two main types of plans, Strategic plans are

designed to meet the broad objectives of the organization to
implement the mission that provides the unique reason for
the organisations existence. Operational plans provide details
as to how the strategic plans will be accomplished.
In turn, there are two main types of operational plans.
Single use plans are developed to achieve specific purpose
and to be dissolved when these have been accomplished;
standing plans are standardized approaches for handling
recurrent and predictable situations.
Single-Use Plans :
Single-Use plans are detailed courses of action
that probably will not repeat in the same from in the future.
For example, a rapidly expanding firm, planning to set up a
new warehouse, will need a specific singly-use plan for that
project even thought it has established a number of other
warehouses in the past. It will not be able to use an existing
warehouse plan, because the projected warehouse presents
unique requirements of location, construction costs, labour
availability, zoning restrictions, and so forth. The major type
of single-use plans include programs, project and budgets.
For example, in 1982 when AT & T agreed to split itself into
eight separate companies, it created a single-use plan called.
The plan for Divestitive. Many person-years of work went
into the creation of this document, which served as a blueprint
for the unique events that were to occur.
A program covers a relatively large set of
activities. The program shows (i) the major steps required to
reach an objectives, (2) the organization unit or member
responsible for each step, and (3) the order and timing of each
step. Projects are smaller, separate portions of programs of
limited scope and distinct directives concerning assignments
and time. If the program is to transfer inventory from one
120
warehouse to an other, one related project might to be evaluate

floor space at the proposed installation. Budgets are
statements of financial resources set aside for specific
activities in a given period of time; they are primarily devices
to control an organisations activities and are thus important
components of programs and projects.
Whenever organizational activities occur repeatedly, a
single decision or set of decisions can effectively guide those
activities. Once established, standing plans allow managers
to conserve time use for planning and decision making because
similar situations are handled in a predetermined, consistent
manner. For example, bank managers can more easily approve
or reject loan requests if criteria and established in advance
to evaluate credit ratings, collateral assets; and related
applicant information.
In some cases, however standing plans can be
disadvantageous because they commit managers to past
decisions which, although venerable, may no longer be
appropriate. For this reason, it is particularly important that
standing plans be continuously reinterpreted and analysed for
their potential flexibility.
(b)
Standard Procedures :
Policies are carried out by meant out of more detailed

guidelines called standard procedures or standard methods.
A procedure provides a detailed set of instructions for
performing a sequence of actions that occurs often or regularly.
For example, the refund department of a large discount store
may have a policy of refunds made with a smile, on all
merchandise returned within seven days of purchase. The
procedure for all clerks who handle such merchandise might
then he (1) smile at customer, (2) cheek receipt for purchase
date; (3) check condition of merchandise .... and so on. Such
detailed instructions guide the employees who perform these
tasks and help insure a consistent approach to a specific
situation.
121
(c)
Rules :
Rules are statements that a specific action must or must

not be taken in given situation. They are the most explicit of
standing plans and are not guides to thinking or decision
making rather they are substitutes for them. The only choice
a rule leaves it whether or not to apply it to a particular set of
circumstances. For example, in an office where the rule
requires all employee to work until five O clock, the manager
may decide to suspend the rule in order to dismiss the staff
earlier on a rainy day if a cyclone is expected. The
proliferation of rules can often adversely affect employee
morale. This is especially true when employees have been
accustomed to working without many rules, as was the case
with Apple Computer under its innovative founders Steven
Jobs and Stephen Wozniak. When they hired professional
manager John Sculley, he instituted a more traditional set of
rules, from tough product development deadlines to formal
reporting procedures. Given the once informal nature of these
activities, the changes created quite a morale problem,
particularly for those accustomed to the less formal approach.
While some organizations have many policies,
procedures, and rules, others have few. Even though each
particular instance of a policy, procedure, or rule may be wellintentioned, some organizations, have found that, overall, there
are just too many policies, procedures and rules. They have
taken steps to eliminate those that are unnecessary and to give
people more autonomy in the exercise of their judgement.
3:3 FORECASTING
3:3 Meaning and Nature of Forecasting
Fevers to analysis of past and current events so as to
obtain clues about future trends in the business environment.
On the basis of the foregoing definition, the following features
of forecasting can be identified:
122
1.
Forecasting is concerned with future

events. It defines theprobability of
happening of future events.
2.
Forecasting is done by analysing the past and

present events relevant to the functioning of
the enterprise.
3.
Forecasting has become a specialised

activity wherein several techniques are
available for predicting the future.
4.
Forecasting are made on the basis of data

collected from within (internal sources) and
outside(external sources) the organisation.
Data may be obtained through informal
monitoring and formal scanning of the
environment.
5.
The quality of forecast depends on the

reliability of information.
6.
Forecasts may be made for long term or short

term. Long-term forecasts tend to be less
accurate than short-term forecasts.
7.
Forecasts can be of several types.

Economic forecasts are made to predict
general economic conditions. Sales forecast
predicting the sales for particular enterprise
or product are important part of economic
f o r e c a s t s . Te c h n o l o g i c a l f o r e c a s t s
predicts changes in the attitudes and
preferences of people.
123
3:3:2 Importance of Forecasting

Forecasting provides the following benefits.
1.
Key to Planning:
Forecasting provides the vital facts and pertinent

information for effective planning. It improves the quality of
managerial planning in several ways. With the help of
forecasting management can anticipate future trends and
decide the appropriate course of action to take advantage of
these trends. For example, sales forecasting helps in
identifying the future demand patterns with which
management can plan the development of a profitable product
mix. Forecasting focuses attention on the future and thereby
brings unity of purpose in planning.
2.
Means of Coordination:
People at different levels participate in the process

of forecasting. Regular interactions between the members of
the organisation facilitate cooperation and unity among them.
Forecasting helps in integrating various departmental plans
into the corporate plan.
3.
Basic for Control:
Forecasting provides relevant information for

exercising control. The managers can know their weaknesses
in forecasting process and take suitable action to overcome
these. Forecasting can disclose the areas were control is
lacking. Once such areas are identified steps can be taken to
make control effective.
4.
Executive Development:
Forecasting requires executives to look ahead,

think through the future and improve their mental faculties.
Managers develop the habit of collecting, analysing and
interpreting data instead of depending on guesswork.
124
5.
Facing Environment Challenges:
Forecasting provides clues about the future

happenings. With the help of this knowledge managers can
save the organisation from the impact of trade cycles and other
threats. Without business forecasting external forces may
cause irreparable damage to the organisation and many
opportunities might be lost. Forecasts provide a vision of the
nature.
3:34:3 Limitations of Forecasting
On the basis of forecasting assumptions about
future trends are made. These may not be fully true because
future can rarely be predicted with complete accuracy.
Therefore, while using it in planning managers should be
aware of the limitations of forecasting. These limitations are
as follows:
1.
Based on Assumptions.
All forecasts are based on certain assumptions which

may not always be true. The basic assumption behind
forecasting is that events do not change haphazardly and there
is an orderly pattern in their behaviour. This assumption may
not hold good in all cases. As a result forecasts may become
unreliable.
2.
Not absolute Truth.
Forecasts merely indicate the trend of future events and

may not be fully true. The various technique of forecasting
simply project the future trends and cannot guarantee that a
particular trend will occur in future. All forecasts are wrong,
they only differ in the degree of error. There is always a
possibility of mistake.
125
3.
Time-consuming and Expensive.
Lot of time and money are involved in the collection,

analysis and interpretation of data for forecasting. Therefore,
forecasting is useful only to the extend that benefits expected
from it exceed the time and cost involved.
126
SELF- ASSESSMENT QUESTIONS:

1. Management is concerned with the _________of policies.
2. Planning and decision making are different .
True / False
3.
Match the following
1.
Administration -a. Prediction of future events
2.
Forecasting
-b. Laying down policies
3.
Span of contrast -c.Optimum number of
subordinates
3:4 SUMMARY
Management as a team includes individuals who
perform the managerial activities in the organisation.
Management this term includes planning, organizing,
controlling, staffing and leading. All the managerial actions
depend on planning. It provides a guideline to all functions.
We come to know briefly from this chapter what are the
principles of scientific management and importance of
forcasting.
UNIT QUESTIONS
1.
2.
3.
4.
5.
6.
7.
8.
9.
What is Management?
Is management an art or a science? Discuss.
Compare and contrast Taylors and Fayols
principles of management?
Explain the various functions of management.
What is planning?
Describe the basic steps in the planning process.
Why is each step important?
Explain the importance of planning.
What are the different types of plan?
What is forecasting?
127
10.
What are the Importance and limitations of

Forecasting?

1.
2.
3.
Dr. C.B. Gupta

Pinkar pagare
S.A. Sherlekar
V.S. Sherlekar
4.
J.Jayasankar
management.
Business Management
Business Management
Principles of Business
Management
Principles
of
ANSWERS OF SELF- ASSESSMENT QUESTIONS

1. Implementation (or) execution
2. True
3. 1-b, 2-a, 3-c
128
UNIT IV ORGANIZATION
UNIT STRUCTURE
4:1
4:1:0
4:1:1
4:1:2
4:2
4:2:1
4:2:2
4:2:3
4:2:4
4:2:5
4:3
4:3:1
4:3:2
4:3:3
4:3:4
4:3:5
4:3:6
4:4
4:4:1
4:4:2
4:4:3
4:4:4
4:4:5
4:4:6
4:5
4:5:0
4:5:1
4:5:2
4:5:3
Organization
Introduction
Nature and elements of Organisation
Purpose and Importance of Organisation
Leadership
Meaning
Nature of Leadership
Importance of Leadership
Types or Styles of Leadership
Qualities of Leadership
Directing
Definition of Directing
Nature and purpose of Directing - Its importance
Pervasiveness of direction
Role and Importance of Direction
Delegation as an a means of directing
Principles of Direction
Controlling
Definition
Natural of Control
Significance of Control
Benefits and limitations of Control
Steps in the control process
Requirement of an effective control system
Co ordination
Introduction
Definition
Techniques of Coordination
Need and Importance of Coordination

3:6
Summary
Unit Questions
129
UNIT - IV
4. ORGANIZATION
4:1 ORGANIZATION
4:1:0 INTRODUCTION
For-reaching changes have been taking place in the
economy over the past few decades. Then changes are also
reflected in business enterprises. The growth in the size of
the enterprises following technological improvements have
been occurring with startling rapidity. In the early stages of
industrial development, the size of business units was very
small, but to-day, we have a very large business enterprises.
For example the Indian Railways, Steel Authority of India
Ltd., (SAIL), Tata Iron and Steel Company Ltd (TISCO). etc.,
are some of the organisations which employ a very large men
and women to carry out their business objective. In these
organisations, except for hightly-intelligent computers, no one
else can remember the names of all employees. In such a
situation, the problem is how to manage such a large
employees. The solution is the development of a sound
organisation.
What is ORGANISATION?
A manager, in managing must develop an organisation
capable of accomplishing his objectives. Organisation here
refers to the structure which results from identifying and
grouping work, defining and delegating the authority and
responsibility and establishing relationships.
Whenever several people are working together for a
common end, there must be some from of organisation, that
is, the tasks must be divided among them and the work of the
group must be coordinated. Otherwise there may be
duplication of effort or even work at cross purpose. During
the work and arranging for coordination make up the process
of organisation, and once that is completed the group may be
described as an organisation.
130
4:1:1 NATURE AND ELEMENTS OF ORGANISATION

The main elements of an organisation are given below :
1.
Common Purpose:
Every organisation exists to accomplish some common

goals. The structure must reflect these objectives as enterprise
activities are derived from them. It is bound by common
purpose.
2.
Division of Labour :
The total work of an organisation is divided into

functions and sub-functions. This is necessary to avoid the
waste of time, energy and resources which arise when people
have to constantly change from one work to another. It also
provides benefits of specialisation.
3.
Authority Structure :
There is an arrangement of positions into a graded series.

The authority of every position is defined. It is subordinate
to the position above it and superior to the one below it. This
chain of superior - subordinate relationships is known as chain
of command.
4.
People :
An organisation is basically a group of persons.

Therefore, activity groupings and authority provisions must
take into account the limitations and customs of people.
People constitute the dynamic human element of an
organisation.
5.
Communication :
Every organisation has its own channels of

communication. Such channels are necessary for mutual
understanding and co-operation among the members of an
organisation.
131
6.
Coordination :
There is a mechanism for coordinating different

activities and parts of an organisation so that it functions as
an integrated whole. Co-operative effort is a basic feature of
organisation.
7.
Environment :
An organisation functions in an environment comprising

economic, social, political and legal factors. Therefore, the
structure must be designed to work efficiently in changing
environment. It cannot be static or mechanistic.
8.
Rules and Regulations :
Every organisation has some rules and regulations for

orderly functioning of people. These rules and regulations
may be in writing or implied from customary behaviour.
4:1:2 PURPOSE AND IMPORTANCE OF ORGANISATION
Sound organisation is essential for the continuity and
success of every enterprise. It is indeed the backbone or
foundation of effective management. The main advantages
of sound organisation are given below :
1.
Aid to Management :
Organisation is the mechanism through which

management coordinates and controls the businees. It serves
as an effective instrument for realising the objectives of the
enterprise. It is through the framework of organisation that
plans are put into practice and other managerial functions are
carried out. It helps to focus the attention and action of
management on the accomplishment of enterprise objectives.
If the organisation is ill-designed, management is rendered
difficult and ineffective. If it is logical then the first requisite
of sound management has been achieved.
132
2.
Facilitates Growth :
A well-designed and balanced organisation provides for

systematic division of work and permits necessary change. It
is the framework within which an organisation grows.
Therefore, it enables the enterprise to enter new lines of
business. The enterprise possesses necessary adoptability to
face new challenges. There can be continuity in work
performance. Scope for innovation and diversification is
increased.
3.
Ensures Optimum use of Resources :
A good organisational setup permits adoption of new

technology. It helps to avoid duplication of work, overplaying
efforts and other types of waste. As a result it facilitates the
best possible utilisation of human and physi6cal resources.
Effective check can be exercised on work and workers.
4.
Stimulates Creativity :
Sound organisation encourages creative thinking and

initiative on the part of employees. Delegation of authority
provides sufficient freedom to lower level executives for
exercising discretion and judgement. Clear lines of authority
and responsibility simplify communication. Individual
objectives can be integrated with organisational goals. New
and improved ways of working can be developed.
5
Facilitates Continuity :
A well-designed organisation provides for training and

development of employees at all levels. It provides
opportunities for leadership and helps in ensuring the stability
of the enterprise through executive development.
6.
Helps in Coordination :
Organisation is an important means of integrating

individual efforts. It helps in putting balanced emphasis on
different departments and divisions of the enterprises. It makes
for co-operation and harmony of actions.
133
Describing the significance of sound organisation,

Andrew Carnegie, a well-known American industrialist once
said: Take away our factories, our trade, our avenues of
transportation, our money, level us nothing but our
organisation and in four years we shall have re-established
ourselves.
4:2 LEADERSHIP
4:2:1 Meaning
A leader is one who guides and directs other people.
He gives the efforts of his followers a direction and purpose
by influencing their behaviour. Therefore, leadership may be
defined as the quality of behaviour of a person by which he is
able to persuade others to seek the goals enthusiastically. It
is the force which binds a group together and motivates it
towards certain goals. According to George R. Terry leader
ship is the activity of influencing people to strive willingly
for mutual objectives.
Koontz and Odonnell have defined leadership as the
ability of a manager to induce subordinates to work with
confidence and zeal. In the words of Robert Appleby,
leadership is a means of direction. It is the ability of
management to induce subordinates to work towards group
ideals with confidence and keenness.
Simply stated, leadership is a process involving two or
more people in which one attempts to influence the others
behaviour towards the accomplishment of some goals.
4:2:2 Nature of Leadership
An analysis of the above definitions reveals the
following characteristics of leadership :
134
1.
Leadership is a process of influence:
Exercised by the leader on group members. A person is

said to have an influence on others when they are willing to
carry out his wishes and accept his direction. A successful
leader is one who influences the behaviour, attitude and beliefs
of his followers.
2.
Leadership is a function of stimulation:
It involves motivating people to strive willingly towards

organisational goals. A successful leader is above to
subordinate the individual interest to the common interest of
the group. He creates goal congruency so that people
enthusiastically work to attain the goals.
3.
Leadership gives a feeling of contributing to

common objectives:
A successful leader creates an environment under which

every person feels that he is contributing to the attainment of
organisational objectives. He recognises the efforts and
activities of every individual in the organisation.
4.
Leadership is related to a particular situation:
At a given point of time and under a specific set of

circumstances. This implies that leadership style will differ
from one situation to another.
5.
Leadership is a shared experience:
A good leader shares ideas, experience and credit with

his followers. He lets the subordinates to influence his
behaviour so that they are satisfied with the type of leadership
provided.
6.
Leadership is not headship or bossiam:
Headship implies exercise of formal authority and

control whereas leadership involves use of persuasion to
influence behaviour.
135
7.
Leadership implies existence of followers:
By their willingness to be influenced by the leader,

subordinates formalise the leaders authority and make the
leadership process possible.
8.
Successful leadership leads to goal accomplishment:
Leaders efforts to influence are aimed at some level

of achievement.
4:2:3 Importance of Leadership
Leadership is important due to the following reasons :
1.
Aid to Authority :
There are serious limits to the use of formal authority

in obtaining high performance. Managers having leadership
qualities can secure willing cooperation of employees which
leads to higher performance.
2.
Motive Power to Group Efforts :
Group efforts and teamwork are essential for achieving

organisational goals. Leadership helps to create mutual
cooperation and team spirit among people. It pulls the group
towards higher level of performance through human relations.
3.
Basis for cooperation :
Leadership improves employer-employee relations

through man to man relationship and participation.
Interactions and two way communication promote positive
attitudes and mutual understanding.
4.
Integration of formal and informal organisations:
When management fails to provide competent
leadership, informal leadership will prevail over management
in regulating the behaviour of employees. Competent
leadership on the part of managers can utilise informal
organisation constructively for achieving the companys
objectives.
136
4:2:4 Types or Styles of Leadership

Leadership style to a leader s behaviour. The
behavioural pattern which a leader adopts in influencing his
followers is known as the style of leadership. Different
leadership styles exist among leaders in different situations.
Leadership style is the outcome of leaders personality,
philosophy, experience and value system. It also depends
upon the type of followers and the environment prevailing in
the organisation. According to the degree of power exercised
by the leader, there can be following styles of leadership.
1.
Autocratic or Authoritarian Leadership:
An autocratic leader is one who likes to run the shop

himself. He takes all decisions himself without consulting
the followers. He gives orders and insists that they be obeyed.
Subordinates are expected to do what they are told. Thus,
under this style all decision-making power is centralised in
the leader. He stresses his prerogative to decide and given no
freedom to the followers. He considers his subordinates
immature and delegates no authority to them. An authocratic
leader exercises close supervision over subordinates. He holds
out threats of punishment or uses his powers to distribute
rewards on the assumption that people are lazy and will avoid
work and shirk responsibility.
Advantages
(i)
Autocratic leadership permits quick

decisions as a single person (leader) takes
decisions.
(ii)
It provides strong motivation and

satisfaction to the leader.
(iii) Many subordinates prefer to work under

centralised authority and strict discipline.
(iv)
Less competent subordinates are needed at

lower levels.
137
(v)
It can be successful where subordinates are

reluctant to take initiative. For example, this
style is quite common in India.
Disadvantages :
(i)
People dislike this style specially when the

motivational sytle is negative.
(ii)
It leads to frustration, low morale and

c o n f l i c t w h i c h a ff e c t o rg a n i s a t i o n a l
efficiency.
(iii) Due to lack of opportunity to exercise

initiative and judgment, future
l e a d e r s h i p does not develp.Followers
remain uninformed, insecure and afraid of
leaders power.
(iv)
There is resistance to change as workers

feel harassed and disturbed.
Autocratic style is likely to be less effective in future

because the literacy level and standard of living are rising.
People are becoming socially aware and look for egoistic
satisfaction from their jobs. The coming generation is less
amenable to rigid direction and control i.e., unquestioned
compliance. That is why authoritarianism is gradually being
resisted.
2.
Participative or Democratic Leadership:
A democratic leader makes decisions in consulation with

his follwers. He decentralises authority and allows the group
to share his power. Instead of taking unilateral decisions, he
allows the subordinates to discuss the problem and to express
their opinions freely. Democratic style is based on the
assumption the leader derives his power by consent of the
followers who are mature and can be creative.
138
Advantages:
(i)
It reduces resistance to change and

increases acceptance of new ideas.
(ii)
It improves the attitudes of

employeestowards their jobs and the
o rg a n i s a t i o n .
(iii) I t i n c r e a s e s c o o p e r a t i o n b e t w e e n
management and workers.
(iv)
It improves employee morale and reduces

complaints or grievances.
(v)
It facilitates the development of future

leaders.
Disadvantages:
(i)
It may be dilatory leading to delay in
decisions.
(ii)
It may be used convertly to manipulate

employees.
(iii) Participation will not be meaningful unless

the subordinates understand thouroughly
the compels problems of the organisation.
(iv)
It may not be liked by people who want

minimum interaction with superiors and
colleagues.
3. Free - Rain or Laissez-Fair Leadership:

A free rein leader gives complete freedom to his
follwers to establish their own goals and policies. He does
not lead and avoids power.He maintains contact with outsiders
to bring the information and resources required by the group.
The leader abdicates his authority and lets the group to operate
entirely on its own.
139
Advantages:
(i)
Complete freedom to subordinates improves

their motivation and morale
(ii)
There is maximum opportunity for the

development of subordinates.
Disadvantages:
(i)
As there is abdication of formal leadership

role, informal leaders emerge to fill the void.
(ii)
The group does not get the benefit of

leader s inspired motivation, guidance and
socio-emotional support.
(iii) It can succeed only when the followers

are highly mature, able and selfmotivated.
Otherwise they will feel insecure,
vulnerable and may group in the day.
(iv) It ignores the managers contribution just
as autocratic leadership ignores the
contribution of the group.
4.
Paternalistic Leadership:
A paternalistic leader serves as the head of the

family and treats his followers like his family members. He
assumes a paternal or fatherly role to help, guide and protect
the followers. He provides them with good working
conditions, fringe benefits and welfare facilities and services.
Such a style creates social warmth and group cohesiveness.
But the employees may resent the leaders gratitude in
industrial organisations. There is little opportunity for them
to exercise initiative to grow and realise their full potenitla.
Paternalistic leadership has been quite successful in Japan
because of its cultural background.
140
4:2:5 Qualities of Leadership

To be able to provide effective leadership to his
subordinates, a leader needs to have certain qualities.
According to Ordway Dead, a leader must posses physical
and nervous energy, a sense of purpose and direction,
enthusiasm, friendliness and affection, integrity, technical
mastery, decisiveness, intelligence, teaching skills, and faith.
According to Henry Fayol, the qualities that a leader must
possess are :
(a)
(b)
(c)
(d)
(e)
(f)
health and physical fitness,

mental vigour and energy
courage to accept responsibility
steady, persistent, thoughtful determination,
sound general education, and
management ability embracing foresight and
the at of handling men.
The more important qualities of a leader may be

summarised as follows :
1.
Physical and mental vigour:
The leader has to put in hard mental and physical work,

which requires tremendous stamina and victor to sustain long
and irregular hours of work.
2.
Emotional Stability:
The leader should not be unduly moved by emotion or

sentiment. He should be able rationally and logically to
analyse the various problems before him and reach a decision
without any fear or favour. He should not loss his temper or
show indecision even in the face of heavy odds.
3.
Sense of judgement:
The leader should be a master of human psychology.

He should possess deep understanding of human behaviour,
emotions, sentiments, needs, motives, etc., This would enable
him to anticipate the resp1onse to his decisions and actions.
141
4.
Balance:
The leader should be rational and objective in his

approach. He should be free from bias, prejudice and preconceived notions. Only then he would be able to decide
issues on their merits.
5.
Understanding or empathy:
The leader should show understanding for others

viewpoints. If he tends to have his own way in all matters, he
might lose their goodwill.
6.
Motivation:
Only a person who is himself well motivated can

motivated others. The desire to lead people should come from
within. If person is forced to do his job under fear of
punishment, he would behave more like a follower than a
leader.
7.
Communicating skill:
The leader should be good at communicating ideas,

feelings, decisions, orders, etc., He should be a good and
effective speaker and writer. Then alone he would be above
to persuade, inform, stimulate and direct his subordinates.
8.
Ability to guide:
The leader should help his subordinates to learn. Both

by word and deed, he should demonstrate to them the best
ways of accomplishing the jobs.
9.
Sociability:
The leader should show keen interest in his

subordinates. He should try to meet them often, and encourage
them to discuss their problems and difficulties with him. He
should be friendly, helpful and easily accessible to all his
subordinates.
142
10.
Technical competence:
The leader should possess a thorough knowledge of the

theory and practice of his job. Besides, he should be quite
familiar with the jobs done at different work points in his
department.
11.
Other personal abilities:
The leader should have an attractive and pleasing

personality. He should possess optimistic and cheerful
outlook. He should have sound physical and mental health.
His subordinates will accept his leadership only when they
find him full of youthful vigour, energy, vitality, enduracne
and creativity.
Besides, he should be honest, sincere, fair and
reasonable in his dealings with his subordinates. If he is a
man of integrity and behaves with his subordinates in a
dignified manner, him leadership will be cheefully and
enthusiastically accepted by one and all
4:3 DIRECTING
4:3:1 Definition of Directing
We can plan and organise, but no tangible results can
be achieved until we implement the proposed course of action.
This needs directing or activating, which literally means the
moving into action. According to Earnest Dale, Direction is
telling people what to do and seeing that they do it to the best
of their ability. It includes making assignments, corresponding
procedures, seeing that mistakes are corrected, providing onthe-job instruction and, if course, issuing Orders. Direction
involves communicating and providing leadership to the
subordinates and motivating them to contribute to the best of
their capability for the achievement of organisational
objectives.
143
4:3:2 Nature and purpose of Directing - Its importance

Directing is that part of the management process which
activates the organisation members of work efficiently and
effectively for the attainment of organisational objectives. It
constitutes the life-spark of the enterprise which, like electric
power, sets it into motion. Planning, organising and staffing
and merely preparation for doing the work and the work
activity starts when the Managers start performing the
direction function. Direction is the inter-personal aspect of
Management which deals directly with influencing, guiding,
supervising and motivating the subordinates for the
accomplishment of pre-determined objectives.
Directing is the managerial function which initiator
organised action. It is one of the important fundamental
functions of management and is a part of every managerial
action taken. It is very difficult to perform this function
because it deals with human element of the enterprise which
represents a complex of forces about which not much is
known. Directing offers tremendous challenge in dealing with
human beings. A persons beliefs, hopes, ambitions,
behaviour, satisfaction and interaction with other persons are
all involved in the directing process.
4:3:3 Pervasiveness of direction
Direction is a pervasive function of management. It
exists at every level, location and operation throughout an
enterprise. Some people think that only the managers at the
lower level, who deal directly with the workers, perform the
direction function. This point of view is not correct. Direction
function must be performed by every Manager at different
levels of the enterprise. For instance, chief executive of a
company interprets the objectives and policies of the company
and delegates authority to the departmental managers, the
direction function is a part and parcel of these activities. Every
Manager, regardless of the number of subordinates, perform
144
this function because he is busy in giving instructions to the

subordinates, giving them, and motivating them for the
achievement of certain goals.
Directing concerns the total manner in which a
Manager influence the actions of subordinates. It is the final
action of a Manager in getting others to act after all
preparations have been completed. It consists of four
elements.
1.
Lassoing of orders that are clear, complete

and with in the capacities of subordinates
to accomplish.
2.
Continuous training activity in which

subordinates are instructed to come out
with the particular assignment in the
existing situations.
3.
Motivation of subordinates to try to meet

the expectations of the Manager.
4.
Maintaining discipline and rewarding

those who perform properly.
4:3:4 Role and Importance of Direction

Directing deserves sufficient attention along with the
other functions of planning, organising, staffing and
controlling because it is the function of guiding the
subordinates to work willingly and enthusiastically towards
the accomplishment of pre-determined organisational
objectives. Direction function deals with the human factors
and hence it is a very delicate job. For effective co-operation
of the workers, it is essential to understand their nature, culture
and their needs. It is also essential to provide them with
sufficient financial as well as non-financial incentives which
will help in satisfying the needs of the workers.
145
Issuing of orders of instructions:

The giving of instructions or orders for carrying
out the process or direction is indispensable to get things done.
Lessing of instructions or order is essential to direct the
subordinates so that they may contribute effectively to the
objectives of the enterprise. It may be mentioned that the
terms order, instruction, directive and command are used interchangeably tool of directing by means of which activities are
started, terminated, guided and altered. In other words, in
initiates, modifies or stops an activity. According to Harold
Koontz and Cyril O Donnel. As a directional technique,
an instruction is understood to act or restrain from acting in a
given circumstance. This definition implies that an order or
instruction can be issued by a superior only. Another
implication is that the order is enforceable because the superior
has got the authority for this purpose.
Characteristics of a good order :
In order to provide better direction, an order should
possess the following characteristics :
(i)
The order should be stated in an unambiguous and clear
cut words so that it is easily understood by the subordinates.
(ii) The order can be accomplished within the authority
given to the subordinates. The order must be reasonable and
the subordinates has got the capability to execute it.
(iii) The order should be compatible with objectives of the
organisation. As far as possible it should not also go against
the interest of the subordinates. The order should specify the
time within which it should be carried out and completed.
(iv) The order should be in written form if it is of a nonroutine nature. Generally, the orders or instructions are issued
to the subordinates orally because of the faith of the superior
in the subordinates. But sometime it becomes essential to
issue written orders. Whether an order should be oral or written
will depend upon many factors like the relationship
146
between superiors land subordinates, the quality of faith and

trust between them; avoiding overlapping instructions a n d
the need for issuing a non-routine order in clear cut terms.
4:3:5 Delegation as an a means of directing
Delegation of authority involves assigning a part of his
work by the superior to the subordinate and giving the
necessary authority to the subordinate to do the work assigned.
Thus, delegating of authority is a form of directing. Delegation
cannot be specifically referred to as issuing of orders because
the formers is a technique as sharing authority with the
subordinate and providing him an opportunity
for development.
Managing the Human Factors
The direction function of management is concerned with
the human factor. The management of people has become a
very difficult task because of increasing awareness of the
workers about their right. In order to be successful in
managing the people, the managements has to undestand their
behaviour. The behaviour of the human beings is caused by
their needs aspirations and expectations. Mc Gregor, Maslow,
Harzberg, schein and many other management thinkers heve
tried to propound their theories about the behaviour of human
beings.
Group Behaviour
The study of group behaviour has assumed greater
importance these days because group behaviour is an entity
of its own; it is not simply a summation of the behaviour of
the individuals making up the group. There is a significant
change in the behaviour of a person when he acts as a member
of a group. Groups may exercise stronger control over their
members than does the management. Since management can
achieve results only through and with the help of people, it
must understand the significance of group dynamics and make
use of it.
147
George, R. Terry is of the opinion that a group can be

influenced more effectively by dealing with it as a unit rather
than with the components of the groups. He assigns the
following three reasons for this.
(i)
When members of the group change their

attitude, the
individual can see that
change on his part will not reduce his relative
ego-involvement.
(ii)
Changes or acceptance of persuasive efforts are

often more effective on a group than on
individual, the influence of non-phychology
and group motivations being exercised.
(iii)
The attainment of an atmosphere of his

enthusiasm helpful
for inducing changes,
can best be reached with a group.
4:3:6 Principles of Direction

Following are the important principles which help
in achieving effective direction.
1.
Harmony of Objectives :
Every individual is assigned particular task which

he is responsible to accomplish. He will do it better if he
thinks that it is going to achieve his personal goals which
may be different from the organisational goals. Therefore, a
Manager, must try to reconcile the personal goals of his
subordinates with those of the organisation.
2.
Unity of Command :
This principle is not only important in

organisation but also in direction. This principle states that a
subordinate should get orders and instructions from one boss.
He should know clearly to whom he is accoutable.
148
3.
Direct Supervision :
Direct supervision by the boss and his direct advice to

the subordinates boosts their morale resulting into renewed
and vigorous effort. This also increases loyalty among the
subordinates which is better for effective direction.
4.
Effectie Communication :
A good system of communication between the boss and

his subordinates is essential for co-ordination. Effective
communication is an instrument of direction. Two-way
communication given the subordinate a chance to express their
feelings and the boss to know the feelings of the subordinates.
Misunderstanding can be removed through effective
communication.
5.
Effective Leadership :
Subordinates are happy if the get effective leadership

from their boss. The boss must contain the qualities of a good
leader, the boss should guide and counsel the workers not
only on the work problems but also on the personal problems
of the subordinates. In this way, he will win the confidence
of the subordinates which will make their direction clear.
4:4 CONTROLLING
4:4:1 Definition
Control is seeing that actual performance is guided
towards expected performance. It is an imprtant function of
management and is related to all other management functions.
All other functions cannot be completed effectively without
the performance of the control function. According to Earnest
Dale, The modern concept of contrl envisages a system that
not only provides a historical record of what has happened
and provided date that enable the Chief executive or the
departmental head to take corrective steps if he finds he is on
the wrong work.
149
Koontz and O Donnell have defined controlling as the

measurement and correction fo the performance of activities
of aubordinates in order to make sure that enterprise objectives
and the plans devised to attain them are being accomplished.
Thus, Managerial function of control implies measurement
of actual performance, comparing it with the standards set by
plans and correction of deviations to assure attainment of
objectives according to plans.
4:4:2 Natural of Control
Managerial control has the following characteristics :
(I)
Control is a function of Management :
It is, in fact, a follow up action to the other functions of

Management. This function is performed by all the Managers
in the Organisation to control the activities assigned to them.
(ii)
Control is a dynamic process:
It involves continuous review of standards of

performance and results in corrective action which may lead
to changes in other functions of Management.
(iii) Control is continuous activity:
It does not stop any where. According to Koontz and
O Donnwel just as the navigator continuously takes reading
to as certain whether he is relative to a planned action, so
should be the business manager continuously take reading to
assure himself that his enterprises or department is on course.
(iv)
Control is forward looking:
It is related to future as cannot be controlled. It is usually

preventive as the presence of control systems leads to minimise
wastages, losses and deviations from standards. It should be
noted that control does not curtail the rights of the individuals,
it simply keep a check on the performance of individuals.
150
(v)
Planning and controlling are closely related with

each other:
According to Billy E.Goetz, Managerial

Planning seeks consistent, integrated and articultated
programme while managerial control seeks to compel events
to conform to plans. As a matter of fact, planning is based
on control and control is based on planning. The process of
control uses certain standards for measuring performance
which are laid down by planning. The control process, in
turn may reveal the deficiency of planning and may lead to
the revision of planning. It may also lead to setting of new
goals, changing the organisational structure, improving
staffing and making major changes in the techniques of
directing.
(vi)
The essence of control is action:
The performance of control is achieved only when

corrective action is taken on the basis of feed back information.
It is only action which adjust performance to pre-determined
standards whenever deviations occur. A good system of
control facilities timely action so that there is minimum waste
of time and energy.
4:4:3 Significance of Control
Control consists in verifying whether everything
occurs in conformity with the plans adopted, the instructions
issued and principles established. It will point out weakness
and errors in order to rectify them and prevent recurrence. It
operates on everything, things, people, action. Control is an
important function of Management. Without control, a
Manager cannot do a complete job of managing. All other
functions are the preparatory steps for getting the work done
and controlling is concerned with making sure that there is
proper execution of these functions. Control is necessary
whenever a Manager assigns over the actions of his
subordinates so that he can ensure that the delegated authority
is being used properly.
151
The road signals at a busy road crossing appropriately

issustrate the significance of control. Just as oad signals are
essential to ensure accident free and smooth traffic,
management control devices are necessary in any organisation
for its smooth function. By controlling, the Manager ensures
that resources are obtained and used economically and
efficiently for the achievement of organisational objectives.
A good control system provides timely information to the
Manager which is very much useful for taking various
operations. Control implies supervision by point out the
significant deviations from the standards of performance. It
keeps the subordinates under check and brings discipline
among them. It also enables the expansion of span of
supervision at various levels in the organisation.
4:4:4 Benefits and limitations of Control
Following the advantages of an effective system of
control :
(i)
Control provided the basis for future action.

It will reduce t h e c h a n g e s o f m i s t a k e s
b e i n g r e p e a t e d i n f u t u r e b y suggesting
preventive methods.
(ii)
Control facilities decision making. The

process of control is complete only when
corrective measures are taken. This requires
taking a right decision as to what type of follow
up action is to be taken.
(iii)
An effective system of control facilities

decentralisation of authority because the top
executive get the feed back information
constantly which help them to ensure tht the
decisions taken at the lower levels are
consistent with the policies of the enterprise
and are in the interest of the enterprise.
152
(iv)
Control and planning go hand in hand, control

is the only means to ensure that the plans are
being implemented in real sense.Control
points out the short comings of not only
planning but also functions of
m a n a g e m e n t s u c h a s organising, staffing
and directing.
(v)
The existence of a control system has a positive

impact on the behaviour of the employees.
They are cautious while performing their
duties and they know that they are being
observed by their superiors.
(vi)
Control helps in co-ordination of the activities

of the various departments of the enterprise
by providing them unity of direction.
Limitations of Control
A control system may be faced with the following
limitations :
(i)
An enterprise cannot control the external

factors such as Government policy,
technological changes, fashion changes etc.,
(ii)
Control is an expensive process because

sufficient attention h a s t o b e p a i d t o
observe the performance of the
subordinates. This requires and expenditure of
a lot of time and effort.
(iii) Control system loses its effectiveness when

standards of performance cannot be defined
in quantitative terms. For instance, it is very
difficult to measure human behaviour and
employee morale.
153
(iv)
The effectiveness of control mainly

depends on the acceptance of subordinates.
They may resist control because they may feel
that it will reduce or curtail their freedom
controls also loses its significance when it is
not possible to fix the accountability of the
subordinates.
4:4:5 Steps in the control process

In order to perform his control functions a Manager
follows three basic steps. First of all, he estabilishes the
standards of performance. Secondly, he ensures that
performance is in a accordance with the plan. Thirdly, after
this, the Manager will apprise the performance and compare
it with pre-determined standards. This step will lead the
manager to know whether the performance has gone up to the
expected standard or if there is any deviation. If the standards
are not being next, the Manager takes steps in controlling as
shown in Fig.1. The detailed discussions of these steps are as
below.
(i)
Establishing standards :
A standard acts as a reference line or basis of comparison

of actual performance. Standards should be set precisely and
preferably in quantitative terms. It should be noted that setting
standards is also closely linked with and is an integral part of
the planning process. Different standards of performance are
set up for various operations at the planning stage which serves
as the basis of any control system. Establishment of standards
in terms of quantity, quality or time is necessary for effective
control because it is essential to determine how the
performance is going to be apprised. Standards should be
accurate, precise, acceptable and workable. Standards should
be flexible, incapable of being changed when the
circumstances require so.
154
Different types of standards are used for measuring the

performance of different operations. Many standards are of a
physical nature, such as number of units, man-hours etc., and
there are other standards which are expressed in monetary
terms relating to sales, revenue, expenses, costs and so forth.
In addition to these standards, there are also standards of an
intangible nature like reputation of the firm. Whenever
standards are intangible, it is essential to lay down quantitative
factors which will determine whether the standards are being
met or not.
(ii)
Apprising performance :
This step involves measuring of actual performance of

various individuals, groups or units and then comparing it
with the standards which have already been set up at the
planning stage. The quantitative measurement should be done
in cases where standards have
been set in quantitative terms. In other cases, performance
should be measured in terms of quantitative factors as in case
of performance of industrial relations Manager. Comparison
of performance with standards tocomparatively easier when
the standards are expressed in quantitative terms.
The process of performance appraisal will reveal the
deviations from the standards. The appraisal should try to
analyse the various deviations and investigate into their causes.
It is also important to establish a range of deviations beyond
which the attention of top management is warranted. Only
such cases should be reported up which pin-point exceptional
situations. This is what is known as management by exception.
(iii) Taking corrective action :
The final step in the control process is taking
corrective actions so that deviations may not occur again and
the objectives of the organisation are achieved. This will
involve taking certain decisions by the management like replanning or re-drawing of goals of standards, re-assignment
155
or classification of duties. It may also necessitate reforming

the process of selection and training of workers. Thus, control
function may require change in all other managerial functions.
If the standards are found to be defective, they will be modified
in the light of the observations.
4:4:6 Requirement of an effective control system
Following are the essential requisites of an effective
control system :
(i)
Emphasis on objectives :
Before planning a control system, it is essential to know

clearly the objectives of the organisation. The control system
should aim at accomplishing the organisational objectives.
(ii)
Suitability :
Controls should be tailored to fit the needs of the

organisation. The flow of information concerning current
performance should correspond with the organisational
structure employed.
(iii) Flexibility :
A good control system must keep pace with the
continuously changing pattern of dynamic business world. It
should be adaptable to new developments including the failure
of the control system itself.
(iv)
Forward-looking :
The control system should be directed towards future.

It should report the deviations from the plans quickly in order
to safeguard the future.
(v)
Objectively :
Standards of performance should, as far as possible be

objective and specific. They should be based on facts and
participation so that control is acceptable and workable.
156
(vi)
Economical :
They system of control must be worth their costs. They

must justify the expenses involved. A control system is
justifiable if the saving anticipated from it exceeds the
expected costs on its working.
(vii) Strategic point control :
Effective and efficient control can be achieved if critical,
key or limiting points can be identified and close attention
directed to adjustment at those points. This is know as Control
by exception.
(viii) Correctie actions :
Merely pointing of deviations is not sufficient in a good
control system. It must lead to taking of he corrective action
to check deviations from standards through appropriate
planning, organising and directing.
4:5 CO ORDINATION
4:5:0 Introduction
Coordination of separate work units and
departments within an organisation is crucial to achievement
of organisational goals. Withou corrdiantion, individuals and
departments may pursue their divided work activities,
unmindful of the importance of their roles and duties within
the organistation as a whole.
4:5:1 Definition
Coordination has been defined by Mooney and
Reily as the orderly arrangement of group effort to provide
unity of action in pursuit of a common purpose.
157
4:5:2 Techniques of Coordination

According to Louis A. Allen, a manager, in
managing, must coordinate the work for which he is
accountable by balancing, timing and integrating. In other
words, balancing, timing and integrating are the basic
techniques of coordination.
(a) Balancing. It means adequate provision of any
one using to support or counterbalance the other.
(b) Timing. It involves synchronising of the time
schedules of different activities in such a way that they support
and reinforce one another.
(c) Integrating. It donotes unification of diverse
interests and activities with a view to accomplishment of the
overall organisational objectives.
4:5:3 Need and Importance of Co ordination
Coordination offers the following advantages :
1.
Efficiency and Effectiveness.
Corrdination helps to improve the efficiency of

operations by avoiding overlapping efforts and duplication
of work. Integration of individual efforts leads to teamwork.
Coordination makes a productive enterprise out of diverse
activities. It produces the total result which is greater than
the sum of individual contributions. This is called synergy.
The quality of coordination determines the effectiveness of
organised efforts. Therefore, coordination is known as the
first principle of organisation.
2.
Unity of direction.
Coordination helps to ensure unity of action in the face

of disruptive forces. By welding together different work
groups it facilitates the stability and growth of an organisation.
It provides unity of action and helps to avoid conflicts between
line and staff elements.
158
3.
Human relations.
Coordination helps to improve team spirit and morale

of employees. In a well-coordinated organisation,
organisational goals and personal goals of people are
reconciled. As a result employees derive a sense of security
and job satisfaction.
4.
Qunitessence of management.
Coordination is all-inclusive concept and the end result

of management process. According to Mary Parker Follett,
the first test of effective adminisatration should be whether
you have a business with all its parts so coordinated, so moving
together in thier closely knit and adjusting activities, so
interlocking that they make a working unit that is not a
congenis of separate pieces but a functional whole or
integrated unit.
Thus, coordiantion helps in the accomplishment
of organisational goals.
159
SELF- ASSESSMENT QUESTIONS:

1.
2.
3.
The organisation that arises out of personal relationship

is called ________organisation.
An organisation chart can show both formal and
informal relationships
True / False
Match the following
1. Control
2. Co-ordination
3. Line organisation
- a. Linking function
- b. Military Organisation
- c. Looking back
SUMMARY
Organisation means the structure which results from
identifying and grouping work, defining and delegating the
authority and responsibility and establishing relationships.
This lesson explains you that nature and elements of
organisation and importance of leadership. Direction definied
as what to do and seeing that they do it to the best of their
ability. Managerial function of control implies measurement
of actual performance comparing it with the standards set by
plans and correction of deviations. Coordination defined as
the orderly arrangement of group effort to provide unity of
action in pursuit of a common purpose.
UNIT QUESTIONS
1.
What is Organisation?
What are its nature and elements?
2.
What are the importance of Organisation?
3.
Explain the basic characteristics of Leadership.
4.
Explain the different styles of Leadership.
160
5.
6.
7.
8.
9.
10.
List out the qualities required for a successful leader.

Define Directing. What are the Nature and purpose of
Directing?
What are the principles of Direction?
What are the advantages and Disadvantages of control?
What are the steps in the control process?
State the techniques of co-ordination.

1.
Dr. C.B. Gupta Business Management
2.
Pinkar pagare
Business Management
4.
V.S. Sherlekar
Management
5.
J.Jayasankar
Principles of
Management.
1. Informal
2. False
3. 1-c,2-a,3-b
161
UNIT V STAFFING
UNIT STRUCTURE
5:1
5:1:0
5:1:1
5:1:2
5:1:3
5:2
5:2:1
5:2:2
5:3
5:3:1
5:4
5:4:1
5:4:2
5:5
5:6
5:7
5:7:1
5:7:2
5:7:3
5:7:4
5:7:4
5:7:7
Staffing
Introduction
Definition
Features of Staffing
Purpose and Importance of staffing
Manpower planning
Objectives of manpower planing
Manpower planning process
Recruitment
Sources of Recruitment
Selection procedure
Signifecance of selection
Steps in selection procedure
Placement
Induction
Training
Objectives of Training
Training Development and Education
Need ans Advantages Training
Steps in Training
Steps in Training
Methods of training

3:8
Summary
Unit Questions
162
UNIT - V
STAFFING
5:1 STAFFING
5:1:0 INTRODUCTION
Staffing has come to be recognised a separate
management function in recent years. Only previously, it was
considered to be a part of organisation function of
Management. The reason for separating the staffing from
organising is to give proper emphasis to the actual manning
of organisation roles. The staffing function has assumed
greater importance these days because of rapid advancement
of technology, increasing size of organisations and
eomplicated behaviour of human beings.
5:1:1 Definition
According to Harold Koontz and Cyril ODonnel, The
managerial function of staffing involves managing the
organisational structure though proper and effective selection,
appraisal, and development of personnel to fill the roles
designed in to the structure.
5:1:2 Features of Staffing
The above description reveals the following features of staffing;
1. Staffing is a universal function. It is the responsibility
of every manager. In large organisations there exists generally
a persondepartment. But this department only advises and helps
the line managers in performing the staffing function.
2. Every manager is continuously engaged in performing
the staffing function to ensure successful functioning of his
department and to develop his successors. The Board of Directors
undertake staffing function by selecting, developing and
appraising the chief executive. The chief executive performs
staffing function in relation to departmental heads.
163
Departmental heads in turn select, train and develop middle level

managers and so on. Thus, staffing is an all pervasive function
of management.
3. Staffing is a dynamic function. It is a never-ending
process.
Management of human resources is a delicate task
requiring sustained or regular efforts. With changes in the size
and environment of the organisation, changes take place in
personnel.
4. Staffing cannot be entrusted fully to personnel
department or any other service department.Its scope is very
wide.
5. The basic purpose of staffing is the accomplishment of
organisational goals through team-spirit and optimum
contribution from every employee.
6. Sometimes a distinction is made between staffing and
personnel management. Staffing is said to be concerned with
the management of managers while personnel management
involves plans, policies and procedures for operative positions.
But in practice it is not possible to distinguish between the two.
Every manager is concerned with staffing and the principles
underlying managerial and non-managerial staffing are the same.
7. Staffing is a difficult function with extraordinary
problems of social, philosophical and psychological nature. In
order to handle these problems certain well- defined principles
have been developed after a great deal of research and experience.
5:1:3 Purpose and Importance of staffing
The basic purpose of staffing is to ensure that right persons
occupy the right positions at all times in the organisation. Staffing
is a very important function of management. No organisation
can be successful unless it can fill and keep filled the various
positions with the right type of employees. Effective staffing
provides the following benefits:
164
1.
It helps in discovering and obtaining

c o m p e t e n t personnel for various jobs.
2.
It makes for higher performance by placing right

persons on the right jobs.
3.
It improves job satisfaction and morale of

employees through objective assessment a n d
fair compensation for their contributions.
4.
It facilitates optimum utilisation of human

resources.
5.
It ensures the continuity and growth of the

organisation through the development of
managers.
In recent years, the need for staffing has increased due to

the following reasons;
(1) Increasing size of organisations. In a large
organisation, there are several positions. Systematic programmes
for the selection, training and appraisal of employees are required
for efficient functioning of the enterprise. This has increased
the significance of staffing.
(2)
Advancement of technology. Significant
improvements have taken place in technology. In order to make
use of the latest technology, the appointment of right type of
persons is necessary. Right personnel can be procured, developed
and maintained for new jobs only if the management performs
its staffing function effectively.
(3) Long-range needs for manpower. In order to execute
the long term plans, management must determine the manpower
requirements well in advance. It is also necessary to develop
managers for succession in future. The need for staffing has
increased due to shortage of good managerial talent and high
rate of labour turnover.
(4) High wage bill. Personnel cost accounts for a major
portion of operating costs today. Efficient performance of the
165
staffing function is essential to make the best use of personnel .

For example . if right type of people are selected and trained,
management can obtain optimum results from the expenses
incurred on recruitment, selection and training.
(5) Trade unionism. Efficient system for staffing has
become necessary to negotiate effectively with organisations of
executives. With the spread of education, executives have
become increasingly aware of their attitudes. Separation of
ownership from management requires a more professional
approach towards the staffing function.
(6) Human relations movement. Enlightened employees
have come to recognise the dignity of labour - increasing
awareness of the role of human factor in industry . Now
managers can use the knowledge of behavioural sciences in
moulding the behaviour of employees in the right direction. At
the executive level , there is greater need for non- financial motivation. By performing the staffing function well. Management
can show the significance it attaches to the human resources in
the organisation.
5:2 MANPOWER PLANNING
Manpower planing maybe defined as a strategy for the
procurement, development , allocation and utilisation of an
enterprises human resources. Procurement of personnel deals
with the task of recruitment and selection of workers of the
desired skill -mix. Training and development plans help in
keeping and raising the skill -standards of workers. Manpower
allocation plans help in mitigating shortage and surplus in
manpower supply through promotions and transfers. Manpower
utilisation deals with the dynamics of leadership and motivation.
Description of all these topics is given at relevant places.
166
5:2:1 Objectives of manpower planing

The objectives of manpower planing are mainly:
1.
To ensure optimum use of human resources

currently employed,
2. To determine future recruitment level;

3.
To provide control measures to ensure that

necessary resources are available as and when
required;
4. To anticipate redundancies and avoid unnecessary

dismissals;
5.
To forecast future skill requirements to serve as

abasis for training and development programmes;
6. To assess future housing needs of employees;

7. To cost the manpower component in new projects;
8.
To decide whether any of the enterprises

activities, e.g., maintenance, be off-loaded or
sub- contracted.
5:2:2 Manpower planning process

Following are the steps involved in manpower planing process:
(a)
(b)
(c)
(d)
(e)
Analysis of the system,

Deciding the time horizon of the plan,
Forecasting the demand for and the supply
of manpower,
Reconciliation, and
Preparation of action plans.
(a) Analysis of the system.

Before embarking on the manpower planning exercise, it
is essential to define the system in which the organisation works.
167
The system can be either closed or open -end . A closed

system is one which contains within its boundaries all actions,
variables, information and relationship necessary for the
achievement of its goals . Such a system has a high degree of
predictability of its behaviour. This makes planing easiest in a
closed system. An open-end system, on the other hand, is far
more uncertain and unpredictable , causation is speculative, vital
relationships are a matter of mere guess, and appropriate
corrective actions are often unknown.
It should be remembered that manpower planning
generally has to make its way in a vast open -end system (the
national economy ) which contains a number of complicated
open-end sub-systems (firms, unions, families and individuals
). It is, therefore, necessary that first of all a thorough analysis
of this system is done in the following terms;
i)
Goals. Goals should always be exploit. Manpower
planning cannot go on efficiently until the goals of the
organisation ( e.g., profit, welfare, utility, etc.) are clearly defined
and priorities assigned to them.
ii)
Uncontrollable Variables or Constraints. The
planner must take account of all such variables (population,
investment, union rules , etc.) which are beyond his control.
iii) Controllable Variables. The planner must also
identify those variables which are manipulatable, for example,
productivity incentives or training or redundancy payments.
iv) Expectations about Behaviour. All expectations
about the behaviour and the environment and about the reactions
which the planners own behaviour and the behaviour of the
system will provoke must be specified.
(b) Deciding the Time Horizon of the plan.
The planner must determine in advance the time horizon
of his plan since this will affect how much is changeable within
168
the system. Generally , the shorter the time span contemplated,

the less there is variable and the more there is fixed in the system.
A reasonable accuracy can be expected in case of short-term
forecasts up to two years. A useful technique is to roll on the
forecast by a year at each annual revision , thereby keeping the
length of the forecasting period unchanged whilst making any
amendment necessary in the light of changing circumstances.
Short -term planning is generally done to find a temporary
match between the existing individuals and the existing jobs.
Its aims at removing the anomalies in postings and placements.
Long-term planning, on the other hand, is done to find a proper
match between the future jobs and their future incumbents.
( c) Forecasting the Demand for and supply of Manpower.
The most crucial step of manpower planning is the
forecasting of the demand and the supply of manpower, for the
period for which the plan is outlined.
5:3 RECRUITMENT
Recruitment is the process of searching for
prospective employees and stimulating them apply for jobs in
the organisation. It is a positive process because it increase
the selection ratio by attracting a large number of applicants
for the advertised jobs. According to Roger. H.WARK.,
The purpose of a recruitment function are
primarily straight ward to seek out, to evaluate, obtain
commitment from,m place and orient the employees to fill
positions required for the seccessful conduct of the work of
an organisation.
Recruitment enables the management to select
suitable employees for different jobs. It is significant to point
out that hiring of employees through selection is a negative
process since it involves taking of suitable candidates for the
organisation and rejection or elimination of the other
applicants.
169
5:3:1 SOURCES OF RECRUITMENT

The various sources of recruitment may be grouped into
the following categories:
1. Internal sources (Recruitment from within the
enterprises)
2. External sources (Recruitment from outside)
INTERNAL SOURCES
There are two important sources of recruitment viz.,
transfers and promotions. Transfer involves the shifting of
an employee from one job to another. At the time of transfer it
is ensured that the employee to be transferred to the new job
is capable of performing it. In fact, transfer does not involve
any drastic change in the responsibilities and status of the
employee. On the other hand, promotion leads to shifting an
employee to higher position carrying higher responsibilities,
facilities, status and pay.
EXTERNAL SOURCES
Every new enterproses has to tap external sources for
various position. Running enterpreises have also to recruit
employees from outside for filling the positions whose
specifications cannot be meant by present employees. An
important source of recruitment is direct recruitment by
placing a notice on the notiece board of the enterprise
specifying the details of the job available. It is known as
recruitment is followed usually for casual vacancies. In
addition, more commonly used external sources of recruitment
are listed below:
i)
ii)
iii)
iv)
Unsolicited Application.
Advertisement.
Employment Agencies.
Educational Institutions.
170
v)
vi)
Recommendations.
Labour contractors.
5:4 SELECTION PROCEDURE

The process of selection leads to employment of
persons who possess the ability and qualifications to perform
the jobs which have fallen vacant in an organisation. It divides
the candidates for employment into two catagories viz., those
who will be offered employment and those who will not be.
This process could be called rejection since more candidates
may be turned away than hired. That is why selections is
frequently described as a negative process in contrast with
the positive nature of recruitment. The basic purpose of the
selection process is choosing right type of candidates to man
various position in the organisations.
5:4:1 SIGNIFICANCE OF SELECTION
Hiring of employees is an important function of
the personnel department. This function must be performed
carefully because errors committed at the selection may
prove to be very costly lateron. It selection process is
faulty,absenteeism will be too high and the rate of labour turn
over will also be higher. Whenever unsuitable candidates are
hired, the efficiency of the organisation will go down. Such
persons will shirk work and will absent themselves from work
more often. In many cases unsuitable employees have to leave
their jobs. This will lead to waste of time, energy and money
in hiring such employees. The training cost in current on them
lass a waste. Proper selection and placement of personnel go
a long way to building up a suitable work force. It will keep
the rates of absenteeism and labour turn over low and will
increase the moral of the employees. If the employees are
quite will show higher efficiency and productivity. This will
enable the organisation to achieve its objectives effectively.
171
5:4:2 STEPS IN SELECTION PROCEDURE

Selection has become a critical process these days
because it requires a heavy investment of money to get right
types of people. Induction and training cost are also rising.
If the right type of persons are not chosen, it will lead to a
huge loss to employer in terms of time, effort and money. The
major steps followed by modern organisations to get right
type of persons are discussed below:
i) Preliminary interview:
In most of the organisation, the selection programme
begins with preliminary interview. The preliminary interview
is generally brief and does the job of eliminating the totally
unsuitable candidates. The preliminary interview offers
advantages not only to the organisation but also to the
applicant. If an applicant is eliminated at this stage, the
organisation will be saved from the expenses jof processing
him through the remaining steps of the selection procedure
and the unsuitable candidate will be saved from the trouble
of passing through the long procedure.
ii) Application Blank:
An important step in hiring a man for the organisation is
to get a written record of his qualification, experience and any
other speciality. There is a high degree of similarity between
the application blanks of various organisations as the basic
information about the individuals to which all organisations
give importance. Application blanks help in securing
information which is helpful at the stage of interview.
iii) Employment Test:
Individuals differ in almst all aspects one can think of.
They differ with respect to physical cahracteristics, capacity, level
of mental ability, their likes and dislikes and also with respect
to personality traits. So they require the employment tests, which
are,
172
a)
b)
c)
d)
e)
Intelligence tests.
Aptitude tests.
Proficiency tests.
Interest Test.
Personality tests.
Matching of individuals physically mental and

temperamental pattern with the requirement of fob or field of
trainging is a difficult task. But where this matching takes place,
the result is happiness for the individual and greater prosperity
for the organisation and the society. But instances of round pags
in square holes are not rare. So before deciding upon the job or
jobs suitable for a particular individual, one should know the
level of this abiltiy and knowledge, the pattern of his interest
and aptitudes in detail. This will require the use of employment
tests which are described below:
a)
Intelligence Tests:
This test is used to judge the mental capacity of an

applicant. It measures the individual learning ability i.e., ability
to catch or understand instructions and also ability to make
decision and judgment. There are many verbal as well as nonverbal intelligence tests which as widely used in the selection of
personnel for almost every kind of job from the unskilled to
skilled one.
b)
Aptitude Tests:
Aptitude means the potential which an individual has for

learning the skills reuired to do a job efficiently. Aptitude tests
measure
applicants capacity and his potential for development. Aptitude tests are the most prominsing indices predicting
workers success.
c)
Proficiency Tests:
Proficiency tests are those which are designed to measure

the skills already accquired by the individuals. They also test
the level of knowledge and proficiency acquired by an applicant.
173
A trade test takes a sample of individuals behaviour which his

designed as a replica of the actual; work situation such as typing.
A trade test should be differential from the aptitude test. A
aptitude test measures the potential of the applicant to learn skills
required on a job.
d)
Interest Tests:
Interest tests identify patterns of interest in those areas in

which the individuals show special concern, fascination and
involvement. These tests will suggest what types of job may be
satisfying to the employees. Interest test are more often used for
vocational guidance also. They help the individuals in selecting
occupations of their interests.
e)
Personality Tests:
Personality tests probe for the qualities of the personality

as a whle, the combination of aptitude, interest and usual mood
and temperament. It is very difficult to devise and use personality
tests because they are concerned with discovering clues to an
individuals value system, his emotion reactions, maturity etc.
iv)
Employment interview:
Although application blank and employment tests provide

a lot of valuable information as to the candidate yet they do not
provide the complete set of information required of the applicant.
Interview may be used to secure more information about a
candidate.
v)
Checking References:
A reference is potentially an important source of

information about a candidate as it and personality if he holds a
responsible position in some organisation or has been the boss
or employer of the candidate.
vi)
Physical Medical Examination:
The pre-employment physical examination or medical test

of a candidate is an important step in the selection procedure.
174
vii)
Final Selection & Placement:
After a candidat has cleared all the hurdles in the selection

procedure, he is formally appointed by issuing him an
appoinment order by concluding with him a service agreement.
5:5 PLACEMENT
So far we have focused on selection, that is , a decision to
accept or reject each applicant on the basis of his performance
in some selection techniques. Now we are going to focus on
placement , that is, a decision to place a selected individual in
one job than in another. In selection the task is to match people
with the positions. In placement the task is to match positions
with people so that each individual is assigned to that position
where he is likely to make the best use of ;his abilities
consistent with the requirements of his total working group.
Selection is best done where the number of applicants is large
relative to the number of available jobs.
Placement is best
done where the number of available jobs is large relative to the
number of selected individuals.
At the time of employment , selection and placement are
often inseparable parts of a single process. As a rule , a small
company has only a few vacancies at any one time, and
consequently it selects people for specific jobs. In large
companies, however, where there are a number of vacancies ,
selection and placement may become distinct processes.
Placement problems arise when large-scale transfers or
promotions are being made or when some people rendered
surplus from some parts of the organisation are being placed
elsewhere in the organisation or when executive trainees on;
completion of their general training programme are being
assigned to jobs in production, sales, marketing or some other
functional area and so on. In such situations the individual is
already employed and the placement decision is then made to
assign him to the job for which he is considered to be best
qualified.
175
In making placements of individuals the principle that each

individual should be placed on that job for which he has the
greatest ability should not be rigidly followed because this may
result in some jobs being filled by unqualified persons. The aim
should be to realise the abilities and talents of the largest number
of individuals. This may involve some workers being assigned
to jobs for which their talents are secondary. But the composite
assignment collectively are optimum.
5:6 Induction
Induction is the process of inducting a new employee into
the new social setting of his work. The step should take into
account two major objects :
(i) familiarising the new employee with his new
surroundings and company rules and regulations,
and
(ii) integrating his personal goals with the
organisational goals. The first objects ins
generally easy to achieve.
The information which is commonly passed on to the new
employee covers the following subjects:
1.
Company history, products and major operations.
2.
Geography of the plant.
3.
Structure of the organisation and functions of

various departments.
4.
General company policies and regulation

sregarding wages and payment, hours of work
and overtime, safety andaccidents, discipline
and grievances, uniforms and clothing and
parking.
5.
Economic and recreational services available.
6.
Opportunities for promotion and transform,

performance appraisal and suggestions system.
176
It is believed that the above information is conductive to

the development of favourable attitudes on the part of employees,
and also help new employees to become more effective in their
jobs.
The second objective, a more difficult one, is tried to be
achieved by convincing the new employee that, in the ultimate
analysis, what is good for the company is also good for him. If
the employee is convinced of the congruence of goals, he is one
of the channels by which the public is also convinced of the
merit of the company and its cause. It should be remembered
that the assimilation of anew employee begins with his first
contact with the company. The first impression made on the
mind of the employee is likely to be a lasting impression, and
the treatment he receives during the early days on the new job
will help him to form his opinion about his employer. If he has
formed a good opinion his adjustment to the job will be ore
rapid, his mistakes fewer and his attitude more cop-operative.
The activities of an induction programme usually include
group lectures, individual interviews with key people and
company films. Someone outlines company organisation
structure, employee benefits, general rules, guidelines, and
policies of general interest. Most programmes include a tour of
the plant or office. The compete induction programme is
generally divided in to 2 phases. In the first phase, induction is
done by the personnel department which supplies to the new
employee all sorts of
information relating to the company.
Sometimes too much is given about too many subjects in too
short a period and this many create confusion in the mind of the
employee. In the second phase induction is done by the
supervisor. He has the responsibility of seeing that both the
newcomer and the work team accept each other. The supervisor
should follow a set induction procedure. A seven-step
programme provides for:
177
*
*
*
*
*
greeting the new comer cordially.

telling the newcomer his duties
explaining the importance of his job in relation
to other jobs of the department. introducing the
newcomer to the rest of the work team and the
trade union
introducing the newcomer to the person with whom
he will get training.
telling the newcomer what to do if he:
*
*
*
*
*
*
*
*
*
has problem in understanding the wage/

salary system.
has a medical problem
feels that working conditions are unsafe or
unwelcome
does not get on with his co-worker
has difficulty with the work.
is bullied or harassed
has complaint
does not receive adequate training
checking frequently the newcomer s
progress.
At some point of time the new comer will also have to be

told about the expected performance and quality standards and
the norms of behaviour and protocol in the organisation. Here
it should be remembered that the informal organisation of the
newcomer will also acquaint him with its own norms and
practices. The personnel department and the supervisor can do
little to prevent this.
Some indicators of faulty induction are: low morale, low
productivity, more accidents, quits, request for transfer,
absenteeism and various sorts of complaints. The programme
should be corrected after interviewing the new employees.
178
5:7 TRAINING
Training is an organised activity for increasing the
knowledge and skill of people for a definite purpose. The purpose
of training is to achieve a change in the behavour of those trained
and to enable them to do their jobs in a better way. In the industrial
situation this means that the trainees will acquire new
manipulative skillls, technical knowledge, porblem-solving
ability or attitude etc., The training enables the employees to get
acquainted with their present or potential jobs and also increase
their skills and knowledge.
Training makes newly recruited employees fully
productive in the minimum of time. Even for the old workers, it
is necessary to refresh them and to enable them to keep with
new methods and techniques as well as new machines and
equipements for doing the work. Training is not a One step,
process; but it is a continuous or never ending process.
5:7:1 Objectives of Training
Training is the act of increasing the knowledge and skills
of an employee for doing a particular job. The main objective of
training is to achieve a change in the behaviour of the trainees.
In order to achieve this objective, any training programme should
be to bring positive change in:
i)
ii)
iii)
Knowledge
Skills &
Attitudes.
5:7:2 Training Development and Education

The term training and Development are often confused.
Traning means learning the basic skills and knowledge necessary
for aparticular job or agroup of jobs. In other words,training is
the act of incresaing the knowledge for doing a particular job.
But development means the growth of the individual in all
respects. An organisation works for the development of its
executives or potential executives in order to enable them to be
179
more effective in performing the various functions of

management. Any executive development programme aims at
increasing the capacities of the inidviduals to achieve the desired
objective. Executive Capacities imply his personnel abilities.
Training must also be distinguished from Education.
Training is concerned with increasing knowledge and skill in
doing a particular job. But education is broader in scope. The
purpose is to develop individuals. It is concerned with incresing
general knowledge and understanding environment. But
education we generally formal instruction in a social or a college,
whereas training is vacationally oriented and is generaly imparted
at the work place. Training usually has amore immediate
utilitarian purpose than educatio. Actually the distinction between
training and education is not precise because in many cases, both
training and education occure at the same time.
5:7:3 Need ans Advantages Training
The responsibility for imparting rraining to the employees
rests with the employer. If there is no formal training programme
in an organisation, the workers will try to train themselves by
trail & error or by observing others. By this, process will take
alot of time and will result in higher costs fo training. Moreover,
the workers may not be able tolearn the best operating methods.
Training is important not only from the point of view of the
organisation; but also for the employee. Training is valuable to
the employees because it will give them greater job security and
an opportunity for advancement.
Advantages of Training
The major benefits of training are listed below:
1.
2.
3.
4.
Less learning period.

Better performance.
Uniformity of procedures.
Economy of materials & equiupments.
180
5.
6.
7.
8.
Fill manpower needs.

Less supervision.
High morale.
Better management.
5:7:4 Steps in Training

A systemmatic training programme involves the following
steps:
1)
Identifying the training needs of goals.
2)
Selection a group of trainees.
3)
Designing the training experiences in terms

of the appropriate learning theory into account
the nature of what is to be learnt and who the
trainees are.
4)
Preparation of the instructors and selecting the

techniques training.
5) Evaluating the outcome of training with a

scientifically, designed evaluation schemes.
5:7:5 Essentioal of Effective Training
Training is an important tool of management capable of
making significant contribution to the goals or the organisation.
Training tends to improve the performance of employees by
narrowing the distance between expectation and achievements.
Because of its significant role its essential to have an effective
training programme should possess the following characteristics.
i)
Training programme is chalked out after

identifying the training needs or goals. It has
relevance to the job requirements.
ii)
An effective training programme is flexible and

makes the allowance of differences among the
individuals in regard to ability, aptitudes,
learning, capacity, emotional make up etc.,
181
iii) A good training programme prepares the trainees mentally before they are imparted and job
knowledge or skill.
iv) An effective training programme is conducted by
well qualified and experienced trainers.
v)
An effective training programme emphasises

both training and practice. It shuold help in
acquiring knowledge and their application.
vi) An effective training programme has the top

managements support. The top management can
greatly influence the quality of trainee in t h e
organisation by the policies it adopts and
the extent to which it support the training
programme.
vii) An effective training programme is supported by
a system of critical of the outcome of the training
efforts.
5:7:6 Types of Training
Different kinds of training programme used in industry
include the following:
1.
Induction or Orientation Training:

Induction is concerned with the problem of introducing
or orienting a new employee to the orgaisation and its procedure,
rules and regulations. When a newly appointed employee reports
for work, he must be helped to get acquainted with the work
environment and the fellow employees.
2.
Job Training:
Job training is provided to new employees to acquaint
them with the jobs they are expected to perfom. Various on the
job training and off-the job training techniques are adopted to
educate the employees in handling the equipments and raw
materials correctly and perform their efficiently.
182
REFRESHER TRAINING OR RETRAINING

As the name implies, the refresher training is meant for
the oldemployees of the enterprises. The basic purpose of
refresher training is to acquiant their jobs and improve their
efficiency. In the words of DALE YODAR, Retraining
programme are designed to avoid personal absolecence.
TRAINING FOR PROMOTION
The existing talented employees may be given
adequate training to make them eligible for promotion to higher
jobs in the organisation. Promotion of an employee needs a
significant change in his responsibilitie and duties.
APPRENTICESHIP TRAINING
Apprenticeship training programme involves
importing knowledge and skill in doing a craft or a series of
related jobs. The governments of various countries have passed
Laws which make it obligatory n certain employees to provide
apprenceship training to the young people.
INTERNSHIP TRAINING
Internship training programme have become

popular these days because of co-operation between employers
and vocational and professional institutions. Under this method,
the vocational or professional institutions enter into an
arrangement with big business enterprise for providing practical knowledge to its students by gaining actual work experience.
LEARNING TRAINING
Learner training programme are drawn up for those

people who do not have sufficient vocational background and
knowledge about the jobs for which they have been selected.
Such employees are sent to vocational schools for some time
where they get some education and learn machine operations.
183
5:7:7 METHODS OF TRAINING

Following are the important methods of training to the
operative employees:
(i)
On-the-job training:
On-the-job training is considered to be the most effective

method of training the operating personnel. Under this method
the worker is given training at his workplace, by his immediate
supervisor who knows exactly what the trainee should learn.
(ii)
Vestibule Training:
Vestibule schools are adopted to the same general type of

training that is faced by on-the-job training. Vestibule training
is suitable for a large number of persons are to be trained at the
same time for the same kind of work.
184

1.
Training given to an exployee to update his job knowledge
or shill is called __________ training.
2.
Recruitment may be drne both from tithin and outside the
organisation.
True / False
3.
Match the following
1. Job sado specification
- a. Merit (or) efficiency
2. Face to face oral Examination - b. Interview
3. Performance appraisel
- c. Right man for the
right job
SUMMARY
Staffing is a universal function. It involves managing the
organisational structure though proper and effective selection,
appraisal, and development of personnel to fill the roles
designed in to the structure. Manpower utilisation deals with
the dynamics of leadership and motivation. Recruitment enables
the management to select suitable employees for different jobs.
The aim of placement is to realise the abilities and talents of
the largest number of individuals.The purpose of training is to
achieve a change in the behaviour of those trained and to enable
them to do their jobs in a better way.
UNIT QUESTIONS
1.
2.
3.
4.
5.
6.
What is staffing? What are the nature and importance of

staffing?
What is recruitment? Briefly Explain various sources of
recusitment.
What is meant by selection?
What are the steps involved in selection procedure?
Explain the various types of training employees.
What are the advantages of training?
185
7.
8.
9.
10.
What are the various methods of training?

Define on the job training?
What is meant by man power planning? What are its
process?
Recruitingthe empolyee is only the beginning - the
problems commence with his induction. comment.

1.
Dr. C.B. Gupta Business Management
2.
Pinkar pagare
Business Management
3.
S.A. Sherlekar
V.S. Sherlekar
Management
4.
J.Jayasankar
Principles of Management.
1. Refreshes
2. True.
3. 1-c, 2-b, 3-a
186
NOTES
187
188
189
190
191

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BUSINESS COMMUNICATION

KINDS OF BUSINESS LETTERS

NATURE AND SCOPE OF

BLOCK PLAN (CONTENT)

Banking Correspondence, Correspondence of a Company

UNIT I BUSINESS COMMUNICATION

SELF- ASSESSMENT QUESTIONS: I

response results. We shall now see some of the important

One of the important objectives of communication is

Information that are required for the organisation are

Advice is also a kind of information. It means opinion

Order is an authoritative communication. Orders are

The term suggestion means proposing something for

Including, compelling or promoting a person to act

Warning is a forceful means of communication. It may

Inspiring the interest in their job in the minds of the

Counseling is done by a man of greater skill or

Counseling is objective and impersonal,

Counsel is almost professional, whereas

Counsel is eagerly sought, whereas advice

Morale is the term usually applied to armed forces

Praising of initiative, good effort and work by

As shown in the following figure, the sender of the

On the basis of organisational structure,

Formal Communication, and

We shall now describe them briefly.

Formal communication takes place via formal channels

organisation. They are helpful for performing functions like

Communication is said to be downward when it moves

Give job instructions.

Create an understanding of the work and

Inform about procedures.

Inform subordinates about their

Indoctrinate the workers to

However, downward communication suffers from

It develops an authoritative atmosphere

As information passes through the

On the basis of media used, communication can be

It is time consuming and costly.

Written communication, on the other hand, is very wide

Letters or written communications can be kept

Limitations of Written Communication:

verbal message. E.g. smiling while greeting your colleague.

iii) Body stance:

were late, emphasis is given to were. However ,while stressing

Intimate zone extends from physical contact to about 18

Audio- visual communication

Audio-visual communication uses the methods that

An individuals view of reality is known as perception.

Hodgetts say that, the senders meaning and the

Semantic or Language Barriers:

Language serves as the basis for the communication. It is

If receiver pays very little attention to the message,

One of the basic barriers to communication arises due to

Generally, people resist changes. Resistance to changes

Effective communication depends greatly sound

Premature evaluation refers to a tendency of forming a

Emotional attitude of the parties involved in the exchange

Failure to communicate is a pervasive barrier to

Other barriers include faulty translation, badly expressed

The structure of a business letter.

The structure of a business letter refers to the proper

Almost all business firms use printed letterheads for their

The Inside Address