Staffing
An organisation can achieve its objectives only when it has right people in the right positions. Staffing is that part of the process of management which is concerned with obtaining, utilizing and maintaining a satisfactory and satisfied work force.
Staffing has been described as the managerial function of filling and keeping filled the positions in the organisation structure.
Importance of staffing
Since the right people have to be chosen while selecting a person, the human element is very important. Staffing provides the human element or instinct while selecting. The attitude, aptitude, commitment, loyalty are important qualities perceived by the enterprise.
Human resource is the foundation of any business. The right people can help you take your business to the top; the wrong people can break your business. Hence staffing is the most fundamental and critical to organizational performance.
The staffing function has assumed greater importance these days because of
· Rapid advancement of technology
· Increasing size of organisation and
· Complicated behavior of human beings
No organisation can be successful unless it has the right kind of people at different job positions.
Staffing ensures the following benefits to the organizations:
1. It helps in finding and placing competent personnel at various jobs.
2. It ensures higher performance by placing right person at the right job.
3. By appointing efficient staff, it ensures continuous survival and growth of the organisation.
4. It ensures optimum utilization of human resource. Through manpower planning and job analysis we can find out the number and type of employees required. So there are no chances of overmanning and shortage of personnel.
5. Objective assessments and fair rewards improve job satisfaction and morale of employees. Such efficient staff helps to win over the competitors..
Sunday, August 30, 2009
Sunday, August 23, 2009
Importance of decentralisation
Importance of decentralisation
1. Develops initiative among subordinates: When the lower level managers are given freedom to take their own decisions they learn to depend on their own judgment. They keep facing challenges and take initiative to develop solutions for them. It also helps in identifying those executives who have the necessary potential to become dynamic leaders.
2. Develops managerial talent for the future: When the work is passed on to the employees it gives them opportunity to use their talents and increases their experience of handling work independently. This gives them a chance to prove their abilities and prepares qualified manpower who can be promoted to the vacant positions. It also helps to identify those who may not be successful in assuming greater responsibility.
3. Quick decision making: Through decentralisation, the decision making power is entrusted to all the managers. This leads to faster decision making because employees near the point of action need not take approval from the higher level and can take their own decisions. So the process is much faster.
4. Relief to top management: in the process of decentralisation, top level managers are not overburdened with the responsibility and authority as they systematically pass the authority and responsibility at different levels and they become free to concentrate on more important issues.
5. Facilitates growth: Decentralisation means greater freedom to lower levels as well as divisions and departments. This develops a sense of competition among them where each one tries to do better than the other. Thus their productivity levels increase and they generate greater returns for the organization.
6.Better control:
1. Develops initiative among subordinates: When the lower level managers are given freedom to take their own decisions they learn to depend on their own judgment. They keep facing challenges and take initiative to develop solutions for them. It also helps in identifying those executives who have the necessary potential to become dynamic leaders.
2. Develops managerial talent for the future: When the work is passed on to the employees it gives them opportunity to use their talents and increases their experience of handling work independently. This gives them a chance to prove their abilities and prepares qualified manpower who can be promoted to the vacant positions. It also helps to identify those who may not be successful in assuming greater responsibility.
3. Quick decision making: Through decentralisation, the decision making power is entrusted to all the managers. This leads to faster decision making because employees near the point of action need not take approval from the higher level and can take their own decisions. So the process is much faster.
4. Relief to top management: in the process of decentralisation, top level managers are not overburdened with the responsibility and authority as they systematically pass the authority and responsibility at different levels and they become free to concentrate on more important issues.
5. Facilitates growth: Decentralisation means greater freedom to lower levels as well as divisions and departments. This develops a sense of competition among them where each one tries to do better than the other. Thus their productivity levels increase and they generate greater returns for the organization.
6.Better control:
Decentralization
Decentralization
Decentralization means delegation of authority at every level. It is the even and systematic distribution of decision making authority to the lowest level of management. Under decentralization every employee working at different levels gets some share in the authority. Decentralization is a policy matter and managers plan in advance whether to go for centralized or decentralized policy.
Relation between delegation and decentralization
Decentralisation is the extension of delegation. In delegation, we multiply the authority by two whereas in decentralization, the authority is multiplied by many because systematic delegation taking place at every level will result in evenly distribution of authority and responsibility at every level and result in decentralistion. If delegation is restricted to certain levels only then there will be no complete decentralization also.
For example if the director gives the responsibility to production head to complete the target of 50,000 units per annum, and authorize him to hire the required workers, decide their salaries and working conditions.
The production head further shares his authority and responsibility with production manager to achieve the target and select the workers.
The production manager in turn shares with the supervisor to select the workers.
This sharing of authority and responsibility between the director, production head, production manager and the supervisor will result in systematic distribution of authority at every level automatically. Thus we say that delegation leads to decentralization.
Relation between centralization and decentralisation
An organization is centralized when decision making authority is retained by higher management whereas it is decnetralised when the authority is delegated.
Complete centralization means concentration of all decision making authority at the top level in the management hierarchy. On the other hand complete decentralisation implies the delegation of all decision making authority to the lower level of the hierarchy. Both these situations are unrealistic. An organization can never be completely centralized or decentralized. As it grows in size and competency, there is a tendency to move towards decentralisation. This is because in large organizations, those employees who are closely involved with the operations tend to have more knowledge about them than the top management. Hence there is a need for a balance between these co-existing forces.
Decentralization means delegation of authority at every level. It is the even and systematic distribution of decision making authority to the lowest level of management. Under decentralization every employee working at different levels gets some share in the authority. Decentralization is a policy matter and managers plan in advance whether to go for centralized or decentralized policy.
Relation between delegation and decentralization
Decentralisation is the extension of delegation. In delegation, we multiply the authority by two whereas in decentralization, the authority is multiplied by many because systematic delegation taking place at every level will result in evenly distribution of authority and responsibility at every level and result in decentralistion. If delegation is restricted to certain levels only then there will be no complete decentralization also.
For example if the director gives the responsibility to production head to complete the target of 50,000 units per annum, and authorize him to hire the required workers, decide their salaries and working conditions.
The production head further shares his authority and responsibility with production manager to achieve the target and select the workers.
The production manager in turn shares with the supervisor to select the workers.
This sharing of authority and responsibility between the director, production head, production manager and the supervisor will result in systematic distribution of authority at every level automatically. Thus we say that delegation leads to decentralization.
Relation between centralization and decentralisation
An organization is centralized when decision making authority is retained by higher management whereas it is decnetralised when the authority is delegated.
Complete centralization means concentration of all decision making authority at the top level in the management hierarchy. On the other hand complete decentralisation implies the delegation of all decision making authority to the lower level of the hierarchy. Both these situations are unrealistic. An organization can never be completely centralized or decentralized. As it grows in size and competency, there is a tendency to move towards decentralisation. This is because in large organizations, those employees who are closely involved with the operations tend to have more knowledge about them than the top management. Hence there is a need for a balance between these co-existing forces.
Sunday, August 16, 2009
Importance of delegation
Importance of delegation
1. Effective management: By delegation, managers pass their routine work to their subordinates. So they get more time to concentrate on more important matters. This will help them to excel in new areas and be more efficient and effective.
2. Employee development: In the process of management, the work is passed on to the employees. This gives them opportunity to use their talents and increases their experience. It makes them better leaders and decision makers. Thus delegation helps in preparing better future managers.
3. Motivation of employees: When a superior passes on the responsibility to his subordinate, it is not merely sharing work but also sharing trust. This develops a feeling of belongingness and commitment for the subordinate. It improves his confidence and he feels encouraged to improve his performance.
4. Facilitation of growth: While passing on a responsibility and authority managers have to take care of the qualification and capability of the employee. This division of work and specialization provides a ready work force to take the leading position in a new venture and thus help in the expansion of the enterprise.
5. Basis of management hierarchy: Delegation establishes authority responsibility relationships between employees. The degree and flow of authority determines who is to report to whom. It also decides the power enjoyed by each job position in the organization.
6. Better coordination: Authority, responsibility and accountability help to define the powers, duties and answerability related to various job positions in an organization. This helps to avoid overlapping and duplication of efforts and thus helps in maintaining coordination amongst departments and functions of management.Importance of delegation
1. Effective management: By delegation, managers pass their routine work to their subordinates. So they get more time to concentrate on more important matters. This will help them to excel in new areas and be more efficient and effective.
2. Employee development: In the process of management, the work is passed on to the employees. This gives them opportunity to use their talents and increases their experience. It makes them better leaders and decision makers. Thus delegation helps in preparing better future managers.
3. Motivation of employees: When a superior passes on the responsibility to his subordinate, it is not merely sharing work but also sharing trust. This develops a feeling of belongingness and commitment for the subordinate. It improves his confidence and he feels encouraged to improve his performance.
4. Facilitation of growth: While passing on a responsibility and authority managers have to take care of the qualification and capability of the employee. This division of work and specialization provides a ready work force to take the leading position in a new venture and thus help in the expansion of the enterprise.
5. Basis of management hierarchy: Delegation establishes authority responsibility relationships between employees. The degree and flow of authority determines who is to report to whom. It also decides the power enjoyed by each job position in the organization.
6. Better coordination: Authority, responsibility and accountability help to define the powers, duties and answerability related to various job positions in an organization. This helps to avoid overlapping and duplication of efforts and thus helps in maintaining coordination amongst departments and functions of management.Importance of delegation
Delegation
Delegation
Delegation is defined as ‘a process of entrusting responsibility and authority to the subordinates and creating accountability on those who are entrusted with the authority and responsibility.’
Delegation means downward transfer of authority from a superior to subordinate. It is required for efficient functioning of the organization as well as enables the manager to use his time on high priority work. It helps the subordinate to satisfy his needs.
However it is not the process of abdication. The manager shall still be responsible for the performance of the job assigned to him. Moreover, the authority delegated to a person can be taken back and redelegated to another person. Thus, irrespective of the authority delegated, the manager will still be accountable to his senior.
Elements of Delegation
1.Responsibility: It means the obligation of the subordinate to properly perform the work assigned to him. The process of delegation begins when the manager passes on some of his responsibilities to his subordinates which mean that responsibility can be delegated.
However, when an employee is given the responsibility of some job, he must also be given the requisite authority to carry out his job.
2.Authority: It means power to take decision. It also refers to the right of an individual to command his subordinates within the scope of his position.
When the managers are passing their responsibilities to the subordinates, they also pass some authority matching the responsibility. However they should not pass all their authority to their subordinate.
3.Accountability: It implies answerability of the subordinate for accomplishment or non accomplishment of job assigned. Once, the authority has been delegated and responsibility accepted, one cannot deny accountability. Accountability can only be shared with the subordinate, it cannot be delegated and it flows upwards.
It indicated that the manager must ensure proper discharge of duties by his subordinates. The subordinate is expected to explain the consequences of his actions and omissions.
Thus it can be stated that while the authority can be delegated, responsibility is assumed and accountability is imposed.
Delegation is not the process of abdication
This means that accountability is absolute. It can never be passed or delegated. Even after creating accountability on subordinates, the superiors also remain answerable. For example, if the sales manager is assigned a target of selling 1000 units in one month, and he divided this target among 5 salesmen under him. At the end of the month, if only 80 units could be sold, he can not escape his accountability. Though he had passed this target to his subordinates, still he cannot get rid of his accountability. He should have checked the performance from time to time to make sure that the work is going on in the right direction and taken timely action.
Delegation is defined as ‘a process of entrusting responsibility and authority to the subordinates and creating accountability on those who are entrusted with the authority and responsibility.’
Delegation means downward transfer of authority from a superior to subordinate. It is required for efficient functioning of the organization as well as enables the manager to use his time on high priority work. It helps the subordinate to satisfy his needs.
However it is not the process of abdication. The manager shall still be responsible for the performance of the job assigned to him. Moreover, the authority delegated to a person can be taken back and redelegated to another person. Thus, irrespective of the authority delegated, the manager will still be accountable to his senior.
Elements of Delegation
1.Responsibility: It means the obligation of the subordinate to properly perform the work assigned to him. The process of delegation begins when the manager passes on some of his responsibilities to his subordinates which mean that responsibility can be delegated.
However, when an employee is given the responsibility of some job, he must also be given the requisite authority to carry out his job.
2.Authority: It means power to take decision. It also refers to the right of an individual to command his subordinates within the scope of his position.
When the managers are passing their responsibilities to the subordinates, they also pass some authority matching the responsibility. However they should not pass all their authority to their subordinate.
3.Accountability: It implies answerability of the subordinate for accomplishment or non accomplishment of job assigned. Once, the authority has been delegated and responsibility accepted, one cannot deny accountability. Accountability can only be shared with the subordinate, it cannot be delegated and it flows upwards.
It indicated that the manager must ensure proper discharge of duties by his subordinates. The subordinate is expected to explain the consequences of his actions and omissions.
Thus it can be stated that while the authority can be delegated, responsibility is assumed and accountability is imposed.
Delegation is not the process of abdication
This means that accountability is absolute. It can never be passed or delegated. Even after creating accountability on subordinates, the superiors also remain answerable. For example, if the sales manager is assigned a target of selling 1000 units in one month, and he divided this target among 5 salesmen under him. At the end of the month, if only 80 units could be sold, he can not escape his accountability. Though he had passed this target to his subordinates, still he cannot get rid of his accountability. He should have checked the performance from time to time to make sure that the work is going on in the right direction and taken timely action.
Formal and Informal organization
Formal and Informal organization
Formal Organisation
When the managers are carrying on the organizing process then as a result, an organizational structure is created to achieve systematic working and efficient utilization of resources. This type of structure is known as formal organizational structure.
This structure clearly spells out the job, authority, and responsibility assigned to each individual, the superior subordinate relationship and their designations.
The features of such a structure are:
1. This structure is created deliberately created by the process of organizing.
2. The purpose of the structure is to achieve organizational goals.
3. It gives more emphasis to work than to interpersonal relationships among employees.
4. Each individual is assigned a specific job and a fixed authority. Various job positions and their interrelationships are clearly defined. This clarifies who is to report to whom.
5. It results into the creation of a scalar chain. Efforts if different departments are coordinated, interlinked and integrated.
Advantages
1. It helps in effective accomplishment of goals by clearly defining the job role of each employee.
2. It is easy to fix responsibility as mutual relationships are clearly defined.
3. There is no overlapping or duplication of work as work is systematically divided among various departments and individuals.
4. Unity of command is maintained through an established scalar chain.
5. It provides stability to the organization since the behavior of members can be fairly predicted.
Limitations
1. Because of scalar chain, communication is generally slow, leading to delay in action.
2. It does not give importance to the social and psychological needs of the employees. This may lead to demotivation.
3. It places more emphasis on structure and work, and so it ignores human relations, creativity and talent.
Informal structure
In the formal structure, individuals are assigned certain job positions. While working on these job positions, the individuals interact with each other and develop some social and friendly relations in the organization. This network of social and friendly groups forms another structure in the organization which is called the informal structure.
Informal structure gets created automatically and spontaneously for getting psychological satisfaction. However, the existence of such organization depends upon the existence of formal structure. So, if there is no formal structure, there will be no job positions, there will be no people working on these job positions, and there will be no informal structure.
Features of informal structure are:
1. It gets created automatically without any deliberate efforts by the management.
2. The existence depends upon formal organization. It originates from within formal organization as a result of personal interactions among employees.
3. It does not follow any fixed path of authority or communication. So there is no specific direction of flow of information.
4. There are no officially laid down norms of behavior. There is no definite structure. The source of information cannot be known
Formal Organisation
When the managers are carrying on the organizing process then as a result, an organizational structure is created to achieve systematic working and efficient utilization of resources. This type of structure is known as formal organizational structure.
This structure clearly spells out the job, authority, and responsibility assigned to each individual, the superior subordinate relationship and their designations.
The features of such a structure are:
1. This structure is created deliberately created by the process of organizing.
2. The purpose of the structure is to achieve organizational goals.
3. It gives more emphasis to work than to interpersonal relationships among employees.
4. Each individual is assigned a specific job and a fixed authority. Various job positions and their interrelationships are clearly defined. This clarifies who is to report to whom.
5. It results into the creation of a scalar chain. Efforts if different departments are coordinated, interlinked and integrated.
Advantages
1. It helps in effective accomplishment of goals by clearly defining the job role of each employee.
2. It is easy to fix responsibility as mutual relationships are clearly defined.
3. There is no overlapping or duplication of work as work is systematically divided among various departments and individuals.
4. Unity of command is maintained through an established scalar chain.
5. It provides stability to the organization since the behavior of members can be fairly predicted.
Limitations
1. Because of scalar chain, communication is generally slow, leading to delay in action.
2. It does not give importance to the social and psychological needs of the employees. This may lead to demotivation.
3. It places more emphasis on structure and work, and so it ignores human relations, creativity and talent.
Informal structure
In the formal structure, individuals are assigned certain job positions. While working on these job positions, the individuals interact with each other and develop some social and friendly relations in the organization. This network of social and friendly groups forms another structure in the organization which is called the informal structure.
Informal structure gets created automatically and spontaneously for getting psychological satisfaction. However, the existence of such organization depends upon the existence of formal structure. So, if there is no formal structure, there will be no job positions, there will be no people working on these job positions, and there will be no informal structure.
Features of informal structure are:
1. It gets created automatically without any deliberate efforts by the management.
2. The existence depends upon formal organization. It originates from within formal organization as a result of personal interactions among employees.
3. It does not follow any fixed path of authority or communication. So there is no specific direction of flow of information.
4. There are no officially laid down norms of behavior. There is no definite structure. The source of information cannot be known
Advantages
1. Informal communication does not follow scalar chain and so there can be faster spread of communication.
2. It helps to fulfill the social needs of members and gives them a sense of belongingness and motivation.
3. It helps the top level manager to know the real feedback of employees. This information can be made use of to fulfill organizational objectives.
Disadvantages
1. It may sometimes work against the interests of formal organization and spread rumors.
2. Sometimes the informal structure may oppose the policies and changes of management, and then it becomes very difficult to implement them in organization.
3. It may force the members to follow group norms. This may be harmful to the interest of the organization.
Types of organizational structure -Divisional structure
Types of organizational structure
B. Divisional Structure
An organization which is very large in size and is producing more than one product, they need to evolve a design to cope with the complexity. The activities related to one product are grouped under one division. The organizational structure consists of separate divisions, each such division has its own manager. Within each division, functions like production, marketing, finance etc. are performed.
In other words, each division tends to adopt a functional structure. However, functions may vary across divisions in accordance to their product line.
Advantages
1. Development of personnel: All activities related to one type of product are grouped under one department only. This helps in development of varied skills in the head and prepares him for a higher post.
2. Accountability: In this type of structure, the performance of each department can be easily assessed. It also helps in fixation of responsibility for poor performance so that appropriate remedial action can be taken.
3. Fast decision making: Each division functions independently and so decisions are much faster. This also promotes flexibility and initiative.
4. Expansion and growth: New departments can be easily added without disturbing the existing departments.
Disadvantages
1. There may be a conflict among different divisions on allocation of resources. A particular division may seek to maximize profits at the cost of others.
2. Each department requires all the resources to work as an independent unit. This increases cost as there may be duplication of activities across products.
3. The divisional heads focus only on their product. They may fail to identify themselves as a part of the common organization and develop divisional conflicts, ignoring organizational interests.
Suitability
Divisional structure is suitable where:
· The number of products is more than one.
· Different manufacturing technologies and marketing methods are used.
· The size of the concern is very large or is growing.
B. Divisional Structure
An organization which is very large in size and is producing more than one product, they need to evolve a design to cope with the complexity. The activities related to one product are grouped under one division. The organizational structure consists of separate divisions, each such division has its own manager. Within each division, functions like production, marketing, finance etc. are performed.
In other words, each division tends to adopt a functional structure. However, functions may vary across divisions in accordance to their product line.
Advantages
1. Development of personnel: All activities related to one type of product are grouped under one department only. This helps in development of varied skills in the head and prepares him for a higher post.
2. Accountability: In this type of structure, the performance of each department can be easily assessed. It also helps in fixation of responsibility for poor performance so that appropriate remedial action can be taken.
3. Fast decision making: Each division functions independently and so decisions are much faster. This also promotes flexibility and initiative.
4. Expansion and growth: New departments can be easily added without disturbing the existing departments.
Disadvantages
1. There may be a conflict among different divisions on allocation of resources. A particular division may seek to maximize profits at the cost of others.
2. Each department requires all the resources to work as an independent unit. This increases cost as there may be duplication of activities across products.
3. The divisional heads focus only on their product. They may fail to identify themselves as a part of the common organization and develop divisional conflicts, ignoring organizational interests.
Suitability
Divisional structure is suitable where:
· The number of products is more than one.
· Different manufacturing technologies and marketing methods are used.
· The size of the concern is very large or is growing.
Friday, August 14, 2009
Types of organizational structure
A. Functional Structure
When the activities or jobs are grouped keeping in mind the functions to be performed then it is called functional structure. These functions are organized in to separate departments. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, and personnel.
Advantages
1. Specialisation: Activities are grouped according to functions to be performed. Similar tasks are placed under one department. This leads to efficiency and specialization.
2. Easy supervision: Since the tasks to be done in one department are of similar nature, it becomes easy for the supervisor to guide and supervise the employees performing the jobs.
3. Easy coordination: Similarity of tasks being performed help in promoting control and coordination within the departments
4. Increases managerial efficiency: Managers in each department are performing the jobs again and again. This makes them specialized and increases their efficiency.
5. Effective training: Training of employees become easy as focus is only on a limited range of skills.
6. Decreased cost: Minimum duplication of efforts and economies of scale results in lower cost.
Disadvantages
1. The departments become specialized in their own way and fail to see the prospects of the whole organization. Thus it becomes difficult to achieve organizational goals.
2. The departmental heads start thinking their departments to be functional empires. This leads to conflicts among various departments.
3. When the departments become large it becomes difficult to coordinate.
4. Even when the organizational goals are not achieved it becomes difficult to fix responsibility as all the departments are interrelated.
5. Employees and managers are trained for only one function i.e. the department to which they belong. This develops inflexibility in them as they have difficulty in appreciating others point of view.
A. Functional Structure
When the activities or jobs are grouped keeping in mind the functions to be performed then it is called functional structure. These functions are organized in to separate departments. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, and personnel.
Advantages
1. Specialisation: Activities are grouped according to functions to be performed. Similar tasks are placed under one department. This leads to efficiency and specialization.
2. Easy supervision: Since the tasks to be done in one department are of similar nature, it becomes easy for the supervisor to guide and supervise the employees performing the jobs.
3. Easy coordination: Similarity of tasks being performed help in promoting control and coordination within the departments
4. Increases managerial efficiency: Managers in each department are performing the jobs again and again. This makes them specialized and increases their efficiency.
5. Effective training: Training of employees become easy as focus is only on a limited range of skills.
6. Decreased cost: Minimum duplication of efforts and economies of scale results in lower cost.
Disadvantages
1. The departments become specialized in their own way and fail to see the prospects of the whole organization. Thus it becomes difficult to achieve organizational goals.
2. The departmental heads start thinking their departments to be functional empires. This leads to conflicts among various departments.
3. When the departments become large it becomes difficult to coordinate.
4. Even when the organizational goals are not achieved it becomes difficult to fix responsibility as all the departments are interrelated.
5. Employees and managers are trained for only one function i.e. the department to which they belong. This develops inflexibility in them as they have difficulty in appreciating others point of view.
Suitability
Functional structure is suitable where:
1. The size of the business unit is large.
2. Specialization is required.
3. Decentralization of authority is needed.
4. Only one product is sold.
Sunday, August 9, 2009
Organising Structure
Organising Structure
Organising structure is the outcome of organizing process. Whenever an organization grows in size and complexity, an adequate structure is needed. Structure clearly defines the job positions, authority, and responsibilities of different employees.
An organizational structure is defined as ‘Network of job positions, responsibilities and authority at different levels’.
Peter Drucker clearly says, ‘An organizational structure is an indispensable means; and the wrong structure will seriously impair business performance and even destroy it.’
Benefits of a good structure
- It allows correlation and coordination among human, physical resources and enables the business to achieve its goals.
- It ensures a smooth flow of communication and better control over the operations.
- It provides the framework within which an organization functions while coordinating the responsibilities of individuals and departments.
The span of management, to a large extent gives shape to organizational structure. It refers to the number of subordinates that can be effectively managed by a superior. This determines the levels of management in the structure. The span of control depends upon:
· Capacity and intelligence level of managers.
· The trust of managers in their employees.
· The employees’ intelligence level.
· Nature of job.(routine or specialized)
Importance of organizing
Importance of organizing
- Benefits of specialization: In organizing, each work is divided into smaller jobs and one individual is assigned only one job according to his qualification. Such division of work leads to specialization.
- Clarity in working relationships: Organising function clearly defines the authority or power enjoyed by every individual. Everyone knows very clearly to whom he can give orders and from whom he has to receive orders. This also helps in the creation of managerial hierarchy.
- Optimum utilization of resources: Organising helps in proper usage of men, material and money. Jobs are properly assigned, so there is no confusion or duplication. This helps in minimizing the wastage of resources.
- Adaptation to change: Organising function helps in the creation of different departments and managerial hierarchy. This structure helps in adapting and adjusting to the activities in response to the changes in the external environment.
- Effective administration: Organizing function provides a clear description of jobs, there is no confusion and duplication. Every individual knows his role and position very clearly. Thus, management becomes easy and this brings effectiveness in administration.
- Development of Personnel: through organizing structure, mangers reduce their workload by assigning their routine jobs to their subordinates. This allows the manager to develop new methods and ways to perform the job. This also gives them the opportunity and time to innovate and thus help in strengthening the company’s competitive position. Such delegation also develops the subordinate by giving them the ability to handle challenges and to realize their full potential.
- Expansion and growth: With optimum utilization of resources, proper division of work and departmentation, companies can easily meet the challenges and can expand their activities in a planned manner. They can easily add more job positions, departments, and even diversify their product lines. New geographical areas can also be added to increase sales and profits.
Organising- meaning and process
Organizing
Organising means ‘identifying and grouping different activities in the organization and bringing together the physical and financial and human resources to establish the most productive relations for the achievement of organizational goals’.
Organising Process
1. Identification and division of work: The organizing function begins with division of work into smaller units. Each such unit is called a job. One individual is assigned only one job according to his capabilities and qualification. This leads to systematic working and specialization.
2. Departmentalization: Once the work is divided into smaller manageable units, related jobs are grouped together and put under one department. This grouping process is called departmentalization. The most common ways of departmentation are functional departmentation and divisional departmentation.
3. Assignment of duties: once departments are formed, each department is put under the charge of an individual. The work must be assigned to those who are best suited for it.
4. Establishing reporting relationships: After assigning the duties, all individuals must also be assigned matching authority. This assignment of authority and responsibility results in the creation of authority responsibility relationship between superior and subordinate. With this, a managerial hierarchy is created (chain of command) where every one knows who he has to take orders from and to whom he is accountable.
Wednesday, July 15, 2009
Limitations of Planning
1. Planning leads to rigidity: most of the times planning leads to rigidity I n functioning because it is not easy to make changes in them. When the circumstances change, following the pre-decided plan may no be in the interest of the organization.
2. Planning may not work in dynamic environment: Business environment is dynamic. The organization has to constantly adapt itself to the changes. For example, if economic policies are modified, or political conditions change, or there is a natural calamity. All these changes may not be predicted by planners and so there may be an obstacle to effective planning.
3. Planning reduces creativity: Planning is an activity done by the top management. Rests of the members just implement it. They are not permitted to deviate from the plans. So the creativity in them gets lost. For them, there is nothing new or innovative.
4. Planning involves huge cost: planning involves a lot of cost in terms of time, money and accuracy. A lot of calculations are required to be done and professional experts are to be hired in order to plan. When the cost of planning exceeds the value of benefits derived from it, it becomes uneconomical to plan.
5. Planning is time consuming: Sometimes plans to be drawn up take so much of time that there is not much time left for their implementation.
6. Planning does not guarantee success: The success of an organization depends upon properly drawn plans. Managers generally have a tendency to rely on previously tried and tested successful plan. However, it is not always true that just because a plan has worked before it will work again. It may lead to failure instead of success.
Types of plans
1. Objectives: They are the ends towards which the activities are directed. It is what you would like to achieve. An objective should be:
-Related to a single activity.
-Related to end result and not to the activity performed.
-It should be measurable in quantitative terms.
-It must have a time limit for achievement.
-It must be achievable.
2. Policies: It is an organizational own way of handling a problem. Its general response to a particular situation. They are the guides to thinking and decision making. For example:
· A school’s policy that admissions will be granted to only those applicants scoring minimum 75% marks.
· An organization’s policy of handling complaints within four hours.
3. Procedures: it is the sequence of steps to be followed by employees in different situations. It is the exact manner in which an activity is to be achieved. For example:
-Set up a file for applicants;
-Accept the forms and put them in a file;
-Ask for other certificates to verify marks of students;
-Put those documents into the file;
-Give the file to admission incharge.
4. Rules: They are the directives to do or not to do things, to behave or not to behave in a particular way. They must be strictly followed and if they are not followed, then strict actions can be taken against those who are disobeying the rules. They are spelt out to create an atmosphere of discipline in the organization. For example there can be a rule of no smoking in the organization.
5. Programme: it is a combination of goals, policies, procedures, and rules. They are prepared at different levels. A primary programme is prepared at the top level and then to support the primary plan, supportive programmes at different levels are prepared for smooth functioning of the company.
6. Methods: A method is a systematic way of doing routine and repetitive jobs. It is common way of doing a job so that there is no confusion in the minds of employees and comparisons are possible. For example, method of valuation of stock may be LIFO or FIFO.
7. Budgets: It is the statement of expected result expressed in numerical terms. Most of the times, budgets are financial in nature but it does not mean that company prepares only financial budget. Along with the financial budget, it also prepares capital budget, sales budget etc.
Saturday, July 11, 2009
Planning
Planning can be defined as “thinking in advance what is to be done, when it is to be done, how it is to be done and by whom it should be done.” It bridges the gap between where we are and where we want to reach in future.
Features of Planning
1. Primacy of planning: Planning is the primary or first function of management. No other function can be performed without planning. It provides the basis for other functions like organizing, staffing directing and controlling.
2. Forward looking: planning is looking ahead and is a futuristic function. It is never done for the past. Managers try to make predictions for the future according to their past experiences.
3. Pervasive: Planning is required at all levels and in all organizations. At the top level, major plans are framed, departmental heads make plans for their respective departments, and lower level managers make plans for the day to day activities.
4. Continuous: Planning is an on going, never ending process. After making plans, planners keep changing them according to the changing environment needs.
5. Planning is a mental exercise: Planning means looking ahead, anticipating opportunities and threats, evaluating alternatives, and choosing the best alternative. All this requires intelligent imagination, sound judgment and foresight. So it is called an intellectual process.
6. Planning involves choice/ decision making: Planning is required only when different alternatives are available and we have to select the most suitable one. If there is only one way of doing a job, then there is no need of planning. For example, if we have to import technology and the license is only with STC, then companies have no choice but to import from them only.
7. Planning focuses on achieving objectives: while planning, specific goals are set out along with the activities required to achieve the goals. After setting the targets, planning decides the method, procedure, and steps to be taken to achieve them.
Features of Planning
1. Primacy of planning: Planning is the primary or first function of management. No other function can be performed without planning. It provides the basis for other functions like organizing, staffing directing and controlling.
2. Forward looking: planning is looking ahead and is a futuristic function. It is never done for the past. Managers try to make predictions for the future according to their past experiences.
3. Pervasive: Planning is required at all levels and in all organizations. At the top level, major plans are framed, departmental heads make plans for their respective departments, and lower level managers make plans for the day to day activities.
4. Continuous: Planning is an on going, never ending process. After making plans, planners keep changing them according to the changing environment needs.
5. Planning is a mental exercise: Planning means looking ahead, anticipating opportunities and threats, evaluating alternatives, and choosing the best alternative. All this requires intelligent imagination, sound judgment and foresight. So it is called an intellectual process.
6. Planning involves choice/ decision making: Planning is required only when different alternatives are available and we have to select the most suitable one. If there is only one way of doing a job, then there is no need of planning. For example, if we have to import technology and the license is only with STC, then companies have no choice but to import from them only.
7. Planning focuses on achieving objectives: while planning, specific goals are set out along with the activities required to achieve the goals. After setting the targets, planning decides the method, procedure, and steps to be taken to achieve them.
Planning Process
1.Setting objectives: planning begins with setting up of objectives. The managers set up objectives keeping in mind the physical and financial resources. Managers prefer the goals which can be achieved quickly and with less time.
2. Developing premises: premises means making assumptions for the future. Before listing out the alternative ways of achieving the objectives, manager makes some assumptions for each such alternative. For example of the alternative is to increase in sales by increasing more line of products then assumption can be that the increased production will automatically lead to increased sale.
3. Listing various alternatives: After setting of objectives the managers makes a list of alternatives through which the organization can achieve its objectives. For example, if the objective is to increase sales, then the alternatives may be :
-Adding more lines of products.
-Offering discount.
-Increasing expenditure on advertisements.
-Increasing share in the market.
-Appointing more salesmen.
4. Evaluating alternatives: After making the list of alternatives, the manager starts evaluating each and every one of it to note down their positive and negative aspects. Then he starts eliminating the alternatives with more of negative aspects.
5. Selecting the best alternative: The alternative with the most positive aspects is then selected. Sometimes instead of selecting one alternative, a combination of different alternatives is selected.
6. Formulation of supporting plans: After making the main plan, a number of small or supporting plans are made related to the performance of routine jobs. They are also called derivative plans. For example if the plan was to import Japanese technology, the supporting plan would be from where to import, selection of employees to operate such machine, finance required to buy and so on.
7.Implementing the plan: Plans are of no use until they are put in action. The managers then start communicating the plans to all employees very clearly. After such communication, the mangers start acting on the plan with their support.
8. Follow up: The managers monitor the plan very carefully while it is implemented. This helps him to verify whether the predictions assumed while planning are holding true or not. If these are not, then immediate changes are made in the plans in order to ensure their success.
Importance of planning
1. Planning provides direction: planning decides in advance how work is to be done. It ensures that goals and objectives are clearly stated, employees know what they are required to do to achieve the objectives, and organizations are able to work in coordination.
2. Planning reduces the risk of uncertainty: Organizations have to face many uncertainties every day. Planners look ahead and anticipate these changes. Planning shows the way to deal with them. So though risk cannot be eliminated, it can be anticipated and reduced.
3.Planning reduces overlapping and wasteful activities; plans are made keeping in mind the requirements of the organization, departments and individuals. Planning ensures clarity of thought and action and thus helps in avoiding confusion and misunderstanding.
4. Planning promotes innovative ideas: planning is a challenging activity that requires high thinking. It forces the managers to think differently and find better ideas and better methods to handle different situations.
5. Planning facilitates decision making: planning helps the managers to look into the future, evaluates alternatives and choose the most profitable proposition. Thus it helps in taking rational decisions.
6. Planning establishes standards for controlling: controlling means comparison between planned and actual output. If there is no planning, then the manager will have no base to compare whether the actual output is adequate or not. So planning is a prerequisite for controlling.
1. Planning provides direction: planning decides in advance how work is to be done. It ensures that goals and objectives are clearly stated, employees know what they are required to do to achieve the objectives, and organizations are able to work in coordination.
2. Planning reduces the risk of uncertainty: Organizations have to face many uncertainties every day. Planners look ahead and anticipate these changes. Planning shows the way to deal with them. So though risk cannot be eliminated, it can be anticipated and reduced.
3.Planning reduces overlapping and wasteful activities; plans are made keeping in mind the requirements of the organization, departments and individuals. Planning ensures clarity of thought and action and thus helps in avoiding confusion and misunderstanding.
4. Planning promotes innovative ideas: planning is a challenging activity that requires high thinking. It forces the managers to think differently and find better ideas and better methods to handle different situations.
5. Planning facilitates decision making: planning helps the managers to look into the future, evaluates alternatives and choose the most profitable proposition. Thus it helps in taking rational decisions.
6. Planning establishes standards for controlling: controlling means comparison between planned and actual output. If there is no planning, then the manager will have no base to compare whether the actual output is adequate or not. So planning is a prerequisite for controlling.
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