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Business and Management

STAFFING


Staffing may be defined as the managerial function of employing and developing human resources for carrying out the various managerial and non-managerial activities in an organization. The function is concerned with attracting, acquiring and activating the human resources for achieving organizational goals and staffing also involves upgrading the quality and usefulness of members of the organization with a view to getting higher performance from them and in other words the policy of selecting ‘right man for the right job’ should be adopted. The staffing function includes such activities as manpower or human resource planning, recruitment, selection, placement, training and development, remuneration, performance appraisal, promotion, transfers, and so on. Staffing is a continuous function of managers and this is because the organization’s need to retain and maintain its personnel is a need ending process and managers have to keep a regular watch on the size and composition of personnel needed by the organization. As said by Weihrich and Koontz “The managerial function of staffing involves the filling and keeping filled, positions in the organizational structure”.

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NATURE OF STAFFING

Staffing is related to people not with goods and it is a human factor related to people and staffing is also influenced by the social, economical, political, and educational environment of the country. Speaking, staffing is a function of far-reaching consequences and the reason is that managers are not shown as an asset in the balance-sheet of the organization whatsoever money we may have to spend on their selection, education, training and development and hence, we may conclude that staffing is a function of a for reaching consequences. According to Theo Haimann “Staffing is also a liability of the management like its other functions which is to be done by a manager continuously”. Recruitment, selection, training, and development of employees is a continuous process and with the increase in the size of the organization, continuity in staffing also increases. Staffing is influenced by the internal and external environment of the organization and the internal environment includes policies regarding promotion, retirement, etc., while the external environment includes the social, economic, political, and educational environment of the country and speaking both internal and external effect the staffing function.

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In management selection, training, development, and evaluation of manpower are interlinked and hence convert staffing into a system and it is treated as a sub-system of management system because it is linked with organizational structure. Staffing is done not only to fulfill the present vacancies but also to fulfill the future vacancies and here we have to forecast the number and type of vacancies in near future and the level of the educated and trained people required for fulfilling these vacancies and arrange for the fulfillment, education, and training for these vacancies in advance. Staffing is not a phase of organizing but a separate managerial function and staffing is the responsibility of the managers. Staffing helps in determining and securing qualified and capable personnel for various jobs and it places round pegs in round holes and square pegs in square holes and it aims at economical and better employee performance.

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Business and Management

DECENTRALIZATION AND CENTRALISATION

DECENTRALIZATION

Decentralization is a systematic effort to delegate to the lowest levels of the authority except that which can be expected that can be exercised at central points. It is the pushing down of authority and power of the decision-making to the lower levels of the organization and the essence of decision making is dispersed throughout the organization. The essence of decentralization is the transference of authority from a higher level to a lower level. It is a fundamental principle of democratic management where each individual is respected for his inherent worth and constitution as Newman and Summer rightly said “Decentralization is simply a matter of dividing up the managerial work and assigning specific duties to the various executive skills”.

FEATURES OF DECENTALISATION

The following are the chief characteristics of decentralization:

  1. It is an extended form of delegation.
  2. It gives importance to the role of subordinates.
  3. It reduces the work-load of the managers in the top hierarchy.
  4. It is a process applied to the entire organization.
  5. Under it its decisions are taken by those employees who implement them; and
  6. Under it along with authority, responsibility is also transferred.

CENTRALIZATION

Centralization is the reservation or withholding of authority by individual managers within the organization and according to Henry Floyd “Everything that goes to increase the importance of the subordinate’s role in decentralization, everything which goes to reduce it is centralization”.

In centralization a little delegation of authority is the rule; power and discretion are concentrated in a few executives. Control and decision-making are in the hands of top-level management, however, absolute centralization is untenable because it would mean that the subordinates have no duties, power, or authority.

Centralization may be essential in a small organization to survive in a highly competitive world, but as an organization becomes more complex in terms of increasing size, the interdependence of work-flow, complexity of tasks and spatial physical barriers within and among groups, a requisite for efficiency is to move decision-making centres to the operating level. Thus, the larger the size of an organization, the more urgent is the need for decentralization and this does not mean that denaturalization is good and centralization is bad. According to Allen “ Centralization is the systematic and consistent reservation of authority at central points in the organization” and according to Fayol “Centralization is that organization where the role of subordinates is reduced”.







FEATURES OF CENTRALIZATION

          On the basis of the properties, the following are the characteristics of centralization:

  1. Right of decision is centralized and withhold with the top level of the management.
  2. The lower level of management executives only follows the decisions and necessary actions taken by top-level management.
  3. There is the least use of the process of delegating rights as it brings down the taken for making a decision and reduces the number of people involved as there is the direct involvement of the top-level management.
  4. There is reduction in the role of subordinates.
  5. There are a great distance work site and the decision-making place.
Business and Management

DELEGATION OF AUTHORITY


Just as no person alone in an enterprise can do all the tasks necessary for the accomplishment of goals, so also it is impossible, for one person to exercise all the authority for making decisions. There is a limit to the number of person managers can effectively supervise and for whom they can make decisions and once this limit is crossed, the authority must be delegated to the subordinates, who will make decisions within the area of their assigned duties. Then the question is how authority is delegated when decision-making power is vested in a subordinate by his superior and superiors cannot delegate all their authority without, in effect, transferring their position to their subordinates. The entire process of delegation involves four steps. They are:

  1. The determination of results expected from persons in a position;
  2. The assignment of tasks to persons;
  3. The delegation of authority for accomplishing these tasks; and
  4. The holding of people responsible for the accomplishment of these tasks.

Thus, delegation is the process that a manager follows in diving the work assigned to him so that he performs that part, which because of his position, can perform effectively. According to F.G.Moore “ Delegation means assigning work to others and giving them authority to do it”.

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FEATURES OF DELEGATION OF AUTHORITY

The salient features of the delegation of authority that can be derived are:

  1. Delegation essentially means passing on authority.
  2. Only a part of the authority is delegated by a superior.
  3. Authority is delegated to a subordinate.
  4. A superior can delegate authority only when the superior possesses that.
  5. The limits within which a subordinate is expected to exercise delegated authority, have to be fixed.
  6. Delegation of authority does not imply the abdication of responsibility on the part of the superior.
  7. Delegation of authority is for the discharge of some responsibility or duty assigned.
  8. It creates accountability or obligation on the part of the person who has been delegated authority, for proper use of authority and accomplishment of the task assigned.
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A manager cannot delegate all his authority and for the purpose of the delegation, all authority of a manager can be divided into three broad categories:

  1. The authority which must be delegated as authority to take routine decisions for the accomplishment of tasks;
  2. The authority which can be delegated as the administration of policies; and
  3. The authority cannot be delegated at all as the authority to make policy decisions.

A successful manager is one who can delegate his authority successfully and he must delegate the authority to do work of routine and subsidiary nature. For instance, the marketing manager of a business enterprise is responsible for many operations like conducting marketing research, development of means of sales promotion, management of advertising, employment and training of sales forces, etc. The marketing manager cannot look after all these operations and he can entrust the responsibility of the performance of some of these operations to his subordinates.  

Business and Management

INFORMAL ORGANIZATION


Informal organization refers to relationships between individuals in the organization based on interest, personal attitudes, emotions, prejudices, likes, dislikes, physical location, the similarity of work et. The informal organization comes into existence because of the limitations of the formal structure and it represents a natural grouping of people in working situations and the birth of small groups in an organization is a natural phenomenon. The informal group may overlap because an individual may be a member of more than one informal group. Informal groups come into being to support and supplement the formal organization. The formal and informal organization are inextricably interlinked. As Joseph L. Massie said, “Informal organization has been defined as any human interactions that occur spontaneously and naturally over long periods of time”.

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CHARACTERISTICS OF INFORMAL ORGANIZATION

The main characteristics of informal organization are:

  1. It has no place in the formal chart.
  2. It is definite and has no structure.
  3. It is a network of personal and social relations.
  4. It has its own rules and traditions.
  5. It provides for social satisfaction to its members.
  6. An informal organization arises spontaneously.
  7. It is an integral part of a total organization and management cannot eliminate it.
  8. It is based on personal attitudes, emotions likes and dislikes etc.

  ADVANTAGES OF INFORMAL ORGANIZATION

The informal organization is a psycho-social system and the main advantages of an informal organization are:

  1. Informal organization evolve short cuts and eliminate various individuals and departments.
  2. Informal organizations help in solving work problems of members.
  3. Informal groups recognise talented workers as their leaders.
  4. A manager can build better relations with his subordinates through informal contacts.
  5. Informal groups do not allow managers to cross the limits of authority.
  6. Informal groups often fill up the communication gaps which might arise in the organization.
  7. The informal organization may fill in gaps, if any, in the abilities of managers.
  8. Informal groups develop certain norms of behaviour which differentiate between good and bad conduct and between legitimate and illegitimate activities.
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LIMITATIONS OF INFORMAL ORGANIZATION

Informal groups have negative aspects too. They may create problems for the organization as mentioned below:

  1. Informal groups generally tend to resist change and change requires new skills but informal groups want to maintain the status quo and this creates obstructions in implementing new ideas and thus organization’s growth.
  2. An informal leader may turn out to be a troublemaker for the organisation and to increase his influence, he may work against the policies of management, and try to manipulate the behaviour of his followers.
  3. Every member of an informal group is also a member of the formal organization and sometimes role conflict may arise because the ideas, expectations and requirements of both the organizations may be opposite to each other.
  4. An informal group exerts strong pressure on its members for conformity and the members may become so loyal to their group that following the group norms may become a part of their life.
  5. Informal communications may give rise to rumours which may create conflict and misunderstanding among the people and rumours may prove dangerous for the organization. 
Business and Management

FORMAL ORGANIZATION


A formal organization is a planned structure which represents the officially established pattern of relationships among individuals, groups, sections, units, departments and divisions to accomplish the goals of the enterprise. A formal organization provides a broad framework and delineates certain prescribed functions and the relationships between them, a formal organization may be defined as a system of consciously coordinated activity of two or more persons towards a given objective. A formal organization may also be defined as:

  1. A pattern of formal relationships and duties, the organization charts, job description and position guides.
  2. Formal rules, policies, work procedures and similar devices adopted by management to guide employee behaviour in certain ways within the structure of formal relationships.

   As Louis A. Allen said, “The formal organization is a system of well-defined jobs, each bearing a definite measure of authority, responsibility and accountability, the whole consciously designed to enable people of the enterprise to work more effectively together in accomplishing their objectives”.  A formal organization facilitates the determination of objectives and policies. Communication, the delegation of authority, and coordination take place according to a prescribed pattern and in fact, formal structure restricts and circumstances the area of operation of individuals working within an organization.

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FEATURES OF FORMAL ORGANIZATION

The main characteristics of a formal organization are:

  1. It is based on the division of Labour.
  2. This organization is formed by voluntary thinking.
  3. It is represented by organizational charts and manuals.
  4. In this organization, the rights, duties and liabilities of different persons are clarified on different levels of management.
  5. In a formal organization, unity of command is followed.
  6. It is prepared only for the accomplishment of od predetermined goals.
  7. Here the relationships among members are fully impersonal.
  8. Here delegation of authority flows from top to bottom.
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 ADVANTAGES OF FORMAL ORGANIZATION

The main advantages of Formal Organization include:

  1. The best use of resources.
  2. Feeling of cooperation in a formal organization.
  3. No duplication of work.
  4. End of biased opinions from everyone related to any work.
  5. Proper standardisation of work becomes easy to implement.
  6. Helpful in achieving objectives.
  7. Well defined authority and responsibility and accountability avoid any chance of friction and enmity.
  8. Merits of specialisation can be achieved due to the principle of division of labour.
  9. The efficiency of employees can easily be measured due to the predetermination of the rights and duties of each individual.
  10. This type of organization restricts conflicts among executives.
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LIMITATIONS OF FORMAL ORGANIZATION

The main limitations of Formal organization include:

  1. Rules are considered more important than the person.
  2. This organization ends the spirit of initiative.
  3. Excessive and undue use of authority takes place in this type of organization.
  4. In this type of organization procedures, programmes, rules etc., are followed strictly and that is why frequent changes are not possible.
  5. A formal organization is impersonal; that is why human feelings have no place here.
  6. There is a lack of coordination among the activities of different persons in different departments.
  7. No consideration is given to the social and human elements.
  8. This organization takes into consideration only the formal communication and creates obstacles in the application of informal communication.
Business and Management

STRUCTURE OF ORGANISING


The structure is the pattern in which various parts or components are integrated or interconnected and this prescribes the relationships among various activities and positions, as these positions are held by various persons, a structure is called the relationships among people in the organization and thus organization structure refers to the differentiation and integration of activities and authority, role and relationships in the organization. Differentiation is the differences in cognitive and emotional orientations among managers in different functional departments and differences in formal structure among these departments. Integration refers to the quality of the state of collaboration that is required to achieve unity of effort by the organization. The structure of an organization thus regulates, coordinates, and reduces uncertainty in the behaviour of people. According to Peter F. Drucker, “Organisation structure is the most important means as a structure wrongly build cannot assist in the promotion of the business”. Thus, the organisational structure is the lifeline of an organisation and this determines the mutual relationship of different persons working within an institution and clarifies the position of each person in it.

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TYPES OF ORGANISATION

Creation of an appropriate structure is indispensable for any organisation and Organisation structure represents the hierarchical arrangement of various positions in the enterprise and it helps in allocating authority and responsibility formally and it also lays down the pattern of communication and coordination in the enterprise and As Kimball write, “ The problem of an organisation is to select and combine the efforts of men of proper characteristics to produce the desired results”. Although character and type of organization would depend largely on the size and nature of the enterprise, yet, there are certain patterns of organising the personnel in an organisation and the need of clear-cut authority/responsibility relationships has led to different forms of administrative organisation as follows:

1. Line Organisation

It represents a direct vertical relationship through which an activity flows from top to bottom throughout the organization and the quantum of authority is highest at the top and it reduces at each successive level down the hierarchy, every person in the organisation is in the direct chain of command. The line of authority not only becomes the avenue of command to operating personnel but also provides the channel of communication, coordination and accountability in the enterprise.

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2. Line and Staff organization

Under the line and staff organization, the function of line is similar to its function under the line of organisation but some staff or experts are also appointed as advisors to the line officers. The functions of line officer are to take decisions, while the function of the staff officers is to advise them and these staff officers are experts in their respective fields and they offer their useful advice after analysing the problems presented by the line officers and in the way, the work of thinking and execution is done by different persons and this removes the chief defect of the line organisation and it can be adopted in case of large business enterprises. It is, however, important to make it clear that the line officers are not bound to accept the advice offered by the staff officers because the line officers alone are responsible for the outcome.

Business and Management

ORGANISING

The organisation provides a framework where duties are identified, define tasks are allotted to suitable persons, and interrelationships of personal are made certain and the joint efforts made by different persons become more productive, effective and economical if a well-knit organization is provided by the management and the purpose of establishing an organization, this is to enable its personnel to work more effectively as a unit and no wonder organisation serves as the backbone of management and it is very foundation of most of the steps of operating management.

Organising can be defined as “Organisation is a harmonious adjustment of specialised parts or the accomplishment of common purpose or purposes” by Haney. The organisation is the process of identifying and grouping the work performed, defining and delegating responsibility and authority and establishing a relationship to enable people to work together in accomplishing common objectives.

NATURE OF ORGANISING

1. Division of work

The setting of an organisation involves division of the total work into various activities and functions and assigning the tasks to different persons according to their skill, ability and experience.

2. Chain of command

The superior-subordinate relationship established in an organisation is based on the authority which flows from the higher levels of management to the immediately lower of management and thereby forming a hierarchical chain and is known as the chain of command.

3. Plurality of Persons

The organisation is a group of many persons who assemble to fulfil a common purpose and a single individual cannot create an organisation.

4. Common Objectives

There are various parts of an organisation with different functions to perform but all move in the direction of achieving a general objective.

5. Group of people

An organisation comes into existence when a group of people combine their efforts for some common purpose and willingly contribute towards their common endeavour.

6. Common Purpose

Every organisation comes into existence based on goals of the enterprise which are separate from the personal goals of the people employed and it is the common purpose of the organisation which provides the basis of cooperation among its members.

7. Vertical and Horizontal Relationships

An Organisation creates cooperative relationships between different departments and divisions as well as between superiors and subordinates. The duties and responsibility of superiors and subordinates in each department or division are also unified to serve the purpose of their joint efforts.

8. Organising is a universal process

Organising is needed both in business and also in non-business organisations and nor only this, an organisation will be needed where two or more than two people work jointly. Therefore, an organisation has the quality of universality.

9. Dynamics of organisation

Besides the structural relationships among people which are based on their activities and functions, there exists an organising interaction based on sentiments, attitudes and behaviour of individuals and groups and they are subject to change from time to time.

According to Chester Bernard, Communication, Cooperation and Spirit of service and common objectives are the main elements of the organisation.

Business and Management

PLANNING IN MANAGEMENT

Planning is deciding the objectives and methods to achieve them. Planning involves deciding in advance what is to be done, how is to be done, where is to do, how is to done and by whom is to be done and it makes things happen which may not occur otherwise and it bridges the gap between where we are and where we want to go, the process of planning includes two things:

             1. Deciding objectives

             2. Choosing best from available alternatives

Planning is a fundamental managerial function planning implies an arrangement for doing something as considered in advance and simple words, planning is deciding in advance and Prof. Urwick rightly said: “Planning is fundamentally a mental predisposition to things in an orderly way, to think before acting and to act in the light of facts rather than guesses”. Thus, a plan is a predetermined course of action and it is an attempt on the part of a manager to anticipate the future to achieve better performance, and planning is based on the principle, ‘Look before you leap’.

CONCEPT OF PLANNING

Planning requires goals and it focuses attention on purposes and determines ways achieving them and planning is necessarily a problem of choice and it involves the selection of the most feasible course of action from all available alternatives. Planning is a means of building a bridge to span the present position of the firm with its desired future position. It implies the work of both problems solving as well as decision-making. Man possesses a unique power of reasoning and he often evaluates the pros and cons before proceeding further into the matter.

NATURE OF PLANNING

1. Planning focuses on achieving objectives:

 Planning is to facilitate the attainment of objectives of the organization and planning focuses action on purposes. Planning is merely an empty mental exercise if it loses sight of the organizational objectives and every plan should contribute towards the achievement of company goals. Thus, all plans are directly linked with the goals and objectives of the enterprise and contribute to its attainment and if there are objectives, there is no need for any planning.

2. Planning is a primary function of Management

 Planning is a primary function of management and a manager must perform efficient and intelligent planning before performing any other managerial activities. Thus, planning comes before the execution of all other managerial functions. Planning function of management has the distinction of establishing objectives and all managerial efforts of organizing, staffing, directing, and controlling are directed towards their attainment.

3. Planning is pervasive  An element of planning can be seen behind every human activity in an organization and God has gifted man with the faculty of reasoning and this enables a person to measure the consequences of his planned actions and we can quote several examples where planning precedes individual or group action. Planning is a pervasive activity covering the entire enterprise will all its segments and every level of management. Top management does strategic planning, middle management looks after the administrative planning and the lower management concentrates on operational planning.

Business and Management

FUNCTION OF MANAGEMENT


According to George R. Terry, “Functions are the main entities around which a manager builds an effective organization structure”. The study of functions of management is an important topic in the field of management, the basic characteristics of efficient management are common whether the unit to be managed is as small as a family or large enough as a business, social, political or religious organization.

The main functions of management are:

  1. Planning
  2. Organizing
  3. Staffing
  4. Directing
  5. Controlling
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1. Planning

 Planning is decided in advance and it is an important and vital function of management. Planning is done to chalk out the future course of action and according to M.E. Hurle, “Planning is deciding in advance, what is done and it involves the objectives, policies, procedures programming for attaining enterprise goals”. Planning is a critical evaluation of relative merits and demerits of alternate policies and actions and in choosing the best program for achieving the predetermined objectives and targets.

2. Organizing

To organize means to put into working order and arrange on a system and organizing can be defined as arranging several complex tasks to manageable units and defining the formal relationship among the people who are assigned the various units of tasks and the process of organizing is very essential for accomplishing the objectives of the organization set by the administration and planned by management.

3. Staffing

The staffing of an organization is as important as the structure itself since successful performance by individuals determines whether the structure can produce its results successfully or not and staffing is a process of matching the jobs with the individuals. Staffing requires and involves the recruitment, selection, training, placement, compensating, promotion and demotion, and finally, the retirement of an employee and the sole aim of staffing is to take the right man for the right job and it needs man power-planning, job analysis, and such other staff functions. Psychology and sociology have added a considerable and important of knowledge and practice in this area of the managerial function.

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4. Directing

Directing means telling people what to do and seeing that they do it to the best of their ability. As a process of management, directing is concerned with getting work done through, and with people, they require continuous and encouragement to work effectively. According to Terry, “Directing means moving to action and supplying stimulating power to a group of persons”. Good planning and the best organization may fail to deliver goods if the direction is faulty and is not up to the mark. The direction is concerned with the execution of plans and it initiates organized action and breathes life into the organization and speaking, the direction is Management in action and it includes:

  1. Supervision
  2. Communication
  3. Leadership
  4. Motivation

5.Controlling

Control is an important function of management and it is an essential feature of scientific management and control ensure the qualitative and quantitative performance of work in the organization for the achievement of objectives and completion of plans and it is the binding force that orderly links all components of an enterprise. Controlling includes an evaluation to determine whether planned objectives or results have been achieved.

Business and Management

SCIENTIFIC MANAGEMENT


The origin of scientific management dates back to the year 1832 when Charles Babbage discussed the principles of scientific management in his book “The economy of manufactures”. In real sense, scientific management owes its origin to Frederick Winslow Taylor, who is commonly regarded as the father of scientific management.

MEANING OF SCIENTIFIC MANAGEMENT

Scientific management may be regarded as a set of scientific techniques that are supposed to increase the efficiency of an enterprise. Under scientific management, the selection of men, machines, materials is made by a scientific approach. Here, all the organizational activities are performed by rationality and proper discipline, this scientific management is a logical approach towards the solution of management and it assumes that the methods of scientific inquiry, analysis and experimentation can be applied to the activities of managers. It means approaching the problems of management in the manner and spirit of scientific research using tools such as definition, analysis, experiments, etc. It is ‘Scientific Management’ as opposed to ‘Traditional Management’ based on the rule of thumb, trial, error. As said by Peter F. Drucker “The cost of scientific management is the organized study of work, the analysis of work into its simplest elements and the systematic management of the worker’s performance of each element”.

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We can summarise scientific management as:

  1. Scientific study and analysis of work.
  2. Scientific selection and training of employees.
  3. Standardization of raw material, equipment, and working conditions.
  4. Reasonable remuneration to employees.
  5. Scientific management is an economical method that makes the best possible use by integration and coordination of available resources.
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MAIN CHARACTERISTICS OF SCIENTIFIC MANAGEMENT

1. A definite plan: To achieve predetermined definite objectives, management needs a definite plan, and the plan should be goal-oriented.

2. A definite objective: In scientific management, every organization has to establish the basic objectives and efforts are to be made by applying physical and human resources to achieve these predetermined objectives.

3. A set of rules: To make scientific management more effective, a set of rules are framed and these sets of rules are tested and verified as regards their effectiveness in the real business situations by a group of persons.

4. Economy: The main aim of scientific management is to achieve the economy of time, money, and labor, and the technique of economy is used for producing maximum at a minimum cost.

5. Scientific analysis and experiment: Before starting any work, the utility, effectiveness, and suitability of plans are to be tested and analyzed, and thus by scientific analysis and experiment, we can choose the best course of action.

6. Increase in efficiency: The techniques of scientific management help in increasing the efficiency of workers and new techniques and improved tools are used for increasing efficiency.

7. Time study: Time study is concerned with labor productivity and according to it, an estimate is made of the amount of work required to be done to perform a job.

8. Cooperation: In the present competitive situation, efforts should be made to establish a cordial relation between labor and capital. Cooperation is essential for efficient management and group efforts for group benefit can be the active cooperation of each individual.