UNIT-IV
DIRECTING AND CONTROLLING
All human make mistakes and forget things. Our attention span is limited. We overlook key information when making decisions. We get distracted, bored, tired or preoccupied. We mishear and misunderstand. These are as much a part of human life as breathing and sleeping. Human factor is concerned with understanding and managing the capabilities and limitations of people. It is the application of scientific knowledge and principles – as well as lessons learned from previous incidents and operational experience – to optimise health, safety, well-being, overall system performance and reliability.
Every employee makes mistakes, no matter how well they are trained and motivated. The challenge is to develop systems to prevent such errors. Clearly, we cannot change the human condition, but we can design activities, plant, processes and procedures in such a way that takes into account human imperfections.
Some examples of factors relating to the Work, People and Organisation that are often-cited as causes in accidents are provided below.
Work factors
People factors
Organisation factors
Human factors is about ensuring a good ‘fit’ between people, the equipment they use, the task they carry out and the environment in which they work. Effective use of human factors will make work safer, healthier and more productive
Key Takeaway
The term motivation is derived from the word ‘motive”. The word ‘motive’ as a noun means an objective, as a verb this word means moving into action. Therefore, motives are forces which induce people to act in a way, so as to ensure the fulfilment of a particular human need at a time. Behind every human action there is a motive. Therefore, management must provide motives to people to make them work for the organization.
Motivation may be defined as a planned managerial process, which stimulates people to work to the best of their capabilities, by providing them with motives, which are based on their unfulfilled needs.
“Motivation means a process of stimulating people to action to accomplish desired goods.” —William G. Scott
“Motivation is the process of attempting to influence others to do your will through the possibility of gain or reward.” — Flippo
Motivation is, in fact, pressing the right button to get the desired human behaviour.
Motivation is no doubt an essential ingredient of any Organisation. It is the psychological technique which really executes the plans and policies through the efforts of others.
Nature of Motivation
Following is the nature of motivation:
1. Motivation is a psychological phenomenon which generates within an individual.
2. Motivation is need based. If there are no needs of an individual, the process of motivation fails. It is a behavioural concept that directs human behaviour towards certain goals.
3. Because human wants are unlimited, therefore motivation is an ongoing process.
4. A positive motivation promotes incentives to people while a negative motivation threatens the enforcement of disincentives.
5. People differ in their approach, to respond to the process of motivation; as no two individuals could be motivated in an exactly similar manner. Accordingly, motivation is a psychological concept and a complex process.
Significance of Motivation
Motivation is an integral part of the process of direction.
While directing his subordinate, a manager must create and sustain in them the desire to work. Following are the significance of motivation:
1. High Efficiency: A good motivational system releases the immense untapped reservoirs of physical and mental capabilities. A number of studies have shown that motivation plays a crucial role in determining the level of performance. “Poorly motivated people can nullify the soundest organisation.” said Allen.
By satisfying human needs motivation helps in increasing productivity. Better utilisation of resources lowers cost of operations. Motivation is always goal directed. Therefore, higher the level of motivation, greater is the degree of goal accomplishment.
2. Better Image: A firm that provides opportunities for financial and personal advancement has a better image in the employment market. People prefer to work for an enterprise because of opportunity for development, and sympathetic outlook. This helps in attracting qualified personnel and simplifies the staffing function.
3. Facilitates Change: Effective motivation helps to overcome resistance to change and negative attitude on the part of employees like restriction of output. Satisfied workers take interest in new organizational goals and are more receptive to changes that management wants to introduce in order to improve efficiency of operations.
4. Human Relations: Effective motivation creates job satisfaction which results in cordial relations between employer and employees. Industrial disputes, labour absenteeism and turnover are reduced with consequent benefits. Motivation helps to solve the central problem of management, i.e., effective use of human resources. Without motivation the workers may not put their best efforts and may seek satisfaction of their needs outside the organisation.
The success of any organisation depends upon the optimum utilisation of resources. The utilisation of physical resources depends upon the ability to work and the willingness to work of the employees. In practice, ability is not the problem but necessary will to work is lacking. Motivation is the main tool for building such a will. It is for this reason that Rensis Likert said, “Motivation is the core of management.” It is the key to management in action.
Key Takeaways
It is probably safe to say that the most well-known theory of motivation is Maslow’s need hierarchy theory Maslow’s theory is based on the human needs. Drawing chiefly on his clinical experience, he classified all human needs into a hierarchical manner from the lower to the higher order.
In essence, he believed that once a given level of need is satisfied, it no longer serves to motivate man. Then, the next higher level of need has to be activated in order to motivate the man.
1. Physiological Needs:
These needs are basic to human life and, hence, include food, clothing, shelter, air, water and necessities of life. These needs relate to the survival and maintenance of human life. They exert tremendous influence on human behaviour. These needs are to be met first at least partly before higher level needs emerge. Once physiological needs are satisfied, they no longer motivate the man.
2. Safety Needs:
After satisfying the physiological needs, the next needs felt are called safety and security needs. These needs find expression in such desires as economic security and protection from physical dangers. Meeting these needs requires more money and, hence, the individual is prompted to work more. Like physiological needs, these become inactive once they are satisfied.
3. Social Needs:
Man is a social being. He is, therefore, interested in social interaction, companionship, belongingness, etc. It is this socializing and the feeling of belongingness that drive individuals to work in groups, especially the older people.
4. Esteem Needs:
These needs refer to self-esteem and self-respect. They include such needs which indicate self-confidence, achievement, competence, knowledge and independence. The fulfillment of esteem needs leads to self-confidence, strength and capability of being useful in the organization. However, inability to fulfill these needs results in feelings like inferiority, weakness and helplessness.
5. Self-Actualization Needs:
This level represents the culmination of all the lower, intermediate, and higher needs of human beings. In other words, the final step under the need hierarchy model is the need for self-actualization, self- fulfillment.
The term self-actualization was coined by Kurt Goldstein and means to become actualized in what one is potentially good at. In effect, self- actualization is the person’s motivation to transform perception of self into reality.
According to Maslow, the human needs follow a definite sequence of domination. The second need does not arise until the first is reasonably satisfied, and the third need does not emerge until the first two needs have been reasonably satisfied and it goes on. The other side of the need hierarchy is that human needs are unlimited.
However, Maslow’s need hierarchy theory is not without criticisms.
The main criticisms of the theory include the following:
1. The needs may or may not follow a definite hierarchical order. So to say, there may be overlapping in need hierarchy. For example, even if safety need is not satisfied, the social need may emerge.
2. The need priority model may not apply at all times in all places.
3. Researches show that man’s behaviour at any time is mostly guided by multiplicity of behaviour. Hence, Maslow’s preposition that one need is satisfied at one time is also of doubtful validity.
4. In case of some people, the level of motivation may be permanently lower. For example, a person suffering from chronic unemployment may remain satisfied for the rest of his life if only he/she can get enough food.
Notwithstanding, Maslow’s need hierarchy theory has received wide recognition, particularly among practicing managers. This can be attributed to the theory’s intuitive logic and easy to understand. One researcher came to the conclusion that theories that are intuitively strong die hard.
The psychologist Frederick Herzberg extended the work of Maslow and proposed a replacement motivation theory popularly referred to as Herzberg’s Motivation-Hygiene (Two-Factor) Theory. Herzberg conducted a widely reported motivational study on 200 accountants and engineers employed by firms in and around Western Pennsylvania. He asked these people to explain two important incidents at their jobs:
(1) When did you feel particularly good about your job, and
(2) When did you feel exceptionally bad about your job?
He used the critical incident method of obtaining data.
The responses, when analyzed, were found quite interesting and fairly consistent. The replies respondents gave once they felt good about their jobs were significantly different from the replies given once they felt bad. Reported good feelings were generally related to job satisfaction, whereas bad feeling with job dissatisfaction. Herzberg labelled the work satisfiers motivators, and he called job dissatisfies hygiene or maintenance factors. Taken together, the motivators and hygiene factors have become referred to as Herzberg’s two-factor theory of motivation.
The maintenance/ hygiene factors according to Herzberg are:
The motivational factors are:
According to Herzberg, the removal of dissatisfying characteristics from a job does not necessarily make the job satisfying. He believes in the existence of a dual continuum. The opposite of ‘satisfaction’ is ‘no satisfaction’ and therefore the opposite of ‘dissatisfaction’ is ‘no dissatisfaction’.
According to Herzberg, today’s motivators are tomorrow’s hygiene because the latter stop influencing the behaviour of persons once they get them. Accordingly, one’s hygiene could also be the motivator of another.
However, Herzberg’s model is labelled with the subsequent criticism also:
1. People have a tendency to take credit themselves when things go well. They blame failure on the external environment.
2. The theory basically explains job satisfaction, not motivation.
3. Even job satisfaction isn't measured on an overall basis. It is not unlikely that an individual may dislike a part of his/ her job, still thinks the job acceptable.
4. This theory neglects situational variable to motivate an individual.
Because of its ubiquitous nature, salary commonly shows up as a motivator also as hygiene.
Douglas McGregor formulated two distinct views of human being based on participation of workers. The first basically negative, labeled Theory X, and the other basically positive, labeled Theory Y.
Theory X is based on the following assumptions:
1. People are by nature indolent. That is, they like to work as little as possible.
2. People lack ambition, dislike responsibility, and prefer to be directed by others.
3. People are inherently self-centered and indifferent to organisational needs and goals.
4. People are generally gullible and not very sharp and bright.
On the contrary, Theory Y assumes that:
1. People are not by nature passive or resistant to organisational goals.
2. They want to assume responsibility.
3. They want their organisation to succeed.
4. People are capable of directing their own behaviour.
5. They have need for achievements.
McGregor tried to draw the fencing within which a person in the organization is usually seen to behave. The fact remains that no one would actually belong either to theory X or theory Y. In reality, he/she shares the traits of both. What actually happens is that man swings from one set or properties to the other with changes in his mood and motives in changing environment.
William Ouchi proposed Theory Z in early 80s. The letter Z does not represent anything. It just denotes the state of affairs in organization and human behaviour as has been done in case of Theories X and Y. Theory Z is a mixed US-Japanese management system for modern organizations. Ouchi came up with this theory after making a comparative study of American and Japanese management practices. It is an integrative model, containing the best of both American and Japanese practices. It takes into account the strengths of Japanese Management, e.g. social cohesion, job security, concern of employees, as well as American Management, e.g. speedy decision making, risk taking skills, individual autonomy, innovation and creativity. Theory Z is predicated on the subsequent four postulates:
1. Strong bond between organisation and employees.
2. Employee participation and involvement.
3. No formal organisation structure.
4. Human resource development.
Theory Z as proposed by William Ouchi has the following characteristics:
1. Trust and openness among different stakeholders, viz. the employees, supervisors, work group, management, unions and the government, are the building blocks of Theory Z.
2. Theory Z argues for life time employment for the people in an organization.
3. This theory emphasises on participation of subordinates in decision-making as it promotes commitment.
4. Ouchi proposed an unstructured organization, which runs not on the basis of formal relationship, specialization of tasks and positions but on the basis of team work and understanding.
5. Theory Z suggests that individual responsibility should be fixed for each act to be performed.
6. According to Theory Z, promotion should be relatively slow. It should be based on skill and performance rather than time.
7. This theory is in favour of moderately specialized career rather than specialized and non-specialized career.
Indian companies have started experimenting with the ideas of Theory Z, such as Maruti Udyog Ltd. and Bharat Heavy Electronics Ltd. In these companies, the work place is designed on the Japanese pattern by having a common canteen, a common uniform for both the officers and the workers etc. Other ideas of Ouchi such as lifelong employment, owners bearing temporary losses in order to provide a cushion for employees may be difficult to implement in Indian companies because of several complicating problems. The differences in culture, caste, language, religion etc. often come in the way of transforming the theory into concrete action plans.
David McClelland was an American Psychologist who developed his theory of needs or Achievement Theory of Motivation which revolves around three important aspects, namely, Achievement, Power and Affiliation. This theory is also known as the Acquired Needs as McClelland put forth that the specific needs of an individual are acquired and shaped over time through the experiences he has had in life. This motivation theory states that the needs for achievement, power and affiliation significantly influence the behavior of an individual, which is useful to understand from a managerial context.
This theory can be considered an extension of Maslow’s Need Hierarchy Theory. As per McClelland, every individual has these three types of motivational needs irrespective of their demography, culture or wealth.
Need for Achievement
This is the drive to excel, to achieve in relation to a set of standard, and to strive to succeed. It is a behavior directed towards competition with a standard of excellence. According to McClelland, people with a high need for achievement perform better than those with a moderate or low need for achievement.
Need for Power
The need for power is concerned with making an impact on others, the desire to influence others, the urge to change people, and the desire to make a difference in life. People with a high need for power are people who like to be in control of people and events. This gives ultimate satisfaction to man.
Need for Affiliation
The need for affiliation is defined as a desire to establish and maintain friendly and warm relations with other people. The need for affiliation, in many ways, is similar to Maslow’s social needs.
McClelland’s theory can be applied to manage the corporate teams by being identifying and categorizing every team member amongst the three needs. Knowing their attributes may certainly help to manage their expectations and running the team smoothly.
Key Takeaways
Motivation techniques help managers in applying the concepts of motivation. These help to link theories to practice. There are a number of motivation techniques and programmes that have gained acceptance in practice. A few of these techniques are:
1. Financial incentives: First technique of motivation is financial incentives as money is indicator of success. Therefore, it fulfils psychological safety and status need as people satisfy their needs by money. Wages, salary motivates employees to perform better.
2. Job enlargement: Under this technique, task assigned to do job are increased by adding simile task. So the scope of job enlargement is high for the motivation of subordinates. It is also known as horizontally leading of job.
3. Job enrichment: Under this technique jobs are made challenging and meaningful by increasing responsibility and growth opportunities. In such technique of motivation, planning and control responsibility are added to the job usually with less supervision and more self-evaluation. It is also called vertical leading.
4. Job rotation: It refers to shifting an employee from one job to another. Such job rotation doesn’t mean hanging of their job but only the employees are rotated. By this it helps to develop the competency in several jobs which helps in development of employees.
5. Participation: Participation refers to involvement of employee in planning and decision-making .it helps the employees feel that they are an asset of the organization which helps in developing ideas to solve the problems.
6. Delegation of authority: Delegation of authority is concerned with the granting of authority to the subordinates. It helps in developing a feeling of dedication to work in an organization because it provides the employees high morale to perform any task.
7. Quality of work life: It is the relationship between employees and the total working environment of organization. It integrates employee needs and well-being which improves productivity, higher job satisfaction and great employee involvement. It ensures higher level of satisfaction.
8. Management by Objectives: It is used as a motivation technique and also for self-control of performance. By this technique, supervisor and subordinates set individual and organizational goals. Each individual’s responsibilities are clearly defined which would help identify the skill sets one has to make the best use of the same to meet organizational mission and vision. This also helps the organization function effectively.
Key Takeaways
Communications is fundamental to the existence and survival of humans as well as to an organization. It is a process of creating and sharing ideas, information, views, facts, feelings, etc. among the people to reach a common understanding. It is the key to the directing function of management.
The word communication has been derived from the Greek word ‘communis’ which means ‘common’. Thus, it means sharing of ideas in common.
According to Louis A. Allen, “Communication is the sum of all the things one person does when he wants to create understanding in the mind of another. It is a bridge of meaning. It involves a systematic and continuous process of telling, listening and understanding.”
The American Management Association defines communication as, “any behavior that results in the exchange of meaning.”
Koontz and O’Donnell are of the opinion that, “Communication is a way that one organization member shares meaning and understanding with another.”
Thus, communication refers to the whole process of man’s life in relation to the group and includes exchange of information, a system of communicating and a process by which meanings are exchanged among human beings.
Nature of Communication
The nature of communication may be discussed as follows:
1. Human beings are poor communicators but our communicative competence can be improved by learning and practising effective communication skills.
2. Communication has a symbolic nature and is an act of sharing one’s ideas, emotions, attitudes, or perceptions with another person or group of persons through words (written or spoken), gestures, signals, signs, or other modes of transmitting images. The transmission of ideas always encounters barriers that reduce its effectiveness.
3. The essential elements of the process of communication are the message, the sender, encoding, the channel, the receiver, decoding, acting on the message, the feedback, and the communication environment.
4. Both the sender and the receiver play a role in making communication effective. The sender should encode the message accurately after considering the level, expectations, and needs of the target audience (receiver); the receiver should listen or read carefully to try to understand the intended meaning of the sender.
5. The universal, common elements of communication are the communication environment, the use of symbols, and the presence of mental filters.
6. Perfect communication is impossible; the meaning of a message is in the mind/perception of the receiver; and personality affects the effectiveness of communication.
7. To communicate effectively, one should develop not only skills, but also a sense of empathy with others.
Significance of Communication
The main objective of communication is to offer information and to influence different persons. Other objectives include conveying suggestion, opinion, idea, advice, request, etc.; imparting instructions, guidance and counselling; providing training; giving warning; appreciating good work; boosting of morale; etc. within the case of a commercial enterprise the main objective of communication is that the improvement of its activities, all-round development of the organisation, and supreme success in its operation.
1. Giving Information: The primary significance of communication is the passing of information.
2. Persuasion: To persuade means to make people plan to do something, especially by repeatedly asking them or telling them the reasons why they should do it; in other words, influencing people to believe or to do what one wants. Communication helps in persuasion.
3. Conveying Suggestion: Communication helps in conveying suggestions, opinions and concepts.
4. Advice: Communication helps in providing advice to those who require it.
5. Motivation: Communication is created to inspire, to motivate, and to make a sense of loyalty among the workers. Through communication their morale is boosted up and it results in better performance. Regular communication is important for motivating the workers and infusing in them a positive attitude towards work and a healthy relationship with the managers.
6. Training: To meet the necessity of an organisation, senior employees may have to be trained to update them about the new technological developments so on adjust themselves to changing work environment or job demands. The new employees can also require training at the initial stage to cope up with the methods, techniques and systems of labour within the organisation. Communication is the key to all these sorts of training. Such communication are often made through classroom teaching, lectures, seminars, short courses, conferences, educational tours, film shows, etc.
7. Instruction, Guidance and Counselling: One of the objectives of business communication is to manage the workers by means of imparting instruction, providing guidance and arranging for counselling. Legal, vocational and medical guidance and counselling are provided free of cost for the workers in a good business organisation. Doctors, lawyers, coaches, etc. are employed for the aim. The underlying objective of such assistance is to stay the employees physically fit and mentally alert so that they'll work whole-heartedly for the well-being of the organisation.
8. Giving Warning and Appreciating Good Work: It is considerably necessary to understand a good worker. It’ll encourage him/her to strive for better performance and greater involvement. It makes the worker conscious about his/her responsibilities. On the opposite hand, it's also necessary to offer warning to the workers who tend to be in disciplined, non-accountable and unproductive or create disturbance. The target of both appreciation and warnings could also be accomplished through oral or written communication.
9. Resource Utilisation: Communication checks wastage of the resources of the organisation and helps their better utilisation. Lack of data or lack of proper direction in time may cause the waste or misuse. Communication helps to bridge the gap of data through instruction, advice, etc. and waste or misuse of resource is minimised. Not only material resources, but also the financial resources, human resources and other resources are utilised properly through communication.
10. Management Efficiency: One of the objectives of business communication is to extend efficiency of the management. If there's an honest network of communication (formal and informal), the organisation are often managed efficiently and effectively.
Key Takeaways
The barriers prevent effective communication due to which misunderstandings may be created. Therefore, it is essential for a manager to identify such barriers and take appropriate measures to overcome them. The barriers to communication are as follows:
1. Semantic Barriers: It is the problems and obstructions in the process of encoding and decoding of a message into words. Normally, such barriers result due to use of wrong words, faulty translations, different interpretations etc.
2. Psychological Barriers: The state of mind of both sender and receiver of communication reflects in effective communication. Emotional or psychological factors also act as barriers to communication.
3. Organizational Barriers: The factors related to organizational structure, rules and regulations, authority relationships, etc. may sometimes act as barriers to effective communication. Rigid rules and regulations and cumbersome procedures may also become a hurdle to communication.
4. Personal Barriers: The personal factors of both sender and receiver may act as a barrier to effective communication. Personal factors like difference in judgement, social values, inferiority complex, bias, attitude, inability to communicate etc. widen the psychological distance between the communicator and the communicate.
5. Premature Evaluation: Some people have the tendency to form an opinion before listening to the entire message. This is premature evaluation and it acts as a barrier to effective communication.
6. Inadequate attention: Inadequate attention to the message makes communication less effective and the message is likely to be misunderstood.
7. Resistance to change: It is a general tendency of human beings to stick to old and customary patterns of life. When new ideas are being communicated to introduce a change, it is likely to be overlooked or even opposed. This resistance to change creates an important obstacle to effective communication.
8. Other barriers: There may be many other barriers such as unclarified assumptions, lack of ability to communicate, mirage of too much knowledge or closed minds, communication overload, shortage of time etc. which cause distortion or obstruction in the free flow of communication and thus makes it ineffective.
Key Takeaways
The following steps may be taken to minimize barriers to communication and making it more effective:
1. Clarity and completeness: The message to be conveyed must be absolutely clear in the mind of the communicator because if one does not understand an idea, one can never express it to someone. The message should be adequate and appropriate to the purpose of communication. The communication, itself, should be clearly defined.
2. Proper Language: To avoid semantic barriers, the message should be expressed in simple, brief and clear language. The words or symbols selected for conveying the message must be appropriate to the reference and understanding of the receiver.
3. Sound organization structure: To make communication effective, the organizational structure must be sound and appropriate to the needs of the organization.
4. Avoid premature evaluation: To communicate effectively, one should be a good listener. Superiors should develop the habit of patient listening and avoid premature evaluation of communication from their subordinates. This will encourage free flow of upward communication.
5. Motivation and mutual confidence: The message to be communicated should be so designed as to motivate the receiver to influence his behavior to take the desired action. A sense of mutual trust and confidence must be generated to promise free flow of information.
6. Informal Communication: Informal channels of communication help to overcome the barriers in formal channels and make communication more effective.
7. Feedback: Communication is not complete unless the response or reaction of the receiver of the message is obtained by the communicator.
8. Orientation of employees: Employees should be oriented to understand the objectives, rules, policies, authority relationships and operations of enterprise. It will help in understanding one another, minimizing conflicts and distortion of messages.
Key Takeaways
It is also known as leader centered style. Under this style of leadership there is complete centralization of authority in the leader i.e. authority is centered in the leader himself. He has all the powers to make decisions. There is no two ways communication, only downward communication is used.
It is leader who ran only communicate, he cannot be a communicate. He uses coercive measures. He adopts negative method of motivation. He wants immediate obedience of his orders and instructions. Any breach on the part of subordinates invites punishment. There is no participation from the subordinates in decision making. Leader thinks that he is the only competent person. Under autocratic style no time is wasted in two way communication for seeking opinion or advice. The task gets completed on time.
Edwin. B. Flippo has divided autocratic style of leadership into following three:
(a) Hard Boiled or Strict Autocrat:
He uses negative influence and expects that his orders should be obeyed by the employees immediately. Non-compliance of his orders invites punishment. His outlook is “pay for performance”. He makes all decisions and does not reveal anything to anyone.
He is quite rigid on performance. This style is useful for newly employed or the employees having no experience. But this style should not be adopted when employees by nature are hard workers, experienced and understand their responsibility fully.
(b) Benevolent Autocrat:
He uses positive influences and develops effective human relations. He is known as paternalistic leader. He showers praise on his employees if they followed his orders and invites them to get the solutions of the problems from him.
He assumes the status of a parent. He feels happy in controlling all the actions of his subordinates. He wants complete loyalty from his subordinates. He hates disloyalty and punishes disloyal employees. He takes all the decisions and does not want any interference from anyone. This style of leadership is useful only when subordinates do not want to take any responsibility and wants close supervision.
(c) Manipulative Autocrat:
He is manipulative by nature and creates a feeling in the minds of his subordinates and workers that they are participating in decision making process. Like the two other types he also makes all decisions by himself. Non-compliance of his orders invites punishment.
2. Democratic or Participative Style:
This style of leadership is also known as group centered or consultative leadership. Under this style leaders consult the group and solicit their opinion and participation from the following in decision making process. Democratic leaders confer authority on the group and after their consultation decisions are taken.
Leaders under this style encourage discussion by the group members on the problem under consideration and arrive at a decision by consensus. Two way communication channels are used. Participation or involvement in decision making process is rewarded. Under this style positive motivation techniques are used.
Exchange of ideas among subordinates and with the leader is given encouragement. Human values get their due recognition. Leaders give more freedom to their subordinates and invite to share responsibility.
Subordinates are asked to exercise self-control. Leaders do not delegate authority to subordinates to make decisions but their opinions are sought before arriving at a decision. Under this style subordinates feel that their opinions are honoured and they are given importance and not feel neglected. The leaders delegate responsibility according to experience and knowledge of the subordinates.
Cooperation of subordinates are sought that lead to creativity. This increases the productivity too. This is a very effective style where the subordinates are talented and qualified. It develops a sense of confidence among subordinates and they derive job satisfaction by working under participative leader. It improves quality of decision as it is taken after due consideration to valued opinions of the talented subordinates.
This style of leadership is not free from demerits. It takes more time to arrive at a decision. It is less effective if participation from the subordinates is for name sake. Consulting others while making decisions, goes against the capability of the leader to take decisions. Leader has to waste lot of time in pursuing subordinates. If employees refuse to work as a team with other members of the group renders the style of leadership ineffective.
3. Laissez-faire or Free Rein Style:
Under this style of leadership there is virtual absence of direct leadership. It is, therefore, known “as no leadership at all.” There is complete delegation of authority to subordinates so that they can make decisions by themselves. There is free flow of communication. Subordinates have to exercise self-control. They also have to direct their activities. It is people oriented style of leadership in true sense of the term. Leader gives free hand to his followers or subordinates. Absence of leadership may have positive and sometimes negative effects.
Free rein leadership may be effective if members of the group are highly committed. The negative aspect creates blemishes on the leader himself because of his incompetency in leading his people. It casts aspersions on the leader. However, this style of leadership provides chance for competent members of the group to fulfil and attain self-actualization needs.
It gives chance to take initiative to the member. It gives chance for open discussion and creativity to all. It has free work environment. Members feel insecure and develop frustration for lack of specific decision making authority.
This style of leadership suffers a setback when some member of the group refuses to cooperate. It cannot take proper decision. It may lead to chaos and confusion. This style may work effectively when the subordinates are highly competent, able to exercise self-control and can have the capacity to take decisions.
4. Bureaucratic Style:
Under this leadership the behaviour of leader is determined by rules, regulations and procedure. These rules and regulations are followed by the leader and the subordinates both. No one can escape. Hence, the management and administration has become a routine matter. This is apathetic to the employees because they know that they cannot do anything in this regard. It is the rules that determine their minimum performance. Rules allow work without participation and without committed to work. A lot of paper work is involved. Rules lead to red-tapeism. This style of leadership centres round the rules.
5. Manipulative Style:
As the name suggests the leader manipulates the employees to attain his objectives. Manipulative leader is quite selfish and exploits the aspirations of the employees for his gains. He knows very well the needs and desires of the employees but he does very little to fulfil them. He views these needs and desires as a tool to fulfil his aims. Employees do not trust such leader. He has to face the resentment of the employees at times.
6. Paternalistic Style:
The paternalistic style of leadership maintains that the fatherly attitude is the right one for better relationship between the manager and the employees. All are working together like a family. According to this style of leadership more benefits are to be provided to make the employees happy and extract maximum output from them. It believes in the concept that the happy employees work better and harder.
7. Expert Leadership Style:
The expert leadership style emerged as a result of complex structure of modern organisations. The leadership is based on the ability, knowledge and competence of the leader. He handles the situation skilfully with his talent. The employees feel relieved as they are working under a person who is expert and can handle the situation ably without any problem. But the expert may fail to handle the situation which does not belong to the area of his expertise.
Key Takeaways
Leadership theories study the qualities of good leaders. Psychologists analyze and develop leadership theory, and researchers try to discover the common qualities or behavioural patterns of excellent leaders.
The primary leadership theories are:
The great man theory of leadership states that excellent leaders are born, not developed. A popular concept in the 19th century, this theory states that leadership is an inherent quality. This type of leader often possesses the natural attributes of intelligence, courage, confidence, intuition and charm, among others.
2. The Trait Theory
The trait theory of leadership states that certain natural qualities tend to create good leaders. Having certain qualities does not necessarily mean someone has strong leadership skills, however. Some leaders may be excellent listeners or communicators, but not every listener or communicator makes an excellent leader.
3. The Behavioural Theory
The behavioral theory of leadership focuses on how a person’s environment, not natural abilities, forms him or her into a leader. One of the key concepts of behavioral theory is conditioning. Conditioning states that a person will be more likely to act or lead in a certain style as a result of environmental responses to behavior.
4. The Transactional Theory or Management Theory
The transactional theory of leadership, also called "the management theory," studies leadership as a system of rewards and penalties. It views effective leadership as results-focused and hierarchical. Transactional leaders prioritize order and structure over creativity.
5. The Transformational Theory or Relationship Theory
The transformational theory of leadership, also called "the relationship theory," studies effective leadership as the result of a positive relationship between leaders and team members. Transformational leaders motivate and inspire through their enthusiasm and passion. They are a model for their teams, and they hold themselves to the same standard they expect of others.
6. The Situational Theory
The situational theory of leadership does not relate to a certain type of leader or claim that any one style is best. Instead, situational theory argues that the best kind of leader is one who is able to adapt her style based on the situation. They may respond to a situation by commanding, coaching, persuading, participating, delegating or however they think is necessary. Situational leaders are defined by their flexibility.
Key Takeaways
After the planning, organising, staffing and directing have been carried out, the final managerial function of controlling assures that the activities planned are being accomplished or not. Control is a primary goal-oriented function of management in an organisation. Control can be defined as the process of analysing whether actions are being taken as planned and taking corrective actions to make these to confirm to planning. It is a process of comparing the actual performance with the set standards in order to ensure that activities are performed according to the plans and taking corrective action, if necessary. Controlling is performed at the lower, middle and upper levels of the management.
The managerial function of controlling is defined by Koontz and O’Donnell as, “the measurement and correction to the performance of activities of subordinates in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.”
George R. Terry remarked, “Controlling is determining what is being accomplished, that is evaluating the performance and, if necessary, applying corrected measures so that the performance takes place according to plans.”
Thus, management control is the process by which managers assure that resources are obtained and used effectively and efficiently in the accomplishment of the organisation’s objectives. Further, it is defined as the process by which managers in the organisation assure that activities and efforts are producing the desired objectives in the organisation.
Elements of a good Control System
Every decent control system must possess certain basic elements. Since they all play a major role, the absence of any one of them can make the whole system weak. Hence, managers must ensure that their control systems contain the following basic elements and considerations.
1) Feedback: Feedback is the backbone of all control systems. The aim of feedback is basically to adjust future actions using previous experiences. Managers use the information they receive from feedbacks to implement corrective measures. Such measures generally help in bridging the gap between the actual performance of the organization and its goals. Feedback may be either formal or informal. Formal feedback consists of sources like financial statements, statistics, reports, other written communication, etc. On the other hand, informal feedback includes personal opinions, informal discussions and an individual’s observations.
2) Control must be objective: The second essential requirement of a good control system is that it must always be objective. A subjective criterion should never be the basis of evaluating actual performances. For example, evaluation of an employee’s performance should comprise of standards like working hours, productivity, efficiency, etc. Managers should not evaluate employees using subjective prejudices.
3) Prompt reporting of deviations: This element of the controlling system basically requires quick reporting of deviations and discrepancies. If some work is not going according to plans, relevant managers must take notice of this immediately. This is because any delay in reporting problems and taking corrective measures can lead to financial losses for a business.
4) Control should be forward-looking: Control systems can often suffer from the defect of delays in reporting of deviations and taking of corrective measures. Hence, managers must ensure that their control systems are forward-looking. This will help in predicting deviations in advance as well as giving adequate time for course correction.
5) Flexible controls: A rigid control system can often make it ineffective in extraordinary and unpredictable situations. It should, thus, be flexible and open to changes. Managers must be able to adapt their control measures as per the requirements of every possible scenario.
6) Hierarchical suitability: Almost all business organizations possess management hierarchies comprising of managers at various positions and levels. Since each manager performs controlling functions at his level, the system itself must suit his organization’s hierarchy. Every manager must have adequate powers for this purpose and the flow of information for evaluation should be effective.
7) Economical control: Every good controlling system has to be economical when it comes to its implementation and maintenance. In other words, its benefits should outweigh its costs. An organization must be able to afford it and also derive all possible advantages from it.
8) Strategic control points: Not all deviations require the same level of attention and importance. A good control system must be able to deal with every deviation as per its seriousness. No organization can afford to accord equal importance to each and every problem. This is basically the whole aim of strategic control points.
9) Control must be simple to understand: Sophisticated policies can often make elements of control systems difficult to understand and implement. A good system, however, is always simple to comprehend and work on. Thus, before launching controlling measures, managers should first check whether their employees will be able to understand them. They should also try to resolve any ambiguities and confusion that may arise later.
10) Control should focus on workers: Good control systems always focus on workers instead of the work itself. Since it is workers who implement these systems, everybody should be able to work with them effectively.
Key Takeaways
Control is a fundamental managerial function. Managerial control regulates the organizational activities. It compares the actual performance and expected organizational standards and goals. For deviation in performance between the actual and expected performance, it ensures that necessary corrective action is taken.
There are various techniques of managerial control which can be classified into two broad categories namely- Traditional techniques and Modern techniques.
Traditional Techniques of Managerial Control
Traditional techniques are those which have been used by the companies for a long time now. These include the following:
1. Personal Observation:
This is the most traditional method of control. Personal observation is one of those techniques which enable the manager to collect the information as first-hand information. It also creates a phenomenon of psychological pressure on the employees to perform in such a manner so as to achieve well their objectives as they are aware that they are being observed personally on their job. However, it is a very time-consuming exercise & cannot effectively be used for all kinds of jobs.
2. Statistical Reports
Statistical reports can be defined as an overall analysis of reports and data which is used in the form of averages, percentage, ratios, correlation, etc., present useful information to the managers regarding the performance of the organization in various areas. This type of useful information when presented in the various forms like charts, graphs, tables, etc., enables the managers to read them more easily & allow a comparison to be made with performance in previous periods & also with the benchmarks.
3. Break-even Analysis
Breakeven analysis is a technique used by managers to study the relationship between costs, volume & profits. It determines the overall picture of probable profit & losses at different levels of activity while analyzing the overall position. The sales volume at which there is no profit, no loss is known as the breakeven point. There is no profit or no loss.
Breakeven point can be calculated with the help of the following formula:
Breakeven point = Fixed Costs/Selling price per unit – variable costs per unit
4. Budgetary Control
Budgetary control can be defined as such technique of managerial control in which all operations which are necessary to be performed are executed in such a manner so as to perform and plan in advance in the form of budgets & actual results are compared with budgetary standards.
Therefore, the budget can be defined as a quantitative statement prepared for a definite future period of time for the purpose of obtaining a given objective. It is also a statement which reflects the policy of that particular period. The common types of budgets used by an organization are:
Modern Techniques of Managerial Control
Modern techniques of controlling are those which are of recent origin & are comparatively new in management literature. These techniques provide a refreshingly new thinking on the ways in which various aspects of an organization can be controlled. These include the following:
1. Return on Investment
Return on investment (ROI) can be defined as one of the important and useful techniques. It provides the basics and guides for measuring whether or not invested capital has been used effectively for generating a reasonable amount of return. ROI can be used to measure the overall performance of an organization or of its individual departments or divisions.
2. Ratio Analysis
The most commonly used ratios used by organizations can be classified into the following categories: Liquidity ratios, Solvency ratios, Profitability ratios, Turnover ratios.
3. Responsibility Accounting
Responsibility accounting can be defined as a system of accounting in which overall involvement of different sections, divisions & departments of an organization are set up as ‘Responsibility centres’. The head of the center is responsible for achieving the target set for his center.
4. Management Audit
Management audit refers to a systematic appraisal of the overall performance of the management of an organization. The purpose is to review the efficiency &n effectiveness of management & to improve its performance in future periods.
5. PERT & CPM
PERT (programmed evaluation & review technique) & CPM (critical path method) are important network techniques useful in planning & controlling. These techniques, therefore, help in performing various functions of management like planning; scheduling & implementing time-bound projects involving the performance of a variety of complex, diverse & interrelated activities.
Therefore, these techniques are so interrelated and deal with such factors as time scheduling & resources allocation for these activities.
Key Takeaways
A sound system of control is essential for the success of management. Determinants of an effective control system are listed below:
Key Takeaways
References
