UNIT 4
Directing and Controlling
Q1) Discuss the meaning and features of Motivation.
A1) 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 fulfillment 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.
Following are the outstanding Features of the concept of motivation:
1. Motivation is a personal and internal feeling:
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. Motivation is a continuous process:
Because human wants are unlimited, therefore motivation is an ongoing process.
4. Motivation may be positive or negative:
A positive motivation promotes incentives to people while a negative motivation threatens the enforcement of disincentives.
5. Motivation is a planned process:
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.
6. Motivation is different from job satisfaction:
He might choose the second alternative and succeed in getting promotion (goal achievement) thus, his need for promotion would be satisfied and he would start again for the satisfaction of a new need.
Q2) Discuss briefly the importance of Motivation.
A2) IMPORTANCE OF MOTIVATION – BRIEFLY DISCUSSED
A manager guides the people in a desired manner in order to achieve organisational objectives. Two important things are necessary to perform any job. People should have ability to work and willingness to work. Unwillingness to work is of no use. Hence, there is a need for motivation to create willingness in the minds of workers to do a job.
So, the performance may be expressed in the following formula:
Performance = ability x motivation (willingness)
E. F. L. Brech has explained the importance of motivation as “The problem of motivation is the key to management actions and in its executive form, it is among chief tasks of the general manager. We may safely lay it down that the tone of an organisation is the reflection of the motivation from the top.”
The importance of motivation is briefly discussed below:
1. Maximum utilisation of factors of production – Workers perform the work sincerely through the inspiration of motivation. This creates the possibility of maximum utilisation of factors of production viz., labour and capital.
2. Willingness to work – Motivation influences the willingness of people to work. A man is technically, mentally and physically fit to perform the work but he may not be willing to work. Motivation creates a willingness on the part of workers to do the work in a better way.
3. Reduced absenteeism – Financial incentive schemes coerce the workers to work more. Financial incentive scheme is framed in such a way that monetary benefits are given on the basis of number of hours engaged. This reduces absenteeism.
4. Reduced labour turnover – Motivation has both financial and non-financial incentive schemes. This helps to retain the existing labourers. The enterprise can plan its activities on long-term basis with the help of reduced labour turnover.
5. Availability of right personnel – Financial and non-financial incentives not only retains the existing employees but also attract the employees from outside the enterprise. In other words, right people are attracted from outside to work for the enterprise.
6. Building of good labour relations – Motivation helps to solve the labour problems of absenteeism, labour turnover, indiscipline and grievances. This ensures building of good labour relations.
7. Increase in the efficiency and output – Both workers and management have got benefits from motivational plans. On the one hand, wages of the workers increase corresponding to the increase of output and efficiency. On the other hand, the productivity of the organisation and its profits increases due to consolidated efforts of the motivated people.
8. Sense of belonging – A proper motivation scheme promotes closer rapport between enterprise and workers. The workers begin to feel that the enterprise belongs to them and consider its interests as their own. Thus there is no difference between workers and enterprise.
9. Basis of co-operation – Efficiency and output are increased through co-operation. The co-operation could not be obtained without motivation, so, motivation is a basis of cooperation.
10. Helps in realising organisational goals – Organisational goals are achieved quickly through motivation. Motivated employees have a feeling of total involvement in the performance of organisation task. Employees may work whole-heartedly for the realisation of organisational goals.
11. Improvement upon skill and knowledge – Employees have promised efficient job performance or completion. Hence, the employees may improve upon their skill and knowledge required for the job.
Q3) Explain the factors that influence motivation.
A3) Motivation is the reason that drives all of our actions. An individual expects that if they behave a certain way or perform certain tasks, they will achieve their desired outcome. In the workplace, this outcome, as long as it’s positive, is the driver that can impact if and how the tasks given to employees are performed. The key to reaching the highest possible results lies in being able to identify the factors that drive each individual in a workforce.
It’s crucial that apart from considering that the final outcome is worthwhile, employees also believe that they are capable of performing the task that’s expected of them. If the targets or goals seem unachievable from their perspective, it is unlikely they’ll feel motivated which in return will lead to lower performance.
This is why, being able to identify the main factors that drive an employee is a first and most important step on the way to increasing performance. There are 9 main components that contribute to employees motivation:
1. Salary
Receiving regular payment, especially in reference to permanent employees, is considered a basic need that is expected to be satisfied by an employer. However, salary on its own is a short term satisfied. In the longer term salary isn’t a factor that increases performance and a promise of getting a pay rise frequently has only a temporary impact.
However, if the salary is lower than an employee would expect, it could cause dissatisfaction and disengagement. While earning an ‘equitable’ salary might not motivate employees to perform better, it will reduce the risk of them feeling resentful or frustrated by the job.
2. Non-monetary incentives
Non-financial rewards are a way of satisfying employees’ ego and self-actualization needs. These are often used to:
According to research conducted by the Industrial Relations Services, non-monetary rewards help to fulfil organisational objectives at a relatively low cost. What’s more, some non-financial incentives can be executed almost immediately as opposed to financial rewards, which can take weeks or months to take effect.
There is a wide range of different non-financial incentives that can be used by managers:
3. Relationship with colleagues
As employees spend one-third of their day at work, relationships and interactions they have with their colleagues can significantly impact their mood and outlook. Negative experiences or attitudes will eventually lead to isolation and loneliness, making it more difficult to find satisfaction from work, which in turn will decrease motivation.
Employee’s social needs linked to their desire to be accepted and to belong to a community can be used to build strong and loyal teams that will achieve higher results by cooperating on the basis of common understanding.
To stimulate the development of positive work relationships, it’s advised to focus on team building activities that will allow employees get to know each other better:
4. Relationship with leadership
Each employee has a hierarchy of needs that should be addressed and the responsibility of understanding those needs lays with their line manager. The basis for effective communication between the two parties is two-sided trust. Relationships built on this foundation will help employees to honestly and openly talk about their needs, thoughts and feelings, which in turn will give the line managers clear direction on how to support and motivate their team members.
5. Company’s culture
According to survey conducted by the Harvard Business Review, the reasons behind why employees work determines how well they perform. Employees are conscious of their company’s culture and learn and align their professional goals with the organization’s goals, which becomes their answer to the question: “why we do what we do”. The extent to which employees align with the goals set by their employer is directly impacted by the strength and clarity of their employer’s mission statement and values.
Any lack of belief or understanding of the employer’s goals is one of the major causes of low job satisfaction, negative attitude and lower commitment. On the other hand, employees who are aligned with the culture are generally more happy in their roles, achieve better result and fulfillment.
A company’s culture comes down to 6 main elements: work environment, company mission, value, ethics, expectations and goals. In practice, the culture is just a set of rules or accepted behaviours that help employees make decisions everyday. While every company would have their own unique set of features, values and beliefs, culture is always about making sure that the employees have a productive and enjoyable working environment.
6. Learning and development opportunities
Self-actualisation is a natural by product of high performance. Most employees naturally want to do a good job to feel they are achieving their full potential. Learning & Development (L&D) is a way of educating and guiding your employees on the areas and aspects that will help them develop and progress.
The subject of personal and professional development is especially important to generation Y - a recent M3S survey has shown that the desire to learn, acquire new skills and continue personal development is one of the reasons millennial choose to leave their employer. According to the research, the lack of professional and/or personal development is one of the main causes of job dissatisfaction among this group.
On the other hand, L&D can stimulate higher performance and improve engagement as long as the company offers development opportunities at every level - from learning on the job, through mentorship, shadowing and specific internal or external training programmes.
7. Processes within the company
While processes on their own aren’t a motivational tool, they are closely linked to the areas that impact desire, enthusiasm and willingness of the employees. The workload, division of responsibilities, access to resources and accountability all depends on the structure and efficiency of the processes on which the business runs.
Efficient processes stimulate workers, allowing them to work effectively and efficiently and by reducing the amount of potential blockers. At each stage of the process an individual should be aware of what’s expected from them and what resources are available. Making sure that an employee feels responsible for the outcomes of their work is crucial in building work engagement and stimulating higher performance.
8. Personal life
According to a research by Bensinger, DuPont & Associates, 47% of employees state that problems in their personal lives affect their work performance. Personal challenges can cause issues with concentration, poor attention, lack of engagement and even absenteeism.
As employees spend ⅓ of their days at work, there’s a lot that an employer and/or a manager can do to support members of their team who are going through a tough time. Being patient and understanding towards them is the first step.
Most organisations have clear policies, procedures or guidelines that specify how employees can be supported during difficult times. These often fall under “work-life balance” umbrella and are especially helpful in situations when bereavement or grief strikes, including flexible working, paid time off or Employee Assistance Programs.
By offering support and understanding, as well as guiding employees through the hard times, it is possible to build trust and loyalty within people who frequently will return stronger and more committed. Making their professional career another challenge to deal with and manage might create the opposite result and as an employer, you may never regain their trust and commitment.
9. Performing meaningful work
As in case of non-monetary incentives, motivation through meaning targets the need of self-actualisation. Finding meaning is an existential question and according to research, including Deloitte’s Talent 2020 series, performing meaningful work is one of the top 3 motivational drivers.
Finding the meaning behind work turns out to be linked to being able to make a difference to humanity through the job. By creating a culture of ethics, morals and establishing a CSR strategy, companies can encourage and guide their employees in the search of meaning.
Another element to consider is educating employees on the values and the mission of the organisations they work for - the foundation of seeing the meaning is understanding why the company does what it does and how it makes a difference. Another aspect is showing how the employees the role they play within the company links to the Company’s vision, mission and values. By helping employees understand how they make an impact on the business and through that how they contribute to society is a clear and simple way of giving them a purpose.
Q4) What is communication? Explain its process.
A4) 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.
Process
The communication process follows the steps given below:
1. Sender: The sender generates the message and conveys it to the receiver. He is the one who starts the communication.
2. Message: It is the information that is generated by the sender and is then intended to be communicated further.
3. Encoding: The message generated by the sender is encoded symbolically in the form of words, pictures, gestures, etc. before it is being conveyed.
4. Media: It is the manner in which the encoded message is transmitted. The message may be transmitted orally or in writing. The medium of communication includes telephone, internet, post, fax, e-mail, etc. The choice of medium is decided by the sender.
5. Decoding: It is the process of converting the symbols encoded by the sender.
6. Receiver: The person who is last in the chain of communication process is the receiver.
7. Feedback: Once the receiver confirms to the sender that he has received the message and understood it, the process of communication is complete.
Q5) What are the barriers to effective communication?
A5) The process of communication has multiple barriers. The intended communique will often be disturbed and distorted leading to a condition of misunderstanding and failure of communication. The Barriers to effective communication could be of many types like linguistic, psychological, emotional, physical, and cultural etc. We will see all of these types in detail below.
Linguistic Barriers
The language barrier is one of the main barriers that limit effective communication. Language is the most commonly employed tool of communication. The fact that each major region has its own language is one of the Barriers to effective communication. Sometimes even a thick dialect may render the communication ineffective.
As per some estimates, the dialects of every two regions changes within a few kilometers. Even in the same workplace, different employees will have different linguistic skills. As a result, the communication channels that span across the organization would be affected by this.
Thus keeping this barrier in mind, different considerations have to be made for different employees. Some of them are very proficient in a certain language and others will be ok with these languages.
Psychological Barriers
There are various mental and psychological issues that may be barriers to effective communication. Some people have stage fear, speech disorders, phobia, depression etc. All of these conditions are very difficult to manage sometimes and will most certainly limit the ease of communication.
Emotional Barriers
The emotional IQ of a person determines the ease and comfort with which they can communicate. A person who is emotionally mature will be able to communicate effectively. On the other hand, people who let their emotions take over will face certain difficulties.
A perfect mixture of emotions and facts is necessary for effective communication. Emotions like anger, frustration, humour, can blur the decision-making capacities of a person and thus limit the effectiveness of their communication.
Physical Barriers to Communication
They are the most obvious barriers to effective communication. These barriers are mostly easily removable in principle at least. They include barriers like noise, closed doors, faulty equipment used for communication, closed cabins, etc. Sometimes, in a large office, the physical separation between various employees combined with faulty equipment may result in severe barriers to effective communication.
Cultural Barriers of Communication
As the world is getting more and more globalized, any large office may have people from several parts of the world. Different cultures have a different meaning for several basic values of society. Dressing, Religions or lack of them, food, drinks, pets, and the general behaviour will change drastically from one culture to another.
Hence it is a must that we must take these different cultures into account while communication. This is what we call being culturally appropriate. In many multinational companies, special courses are offered at the orientation stages that let people know about other cultures and how to be courteous and tolerant of others.
Organisational Structure Barriers
As we saw there are many methods of communication at an organizational level. Each of these methods has its own problems and constraints that may become barriers to effective communication. Most of these barriers arise because of misinformation or lack of appropriate transparency available to the employees.
Attitude Barriers
Certain people like to be left alone. They are the introverts or just people who are not very social. Others like to be social or sometimes extra clingy! Both these cases could become a barrier to communication. Some people have attitude issues, like huge ego and inconsiderate behaviours.
These employees can cause severe strains in the communication channels that they are present in. Certain personality traits like shyness, anger, social anxiety may be removable through courses and proper training. However, problems like egocentric behaviour and selfishness may not be correctable.
Perception Barriers
Different people perceive the same things differently. This is a fact which we must consider during the communication process. Knowledge of the perception levels of the audience is crucial to effective communication. All the messages or communique must be easy and clear. There shouldn’t be any room for a diversified interpretational set.
Physiological Barriers
Certain disorders or diseases or other limitations could also prevent effective communication between the various channels of an organization. The shrillness of voice, dyslexia, etc are some examples of physiological barriers to effective communication. However, these are not crucial because they can easily be compensated and removed.
Technological Barriers & Socio-religious Barriers
Other barriers include the technological barriers. The technology is developing fast and as a result, it becomes difficult to keep up with the newest developments. Hence sometimes the technological advance may become a barrier. In addition to this, the cost of technology is sometimes very high.
Most of the organizations will not be able to afford a decent tech for the purpose of communication. Hence, this becomes a very crucial barrier. Other barriers are socio-religious barriers. In a patriarchal society, a woman or a transgender may face many difficulties and barriers while communicating.
Q6) What are different leadership styles?
A6) Leadership Styles
1. Autocratic or Authoritarian Style:
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 go 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 fulfill 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 tapism. 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 fulfill 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 skillfully 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.
Q7) Discuss the qualities of a good leader.
A7) When thinking about the concept of leadership, many individuals assume that it is the same thing as management. This couldn't be further from the truth - a leader is anyone who wants to be, regardless of their position with an organization. Similarly, many managers do not actually possess the leadership qualities that would make them true leaders.
Leadership can mean many things to different people. One good definition of an effective leader is "a person who does the following:
When considering what strong leadership looks like, there are a few qualities of a great leader that tend to be true across the board - these are traits that every good leader has, or should strive for.
The Top 10 Qualities of a Great Leader
1. Vision
Perhaps the greatest quality any leader can have is vision - the ability to see the big picture of where the organization or team they are working within is headed, what it's capable of, and what it will take to get there.
2. Inspiration
Equally as important as having a vision is the ability to convey that vision to others, and get them excited about it. This means maintaining a positive yet realistic presence within the organization helping team members stay motivated and engaged, and remember what it is that they are working for.
3. Strategic & Critical Thinking
A good leader will be able to think critically about the organization or team they work within, and develop a clear understanding of its strengths, weaknesses, opportunities, and threats (and how they as an individual can work to support or overcome these). They'll be able to course-correct when necessary, and be able to assess the work they do to determine how it fits into overall organizational strategy and goals.
4. Interpersonal Communication
Good leaders must be able to interact with other people in a way that feels genuine. This does not mean you have to be an extrovert or a people-person to be a leader - there are many excellent leaders who self-identify as introverts! Rather, it means being able to demonstrate empathy, engaging in active listening, and building meaningful working relationships with those around you, whether they are a peer or a direct report.
5. Authenticity & Self-Awareness
One of the key ways to become a great leader is to be self-aware enough to understand your strengths and your flaws, and to build an authentic leadership style that's true to who you are and how you do your best work. You want to be the best possible leader you can be, not try to fit into a mold set by someone else. Try to embrace the things that make you who you are, and that will naturally translate into you developing an authentic leadership style.
6. Open-Mindedness & Creativity
Being a good leader means being open to new ideas, possibilities, and perspectives, and understanding that there's no "right" way to do things. Leadership involves the knowledge that success comes with a willingness to change how things are done and to bring in fresh eyes to inspire new ideas, in addition to trying to think outside the box as much as possible. Leaders must be able to listen, observe, and be willing to change course when necessary.
7. Flexibility
Leadership also means being adaptable and nimble when the situation calls for it. Nothing ever goes according to plan - whether you encounter minor roadblocks or large obstacles, you will need to be prepared to stop, reassess, and determine a new course of action. Good leaders will embrace the ever-changing nature of business and meet challenges with a flexible attitude - and be able to build inspire that same willingness to adapt in those around them.
8. Responsibility & Dependability
One of the most important qualities a leader can have is a sense of responsibility and dependability. This means displaying those traits in your individual work, but also demonstrating them in your interactions with others. Your team members need to know that they can depend on you to take on your fair share of work and follow through, support them through tough times, and help them meet both shared and individual goals.
9. Patience & Tenacity
A good leader knows how to take the long view, whether it's of a strategy, a situation, or a goal. Being able to take on any bumps in the road and persist on without getting frustrated or defeated is key—from small projects to corporate vision, patience is a trait that is essential to strong leadership.
10. Continuous Improvement
True leaders know that perfection is a myth - there is always room for improvement on all levels, from the personal to the team to the overall organization. They'll always be willing to help team members find ways to develop new skills or improve upon a weakness, be able to identify and implement strategies for helping the organization as a whole grow, and, perhaps most importantly, be able to look inward and identify the areas they would like to work on - and then act on them.
Q8) Define Control and explain its process.
A8) According to F. E. L. Brech, “Managerial control is checking current performance against pre-determined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performances.”
According to Henri Fayol -“In an undertaking control consists in verifying whether everything occurs in conformity with the plans adopted, the instruction issued and the principle established. Its object is to point out the weakness and error in order to rectify them and prevent occurrence. It operates on everything i.e., things, people and action.”
Dalton E. McFarland has said -“Control in its managerial sense is the presence in a business of that force which guides it to a pre-determined objective by means of pre-determined policies and decision.”
Thus, we see that managerial control is fundamental management function that ensures work accomplishment according to plans. It is concerned with measuring and evaluating performance so as to secure the best results of managerial efforts.
Steps
The top management initially must decide what elements of the environment and the organisation need to be monitored, evaluated and controlled. The four key areas to be monitored and controlled are – the macro environment, mission and objectives, the industry environment and internal operations.
Step # 1. Key Areas to be Monitored:
I. Macro-Environment:
One of the key areas to be monitored is the macro-environment of the company. This area should be focused first. Normally individual companies cannot influence the environment significantly. But the external environmental forces must be continuously- monitored as the changes in the environment influence the implementation of the plans of the company.
II. Mission and Objectives:
This includes modifying any one or more of the areas like company’s mission, objectives, plans, goals, strategy formulation and implementation. The modification depends upon the nature and degree of changes and shifts in the environment.
III. Industry Environment:
The manager also monitors and controls the industry related environment. The environmental forces may not be as they were planned. The changes in the environment may provide new opportunities or pose new threats. The plan, therefore, should be modified accordingly.
The industry environment of the future should be considered by the top management for the purpose of evaluation and control.
IV. Internal Operations:
The manager has to evaluate the internal operations continuously in view of the changes in the macro-environment and industry environment. The manager has to introduce changes in internal operations when changes in the environment affect the plans.
Step # 2. Establishing Standards:
Evaluating an organisational performance is normally based on certain standards. These standards may be the previous year’s achievements or the competitor’s records or the fresh standards established by the management. Qualitative judgements like the qualitative features of the product or service in the last year may be used.
Quantitative measures like Return on Investment (ROI), Return on sales may also be used for judging the performance. Companies should establish the standards for evaluating the performance of the strategies taking several factors into consideration.
The standards may include:
1. Quality of Products/Services.
2. Quantity of Products to be Produced.
3. Quality of Management.
4. Innovativeness/Creativity.
5. Long-term investment value.
6. Volume of sales and/or market share.
7. Financial soundness in terms of return on investment, return on equity capital, market price of the share, earning per share etc.
8. Community and environmental responsibility in terms of amount spent on community development, variety of facilities provided to the community, programmes undertaken for environmental protection and ecological balance etc.
9. Soundness of human resources management in terms of percentage of employee grievances redressed, employee satisfaction rate, employee turnover rate, industrial relations situation etc.
10. Ability to attract, develop and retain competent and skilled people.
11. Use of company’s assets.
12. Production targets, rate of capacity utilisation, design of new products, new uses of existing products, rate of customer complaints about the product quality, suitability of ingredients etc.
13. Corporate image among the customers and general public.
14. Market place performance.
15. Standards relating to the organisational variables include freedom and autonomy, level of control, responsibility, formal organisation and degree of formality and informal organisation scope for innovation and creativity.
Step # 3. Measuring Performance:
The manager has to measure the performance of various areas of the organisation before taking an action. Performance may be measured through quantitative terms or qualitative terms. Reports and statements help to measure the actual performance through quantitative terms and managerial observations help to measure performance through qualitative terms.
Production, sales, profitability, staff cost etc. can be measured through quantitative terms and quality of the product, employee’s performance, attitude etc. can be measured through qualitative terms.
Step # 4. Compare Performance with Standards:
Once the performance of different aspects of the organisation is measured, it should be compared with the predetermined standards. Standards are set to achieve the already formulated organisational goals and plans. Organisational standards are yardsticks and benchmarks that place organisational performance in perspective.
The manager should set standards for all performance areas of the organisation based on organisational goals and strategies. Normally, the standards vary from one company to the other company. Further, they also vary from time to time in the same company. The standards developed by General Electric Company can be used as model standards.
These standards include:
i. Profitability Standards:
They include how much gross profit, net profit, return on investment, earning per share, percentage of profit to sales, the company should earn in a given time period.
ii. Market Position Standards:
These standards include total sales, sales region-wise and product-wise, market share, marketing costs, customer service, customer satisfaction, price, customer loyalty shifts from or to other organisation’s products etc.
iii. Productivity Standards:
These standards indicate the performance of the organisation in terms of conversion of inputs into output. These standards include capital productivity, labour productivity, material productivity etc.
iv. Product Leadership Standards:
They include the innovations and modifications in products to increase the new uses of the existing product, developing new products with new uses etc.
v. Human Resources Standards:
These standards include providing competitive salaries, benefits and different aspects of quality of work life. They also include human resources performance, productivity, turnover rates, absenteeism rates providing challenging and creative jobs etc.
vi. Employee Attitude Standards:
They include employees’ favourable attitude towards the nature of work, organisation, salaries, benefits, working environment, quality of work life, treatment by superiors etc.
vii. Social Responsibility Standards:
All organisations discharge their responsibilities towards different sections of the society. These standards are related to the services of organisations towards community, government, employees, suppliers, creditors etc.
viii. Standards Reflecting Balance between Short-Range and Long-Range Goals:
Short- range and long-range strategies should be balanced successfully. Standards in these areas should bring balance between these two goals.
Step # 5. Take No Action, if Performance is in Harmony with Standards:
If the performances of various organisational areas match with the standards, the manager need not take any action. He should just allow the process to continue. However, he can try to improve the performance above the standards, if it would be possible, without having any negative impact on the existing process.
Step # 6. Take Corrective Action, if Necessary:
Managers should take necessary corrective action, if performance is not in harmony with standards. If the deviation is positive i.e. performance is above the standards continuously, revises the standards. On the contrary, if performance is below standard, take steps to improve the performance.
The managers compare the performance with standards. If they find any deviation between the standards and performance, they should take corrective action to bridge the gap between the standards and performance.
Causes of Deviations:
It is very easy to conclude that someone made a mistake, when deviations are identified. But the deviations maybe the result of an unexpected move by a competitor, or changes in external environment.
Therefore, the manager should consider the following before making a decision, in this regard:
1. Was the cause of deviation internal or external?
2. Was the cause random, or should it have been anticipated?
3. Is the change temporary or permanent?
4. Are the present plans still appropriate?
5. Does the organisation have the capacity to respond to the change needed?
Corrective Action:
Corrective action may be defined as change in a company’s operations to ensure that it can more effectively and efficiently reach its goals and perform its established standards.
Plans that do not achieve standards produce three possible responses viz.:
(i) To revise plans,
(ii) To change standards and
(iii) To take corrective action in the existing process without changing standards and plans.
Change in plans may require a ‘fine tuning’ of the existing strategy or complete changes in plans. If it is realised that the existing standards are unrealistic under the present conditions, the manager should reset the standards taking the existing conditions into consideration.
Corrective action may be as simple as to increase the price or may be as complex as change the chief executive officer. Deviations require re-examination of the company’s mission, objectives, and relationship to its environment, internal strengths, weaknesses and plans. After having an idea of the process of control, now we shall study the types of control. Now, we shall discuss the control techniques.
Q9) What are the essentials of a good control system?
A9) Essentials of Good Control System
If control is to be effective and adequate, it must satisfy the following requirements:
1. Perfect Plan: Control should reflect the plan designed to be followed. Managers should have information with regard to the plans for which they are responsible for working.
2. Point out Exceptions: Management by exception is a system of warning the management when the situation is likely to become out of control and the intervention of management is needed. Its main object is to make the task of managing simpler and more effective. If control is based on exception principle, it will allow the managers to concentrate on important issues. Hence, control should point out exceptions.
3. Objective: Control should be objective rather then subjective because an individual’s job is not a matter of subjective determination. Hence, objective standards are to be established.
4. Flexible: An effective control system should be flexible. It should be capable of adjusting itself to unforeseen changes of plans. It must be adaptable to new developments.
5. Economical: The control system should be economical to operate. The expenditure on control must correspond with the benefits derived from them. The question of economy should be decided by considering the factors like importance of activity, the size of the operation, the expense which might be spent in the absence of control and the utility derived from the control system.
6. Remedial Action: An effective control system should point out the deviations, the persons responsible for such deviations and make sure that remedial action is taken. The main purpose of control is taking remedial action to set right the deviations. If no remedial action is taken, controls are not necessary.
7. Simple: A control system to be effective, should be simple to adopt. It should be easily understandable by the parties concerned so that the smooth working of the system can be ensured.
8. Suggestive of Corrective Action: An adequate and effective control system should be suggestive of corrective action. It should not stop merely with pointing out deviations. It should go further and try to generate solutions to the problem responsible for deviation from the predetermined standards.
Q10) Write a note on Techniques of control.
A10) 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 of Managerial Control
Traditional techniques are those which have been used by the companies for a long time now. These include:
1. Personal Observation
This is the most traditional method of control. Personal observation is one of those techniques which enables 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.
Some of the types of budgets prepared by an organisation are as follows,
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:
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. It can be calculated as under-
Net income before or after tax may be used for making comparisons. Total investment includes both working as well as fixed capital invested in the business.
2. Ratio Analysis
The most commonly used ratios used by organizations can be classified into the following categories:
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 centers’. The head of the center is responsible for achieving the target set for his center. Responsibility centers may be of the following types:
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.
