Q.

What are the principles of management ?

Answer: A principle refers to a fundamental truth. It establishes cause and effect relationship between two or more variables under given situation. They serve as a guide to thought & actions. Therefore, management principles are the statements of fundamental truth based on logic which provides guidelines for managerial decision making and actions. These principles are derived: a. On the basis of observation and analysis i.e. practical experience of managers. b. By conducting experimental studies. There are 14 Principles of Management described by Henri Fayol.
1. Division of Labor

a. Henry Fayol has stressed on the specialization of jobs. b. He recommended that work of all kinds must be divided & subdivided and allotted to various persons according to their expertise in a particular area. c. Subdivision of work makes it simpler and results in efficiency. d. It also helps the individual in acquiring speed, accuracy in his performance. e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility

a. Authority & responsibility are co-existing. b. If authority is given to a person, he should also be made responsible. c. In a same way, if anyone is made responsible for any job, he should also have concerned authority. d. Authority refers to the right of superiors to get exactness from their subordinates whereas responsibility means obligation for the performance of the job assigned. e. There should be a balance between the two i.e. they must go hand in hand. f. Authority without responsibility leads to irresponsible behavior whereas responsibility without authority makes the person ineffective.
3. Principle of One Boss

a. A sub-ordinate should receive orders and be accountable to one and only one boss at a time. b. In other words, a sub-ordinate should not receive instructions from more than one person because It undermines authority Weakens discipline Divides loyalty Creates confusion Delays and chaos Escaping responsibilities

- Duplication of work - Overlapping of efforts c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely essential. d. Unity of command provides the enterprise a disciplined, stable & orderly existence. e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction

a. Fayol advocates one head one plan which means that there should be one plan for a group of activities having similar objectives. b. Related activities should be grouped together. There should be one plan of action for them and they should be under the charge of a particular manager. c. According to this principle, efforts of all the members of the organization should be directed towards common goal. d. Without unity of direction, unity of action cannot be achieved. e. In fact, unity of command is not possible without unity of direction. Basis Meaning Unity of command It implies that a sub-ordinate should receive orders & instructions from only one boss. It is related to the functioning of personnels. Unity of direction It means one head, one plan for a group of activities having similar objectives. It is related to the functioning of departments, or organization as a whole. It is necessary for sound organization. It avoids duplication of efforts and wastage of resources. It leads to smooth running of the enterprise.

Nature

Necessity

It is necessary for fixing responsibility of each subordinates. It avoids conflicts, confusion & chaos. It leads to better superior subordinate relationship.

Advantage

Result

Therefore it is obvious that they are different from each other but they are dependent on each other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically comes from the unity of direction.
5. Equity

a. Equity means combination of fairness, kindness & justice. b. The employees should be treated with kindness & equity if devotion is expected of them. c. It implies that managers should be fair and impartial while dealing with the subordinates. d. They should give similar treatment to people of similar position. e. They should not discriminate with respect to age, caste, sex, religion, relation etc. f. Equity is essential to create and maintain cordial relations between the managers and sub-ordinate. g. But equity does not mean total absence of harshness. h. Fayol was of opinion that, at times force and harshness might become necessary for the sake of equity.
6. Order

a. This principle is concerned with proper & systematic arrangement of things and people. b. Arrangement of things is called material order and placement of people is called social order. c. Material order- There should be safe, appropriate and specific place for every article and every place to be effectively used for specific activity and commodity. d. Social order- Selection and appointment of most suitable person on the suitable job. There should be a specific place for every one and everyone should have a specific place so that they can easily be contacted whenever need arises.
7. Discipline

a. According to Fayol, Discipline means sincerity, obedience, respect of authority & observance of rules and regulations of the enterprise. b. This principle applies that subordinate should respect their superiors and obey their order. c. It is an important requisite for smooth running of the enterprise. d. Discipline is not only required on path of subordinates but also on the part of management. e. Discipline can be enforced if - There are good superiors at all levels. - There are clear & fair agreements with workers. - Sanctions (punishments) are judiciously applied.
8. Initiative

a. Workers should be encouraged to take initiative in the work assigned to them. b. It means eagerness to initiate actions without being asked to do so. c. Fayol advised that management should provide opportunity to its employees to suggest ideas, experiences& new method of work.

d. It helps in developing an atmosphere of trust and understanding. e. People then enjoy working in the organization because it adds to their zeal and energy. f. To suggest improvement in formulation & implementation of place. g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration

a. The quantum and method of remuneration to be paid to the workers should be fair, reasonable, satisfactory & rewarding of the efforts. b. As far as possible it should accord satisfaction to both employer and the employees. c. Wages should be determined on the basis of cost of living, work assigned, financial position of the business, wage rate prevailing etc. d. Logical & appropriate wage rates and methods of their payment reduce tension & differences between workers & management creates harmonious relationship and pleasing atmosphere of work. e. Fayol also recommended provision of other benefits such as free education, medical & residential facilities to workers.
10. Stability of Tenure

a. Fayol emphasized that employees should not be moved frequently from one job position to another i.e. the period of service in a job should be fixed. b. Therefore employees should be appointed after keeping in view principles of recruitment & selection but once they are appointed their services should be served. c. According to Fayol. Time is required for an employee to get used to a new work & succeed to doing it well but if he is removed before that he will not be able to render worthwhile services. d. As a result, the time, effort and money spent on training the worker will go waste. e. Stability of job creates team spirit and a sense of belongingness among workers which ultimately increase the quality as well as quantity of work.
11. Scalar Chain

a. Fayol defines scalar chain as The chain of superiors ranging from the ultimate authority to the lowest. b. Every orders, instructions, messages, requests, explanation etc. has to pass through Scalar chain. c. But, for the sake of convenience & urgency, this path can be cut shirt and this short cut is known as Gang Plank.

d. A Gang Plank is a temporary arrangement between two different points to facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the communication upwards with the help of C, B to A and then downwards with the help of E and F to G which will take quite some time and by that time, it may not be worth therefore a gang plank has been developed between the two. e. Gang Plank clarifies that management principles are not rigid rather they are very flexible. They can be moulded and modified as per the requirements of situations
12. Sub-Ordination of Individual Interest to General Interest

a. An organization is much bigger than the individual it constitutes therefore interest of the undertaking should prevail in all circumstances. b. As far as possible, reconciliation should be achieved between individual and group interests. c. But in case of conflict, individual must sacrifice for bigger interests. d. In order to achieve this attitude, it is essential that - Employees should be honest & sincere. - Proper & regular supervision of work. - Reconciliation of mutual differences and clashes by mutual agreement. For example, for change of location of plant, for change of profit sharing ratio, etc.
13. Espirit De Corps (can be achieved through unity of command)

a. It refers to team spirit i.e. harmony in the work groups and mutual understanding among the members. b. Spirit De Corps inspires workers to work harder.

c. Fayol cautioned the managers against dividing the employees into competing groups because it might damage the moral of the workers and interest of the undertaking in the long run. d. To inculcate Espirit De Corps following steps should be undertaken There should be proper co-ordination of work at all levels Subordinates should be encouraged to develop informal relations among themselves. Efforts should be made to create enthusiasm and keenness among subordinates so that they can work to the maximum ability. Efficient employees should be rewarded and those who are not up to the mark should be given a chance to improve their performance. Subordinates should be made conscious of that whatever they are doing is of great importance to the business & society. e. He also cautioned against the more use of Britain communication to the subordinates i.e. face to face communication should be developed. The managers should infuse team spirit & belongingness. There should be no place for misunderstanding. People then enjoy working in the organization & offer their best towards the organization.
14. Centralization & De-Centralization

a. Centralization means concentration of authority at the top level. In other words, centralization is a situation in which top management retains most of the decision making authority. b. Decentralization means disposal of decision making authority to all the levels of the organization. In other words, sharing authority downwards is decentralization. c. According to Fayol, Degree of centralization or decentralization depends on no. of factors like size of business, experience of superiors, dependability & ability of subordinates etc. d. Anything which increases the role of subordinate is decentralization & anything which decreases it is centralization. e. Fayol suggested that absolute centralization or decentralization is not feasible. An organization should strike to achieve a lot between the two.

Q. 2 What are the characteristics of leading? 5.4 Characteristics of Leading

Pervasiveness Leading is required at all levels of organisation. It is incorrect to believe that leading is required only at the top level. This is more so in the modern context where teams are the working entities. In team based working, the team leader has to act much like a CEO except that the level of working may be much smaller. He/she may be motivating a team of 5 or 10 people while the CEO may be motivating the whole company, but the function of giving targets, resources, support, motivating, etc. does not change. Continuity Leading is a continuous activity as it is continuous throughout the life of organisation. It takes place on a day to day basis though its importance may become higher when the organisation is undergoing a change. Human factor Leading implies the existence of followers much like directing implies the existence of subordinates to whom one can pass orders. It follows that there is a key human factor in leading and because human factor is complex and behaviour is unpredictable, leading function is important and people have to learn the art of leading. Further, this characteristic is based on the belief that human beings are motivated by challenging jobs and they feel a sense of achievement in doing these. The premise is also that people normally work towards achieving the goals i.e., human being have a goal oriented behaviour. Creativity Leading is a creative activity because of the human factors and individual variances and group variances. In the case of Sambhavi Bakers we saw how Mrs. Rakhi was creative in enabling her staff to take leadership roles. Thus, converting her plan of having a differentiated bakery outlet is actually creatively executed by the employees. It is the creativity aspect which brings in the differentiation. It also ensures that people have to look forward to the meaning and without functions people find it difficult to find the meaning. Hence, we can see that creating functions around which people find meaning is a creative function that leads to achievements. Executive function Leading is carried out by all managers and executives at all levels throughout the working of an enterprise. A follower receives tasks, resources, know-how, and support from a leader and he/she trusts his/her leader to do the same. Leading implies that the followers execute the functions, which the leader and the follower agree is important for achieving the organisational goals and through it the individual goals. Delegating function Leading implies guiding followers to the destination. It means that the followers actually execute and if they have to execute, they need the powers for doing so. Hence, delegating is natural fallout of leading. It also follows that the leader trusts his/her followers and the vice versa. Hence, mutual trust always exists in leading. Therefore, delegating function based on mutual trust is a characteristic of leading.

Q. 3

Briefly explain the four main approaches to Organisational Behaviour

Answer: i) An Interdisciplinary Approach: It is integrating many disciplines. It integrates social sciences and other disciplines that can contribute to the Organizational Behavior. It draws from these disciplines any ideas that will improve the relationships between people and organization. Its interdisciplinary nature is similar to that of medicine, which applies physical, biological and social scienceinto a workable medical practice. Organizations must have people, and people working toward goals must have organizations, so it is desirable to treat the two as a working unit. ii) Scientific Management Approach: The fundamental concern of the scientific management school was to increase the efficiency of the worker basically through good job design and appropriate training of the workers. Taylor is the father of the scientific management movement and he developed many ides to increase organizational efficiency. Taylor showed that through proper job design, worker selection, employee training and incentives, productivity can be increased. The scientific management school advocated that efficiency can be attainted by finding the right methods to get the job done, through specialization on the job, by planning and scheduling, by using standard operating mechanisms, establishing standard times to do the job, by proper selection and training of personnel and through wage incentives. iii) A Human Resources (Supportive) Approach: It is developmental approach concerned with the growth and development of people toward higher levels of competency creativity and fulfillment, because people are the central resource in any organizations and any society. It helps people grow in self-control and responsibility and then it tries to create a climate in which all employees may contribute to the limits of their improved abilities. It is assumed that expanded capabilities and opportunities for people will lead directly to improvements in operating effectiveness. Work satisfaction will be a direct result when employees make fuller use of their capabilities. Essentially, the human resources approach means that better people achieve better results. iv) A Contingency Approach: Traditional management relies on one basic principle there is one best way of managing things and these things can be applied across the board in all the instances. The situational effect will be totally ignored in this traditional management. Situations are much more complex than first perceived and the different variables may require different behavior which means that different environments required different behavior for effectiveness. Each situation much be analyzed carefully to determine the significant variables that exist in order to establish the kinds of practices that will be more effective. Contingency theorist argues that the external environment and several aspects of the internal environment govern the structure of the organization and the process of management. Effective management will vary in different situations depending on the individual and groups in the organization, the nature of jobs, technology, the type of environment facing the organization and its structure. For example, if

the employees are highly matured and willing to take more responsibility, the managers can follow delegating style and give full freedom to their employees. If the employees are not so matured and avoid taking any responsibility, the managers must follow directing style. Depends upon the situation, that is, employees level of maturity, managers will adopt different style of leadership to ensure more successful results. v) A Systems Approach: This implies that organization consists of many inter related and inter dependent elements affecting one another in order to achieve the overall results. Conceptually a system implies that there are a multitude of variables in organization and that each of them affects all the others in complex relationships. An event that appears to affect one individual or one department actually may have significant influences elsewhere in the organization. Systems theorists describe the organization as open to its external environment, receiving certain inputs from the environment such as human resources, raw materials etc, and engaging in various operations to transform those raw materials into a finished products and finally turning out the outputs in its final form to be sent to the environment. The organization, since it is open to the environment, also receives feedback from the environment and takes corrective action as necessary. This input-transformation process-output model

Q. 4

Explain the five major leadership styles as per the Managerial Grid theory.

Answer: The Managerial Grid was the original name which was the modifications were made by Robert R Blake and Anne Adams McCanse. After the modifications it was named as Leadership Grid. Figure: Leadership Grid

Leadership Grid an approach to understanding a leaders concern for results (production) and concern for people The five major leadership styles specified as per Managerial Leadership Grid Theory: 1. The impoverished style (1, 1). The indifferent Leader (Evade & Elude) In this style, managers have low concern for both people and production. Managers use this style to avoid getting into trouble. The main concern for the manager is not to be held responsible for any mistakes, which results in less innovative decisions. A leader uses a delegate and disappear management style. Since they are not committed to either task accomplishment or maintenance; they essentially allow their team to do whatever it wishes and prefer to detach themselves from the team process by allowing the team to suffer from a series of power struggles. 2. The country club style (1, 9). The accommodating Leader (Yield & Comply) This style has a high concern for people and a low concern for production. Managers using this style pay much attention to the security and comfort of the employees, in hopes that this would increase performance. The resulting atmosphere is usually friendly, but not necessarily that productive. This person uses predominantly reward power to maintain discipline and to encourage the team to accomplish its goals. Conversely, they are almost incapable of employing the

more punitive coercive and legitimate powers. This inability results from fear that using such powers could jeopardize relationships with the other team members. 3. The produce or perish style (9, 1). The Controlling Leader (Direct & Dominate) This believes in the authority-obedience. With a high concern for production, and a low concern for people, managers using this style find employee needs unimportant; they provide their employees with money and expect performance back. Managers using this style also pressure their employees through rules and punishments to achieve the company goals. This dictatorial style is based on Theory X of Douglas McGregor, and is commonly applied by companies on the edge of real or perceived failure. This is used in case of crisis management. People who get this rating are very much task-oriented and are hard on their workers (autocratic). There is little or no allowance for co-operation or collaboration. Heavily task-oriented people display these characteristics: they are very strong on schedules; they expect people to do what they are told without question or debate; when something goes wrong they tend to focus on who is to blame rather than concentrate on exactly what is wrong and how to prevent it; they are intolerant of what they see as dissent (it may just be someones creativity), so it is difficult for their subordinates to contribute or develop. 4. The middle-of-the-road style (5, 5). The Status Quo Leader. (Balance & Compromise) It is Organization man management approach, which believes that the adequate organization performance is possible through balancing the necessity to get out wprk with maintaining morale of people at satisfactory level. Managers using this style try to balance between company goals and workers needs. By giving some concern to both people and production, managers who use this style hope to achieve acceptable performance. 5. The team style (9, 9). The Sound / Team Leader (Contribute & Commit) This is based on the aspect that work accomplishment is from committed people; interdependence through a common stake in the organization purpose leads to relationships of trust and respect. In this style, high concern is paid both to people and production. As suggested by the propositions of Theory Y, managers choosing to use this style encourage teamwork and commitment among employees. This method relies heavily on making employees feel as a constructive part of the company. This type of person leads by positive example and endeavors to foster a team environment in which all team members can reach their highest potential, both as team members and as people. They encourage the team to reach team goals as effectively as possible, while also working tirelessly to strengthen the bonds among the various members. They normally form and lead some of the most productive teams.

Q. 5

List some of the commonly found perceptual biases

Answer: While observing others in our day-to-day life, people tend to commit errors due to faulty perceptual process and make a wrong decision. This has to be avoided. There are five types of errors or short-cut methods which are frequently used by the individuals. They are: i) Selective Perception ii) Projection iii) Stereotyping iv) Halo Effect v) Contrast Effect

i) Selective Perception
It is a tendency to observe people selectively and accordingly interpret based on their interest, background, experience and attitudes. For example, a production manager is always likely to identify the need to strengthen the production system; the marketing manager will focus only on the marketing research and sales promotions activities. In general, we tend to notice things which are similar to us. For instance, we are more likely to notice the type of cars which are similar to ours. The simplest way of avoiding hasty or wrong decision being made due to selective perception is to seek other peoples perceptions of reality in the same situation in order to make a better assessment of the situation.

ii) Projection
It is a tendency to assign ones own personal attributes to others. For instance, a manager who is corrupt will tend to project that all others are also corrupt like him. Similarly, a manager who loves challenging work might project that all others like challenging work. Many times, this is not true, and the manager who tries to enrich all the jobs as challenging might be leading to wrong motivational technique for other employees. When managers engage in projection, they compromise their ability to respond to individual differences. They tend to see people as more homogeneous than they really are. Thus, managers should guard themselves against perceptual biases through projection. iii) Stereotyping: It is a tendency to judge people based on the perception of the group to which he belongs. We tend to attribute favorable or unfavorable characteristics to the individual based on upon widely held generalization about the group. For instance, we perceive that Japanese in general are hard working, quality conscious and industrious, and based on that we generalize that all Japanese are like that, but in reality it may not be so. There are some Japanese who may not possess the above mentioned characteristics. Similarly we assume that women in general are soft, kind, caring, affectionate, considerate, gentle, but there are some women who may not possess these characteristics. Similarly, we may assume older people are traditional, conservative, and cranky, but not every elderly person fits into this mould and hence we are likely to make errors of judgment. Sex-role stereotypes and age-stereotypes adversely affect recruitment, pay, job placement, and promotion decisions. As a result of which, organizations frequently lose good employees.

iv) Halo Effect: It is tendency to draw a general overall impression about an individual based on single striking characteristics. For instance, if a person speaks English fluently, we tend to assume that that person is very knowledgeable, intelligent, smart, clever etc. hard working, smart etc. Similarly, if a man is abrasive, he may also be perceived as bad, awful, unkind, aggressive, harmful, deceitful and wicked. Halo effect, whether it is positive or negative, will distort our perception and block us from actually perceiving the trait that is being judged. This phenomenon frequently occurs when students appraise their university lecturer. v) Contrast Effect: It is tendency to evaluate a persons characteristics by just comparing with other people who happened to acquire higher or lower position on the same characteristics. For instance, while comparing the presentation of students, a good presentation made by one student just before you will probably make you feel that you wont be as good as you probably are. This contrast effect can distort our perception. In general, a person will be evaluated in isolation. But our reaction to one person is often influenced by other people or events in which we have recently encountered. In interview situation, a job applicant is likely to receive a more favorable evaluation if preceded by mediocre applicants and a less favorable evaluation if preceded by strong applicants.

Q. 6

Suppose you are the Team Manager in a multinational company with team strength of 12 members. You are given the responsibility of ensuring that the team gives excellent performance or results. What are the key issues you have to handle in team building? Answer: Key Issues in Team Building All managers strive to improve their performance and business results and they consider teamwork to be crucial for it. So, you have teams for continuous improvement, total quality, lean manufacturing, customer complaints, product development, etc. Yet, most managers are also not happy with the way the teams function. Let us see how we can create teams which can give excellent performance or results. Have clear expectations and context: Have clear performance targets and expectations from the team. The team should get sufficient resources-people, time and money. Their work should receive sufficient emphasis as a priority in discussions. This makes the team feel that they matter and then they perform. A classic example is the Nano team which was directly supported by Ratan Tata. Equally important is that the team understands the role and importance of their work and its strategic importance. Of course, this may not be so for some temporary teams such as a team created to celebrate an annual or award function. The team members should be able to define their importance if a team has to yield results. Commitment: All team members may not be equally committed. First, ensure that all the members believe in the mission and anticipate recognition for their contribution. They expect their skills to grow and develop and they should feel excited and challenged by the opportunity. Only then does a team work well. Those without commitment are better out of the team. Team design and competence: The next important aspect is having adequate competences. If the team is to improve a process, it should have people with expertise in each step of the process. Therefore, it is not sufficient to get some people together, but it is necessary to get people with the requisite competencies. If one fails in this, the teams may not perform or underperform. The team design should be such that the competencies required to accomplish the task are included. In addition to the technical competencies which vary from task to task, teams succeed if they have the right managerial or leadership competencies. The team wheel is one structure that we can look at to ensure that the competencies mentioned therein are included. Researchers have experimented with the team wheel and trained people in the deficient areas to ensure better team success. Charter of performance: The team should take the assigned responsibility as its mission. This is the crux of a successful team. It must define its goals, the outcomes, the timelines, measuring success, and the process to accomplish tasks. Equally, the support of top leadership for the work of the team is a precondition. The task of the team should be a task derived from the top management if it has to succeed. Control and coordination: Any management function works through controls and coordination and teams are no exception. Some of the issues to be considered are what are the controls the team members accept and impose on themselves, what are the

limitations in terms of money, time, how far the members should go in pursuit of the solutions, what is the degree of freedom and the chain of reporting. To succeed, the teams should have sufficient freedom and a mechanism for self regulation and coordination. One of the challenges in doing it is the interdepartmental nature of the team and the interdepartmental conflicts which are often taken to the team usually by denying a resource or an appropriate skill. The top management can address this challenge through incentives and motivation. Collaboration: The team goals should be a collaborative one and not a competitive one. This would lead to their understanding and interpreting the goals correctly. The teams should also establish norms so that collaboration becomes easy. If the output is defined correctly and the reward for accomplishment fair and equitable, then teams tend to collaborate more effectively. Communication: This is a common problem in team building. The barriers to communication should be broken down and free flowing communication should be established. Despite all these, conflict does exist due to several barriers. The ability to detect conflict and resolve it in time is another key to success. Consequences: Team members should feel responsible and accountable for the achievement and they should inherently get the idea of consequences of not achieving it. Reward is one of the important factors to be considered to achieve this. Else, there will be finger pointing and related issues that make the teams non-functional. Look at a successful soccer or cricket team and you get the idea intuitively. Creative innovation: Depending on the problem, the teams should be able to innovate and they should have the freedom to do so. Even if the composition of the team is ideal, one cannot get results if they do not have the freedom for creativity. Cultural change: Teams can function only if the organisation has such a culture. Teams need flat organisational structure, rewards and recognitions, and training and development of a high order. Traditional companies are not designed for effective team operation.