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Organization means to control any business through a specific systematic approach. All the
businesses have some kind of structure or hierarchies. Some are formal and owners are informal.
Formal organization of a business means that there is specific structure, hierarchy and procedures are
involved. On the other hand informal organization means that no rigid structure is there to follow and
organization style is very flexible.
Management
Management is the process of achieving the objectives of the business by using its available
resources effectively.
In a small business, the owner is likely to be the manager as well, responsible for all the managerial
tasks. However, as a business grows, then some of these tasks can be delegated to others.
Organizing: dividing the work into smaller tasks and delegating to others.
Staffing: having the right person in the right job (known as Human Resource
Management).
Budgeting: preparing a detailed financial plan for the next trading year.
One of the most important skills of management in a large business is knowing how, when and what
tasks to delegate to others. Delegation occurs when managers pass a degree of authority down the
hierarchy to their subordinates. The managers must ensure that the subordinates are sufficiently
competent to cope with the task, and that they have the necessary skills and time available to
complete the delegated task.
The relationship that exists between the management and their subordinates in a business can be
represented diagrammatically in the form of an organizational chart.
a) The different departments within the business. In this example, there are 4 different
departments (Production, Marketing, Finance, and Personnel).
b) The chain of command. In this example, a chain of command exists between person a (senior
manager), person B (middle manager), person C (supervisor), and person D (shop-floor worker).
c) The span of control of each manager. This refers to the number of people directly accountable to
a single superior. In this example, the span of control is 4 people.
A line relationship exists where there is direct authority (in the diagram, an example of a line
relationship is between person B and person C).
A recent trend in many large businesses has been delayering the organizational chart. This means
stripping out one layers of management from the hierarchy. This is done to reduce costs and to
improve the speed of communication flows within the business, as well as to provide each employee
with more responsibilities.
However, Delayering can actually overstretch employees by giving them too much work and can,
therefore, actually have a negative effect on their level of morale and motivation.
Traditionally, many businesses had highly centralized decision-making, with all they key decisions
being made by senior management, with little responsibility and authority being passed down the
hierarchy.
Functional structures:
CEO
DIR R&D DIR Marketing DIR Production DIR Finance DIR HRM DIR Admin
Workers Workers
It allows the business to be coordinated from the top and to a sense of overall direction.
It provides clear lines of communication and authority for employees.
It lets specialists operate in particular areas.
Senior managers may become very remote as the business grows and may become
unaware of local issues.
Decision-making may be slow because of long chain of command, which may damages
the competitiveness.
It provides little coordination and direction to those lower in the organization.
This reflects the authority the entrepreneur has control over all aspects of the business and its
employees. This kind of structure will usually encourage delegation and empowerment.
Appropriate
where quick decision making is needed with an element of skill and flair
Problems
As an organization gets bigger it becomes difficult for the entrepreneur to maintain direct
authority over all employees and a change in structure is necessary.
Today many companies have reduced the number of management layers and have re-organized away
from functional structure towards a divisional structure. Within each division marketing, production
and other staff would work together on the same projects.
Features
Each division is self contained and operates as a profit centre (a firm within a firm).
Within each division the functional structures tends to be adopted.
Advantages
Allows individuals to specialize and gain expertise in specific products and markets.
Allows a large company to operate as several smaller ones, each with greater identity and
autonomy, thus facilitating rapid decision making and unambiguous performance
measurement.
Greater flexibility for growth and expansion (additional profit centers can be grafted onto the
organization).
Disadvantages
Conflict between divisions, e.g., allocation of fixed costs and machines, setting of budgets
and availability of finance)
There can be higher costs as activities such as marketing will be replicated in different
divisions.
Difficult to co-ordinate if divisions grow too large.
This structure regards organizations as groups of inter-relating elements that require co-ordination
and information to turn a wide range of inputs into a variety of outputs. This approach acknowledges
the dynamic nature of business and recognizes that static organizational structures are at times
wholly inadequate for decision making.
The matrix approach involves organizing the management of a task along lines that cross normal
departmental boundaries, e.g., a new product development team might be formed from an engineer, a
research chemist, a marketing manager and a designer. This means that each team member can end
up with two bosses; the departmental bosses and the project leader. Once the project has been
finished the team will usually be disbanded, with the individual members being drafted into other
teams or absorbed back into the organizations skeleton structure.
This can lead to problems of loyalty and prioritizing of workloads, as the employee can neglect their
departmental duties in favor of the new project they are involved in.
Another management technique is management by objectives, which involves each manager setting
objectives for himself, based on the overall objectives of the business.
In the matrix individuals have two or more superiors, e.g., a sales manager will report to the
marketing director and the product manager
It can help to break down traditional dept barriers and improves communication.
It can allow individuals to use particular skills in a variety of contexts.
It avoids the need for several Dept to meet regularly, so reducing costs.
It can put project team members under a heavy pressure of work as they have to report
to two or more line managers.
There may not be a clear line of accountability for project teams because of complex
nature of matrix.
In project based organizations, organizations arrange their activities into programs or portfolios, and
implement them through the projects. Here, the project manager is in charge of his project, and he
has full authority over it. Everyone in his team reports to him. The projectized organization structure
is opposite to the functional organization structure.
The project manager has full power and authority over resources to be utilized in the project.
He controls the budget, resources, and work assignments.
The project manager has full-time team members working under his control who directly
report him.
When the project is completed the team is disbanded, and team members and all other
resources are released.
Since the team members directly report to the project manager, there is a clear line of
authority. This reduces conflict, and makes decision making faster and more flexible.
Due to a single reporting system, there are shorter lines of communication which creates
strong and effective communication within the project management team.
Due to a single authority, less time is consumed in communication, and response to
stakeholders concerns is fast.
Due to a sense of urgency, milestones, good communication, and cooperation, the learning
curve is faster for any new member.
Since the project manager has full authority and power over his team members, he can
become arrogant. A lack of power is a problem for project managers in functional
organizations, while abundance of power of a project manager can be a problem for team
members in projectized organizations.
In projects, there is always a deadline and usually a tight schedule, which makes the work
environment stressful.
If the organization has multiple projects, there can be poor communication among them,
causing resources to be duplicated.
There is a sense of insecurity among the team members, because once the project is
completed, they feel that they may lose their jobs. Therefore, they tend to be less loyal
towards the organization.
The cost of employees and equipment can be higher because you may be hiring skilled
people and specialized equipment for a shorter period of time. Moreover, if the project gets
stretched out, the cost of equipment and other resources can be much higher.
Size. As a business grows it is unlikely to move away from an organizational structure to one
where authority is passed to other employees. A large firm will tend to have a longer chain of
command with more levels of hierarchy.
Views of the owner or leadership style. If owners wish to retain control in the business, they
will want a narrow span of control. Owners or managers who wish to motivate employees
may delegate decision making to them.
Business objectives. If the business wishes to expand rapidly, perhaps by a merger, its likely
to find its span of control gets wider.
External factors, e.g., in a period of rising costs or recession, a business may be forced to
reduce its chain of command in order to cut costs. Similarly in a period of growth a firm may
employ extra managers as specialists in order to gain economies of scale.
Changes in technology, e.g., a new information technology system could reduce the role of
administration.
Span of Control
Number of workers working under the direct supervision of senior person is known as span of control
of that senior person. The ideal span of control is five to six person but it may vary according to
nature of business is operating.
Lack of innovation
Low motivation because there will be less delegation
More chances of miscommunication.
CHAIN OF COMMAND
Number of steps involved in any decision making process or in any organizational structure is known
as chain of command.
DELEGATION
Delegation is a process in which the senior person transfers authority, from a senior person to
subordinates. The basic objective of delegation is to motivate work force and to decrease the
workload of managers. In delegation process authority transferred to subordinates, but not the
responsibility. Senior manager will remain responsible for every act, which is carried out by the
subordinate.
Senior manager always has the fear of redoing the work if not properly completed by the
subordinate because the responsibility remains with the senior manager.
Some manager fears that if authority is delegated subordinate can supersede the senior
manager with his/her performance. (Insecurity about the position)
He can try to hold maximum authority and will no pass on any power to subordinate.
Lack of confidence and the workforce can also cause problems in delegation
Significance of Delegation:
It off wads the works burden of higher a management and senior manager can have more time
to plan for formation of strategy for the business.
It can be a vital source of motivation for the workforce as a worker will feel more important
and they will work more efficiently and productively.
Through delegation process management can generate new ideas and new decision-making
techniques, which can be useful tool for the business as every subordinate, will participate in
decision-making.
Senior managers can train their subordinates by delegation and by providing them different
new challenges.
In this way business can have skilled workforce without spending for training cost.
Centralization:
It is a process where all the decision are made by the head office and then these decisions are
communicated to different departments or other units of the business the basic purpose of centralized
decision making is to maintain the quality of decision making and to create a situation where each
and every department can follow the same pattern of decision making. It is also used to control
frauds, errors and duplication of resources and can also be used to economies of scales e.g. in
centralization decision making head office will purchase all the materials and components required
by each and every department so trade discounts for bulk buying can easily be achieved.
Advantages
Procedures such as ordering and purchasing can be standardized throughout the company,
leading to economies of scale.
In times of crisis the firm may need strong leadership by a central group of senior managers.
Centralization reduces the input of the day to day experts, e.g., the shop floor staff, into the
firms decision making.
Decentralization
Decisions are made by different units or departments of the business independently according to their
own requirement. Head office set overall policy of the business but make the different departments
autonomous for their functional decision making so that they can make quick decision without any
time tags according to their local requirement. Decentralized decision-making can increase the
chances of frauds but can be highly beneficial where situations vary from department to department.
Advantages
It can empower local managers encouraging them to be more innovated and motivated.
It reduces the volume of day to day communication between head office and the branches,
therefore giving senior managers the time to consider long term strategy.
Management at middle and junior levels are groomed to take over higher positions. They are
given the experience of decision making when carrying out delegated tasks (management
development).
Could allow greater flexibility and a quicker response to changes. If problems do not have to
refer to senior management decision making will be quicker. Since decisions are quicker,
they are easier to change in the light of unforeseen circumstances.
Disadvantages
Reduction in uniformity may unsettle customers who expect every product to be the same one
and look like.
Head office is in a position to measure the success of every aspect of the product and sales
mix, therefore its instructions may prove more profitable than local managers intuition.
Conclusion
It is unlikely there will ever be complete centralization or decentralization. Certain functions within a
business will always be centralized because of their importance, e.g., decisions about budget
allocation are likely to be centralized as they affect the whole economy. The decision to distribute
profits is also taken only by a few. Some delegation is necessary in all firms because the limits to the
amount of work senior management can carry out. Even if authority is delegated to a subordinate it
is usual for the manager to retain responsibility
TYPES OF AUTHORITY
Line Authority: It means where senior person has complete authority on his department he can order
them to perform any specific task related to that department. But under line authority, line manager
cannot order any task to other departments, e.g. marketing manager can assign targets to marketing
staff but cannot order anything to production departments staff.
Advantages:
Area of responsibility is clear and each and every worker knows who his or her immediate
boss is. So less chances of miscommunication and ambiguity is there.
Workers remain highly target oriented and business can achieve is overall goal by using them
more efficiently.
It is also easy for manager to control and communicate because his workload and area of
planning is clearly mentioned.
Managers have to make sole decisions and consultative services are not theyre which can
increase workload and stress level for the manager.
New idea or suggestions from other managers are discouraged even though they can be of
help to manager.
Staff Authority: It is situation where manager posses line authority but he can also suggest or
express his opinion about different things to other department. But it is just a consultative authority
because it depends on the content of other department, manager whether to accept or not accept the
suggestion. It means under staff authority marketing manager cannot order anything to production
department but he can suggest or express his view.
Advantages:
Mangers can make decisions after a thorough consultative process, which will make the
decision process which will ask the decision process more efficient and effective, especially
where multi skilling is required for decision making.
New ideas can be there which can provide new dimensions and innovative opportunities to
different departments.
Disadvantages:
It can also increase the cost of decision making as to modify the decision because has to occur
cost.
Functional authority: Where manager of a specific department has authority on all other
departments due to his unique expertise, which is used by the entire department. Therefore,
managers of other departments have to follow the instruction of that specific manager i.e. Manager of
IT can suggest or order other departments about the usage of software or network that is being
constructed by the IT Manager.
Advantages:
Manager can avoid the problem of different systems by taking the decision from expert in that
specific area
Different departments can avoid extra overhead by taking the decisions from that specific
expert. Now they dont have to hire different staff for that specific job.
Disadvantage:
As a manager, leading your team, you might find yourself resolving a conflict, negotiating new
contracts, representing your department at a board meeting, or approving a request for a new
computer system. So as a manager you probably fulfill many different roles every day. It means a
manager constantly switching roles as tasks, situations, and expectations change. Management expert
and Professor Henry Mintzberg recognized this and argued that there are ten primary roles or
behaviors that can be used to categorize a manager's different functions.
Category Roles
Figurehead
Leader
Interpersonal
Liaison
Monitor
Disseminator
Informational
Spokesperson
Entrepreneur
Disturbance
Handler
Decisional
Resource
Allocator
Negotiator
Interpersonal role
The managerial roles in this category involve providing information and ideas.
Figurehead: As a manager, you have social, ceremonial and legal responsibilities. You're expected to
be a source of inspiration. People look up to you as a person with authority, and as a figurehead.
Figureheads represent their teams. If you need to improve or build confidence in this area, start with
your image, behavior, and reputation . Cultivate humility and empathy , learn how to set a good
example at work , and think about how to be a good role model .
Leader This is where you provide leadership for your team, your department or perhaps your
entire organization; and it's where you manage the performance and responsibilities of everyone in
the group.
This is the role you probably spend most of your time fulfilling. Next, learn how to be an authentic
leader , so your team will respect you. Also focus on improving your emotional intelligence (this is
an important skill for being an effective leader).
Liaison Managers must communicate with internal and external contacts. You need to be able to
network effectively on behalf of your organization. To improve your liaison skills, work on your
professional networking techniques.
Informational role
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The managerial roles in this category involve processing information.
Monitor In this role, you regularly seek out information related to your organization and industry,
looking for relevant changes in the environment. You also monitor your team, in terms of both their
productivity, and their well-being.
To improve here, learn how to gather information effectively and overcome information overload .
Also, use effective reading strategies , so that you can process material quickly and thoroughly, and
learn how to keep up-to-date with industry news .
Disseminator This is where you communicate potentially useful information to your colleagues
and your team. To be a good disseminator you need to know how to share information and outside
views effectively, which means that good communication skills are vital. Next, focus on improving
your writing skills.
Spokesperson Managers represent and speak for their organization. In this role you're responsible
for transmitting information about your organization and its goals to the people outside it. To be
effective in this role, make sure that you know how to represent your organization at a conference
and working with the media (if applicable to your role).
Decisional role
Entrepreneur As a manager, you create and control change within the organization. This means
solving problems, generating new ideas, and implementing them.
To improve here, build on your change management skills, and learn what not to do when
implementing change in your organization. You'll also need to work on your problem solving and
creativity skills , so that you can come up with new ideas, and implement them successfully.
Disturbance Handler When an organization or team hits an unexpected roadblock, it's the
manager who must take charge. You also need to help mediate disputes within it. In this role, you
need to excel at conflict resolution and know how to handle team conflict . It's also helpful to be able
to manage emotion in your team .
Resource Allocator You'll also need to determine where organizational resources are best applied.
This involves allocating funding, as well as assigning staff and other organizational resources. To
improve as a resource allocator, learn how to manage a budget , cut costs , and prioritize , so that you
can make the best use of your resources.
Negotiator You may be needed to take part in, and direct, important negotiations within your team,
department, or organization. Improve your negotiation skills by learning about Win-Win Negotiation
and Distributive Bargaining .
LEADERSHIP
Types of Leaders:
Autocratic or Authoritative
Democratic
Laissez-faire or charismatic
Autocratic:
A leadership style where a leader makes his own decision without any discussions or consultancy
with his subordinates. Autocratic leaders believe in just do it approach and they normally think
that their decision making skills are far more superior to others so they dont bother about discussion,
arguments, or consultation. They normally pass on the orders and expect that subordinates will follow
their orders without any hesitation or arguments. Thats why they are also known as authoritative
leaders.
DEMOCRATIC
Where quick decision making is required a time is the main element of decision making.
Where workers are unskilled.
Where strict procedure and hierarchy id involved.
Leadership style where leader highly believes in delegation and he always prefers to put new
challenges for subordinates and encourages them to make their own decisions. Charismatic leaders a
charisma around them with their magnetic personality and normally subordinates are highly fond of
these leaders and they can motivate work force very easily. They are known to be people oriented
leaders.
Where work is highly technical but work force is highly qualified and trained.
Where strategic decision-making is required.
Motivation
SELF-ACTUALIZATION
We first need to satisfy the basic requirements of continued existence (i.e. physiological needs). Once
these needs are satisfied, then we seek to satisfy the higher level needs.
Until a lower order need is satisfied, you cannot progress onto a higher level need. Hence, once the
lower level needs is satisfied, then further motivation for the employee can only come by giving them
greater scope for using skill, initiative, and creativity.
Most people reach the safety and social categories; some reach the ego category, yet very few reach
the self-fulfillment category (and those that do reach it will not remain at it for very long). As a result
of this progression, the size of each of the sections in Maslows hierarchy diminishes the higher they
get, as fewer and fewer people reach them.
Applying this theory to employees, physiological needs include pay and working conditions, safety
needs include Health & Safety protection and pension schemes, social needs include the need to work
in a team and mix with others, and ego needs may include a company car, job title, or size of office.
Self-fulfillment needs will depend on the individual employee, whether he has achieved his full
potential or not.
Herzberg studied 200 engineers and accountants, who represented a cross-section of Pittsburgh
industry. They were asked about events they had experienced at work, which had either resulted in a
marked improvement or a marked reduction in their job satisfaction. The motivators are concerned
with the content of the job and include a sense of achievement, being given responsibility, using
initiative and creativity, and being involved in decision-making. In other words, these motivators
equate with the ego and self-fulfillment categories in Maslows Hierarchy.
The Hygiene / Maintenance factors are concerned with the context of the job and include such items as
pay, working conditions, supervision, company policy, bureaucracy (red tape) and interpersonal
relations. For managers, the implications of Hertzbergs work are that it is necessary to provide strong
motivational factors, whilst at the same time ensuring that the negative, hygiene factors are minimized.
Herzberg's findings revealed that certain characteristics of a job are consistently related to job
satisfaction, while different factors are associated with job dissatisfaction. These are:
All of these actions help you eliminate job dissatisfaction in your organization. And there's no point
trying to motivate people until these issues are out of the way!
To create satisfaction, Herzberg says you need to address the motivating factors associated with
work. He called this "job enrichment." His premise was that every job should be examined to
determine how it could be made better and more satisfying to the person doing the work. Things to
consider include:
Theory X Theory Y:
Douglas McGregor developed what he termed Theory X and Theory Y management styles. A
Theory X manager is very authoritarian, assuming that employees need constant supervision, they will
avoid performing their jobs if they can, they do not seek responsibility, they prefer to be told what to
do, and they are really only interested in job security. A Theory Y manager, on the other hand, assumes
that employees wish to be given praise and recognition for their achievements, they like to be given
responsibility at work, and they wish to use their imagination, creativity, and initiative.
Theory X
This assumes that employees are naturally unmotivated and dislike working, and this encourages an
authoritarian style of management. According to this view, management must actively intervene to
get things done. This style of management assumes that workers:
Dislike working.
Avoid responsibility and need to be directed.
Have to be controlled, forced, and threatened to deliver what's needed.
Need to be supervised at every step, with controls put in place.
Need to be enticed to produce results; otherwise they have no ambition or incentive to work.
X-Type organizations tend to be top heavy, with managers and supervisors required at every step to
control workers. There is little delegation of authority and control remains firmly centralized.
McGregor recognized that X-Type workers are in fact usually the minority, and yet in mass
organizations, such as large scale production environment, X Theory management may be required
and can be unavoidable.
Theory Y
This expounds a participative style of management that is de-centralized. It assumes that employees
are happy to work, are self-motivated and creative, and enjoy working with greater responsibility. It
assumes that workers:
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Take responsibility and are motivated to fulfill the goals they are given.
Seek and accept responsibility and do not need much direction.
Consider work as a natural part of life and solve work problems imaginatively.
Motivation
Theory X assumes that people dislike work; they want to avoid it and do not want to take
responsibility. Theory Y assumes that people are self-motivated, and thrive on responsibility.
Work Organization
Theory X employees tend to have specialized and often repetitive work. In Theory Y, the
work tends to be organized around wider areas of skill or knowledge, and employees are
encouraged to develop their expertise and make suggestions and improvements.
Theory X organizations work on a carrot and stick basis, and performance appraisal is part
of the overall mechanisms of control and remuneration. In Theory Y organizations, appraisal
is also regular and important, but is usually a separate mechanism from organizational
controls. Theory Y organizations also give employees frequent opportunities for promotion.
Application
Although the Theory X management style is widely accepted as inferior to others, it has its
place in large-scale production operation and unskilled production line work. Many of the
principles of Theory Y are widely adopted by types of organization that value and encourage
participation. Theory Y-style management is suited to knowledge work and professional
services. Professional service organizations naturally evolve Theory Y-type practices by the
nature of their work; Even highly structured knowledge work, such as call center operations,
can benefit from its principles to encourage knowledge sharing and continuous improvement.
This method was developed in the USA in the early part of the 20th century by Frederick Taylor,
building on the earlier work of Henri Fayol. Taylor also believed that a high division of labour was
needed to produce more output, and he introduced a piece-rate style of payment for the workforce
(this meant that the workers received an amount of money per piece that they produced, thereby
linking their pay to their productivity).
Taylor also worked very closely with Henry Ford in developing the worlds first moving production-
line for the model T Ford car. This method of management paid close attention to time and motion
studies, where each worker is timed when performing a task, and then this provides the basis for the
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workers level of output per day (e.g. if it took a worker 2 minutes to perform a task, then this could be
done 30 times per hour, and 240 times in an 8-hour day).
If the worker completed more than his designated number of tasks per day, then he would be eligible
for a monetary bonus. Taylor believed that efficiency and discipline were the two greatest features of a
good manager and a good workforce, but what he failed to recognize was the high level of alienation
and low levels of morale and motivation that this system produces in the workforce.
FINANCIAL REWARDS
Time-rate (flat rate) schemes: This payment method involves the employee receiving a basic rate
of pay per time period that he works (e.g. $5 per hour, $50 per day, and $400 per week). The pay is
not related to output or productivity. Any time that the employee works above the agreed number of
hours per week may make him eligible for overtime payments, often at time and a half (e.g. $7.50
per hour instead of $5 per hour).
Piece-rate schemes: This payment method involves the employee receiving an amount of money per
unit (or per piece) that he produces. Therefore his pay is directly linked to his productivity level.
However, it is possible that in order to boost his earnings, an employee may reduce the quality and
craftsmanship per unit, so that he can produce more output in a given period of time.
Commission: This is a common method of payment for salesmen (e.g. insurance, double-glazing,
and telesales). The employee receives a very small percentage (say 0.5%) of the value of the goods
that he manages to sell in a period of time.
Performance-related pay (PRP): This is a method of giving pay rises on an individual basis, related
to the employee achieving a number of targets over the past year. This is common with managerial
and professional workers.
Profit sharing: This involves each employee receiving a share of the profit of the business each year,
effectively representing an annual pay rise. It aims to increase the levels of effort, motivation, and
productivity of each employee, since their annual pay-award will be related to the profitability of the
business. However, if the business makes low profits (or even a loss) then this is likely to have a
detrimental effect on the level of motivation of the employees.
Share ownership: A common form of payment in many PLCs is what is termed share options.
This basically involves each employee receiving a part of each months salary in the form of shares
(usually at a discounted price). This forms a profitable savings-plan for the employee, and he can sell
them after a given period of time. This should motivate the employees to work harder and increase
their efforts, since the share price will rise as the company becomes more profitable, therefore
increasing the capital gain on their shares.
Many of these different methods of pay are likely to be supplemented by fringe benefits (or perks)
such as private health schemes, pension schemes, subsidized meals, discounts on holidays and travel,
cheap mortgages and loans, company cars and discounts when buying the companys products. The
total package of pay plus fringe benefits is known as the remuneration package.
NON-FINANCIAL REWARDS
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There is no universal rule for motivating employees, and there are many methods which are used by
different managers to achieve the goal of a motivated and satisfied workforce. These include:
Delegation: This occurs when managers pass a degree of authority down the hierarchy to their
subordinates.
Empowerment: This involves a manager giving his subordinates a degree of power over their work
(i.e. it enables the subordinates to be fairly autonomous and to decide for themselves the best way to
approach a problem).
Job enlargement: This involves increasing the number of tasks, which are involved in performing a
particular job, in order to motivate and multi-skill, the employees.
Job enrichment: This is a method of motivating employees by giving them more responsibilities and
the opportunity to use their initiative.
Job rotation: This involves the employees performing a number of different tasks in turn, in order to
increase the variety of their job and, therefore, lead to higher levels of motivation.
Quality circles: This is a group of workers that meets at regular intervals in order to identify any
problems with quality within production, consider alternative solutions to these problems, and then
recommends to management the solution that they believe will be the most successful.
Team working: This is the opposite production technique to an assembly-line which uses an extreme
division of labor. Team working involves a number of employees combining to produce a product,
with each employee specializing in a few tasks. Cell production is an example of team working.
Worker participation: This refers to the participation of workers in the decision-making process,
asking them for their ideas and suggestions.
Works council: This is a type of worker participation and it consists of regular discussions between
managers and representatives of the workforce over such issues as how the business can improve its
processes and procedures (in production or marketing, for example).
When a poor level of motivation exists in a workforce, then the management should:
e) Give praise and recognition to employees for their efforts and achievements.
f) Ensure that communication flows are effective and that the relevant messages get to the
relevant personnel.
Communication:
Formal communication refers to the official channels of communication, which exist in a business,
such as information being passed through line and staff relationships (e.g. between superiors and
subordinates, or between people on the same level). These information flows will be concerned with
the content of the jobs and may be in one of several forms, spoken, written, or electronic for example.
Informal communication refers to the unofficial channels of communication that exist in a business
(often spoken as opposed to written communication). This is often referred to as the grapevine. This
can be concerned with the content of the jobs (e.g. two employees commenting on the poor
performance of a task by their superior), or it can be discussing non work-related matters (e.g.
arranging a staff social function).
It could also refer, for example, to the anonymous passing of information to the media relating to
unethical business practices. Communications can also be classified in terms of direction, vertical or
horizontal. Vertical communication can be top-down (e.g. directions and instructions given from
superior to sub-ordinate) or it can be bottom-up (e.g. feedback from sub-ordinate to superior).
Horizontal communication refers to contacts and flows of information between people at the same
level in the business. Where there is no facility for feedback, (often under an authoritarian
management style) then this is referred to as one-way communication.
There is a danger here; however, that the message will be misunderstood or poorly performed, since
the employee performing the task is unable to ask his superior for assistance or clarity. It is a widely
held view among many businesses today that communication must be multi-directional (i.e. top-
down, bottom-up and horizontal) in order to involve employees and make them feel valued by the
business (e.g. implementing systems of quality circles or works councils). This will help to improve
their job satisfaction and level of motivation, as well as encouraging lower rates of absenteeism and
labour turnover.
Quantitative communication involves the transmission and interpretation of data and numerical
information (e.g. sales figures or financial data).
Qualitative communication involves the use of language, either spoken or written. However, these
messages are often complicated by the use of non-verbal communication (e.g. body language),
which can often confuse the recipient of the message and lead to the misinterpretation of the
information.
The basic communication process involves the transmitter (the sender) encoding a message (i.e.
putting the message and the information into a form that can be easily understood). The transmitter
then chooses the communication channel that he wishes to use in order to send it to the receiver (the
target for the message). On receipt of the message, the receiver will decode it (i.e. interpret what the
message is conveying) and act upon it as necessary. There are a number of communication channels
that the transmitter of the message can use to send the message to the receiver. The choice of
communication channel will usually depend on the type of stakeholder that the message is being sent
to (i.e. whether the receiver is an employee, a customer, or a supplier).
Whichever communication channel is chosen, the message will have the same objectives, to be
simple, fast, and efficient. However, if a business believes that it needs to improve the
communication channels that it uses, then the following criteria should be considered:
c) Encourage feedback
Communication Breakdown
This is often referred to as noise and simply means anything that will distract the recipient of the
message or cause either a failure to receive the message or a misinterpretation of the message. There
are a number of factors which can cause communication breakdown:
This last point has become a growing problem over the last 10 years and is likely to continue to grow,
as an increasing number of businesses rely on computers and information technology systems for
their communications (as well as for their financial, production and personnel records).
Added to this is the increasing amount of business being conducted using electronic mail (e-mail) and
the Internet (it is estimated that by 2005, any businesses which are not using the Internet to trade and
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interact with customers are likely to lose any competitive edge that they may have).
So it is clear to see that the information-age and the digital-age are going to be a major influence
on how business is conducted in the future. Any business which does not employ computer-literate
staff and does not use Internet-trading is likely to suffer falling levels of sales and profits as a result.
However, there are many problems inherent in what is termed the electronic office that is, a work
environment that is highly computerized and relies heavily on software and communications
equipment.
Much time is often required to train staff in the use of the new equipment and
software
Computer fraud (e.g. hacking into the computer-held information and
changing the data or embezzling the business funds)
Huge initial capital outlay required in order to purchase the equipment and
software
Resistance from employees and from trade unions to the new working
practices