PRINCIPLEs OF MANAGEMENT

EMBA Program DISTANCE LEARNING ASSIGNMENT PRINCIPLEs OF MANAGEMENT Name: Ashfaq Hussain Khan Reg. No: 1052-215002 Assignment # 1 1 /35 Q-1 Define Management and explain basic management functions. Management can be defined as a process, structure and set of rules to effectively plan, run, sustain and operate an organization with an active and successful, approach in order to accomplish a task defined. It's the most important factor in an organizations growth and success that has to decide not just about the profitability or loss but an inevitable tool to provide an atmosphere where every potential is used to its utmost and stream lined to meet the results, desired . Basically when we talk about management, we mean some responsible known as managers, who have this responsibility to arrange, manage and sustain a quality process and operational hold so that individuals working are having their full potential being utilized and give their input to contribute for a successful overall output. Functions of Management: Basic Organizational functions can be outlined as: 1- Planning: Planning is the preliminary job to be done. It has to be rolled out as how to do a task how to arrange all available resources to its utmost level, how to distribute responsibilities and schedule things. Basically planning is the tool that would decide how successful a project in hand is successfully accomplished. It involves all type of assessments, financial constraints, risk factors and time obligations 2- Organizing: Organizing the functionalities, arrangement of resources, reporting of the progress, coordination in operational activities among the team and provision of all tools needed to perform the task. It requires a careful calculation of inputs needed to get the best out of it. It maintains a logical working relationship and a well conceived schedule based on proper calculation of available resources. The basic aim of organizing is to create and sustain an organizational structure that would serve as a bridge to get the job done. 3-Staffing: Any organization needs individuals to work and it’s in the best favor of an organization to select the best people so as to maintain a respectable and successful portfolio. Once the selection of team is done, it comes to proper placement of workers, distribution of tasks and effective monitoring of the progress. It covers not only getting output but has to be in touch with requirement and needs of the workers..It is evident that keeping the staff happy in terms of facilitating them and reasonable facilities and perks, boosts the willingness and 2 /35 morale to work and at the end it increases the progress and paves for a successful completion. 4-Leading: Leading a work and project entities the manager of huge responsibility. It is the basic part of the managerial function that actually runs and operates the work flow and chain of command needed to continue with the task in a successful way. It needs adequate supervision of the involved staff, requires skills to help sustain the progress and enhance performance and quality of work by individuals. As a manager it needs leadership qualities to direct and supervise staff and power of decision to tackle on going issues with instant remedies. So leading a project is rightly said to be an owner of success with the contribution of a team that all work together to meet the goal and successfully complete the job. 5-Controlling: It is meant to have control on the whole working environment and quality, observe, analyze and decide to keep things in the right direction with effective change management plans. It is deemed to keep an eye on the Quality of work and performance of the team so as to ensure the project work standards are matched to the desired levels. It serves as a threshold to critically monitor the work and act as needed. The overall performance of the project and successful handover is just an outcome of proper controlling and vigilant skills. Reference: Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V Cannice, Harald Koontz 3 /35 Q-2 Describe the concept of an MBO in the context of management and explain four different strategies of TOWS matrix. Essence of MBO MBO being interpreted in a diversified way around the globe, but as a most common definition to elaborate , we can sum up it as a methodical and organized approach that enables management to focus on desired results and goals and to attain the best possible results from available resources. It helps to increase organizational performance by stream lining goals and individual objectives and tasks throughout the organization. For , a desired objective, participants get strong input to identify their responsibilities and follow, time lines for completion, Besides MBO includes ongoing tracking and feedback in the process to reach objectives where proper reporting of progress and application of desired action when and as needed. Basically its not a method to cover any in efficiency, it enables the team to work in unison and know the individual plus common goals.AS a reference, Management by Objectives (MBO) was first outlined by Peter Drucker in 1954 in his book 'The Practice of Management'. In the 90s, Peter Drucker himself decreased the significance of this organization management method, when he said: "It's just another tool. It is not the great cure for management inefficiency... Management by Objectives works if you know the objectives, 90% of the time you don't." According to Drucker managers should "avoid the activity trap", getting so involved in their day to day activities that they forget their main purpose or objective. Instead of just a few top-managers, all managers should: participate in the strategic planning process, in order to improve the implementation of the plan, and exercise a range of performance systems, designed to help the organization stay on the right track.in order to meet the desired goals. Managerial Focus Successful MBO managers aim at the final goal and not on day to day activity. They delegate tasks by "negotiating a contract of goals" with their subordinates without dictating a detailed roadmap for implementation. Management by Objectives (MBO) is about setting your objectives and then breaking these down into more specific goals or key results by designating parts and portions of the complete task divided and let the target be achieved with an collective work from all the team involved. Main Principle of MBO Just to summarize , The principle behind Management by Objectives (MBO) is to make sure that everybody within the organization has a clear understanding of the aims, or objectives, of that organization, as well as awareness of their own roles and responsibilities in achieving those aims. The complete MBO system is to get managers and empowered employees acting to implement and achieve their plans, which automatically achieve those of the organization. 4 /35 Basic constituents of MBO & different Stages Every individual within an organization is assigned a special set of objectives that they try to reach during a normal operating period. These objectives are mutually set and agreed upon by individuals and their managers. Performance monitoring and reviews are conducted periodically to determine how close individuals are to attaining their objectives. Incentives & benefits are offered to individuals on the basis of their performance and work progress. Different stages of MBO are to • • • • • Define corporate objectives at board level Analyze management tasks and devise formal job specifications, which allocate responsibilities and decisions to individual managers Set performance standards, agree and set specific objectives Align individual targets with corporate objectives Establish a management information system to monitor achievements against objectives Merits and Demerits of MBO Advantages • Meant to emphasize what should be done in an organization to achieve organizational goals. • It profusely enables employee commitment to attain organizational goals. 5 /35 Disadvantages • • It might consume more time for considering objectives, leaving both managers and employees less time in which to do their actual work. Well defined written goals, proper communication of goals, and continuous performance evaluation required in an MBO program increase the volume of paperwork in an organization TOWS Matrix: The TOWS matrix is a variant of the SWOT analysis, which is another popular strategic planning method while implementing any project plan.. Both have common techniques of first identifying an organizations strengths, weaknesses, opportunities and threats. As SWOT analysis specifically use strengths and weaknesses to reduce threats and maximize opportunity. While the TOWS matrix looks for external opportunities and threats and evolve plans and strategies and compares them to internal strengths and weaknesses. TOWS is an abbreviation for (Threats, opportunities, weaknesses, strengths) This is a two- by two-cell matrix that is used to guide organizations as to when and where the change in strategy to be brought with an eye on available opportunities and threats from outside and also from inside weaknesses.. All the threats, opportunities, weaknesses and strengths are listed on the outside of the matrix and compared within each cell. The TOWS matrix is mainly used for strategic planning and helps organizations familiarize with opportunities and threats and measure them against internal strengths and weaknesses. 6 /35 SO Strategies Adopting and implementing Strategies that enable competitive advantage, and external opportunities that are in unison with internal strengths, brings the possibility of that desired benefit to be opted and paves the way for a successful goal oriented struggle ST Strategies Know as ,Mitigation Strategies, as any organization possesses internal strengths that minimizes the danger of external threats which further , may lead to temporary advantage if other competitors are influenced by their local threats. WO Strategies Acquisition/Development Strategies, situation where strategies are introduced to acquire or develop new resources/capabilities to take advantage of external opportunities WT Strategies Consolidation/Exit Strategies, if any organization is not capable of converting weaknesses to strengths via acquisition/development, its in the best interest to shift from the market and a safe exit is recommended References: • Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V Cannice, Harald Koontz • Peter Drucker ,1954 'The Practice of Management' 7 /35 Q-3 What is meant by “span of management” and explain the factors that influence the span of management Generally speaking, Span of management refers to some sort of span of control or span of monitoring and supervision that enables the high-up's to effectively monitor and control the activities being carried out by the staff It refers to the number of subordinates who can be managed effectively by a superior. It is meant to bring about an effective cooperation among people in an organization. Different hierarchal levels exist in organizations that serve for better control and result oriented team work.. Wide and Narrow Span of management It is generally categorized under two heads- Narrow span and Wide span. Narrow Span of management means a single manager or supervisor oversees few subordinates. This gives rise to a tall organizational structure. While, a wide span of management means a single manager or supervisor oversees a large number of subordinates. This gives rise to a flat organizational structure. There is an inverse relation between the span of management and the number of hierarchical levels in an organization, i.e., narrow the span of management, greater the number of levels in an organization. The more efficient and organized the managers are in performing their tasks, the better it is to have wide span of management for such organization. The less capable, motivated and confident the employees are, the better it is to have a narrow span of management so that the managers can spend time with them and supervise them well 8 /35 Narrow span of management is more costly compared to wide span of management as there are larger number of superiors/ managers and thus there is greater communication issues too between various management levels. The less geographically scattered the subordinates are, the better it is to have a wide span of management as it would be feasible for managers to be in touch with the subordinates and to explain them how to efficiently perform the tasks. In case of narrow span of management, there are comparatively more growth opportunities for a subordinate as the number of levels are more. Factors Effecting Span of Management . • • • • • • 9 /35 Span or control may be increased as the work is standardized and performed. Quality of leadership in the supervisor is most important that influences span of management directly. IF the subordinates are skilled enough and confident of quality work, it can lead to enhanced span of control. If the supervisor utilizes most of his time in administrative duties, that would adversely effect the supervisory role and leave with less time to interact with subordinates. Nature of the work depends a lot for span of management, as if the work is of repetitive nature, that can give an edge to have wide span of management and decreasing the need for continuous monitoring and supervision Another factor to influence span of management is the delegation of powers to abled subordinates, that decreases the load on supervisor and enhances over all span of management. If the work nature is fixed and no change in mechanism of work, that needs no supervision thus make a positive step for management span. If there are set standards being followed, need of supervision is minimized. Communications and instructions from top to bottom hierarchies are important. As per Graicunas theory of span management, relation of supervisor and subordinate can be categorized in three groups: • • • a) Direct single relation ship b) Direct group relationship c) Cross relationship References: • Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz • Graicunas theory of span management 10 /35 Q-4 List categories of departmentation and explain departmentation by functions Departmentation is a an organizing methodology where sub groups and departments are created in order to ease the management possibilities and strengthen the supervision. These departments speak of any specific area, branch or a portion where a designated manager is responsible. These departments might be production, sales, marketing, logistics .So by departmentation a larger organization is divided into smaller units for effective supervision and productivity. Factors affecting Departmentation: • • • To get the benefits of specialization, Control should be effective so as to ensure clear authority and responsibility. Coordination from top to bottom should be taken into high consideration and be made available essentially. Key activities need to be separated so that no overlapping or misuse of resources happen Expenses involved in creating separate departments Departmentation by functions: Functional Departmentation: • • • • • Grouping of common or homogeneous activities to form an organization unit is known as functional departmentation Further functions in an organization are divided in two categories basic and secondary function. Basic functions are those which are necessary for the smooth running of the business like production ,marketing , finance When span of management is too large then further departments are created within the main departments they take care of secondary functions In this case like the basic function is marketing but it may further be divided into advertisement , sales , market research Product wise Departmentation: 11 /35 • • Product departmentation involves the grouping together of all the activities necessary to manufacture a product or product line It can be divided on the basis of product line name. Thus dividing into different division facilitates its management and increases the quality control Territorial or Geographical Departmentation : • Departmentation by territory or geography means Grouping of activities by area or territory. It is common in enterprises operating over wide geographic areas and whose different division are spread over an area around a big geographical area. • • • • Organizations which are involved in banking , insurance , transportation Just for an example, Pakistan could be divided into Punjab , KPK, Sindh ,Baluchistan Gilgit Baltistan and Islamabad zones Further Punjab zone can be divided into Lahore , Rawalpindi , Multan , Bahawalpur divisions Process wise Departmentation: • • • In this processes involved in production or various type of equipments used are taken as basis of departmentation The basic aim to do process departmentation is to achieve economic benefits and minimize the costs In case of any textile organization can be by dividing the production into spinning , dyeing , weaving , finishing departments Customer wise Departmentation : • • • Grouping of activities around marketing channels involves making an organization structure reflect the ways an organization reaches the ultimate customer Advantage of this type is that it focuses on customer who are the ultimate suppliers of money to the organization Eg in pharmaceutical companies different customers could be doctors , hospitals , government , retail stores Time wise Departmentation : • • In some organizations where work is performed through day and night , the work is divided into shifts Thus when an organization may operates on three shifts, three different departments may exist Reference: Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V Cannice, Harald Koontz 12 /35 Q-5 Describe in details the term “line”, “staff” and “functional authority”. Authority is the right to perform or command. It allows its holder to act in certain designated ways and to directly influence the actions of others through orders. Organizational structure involves, in addition to task organizational boundary considerations, the designation of jobs within an organization and the relationships among those jobs. There are numerous ways to structure jobs within an organization, but two of the most basic forms include simple line structures and line-and-staff structures. In a line organization, top management has complete control, and the chain of command is clear and simple. Examples of line organizations are small businesses in which the top manager, often the owner, is positioned at the top of the organizational structure and has clear "lines" of distinction between him and his subordinates. The line-and-staff organization combines the line organization with staff departments that support and advise line departments. Most medium and large-sized firms exhibit line-and-staff organizational structures. The distinguishing characteristic between simple line organizations and line-and-staff organizations is the multiple layers of management within line-and-staff organizations. The following sections refer primarily to line-and-staff structures, although the advantages and disadvantages discussed apply to both types of organizational structures. Several advantages and disadvantages are present within a line-and-staff organization. An advantage of a line-and-staff organization is the availability of technical specialists. Staff experts in specific areas are incorporated into the formal chain of command. A disadvantage of a line-and-staff organization is conflict between line and staff personnel It also allows its holder to allocate the organization’s resources to achieve organizational objectives. AUTHORITY ON THE JOB : Barnard defines authority as the character of communication by which an order is accepted by an individual as governing the actions that individual takes within the system. Barnard maintains that authority will be accepted only under the following conditions: 1. The individual can understand the order being communicated. 2. The individual believes the order is consistent with the purpose of the organization. 3. The individual sees the order as compatible with his or her personal interests. 4. The individual is mentally and physically able to comply with the order. 13 /35 The fewer of these 4 conditions that are present, the lower the probability that authority will be accepted and obedience be exacted. Barnad offers some guidance on what managers can do to raise the odds that their commands will be accepted and obeyed. He maintains that more and more of a manager’s commands will be accepted over the long term if: 1. The manager uses formal channels of communication and these are familiar to all organization members. 2. Each organization member has an assigned formal communication channel through which orders are received. 3. The line of communication between manager and subordinate is as direct as possible. 4. The complete chain of command is used to issue orders. 5. The manager possesses adequate communication skills. 6. The manager uses formal communication lines only for organizational business. 7. A command is authenticated as coming from a manager. TYPES OF AUTHORITY: 3 main types of authority can exist within an organization: 1. Line Authority 2. Staff Authority 3. Functional Authority Each type exists only to enable individuals to carry out the different types of responsibilities with which they have been charged. STAFF AUTHORITY: Staff authority consists of the right to advise or assist those who possess line authority as well as other staff personnel. Staff authority enables those responsible for improving the effectiveness of line personnel to perform their required tasks. Line and Staff personnel must work together closely to maintain the efficiency and effectiveness of the organization. To ensure that line and staff personnel do work together productively, management must make sure both groups understand the organizational mission, have specific objectives, and realize that they are partners in helping the organization reach its objectives. 14 /35 Size is perhaps the most significant factor in determining whether or not an organization will have staff personnel. The larger the organization, the greater the need and ability to employ staff personnel. As an organization expands, it usually needs employees with expertise in diversified areas. Although small organizations may also require this kind of diverse expertise, they often find it more practical to hire part time consultants to provide it is as needed rather than to hire full time staff personnel, who may not always be kept busy. LINE – STAFF RELATIONSHIPS : e.g. A plant manager has line authority over each immediate subordinate, human resource manager, the production manager and the sales manager. However, the human resource manager has staff authority in relation to the plant manger, meaning the human resource manager has staff authority in relation to the plant manager, meaning the human resource manager possesses the right to advise the plant manager on human resource matters. Still final decisions concerning human resource matters are in the hands of the plant manager, the person holding the line authority. ROLE OF STAFF PERSONNEL: Harold Stieglitz has pinpointed 3 roles that staff personnel typically perform to assist line personnel: 1. The Advisory or Counseling Role : In this role, staff personnel use their professional expertise to solve organizational problems. The staff personnel are, in effect, internal consultants whose relationship with line personnel is similar to that of a professional and a client. 2. The Service Role : Staff personnel in this role provide services that can more efficiently and effectively be provided by a single centralized staff group than by many individuals scattered throughout the organization. This role can probably best be understood if staff personnel are viewed as suppliers and line personnel as customers. 3. The Control Role : Staff personnel help establish a mechanism for evaluating the effectiveness of organizational plans. The role of staff in any organization should be specifically designed to best meet the needs of that organization. 15 /35 CONFLICT IN LINE – STAFF RELATIONSHIP: From the view point of line personnel, conflict is created because staff personnel tend to • • • • • Assume Line Authority Do not give Sound Advice Steal Credit for Success Fail to Keep line personnel informed of their activities Do not see the whole picture. From the view point of Staff Personnel, conflict is created because line personnel do not make proper use of staff personnel, resist new ideas and refuse to give staff personnel enough authority to do their jobs. Staff Personnel can often avert line-staff conflicts if they strive to emphasize the objectives of the organization as a whole, encourage and educate line personnel in the appropriate use of staff personnel, obtain any necessary skills they do not already possess, and deal intelligently with the resistance to change rather than view it as an immovable barrier. Line personnel can do their part to minimize line staff conflict by sing staff personnel wherever possible, making proper use of the staff abilities, and keeping staff personnel appropriately informed. FUNCTIONAL AUTHORITY: Functional authority consists of the right to give orders within a segment of the organization in which this right is normally nonexistent. This authority is usually assigned to individuals to complement the line or staff authority they already possess. Functional Authority generally covers only specific task areas and is operational only for designated amounts of time. It is given to individuals who, in order to meet responsibilities in their own areas, must be able to exercise some control over organization members in other areas. Reference: Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V Cannice, Harald Koontz 16 /35 Q-6 What are the critical factors in effective organizing? Structure of an organization is the framework companies use to outline their authority and communication processes. The framework usually includes policies, rules and responsibilities for each individual in the organization. Different factors affect the organizational structure of a company. These factors can be internal or external. Small business owners must be responsible for creating their companies organizational structure framework. Business owners may use a management consultant or review information from the Small Business Administration before setting up their organizational structure. Size Size is many times the driving factor for a company’s organizational structure. Smaller or home-based businesses do not usually have a vast structure because the business owner is usually responsible for all tasks. Larger business organizations usually require a more intense framework for their organizational structure. Companies with more employees usually require more managers for supervising these individuals. Highly specialized business operations can also require a more formal organizational structure. Life Cycle The company along its general behavior about life cycle also plays an important part in the development of an organizational structure. Business owners attempting to grow and expand their company operations usually develop an organizational structure to outline their company structure,business mission and goals. Businesses reaching peak performance usually become more mechanical in their organizational structure. This occurs as the chain of command increases from the business owner down to frontline employees. Mature companies usually focus on developing an organizational structure to improve efficiency and profitability. These improvements may be the result of more competitors entering the economic marketplace. Strategy Business strategies can also be a factor in a company;s organizational structure development. High-growth companies usually have smaller organizational structures so they can react to changes in the business environment quicker than other companies. Business owners may also be reluctant to give up managerial control in business operations. Small businesses still looking to define their business strategy often delay creating an organizational structure. Business owners are usually more interested in setting business strategies rather than developing and implementing an internal business structure. 17 /35 Business Environment The external business environment can also play an important part in a company;s organizational structure. Dynamic environments with constantly changing consumer desires or behavior is often more turbulent than stable environments. Companies attempting to meet consumer demand can struggle when creating an organizational structure in a dynamic environment. More time and capital can also be spent in dynamic environments attending to create and organizational structure. This additional capital is usually a negative expense for many small businesses. Successful small-business owners keep track of all the factors that can have an impact on their business. They know when to sweat the small stuff without taking their eyes off the big picture, and they understand that all kinds of circumstances can change the all-important bottom line. Knowing the internal and external factors that affect an organization gives a small-business owner the intelligence he needs to sort out the company's priorities and make strategic plans for the future. Internal Factors The best thing about internal factors is that an organization can control many of them. Some factors, such as the business's reputation, image and credibility, are a result of the way an organization run its business. Other factors, such as your organization's management structure and staffing and the physical decor of companys business, are based on the business decisions, and could be changed as needed. Changing internal factors usually involves some indirect costs, such as lost productivity while new employees are trained, some direct costs, such as a penalty for terminating a lease before it expires, or some combination of the two. External Factors External factors are all those things that are beyond an organizations control. Tight lending conditions, government regulations and competition are some of the external factors that affect virtually every small business. Strategic planners anticipate and manage some of the circumstances that affect their business. Exploring alternative financing sources until lending restrictions ease, developing plans for compliance with regulations and enhancing innovation and service to stay ahead of the competition are forward-thinking ways to keep external factors from threatening the survival of your business. 18 /35 Prioritization There are many different ways to prioritize and manage the issues that affect your business. Making a traditional list of pros and cons or conducting a simple return-oninvestment analysis can add clarity to virtually any business decision. Sorting factors according to how severely each factor will impact your organization and how likely each factor is to take place can help you discern which factors need your immediate attention and which ones can simmer on the back burner for awhile. Review Regularly reviewing the factors that affect your small business is the best way to guard against a catastrophe such as a new regulation that you are not prepared to comply with. A formal monthly or quarterly review of your internal operations will help you discern subtle trends and issues that you need to address. Trade publications, blogs and newsletters are some of the resources that can help you keep informed about the external factors that affect your business. Reviewing this information will help maintain your awareness of critical factors and help ensure that your priorities remain sound so you can adjust your business plans as needed for your continued success. Reference: Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz 19 /35 Q-7 Explain the Adam’s Equity theory of motivation. Adams' Equity Theory clearly exhibits a need of some logical balance between an employee's inputs/efforts/skills/abilities and the return an employee receives from organization in terms of perks/ benefits, along with respect/ recognition and ownership. As per this theory, existence this fair balance serves to ensure a strong and productive relationship that is achieved with the employee, and the entire result being contented, motivated employees who feel the sense of justice and equity within organization and makes them contribute for what they are definitely confident of being returned for. This equity theory states the prevalence of an equal attitude and behavior towards employees that further enables a healthy competition for a more productive output. Its a fact that if there exists a sense of inequitable rewards/returns, employees definitely will be discouraged and as a result that excitement and vigor to work may diminish that would adversely affect the overall output. “Swinton (2006) developed a list of ways an employee can express motivation. This list is produced below. 20 /35 Typical Inputs: • • • • • • • • • • • • • • • • • • Effort Loyalty Hard Work Commitment Skill Ability Adaptability Flexibility Tolerance Determination Enthusiasm Trust in superiors Support of colleagues Personal sacrifice Time Honesty Devotion Organization Typical Outputs: • Financial rewards (salary, benefits, perks, etc.) • • • • • • • • • • • Intangibles that typically include Esteem Recognition Reputation Responsibility Sense of Achievement Sense of Advancement/Growth Job Security Peer respect Self respect Well-being • Stronger relationships There needs to be a balance between the inputs and outputs received. The employee must also be content when trying to perceive these all in balance.However, if an employee’s perceived input is greater than their perceived outcomes, they can become de-motivated and engage in disruptive behaviors (Swinton, 2006). Examples of disruptive behaviors include decreasing productivity, theft, increased breaks, or absenteeism. Management can do a lot to prevent perceptions of inequity, the assessment of inputs and outcomes will remain based on individual's subjective perception (Adams, 1963). 21 /35 Although management can do a lot to prevent perceptions of inequity, the assessment of inputs and outcomes will remain based on an individual’s subjective perception (Adams, 1963). Equity Sensitivity Equity theory is based on the “norm of equity” which assumes that everyone is equally sensitive to equity and inequity (Huseman, et. al., 1987). This means that everyone experiences the same level of tension when they experience the same level of inequity; however, this isn’t always true. Research has found that other norms may exist which are dependent upon factors such as age or personality (Huseman, et. al., 1987). The Equity Sensitivity Construct describes a spectrum of varying sensitivities to equity and inequity (Huseman, et. al., 1987). The idea of equity sensitivity determines the extent to which an individual will tolerate inequity. There are three categories of individuals identified along the equity sensitivity spectrum: benevolents, equity sensitives, and entitleds (Huseman, et. al.,1987). Benevolents are “givers” and are more tolerant of under reward inequity (Huseman, et. al., 1987). Equity sensitives are in the middle of the spectrum, and behave in accordance with the “norm of equity” and equity theory. Equity sensitives experience tension with inequity and will seek to restore a balance of equity in their relationships (Huseman, et. al., 1987). On the other end of the spectrum is the entitleds. Entitleds prefer to be over-rewarded. As the name indicates, entitleds are individuals who frequently have an attitude that they are owed and thus are entitled to great outcomes. Equity sensitives will experience distress when faced with either type of inequity: under-reward or over-reward. Benevolents will experience distress and possibly guilt when they in a situation of over-reward. Because benevolents don’t necessarily seek out under-reward, they might not experience distress when in an equitable relationship. Entitleds experience distress when in an equitable or under-reward situation. 22 /35 The Equity Sensitivity Construct is useful to understanding equity theory and individual behavior; however, the three categories of equity sensitivity don’t account for all individual differences in preferences and behavior. Individuals might show different equity sensitivities in different contexts (Huseman, et. al., 1987). For example, an individual might be equity sensitive in their personal relationships, preferring an equitable balance; however, they might be an entitled at work and feel comfortable with over-reward. In addition to preferring different outcome ratios, equity sensitivity groups also differ in their preference for types of outcomes (Miles, Hatfield, & Huseman, 1994). Specifically there are differences in preference for extrinsic tangible outcomes versus intrinsic outcomes (Miles, et. al., 1994). Entitleds have a stronger preference for extrinsic tangible outcomes (Miles, et. al., 1994). A specific example of this is in the realm of pay: entitleds rate pay higher in importance than the other two equity sensitivity groups (Miles, et. al., 1994). Conversely, benevolents rate extrinsic outcomes lower in preference and show a stronger preference for intrinsic outcomes (Miles, et. al., 1994). It is possible that some of these differences can be attributed to other factors such as age. Younger workers and older workers value different things and the meaning of work varies by age (Smith, 2000). With this is mind, it is possible that age, or other external factors, might play a part in which equity sensitivity group an individual is likely to be in. Where does Perceived Inequity Come From? According to equity theory, perceived inequity comes from social comparisons (Adams, 1965). It is not just one person's input to outcome ratio, it is when we form a ratio of our inputs to outcomes and compare it with others' input/outcome ratios (Redmond, 2010). A person to whom we compare ourselves to is called the Comparison Other. Equity Theory states that people strive hard to achieve and maintain a state of equity or fairness in order to maintain internal, psychological balance (Adams, 1965). However, when ratios are different, a state of inequity exists, and employees will be motivated to bring it back into balance. There are two types of inequity; underpayment and overpayment. With both under and over payment inequity, the amount of inequity a person feels is proportional to the size of the difference between this person's ratio and their comparison other. 23 /35 Ways to Reduce Inequity When an individual experiences tension due to perceived inequity they will work to reduce that tension (Adams, 1963). The greater tension they experience, the more effort they will put into reducing it (Adams, 1963). There are two main processes an individual can use to restore equity: behavioral processes and cognitive processes. Behavioral Processes to Restore Equity Behavioral processes involve changing an individual’s input or outcomes. These behaviors can be positive, such as being more productive at work, or negative, such as decreased productivity at work. Behavioral ways to reduce inequity are dependent on whether the individual perceives the inequity as under-reward or over-reward. One behavioral approach for an individual to balance equity is to either increase or decrease their inputs in order to achieve equity. If they feel under-rewarded they will decrease their inputs. If they feel over-rewarded they will increase their inputs. For example, an employee who feels underpaid at work compared to his coworkers (under-reward) might start taking longer breaks in order to read the entire newspaper, which decreases productivity (reduced input). By decreasing inputs, the perception of equity is restored. Conversely, an employee who feels over paid compared to coworkers (over-reward) might choose to start working through the lunch hour (increased input). In both of these examples, the employee was dissatisfied with their perceived inequity and reduced or increased their input to achieve equity. 24 /35 Another behavioral approach that individuals can use to achieve equity is changing their outcomes. Types of behavioral outcomes are also determined by the employee’s perception of under-reward or over-reward. If an employee doesn’t receive their annual holiday bonus as expected (under-reward) they might steal office supplies for their home to compensate (increased outcome). Even though the employee might ethically disagree with stealing, the employee justifies the action based upon the need to restore equity. Theft has been found as a retaliation tactic to unfairness in the workplace (Hollinger & Clark, 1983). An employee can also take more ethical action to increase inputs, such as lobbying for a wage increase or extra time off. On the other hand, an employee that perceives inequity due to a large holiday bonus (over-reward) might donate toys to the company daycare center (reduced outcome). This restores the perception of equity in the workplace. Behavioral approaches can also cause an individual to attempt to change the input or outcome of their comparative other. A group of employees might perceive that a coworker is over-rewarded, so they might pressure their co-worker to work faster or improve quality. Conversely, an employee or group of employees might pressure a co-worker to slow down or work less. An individual’s power to change the inputs or outcomes of their comparative other might be limited, so working to change their own inputs or outcomes is usually attempted first. Cognitive Processes to Restore Equity Cognitive processes involve developing justifications for the inequity to make it seem equitable, distorting perceptions of inputs and outcomes, changing the comparative other, or any other method that attempts to re-frame the perception of the situation. In some ways, cognitive processes can require less effort than behavioral processes; however, they can also be more difficult to accomplish due to the necessity of distorting one’s own perceptions. Both cognitive processes and behavioral processes can be effective in reducing one’s perception of inequity. An individual will most likely use a process that is relatively easy and the most satisfying in restoring a perception of equity. References • • • • 25 /35 Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz Swinton -2006) Miles, Hatfield, & Huseman, 1994). Adams, 1965 Q-8 List types of leadership approaches and explain “Autocratic Approach”. To define a good leader or manager, it comes differently For many it is someone who can inspire and get the most from their staff. There are many qualities that a good leader or manager is supposed to have. • He must be able to think creatively to provide a vision for the company and solve problems • • • • • Be calm under pressure and make clear decisions Possess excellent two-way communication skills Have the desire to achieve great things Be well informed and knowledgeable about matters relating to the business Possess an air of authority Managers deal with their employees in different ways. Some are strict with their staff and like to be in complete control, whilst others are more relaxed and allow workers the freedom to run their own working lives (just like the different approaches you may see in teachers!). Whatever approach is predominately used it will be vital to the success of the business. "An organization is only as good as the person running it". There are three main categories of leadership styles: autocratic, paternalistic and democratic. “Leadership is an interpersonal influence directed toward the achievement of a goal or goals”. When broken down there are three key principles to this traditional definition which 26 /35 are: Interpersonal – meaning dealing with more then one person (thus a leader works with a group of people). Influence – the power to affect others. Goals – the end that one strives to attain. This traditional definition of leadership can be re-worded to simply state “a leader influences more then one person towards a goal”. A more contemporary definition – “Leadership is a dynamic relationship (based on mutual influence and common purpose) between leaders and collaborators which leads both parties to higher levels of motivation and moral development as they evoke “real” change. When this definition is broken down there are also three key principles which are: Relationship – the connection between people. Mutual –sharing something in common. Collaborators – working together. This more contemporary definition of leadership can be re-worded to simply state “the leader is influenced by the collaborators while they work together to achieve real change”. Leadership Theories The Trait Theory – The trait theory of leadership (which was popular in the 1940’s and 1950’s), attached leadership ability to specific traits. This theory of leadership attempted to state that if someone had “true leadership traits” they could lead regardless of the situation. The trait theory focused on “what a person is” and not on what they could accomplish. The following are assumptions of the trait theory: People are born with inherited traits. Some traits are particularly suited to leadership. People who make good leaders have the right (or sufficient) combination of traits. The trait theory postulates the following as important leadership traits: Physical attractiveness (neat, well groomed, tall, healthy, usually male). Social and personal characteristics that are inherent to leaders (well bred, intelligent, educated, and well mannered). Adaptable to situations /Alert to social environment Ambitious and achievementorientated Assertive/Cooperative/Decisive/Dependable/Persistent Dominant (desire to influence others) Autocratic type of Leadership: An Autocratic leader is someone who usually needs to dominate others. The autocratic approach is often a unilateral one and they are most likely attempting to achieve a single goal or objective. This approach to leadership generally results in passive resistance from teammembers and in order to get things done, requires continual pressure and direction from the leader. Generally an authoritarian approach is not a good way to get the best performance from the team. The Autocratic approach is sometimes confused with the yelling and demeaning approach that an “abusive” leader would resort to. There is however some instances where an autocratic style of leadership may not only be necessary but actually the most appropriate style of leadership for a given situation. These situations are ones that call for urgent or quick action. Because most people are familiar with autocratic leadership, they have less trouble adapting to this style. In stressful situations (such as an impromptu survey), staff may prefer an autocratic approach. . The Democratic Leader The Democratic leader uses a team approach to make decisions. Although the Democratic leader makes the final decision; they will usually involve one or more team members in the decision making process. A good Democratic leader is one who encourages staff participation, is empowering and supportive, and is careful not to lose site of the fact that he/she is still ultimately responsible for the final outcome. The Democratic leader is happy to see staff members collaborate and is willing to accept that outcomes may turn out different then originally planned (it is all about the process). One draw back to the Democratic leadership style is that the leader is sometimes viewed as someone who cannot make a decision on his/her own. Though most team members will have respect for this type of leader; not everyone will view them as a "true" leader. Another draw back to this leadership 27 /35 style is that many discussions, emails and meetings are usually required before a decision that has group consensus is made (this can be time consuming). A good use of democratic leadership is when a practice change (needs to occur and the leader includes staff ideas and suggestions to help with the smooth implementation and transition of the change. The Laissez-Faire Leader The Laissez-Faire leader exercises very little control over his/her staff members. This type of leadership essentially leaves all of the decision making to those who will be affected most. The Laissez-Faire leadership style works very well when dealing with staff members who are committed, motivated and able to analyze a situation properly. Once the Laissez-Faire leader has established that staff members are high functioning; it is often best for this leader to step back and let staff members get busy with the task at hand. This type of leadership also allows for delegation of tasks that empowers staff members to achieve their goals. Although independence and decision making is relinquished to staff members; using this style of leadership makes jumping back into a failing process very difficult. Interfering in the middle of a task or ongoing project can cause resentment and an overall lack of trust on the part of staff members. A good use of Laissez-Faire leadership would be identifying a problem and allowing staff to come up with and implement a solution. When staff develops “anything” on their own, there is a much greater chance that they will be accountable for the change or improvement. The Situational or Contingency Theory of Leadership In 1967 Fred Fielder ( a leading scientist in the area of organizational and industrial psychology) developed “The Contingency Theory of Leadership” based on his belief that in addition to specific behavioral traits; leaders also need to assure that there actions were in sync with the situation (known as situational favorableness). The Contingency Theory of Leadership postulates that leaders must match their leadership style (either task or relationship oriented) to the situation and then assess the situation for its degree of favorableness or unfavorableness to the leader’s style of influence. In order to determine ones leadership style; Fielder developed an index called the “Least Preferred Co-Worker” (LPC) scale. Transformational vs. Transactional Leadership Theory (21st Century) Great leaders come from great team members. Coaching and mentoring are often words associated with the transformational leader. The ultimate goal is to create a clinical staff leader who will head off in a different direction, and carve out new ideas and pathways. The transformational leader sets the standard by their actions, and not their words. The following statements describe the Transformational Leadership Theory: The Transformational theory focuses on the leader and employee working together for the greater good. It is a theory that places strong emphasis on one individual engaging others and creating a connection that elevates the level of motivation and morality in both the leader and the follower. Transformational leadership merges ideals and focuses to unite both the employee and the nurse manager. Transformational leadership promotes change. References: • The Trait theory of leadership , 1940-1950 • Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz 28 /35 Q-9 Describe briefly the reasons for using “committees” and “groups” A committee is a group of people, whom an assignment has been tasked with and who are liable to look after that task from start till completion. Its like a feature of some group action that constitutes the committee apart from the other organs of an organization and usually its not like a permanent group or team, its for some specific time and scope is limited. Regarding formation of Groups in an organization, generally it comprises of four stages: Forming: It’s a stage where mutual introduction of concerned member is made available and here members know each other as how is where and what are Storming: Like brain storming about the purposes, objectives and conflicts arising among the team members Norming:Its like setting of some rules, norms and drawing limitations , responsibilities of individual behaviors. Performing:Its the stage of performing the required task, in other words practically accomplishing the task. Usually these steps are considered to be some basic guide lines for group forming, but not necessarily these are followed always.In a group or committee, responsibilities and duties are allocated. Some of them are supposed to supervise and seek information, while others have to report and update about the progress. For more effectiveness and better performance in a group, not only verbal discussions and instructions are cared but it continuously requires action as per condition. To act as required might not be pre defined ina group rule but its an advantage of wise decision to keep up the overall group progress. A committee may adopt line or staff oriented management functional styles depending on its authority of operation..If the authority given covers decision making applicable to subordinates to , its termed as a line committee that also carries out managerial functions. On the other hand if the authority relationship to a superior is of advisory type, its rightly called as staff committee Committee may be formal as if its constituted as per organizations rules and regulations to perform a specific task with a scope defined and time limit applied. Time period of formal committees might be of permanent nature but not compulsory. 29 /35 While informal committees are those which are formed without specific and defined delegation of authority .Usually these are formed by some manager or superior looking for group thinking over a specific task and objective in order to solve a problem or task. These types committees are having a time limit and usually time limited but may be prolonged in terms of continue production tasks or marketing /sales perspectives. Reasons for Using Committees and Groups • Group Deliberation and Judgment • Fear of Too Much Authority in a Single Person • Representation of Interested Groups • Coordination of Departments, Plans and Policies • Transmission and Sharing of Information • Consolidation of Authority • Motivation through Participation • They may result on compromises • They may lead to indecision • They can split responsibility • May lead to a situation where in a few persons impose their will on the majority Guidelines for a Successful Operation of Committees and Groups • Authority • Membership • Subject Matter Group Two or more people acting independently in a unified manner toward the achievement of common goals 30 /35 Characteristics of Groups • Group Members share common goal • Require interaction and communication among members • Usually a part of a larger group • Sociological characteristics - develop norms that refer to the expected behavior of group members Functions and Advantages of Groups • Influence Communication Pattern • Affect Motivation • Leadership Teams A small group of people with complementary skills who are committed to a common purpose, set performance, goals and approach for which they had themselves mutually accountable. Kinds of Teams • Self-managing Teams • Consist of members who have a variety of skills needed to carry out a relatively complete task • Virtual Teams A team whose members rarely meet face to face and interact only using various forms of information technology Team members must be convinced of the team's purpose Team members should be selected according to skills needed. Conflicts in Committees, Teams and Groups • Interpersonal Conflict • Intergroup Conflict • Organization and its environment • Decision making It is one of the central activities of management and is a huge part of any process of implementation and an essential skill to become an effective leaders and for a successful career. 31 /35 Attributes of Decision 1. The quality of decision, for those decision may represent a false consensus. 2. The required level of commitment to the decision by group members. 3. The time table to make decisions. Advantages of Group Decision Making 1.Combine individual strengths of group members. 2. Broader perspective owing to differences of perspective between individual in the group. 3. Enhanced collective understanding of the course of action to be taken after the decision is taken. 4. Gains greater group commitment since everyone has his/her share in the decision making. 5. Imbibes a strong sense of team spirit among group members and helps the group together in terms of success as well as failure. Disadvantages of Group Decision Making 1. More time consuming and costly. 2. People whose decisions are not considered tend to be left out. 3. Group think 4. Responsibility and Accountability are not equally shared. 5. Highly cohesive groups sometimes encourage a restricted view of alternatives. 6. Give rise to hostility and conflict. 7. Tends to be influenced by the relative status of group members. Reference: • Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz 32 /35 Q-10 Write a detailed note on the basic control process and also describe the requirement for establishing effective control. Control to be defined as making sure that something happens the way it was planned to happen. So from this definition, planning and controlling are inseparable functions. Where planning is the basic tool to attain the objective and they are never apart, Its the task of ensuring that the activities are providing the desired results. Setting plan, establishing the structure and directing the people do not guarantee that everything in the organization is going on well. Thus, control process is very important for all types of organizations. Plans rarely go smoothly. Most plans are executed by people and people vary in their abilities, motivations and honesty. While execution of plans to achieve the desired goals and objectives, plans become outdated and require revisions. For these reasons control is an important management tool, where it controls the overall ongoing processes and advise accordingly. Control means controlling every task in an organization – whether it is large, or delegated to some employee. Thus for every task delegated, there has to be a control system that ensures completion of performances in line with the plans A basic control process involves mainly these steps : • • • • 33 /35 Recognition and determination of standards to be followed Performance evaluation Evaluation and comparison of performances Implementation of necessary actions for any rectification required. Plans can be considered as the criteria or the standards against which we compare the actual performance in order to figure out the differences. These are the standards an organization sets at the beginning of a control process, and could be set on the basis of : Profitability standards : How much company would like to make as profit over a given period of time. Market position standards : Standards indicate the share of total sales in the market. Productivity standards : How much various segments should produce. Employee attitude standards : Indicates what type of attitude the company managers should have to strive. Social responsibility standards : Making contributions to the society. Short range goal : Standards that set a balance between the short range and long range goals Measurement of Performances and Comparing Performances Measurement of performance is an important procedure of the control process, the deviations can be detected in advance by taking appropriate actions. COMPARING MEASURED PERFORMANCES TO SET STANDARDS : • • • A standard is the level of activity established to serve as a model for evaluating organizational performance. Evaluation of performance can be for the organization as a whole or for some individuals working within the organization. In simple terms, standards are the evaluations that determine whether an organizations /individuals performance is sufficient or inadequate Taking Corrective Action • • • 34 /35 After the actual performance has been measured and compared with the established standards, the next step is to take corrective action if necessary. Corrective action is managerial activity aimed at overcoming organizational mistakes that hinder organizations performance. Before taking corrective actions, managers should make sure that the standards are properly established and that their measurements of performance are valid and reliable. Requirements for Adequate Control • • • • • • Control should be customized to plans and positions. Control must be must take care of individuals and their responsibilities Control should be able to point out exceptions as critical points. Control should be having capacity to maneuver as per situation and be able to change strategies if needed Control should be cost effective Control should be able to define any amendment to previous plans and implement it successfully Types of Control Pre Control : Control It’s the preliminary control action performed . It is also known as FEED-FORWARD Control. Its used to identify problems and define corrective measures in the beginning. Concurrent Control : Once the work has been started, this CONTROL identifies any issues originating during the work and provides with an appropriate remedy Feedback Control : Once the work has been done, this type of control likely searches out for any shortcoming during the whole process and makes a proper feed back solution for future tasks. Few Obstructions on way to Successful Controlling. • • • Control measures can create unwanted overemphasis on short term production as opposed to long term production. Control activities may distract employees and create frustration Control action may lead to forgeries of employee reports/feedbacks to save their repute and cadre to avoid organizational responses to their weaknesses. Reference: • 35 /35 Management/A Global & Entrepreneurial Perspective by Heinz Weihrich, Mark V. Cannice, Harald Koontz