PRINCIPLES OF MANAGEMENT PART 4

Types of Decisions
Managerial decisions may be broadly classified under two categories-the first category includes the typical, routine and unimportant decisions and the second category covers most important, vital and strategic decisions. Apart from this classification, decisions are taken at different levels for meeting different problems. The following paragraphs present a bird’s eye view of different type of decisions taken by the executives from time to time.
(i) Organisational Vs Personal Decisions
Chester.I. Bernad has explained about this classification of decisions. Decisions taken by the manager in his official capacity are termed as organisational decisions. These decisions have a direct bearing on the functioning of the firm. Also, the authority for taking such decisions can be delegated to the subordinates. For an instance, decisions relating to reward systems or transfer of workers can be cited as examples under this category. In contrast to this, sometimes, decisions may be taken by the manager in his individual capacity. Such decisions are termed as personal decisions. They may partly affect the personal life and partly affect the organisation. For instance, decision to quite the organisation comes under this category.
(ii) Routine Vs Strategic Decision
Routine decisions involve little risk and uncertainty. Hence, they do not call for extraordinary judgement and thinking. They are mostly related to day-do-day conduct of the business. Most of the routine decisions are taken repetitively. That is why they are normally taken at lower levels of management. On the other hand, strategic decisions are taken by the top level management. Either they are concerned with policy matters or with long-term commitments of the organisation. They require through understanding, analyses and best judgement pertaining to location of the plant, type of technology and channel of distribution are the best examples of this type.
(iii) Policy Vs Operating Decisions
Policies act as guidelines for future action. Hence, decisions pertaining to policies are usually taken by the top management. They are considered to be very important since they affect the total organisation. While operating decisions are
administrative in character, they help in translating policies into action. For instance, decision relating to a new incentive scheme may be termed as a policy decision. Decisions relating to the methodology of implementation of such incentive scheme are termed as operating decisions.
(iv) Programmed Vs Non-programmed Decisions
Programmed decisions usually deal with routine and repetitive problems. For dealing such problems, systematic policies, procedures and rules are established. Programmed decisions can be taken with little case as everything goes according to some set of rules. As against this, non-programmed decisions cover mainly unexpected events and challenges. Each of such problems is a special one. In other words, each problem is unique in nature. For dealing with such special problems, executives usually refer them to the top management. For tackling such situations, the manager needs expertise, intuition and creative thinking.
(v) Individual Vs Group Decisions
Decisions taken by the individual in his personal capacity are known as individual decisions. Organisations which are small in size can accommodate this type of decision-making process. When organizations grow in size and stature, complex problems do come into picture. Group decisions are considered to be the best under such situations. Group decisions represent the thinking of more than one executive. The commonly held belief is that “two brains can certainly think in a better way than one.”
Having discussed some of the important types of decisions in the earlier paragraphs, a brief attempt is made to identify some common elements in the decision making process. These elements form as important steps for carrying out decision-making process systematically. The various steps involved in the decision-making process are explained below with the help of the following figure. (V.I.A)
DIAGRAM V.I.A
DECISION MAKING PROCESS













Step (1) Defining the problem
The first step is to determine what the real problem is. A problem is half-solved when it is correctly diagnosed.
Money and effort are going be wasted if problem is not determined correctly. That is why, accurate diagnosis of the real problem is necessary to find out right solution. One should look at the real causes and for the remedial measures by touching the inner details of the problem. Touching only the outer surface of the problem and arriving at decisions may lead to fallacious conclusions.
Step (2) Analysing the problem
Once the problem is clearly defined, then, it must be analyzed in the light of data pertaining to various factors that surmount the decision. Every situation may have some advantages and limitations. Necessary emphasis should be laid on locating the limitations and obstacles in achieving a desired result. Necessary care should be exercised in avoiding personalized bias in judging certain factors. Analysis of crucial factors provides a sound basis for making effective decisions.
Step (3) Developing alternatives
The analyse of the problem becomes complete once it throws light on several alternative solutions. In fact, the success the decision-making process much depends upon the ability of an executive in developing alternative solutions to a given problem. This requires lot of imagination, experience and judgment. Exploring the positive or negative impact of such alternatives forms as a solid base for sound decisions.
Step (4) Evaluating Alternatives
Once the alternatives are developed, the next step is to evaluate them in terms of their cause, time, impact, objectives etc. Many a time, either marginal cost or cost-benefit analysis is used to bring out the tangible benefits of each of such alternatives. Each alternative solution may have its own merits and de-merits. They should be compared with other alternatives for the purpose of appraising the real impact. Peter F Drucker has identified risk, economy, time and limitations as important criteria for evaluating the consequences of different alternatives.
Step (5) Selecting the best possible solution
Selection usually involves choice making. It is the last step in decision-making process. The manager has to select such an alternative course of action which can make the maximum contribution to the goal. It is not always possible to select the best alternative for a given problem. That is why the manager has to rely upon such course of action which can yield good results under a given set of circumstances and limitations.
Step (6) Implementing the decision
Once the best alternative is selected, it must be implemented. This step mainly deals with the execution of the decision taken. It involves development of step by step plans, selling the idea to subordinates and seeking co-operation from the needy people. At this stage, the decision is converted into action. The decision must be implemented in the right time and that too in a proper way.
Step (7) Evaluation of Decisions
The final step in decision-making process is evaluation. The actual results of the decision should be compared with the expected results in order to locate the reasons for deviations. This review is a continuous process and it generates information for necessary feedback for further improving the decision-making process in future.
Rationality in decision-making
The term ‘rationality’ refers to objective and intelligent action. A decision is said to be rational if appropriate means are chosen to accomplish desired objectives. It implies that decision-maker tries to maximize the values in a given situation by choosing the most suitable course of action. A good decision depends on the maker’s being consciously aware of the factors that set the stage for the decision. Obtaining complete rationality is not always possible. That is the reason why people prefer to take satisfactory decisions instead of ideal or optimum decisions. Managers are not always confronted by the problem of rationality in decision-making. In practice, they confine themselves to few important alternatives which have limited risks combined with favourable consequences.
Limits of Rational Decision-making
Managers are not always rational in their decision-making. They cannot always abide by the demands of rationality in decision-making process. There are some limitations which are briefly explained in the following lines.
a. Since decisions are related to future. Managers cannot foresee all the consequences accurately. Moreover, lack of complete knowledge about the problem also makes it impossible to choose a good decision.
b. Because of time and cost constraints, all complex variables that have a bearing on decision cannot be examined fully. Hence, the decision-maker is forced to strike a balance between complete rationality and hard realities on the ground. The impact of all the variables cannot be ascertained because some of them may be intangible.
c. The consequences of various alternatives cannot be anticipated accurately. Hence, decisions taken under uncertainty cannot guarantee the success of decision-making process.
d. Human factors like value systems, perceptions, social factors, institution etc., are the main limits on rational decision-making. Managers, being human beings, are greatly influenced by their personal beliefs, attitudes and biases. Because of this, the capability of a decision-making process varies from individual to individual and from situation to situation.
Every manager is vitally concerned with the above limitations in his approach to rational decision-making. He has to collect all the relevant information and try to overcome the above limits on rationality and choose the most rational decision for solving any given problem.
Barriers to effective Decision-making
Apart from the above limitations, decision-making process remains to be ineffective because of the existence of various barriers in organisation structure. These barriers impede the process of identification of problems, its analysis and the development of the solutions. Elbing has identified some of the important barriers that can block managerial effectiveness in choosing the most suitable decision. Some of them are listed below.
i. The tendency of a human-being to evaluate a given problem with pre-conceived notions, acts as a stumbling block in understanding the real situation.
ii. Though it is dangerous, managers feel safer if they do not change what is familiar. Eventually, the ineffective decision of a familiar way becomes accepted rather than considering new and innovative means.
iii. Many managers fall to demarcate the symptoms from the main problem.
iv. Many managers have a tendency to respond to the problem instantaneously without proper information and thinking. If they gather more information, they become more aware of their options.
v. Similarly, the tendency to equate a new challenge with that of old experience is common with many managers. This often causes managers to look for what is familiar rather than what is unique in new problem.
The above problems are mainly responsible for either indecision or for half-decisions in the modern organizations. Knowledge of the above problems will surely help the managers in arriving at pragmatic decisions. The following suggestions can be offered to overcome the above barriers so as to make the managers more effective in decision-making process.
1. Avoid premature evaluation.
2. Initiate impartial probing by avoiding personal biases on the outcome.
3. Develop a sound system that can supply adequate information for making decisions.
4. Encourage group leaders to respond to a given situation and compare the pros and cons of the solutions offered by the two groups for making an effective decision.
5. Encourage innovative thinking among the sub-ordinates so as to identify the crux of the problem without waste of time and money.
6. When decisions of critical and pivotal in nature are to be taken, encourage group thinking. For this, the problem is to be presented to the subordinate first and they are asked to develop as many solutions as possible in a free environment.
TECHNIQUES OF DECISION-MAKING
1. Brainstorming
Brainstorming is the oldest and widely followed technique for encouraging creative thinking. It was originally developed by A.F. Osborn. It involves the use of a group. This is an approach to improve problem discovery and solving by encouraging subordinates to give their ideas and solutions in a free environment. It starts on the premise that when people interact in free environment, they will generate creative ideas. Continuous interaction through free discussions may result in spontaneous and creative thinking. The larger the numbers of solutions, the fairer are the chances in locating an acceptable solution. Established research proves that one hour brainstorming systems is likely to generate 50-150 ideas. It is interesting to note that while most of them are proved to be impracticable, at least, some of the merit serious consideration. This group process is not without limitations. It consumes lot of time and therefore, is an expensive exercise. Secondly, it emphasizes only quantity of solution which more often than not proved to be superficial. By overcoming the above limitations, a modern manager can use this as an effective tool.
2. Synectics
When compared to Brainstorming, Synectics is a new concept developed by William J.J. Gordon. The term ‘Synectics’ is derived from a Greek word which refers to “Fitting together of diverse elements”. It starts on the premise that this concept encourages novel thinking for the development of alternatives through putting together different ideas which are distinct from each other. A given problem is presented to a group of people with different backgrounds are varied experiences.
It is the responsibility of the group leader to present the problem and lead the discussion in order to stimulate creative solutions. This approach ensures on the spot evaluation of members suggestions. The leader who is a technical expert is always assisting the group in evaluating the feasibility of their ideas. Experience shows that Synectics has been less widely used than “Brainstorming”. When the problem is real tough and challenging, this approach is used for effective decision-making. Like Brainstorming it also suffers from the same range of limitations.
3. Operations Research
Thee origin and development of operations research is attributed to military operations and applications in IInd World War. The war put tremendous pressure on the use of available scarce resources for various strategic and tactical operations. The success of operations research in developing options of effective and efficient nature was instrumental in making this approach rather dependable in decision-making process. Now-a-days, greater emphasis has been laid on the use of mathematical models to reflect different options and constraints in a situation and their effect on a selected goal. This quantitative approach to decision-making is usually referred as “Operations Research”. Of late, it has become an invaluable tool in the kit of a decision-maker. Operations Research employs optimizing models like Linear Programming, Project Management, Inventory Control, Decision Theory and Waiting Line Theory.
Operations Research is the systematic method of studying the basic structure, function and relationships of an organisation as an open system. It always adopts a systems approach to management in getting things done. It is constantly interested in developing optimal solution with limited resources in a given situation. It covers six steps in its approach to problem solving. They are: (a) identification of a problem; (b) construction of a mathematical model to investigate the problem; (b) construction of a mathematical model to investigate the problem; (c) developing a good solution; (d) testing of the model in the light the data available; (e) Identifying and setting up of control points; (f) implementation of the option as a solution to a critical problem (putting a solution to work). In essence, Operations Research attempts to develop the best solution that will contribute to organizational goals.
Limitations of Operation Research
(i) Operations Research technique is not a panacea to all the problems of modern management. In other words, it is not the end. (ii) Since Operations Research does not take intangible aspects into consideration, subjective judgment becomes difficult under this model. (iii) As the operations Research technique directly depends upon the use of mathematical and statistical tools, it is increasingly becoming complex and costly exercise. (iv) Since decision making is a human process, it cannot be predicted properly. At the same time, the impact of such factors cannot be measurable.
4. Delphi Technique
It is a technique normally used for forecasting future events. It is a group decision making technique. Under this method, independent opinions are sought from the members repeatedly so as to develop a best solution to a given problem. The success of Delphi technique depends upon a simple technique of understanding the problem from the other man’ perspective. This ensures success. Though it is a useful technique, since it involves time and cost, it can not be tried in all situations.
SUMMARY
Decision-making is a process of selection of a course of action from among alternatives to achieve specific objectives or to solve a certain problem. Decision is the product of decision-making process.
The types of Decisions are very much used in the organisation for recording its importance. With the help of various alternatives one can find and select the best possible solution at appropriate time.


ASSIGNMENT QUESTIONS
1. Discuss the various decision situations that can be dealt with by managers while performing decision-making function. What are the different approaches which can be applied in each condition?
2. A lot of decision making in modern industrial organisation is quantitative. Bring out the implications of this statement. Enumerate major quantitative methods that are used in decision making.
INTEXT QUESTIONS
1. Define decision making. Describe the different types of decisions.
2. Describe the plan end (or) step approach in decision – making process.
3. How operations research is helpful in decision-making? Identify the limitations of operations research?
4. What are the techniques can be tried by the management in making effective decisions?
SUGGESTED READINGS AND REFERENCE BOOKS
1. Essentials of Management - Harold Koontz & others
2. The process of Management - William Newman and others
3. Management - A.G. Bedian.

CHAPTER – 2 CO-ORDINATION
LEARNING OBJECTIVES
• To define the concept of coordination;
• To identify the need and significance of coordination;
• To understand different types of interdependency concepts;
• To review the principle of coordination;
• To explain the various approaches to effective coordination;
• To identify the problems in coordination.
INTRODUCTION
Harmonious relationships between the various divisions and departments of an organisation are a must for its smooth functioning. The activities of the various divisions have to be blended and unified so as to give them a commonness of the purpose. Hitherto, the concept coordination was viewed as one of the functions of management. Now, it is regarded as the essence of the management process. It helps in achieving harmony among individual efforts towards the accomplishment of groups goals. Group goals can not be achieved automatically. Individual efforts must be integrated and synchronized in order to attain common objectives. It is a dynamic concept. It implies an orderly arrangement of group efforts to ensure unity of action. According to Henry Fayol, “to co-ordinate is to harmonize all the activities of a concern so as to facilitate its functioning on the path of success. Probably in smaller organizations, there is no need for coordination’s where all activities are performed by one person. With the increasing growth the complexity of modern organizations, the need for coordination becomes inevitable. Lack of proper coordination results in inefficient operations, delays, frustrated feelings and waste to time.
MEANING
According to E.F.L. Brech, “Coordination is balancing and keeping together the team by ensuring suitable allocation of task to the various members and seeing that tasks are performed with due harmony among the members themselves”.
According to Mc Farland, “Coordination is the process whereby an executive develops an orderly pattern of group efforts and secures unity of action in the pursuit of common purpose”. This definition views coordination as the task of integrating the individual needs with that of the organisational goals through proper linking.
Characteristics
The above observations reveal the following features of coordination.
i. Coordination is not a distinct function. But, represents the essence of management.
ii. The outcome of the coordination is to attain the common purpose.
iii. Coordination is essential in all work situations where people work together.
iv. Coordination is a continuous and an on going process.
v. Coordination does not arise spontaneously or by force. It is the result of concerted action.
vi. Coordination is required in group efforts but not in individual efforts.
Need for Coordination
Existence of disintegrating forces emphasizes the need for greater coordination among various divisions of an enterprise. These disintegrating forces may act as barriers to effective coordination. They are summarised below:
(i) Increasing Specialisation
Coordination becomes essential when the principle of specialization has been practiced in work situation. The activities of the unit may be divided on the basis of product, function, region or some other form. The greater the number of units, the larger the number of specializations. Every executive is mostly worried about his unit’s performance. It results in conflicting interests within the same organizations. A good coordination paves the way for effective integration of efforts of all people for the accomplishment of a common goal.
(ii) Empire building motive
As stated above, each executive is deeply motivated by the performance of his own unit in question. This kind of attitude may well fulfill his personal ego but isolates him from others. Organisational goals can not be accomplished with this kind of tendency. Coordination is essential to ease out this situation.
(iii) Personal conflicts between employees
Employees are human beings. Personal rivalries, jealousies and politics in the work situation are bound to create problems to the management. For example, conflicts between line and staff and differences between production and sales personnel create problems in the smooth functioning of an organisation. Coordination helps in harmonizing group efforts.
(iv) Subordination of individual interest to that of organisational interest
Individual interests are important for developing loyalty, integrity, hard work, initiative and motivation. Organisational interests are much more important than individual interests. For achieving this, subordination of individual needs to that of organisational goals is a must. The purpose of coordination is to attain this desired end.
The importance of coordination need not be over emphasized. The primary task of management is to coordinate effectively all the activities. It is the end result of managerial process. It is a creative force through which members of the organisation are encouraged to contribute to group goals voluntarily, willingly and enthusiastically. It emphasizes system’s approach to management. The various
functions of management can not be viewed in isolation, but has to be viewed in totality. Coordination allows personal satisfaction on one hand and social satisfaction on the other hand. It, thus, promotes efficiency and tones up the general level of employee morale.
Types of Coordination
Depending upon the nature and coverage, coordination may be studied under different types. On the basis of its coverage, coordination may be divided into two types, such as, internal and external. Another type of classification is possible on the basis of its flow under two headings, mainly, vertical and horizontal coordination.
Internal and External Coordination
Coordination between units of the same organisation is termed as internal coordination. It summarizes the activities of different units so as to make the organisation more effective. Organisations are not free from the influence of external environment. Hence, establishing a close link between organisation and external environment is a must either to survive or surpass the growing competition. External environment includes technology, competition, market forces, customers, government policy etc., External co-ordination tries to coordinate all these forces upto the advantage of an organisation.
Vertical and Horizontal Coordination
Coordination between different levels of hierarchy down the line is termed as “vertical coordination”. It ensures that all levels of people, form top to the bottom, work in harmony. It is greatly facilitated by a technique like delegation of authority to the lower levels of hierarchy. Coordination between people of the same cadre and between different departments at the same level is termed as “Horizontal Coordination”.
Another classification depending upon its content views co-ordination from a different angle.
Procedural and Substantive Coordination
Procedural coordination implies the specifications of different units in the same organisation. On the other hand, substantive coordination is concerned with the content of organisational activities.
Principles of Coordination
Mary Parker Follet has laid down the following four principles for effective coordination. These principles help every manager in discharging his functions.
(i) Early Start
Thinking function of the management precedes the doing function. The task of coordination becomes relatively easy if it starts at the planning stage. Free exchange of ideas helps in clearing doubts and removes misunderstanding. Hence, plans must be prepared in consultation with all people. Plans become successful if coordination is practiced at initial stage. Securing coordination becomes impossible at later stages like execution of work.

(ii) Direct Personal Contact
It stresses the importance of direct contact in removing conflicts and misunderstanding. Effective coordination is best achieved through direct personal contact. Direct communication is the most effective way to convey real feelings to facilitate greater coordination.
(iii) Continuity
Coordination is an unending process. It cannot be left to chance. The management has to continuously strive hard to maintain perfect balance among different units / people. Continuous coordination helps the manager in adjusting and re-adjusting the range of activities so as to minimize wastage, misunderstanding and apathy.
(iv) Integration
The fourth principle of coordination calls for integration of efforts for achieving a common purpose. For this purpose, coordination demands reciprocal relationship among all the concerned.
Interdependence and Coordination
Coordination influences all functional activities of management. In a similar way, all other activities influence coordination. This is termed as “Interdependence”. Such interdependence is imperative for the success of any organisation. Such interdependence of work units has been categorically classified under three heads by James D Thompson. They are:
a. Pooled interdependence
b. Sequential interdependence and
c. Reciprocal interdependence
(i) Pooled Interdependence
When departments/ unit/ divisions are not directly dependent on each other, but indirectly responsible for over all performance of the enterprise, it is termed as “Pooled interdependence”. It represents a situation where failure of one unit / division leads to the failure of the entire enterprise. Each unit / department makes its own contribution and supports the main systems in its own way.
(ii) Sequential interdependence
It refers to a situation where the output of one department becomes the input of the other. This type of interdependence usually exists in process industry.
(iii) Reciprocal Interdependence
It refers to two way interdependence. Here, the output of one becomes input of the other and vice a versa.
Approaches for Achieving Effective Coordination
Different organizations adopt different mechanisms for achieving effective coordination. There is no single method of coordinating the managerial activities that can be universally acceptable. J.D. Thomson has identified three important categories of approaches for achieving effective coordination. All of them are integrative mechanisms. Each one of them is explained below.
1. Integration through standardization: It involves the development of standard rules and procedure through which the job holders/departments have to direct their activities in order to ensure consistency in operations.
2. Plans and Schedules: Separate plans and schedules may be prepared for each departments or units. At corporate level, all plans are merged and integrated so as to obtain optimum results. Coordination becomes easy since departmental plans are flexible than standards.
3. Mutual adjustments: Activities of company are coordinated through mutual adjustments among the sister units/departments on contingency basis. Here cooperator is assured between the needy units for the purpose of getting the things done.
In traditional organizations coordination is sought to be achieved through standardization and planning. The usual methods followed by the traditional and bureaucratic organizations for achieving effective coordination are listed below.
1. Developing elaborate system of rules and procedure for sorting out recurring problems.
2. Non-routine problems are to be referred to higher ups.
3. Where decisions relating to new policy matters have to be taken up, they may be referred to special committees.
Traditional organizations could able to reap advantages through following the above mechanisms for obtaining higher degree of coordination among sister units. This traditional approach is best suitable to normal and predictable conditions. But this kind of approach is inadequate to meet the requirements of a modern organisation under a dynamic environment. More sophisticated methods have been developed by the researchers for the purpose of improving coordination. John Child suggested the following forms of coordination for improved functioning of the organisation.
1. For understanding business problems and offering solutions, direct contact between managers and employees facilitates greater coordination.
2. While too much rapport is required between employees and departments, better coordination may be obtained through the appointment of liaison officers.
3. While there are inter departmental conflicts which cannot be solved immediately, coordination may be attained through special task forces which would deal special situations.
4. Special committees may be appointed to deal with the recurring problems of inter departmental conflicts.
5. An organization which is too big with several divisions may find it difficult to coordinate the total range of activities in a systematic manner. To ease out this problem, a coordinating department may be created within the organisation on par with other departments to perform this special function.
6. If things are too complicated, matrices type of organisation may be developed for establishing effective coordination. Under this method, functions to some of the personnel may be integrated with the functions of other departments. This kind of arrangement encourages effective understanding between various divisions/departments. This facilitates higher degree of coordination among the member units of organisation.
Van de Venn and others proposed three approaches as basis for coordination. They are summarized below:
a. Impersonal mode
This model envisages designing of rules, procedure and programmes suitable for smooth functioning of the organisation.
b. Personal mode
Here, human beings are encouraged to find out how things are going on and to discriminate what to do and what not to do through effective feed back. Personal involvement surely contributes to effective coordination.
c. Group mode
When operations are large, a single individual cannot coordinate properly. This model suggests establishment of committees, task forces, meeting etc. The logic behind this approach is that “two brains can think better than one brain”.
As stated earlier, no single approach to coordination is proved to be useful to all organizations. The suitability of a particular approach to coordination depends upon factors like size of the organisation, complexity of its work, nature of work force, certainty and uncertainty conditions delegation of authority etc. The process of coordination becomes useful and meaningful only with the delegation of appropriate authority.
In order to minimize the problems of over riding departmental interest for the cause of the organisational objective effective coordination is needed. For example, a finance manager may issue a direction that no overtime allowance is paid to workers. At the same time, production manager is worried about realizing production target. He may issue another direction that production workers are entitled to overtime allowance. This might have been done in his anxiety to realize production target. This situation results in misunderstanding and conflicts. The solution for this type of problem lies with effective coordination among member departments.
Coordination process is essential to make unified whole out of diversified functions on smooth lines. It pervades all the managerial activities from planning to controls. Big organizations are now creating separate departments for coordination among departments. New rules and procedures may be developed to minimize problems like red-tapism, overriding goals, blind loyalty and friction.
Co-ordination Vs Co-operation
The term co-operation refers to collective efforts of people who associate themselves voluntarily to achieve some predetermined objective. It indicates about the willingness of individual to help each other. It is the result of voluntary attitudes of people in organisation. However it cannot be a substitute for coordination. While co-operation facilitates coordination, coordination is all inclusive including cooperation. Coordination involves deliberate effort on the part of management to bring together the activities of various individuals / divisions/ units in order to provide unit of action. Coordination does not arise automatically. It requires conscious efforts, whereas cooperation is the results of voluntary efforts put by the people. Thus this scope of coordination is wider than cooperation.
SUMMARY
The term coordination refers to orderly arrangement of group efforts for the purpose of accomplishment of objectives. It is the basic responsibility of every manager. It is a continuous process. Unlike previously it is not viewed as a distinct activity but considered as the quint essence of management. The problem of coordination comes into picture when management is dealing with group efforts but not with individual efforts. The term coordination should not be confused with cooperation. The significance of coordination results in efficiency, morale and optimum use of resources. On the basis of scope and coverage, coordination may be divided into different types. Namely internal Vs external, vertical Vs. horizontal, procedural Vs. substantive. Different techniques are available for achieving higher degree of coordination. Similarly different management deals the problem of coordination through different approaches. Whatever the approach, it has to clarify the role of manager regarding this authority and responsibility for the purpose of attaining optimum use of resources to the common cause of the organization
ASSIGNMENT QUESTIONS
1. Explain the role of coordination and communication in the management of differences and conflicts in an organisation.
2. How can coordination be used as an instrument of effective management action? Discuss the various techniques through which coordination can be achieved in your organisation.
INTEXT QUESTIONS
1. “Coordination is the very essence of management” Do you agree? Give reasons.
2. Describe the importance of coordination. Discuss the techniques of achieving effective coordination.
3. Write short notes on the following.
a. Types of coordination
b. Principles of coordination
c. Approaches to coordination
SUGGESTED READINGS AND REFERENCE BOOKS
1. Essentials of Management - Harold Koontz & others
2. Management - James AE Stoner and Charles
Wankle


Chapter- concept of control

LEARNING OBJECTIVES
• To understand the meaning, steps and the process of control;
• To examine the pre-requisites and characteristics of control process;
• To illustrate the importance of control system;
• To analyse the methods of control;
• To describe the role of integrated control system
INTRODUCTION
Controlling is an important element of management process. It is mainly concerned with measurement and correction of performance in order to attain pre-determined goals. Planning and controlling are closely inter-connected with each other. Plans can not be carried out automatically. The managers have to regulate the activities, review the progress and steer the operations to conform to plan. Hence, control is concerned with the attainment of organisational objectives through regulating individual performance. It is not an exaggeration to state that the success or failure of any organisation depends upon the control process. It touches every facet of the managerial activity.
Control process in the organisation can be compared with that of a thermostat which regulates the room temperature. Controlling is the function of every manager. It is mainly concerned with the execution of plans in a desired way so as to obtain better results. In the words of Henry Fayol: “Control consists in verifying whether everything occurs in conformity with the plans adopted, the instructions received and principles established”. Its object is to point out weaknesses in order to rectify them and prevent recurrence”. In a way, it is acting as a facilitating function.
Definition
According to EFL Brech, “Control is checking performance against pre-determined standards contained in the plans with a view to ensure adequate progress and satisfactory performance”. As per this definition, control guides actions towards some pre-determined goals.
In the words of George R. Terry, “Controlling is determining what is being accomplished, that is evaluating the performance takes place according to plans”. This definition emphasized the fact that the managerial activity of controlling compels the events to conform to plans through appropriate corrective measures.
To understand the real meaning of control, the definition given by T. Haimann is useful. To him, “Control is the process of checking to determine whether or not plans are being adhered to, whether or not proper progress is being made towards the objectives and goals and acting, if necessary, to correct any deviations”. This definition summarizes the purpose of control. As per this definition, control involves measurement of performance against standards set for the purpose of initiating corrective action. The above definitions give rise to the following characteristics for control concept.
(i) Last Function of Management
Control follows other managerial functions like planning, staffing, organisation and direction. Hence, it is considered as the last function.
(ii) All Pervasive
Control ensures consistency in action in a desired way. Control affects other managerial functions and, in turn, affected by them. Hence, it is termed as all pervasive.
(iii) Continuous Process
There is a wrong notion that control is needed when something is going wrong. It is a dynamic process of measuring, checking and regulating the managerial activities in an un-interrupted manner. As the process of management is incomplete without controlling, controlling is considered as an unending process.
(iv) Forward Looking
Past activities can neither be improved nor controlled. Control does not only deal with the post-mortem of what has happened but also regulates the activities for improved performance in the near future. Thus, control is looking at future through the eyes of the past.
(v) Objectivity
Control is not an end in itself. It is only a means for accomplishing pre-determined objectives. Control without objective lacks sense and proves to be unworthy of its existence.
(vi) Delegation
Control becomes meaningless without proper authority. When authority is delegated, control compels the delegator to discharge his duties in a proper way.
(vii) Feedback
It refers to efficient system of reporting back for effective control. Continuous monitoring and review of operations are essential for effective control in any organisation.
(viii) Information
Information is key to success. Control depends upon the information regarding the actual performance. Accurate and timely availability of feedback is the basis for the success of control.
Planning Vs Control
There is a close relationship between planning and control. These two are supplement to each other. While planning is looking ahead, control makes use of standards for improving future on the basis of the past experience.
BASIC CONTROL PROCESS
The basic control process involves three steps: (i) Establishing standards; (ii) Measuring performance and (iii) Compare the results with standards and correcting deviations. The details of these three steps are given below.
(i) Establishing of standards
The term standard refers to ‘norm’ or some criteria of performance. Standards are either qualitative or quantitative goals to be attained. To illustrate some of the standards, we may consider the following verifiable goals, performance, productivity, profitability, etc., are the best examples of quantitative standards. Innovations, social responsibility and morale are the examples of qualitative standard. The management may establish standards on the basis of past experience. These standards are helpful to management either for measuring the performance or judging the success or failure of the organisation.
(ii) Measurement of Performance
It is essentially a comparison process wherein the actual are measured against standards for the purpose of detecting the deviations but measurement is not always practicable. Yet, a forward looking manager has to work it out to prevent reoccurrence of mistake committed by the management. The purpose of the measurement of performance is to alert the management about the probable departures from the established path for taking appropriate actions.
(iii) Correction of Deviation
Control does not end with the measurement of performance and its comparison with standards. Appropriate corrective action is to be taken on the basis of feedback obtained. Taking corrective action seems to be more appropriate while the work is in progress. When the actual differ from that of standards, reasons for such variances are analyzed to identify the root causes.
DIAGRAM V: III A
CONTROL PROCESS








Once basic control process is shown in figure V.3.A. It illustrates that the desired performance in the form of standards are laid down from plans. Actual performance is the result of management operations like Organizing, Staffing & Directing. Measurement and comparison of actual is performance gives rise to identification of deviations. Corrective action is initiated on the basis of analysis of causes for the occurrence of deviations. All appropriate measures must be launched to correct deviations which form the basis of future desired performance.
That is why effective control system should try to overcome the weaknesses of traditional feedback system of getting communication to be modified as feed forward system. The main difference between these two systems lies with the flow of information, while information is the end product of feedback; it is the input of the control system in feed forward tie. It is an innovative way of monitoring real time information to adopt the functioning of the organisation to suit the dynamic conditions.
Feedback Control
The term ‘Feedback’ refers to the process of adjusting future actions on the basis of information about past performance. It is vital to the management because it guides corrective actions. A good control system always depends upon effective feedback of information. But, feedback always consumes time. Management control cannot be instantaneous because of this time lag. The traditional view is that planning is a forward looking exercise, controlling is a backward looking exercise. But, a good control system should be futuristic. That is why Harold Koontz observed that: since past can not be changed, effective control should be aimed at preventing present and future deviations from plans. The present age of computerization comes handy in obtaining feedback on a real time basis. It means that it inculcates “act now” philosophy in control process.
Importance of Control
The importance of control in an organisation need not be over emphasized. Many benefits accrue out of effective control system. To highlight the importance of control, the benefits of control are summarised in the following paragraphs.
1. Facilitates Decision Making
The purpose of control is to take corrective actions; Corrective measures involve right decisions so as to bring the actual performance to that of a desired level. Majority of the executive decisions are centering around control points. Hence, control facilitates decision making process in any organisation.
2. Checks on Delegated Authority
No single manager can obtain the total things in the organisation. He has to delegate authority for the purpose of getting things done through his subordinates. Control enables the manager to check whether or not the delegated authority is being properly used by the subordinates.
3. Basis for Future Action
Through the evaluation of final results control helps in spotting mistakes and weaknesses in the process of implementation of plans. Control supplies useful information for future planning and organizing. A good control system enables the manager to correct the shortcomings in order to pave a smooth route for future activities. Such a system of control guides and directs action towards the organisational objectives.

4. Improves Employees Morale
Effective control system enables the management to identify changes that are effecting the organisation so that subordinates can take advance action to cope-up with threats and opportunities created by such change. It allows timely feedback of information to the subordinates for taking appropriate measures to protect their positions. This ensures a sense of security and comfort among employees which in turn, contributes to higher degree of motivation and morale.
5. Promotes Efficiency in Operations
Control enables the manager to take note of the activities, to detect deviations and to make adjustments in operations. It ensures him that the enterprise moves in a way as planned. It tells the manager whether the objectives are being achieved or not. If not, it helps the manager to revise the plans for achieving goals. Thus control contributes to organisational efficiency.
6. Basic tells the managers what to do and what not to do for the purpose of establishing harmony among various divisions. Control provides unity of direction and tries to establish equilibrium between means and ends. Thus control promotes co-ordination between different units of the organisation.
7. Exerts Psychological Pressures
Control influences the behaviour of the employees in a positive way. Workers become cautions in their duties because their performance is subject to evaluation and control. A good control system brings necessary pressure on the employees to become good doers. Not only that control pressure on the employees to become good doers. Not only has that control made the people to act promptly for minimizing the wastages and losses.
Establishing a control system itself is not a panacea for all the ills of organisation. A control system may have the following limitations.
1. Absence of Proper Standards
The success of an organisation depends upon both tangible and intangible factors. While tangible factors are easily controllable, intangible aspects like quality of supervision, inter-personal relationships, public relations, brand loyalty etc., cannot be quantified for establishing standards.
2. Limitations of Corrective Actions
Operating condition of a business are highly dynamic and volatile. It is not possible to take corrective actions all the time. No business enterprise would have incurred losses had the corrective action been proved to be corrective or productive. It means that there are several limitations in taking corrective actions.
3. Human Reactions
Controls invite opposition from the subordinates because they interfere in their freedom. Controls will not work unless people accept them. People oppose controls when they are biased, unreliable and subjective.
4. Cost of Control
Establishing a good control system is not so easy. It needs elaborate effort, time and money. In modern organizations where man-machine systems go hand in hand, establishing a control system is a complicated process. This may result in excessive cost than the benefits of control.
Pre-requisites of Control
An effective and adequate system of controlling must fulfill the following requisites.
a. Plan: There is a close inter-relationship between planning and controlling. They are not substitutes but supplement to each other. Plans without control are worthless and controls without plans are meaningless. Controls must be always based on plans.
b. Proper Organisation Structure: Any control process yields good results only when the responsibility for detecting the deviations and initiating corrective actions is clearly defined and identified along the lines of hierarchy throughout the organisation. Controls, to be effective must be supported by a good organisational structure.
c. Suitability: A sound control system must suit the needs of the enterprise. Control points designed for a manager are inappropriate for a supervisor. Controls must be tailored to the needs of an organisation.
d. Promptness: A good control system should detect and report the mistakes before the matter becomes serious. It should allow prompt action by the management at correct time.
e. Forward Looking: Controls should be forward looking character. They should be directed towards future. Since past is dead, things can be improved through control system in future. Control becomes useless if it fails to predict future.
f. Flexibility: Control should be static. They should remain workable under dynamic business conditions. Since controlling is a continuous activity, it should be flexible enough to be adopted to changing condition of an organisation.
g. Objectivity: As far as possible, control should serve a specific purpose. They should develop impartial standards for the purpose of minimizing friction.
h. Economical: The benefits from control should be greater than cost. Controls are feasible and desirable when their expected benefits exceed costs. Expensive and inappropriate control should be avoided.
i. Simple: A good control system should be easy to understand and simple to administer. Too elaborate and complicated control system, quite often, fails to deliver the goods.
j. Acceptable: Controls will not work unless people accept the same. They should be acceptable to those to whom they are applicable. Since control is for people, it must be acceptable to the people.
Integrated Control System
Control touches each and every activity of the organisation. Whether the activities are strategic or routine, the control should strive to obtain effectiveness. Control covers all levels of managers from top to bottom. They affect other managerial functions in a great way. But some controls may be disliked by subordinates on the plea that they are unreasonable and unacceptable. This type of dislike among employees about control process should be removed by creating a favourable environment. Lest, the effectiveness of control is destroyed through the resistance of employees. To overcome the above difficulties and to obtain cooperation and participation of employees in the matters of control, the management has to develop an integrated system of control. Any control that is intimately interconnected intertwined with other managerial functions is termed as an integrated Control System. It is of vital importance to modern management in view of their operation in complex environment. The details of such an integrated system are summarized below:
a. Control and Planning
Since control refers to the use of activity for compelling events to conform to plans, it is evident that these two functions are inter-related. Planning, involves setting the activities and controlling keeps them on the right track. Planning is meaningless without control and control is blind without proper plans. The planning function contributes to the smooth discharge of control by way of providing control standards through programmes and budgets. Control function contributes to the adoption of new and revised plans.
b. Control and Organizing
The term organizing refers to a formal grouping of activities for the purpose of achieving organisational objectives. It ensures that objectives are achieved through optimum utilization of resources in an orderly manner and that too in the shortest possible time. Resources like money, material, machinery and skilled man power are limited. These resources must be effectively used and controlled. It may no longer be possible for one man to control all the operations. That is why it is necessary to delegate some responsibility and authority to the subordinates. Control becomes easy when authority is delegated. Control receives negative response and becomes ineffective when authority is centralized. Not only has that effectiveness of control directly depended upon the method of grouping of activities and level of delegation of authority.
c. Control and Directing
It is the heart of administration. Since it tells the people what to do, how to do, where to do and when to do. Activities like leadership and communication play an important role in influencing the behaviour of subordinates in securing desired performance. This aspect is closely related with control function. While leadership guides action, control compels these actions to a here plans. Communication ensures free flow of timely and relevant information. Control uses this information as a feedback for taking corrective action. Information is backbone for regulating the activities in any organisation.
SUMMARY
In order to make the control process as an effective tool in the hands of management. It should be integrated with other managerial functions. All important and critical aspects should be brought under the purview of control process for obtaining better results. Control should not be isolated from the main stream of managerial functions. Control function becomes effective when it is integrated wit other managerial functions. Control is not a perfect substitute for sound managerial practices and cannot ensure business success on its own merit. For obtaining results, the management has to develop an integrated approach.

ASSIGNMENT QUESTIONS AND
LEARNING ACTIVITIES

1. “Control is a fundamental management function that ensures work accomplishment according to plans”. Analyse this statement and outline the various steps in control process.
2. “If you want to control everything, you may end up by controlling nothing. Explain this statement by defining the areas of control.
INTEXT QUESTIONS
1. What is control? Discuss the basic steps in the control process.
2. “Planning is looking ahead and control is looking back” Comment.
3. Discuss the nature and characteristics of control process.
4. Explain the need for integrated control system in modern business organizations.
REFERENCE BOOKS
1. Bedian, A.G. - “Management”, Mc, Graw-Hill
2. Fayol, Henry - “Genera; & Industrial Management”, Pitman.


Unit- IV : Management creativity
1. Introduction
For some time now, innovation has been the fashionable thing to talk about. It is very much easier to talk about than to act upon. Almost all major corporations claim to be innovative. Almost all of them claim that without innovation the company would die. Almost all of them do very little about innovation.
As a term, 'innovation' is preferred to creativity. Innovation implies action and things that work. Creativity implies fanciful and wacky ideas. Yet innovation is the easier part. Without ideas there is nothing to innovate. You can borrow ideas from elsewhere - and that can be valuable - but somewhere, some time the idea has to start.


2. Objectives
To know creativity and civilization – the creative personality, the creative problem solving process- the creative manager- techniques of creativity- effective terms.
Forms of management creativity- traits of highly creative people- climate for organizational creativity, creativity, intelligence and innovation – characteristics of creative organizations- group techniques to improve creativity- brain storming, management games, role plays, and case study
3. Content
Most managements use the strategy of 'maintenance and problem-solving'. In more direct terms, this merely means survival. In practical terms, this means to management 'keep going and avoid criticism'. So why should any senior management be interested in creativity?
THINKING AHEAD
A man jumps off the top of a skyscraper. As he passes the fourth floor window, he is heard to mutter 'So far, so good'.
The argument that without innovation a corporation will eventually die (or be killed) is not very powerful. While many senior executives accept the validity of this 'in the longer term', they know that they will have moved on or retired by then. Quietly keeping the organisation going, day to day, is more important than the long term.
The use of creativity for cost-cutting, downsizing, mergers and acquisitions is more immediately attractive. Such matters are about 'today', not the long term.
There is this ship at sea. The engine keeps breaking down. The rudder is faulty. The lights keep going out. The crew are demoralised. The decks are dirty, etc. Then along comes this new captain. The morale rises because he treats his crew properly. The rudder is fixed. The lights stay on. The engine is repaired. Everything is now fine aboard this ship. But the ship is still heading in the wrong direction!
Far too often all management's time, attention and skill are spent on 'housekeeping'. In contrast, the fundamentals and strategy get little attention.
USES OF CREATIVITY
Creativity is of great use in housekeeping. Simplification requires a lot of creativity. Re-engineering requires creativity. Effective downsizing requires creativity.
Creativity is not just for problem-solving. Very often the most powerful effects of creativity are seen when we challenge existing ways of doing things which are very satisfactory.
In 1971 I suggested to Shell Oil that they should consider drilling oil wells which proceeded sideways when the right depth was reached. Today most oil-wells are drilled exactly like that. Such wells yield between three and six times as much oil. There had been nothing wrong with traditional oil wells. But it was a matter of challenging something that was not a problem.
I am not claiming that the change in drilling wells was a direct result of my suggestion - I have no way of proving that. It is a historical fact, however, that I made the suggestion in 1971.
MOTIVATION
If the above motivations are weak, then how do we motivate senior management to get seriously involved in creativity?
'If an organisation is competent and is not using creativity, then it is always underusing its assets.' That is a simple statement that is true.
Competence means 'a fitness to do things'. Competence is the baseline. If you are not competent, then you are not able to do things. If you are competent, then you should be doing things. And some of the things you should be doing are new.
Otherwise, it is like having a powerful car and then only using it for pottering around and shopping.
Shareholders should insist that management be innovative - otherwise their shareholding is being under-used. At the shareholders' annual meeting there should be a separate booklet (separate from the annual report) which details the innovations. The pages will be blank if there are no innovations. This simple device would put considerable pressure on senior management to perform. Maintenance and problem-solving would no longer be enough.
RISK OR EXPECTATION
In my experience, creativity in an organisation is either a risk or an expectation. If it is not an expectation, it is a risk. Being creative means time, work, political hassle and risk. Why should anyone want to be creative? Successes are great, but not every idea is a success. You are judged only on your last mistake. Prior successes tend to be ignored.
If creativity is set as an expectation, then people tend to play the creative game. If at every meeting there is time set aside specifically to consider new ideas, then people will put forward new ideas. If an executive is expected to do more than just keep within the budget, then that executive will set out to do more. People are very good at playing the game that they are supposed to be playing.
REWARDS
Should creativity be rewarded directly? This would not be at senior level, but at other levels. The idea is that rewards provide incentives. The rewards could be made as direct payments or as a percentage of savings or revenue produced.
The advantages of a reward system are obvious. There is endorsement of the value of creativity. There is 'hero' status for the originator of an idea. There are tangible rewards which others can see and also try to obtain. The name of a person, or team, is attached to the idea.
The disadvantages are not so obvious. The reward implies that creativity is not part of the normal job, but something 'extra' which has to be rewarded. Creativity ceases to be an expectation and becomes an extra task. Many will not wish to undertake this extra task.
Then, the rewards are usually given to big and successful ideas. Many people do not see themselves as having these 'big ideas', so they do not bother. What is the use of having a 'small idea'? Those who win the rewards tend to cluster into an elite 'creative group'. Others quickly assume that it is the business of this special group to be creative, and there is no need for anyone else to try.
There also arises competitiveness amongst ideas: 'my idea is greater than yours'. Some people do not want to compete and stay away from creativity.
DANGER IN REWARDS
Clearly there is value in rewards, but there is also danger. An in-between position might be to give the reward of recognition and hero status, but no financial reward. Creativity is promulgated as being 'part of the job'. There should also be an effort to reward small ideas as well as big ideas. Any person doing a job well should be recognised and praised. In the same way, active creativity should be recognised and praised.
Sometimes there is also a need to reward 'creative effort'. If people bother to put forward suggestions, they should be recognised for this effort - even if the ideas are not very valuable. If everyone gets into the habit of making a creative effort, then, from time to time, there will be valuable ideas.
Creativity in practice is not just the production of wonderful ideas - it is the motivation and effort to produce new ideas. Some of these may prove to be wonderful.
QUALITY OF IDEAS
As people get better and better at creativity, through practice, the quality of ideas will improve. But if you only acknowledge wonderful ideas, then people will not make the effort, will not get the practice and will not produce wonderful ideas.
Creativity is a mix of motivation, time, effort and skill. Included under the skill element are the formal and systematic techniques of lateral thinking.
The advantage of the formal techniques of lateral thinking is that they allow everyone to get going. It is no longer a matter of sitting and waiting for inspiration. There is something to be done. A person using the techniques quickly sees results. These results give that person confidence and the motivation to try to be creative. Exhortation is quite useless by itself and wears off after about a week. The techniques continue because people become more and more skilled at using them.
I believe it is at least as important to motivate people who do not see themselves as creative to become creative, as it is just to choose already creative people.
4. Revision points
the creative personality, the creative problem solving process- the creative manager- techniques of creativity- effective terms.
Forms of management creativity- traits of highly creative people- climate for organizational creativity, creativity, intelligence and innovation – characteristics of creative organizations- group techniques to improve creativity- brain storming
5. Intext questions
- What is creativity?
- What is innovation?
- What is intelligence?
- What is problem solving


6. Summary
Businesses, whether for-profit and nonprofit, are facing change like never before. Numerous driving forces to this change included a rapidly expanding marketplace (globalization), and increasing competition, diversity among consumers, and availability to new forms of technology. Creativity and innovation are often key to the success of a business, particularly when strategizing during strategic planning, and when designing new products and services.


Unit – V- The new era of management
1. Introduction
The aim of this work is to establish the need for the Controller to carry out functions similar to those of Management, ,focusing on the area of information, exercising link a role between the different levels of responsibility in the decision-making process. We test our theoretical proposals 011. the basis of an empirical study of companies operating in the automobile manufacturing sector, using the case methodology by way of interviews with members of management who exercise functions similar to those of the Controller. Likewise, we find sufficient confirmation of the importance of the Controller as coordinator of the new information technologies and, similarly, that the person who exercises these functions must have academic training in economics, business studies and accounting and have sufficient practical experience in that particular firm. Furthermore, it is corroborated that one of the basic tasks always carried out by these individuals is that of budgetary co-ordination.
2. Objectives
To understand about the latest changes from management perspective
3. Content
Managing company ethics – ethical challenges- Indian Ethos and Gandhian Thoughts- relevance of trusteeship- ethics and social responsibility- factors effecting ethical choice- the ethic of sustainability- and the natural environment – evaluating corporate social performance – the environment and corporate culture- shaping corporate culture for innovative response – managing a global environment – roles and responsibilities of managers
Unit- VI: Giant steps and current issues in Management
Current Issues in Management
Many companies are starting to monitor and manage key indicators. Substantial evidences prove that addressing such issues can directly cut cost and save money. As such, these can evaluate the application of management theory and how company are putting those in practices specifically those that can have impact on the company’s reputation.
1) Corporate Social Responsibility (CSR)
The corporate social responsibility concerns the social environment and a changed social contract. Many argued that organizations must consider the societal impact of their decisions and actions. Furthermore, the organizations must act to protect and improve the welfare of the general public. The organizations must aim not only on organizational effectiveness but on existence to address the needs of society (, 2003, ).
According to (1985), the social contract follows the obligation between the organization and the individuals, groups and other organizations, government and the society as a whole. These are set of written and unwritten rules and assumptions in a corporate manner. Such obligations discuss behaviour patterns among various elements of society.
The obligation to individual includes equitable wages, salaries and remuneration packages and suitable working conditions
In return of these obligations, the duties and responsibilities must be carried-out by the employees. The obligations to groups and other organizations require the company to compete within acceptable means. In effect, the competition must be carried-out with respect to mutual rights and obligations of trading partners