BJ(MC) 302 Unit 1 Lesson 1

Unit-I [Management: Functions & Principles]

Lesson 1 Management – Definition, Nature, Principles and Need for
Management
Lesson 2 Management Functions
Lesson 3 Responsibility, Authority and Accountability of Management
Lesson 4 Planning – Definition, process and importance, organizing,
directing and controlling
Lesson 5 Human Resource Planning

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BJ(MC) 302 Unit 1 Lesson 1

Lesson 1 Management – Definition, Nature, Principles and

Need for Management
_______________________________________________________________
STRUCTURE
1.0 Objectives
1.1 Introduction
1.2 Management Definition
1.3 Principle of management
1.4 Nature of Management
1.5 Need of Management
1.6 Assignments
1.6.1 Class assignment
1.6.2 Home assignment
1.7 Summing Up
1.8 Possible answers to self check questions
1.9 Terminal Questions
1.10 References
1.11 Suggested Further Readings
1.12 Keywords

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BJ(MC) 302 Unit 1 Lesson 1

Lesson 1 Management – Definition, Nature,

Principles and Need for Management
_______________________________________________________________
This unit deals with the Management Concepts and its Growing importance of
HR, Finance, marketing & International Business. To understand Management:
Functions & its Principles as essential components for effective task done.

1.0 Objective
After going through this lesson you will learn:
• Management Definition
• Nature of Management
• Principles of Management
1.1 Introduction
Management is the creation and maintenance of an internal
environment in an enterprise where individuals, working in
groups, can perform efficiently and effectively towards the
attainment of group goals. —Harold Koontz and Cyrill O’Donnell
1.2 Management Definition
Management consists in guiding human and physical resources
into dynamic, hard-hitting organisation unit that attains its
objectives to the satisfaction of those served and with a high
degree of morale and sense of attainment on the part of those
rendering the service. —Lawrence A. Appley
(ii) Management is the coordination of all resources through the
process of planning, organising, directing and controlling in order
to attain stated objectives. —Henry L. Sisk.
(iii) Management is principally the task of planning, coordinating,
motivating and controlling the efforts of others towards a specific
objective. —James L. Lundy
(iv) Management is the art and science of organising and
directing human efforts applied to control the forces and utilise

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the materials of nature for the benefit of man. —American Society

of Mechanical Engineers
(v) Management is the art of knowing what you want to do and
then seeing that it is done in the best and cheapest way. —F.W.
Taylor
(vi)To manage is to forecast and to plan, to organise to
command, to coordinate and to control. —Henry Fayol
A Manager is the person responsible for planning and directing
the work of a group of individuals, monitoring their work, and
taking corrective action when necessary. For many people, this is
their first step into a management career.
Managers may direct workers directly or they may direct several
supervisors who direct the workers. The manager must be
familiar with the work of all the groups he/she supervises, but
does not need to be the best in any or all of the areas. It is more
important for the manager to know how to manage the workers
than to know how to do their work well.
A manager may have the power to hire or fire employees or to
promote them. In larger companies, a manager may only
recommends such action to the next level of management. The
manager has the authority to change the work assignments of
team members.
A manager's title reflects what he/she is responsible for. An
Accounting Manager supervises the Accounting function. An
Operations Manager is responsible for the operations of the
company. The Manager of Design Engineering supervises
engineers and support staff engaged in design of a product or
service. A Night Manager is responsible for the activities that take
place at night. There are many management functions in
business and, therefore, many manager titles. Regardless of title,
the manager is responsible for planning, directing, monitoring and
controlling the people and their work.

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1.3 Principle of management

The definition of management is taken as "The process of
coordinating and integrating work activities so that they are
completed efficiently and effectively with and through other
people." The principles are the universal truths of management
that can be taught.
Henri Fayol (1841-1925) was a French management theorist
whose theories in management and organisation of labour were
widely influential in the beginning of 20th century. He was a
mining engineer who worked for a French mining company
Commentry-Fourchamboult-Decazeville, first as an engineer,
then moved into general management and Managing Director
from 1888 to 1918.Fayol was the first to identify the four functions
of management: planning, organizing, directing, and controlling,
as known today. His original definition of management comprised
of five elements: forecast & plan, organise, command,
coordinate, and control. His 14 principles are:
Division of work - specialisation provides the individual to build
up experience, continuous improvement in skills, and thereby be
more productive. A principle of work allocation and specialisation
in order to concentrate activities to enable specialisation of skills
and understandings, more work focus and efficiency, where
efficiency is the direct ratio between INPUT & OUTPUT - the
author sees a further management development as a pre-cursor
to this thinking whereby 'EFFECTIVENESS' should always prevail
over 'EFFICIENCY' - simplistically EFFICIENCY can often mean
JOB RIGHT but 'EFFECTIVENESS' should always mean 'RIGHT
JOB';
Authority - the right to issue commands, along with which must
go the balanced responsibility for its function
authority with corresponding responsibility
If responsibilities are allocated then the post holder needs the
requisite authority to carry these out including the right to require

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others in the area of responsibility to undertake duties. Authority

stems from:
1-that ascribed from the delegation process (the job holder is
assigned to act as the agent of the high authority to whom they
report - hierarchy)
2-allocation and permission to use the necessary resources
needed (budgets, assets, staff) to carry out the responsibilities.
3-selection - the person has the expertise to carry out the
responsibilities and the personal qualities to win the support and
confidence of others.
Discipline - which is two-sided, for employees only obey orders if
management play their part by providing good leadership. The
generalisation about discipline is that discipline is essential for the
smooth running of a business and without it - standards,
consistency of action, adherence to rules and values - no
enterprise could prosper. in an essence - obedience, application,
energy, behaviour and outward marks of respect observed in
accordance with standing agreements between firms and its
employees.
Unity of Command - each worker should have only one boss
with no other conflicting lines of command. The idea is that an
employee should receive instructions from one superior only. This
generalisation still holds - even where we are involved with team
and matrix structures which involve reporting to more than one
boss - or being accountable to several clients. The basic concern
is that tensions and dilemmas arise where we report to two or
more bosses. One boss may want X, the other Y and the
subordinate is caught between the two schools.
Unity of direction - people engaged in the same kind of activities
must have the same objectives in a single plan The unity of
command idea of having one head (chief executive, cabinet
consensus) with agreed purposes and objectives and one plan

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for a group of activities) is self explanatory, and requires no

further examination here.
Subordination of individual interest to general interest -
management must see that the goals of the firms are always
paramount. Fayol's line was that one employee's interests or
those of one group should not prevail over the organisation as a
whole. This would spark a lively debate about who decides what
the interests of the organisation as a whole are. Ethical dilemmas
and matters of corporate risk and the behaviour of individual
"chancers" are involved here. Fayol's work - assumes a shared
set of values by people in the organisation - a unitarism where the
reasons for organisational activities and decisions are in some
way neutral and reasonable. In later times the author sees the
'political' implications of decisions for example in the Public
Sector, should be the pre-requisite of the Chief Executive and
none other, since too early a consideration will both stifle and
potentially 'corrupt' later professional management judgements.
Remuneration - payment is an important motivator although by
analysing a number of possibilities, Fayol points out that there is
no such thing as a perfect system the price of services
rendered.The general principle is that levels of compensation
should be "fair" and as far as possible afford satisfaction both to
the staff and the enterprise (in terms of its cost structures and
desire for profitability/surplus).
Centralisation or decentralisation - this is a matter of degree
depending on the condition of the business and the quality of its
personnel . Centralisation for Fayol is essential to the
organisation and a natural consequence of organising. This issue
does not go away even where flatter, devolved organisations
occur. Decentralisation is frequently centralised, Jarvis 2005. The
modes of control over the actions and results of devolved
organisations are still matters requiring considerable attention.

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Scalar chain (line of Authority) - a hierarchy is necessary for

unity of direction but lateral communication is also fundamental
as long as superiors know that such communication is taking
place. The scalar chain of command of reporting relationships
from top executive to any employee, whatever their status, needs
to be sensible, clear and understood - this understanding needs
to be 'tested'.
Order- both material order and social order are necessary. The
former minimises lost time and useless handling of materials. The
latter is achieved through organisation and selection. The level of
generalisation becomes difficult with this principle. Basically an
organisation "should" provide an orderly place for each individual
member - who needs to see how their role fits into the
organisation and be confident, able to predict the organisations
behaviour towards them. Thus policies, rules, instructions and
actions should be understandable and understood. Orderliness
implies steady evolutionary movement rather than wild, anxiety
provoking, unpredictable movement - in a modern concept Job
Evaluation, Job Specification and particularly Job Analysis should
both inform and influence Fayol's terminology of 'order'.
Equity - in running a business a 'combination of kindliness and
justice' is needed in treating employees if equity is to be
achieved. Equity, fairness and a sense of justice "should"
pervade the organisation - in principle and practice.
Stability of tenure - this is essential due to the time and expense
involved in training good management. Time is needed for the
employee to adapt to his/her work and perform it effectively.
Stability of tenure promotes loyalty to the organisation, its
purposes and values.
Initiative - allowing all personnel to show their initiative in some
way is a source of strength for the organisation even though it
may well involve a sacrifice of 'personal vanity' on the part of
many managers. At all levels of the organisational structure, zeal,

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enthusiasm and energy are enabled by people having the scope

for personal initiative.
Esprit de corps - management must foster the morale of its
employees. He further suggests that, "real talent is needed to
coordinate effort, encourage keenness, use each person's
abilities, and reward each one's merit without arousing possible
jealousies and disturbing harmonious relations." Harmony and
pulling together among personnel. Here Fayol emphasises the
need for building and maintaining harmony among the work force,
team work and sound interpersonal relationships.
Span of control
This is about actual numbers of subordinates looking downwards.
The direct control a manager has is fewer in terms of people
higher up the scale, and more people by managers lower down.
The kinds of decisions higher up are more varied and wide
ranging, whereas the decisions taken lower down are predictable
and repetitive and cover more people. Each subordinate (that is,
a manager or worker below) is managed in an overall fashion by
the super ordinate. The problem is whether specialisation into
levels of expertise allows a manager above to have an overview
based on equivalent information; the second problem is whether
strategic oversight can be step by step hierarchical. Overviews
may be unevenly placed in organizations depending on what
people do, know and understand.
Span of Control means the number of subordinates that can be
managed efficiently and effectively by a superior in an
organization. It suggests how the relations are designed between
a superior and a subordinate in an organization. Span of control
is of two types:
1. Narrow span of control: Narrow Span of control means a
single manager or supervisor oversees few subordinates.
This gives rise to a tall organizational structure.

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2. Wide span of control: Wide span of control 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 control and the
number of levels in hierarchy in an organization, i.e. , narrower
the span, the greater is the number of levels in an
organization.Narrow span of control is more expensive as
compared to wide span of control as there are more number of
superiors and therefore there are greater communication
problems between various levels of management. Wide span of
control is best suited when the employees are not widely
scattered geographically, as it is easy for managers to be in touch
with the subordinates and to supervise them.
In case of narrow span of control, there are comparatively more
opportunities for growth as the number of levels are more. The
more efficient and organized the superiors are in performing their
tasks, the better it is to have wide span of management. The less
motivated and confident the employees are, the better it is to
have a narrow span of management so that the supervisors can
spend time with them and supervise them well. The more
standardized is the nature of work ,like - if same task can be
performed using same types of inputs, the better it is to have a
wide span of management as more number of employees can be
supervised by a single supervisor. There is more flexibility,
prompt decision making, effective communication between higher
level and lower level management, and improved customer
interaction in case of wide span of management. Technological
advancement such as internet, emails, mobile phones, etc.
makes it easy for superiors to widen their span of control as there
is more effective communication.
An ideal span of control according to modern authors is around
15 to 20 subordinates per manager, while according to the

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traditional authors the ideal number is around 6 subordinates per

manager. In reality, the ideal span of control depends upon
various factors, such as:
1. Nature of an organization
2. Nature of job
3. Skills and competencies of manager
4. Employees skills and abilities
5. The kind of interaction that takes happens between
superiors and subordinates, etc
1.4 Nature of Management
Nature of management can be described as follows.
Continuous Process: Management is a never ending process.
It will remain the part of organization till the organization itself
exists. Management is an unending process as past decisions
always carry their impact for the future course of action.
Universal in Nature: Management is universal in nature i.e. it
exists everywhere in universe wherever there is a human activity.
The basic principles of management can be applied any where
whether they are business or non-business organization.
Multidisciplinary: Management is basically multidisciplinary.
Though management has developed as a separate discipline it
draws knowledge and concepts of various other streams like
sociology, psychology, economics, statistics etc. Management
links ideas and concepts of all these disciplines and uses them
for good-self of the organization.
Management is a group activity. Management is a vital part of
group activity. As no individual can satisfy all his needs himself,
he unites with his co-workers and work together as an organized
group to achieve what he cannot achieve individually.
Management is goal oriented: Management is a goal
oriented activity. It works to achieve some predetermined
objectives or goals which may be economic or social.

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Dynamic: Management is dynamic in nature i.e. techniques to

mange business changes itself over a period of time.
System of authority: Authority is power to get the work done by
others and compel them to work systematically. Management
cannot perform in absence of authority. Authority and
responsibility depends upon position of manager in organization.
Management is an art: Management is considered as art as
both requires skills, knowledge, experience and creativity for
achievement of desired results.
Management is Science. Management is considered
as science. Science tells about the causes and effects of
applications and is based on some specific principles and
procedures. Management also uses some principles and specific
methods. These are formed by continuous observations.
1.5 Need of Management
It helps in Achieving Group Goals - It arranges the factors of
production, assembles and organizes the resources, integrates
the resources in effective manner to achieve goals. It directs
group efforts towards achievement of pre-determined goals. By
defining objective of organization clearly there would be no
wastage of time, money and effort. Management converts
disorganized resources of men, machines, money etc. into useful
enterprise. These resources are coordinated, directed and
controlled in such a manner that enterprise work towards
attainment of goals.
Optimum Utilization of Resources - Management utilizes all the
physical & human resources productively. This leads to efficacy in
management. Management provides maximum utilization of
scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts,
professional and these services leads to use of their skills,
knowledge, and proper utilization and avoids wastage. If

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employees and machines are producing its maximum there is no

under employment of any resources.
Reduces Costs - It gets maximum results through minimum input
by proper planning and by using minimum input & getting
maximum output. Management uses physical, human and
financial resources in such a manner which results in best
combination. This helps in cost reduction.
Establishes Sound Organization - No overlapping of efforts
(smooth and coordinated functions). To establish sound
organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfillment of
this, it establishes effective authority & responsibility relationship
i.e. who is accountable to whom, who can give instructions to
whom, who are superiors & who are subordinates. Management
fills up various positions with right persons, having right skills,
training and qualification. All jobs should be cleared to everyone.
Establishes Equilibrium - It enables the organization to survive
in changing environment. It keeps in touch with the changing
environment. With the change is external environment, the initial
co-ordination of organization must be changed. So it adapts
organization to changing demand of market / changing needs of
societies. It is responsible for growth and survival of organization.
Essentials for Prosperity of Society - Efficient management
leads to better economical production which helps in turn to
increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource. It
improves standard of living. It increases the profit which is
beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which
generate income in hands. Organization comes with new
products and researches beneficial for society.

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Self Check Question

1. Management is considered as art as both requires skills,
knowledge, experience and creativity for achievement of
desired results ______________(True/False)
2. An ideal span of control according to modern authors is
around ________subordinates per manager
_______________________________________________________________
1.6 Assignments
1.6.1 Class assignment
1. Prepare the qualities of manager of an organization
1.6.2 Home assignment
1. Write short notes on
a. Span of control
b. Remuneration
c. Order
2. Write the concept of Authority and responsibility
1.7 Summing Up
This lesson dealt with various Management terminology and
proper management gets maximum results through minimum
input by proper planning and by using minimum input & getting
maximum output.
1.8 Possible answers to self check questions
1. True
2. 15 to 20
1.9 Terminal Questions
1. Write the nature and principles of Management?
2. Define Management.What is the need for management?
Explain
1.10 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

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1.11 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication,
New Delhi
1.12 Keywords
Management is a goal oriented activity. It works to achieve
some predetermined objectives or goals which may be economic
or social.

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BJ(MC) 302 Unit 1 Lesson 2

Lesson 2 Management Functions

__________________________________________________________________

STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Introduction to management Functions
2.3 Assignments
2.3.1 Class assignment
2.3.2 Home assignment
2.4 Summing Up
2.5 Possible answers to self check questions
2.6 Terminal Questions
2.7 References
2.8 Suggested Further Readings
2.9 Keywords

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BJ(MC) 302 Unit 1 Lesson 2

Lesson 2 Management Functions

___________________________________________________________________
In the last lesson we had discussed Management – Definition, Nature,
Principles and Need for Management. In present lesson, we shall study
about the Management Functions.

2.0 Objectives
After going through this lesson you will learn:
• Management functions

2.1 Introduction
A manager’s level within the organizational hierarchy has major
influence on the proportion of efforts spent on managerial and non-
managerial activities, and the proportion of different functions within
managerial activities

2.2 Management Functions

Management can be described as a process encompassing several
core functions of management. The list of functions that constitutes total
management prepared by different authors and experts may differ to
some extent from each other, but the basic the overall nature of
management implicit in these different lists remains the same. The most
common classification of management function includes the following
four functions.
1. Planning
2. Organizing
3. Leading
4. Controlling

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Planning covers the process of objectives and deciding on actions to be

taken to achieve these objectives. Organizing is the process of
designing and developing structure of relationships between members
of the team or group assigned to carry out the planned tasks, and filling
and keeping filled the positions in the organization. Leading refers to
motivating, directing and guiding people in the organization It involves
ensuring that the people in the organization are willing and capable of
performing the required tasks. Controlling involves ascertaining the
actual results and situation of the organization and taking corrective
action when significant deviations from expectations occur.
These management functions are common to all the managers
irrespective of the business activity managed by them – for example,
procurement, manufacturing, marketing, finance, human resources
management, and so on, or their level in organizational. However, the
total time and effort devoted by individual managers to each of the
management function as well as the total effort spent on all the
management function in proportion to other non-managerial, technical
and operational, tasks depends on many factors such as nature of
business and organizations structure.
.

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Depending on size and structure, an organization may have half a

dozen or more levels in the management hierarchy. However, for ease
of understanding these are often grouped in three levels.
1. Top-management: This refers to the top one or two hierarchical
levels in the organization structure. Managers at these levels have
responsibilities for the total organizational performance covering
multiple business activities.
2. Middle-management: These are the managers between the top-
and first-level management. They generally do not have the
responsibility for more than one type of business activity, and even
within that may be responsible for only a segment of the total work in
the organization.
3. First-level-management: They are at the lowest one or two levels
of management hierarchy. They are the people responsible for directly
supervising the work of operational staff, and form a link between them
and the management.
As we move from top to the first-level managers, the total proportion of
effort on management work tends to decrease. Within management
work, the effort spent on planning and controlling functions tends to
decrease, and on leading function tends to increase, as we move down
the organizational hierarchy. There is a drop in amount of organizing
effort requirement also with decreasing level of organization hierarchy,
but much less pronounced drop in comparison to that for planning and
leading
___________________________________________________________________
Self-Check Questions
1. Top Managers have responsibilities for the total organizational
performance covering multiple business activities
_________________________ (True/false)
2. __________refers to motivating, directing and guiding people in
the organization

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2.4 Assignments
2.4.1 Class assignment
1. Prepare the work breakdown structure and mark important
functions of management.
2.4.2 Home assignment
1. Write short notes on
a. Planning
b. Organizing

2.5 Summing Up
This lesson dealt with describing management functions and its
application at various levels of Management.

2.6 Possible answers to self check questions

1. True
2. Leading

2.7 Terminal Questions

1. What are the different functions of management?

2.8 References
1) Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2). Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

2.9 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

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2.10 Keywords
1. Planning covers the process of objectives and deciding on actions to
be taken to achieve these objectives.
2. Organizing is the process of designing and developing structure of
relationships between members of the team or group assigned to carry
out the planned tasks, and filling and keeping filled the positions in the
organization.
3. Leading refers to motivating, directing and guiding people in the
organization

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BJ(MC) 302 Unit 1 Lesson 3

Lesson 3 Responsibility, Authority and Accountability of

Management
__________________________________________________________________

STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 Delegation of Authority
3.3 Authority and Responsibility
3.4 Importance of Delegation
3.5 Assignments
3.5.1 Class assignment
3.5.2 Home assignment
3.6 Summing Up
3.7 Possible answers to self check questions
3.8 Terminal Questions
3.9 References
3.10 Suggested Further Readings
3.11 Keywords

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BJ(MC) 302 Unit 1 Lesson 3

Lesson 3 Responsibility, Authority and Accountability

of Management
_____________________________________________________________
In the last lesson we had discussed Management Functions. In present
lesson, we shall study about the Responsibility, Authority and Accountability
of Management.

3.0 Objectives
After going through this lesson you will learn:
• Responsibility
• Authority
• Accountability of Management

3.1 Introduction
Authority is delegated, responsibility is created and
accountability is imposed. Accountability arises out of
responsibility and responsibility arises out of authority.

3.2 Delegation of Authority

A manager alone cannot perform all the tasks assigned to him.
In order to meet the targets, the manager should delegate
authority. Delegation of Authority means division of authority and
powers downwards to the subordinate. Delegation is about
entrusting someone else to do parts of your job. Delegation of
authority can be defined as subdivision and sub-allocation of
powers to the subordinates in order to achieve effective results.
Elements of Delegation
1. Authority - in context of a business organization, authority can
be defined as the power and right of a person to use and
allocate the resources efficiently, to take decisions and to give
orders so as to achieve the organizational objectives. Authority
must be well- defined. All people who have the authority should

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know what is the scope of their authority is and they shouldn’t

misutilize it. Authority is the right to give commands, orders and
get the things done. The top level management has greatest
authority. Authority always flows from top to bottom. It explains
how a superior gets work done from his subordinate by clearly
explaining what is expected of him and how he should go about
it. Authority should be accompanied with an equal amount of
responsibility. Delegating the authority to someone else doesn’t
imply escaping from accountability. Accountability still rest with
the person having the utmost authority.
2. Responsibility - is the duty of the person to complete the
task assigned to him. A person who is given the responsibility
should ensure that he accomplishes the tasks assigned to him. If
the tasks for which he was held responsible are not completed,
then he should not give explanations or excuses. Responsibility
without adequate authority leads to discontent and dissatisfaction
among the person. Responsibility flows from bottom to top. The
middle level and lower level management holds more
responsibility. The person held responsible for a job is
answerable for it. If he performs the tasks assigned as expected,
he is bound for praises. While if he doesn’t accomplish tasks
assigned as expected, then also he is answerable for that.
3. Accountability - means giving explanations for any variance
in the actual performance from the expectations set.
Accountability can not be delegated. For example, if ’A’ is given a
task with sufficient authority, and ’A’ delegates this task to B and
asks him to ensure that task is done well, responsibility rest with
’B’, but accountability still rest with ’A’. The top level
management is most accountable. Being accountable means
being innovative as the person will think beyond his scope of job.
Accountability, in short, means being answerable for the end
result. Accountability can’t be escaped. It arises from
responsibility.

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For achieving delegation, a manager has to work in a system and

has to perform following steps : -
1. Assignment of tasks and duties
2. Granting of authority
3. Creating responsibility and accountability
Delegation of authority is the base of superior-subordinate
relationship, it involves following steps:-
1. Assignment of Duties - The delegator first tries to define the
task and duties to the subordinate. He also has to define the
result expected from the subordinates. Clarity of duty as well
as result expected has to be the first step in delegation.
2. Granting of authority - Subdivision of authority takes place
when a superior divides and shares his authority with the
subordinate. It is for this reason, every subordinate should be
given enough independence to carry the task given to him by
his superiors. The managers at all levels delegate authority
and power which is attached to their job positions. The
subdivision of powers is very important to get effective
results.
3. Creating Responsibility and Accountability - The
delegation process does not end once powers are granted to
the subordinates. They at the same time have to be
obligatory towards the duties assigned to them. Responsibility
is said to be the factor or obligation of an individual to carry
out his duties in best of his ability as per the directions of
superior. Responsibility is very important. Therefore, it is that
which gives effectiveness to authority. At the same time,
responsibility is absolute and cannot be shifted.
Accountability, on the others hand, is the obligation of the
individual to carry out his duties as per the standards of
performance. Therefore, it is said that authority is delegated,
responsibility is created and accountability is imposed.
Accountability arises out of responsibility and responsibility

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BJ(MC) 302 Unit 1 Lesson 3

arises out of authority. Therefore, it becomes important that

with every authority position an equal and opposite
responsibility should be attached.
Therefore every manager,i.e.,the delegator has to follow a
system to finish up the delegation process. Equally important
is the delegatee’s role which means his responsibility and
accountability is attached with the authority over to here.
3.3 Authority and Responsibility
Authority is the legal right of person or superior to command his
subordinates while accountability is the obligation of individual
to carry out his duties as per standards of performance
Authority flows from the superiors to subordinates,in which
orders and instructions are given to subordinates to complete
the task. It is only through authority, a manager exercises
control. In a way through exercising the control the superior is
demanding accountability from subordinates. If the marketing
manager directs the sales supervisor for 50 units of sale to be
undertaken in a month. If the above standards are not
accomplished, it is the marketing manager who will be
accountable to the chief executive officer. Therefore, we can
say that authority flows from top to bottom and responsibility
flows from bottom to top. Accountability is a result of
responsibility and responsibility is result of authority. Therefore,
for every authority an equal accountability is attached.

Differences between Authority and Responsibility

Responsibility

It is the legal right of a It is the obligation of subordinate

person or a superior to to perform the work assigned to
command his him.
subordinates.

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BJ(MC) 302 Unit 1 Lesson 3

Authority is attached to Responsibility arises out of

the position of a superior-subordinate relationship
superior in concern. in which subordinate agrees to
carry out duty given to him.

Authority can be Responsibility cannot be shifted

delegated by a superior and is absolute
to a subordinate

It flows from top to It flows from bottom to top.

bottom.

3.4 Importance of Delegation- Delegation of authority is a process

in which the authority and powers are divided and shared
amongst the subordinates. When the work of a manager gets
beyond his capacity, there should be some system of sharing the
work. This is how delegation of authority becomes an important tool
in organization function. Through delegation, a manager, in fact, is
multiplying himself by dividing/multiplying his work with the
subordinates. The importance of delegation can be justified by -
1. Through delegation, a manager is able to divide the work and
allocate it to the subordinates. This helps in reducing his
work load so that he can work on important areas such as -
planning, business analysis etc.
2. With the reduction of load on superior, he can concentrate
his energy on important and critical issues of concern. This way
he is able to bring effectiveness in his work as well in the work
unit. This effectively helps a manager to prove his ability and
skills in the best manner.
3. Delegation of authority is the ground on which the superior-
subordinate relationship stands. An organization functions as
the authority flows from top level to bottom. This in fact shows

27
BJ(MC) 302 Unit 1 Lesson 3

that through delegation, the superior-subordinate relationship

become meaningful. The flow of authority is from top to bottom
which is a way of achieving results.
4. Delegation of authority in a way gives enough room and space
to the subordinates to flourish their abilities and skill. Through
delegating powers, the subordinates get a feeling of
importance. They get motivated to work and this motivation
provides appropriate results to a concern. Job satisfaction is an
important criterion to bring stability and soundness in the
relationship between superior and subordinates. Delegation
also helps in breaking the monotony of the subordinates so that
they can be more creative and efficient. Delegation of authority
is not only helpful to the subordinates but it also helps the
managers to develop their talents and skills. Since the manager
get enough time through delegation to concentrate on important
issues, their decision-making gets strong and in a way they can
flourish the talents which are required in a manager. Through
granting powers and getting the work done, helps the manager
to attain communication skills, supervision and guidance,
effective motivation and the leadership traits are flourished.
Therefore it is only through delegation, a manager can be
tested on his traits.
5. Delegation of authority is help to both superior and
subordinates. This, in a way, gives stability to a concern’s
working. With effective results, a concern can think of creating
more departments and divisions flow working. This will require
creation of more managers which can be fulfilled by shifting the
experienced, skilled managers to these positions. This helps in
both virtual as well as horizontal growth which is very important
for a concern’s stability.
Therefore, from the above points, we can justify that delegation
is not just a process but it is a way by which manager multiples

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BJ(MC) 302 Unit 1 Lesson 3

himself and is able to bring stability, ability and soundness to a

concern.
Principle of Delegation
There are a few guidelines in form of principles which can be a
help to the manager to process of delegation. The principles of
delegation are as follows: -
1. Principle of result excepted- suggests that every manager
before delegating the powers to the subordinate should be able to
clearly define the goals as well as results expected from them.
The goals and targets should be completely and clearly defined
and the standards of performance should also be notified clearly.
For example, a marketing manager explains the salesmen
regarding the units of sale to take place in a particular day, say ten
units a day have to be the target sales. While a marketing manger
provides these guidelines of sales, mentioning the target sales is
very important so that the salesman can perform his duty
efficiently with a clear set of mind.
2. Principle of Parity of Authority and Responsibility- According
to this principle, the manager should keep a balance between
authority and responsibility. Both of them should go hand in hand.

According to this principle, if a subordinate is given a

responsibility to perform a task, then at the same time he should
be given enough independence and power to carry out that task
effectively. This principle also does not provide excessive
authority to the subordinate which at times can be misused by
him. The authority should be given in such a way which matches
the task given to him. Therefore, there should be no degree of
disparity between the two.
3. Principle of absolute responsibility- This says that the
authority can be delegated but responsibility cannot be
delegated by managers to his subordinates which means
responsibility is fixed. The manager at every level, no matter

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BJ(MC) 302 Unit 1 Lesson 3

what is his authority, is always responsible to his superior for

carrying out his task by delegating the powers. It does not
means that he can escape from his responsibility. He will
always remain responsible till the completion of task. Every
superior is responsible for the acts of their subordinates and are
accountable to their superior therefore the superiors cannot
pass the blame to the subordinates even if he has delegated
certain powers to subordinates example if the production
manager has been given a work and the machine breaks down.
If repairmen are not able to get repair work done, production
manager will be responsible to CEO if their production is not
completed.
4. Principle of Authority level- This principle suggests that a
manager should exercise his authority within the jurisdiction /
framework given. The manager should be forced to consult their
superiors with those matters of which the authority is not given
that means before a manager takes any important decision, he
should make sure that he has the authority to do that on the
other hand, subordinate should also not frequently go with
regards to their complaints as well as suggestions to their
superior if they are not asked to do. This principle emphasizes
on the degree of authority and the level upto which it has to be
maintained.
Self Check Questions
1. _________________suggests that every manager
before delegating the powers to the subordinate should
be able to clearly define the goals as well as results
expected from them.
2. ________________is the obligation of subordinate to
perform the work assigned to him
3.5 Assignments
3.5.1 Class assignment
1. Collect the samples of various ATL and BTL techniques.

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BJ(MC) 302 Unit 1 Lesson 3

3.5.2 Home assignment

1. Write short notes on
a. Commission System
b. Negotiated Fee
c. Percentage Charges
2. What are ATL and BTL techniques?
3.6 Summing Up
This lesson dealt with authority can be delegated but
responsibility cannot be delegated by managers to his
subordinates which means responsibility is fixed. The manager
at every level, no matter what is his authority, is always
responsible to his superior for carrying out his task by
delegating the powers.

3.7 Possible answers to self check questions

1. Principle of result excepted
2. Responsibility

3.8 Terminal Questions

1. What is responsibility? Explain responsibility of an effective
manager.
2. Explain the concept of delegation of authority in an
organization.
3. Write accountability of a manager in a management

3.9 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

31
BJ(MC) 302 Unit 1 Lesson 3

3.10 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication,
New Delhi
3.11 Keywords
1. Authority can be defined as the power and right of a person
to use and allocate the resources efficiently, to take decisions
and to give orders so as to achieve the organizational
objectives.
2. Responsibility is the obligation of subordinate to perform the
work assigned to him.

32
BJ(MC) 302 Unit 1 Lesson 4

Lesson 4 Planning – Definition, process and importance,

organizing, directing and controlling
__________________________________________________________________

STRUCTURE
4.0 Objectives
4.1 Introduction
4.2 Nature of Planning
4.3 Significance of Planning
4.4 Process of planning
4.5 Assignments
4.5.1 Class assignment
4.5.2 Home assignment
4.6 Summing Up
4.7 Possible answers to self check questions
4.8 Terminal Questions
4.9 References
4.10 Suggested Further Readings
4.11 Keywords

33
BJ(MC) 302 Unit 1 Lesson 4

Lesson 4 Planning – Definition, process and importance,

organizing, directing and controlling

In the last lesson we had discussed Responsibility, Authority and

Accountability of Management. In present lesson, we shall study about the
planning process and its importance.

4.0 Objectives
After going through this lesson you will learn:
• Planning need
• Importance of planning
• Process of planning

4.1 Introduction
Planning is the process of deciding in advance what is to be done,
where, how and by whom it is to be done. Planning as a process
involves anticipation of future course of events and deciding the best
course of action. Planning is the selection from among alternatives for
future courses of action for the enterprise as a whole and each
department within it.

4.2 Nature of Planning

The nature of planning can be highlighted by studying its
characteristics. They are as follows:
(a) Planning is a mental activity. Planning is not a simple process. It
is an intellectual exercise and involves thinking and forethought on the
part of the manager.
(b)Planning is goal-oriented. Every plan specifies the goals to be
attained in the future and the steps necessary to reach them. A
manager cannot do any planning, unless the goals are known.
(c) Planning is forward looking. Planning is in keeping with the
adage, “look before you leap”. Thus planning means looking ahead. It is

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futuristic in nature since it is performed to accomplish some objectives

in future.
(d)Planning pervades all managerial activity. Planning is the basic
function of managers at all levels, although the nature and scope of
planning will vary at each level.
(e) Planning is the primary function. Planning logically precedes the
execution of all other managerial functions,
since managerial activities in organizing; staffing, directing and
controlling are designed to support the attainment of
organizational goals. Thus, management is a circular process beginning
with planning and returning to planning for
revision and adjustment.
(f) Planning is based on facts. Planning is a conscious determination
and projection of a course of action for the
future. It is based on objectives, facts and considered forecasts. Thus
planning is not a guess work.
(g)Planning is flexible. Planning is a dynamic process capable of
adjustments in accordance with the needs and
requirements of the situations. Thus planning has to be flexible and
cannot be rigid.
(h) Planning is essentially decision making. Planning is a choice
activity as the planning process involves finding the alternatives and the
selection of the best. Thus decision making is the cardinal part of
planning.

4.3 Significance of Planning

According to G.R. Terry, “Planning is the foundation of most successful
actions of all enterprises.” An enterprise can achieve its objectives only
through systematic planning on account of the increasing complexities
of modern business.
(a) Minimizes uncertainty-The future is generally uncertain and things
are likely to change with the passage of time. Planning helps in
minimizing the uncertainties of the future as it anticipates future events.

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BJ(MC) 302 Unit 1 Lesson 4

(b)Emphasis on objectives -The first step in planning is to fix the

objectives. When the objectives are clearly fixed, the execution of plans
will be facilitated towards these objectives.
(c) Promotes coordination- Planning helps to promote the coordinated
effort because of pre-determined goals.
(d)Facilitates control- Planning and control are inseparable in the
sense that unplanned actions cannot be controlled. Control is nothing
but making sure that activities conform to the plans.
(e) Improves competitive strength-Planning enables an enterprise to
discover new opportunities, which give it a
competitive edge.
(f) Economical operation-Since planning involves a lot of mental
exercise, it helps in proper utilization of resources
and elimination of unnecessary activities. This, in turn, leads to
economy in operation.
(g)Encourages innovation- Planning is the deciding function of
management. Many new ideas come to the mind of a manager when he
is planning. This creates an innovative and foresighted attitude among
the managers.
(h)Tackling complexities of modern business-With modern business
becoming more and more complex, planning helps in getting a clear
idea about what is to be done, when it is to done, where it is to be done
and how it is to be done.
Types of Planning
Planning is of several kinds depending upon their nature. The various
types of plans are as follows:
(a)Financial and non-financial planning-Financial planning relates to
the monetary aspect of the concern. On the other hand, non-financial
planning relates to the physical resources of the concern.
(b)Formal and informal planning- A planning in black and white is
known as formal planning. Informal planning is only thinking about it
and nothing more.

36
BJ(MC) 302 Unit 1 Lesson 4

(c)Short-range and long-range planning- Short-term planning relates

to a period of less than one year. It is to accomplish objectives in the
near future. Medium-term planning covers a period of over one year but
less than three years. A planning between three to five years is known
along-term planning.
(d)Standing and ad hoc planning-Standing plans are permanent in
nature and are meant to be used over and over again. They ensure
quick decision and action whenever need arises. On the other hand, ad
hoc plans are generally for specific matters and are prepared only when
some need arises.
(e)Administrative and operational planning-
Administrative planning associates with middle level managers and
provide guidelines to operational planning. On the other hand,
operational planning associates with lower levels of management and
deals with actual execution of operations. Top level planning is
concerned with fixing of objectives.
Requirements of a Good Plan
An effective and sound plan should have the following features:
(a) Clear objective-The purpose of plans and their components is to
develop and facilitate the realization of organizational objectives. The
statement on objectives should be clear, concise, definite and accurate.
It should not be colored by bias resulting from emphasis on personal
objectives.
(b) Proper understanding-A good plan is one, which is well
understood by those who have to execute it. It must be based on sound
assumptions and sound reasoning.
(c)Flexible-The principle of flexibility states that management should be
able to change an existing plan because of change in environment
without undue extra cost or delay so that activities keep moving towards
the established goals. Thus, a good plan should be flexible to
accommodate future Uncertainties.
(d)Stable-The principle of stability states that the basic feature of the
plan should not be discarded or modified because of changes in

37
BJ(MC) 302 Unit 1 Lesson 4

external factors such as population trends, technological developments,

or unemployment.
(e)Comprehensive- A plan is said to be comprehensive when it covers
each and every aspect of business. It should integrate the various
administrative plans so that the whole organization operates at peak
efficiency.
(f)Economical-A plan is said to be good, if it is as economical as
possible, depending upon the resources available with the organization.
Limitations Of Planning
Although planning is a primary function of management and facilitates
various other management functions, it has many barriers and
limitations. Some of them are explained below:
(a)Costly process- Planning is a costly process as time; energy and
money are involved in gathering of facts and testing of various
alternatives.
(b)Rigidity- Planning restricts the individual’s freedom, initiative and
desire for creativity as it strictly adheres to -predetermined-policies and
Programmes.
(c)Limited scope- The scope of planning is said to be limited in the
case of organizations with rapidly changing situations.
(d)Influence of external factors-The effectiveness of planning is
sometimes limited because of the external social, political, economical
and technological factors, which are beyond the control of the planners.
(e)Non-availability of data- Planning needs reliable facts and figures.
Planning loses its value unless reliable information is available.
(f)People’s resistance-Resistance to change hinders planning.
Planners often feel frustrated in instituting new plans, because of the
inability of people to accept them.
Planning in Event management involves the following steps:-
1. Objective -
• What do we want?
• Ideas & Proposals: Screening Criteria for Screening
• Event Objectives and detailed aims

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BJ(MC) 302 Unit 1 Lesson 4

2. Draft Outline Plan

• Environmental Search- Competition problems Precedents /
Similarities Stakeholders
• Information Gathering /dates/cost& revenues/Venues/ Staffing
3. Systematic detailed Planning
• Financial plan
• Operational Plan
• Marketing Plan
4. Organizing & preparing the Event- Developmental activities,
Preparation & Deadlines
5. Implementing The Event- Operations, Control of Action
6. Disinvestment /Legacy- Closedown Evaluation, Feedback&
Recording : handover
~The Objective have to be carefully thought through and sufficiently
precise and clear to ensure that the purpose of the event is obvious to
all those invoiced in it . Clarity at the beginning also help the planning
process and of getting everyone to pull in same direction.
~The draft plan is really a place for initial ideas to be recorded. It
heading should cover six key issues to give it some structure & form
• Who the event is being undertaken?
• Who will be involved in the process & the event?
• What will take place & what information research is needed to
make decisions?
• How it will be done?
• Where it will happen?
• When it will take place?
1. Operational Plan – The event will require whole range of resources.
There has to be enough time plan the event properly to meet deadline&
cut off points to achieve the setup m, run the event &Break down its
various elements.

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BJ(MC) 302 Unit 1 Lesson 4

2. Financial Planning – There are hidden, cost risk involved in event

management. Break down & Bottleneck cost can be very severe & not
apparent until they occur.
3. Marketing Plan- It Can be Marketing action plan or a event
launch plan. It schedule of activities leading up to the event .The
marketing team need to identify the key lead-time of every activity.
~ A short wash up session should take place for feedback on the
event to write up the account complete the records and make any notes
of importance to the planning of a similar future event.
Process of generating Ideas involve following steps:
1. ideas Or Objective
2. General Nature of the event
3. Purpose of the event
4. How should it `operate?
5. What Benefits are there to participants?
6. Concepts
7. First Screening- Marketing
8. Second Screening- Operational
9. Third Screening- Financial
10. Remaining concepts & Choice
4.4 Process of planning
The various stages in the process of planning are as follows:
1. Goal setting:
Plans are the means to achieve certain ends or objectives. Therefore,
establishment of organizational or overall objectives is the first step in
planning. Setting objectives is the most crucial part of planning. The
organizational objectives should be set in key areas of operations.
They should be verifiable i.e., they should as far as possible be
specified in clear and measurable terms. The objectives are set in the
light of the opportunities perceived by managers. Establishment of
goals is influenced by the values and beliefs of executives, mission of
the organization, organizational resources, etc.

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BJ(MC) 302 Unit 1 Lesson 4

Objectives provide the guidelines (what to do) for the preparation of

strategic and procedural plans. One cannot make plans unless one
knows what is to be accomplished. Objectives constitute the mission of
an organisation. They set the pattern of future course of action.
The objectives must be clear, specific and informative. Major objectives
should be broken into departmental, sectional and individual objectives.
In order to set realistic objectives, planners must be fully aware of the
opportunities and problems that the enterprise is likely to face.
2. Developing the planning premises:
Before plans are prepared, the assumptions and conditions underlying
them must be clearly defined these assumptions are called planning
premises and they can be identified through accurate forecasting of
likely future events.
They are forecast data of a factual nature. Assessment of environment
helps to reveal opportunities and constraints. Analysis of internal
(controllable and external (uncontrollable) forces is essential for sound
planning premises are the critical factors which lay down the bounder
for planning.
They are vital to the success of planning as they supply per tenant facts
about future. They need revision with changes in the situation.
Contingent plans may be prepared for alternate situations.
3. Reviewing Limitations:
In practice, several constraints or limitations affect the ability of an
organization to achieve its objectives. These limitations restrict the
smooth operation of plans and they must be anticipated and provided
for.
The key areas of Imitations are finance," human resources, materials,
power and machinery. The strong and weak points of the enterprise
should be correctly assessed.
4. Deciding the planning period:
Once the broad goals, planning premises and limitations are laid down,
the next step is to decide the period of planning. The planning period

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BJ(MC) 302 Unit 1 Lesson 4

should be long enough to permit the fulfillment of the commitments

involved in a decision.
This is known as the principle of commitment. The planning period
depends on several factors e.g., future that can be reasonably
anticipated, time required to receive capital investments, expected
future availability of raw materials, lead time in development and
commercialization of a new product, etc.
5. Formulation of policies and strategies:
After the goals are defined and planning premises are identified,
management can formulate policies and strategies for the
accomplishment of desired results. The responsibility for laying down
policies and strategies lies usually with management. But, the
subordinates should be consulted as they are to implement the policies
and strategies.
Alternative plans of action should be developed and evaluated carefully
so as to select the most appropriate policy for the organization.
Imagination, foresight, experience and quantitative techniques are very
useful in the development and evaluation of alternatives.
Available alternatives should be evaluated in the light of objectives and
planning premises. If the evaluation shows that more than one
alternative is equally good, the various alternatives may be combined in
action.
6. Preparing operating plans:
After the formulation of overall operating plans, the derivative or
supporting plans are prepared. Several medium range and short-range
plans are required to implement policies and strategies.
These plans consist of procedures, programmers, schedules, budgets
and rules. Such plans are required for the implementation of basic
plans.
Operational plans reflect commitments as to methods, time, money, etc.
These plans are helpful in the implementation of long range plans.
Along with the supporting, plans, the timing and sequence of activities is
determined to ensure continuity in operations.

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BJ(MC) 302 Unit 1 Lesson 4

7. Integration of plans:
Different plans must be properly balanced so that they support one
another. Review and revision may be necessary before the plan is put
into operation. Moreover, the various plans must be communicated and
explained to those responsible for putting them into practice.
The participation and cooperation of subordinates is necessary for
successful implementation of plans. Established plans should be
reviewed periodically so as to modify and change them whenever
necessary.
A system of continuous evaluation and appraisal of plans should be
devised to identify any shortcomings or pitfalls of the plans under
changing situations.
Self check question
1. The ___________have to be carefully thought through and
sufficiently precise and clear to ensure that the purpose of the event is
obvious to all those invoiced in it
2. _____________is the foundation of most successful actions of
all enterprises.”
4.5 Assignments
4.5.1 Class assignment
1. Prepare planning schedule for launching a concept car
4.5.2 Home assignment
1. Write short notes on
a. Operational Plan
b. Planning premises
4.6 Summing Up
These lesson dealt with Plans are the means to achieve certain ends
or objectives. Therefore, establishment of organizational or overall
objectives is the first step in planning. Setting objectives is the most
crucial part of planning. The organizational objectives should be set in
key areas of operations.
4.7 Possible answers to self check questions
1. Objective

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BJ(MC) 302 Unit 1 Lesson 4

2. Planning

4.8 Terminal Questions

1. Define planning.
2. Write process and importance of planning.

4.9 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

4.10 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

4.11 Keywords
Operational Plan – The event will require whole range of resources.

44
BJ(MC) 302 Unit 1 Lesson 5

Lesson 5 Human Resource Planning

___________________________________________________________________

STRUCTURE
5.0 Objectives
5.1 Introduction
5.2 Human Resource Management
5.3 Nature of HRM
5.4 Recruitment & Selection
5.5 Assignments
5.5.1 Class assignment
5.5.2 Home assignment
5.6 Summing Up
5.7 Possible answers to self check questions
5.8 Terminal Questions
5.9 References
5.10 Suggested Further Readings
5.11 Keywords

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BJ(MC) 302 Unit 1 Lesson 5

Lesson 5 Human Resource Planning

In the last lesson we had discussed planning. In present lesson, we shall study about
the Human resource planning, recruitment and selection.

5.0 Objectives
After going through this lesson you will learn:
Human resource planning
recruitment and selection

5.1 Introduction
Human Resource Management is the organizational function that deals
with issues related to people such as compensation, hiring,
performance management, organization development, safety, wellness,
benefits, employee motivation, communication, administration, and
training

5.2 Human Resource Management

HRM as “planning, organizing, directing, controlling of procurement,
development, compensation, integration , maintenance and separation
of human resources to the end that individual, organizational and social
objectives are achieved.”
According to Decenzo and Robbins, “HRM is concerned with the
people dimension” in management. Since every organization is made
up of people, acquiring their services, developing their skills, motivating
them to higher levels of performance and ensuring that they continue to
maintain their commitment to the organization is essential to achieve
organsational objectives. This is true, regardless of the type of
organization – government, business, education, health or social
action”.

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BJ(MC) 302 Unit 1 Lesson 5

Definition 1 “HRM is planning, organizing, directing and controlling of

the procurement, development, compensation, integration, maintenance
and separation of human resources to the end that individual,
organizational and social objectives are accomplished.”
OBJECTIVES OF HRM
Societal objective. To be socially responsible to the needs and
challenges of society while minimizing the negative impact of such
demands upon the organization. The failure of organizations to use their
resources for society's benefit may result in restrictions. For example,
societies may pass laws that limit human resource decisions.
Organizational objective. To recognize that HRM exists to contribute
to organizational effectiveness. HRM is not an end in itself; it is only a
means to assist the organization with its primary objectives. Simply
stated, the department exists to serve the rest of the organization.
Functional objective. To maintain the department's contribution at a
level appropriate to the organisation's needs. Resources are wasted
when HRM is more or less sophisticated than the organisation
demands. A department's level of service must be appropriate for the
organisation it serves.
Personal objective. To assist employees in achieving their personal
goals, at least insofar as these goals enhance the individual's
contribution to the organisation. Personal objectives of employees must
be met if workers are to be maintained, retained and motivated.
Otherwise, employee performance and satisfaction may decline, and
employees may leave the organisation.

5.3 Nature of HRM

1. HRM involves management functions like planning, organizing,
directing and controlling
2. It involves procurement, development, maintenance of human
resource
3. It helps to achieve individual, organizational and social objectives

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BJ(MC) 302 Unit 1 Lesson 5

4. HRM is a multidisciplinary subject. It includes the study of

management, psychology, communication, economics and sociology.
5. It involves team spirit and team work.
6. It is a continuous process.
What Is Needs Assessment?
A needs assessment is the process of collecting information about an
expressed or implied organizational need that could be met by
conducting training. The need can be a desire to improve current
performance or to correct a deficiency. A deficiency is a performance
that does not meet the current standard. It means that there is a
prescribed or best way of doing a task and that variance from it is
creating a problem. The needs assessment process helps the trainer
and the person requesting training to specify the training need or
performance deficiency. Assessments can be formal (using survey and
interview techniques) or informal (asking some questions of those
involved).The term needs assessment is a general term for a three-
phaseprocess to collect information, analyze it, and create a training
plan. Different types of assessments are called needs analysis, such as
performance analysis, job/task analysis, target population analysis, and
so forth. Needs assessment often involves the use of more than one
type of analysis.
Why Conduct a Needs Assessment?
The purpose of a needs assessment is to answer some familiar
questions: why, who, how, what, and when. Following the definitions of
each type of needs assessment is the common needs analysis term.
1. Why conduct the training: to tie the performance deficiency to a
business need and be sure the benefits of conducting the training are
greater than the problems being caused by the performance deficiency.
Conduct two types of analysis to answer this question:
(1) needs versus wants analysis and (2) feasibility analysis.
2. Who is involved in the training: involve appropriate parties to solve
the deficiency. Conduct a target population analysis to learn as much as

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possible about those involved in the deficiency and how to customize a

training program to capture their interest.
3. How can the performance deficiency be fixed: training can fix the
performance deficiency or suggest other remediation if training is not
appropriate. Conduct a performance analysis to identify what skill
deficiency is to be fixed by a training remedy

Policies & Procedure

Policies may be defined as guides to thinking and action of those who
have to make decisions in the course of accomplishment of the
enterprise objectives. They provide ready answers to all questions
faced in the running on the enterprise.Policies are formulated in broad
terms and provide a comprehensive and flexible course of action to be
pursued to attain the given objectives. Thus they give a concrete touch
to objectives.
Procedure- A fixed, step-by-step sequence of activities or course of
action (with definite start and end points) that must be followed in
the same order to correctly perform a task. Repetitive procedures are
called routines.
However, it should be noted that policies & Procedure do not provide
any decisions as such. They only lay down the limits within which
decisions have to be made. For example, an enterprise which has set
the objective of promoting the development of people of the area may
follow the policy of employing only local people. Similarly, an enterprise

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may follow the policy of selling only against or of filling up managerial

posts from among its own employees.
It is critical for organizational policies and procedures to be clearly
defined and communicated.
1) Understanding Organizational Expectations: Without policies and
procedures it is difficult for new and existing employees to understand
the organization's culture, expectations and requirements. Employees
need to be aware of their specific roles and responsibilities, as well as
employment policies for vacation time, sick time, health care, etc.
2) Improving Employee Engagement: If employees are educated and
understand their individual and organizational requirements, overall
morale and productivity will increase.
3) Ensuring Ongoing Compliance: In order to ensure compliance,
organizations must ensure all employees are trained
4) Keeping Up with Escalating Risks and Challenges: All employees
(and third-parties) should be reminded on an ongoing basis about your
organization's policies and procedures as risks, regulations, best
practices, etc. are constantly evolving. As regulations, risks and threats
change, are you updating your procedures or are your policies still the
same as the day you first created them?
5) Avoiding Expensive and Embarrassing Incidents: Many
organizations are too flexible with requirements and can expose
themselves to expensive and embarrassing data breaches, lawsuits,
losses and mistakes by not implementing clearly defined policies.
6) Replacing Status Quo Methodologies: The first step for many
organizations is to determine their requirements and then create their
policies and procedures accordingly. However, this is where many
organizations quit. They create a comprehensive policy manual or
binder, distribute it to their employees and never mention it again. Do
you really think your employees are reading the manual and identifying
the specific roles and responsibilities that apply to them?
7) Avoiding the "I never got that email" Excuse: If your organization
is just blasting your policies out to your people in e-mails and

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memos...how do you know if anyone received the email or is reading

the policies and understands them? How can you hold your employees
accountable?
8) Communicating to All Affected Personnel: It is critical for
organizations of all sizes to not only create comprehensive policies and
procedures ongoing, but to ensure those policies have been
implemented down to the individual level and read, understood and
acknowledged by all employees (staff, management, third-parties,
vendors, contractors, first responders, etc.).
9) Improving Safety and Preparedness: Do your employees know
what to do in the event of a disaster? What is the organization's
emergency plan? What are their individual roles and responsibilities?
Should they evacuate? Where do they go? Where is the emergency call
list? Are systems back-up on a daily basis? And so on... It is critical for
your organization to ensure all individuals understand their
requirements before, during and after an incident occurs.
10) Documenting, Documenting, Documenting: Are employees
signing off on certain policies required by federal and state regulations?
Actually implementing policies, procedures, plans and processes
means organizations have documentation and proof that individuals
have read, understood and acknowledged their roles and
responsibilities. Regulations require proof of implementation. Legal due
diligence requires proof of implementation.

5.4 Recruitment & Selection

The recruitment and selection is the major function of the human
resource department and recruitment process is the first step towards
creating the competitive strength and the strategic advantage for the
organisations. Recruitment process involves a systematic procedure
from sourcing the candidates to arranging and conducting the
interviews and requires many resources and time. A general
recruitment process is as follows:

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BJ(MC) 302 Unit 1 Lesson 5

Identifying the vacancy:

The recruitment process begins with the human resource department
receiving requisitions for recruitment from any department of the
company. These contain:
Posts to be filled
Number of persons
Duties to be performed
Qualifications required
Preparing the job description and person specification
Locating and developing the sources of required number and type of
employees (Advertising etc).
Short-listing and identifying the prospective employee with required
characteristics.
Arranging the interviews with the selected candidates
Conducting the interview and decision making

i. Identify vacancy
ii. Prepare job description and person specification
iii. Advertising the vacancy
iv. Managing the response
v. Short-listing
vi. Arrange interviews
vii. Conducting interview and decision making
The recruitment process is immediately followed by the selection
process i.e. the final interviews and the decision making, conveying the
decision and the appointment formalities.
Purpose & Importance of Recruitment
Attract and encourage more and more candidates to apply in the
organisation.
Create a talent pool of candidates to enable the selection of best
candidates for the organisation.
Determine present and future requirements of the organization in
conjunction with its personnel planning and job analysis activities.

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Recruitment is the process which links the employers with the

employees.
Increase the pool of job candidates at minimum cost.

Help increase the success rate of selection process by decreasing

number of visibly under qualified or overqualified job applicants.
Help reduce the probability that job applicants once recruited and
selected will leave the organization only after a short period of time.
Meet the organizations legal and social obligations regarding the
composition of its workforce.
Begin identifying and preparing potential job applicants who will be
appropriate candidates.
Increase organization and individual effectiveness of various
recruiting techniques and sources for all types of job applicants
Recruitment Policy of a company
In today’s rapidly changing business environment, a well defined
recruitment policy is necessary for organizations to respond to its
human resource requirements in time. Therefore, it is important to
have a clear and concise recruitment policy in place, which can be
executed effectively to recruit the best talent pool for the selection
of the right candidate at the right place quickly. Creating a suitable
recruitment policy is the first step in the efficient hiring process. A
clear and concise recruitment policy helps ensure a sound
recruitment process.
It specifies the objectives of recruitment and provides a framework
for implementation of recruitment programme. It may involve
organizational system to be developed for
Implementing recruitment programmes and procedures by filling up
vacancies with best qualified people.

_________________________________________________
Self Check question
1. The_________ and _________is the major function of the

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human resource department and recruitment process is the first step

towards creating the competitive strength
2. __________is concerned with the people dimension
______________________________________________________
5.5 Assignments
5.5.1 Class assignment
1. Prepare Recruitment classified for any organization.
5.5.2 Home assignment
1. Write short notes on
a. Recruitment
b. selection

5.6 Summing Up
This lesson dealt with various methods of Human resource planning to
assist employees in achieving their personal goals, at least insofar as
these goals enhance the individual's contribution to the organisation.
Personal objectives of employees must be met if workers are to be
maintained, retained and motivated.

5.7 Possible answers to self check questions

1. recruitment and selection
2. HRM

5.8 Terminal Questions

1. Explain human resource planning.

5.9 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

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BJ(MC) 302 Unit 1 Lesson 5

5.10 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

5.11 Keywords
• Recruitment is the process which links the employers with the
employees.

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BJ(MC) 302 Unit 2 Lesson 1

Unit-II [Behaviour and Leadership]

Lesson 1 Foundations of behaviour – Attitudes, Personality and
Learning
Lesson 2 Leadership – Importance and major types
Lesson 3 Motivation and Conflict management

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BJ(MC) 302 Unit 2 Lesson 1

Lesson 1 Foundations of behaviour – Attitudes, Personality

and Learning
___________________________________________________________________
STRUCTURE
1.0 Objectives
1.1 Introduction
1.2 Attitude
1.3 Presonality
1.4 learning
1.5 Assignments
1.5.1 Class assignment
1.5.2 Home assignment
1.6 Summing Up
1.7 Possible answers to self check questions
1.8 Terminal Questions
1.9 References
1.10 Suggested Further Readings
1.11 Keywords

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BJ(MC) 302 Unit 2 Lesson 1

Lesson 1 Foundations of behaviour – Attitudes,

Personality and Learning

This unit deals with the Behaviour and Leadership Concepts. This
present lesson provides you the clarity of concept for Attitudes,
Personality and Learning.

1.0 Objectives
After going through this lesson you will learn:
• Attitude
• Personality
• Learning

1.1 Introduction
Attitude is an understanding or learning of why employees feel and act
the way; they do and help supervisors in winning cooperation from
them. So, it is very essential for the efficient working of an organization.

1.2 Attitude
An attitude is defined as, "a learned pre-disposition to respond in a
consistently favourable or unfavorable manner with respect to a given
object".Attitude is the combination of beliefs and feelings that people have
about specific ideas, situations or other people. Attitude is important because it
is the mechanism through which most people express their feelings.

COMPONENTS OF ATTITUDE
Attitude has three components, which are as follows:
• Affective component
• Cognitive component
• Intentional component

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The affective component of an attitude reflects 'feelings and

emotions' that an individual has towards a situation. The cognitive
component of an attitude is derived from 'knowledge' that an individual
has about a situation. Finally, the intentional component of an attitude
reflects how an individual 'expects to behave' towards or in the
situation. For example, the different components of an attitude held
towards a firm, which supplies inferior products and that too irregularly
could be described as follows:
• "I don't like that company"—Affective component.
• "They are the worst supply firm I have ever dealt with"—Cognitive
component.
• "I will never do business with them again"'—Intentional component.
People try to maintain consistency among the three components of their
attitudes. However, conflicting circumstances often arise. The conflict
that individuals may experience among their own attitudes is called
'cognitive dissonance.

ATTITUDE FORMATION AND CHANGE

Individual attitude are formed over time as a result of repeated
personal experiences with ideas, situations or people. One of the very

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important ways to understand individual behaviour in an organization is

that of studying attitude, which is situation ally specific and learned.
An attitude may change as a result of new information. A manager may
have a negative attitude about a new employee because of his lack of
job-related experience. After working with a new person, a manager
may come to realise that he is actually very talented and subsequently
may develop a more positive attitude toward him.
Work-Related Attitudes
People in an organization form attitude about many things such as
about their salary, promotion possibilities, superiors, fringe benefits,
food in the canteen, uniform etc. Especially some important attitudes
are job satisfaction or dissatisfaction, organizational commitment and
job involvement.
Job Satisfaction
Job satisfaction is an attitude reflects the extent to which an individual is
gratified or fulfilled .by his or her work. Extensive research conducted
on job satisfaction has indicated that personal .factors such as an
individual's needs and aspirations determine this attitude, along with
group and organizational factors such as relationships with co-workers
and supervisors, working conditions, work policies and compensation.
A satisfied employee also tends to be absent less often, makes positive
contributions, and stays with the organization. In contrast, a dissatisfied
employee may be absent more often may experience stress that
disrupts co-workers, and may keep continually looking for another job.
Organizational factors that influence employee satisfaction include pay,
promotion, policies and procedures of the organizations and working
conditions. Group factors such as relationship with co-workers and
supervisors also influence job- satisfaction. Similarly, satisfaction
depends on individual factors like individual's needs and aspirations. If
employees are satisfied with their job, it may lead to low employee
turnover and less absenteeism and vice-versa.

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Organizational Commitment and Involvement

Two other important work-related attitudes arc organizational
commitment and involvement. Organizational commitment is the
individual's feeling of identification with and attachment to an
organization. Involvement refers to a person's willingness to be a team
member and work beyond the usual standards of the job. An employee
with little involvement is motivated by extrinsic motivational factor and
an employee with strong involvement is motivated by intrinsic
motivational factors.
There are a number of factors that lead to commitment and
involvement. Both may increase with an employee's age and years with
the organization, with his sense of job security and participation in
decision-making. If the organization treats its employees fairly and
provides reasonable rewards and job security, employees are more
likely to be satisfied and committed. Involving employees in decision-
making can also help to increase commitment. In particular, designing
jobs, which are interesting and stimulating, can enhance job
involvement.
ATTITUDE: IT’S IMPORTANCE IN ORGANIZATIONAL BEHAVIOUR
Attitudes of both workers and management react to each other and
determine mutual relationships.
Attitude is an understanding or learning of why employees feel and act
the way; they do and help supervisors in winning cooperation from
them. So, it is very essential for the efficient working of an organization.
From a personal perspective, attitudes provide knowledge base or
prepare, our mental state, for our interaction with others, and with the
world around us. This directly affects organizational behaviour, and in
turn organizational working.
Perception
Perception is an important mediating cognitive process. Through this
complex process, people make interpretations of the stimulus or
situation they are faced with. Both selectivity and organization go 'into
perceptual, interpretations. Externally, selectivity is affected by intensity,

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size, contrast, repetition, motion and novelty and familiarity. Internally,

perceptual selectivity is influenced by the individual's motivation,
learning and personality. After the selective process filters the stimulus
situation, the incoming information is organized into a meaningful
whole.
Individual differences and uniqueness are largely the result of the
cognitive processes. Although there arc a number of cognitive
processes, it is generally recognized that the perceptual process is a
very important one. It is a process that takes place between the
situation and the behaviour and is most relevant to the study of
organizational behaviour. For example, the observation that a
department head and a subordinate may react quite differently to the
same top management directive can be better understood and
explained by the perceptual process.
In the process of perception, people receive many different kinds of
information through all five senses, assimilate them and then interpret
them. Different people perceive the same information differently.
Perception plays a key role in determining individual behaviour in
organizations. Organizations send messages in a variety of forms to
their members regarding what they are expected to do and not to do. In
spite of organizations sending clear messages, those messages are
subject to distortion in the process of being perceived by organizational
members. Hence, managers need to have a general understanding of
the basic perceptual process.

Basic Perceptual Process

Perception is influenced by characteristics of the object being
perceived, by the characteristics of the person and by the situational
processes.
• Characteristics of the object include contrast, intensity, movement,
repetition and novelty.
• Characteristics of the person include attitude, self-concept and
personality.

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The details of a particular situation affect the way a person

perceives an object; the same person may perceive the same object
very differently in different situations. The processes through which a
person's perceptions are altered by the situation include selection,
organization, attribution, projection, stereotyping process, and the halo
effect process. Among these, selective perception and stereotyping are
particularly relevant to organizations.
Selective Perception
Selective perception is the process of screening out information that we
are uncomfortable with or that contradicts our beliefs. For example, a
manager has a very positive attitude about a particular worker and one
day he notices that the worker seems to be goofing up. Selective
perception may make the manager to quickly disregard what he
observed.
Stereotyping
Stereotyping is the process of categorizing or labeling people on the
basis of a single attribute. Perceptions based on stereotypes about
people's sex exist more or less in all work places. Typically, these
perceptions lead to the belief that an individual's sex determines which
tasks he or she will be able to perform. For example, if a woman is
sitting behind the table in the office, she will be very often, perceived as
a clerk and not an executive at first.
PERCEPTION AND ATTRIBUTION
Perception is also closely linked with another process called attribution.
Attribution is a mechanism through which we observe behaviour and
then attribute certain causes to it. According to Attribution theory, once
we observe behaviour we evaluate it in terms of its consensus,
consistency and distinctiveness. Consensus is the extent to which other
people in the same situation behave in the same way. Consistency is
the degree to which the same person behaves in the same way at
different times. Distinctiveness is the extent to which the same person
behaves in the same way in other situations. The forces within the
person (internal) or outside the person (external) lead to the behaviour.

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IMPRESSION MANAGEMENT
Social perception is concerned with how one individual perceives other
individuals. Conversely, impression management is the process by
which the general people attempt to manage or control the perceptions
that others form about them. People often tend to present themselves in
such a way so as to impress others in a socially desirable manner.
Thus, impression management has considerable' implications for
activities like determining the validity of performance appraisals. It
serves as a pragmatic, political tool for someone to climb the ladder of
success in organizations.
The Process of Impression Management
Impression construction, the other major process, is concerned with the
specific type of impression people want to make and how they create it.
Although some theorists limit the type of impression only to personal
characteristics others include such things as attitudes, physical status,
interests, or values. Using this broader approach, five factors have been
identified as being especially relevant to the] kinds of impression people
try to construct: the self-concept, desired and undesired identity images,
role constraints, target values and current social image. Although there
has been a considerable research done on how these five factors
influence the type of impression that people try to make, there is still
little known of how they select the way to manage others' perceptions of
them.
Employee Impression Management Strategies
There are two basic strategies of impression management that
employees can use. If employees are trying to minimize responsibility
for some negative event or to stay out of trouble, they may employ a
demotion-preventative strategy. On the other hand, if they are seeking
to maximize responsibility for a positive outcome or to look better than
what they really are, then they lean use a promotion-enhancing
strategy.
The demotion-preventative strategy is characterized by the following
activities:

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• Employees attempt to excuse or justify their actions.

• Employees apologies to the boss for some negative event.
• Employees secretly tell their boss that they fought for the right thing, but
were overruled. Employees using this approach try to disassociate
themselves from the group and from the problem.
The promotion enhancing strategies involve the following activities:
• Employees harbor a feeling that they have not been given credit for a
positive outcome.
• Employees point out that they did more, but received a lesser credit.
• Employees identify cither personal or organizational obstacles they had
to overcome to accomplish an outcome and expect a higher credit.
• Employees ascertain that they are seen with the right people at the right
times.

Coping with Individual Differences

Individual differences and people's perception of them affect every
aspect of behaviour in organizations. Managers must never
underestimate the differences between individuals. Successful
managers constantly monitor their own assumptions, perceptions and
attributions, trying to treat each individual as a unique person.

1.3 Personality
Personality is a complex, multi-dimensional construct and there is no
simple definition of what personality is. Maddi defines personality as, “A
stable set of characteristics and tendencies that determine those
commonalities and differences in the psychological behavior and that
may not be easily understood as the sole result of the social and
biological pressures of the moment".
social learning analysis is one of the most comprehensive and
meaningful ways included in the overall study of organizational
behavior. From this perspective, personality means the way people
affect others. It also involves people's understanding themselves, as
well as their pattern of inner and outer measurable traits, and the

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person and situation interaction. People affect others depending

primarily upon their external appearance such as height, weight, facial
features, color and other physical aspects and traits.
Personality traits are very important in organizational behavior. In
particular, five personality traits especially related to job performance
have recently emerged from research. Characteristics of these traits
can be summarized as follows:
1. Extroversion: Sociable, talkative and assertive.
2. Agreeableness: Good-natured, cooperative and trusting.
3. Conscientiousness: Responsible, dependable, persistent and
achievement-oriented.
4. Emotional Stability: Viewed from a negative standpoint such as
tense, insecure and nervous.
5. Openness to Experience: Imaginative, artistically sensitive and
intellectual.
Identifying the above "big five" traits related to performance reveals
that personality plays an important role in organizational behavior.
Besides physical appearance and personality traits, the aspects of
personality concerned with the self-concept such as self-esteem and
self-efficacy and the person-situation interaction also play important
roles.
PERSONALITY FORMATION
The personality formation of an individual starts at birth and continues
throughout his life. Three major types of factors play important roles in
personality formation, which are as follows:
• Determinants: The most widely studied determinants of personality are
biological, social and cultural. People grow up in the presence of certain
hereditary characteristics (body shape and height), the social context
(family and friends) and the cultural context (religion and values). These
three parts interact with • each other to shape personality. As people
grow into adulthood, their personalities become very clearly defined and
generally stable.

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• Stages: According to Sigmund Freud human personality progresses

through four stages: dependent, compulsive, oedipal and mature. This
concept of stages of growth provides a valuable perspective to
organizational behavior. Experienced managers become aware of the
stages that their employees often go through. This helps them 19 deal
with these stages effectively and promote maximum growth for the
individual and for the organization.
• Traits: Traits to personality are also based on psychology. According to
some trait theories, all people share common traits, like social, (political,
religious and aesthetic preferences but each individual's nature differen-
tiates that person from all others.
PERSONALITY FACTORS IN ORGANISATIQN5
Some of the important personality factors that determine what kind of
behaviors are exhibited at work include the following:
Need Pattern
Steers and Braunstein in 1976 developed a scale for the four needs of
personality that became apparent in the 'work environment. They are as
follows:
• The need for achievement: Those with a high achievement need
engage themselves proactively in work behaviors in order to feel proud
of their achievements and successes.
• The need for affiliation: Those in greater need for affiliation like to
work cooperatively with others.
• The need for autonomy: Those in need for autonomy function in the
best way when not closely supervised.
• The need for dominance: Those high in need for dominance are very
effective while operating in environments where they can actively
enforce their legitimate authority.
Locus of Control
Locus of control is the degree to which an individual believes that his or
her behavior has direct impact on the consequences of that behavior.
Some people, for example, believe that if they work hard they will
certainly succeed. They, strongly believe that each individual is in

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control of his or her life. They are said to have an internal locus of
control. By contrast, some people think that what happens to them is a
result of fate, chance, luck or the behavior of other people, rather than
the lack of skills or poor performance on their part. Because- these
individuals think that forces beyond their control dictate the happenings
around them, they are said to have an external locus of control.
Self-Esteem and Self-Concept
Self-esteem denotes the extent to which individuals consistently regard
themselves as capable, successful, important and worthy individuals.
Self-esteem is an important personality factor that determines how
managers perceive themselves and their role in the organization. Self-
esteem is important to self-concept, i.e., the way individuals, define
themselves as to who they are and derive their sense of identity. High
self-esteem provides a high sense of self-concept, which, in turn,
reinforces high self-esteem. Thus, the two are mutually reinforcing.
Individuals with a high self-esteem will try to take on more challenging
assignments and be successful. Thus, they will be enhancing their self-
concept i.e., they would tend to define themselves as highly valued
individuals in the organizational system. The higher the self-concept
and self-esteem, the greater will be their contributions to the goals of
the organization, especially when the system rewards them for their
contributions.
Authoritarianism and Dogmatism
Authoritarianism is the extent to which an individual believes that power
and status differences are important within' hierarchical social systems
like organizations. For example, an employee who is highly
authoritarian may accept directives or orders from his superior without
much questioning.
Dogmatism is the rigidity of a person's beliefs and his or her
openness to other viewpoints. The popular terms 'close-minded' and
'open-minded' describe people who are more and less .dogmatic in their
beliefs respectively. For example, a manager may be unwilling to listen
to a new idea related to doing something more efficiently

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Machiavellianism
Machiavellianism is manipulating or influencing other people as a
primary way of achieving one's goal. An individual tends to be
Machiavellian, if he tends to be logical in assessing the system around,
willing to twist and turn facts to influence others, and try to gain control
of people, events and situations by manipulating the system to his
advantage.
Type A and B Personalities
Type A persons feel a chronic sense of time urgency, are highly
achievement-oriented, exhibit a competitive drive, and are impatient
when their work is slowed down for any reason. Type B persons are
easy-going individuals who do not feel the time urgency, and who do
not experience the competitive drive. Type A individuals are significantly
more prone to heart attacks than Type B individuals. While Type A
persons help the organization to move ahead in a relatively short period
of time they may also suffer health problems, which might be
detrimental to both themselves and the organization in the long run.
THE SELF-CONCEPT: SELF-ESTEEM AND SELF-EFFICACY
People's attempt to understand themselves is called the self-concept in
personality theory. The human self is made of many interacting parts
and may be thought of as the personality viewed from within. This self is
particularly relevant to the concepts of self-esteem and self-efficacy in
the field of organizational behavior.
People's self-esteem has to do with their self-perceived
competence and self-image. Considerable research has been done on
the role played by self-esteem outcomes in the organizational behavior.
Most recently done studies indicate that self-esteem plays an important
moderating role in the areas of emotional and behavioral responses and
stress of organizational members. It was recently noted that, "both
research and everyday experience confirm that employees with high
self-esteem feel unique, competent, secure, empowered and
connected, to the people around them"

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Self-efficacy is concerned with self-perceptions of how well a

person can cope with situations as they arise. Those with high self-
efficacy feel capable and confident of performing well in a situation. In
the field of organizational behavior, self-efficacy is conceptually close to
self-esteem. Miner points out the differences by noting that self-esteem
tends to be a generalized trait (it will be present in any situation), while
self-efficacy tends to be situation specific. Self-efficacy; has been
shown to have an empirical relationship with organizational
performance and other dynamics of organizational behavior.
In summary, personality is a very diverse and complex cognitive
process. It incorporates almost everything. As defined above,
personality means the whole person. It is concerned with external
appearance and traits, self and situational interactions. Probably the
best statement on personality was made many years ago by Kluckhohn
and Murray, "to some extent, a person's personality is like all other
people's, like some other people's, and like no other people's."

1.4 Learning
Learning is an important psychological process that-determines human
behavior. Learning can be defined as “relatively permanent change in
behavior that occurs as a result of experience or reinforced practice".
There are four important points in the definition of learning:
1. Learning involves a change in behavior, though this change is not
necessarily an improvement over previous behavior. Learning generally
has the connotation of improved behavior, but bad habits, prejudices,
stereotypes, and work restrictions are also learned.
2. The, behavioral change must be relatively permanent. Any
temporary change in behavior is not a part of learning.
3. The behavioral change must be based oh some form of practice or
experience.
4. The practice or experience must be reinforced in order so as to
facilitate learning to occur.

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COMPONENTS OF THE LEARNING PROCESS

The components of learning process are: drive, cue stimuli, response,
reinforcement and retention.
Drive
Learning frequently occurs in the presence of drive - any strong
stimulus that impels action. Drives are basically of two types -primary
(or physiological); and secondary (or psychological). These two
categories of drives often interact with each other. Individuals operate
under many drives at the same time. To predict a behavior, it is
necessary to establish which drives are stimulating the most.
Cue Stimuli
Cue stimuli are those factors that exist in the environment as perceived
by the individual. The idea is to discover the conditions under which
stimulus will increase the probability of eliciting a specific response.
There may be two types i of stimuli with respect to their results in terms
of response concerned: generalization and discrimination.
Generalization occurs when a response is elicited by a similar but new
stimulus. If two stimuli are exactly alike, they will have the same
probability of evoking a specified response. The principle of
generalization has important implications for human learning. Because
of generalization, a person does not have to 'completely relearn each of
the new tasks. It allows the members to adapt to overall changing
conditions and specific new assignments. The individual can borrow
from past learning experiences to adjust more smoothly to new learning
situations.
Discrimination is a procedure in which an organization learns to emit a
response to a stimulus but avoids making the same response to a
similar but somewhat different stimulus. Discrimination has wide
applications in 'organizational behavior. For example, a supervisor can
discriminate between two equally high producing workers, one with low
quality and other with high quality.

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Responses
The stimulus results in responses. Responses may be in the physical
form or may be in terms of attitudes, familiarity, perception or other
complex phenomena. In the above example, the supervisor
discriminates between the worker producing low quality products and
the worker producing high quality products, and positively responds
only to the quality conscious worker.
Reinforcement
Reinforcement is a fundamental condition of learning. Without
reinforcement, no measurable modification of behavior takes place.
Reinforcement may be defined as the environmental event's affecting
the probability of occurrence of responses with which they are
associated.
Retention
The stability of learned behavior over time is defined as retention and its
contrary is known as forgetting. Some of the learning is retained over a
period of time while others may be forgotten.
LEARNING THEORIES
Classical Conditioning
The work of the famous Russian physiologist Ivan Pavlov demonstrated
the classical conditioning process. When Pavlov presented a piece of
meat to the dog in the experiment, Pavlov noticed a great deal of
salivation. He termed the food an unconditioned stimulus and the
salivation an unconditioned response. When the dog saw the meat, it
salivated. On the other hand, when Pavlov merely rang a bell, the dog
did not salivate. Pavlov subsequently introduced the sound of a bell
each time the meat was given to the dog. The dog eventually learned to
salivate in response to the ringing of the-bell-even when there was no
meat. Pavlov had conditioned the dog to respond to a learned stimulus.
Thorndike called this the "law of exercise" which states that behavior
can be learned by repetitive association between a stimulus and a
response.

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Classical conditioning has a limited value in the study of

organizational behavior. As pointed out by Skinner, classical
conditioning represents an insignificant part of total human learning.
Classical conditioning is passive. Something happens and we react in a
specific or particular fashion. It is elicited in response to a specific,
identifiable event. As such it explains simple and reflexive behaviors.
But behavior of people in organizations is emitted rather than elicited,
and it is voluntary rather than reflexive. The learning of these complex
behaviors can be explained or better understood by looking at operant
conditioning.
Operant Conditioning
An operant is defined as a behavior that produces effects. Operant
conditioning, basically a product of Skinnerian psychology, suggests
that individuals emit responses that are either not rewarded or are
punished. Operant conditioning is a voluntary behavior and it is
determined, maintained and controlled by its consequences.
Operant conditioning is a powerful tool for managing people in
organizations. Most behaviors in organizations are learned, controlled
and altered by the consequences; i.e. operant behaviors. Management
can use the operant conditioning process successfully to control and
influence the behavior of employees by manipulating its reward system.
Reinforcement is anything that both increases the strength of response
and tends to induce repetitions of the behavior. Four types of
reinforcement strategies can be employed by managers to influence the
behavior of the employees, viz., positive reinforcement, negative
reinforcement, extinction and punishment.
Positive Reinforcement
Positive reinforcement strengthens and increases behavior by the
presentation of a desirable consequence (reward). In other words, a
positive reinforce is a reward that follows behavior and is capable of
increasing the frequency of that behavior. There are two typos of
positive: reinforces: primary and secondary. Primary reinforcers such as
food, water and sex are of biological importance and have effects,

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which arc independent of past experiences. For instance, a primary

reinforcer like food satisfies hunger need and reinforced food-producing
behavior. Secondary reinforcers like job advancement, recognition,
praise and esteem result from previous association with a primary
reinforcer. Primary reinforcers must be learned. In order to apply
reinforcement procedures successfully, management must select
reinforcers that are sufficiently powerful and durable.
Negative Reinforcement
The threat of punishment is known as negative reinforcement. Negative
reinforcers also serve to strengthen desired behavior responses leading
to their removal or termination.
Extinction
Extinction is an effective method of controlling undesirable behavior. It
refers to non-reinforcement. It is based on the principle that if a
response is not reinforced, it will eventually disappear. Extinction is a
behavioral strategy that does not promote desirable behaviors but can
help to reduce undesirable behaviors.
Punishment
Punishment is a control device employed in organizations to discourage
and reduce annoying behaviors of employees.
OBSERVATIONAL LEARNING
Observational learning results from watching the behavior of another
person and appraising the consequences of that behavior. It does not
require an overt response. When Mr. X observes that Y is rewarded for
superior performance, X learns the positive relationship between
performance and rewards without actually obtaining the reward himself.
Observational learning plays a crucial role in altering behaviors in
organizations.
Cognitive Learning
Here the primary emphasis is on knowing how events and objects are
related to each other. Most of the learning that takes place in the
classroom is cognitive learning. Cognitive learning is important because

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it increases the change that the learner will do the right thing first,
without going through a lengthy operant conditioning process.
LEARNING THEORY AND ORGANIZATIONAL BEHAVIOR
The relevance of the learning theories for explaining and predicting of
organizational behavior is marginal. This does not mean that learning
theories are totally irrelevant. Learning concepts provide a basis for
changing behaviors that are unacceptable and maintaining those
behavior that are acceptable. When individuals engage in various types
of dysfunctional behavior such as late for work, disobeying orders, poor
performance, the manager will attempt to educate more functional
behaviors.
Learning theory can also provide certain guidelines for
conditioning organizational behavior. Managers know that individuals
capable of giving superior performance must be given more reinforces
than those with average or low performance.
Managers can successfully use the operant conditioning process
to control and influence the behavior of employees; by manipulating its
reward system.

Self-Check Questions
1. Positive reinforcement strengthens and increases behavior by
the presentation of a desirable consequence
(reward)_________________________ (True/false)
2. __________ is concerned with self-perceptions of how well a
person can cope with situations as they arise.

1.5 Assignments
1.5.1 Class assignment
1. Prepare an planning exercise that the primary emphasis is on
knowing how events and objects are related to each othe
1.5.2 Home assignment
1. Write short notes on
• Attitude

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BJ(MC) 302 Unit 2 Lesson 1

• Personality
• Learning
1.6 Summing Up
This lesson dealt with Attitude, Personality & Learning theories and
perception to make organization employee productive

1.7 Possible answers to self check questions

1.True
2. Self-efficacy
1.8 Terminal Questions
1. Write notes on
a) Attitude
b) Personality
c) Learning.

1.9 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

1.10 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

1.11 Keywords
1. Cue stimuli are those factors that exist in the environment as perceived
by the individual.
2. Selective perception is the process of screening out information that
we are uncomfortable with or that contradicts our beliefs

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Lesson 2 Leadership – Importance and major types

____________________________________________________________________
STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Meaning of Leadership
2.3 Importance of Leadership
2.4 types of leadership
2.5 theories of leadership
2.6 Assignments
2.6.1 Class assignment
2.6.2 Home assignment
2.7 Summing Up
2.8 Possible answers to self check questions
2.9 Terminal Questions
2.10 References
2.11 Suggested Further Readings
2.12 Keywords

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BJ(MC) 302 Unit 2 Lesson 2

Lesson 2 Leadership – Importance and major types

________________________________________________________
In the last lesson we had discussed Attitudes, Personality and Learning. In present
lesson, we shall study leadership and its importance ,major types .

2.0 Objectives
After going through this lesson you will learn:
• Leadership
• Theories of Leadership

2.1 Introduction
According to Peter Drucker, "Leadership means the lifting of man's
visions to higher sights, the raising of man's performance to higher
standard, the building of man's personality beyond its normal
limitations".

2.2 Meaning of Leadership

Leadership is an integral part of management and plays a vital role in
managerial operations. It provides direction, guidance, and confidence
to the employees and helps in the attainment of goals in much easier
way. In business and industrial organizations, managers play the role of
leader and acquire leadership of subordinates, their efforts towards the
achievement of organizational goals and activate the individuals of an
organization to make them work. Leadership influences behavior of the
individuals. It has an ability to attract others and potential to make them
follow the instructions. Individuals can be induced to contribute their
optimum towards the attainment of organizational goals through
effective leadership. Leadership acquires dominance and the followers
accept the directives and control of a leader. Leadership provides
direction and vision for future to an organization.

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DEFINITION
Leadership is the art of influencing and inspiring subordinates to
perform their duties willingly, competently and enthusiastically for
achievement of groups objectives.
According to Wendell French, "Leadership is the process of
influencing the behavior of others in the direction of a goal or set of
goals or, more broadly, toward a vision of the future”,
According to Keith Davis, “Leadership is the process of
encouraging and helping others to work enthusiastically towards
objectives”.
According to Koontz and O'Donnell, "Leadership is the art or
process of influencing people so that they will strive willingly towards
the achievement of group goals".
According to Peter Drucker, "Leadership means the lifting of
man's visions to higher sights, the raising of man's performance to
higher standard, the building of man's personality beyond its normal
limitations".
According to Grey and Starke, "Leadership is both a process and
a property. As a process, it is used for non-coercive influence lo shape
up the goals of a group or organization, to motivate behavior toward the
achievement of those goals and to help define group or organizational
culture. As a property, leadership is the set multi characteristics
attributed to those who are perceived to be leaders".
Thus, leaders are people who are able to influence the behavior
of others without recourse to threats or other forms of force towards the
individuals. Leaders are the people who are accepted by the other
individuals, as a superior person to them.
FEATURES OF LEADERSHIP
The features of leadership are as follows:
1. Leadership is the process of influencing behavior of individuals of an
organization.

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2. Leadership uses non-coercive methods to direct and coordinate

the activities of the individuals of an organization.
3. Leadership directs the individuals to attain the tasks assigned to them
by following the instructions of their leaders.
4. A leader possesses qualities to influence others.
5. Leadership gives the individuals, a vision for future.
6. Leadership is a group activity. Leader influences his followers and
followers also exercise influence over his leader.
7. Leadership is meant for a given situation, given group for a pre-
determined period of lime.
8. Leadership is continuous process of influencing behavior. It
encourages liveliness in the group.
2.3 Importance of Leadership
The following points can judge the importance of leadership:
a. A leader should act as a friend of the people whom he is leading.
b. A leader must have the capacity to recognize the potentials of the
individuals and transform them into realities.
c. A leader should have the confidence of the individuals of the
organization.
d. A leader must be able to unite the people as a team and build up
team spirit.
e. A leader should be able to maintain discipline among his group and
develop a sense of responsibility.
f. A leader must be able to build up a high morale among the individuals
of the organization.
g. A leader should motivate his people to achieve goals.
h. A leader should try to raise the morale of the individuals and
should maintain ethical standards among the individuals.
i. A leader should act as a link between the work groups and the
forces outside the organization.

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Difference between Leadership and Management

Leading and managing go together but some differences exist between
the two. The following are the differences between the leadership and
the management:
• Management takes rational and logical decisions while leadership takes
decision on expectations of the followers. Leadership has an emotional
appeal while management acts on rationality.
• The management establishes relationship through a lawful authority
while leadership establishes relationship through power.
• Managers have formal authority but the leaders have no such authority.
• All leaders are not managers and all managers are leaders.
• Management is a process of planning, organizing, directing and
controlling the activities of others to attain the organizational objectives.
Leadership on the other hand, is a process of influencing the behavior
of the people to attain their assigned tasks. A successful manager must
possess both the managerial and leadership qualities.

2.4 TYPES OF LEADERSHIP

Following are the main types of leadership:
Autocratic or Authoritarian
In this type of leadership, there is a complete centralization of authority
in the leader, i.e., authority is centered in the leader himself. He has all
the powers to make decisions. He uses coercive measures and adopts,
negative method of motivation. He wants immediate obedience of his
orders and instructions. Any negligence on the part of subordinates
results in punishment. There is no participation from the subordinates in
decision-making. A leader thinks that he is the only competent person in
the organization. According to Edwin B. Filippo, there are following
three types of leaders in autocratic:
1. Hard Boiled or Strict Autocrat: Leader, under such type uses
negative influence and expects that the employees should obey his
orders immediately. Non-compliance of his orders results in

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punishment. He makes all decisions and does not disclose anything to

anyone. He is quite rigid on performance.
2. Benevolent Autocrat: Benevolent autocrat leader uses positive
influences and develops effective human relations. He is known as
paternalistic leader. He praises his employees if they follow his orders
and invites them to get the solutions of the problems from him. He feels
happy in controlling all the actions of his subordinates.
3. Manipulative Autocrat: Leader, under such type is manipulative in
nature. He creates a feeling in the minds of his subordinates and
workers that they are participating in decision-making processes. But he
makes all decisions by himself. Non-compliance of his orders also
results jn punishment.
Democratic or Participative
Democratic or Participative leadership is also known as group centered
or consultative leadership. In this type of leadership, leaders consult
their groups and consider their opinion in the decision-making process.
Leaders encourage discussion among the group members on the
problem under consideration and arrive at a decision depending on their
consent. Participation or involvement of the employees in the decision-
making process is also rewarded. Exchange of ideas among
subordinates and with the leader is given encouragement. Leaders give
more freedom to their group members, who feel that, their opinions arc
honored and they are given importance. It develops a sense of
confidence among subordinates and they derive job satisfaction. It
improves quality of decision as it is taken after due consideration of
valued opinions of the talented group members.
The demerit of this type of leadership is that it takes more time to arrive
at a decision, as a lot of time is wasted while taking the views from the
employee. It is, therefore, very time consuming.
Laissez-faire or Free Rein
In this type of leadership, there is virtual absence of direct
leadership. It is, therefore, known as "no leadership at all". There is
complete delegation of authority to subordinates so that they can make

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decisions by themselves. Absence of leadership may have both positive

and negative effects. Free rein leadership may be effective if members
of the group are highly committed to their work. The negative aspect
shows that the leader is not competent enough to lead his group
effectively. Members may feel insecure and develop frustration for lack
of decision-making authority.
Bureaucratic
This type of leadership emphasizes the rules and regulations of an
organization. The behavior of a leader is determined by the rules,
regulations and procedure to be followed under his leadership. The
leader and the subordinates both follow these rules and regulations.
Therefore, there is no difference between the management and the
administration in this type of leadership. The employees, themselves
cannot do anything in this regard. It is the rules that determine their
performance.
Manipulative
This type of leadership manipulates the employees to attain their
assigned tasks. A manipulative leader is quite selfish and exploits the
aspirations of the employees for his gains. He knows very well the
needs and desires of the employees but he does very little to fulfill
them. Due to such attitude, he has to face the hatred of the employees
at times.

Paternalistic
The paternalistic leadership believes in the concept that the happy
employees work better and harder. It maintains that the fatherly altitude
is the right one for better relationship between the manager and the
employees. Everyone within the organization should work together like
a family.
Expert Leadership
The expert leadership emerged as a result of complex structure of
modern organizations. This type of leadership is based on the ability,
knowledge and competence of the leaders. He handles the situation

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skillfully with his talent. The employees feel relieved as they are working
under a person who is expert and can handle the situation without any
problem.
In modern organizations, human resources vary in terms of skill,
knowledge and competences. They differ in quality, determination and
their attitude towards the organization. They exhibit different behaviors
as they differ in attitude and outlook also. The leader must understand
their behavior and accordingly can make use of the various types
LEADERSHIPS. The manager should assess the situation and adopt that
type of leadership, which suits that situation. He should remember that
leadership is situational. If situation changes, the use of leadership
among its various types also changes. A successful leader is the one
who assesses the situation, studies the psychology of the subordinates
and adopts the most useful type of leadership to lead the people at
work to accomplish the organizational goals.
2.5 THEORIES OF LEADERSHIP
A number of theories and approaches to study leadership have been
developed. There are broadly three theories of leadership.
• Trait Theory
• Behavior Theory
• Contingency Theory

(a) Trait Theory

This theory of studying leadership is taken into consideration to analyze
the personal, psychological and physical traits of strong leaders. The
assumption made in this theory was that some basic traits or set of
traits differentiates leaders from non-leaders. For example, the
leadership traits might include intelligence, assertiveness, above
average height, self-confidence, initiative and understanding of
interpersonal human relations. The existence of these traits determines
the importance of leadership. Possession of these traits helps the
individuals to gain possession of leadership. Since all individuals do not

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have these qualities, only those who have them would be considered
potential leaders.
Some of the weakness of this theory is:
• All the traits are not identical with regard to essential characteristics of a
leader.
• Some traits may not be inherited, but can only be acquired by training.
• It does not identify the traits that are most important and that are least
important for a successful leader.
• It does not explain the leadership failures, in spite of the required traits.
• It has been found that many traits exhibited by leaders are also found
among followers without explaining as to why followers could not
become leaders.
• It is difficult to define traits in absolute terms.
• Thus, the trait theory has been criticized for lack of conclusiveness and
predictability.

(b) Behavior Theory

The behavioral theory assumed that effective leaders behaved
differently from ineffective leaders. It also identified the need of
consistency of behavior of good leaders. This theory can be more
clearly understood with the help of following case studies.
• The Michigan Studies: Researchers at the University of. Michigan, led
by Rensis Likert, began studying leadership in the late 1940s.
Depending on broad discussions with both the managers and sub-
ordinates, the Michigan studies identified two forms of leadership
behavior. They are discussed as below:
! Job-centered leadership behavior : The first was called job-centered
leadership behavior, which focuses on performances and efficient
completion of the assigned tasks. A job-centered leader interacts with
group members to explain task procedures and oversee their work.
! Employee centered leadership behavior: The second behavior was
identified as employee centered leader behavior, which focuses on,
high performance standards to be accomplished. This can be done by

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developing a cohesive work group and ensuring that employees are

satisfied with their jobs. Thus, the leader's primary concern is the
welfare of the ordinates. The Michagan researchers thought a leader
could show signs of one kind of behavior, but not both.
• The Ohio State Studies: At about the same time, a group of
researchers at Ohio State also began studying leadership. The Ohio
State leadership studies also identified two major kinds of leadership
behaviors or styles, which are as follows:
! Initiating-structure behavior: In initiating-structure behavior, the
leader clearly defines the leader-subordinate roles so that everyone
knows what is expected. The leader also establishes formal lines of
communication and determines how tasks will be performed.
! Consideration behavior: In consideration behavior, the leader shows
concern for subordinates feelings' and ideas. He attempts to establish a
warm, friendly and supportive.
The most obvious difference between Michigan and Ohio State
studies is that the Ohio State researchers did not position their two
forms of leader behavior at opposite ends of a single continuum.
Rather, they assumed the behaviors to be independent variables, which
means that a leader could exhibit varying degrees of initiating structure
and consideration at the same time i.e. a particular leader could have
higher ratings on both measures, low ratings on both or high ratings on
one and low on the other.
The Ohio State researchers found that a leader’s behavior
remains consistent over a period of time, if the situation also remains
same. But the researchers could not come up with one best
combination of behavior suitable to all the situations. The researchers
used to believe that the leaders in possession of both types of behavior
are most effective. However, their studies at International Harvester
found that leaders rated highly on initiating structure behavior have
higher performing but dissatisfied sub-ordinates, whereas leaders rated
highly on consideration structure had lower-performing sub-ordinates
who showed signs of higher satisfaction.

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Most experts now agree that no single set of traits or behaviors

appears to be common to all good leaders. The universal approaches to
leadership can help managers examine their own leadership
characteristics and match them against the traits most commonly
identified with good leaders. In order to understand the full complexity of
leadership, contingency theory is to be studied.
(c) Contingency Theory
The main assumption of contingency theory is that the behavior of an
appropriate leader varies from one situation to another. The motive of a
contingency theory is to identify key situational factors and to specify
how they interact to determine appropriate behavior of a leader
The three most important and widely accepted contingency
theories of leadership are as follows:
• The LPC theory: The first contingency theory of leadership is Fred
Fielder's Least Preferred Co-worker (LPC) Model. Fielder identified two
types of leadership: task-oriented and relationship-oriented. Fielder
believes that a leader's tendency to be task-oriented or relationship
oriented remains constant. In- other words, a leader is either task-
oriented or relationship-oriented while leading his group members.
Fielder used the Least Preferred Co-worker (LPC) scale to measure the
type of leadership. A leader is asked to describe characteristics of the
person with whom he or she is least comfortable while working. They
can do this by marking in a set of sixteen scales at each end, by a
positive or negative adjective. For example, three of the scales Fielder
uses in the LPC are:
Helpful -------------------- Frustrating 8 7 6 5 4 3 2 1
Tense ------------------- Relaxed 12345678
Boring ------------------- Interesting 1 2 3 4 5 6 7 8
The leader's LPC score is (hen calculated by adding up the numbers
below the line checked on each scale. A high total score is assumed to
reflect a relationship orientation and a low score, a task orientation by
the leader. The LPC measure is controversial because researchers
disagree about its validity. This is because some of the LPC measures

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show whether the score is an index of behavior, personality or some

other unknown factor.
According to Fielder, the contingency factor favours the situation
from the leader's point of view. This factor is determined by leader-
member relations, task-structure and position-power, which are
discussed as below:
• Leader-member relations: A Leader-member relation refers to the
nature of relationship between the leader and his work group. If the
leader and the group enjoy mutual trust, respect, confidence and they
like one another, relations will remain good. If there is little trust, respect
or confidence and. if they do not like one another, relations will remain
bad. Good relations are assumed to be favourable and bad relations
unfavorable.
• Task-structure: Task-structure is the degree to which the group's task
is clearly defined. When the task is routine, easily understood, and
unambiguous and when the group has standard procedures, the
structure is assumed to be high. When the task is non-routine,
ambiguous, complex, with no standard procedures and precedents,
structure is assumed to be low. High structure is more favourable for
the leader and low structure is unfavorable. If the task structure is low,
the leader will have to play a major role in guiding and directing the
group's activities. If the task structure is high, the leader will not have to
pay much attention.
• Position-power: Position-power is the power vested in the position of a
leader in an organization. If the leader has the power to assign work,
administer rewards and punishment, recommend employees for
promotion or demotion, position-power is assumed lo be strong. If the
leader does not have required powers, the position-power is weak.
From the leader's point of view, strong position power is favourable and
weak position power is unfavorable.
Fielder and his associates conducted various studies
highlighting if a situation favors the leadership and group effectiveness
or not.

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When the situation includes good relations, high structure

and strong power, a risk-oriented leader to lie most effective. However,
when relations are good but task structure is low and position-power is
weak, LI relationship-oriented leader is considered to be most effective.
• A final point about LPC theory is that, Fielder argues that any particular-
type of leadership, which is measured by the LPC is inflexible and
cannot be changed. In other words a leader cannot change his behavior
to fit a particular situation. Fielder's contingency theory has been
criticized on the ground that LPC measure lacks validity and that the
assumption about the inflexibility of the leader's behavior is unrealistic.

(d) The Path-Goal theory

The path-goal model of leadership was introduced by Martin Evans and
Robert House. Path-goal theory says that a leader can motivate
subordinates by influencing their expectations. Leaders can motivate
sub-ordinates by making clear what they have to do to get the reward
they desire. The path-goal model assumes that leaders can change
their style or behavior to meet the demands of a particular situation.
This model identifies four kinds of leader behavior: directive, supportive,
participative and achievement-oriented. According to this model
managers can adjust their behavior to include any four kinds of
leadership behavior mentioned above. For instance, while leading a
new group of sub-ordinates, the leader may be directive in giving
guidance and instructions to them. He may also adopt supportive
behavior to encourage group cohesiveness, to look after their needs
and ensuring that they get the rewards and benefits. As the group
becomes more familiar with the task and as new problems are taken
into consideration, the leader may use participative behavior by which
he can participate with employees in making decisions and take their
suggestions as well. Finally, the leader may use achievement-oriented
behavior to encourage continued high performance of sub-ordinates.
Environmental characteristics are factors, which are beyond the
control of subordinates. It includes task structure, the primary work

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group and the formal authority system. For instance, when structure is
high, directive leadership is less effective than when structure is low.
Sub-ordinates do not usually need their boss to repeatedly tell them
how to do a routine job. According to the path-goal theory, these
environmental factors can create uncertainty for employees. A leader
who helps employees reduce such uncertainty can motivate them. The
figure 14.1 shows the path goal model of leadership.

Leaders do not always have control over environmental factors, but the
theory emphasizes that leaders can use the control they want, to adjust
the environment and to motivate sub-ordinates
Leadership Skills
There is now recognition in both leadership theory and practice of the
importance of skills, how leaders should behave and perform
effectively. Although there are many skills, such as cultural flexibility,
communication, HRD, creativity, and self-management of learning, the
research-based skills identified by Whetten and Cameron seem to be
most valuable. Their personal skills model, involving developing self-
awareness, managing stress and solving problems creatively; the
interpersonal skills model, involving communicating supportively,

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gaining power and influence, motivating others and managing conflict,

are especially comprehensive and useful. Finally, the widely recognized
organizational behavior .techniques such as, training, job design and
leaders can also effectively use behavioral management.

Self Check Question

1 The____________ leadership believes in the concept that the happy
employees work better and harder.
3. Leadership gives the individuals, a vision for
future._______(True/False)

2.6 Assignments
2.6.1 Class assignment
1. Prepare the leader role and responsibility for Media content Manager
2.6.2 Home assignment
1. Write short notes on
a. Manipulative leader
b. Leadership Skills

2.7 Summing Up
This lesson dealt with Leadership theories to control they want, to
adjust the environment and to motivate sub-ordinates

2.8 Possible answers to self check questions

a. paternalistic
b. True

2.9 Terminal Questions

1. Explain the importance of leadership for an effective manager.
2. What are major types of leadership?
3. Explain leadership theories for development of Managerial traits.

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2.10 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

3.11 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

2.12 Keywords
• Leadership is both a process and a property. As a process, it is used
for non-coercive influence lo shape up the goals of a group or
organization, to motivate behavior toward the achievement of those
goals and to help define group or organizational culture.

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Lesson 3 Motivation and Conflict management

__________________________________________________________________

STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 Motivation Definition
3.3 Importance of motivation
3.4 Theories to motivation
3.5 Conflict Management
3.6 Assignments
3.6.1 Class assignment
3.6.2 Home assignment
3.7 Summing Up
3.8 Possible answers to self check questions
3.9 Terminal Questions
3.10 References
3.11 Suggested Further Readings
3.12 Keywords

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Lesson 3 Motivation and Conflict management

In the last lesson we had discussed Leadership – Importance and major types .In
present lesson, we shall study about the Motivation and Conflict management

3.0 Objectives
After going through this lesson you will learn:
o Motivation
o Motivation Theories
o Conflict Management

3.1 Introduction
The word motivation is derived from ‘motive', which means an active
form of a desire, craving or need that must be satisfied. Motivation is
the key to organizational effectiveness. The manager in general has to
get the work done through others. These 'others' are human resources
who need to be motivated to attain organizational objectives.
3.2 Motivation Definition
According to George R. Terry, "Motivation is the desire within an
individual that stimulates him or her to action."
In the words of Robert Dubin, it is "the complex of forces starting
and keeping a person at work in an organization". Viteles defines
motivation as "an unsatisfied need which creates a state of tension or
disequilibrium, causing the individual to move in a goal directed pattern
towards restoring a state of equilibrium, by satisfying the need."
According to Encyclopaedia of Management. "Motivation refers
to the degree of readiness of an organism to pursue some designated
goals and implies the determination of the nature and locus of force
inducing a degree of readiness."
On the basis of above definitions, the following observations can be
made regarding motivation:

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• Motivation is an inner psychological force, which activates and

compels the person to behave in a particular manner.
• The motivation process is influenced by personality traits,
learning abilities, perception and competence of an individual.
• A highly motivated employee works more efficiently and his level
of production tends to be higher than others.
• Motivation originates from the-needs and wants of an individual.
It is a tension of lacking something in his mind, which forces him to work
more efficiently.
• Motivation is also a process of stimulating and channelising the
energy of an individual for achieving set goals.
• Motivation also plays a crucial role in determining the level of
performance. Highly motivated employees get higher satisfaction, which
may lead to higher efficiency.
• Motivating force an^ its degree, may differ from individual to
individual depending on his personality, needs, competence and other
factors.
• The process of Motivation helps the manager in analysing and
understanding human behavior and finding but how an individual can be
inspired to produce desirable working behavior.
• Motivation may be positive as well as negative. Positive
motivation includes incentives, rewards and other benefits while
negative motivation implies some punishment, fear, use of force etc.
• The motivation procedure contributes to and boosts up the
morale of the employees. A high degree of motivation may lead to high
morale.
FEATURES OF MOTIVATION
The following are the features of motivation:
• It is an internal feeling and forces a person to action.
• It is a continuous activity.
• It varies from person to person and from time to time.
• It may be positive or negative.

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3.3 IMPORTANCE OF MOTIVATION

Motivation is an important part of managing process. A team of highly
qualified and motivated employees is necessary for achieving
objectives of an organization because of the following reasons:
• Motivated employees make optimum use of available resources for
achieving objectives.
• Motivation is directly related to the level of efficiency of employees.
• Motivated employees make full use of their energy and other abilities to
raise the existing level of efficiency.
• Motivated employees make goal-directed efforts. They are more
committed and cooperative for achieving organizational objectives.
• Motivated employees are more loyal and sincere to an organization.
These factors help reduce absenteeism and labor turnover.
• Motivation is considered as a backbone of good industrial relations.
• Effectively motivated employees get more job satisfaction and possess
high morale.
• Motivation also helps in improving the image of an organization.

The motivation process begins with identification of individual needs.

For example, when an employee feels underpaid then what, then he
tries to fulfill his needs by asking for a raise or by working harder to earn
a raise or by seeking a new job. He then chooses to pursue one or
more of these options for instance, working harder while simultaneously
looking for a job. If his hard work resulted in a pay rise, he probably
feels satisfied and will continue to work hard. But if no raise has been
provided he is likely to try another option. Since people have many
different needs, the satisfaction of one need or set of needs is likely to
give rise to the identification of other needs. Thus, the cycle of
motivation is constantly repeated.
Understanding human motivation is crucial for managing people.
Extensive research has been performed to find out what makes people
work and how to motivate them. This includes managers, social
scientists, behaviorists and psychologists. A number of theories have

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been developed, even though there is no universally acceptable

motivation theory. Understanding these theories facilitates the
managers to get a better insight into the human behavior.
3.4 THEORIES TO MOTIVATION
Need-based theories try to answer the question, "what factor(s)
motivate people to choose certain behaviors?" Some of the widely
known need-based theories are as follows:
(a) Maslow's Hierarchy of Needs
Maslow Abraham proposed his theory in the 1940s. This theory,
popularly known as the Hierarchy of Needs assumes that people are
motivated to satisfy five levels of needs: physiological, security,
belongingness, esteem and self-actualization needs. The figure shows
Maslow's hierarchy of needs

Maslow suggested that the five levels of needs are arranged in

accordance with their importance, starting from the bottom of the
hierarchy. An individual is motivated first and foremost to satisfy
physiological needs. When these needs are satisfied, he is motivated
and 'moves up' the hierarchy to satisfy security needs. This 'moving up
process continues until the individual reaches the self-actualization
level.

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Physiological needs represent the basic issues of survival such

as food, sex, water and air. In organizational settings, most
physiological needs are satisfied by adequate wages and by the work
environment itself, which provides employees with rest rooms,
adequate lighting, comfortable temperatures and ventilation.
Security or safety needs refer to the requirements for a secure
physical and emotional environment. Examples include the desire for
adequate housing and clothing, the need to be free from worry about
money and job security and the desire for safe working conditions.
Security needs are satisfied for people in the work place by job
continuity, a grievance resolving system and an adequate insurance
and retirement benefit package.
Belonging or social needs are related to the, social aspect of
human life. They include the need for love and affection and the need to
be accepted by one's peers. For most people these needs are satisfied
by a combination of family and community relationships and friendships
on the job. Managers can help ensure the 'satisfaction of these
important needs by allowing social interaction and by making
employees feel like part of a team or work group.
Esteem needs actually comprise of two different sets of needs:
• The need for a positive self-image and self-respect.
• The need for recognition and respect from others.

Organizations can help address esteem needs by providing a variety

of external symbols of accomplishment such as job titles and spacious
offices. At a more fundamental level, organizations can also help satisfy
esteem needs by providing employees with challenging job
assignments that can induce a sense of accomplishment.
At the top of the hierarchy are those needs, which Maslow defines
the self-actualization needs. These needs involve realizing one's
potential for continued: growth and individual development. Since these
needs are highly individualized and personal, self-actualization needs
are perhaps the most difficult for managers to address. Therefore, an

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employee should try to meet these needs on his own end. However, an
organization can help his employee by creating a climate for fulfillment
of self-actualization needs. For instance, an organization can help in
fulfillment of these needs by encouraging employee’s participation in
decision-making process and by providing them with an opportunity to
learn new things about their jobs and organization. This process of
contributing to actual organizational performance helps employees
experience personal growth and development associated with self-
actualizing.
Maslow's concept of the need hierarchy possesses a certain intuitive
logic and has been accepted universally by managers. But research
has revealed several shortcomings of the theory such as some
research has found that five levels of needs are not always present and
that the order of the levels is not always the same as assumed by
Maslow. Moreover, it is difficult for organizations to use the need
hierarchy to enhance employee motivation.
(b) ERG Theory of Motivation
Clayton Alderfer has proposed an alternative hierarchy of needs - called
the ERG Theory of Motivation. The letters E, R and G stand for
Existence, Relatedness and Growth. The figure 9.2 shows ERG theory:

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ERG Theory the need hierarchy developed by Maslow into three

9.2. The existence needs in this theory refers to the physiological and
security needs of Maslow. Relatedness needs refers to belongingness
and esteem needs. Growth needs refers to both self-esteem and self-
actualization needs.

Although ERG Theory assumes that motivated behavior follows

a hierarchy in somewhat the same fashion as suggested by Maslow,
there are two important differences.
• Firstly, ERG theory suggests that more than one kind of need might
motivate a person at the same time. For example, it allows for the
possibility that people can be motivated by a desire for money
(existence); friendship (relatedness), and an opportunity to learn new
skills (growth) all at the same time.
• Secondly, ERG theory has an element of frustrations-regression that is
missing from Maslow's need hierarchy. Maslow maintained that one
heed must be satisfied before an individual can progress to needs at a
higher level, for example, from security needs to belongingness. This is
termed as satisfaction—progression process. Although the ERG theory
includes this process, it also suggests that if needs remain unsatisfied
at some higher level, the individual will become frustrated, regress to a
lower level and will begin to pursue low level needs again. For"
example, a worker previously motivated by money (existence needs) is
awarded a pay rise to satisfy this needs. Then he attempts to establish
more friendship to satisfy relatedness needs. If for some reason an
employee finds that it is impossible to become better friends with others
in the work place, he may eventually become frustrated and regress to
being motivated to earn even more money. This is termed as
‘frustration-regression' process.

The ERG theory emphasis on the following key points regarding needs:
o Some needs may be more important than others.

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o People may change their behavior after any particular set of needs has
been satisfied.
(c) The Dual-Structure Approach to Motivation
Another popular need-based approach to motivation is the dual-
structure approach developed by Frederick Herzberg. This is also
known as Two-factor Theory. Herzberg developed this approach after
interviewing 200 accountants and engineers in Pittsburg. He asked
them to recall such occasions when they had been dissatisfied and less
motivated. He found that entirely different sets of factors were
associated with satisfaction and dissatisfaction. For instance, an
individual who identified 'low pay' as causing dissatisfaction did not
necessarily mention 'high pay' as a cause of satisfaction. Instead,
several other factors, such as recognition or accomplishment, were
cited as causing satisfaction.

This finding suggests that satisfaction and dissatisfaction are at

opposite ends of a single scale. Employees would, therefore, be
satisfied, dissatisfied or somewhere in between. Herzberg argued that
attitudes and motivation consists of a dual structure. One structure
involves a set of factors that result in feelings ranging from satisfaction
to no satisfaction. The other structure involves a set of factors that
result in feelings ranging from dissatisfaction to no satisfaction.
Herzberg identified two sets of factors responsible for causing
either satisfaction or dissatisfaction. The factors influencing satisfaction
are called motivation factors or motivators, which are related specifically
to the job itself and the factors causing dissatisfaction are called
hygiene factors, which are related to the work environment in which the
job is performed.
Motivators
• Achievement
• Recognition
• Advancement
• The work itself

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• The possibility of personal growth

• Responsibility
Hygiene or Maintenance Factors
• Company policies
• Technical supervision
• Interpersonal relations with supervisor
• Interpersonal relations with peers
• Interpersonal relations with subordinates
• Salary
• Job security
• Personal life
• Work conditions
• Status

Based on these findings, Herzberg recommended that managers

seeking to motivate employees should first make sure that hygiene
factors are taken care of and that employees are not dissatisfied with
pay, security and working conditions. Once a manager has eliminated
employee dissatisfaction, Hertzberg recommends focusing on a
different set of factors to increase motivation, by improving opportunities
for advancement, recognition, advancement and growth. Specifically,
he recommends job enrichment as a means of enhancing the
availability of motivation factors.
Although widely accepted by managers, Hertzberg’s dual structure
approach however suffers from certain drawbacks. Other researchers
who measured satisfaction and dissatisfaction based on different
aspects reached very different conclusions. They have also criticized
Herzberg's theory for its inability to define the relationship between
satisfaction and motivation and to pay enough attention to differences
between individuals. Hence, at present Herzberg's theory is not held in
high esteem by researchers in the field of motivation. The theory,
however, had a major impact on managers and has played a key role in

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increasing their awareness of motivation and its importance in type

work place.
'X' AND ‘Y' THEORIES OF MOTIVATION
Douglas McGregor observed two diametrically opposing viewpoints of
managers 'about their employees; one is negative called "Theory of X"
and another is positive called "Theory of Y". I
Theory of X
Following are the assumptions of managers who believe in the "Theory
of X" regarding their employees.
• Employees dislike work.
• Employees must be coerced, controlled or threatened to do the work.
• Employees avoid responsibilities and seek formal direction.
• Most employees consider security of job, most important of all other
factors in the job and have very little ambition.
Theory of Y
Following are the assumptions of managers who believe in the "Theory
of Y" regarding their employees.
• Employees love work as play or rest.
• Employees are self-directed and self-controlled and committed to the
organizational objectives.
• Employees accept and seek responsibilities.
• Innovative spirit is not confined to managers alone, some employees
also possess it.
Applicability of Theories 'X' and 'Y'
Theory 'X' in its applicability, places exclusive reliance upon external
control of human behavior, while theory 'Y', relies heavily on self-control
-and self-direction.
Theory 'X' points to the traditional approach of management.
Literally, this theory of behavior is related to organizations that lay hard
and rigid standards of work-behavior. Some examples of such
organizations are organizations that break down jobs into specialized
elements, establish 'norms of production, design equipment to control

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worker's pace of work, have rigid rules and regulations, that are
sometimes very vigorously enforced.
Theory 'Y’, on the other hand, secures the commitment of
employees to organizational objectives. This motivational theory places
emphasis on satisfaction of employees. While applying this theory, the
use of authority, as an instrument of command and control is minimal.
Employees exercise self-direction and self-control.

The concepts of 'Job' Enlargement', 'Participation' and

'Management by Objectives' are quite consistent with theory ' Y'.
McGregor supports the applicability of motivational theory 'Y',
instead of theory ‘X'. Organization should keep in mind that once theory
'X' is employed for organizational working, it is difficult for the
management to shift to theory ' Y', all of a sudden. However, with
systematic, judicious and slow steps, shifting in the practical
applicability of theory 'X' to theory ' Y' usually can be achieved.
MC-CLELLAND's NEED THEORY OF MOTIVATION
David C. McClelland and his associate Atkinson have contributed to an
understanding of motivation by identifying three types of basic
motivating needs. These needs have been classified as:
1. Need for Power
2. Need for Affiliation
3. Need for Achievement

Need for Power

According to this theory the need for power, which might be defined as
the desire to be influential in a group and to control one's environment
is an important motivation factor. Research suggests that people with a
strong need for power, are likely to be superior performers and occupy
supervisory positions. Such types of individuals generally look for
positions of leadership, they act effectively, are outspoken, have a
stubborn character and exert authority.

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Need for Affiliation

The need for affiliation means the desire for human companionship and
acceptance. Those with a high need for affiliation often behave the way
they think other people want them to, in an effort to maintain friendship.
They prefer a job that entails a good deal of social interaction and offers
opportunities to make friends. The principal characteristics of such
peoples' traits are as follows:
• Desire to like and be liked.
• Enjoy company and friendship.
• Prefer cooperative situation.
• Excel in group task.
• Star attraction in gathering.
• Leadership qualities.
This need is closely associated with the "social-type” of personality,
who are sociable, friendly, cooperative and understanding. Persons with
high motivation for power and affiliation have better chances of
becoming good managers.
Need for Achievement
People with a high need for achievement, always feel ambitious to be
successful; are ever prepared to face challenging situations and set
arduous goals .for themselves. They are prone to take calculated risks;
and possess a high sense of personal responsibility in getting jobs
done. These people are concerned with their progress, and feel inclined
to put in longer hours of work" Failures never dishearten them and they
are always ready to put in their best efforts for excellent performance.
NEW APPROACHES TO MOTIVATION IN ORGANIZATIONS
New approaches are emerging to supplement the established models
and theories of motivation. Two of the most promising are Goal-Setting
Theory and the Japanese Approach.
(a) Goal-Setting Theory
This approach to motivation has been pioneered in the USA by Edwin
Locke and his associates in 1960s and refined in 1980s. Goal-setting
theory suggests that managers and subordinates should set goals for

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an individual on a regular basis, as suggested by MBO. These goals

should be moderately difficult and very specific and of type that an
employee will accept and make a commitment to accomplishing them.
Rewards should be tied directly to accomplished goals. When involved
in goal-settings, employees see how their effort will lead to
performance, rewards and personal satisfaction.
Salient features of this theory are as follows:
• Specific goal fixes the needs of resources and efforts.
• It increases performance.
• Difficult goals result higher performance than easy job.
• Better feedback of results leads to better performances than lack of
feedback.
• Participation of employees in goal has mixed result.
• Participation of setting goal, however, increases acceptance of goal and
involvements.
• Goal setting theory has defined two factors,' which influences the
performance. These are given below:
o Goal commitment
o Self-efficiency.
The mere act of goal setting does not ensure higher levels of
motivation among employees. In fact, there seem to be three important
criteria that goals must meet if they are to influence the behavior of
organization members. They are goal specificity, goal difficulty and goal
acceptance.
Goal Specificity
Goals must be stated in specific terms if they are to motivate effective
performance. Goals must be set in terms of measurable criteria of work
performance, i.e., number of units produced, new sales etc. and must
specify a lime period within which the goal is to be attained. It also gives
a sense of personal satisfaction and accomplishment to workers if he is
able to meet the specific goal.

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Goal Difficulty/Challenge
There exists a relationship between goal difficulty and work motivation.
The more difficult- and challenging the goal is, the higher the level of
motivation and performance. However, it is essential that goals are set
at realistic levels. Goals that are very difficult to achieve are unable to
motivate since it is beyond the capacity of the concerned individual.
Goal Acceptance
In order to influence motivation and performance, a goal must be
internalized by an individual. In other words, the person has to feel
some personal ownership of the goal and must have commitment to
achieve it.
Goal Setting in Practice
The most obvious implication of goal-setting theory is that managers
should be helping subordinates to set goals that are specific and
reasonably difficult so that subordinates accept and internalize them as
their own goals. Besides this, there are a number of issues that arise in
implementing goal setting in practice.
• Though specificity of goal is essential and measurability is desirable, it
should not affect in identifying meaningful and valid objective of goal
attainment.
• The manager can stimulate goal acceptance in at least three ways:
o By involving subordinates in goal-setting process.
o By demonstrating a supportive attitude and approach toward his
subordinates.
o By assigning various rewards to the achievement of goals.
Management by Objectives (MBO) is a managerial technique for
improving motivation and performance using goal-setting principles.

Cognitive Evaluation Theory

A researcher 'Charms' reported in 1960 that extrinsic motivation like pay
or rewards for a job, which has an intrinsic-motivation content, which is
prior to such rewards. It tends to decrease overall level of motivation.
This proposal is called cognitive Evaluation Theory" which has been

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supported by a large number of research studies conducted

subsequently.
(b) Japanese Approach to Motivation
The Japanese approach to motivation has gained increasing popularity
around the world during the past few years. This approach is rather a
philosophy of management than a theory or model. The basic tenet of
the Japanese approach is that managers and workers should perform
together as partners. Since both of them see themselves as one group,
ail members are committed and motivated to work in the best interests
of an organization. No one is called an employee; instead everyone is a
team member, team leader or coach and everyone owns the 'share' of
an organization. Like goal-setting meow, the Japanese approach is
likely to become more common in businesses throughout the world.
Integration of Motivation Theories
Thus several theories complicate our understanding. Some of these
theories are compatible and some are not. The real challenge that a
researcher has to face is integration of all or at least some of these
together so that their inter and intra-relationships are established. This
will also improve the understanding of motivation. Certain attempts are
made in USA and elsewhere.
Enhancing Motivation in Organizations
Managers trying to enhance the motivation of their employees can, of
course, draw on any of the theories described above. They may in
practice adopt specific interventions derived from one or more theories
or they may influence motivation through the organization's reward
system. The organization can enhance motivation in following ways:
• Humanize the work environment: Respect the need to treat each
employee as an individual.
• Publicize both short and long-term organizational goals:
Encourage personal and departmental goal setting.
• Promote from within: It's great for morale and simplifies hiring
procedures.

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• Use incentive programs: Inducing the feeling that 'if you're creative
enough, you won't have to rely on expensive financial bonuses.'
• Establish appropriate deadlines: Every project should have a
deadline.
• Be liberal with praise: It's almost impossible to over praise and easy to
under praise.
• Be consistent in your own work and in your relations with others.
• Show a personal interest in the people who work for you: Relations
are always smoother between people who know each other on a
personal basis than relations between people who merely want
something from each other.
• Admit mistakes: People will respect you for it and will be less likely to
hide their own mistakes.
• Don't whitewash unpleasant assignments: Prepare
subordinates for unpleasant assignments well in advance and offer
what support you can.
Managerial Approaches for Improving Motivation
A number of approaches can help managers motivate workers, to
perform more effectively. The following steps promote intrinsic
motivation:
• Workers Participation in Management (WPM)
• Management by Objectives (MBO)
• Organization Behavior Modification
• Job-Redesign
• Alternative Work Schedules.

Two approaches, however, have been especially effective: linking pay

to jot performance and quality of work-life programs.
Pay and Job Performance
Pay often can be used to motivate employee performance. But a pay
plan also must be able to do the following tasks:

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• Create the belief that good performance leads to high levels of

pay;
• Minimize the negative consequences of good performance; and
• Create conditions in which rewards other than pay are evaluated
as related to good performance.
Quality of Work Life Programs
Quality of Work Life (QWL) is defined as an attempt through a formal
program to integrate employee needs and well being with the intention
of improved productivity, greater worker involvement and higher levels
of job satisfaction.
Programs for QWL improvements range from those requiring
minor changes in an organization to those requiring extensive
modifications in structure, personnel and the utilization of resources.
There are three types of QWL programs, which are as follows:
Quality Circles
Quality Circles (QC) are small groups of workers who meet regularly
with their supervisor as their 'circle leader' to solve work-related
problems. QCs give an employee an opportunity for involvement,
social-need satisfaction, participation in work improvement and
challenge and opportunity for growth. They are, in essence, vehicles for
providing employees with opportunities to satisfy lower and upper-level
needs as stated by Maslow, through the motivators described in
'Herzberg's theory.
Alternative Work Schedule
Organizations also frequently use the modified 'work-week' as a way to
increase employee motivation. A modified 'work-week' can be any work
schedule that does not conform to a traditional 8 hours a day or 5 days
a week format. The modified 'work-week' helps individual satisfy higher-
level needs by providing more personal control over one's work
schedule. It also provides an opportunity to fulfil several needs
simultaneously.

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Job-Redesign
Job-Redesign or changing the nature of people's job is also being used
more as a motivational technique. The idea pursued here is that
mangers can use any of the alternatives job rotation, job enlargement,
job enrichment as part of motivational programme. Expectancy theory
helps explain the role of work design in motivation.

3.5 Conflict Management

Conflict is defined as a clash between individuals arising out of a
difference in thought process, attitudes, understanding, interests,
requirements and even sometimes perceptions. A conflict results in
heated arguments, physical abuses and definitely loss of peace and
harmony. A conflict can actually change relationships. Friends can
become foes as a result of conflict just as in the case of Tim and Joe.
A Conflict not only can arise between individuals but also among
countries, political parties and states as well. A small conflict not
controlled at the correct time may lead to a large war and rifts among
countries leading to major unrest and disharmony.
It is a well known fact that neighbours are our biggest assets as they
always stand by us whenever we need them. Let us take the example
of India and China or for that matter India and Pakistan. India and
Pakistan are twin sisters as there is hardly any difference in the culture,
religion, climatic conditions, eating habits of the people staying in both
the countries, but still the two countries are always at loggerheads and
the reason is actually unknown. Small issues between the two countries
have triggered a conflict between them which has now become a major
concern for both the countries.
Misunderstandings as well as ego clashes also lead to conflicts. Every
individual has a different way to look at things and react to various
situations.
Phases of conflict
A conflict has five phases.

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a) Prelude to conflict - It involves all the factors which possibly arise a

conflict among individuals. Lack of coordination, differences in interests,
dissimilarity in cultural, religion, educational background all are
instrumental in arising a conflict.
b) Triggering Event - No conflict can arise on its own. There has to be an
event which triggers the conflict. Jenny and Ali never got along very well
with each other. They were from different cultural backgrounds, a very
strong factor for possibility of a conflict.Ali was in the mid of a
presentation when Jenny stood up and criticized him for the lack of
relevant content in his presentation, thus triggering the conflict between
them.
c) Initiation Phase - Initiation phase is actually the phase when the conflict
has already begun. Heated arguments, abuses, verbal disagreements
are all warning alarms which indicate that the fight is already on.
d) Differentiation Phase - It is the phase when the individuals voice out
their differences against each other. The reasons for the conflict are
raised in the differentiation phase.
e) Resolution Phase - A Conflict leads to nowhere. Individuals must try to
compromise to some extent and resolve the conflict soon. The
resolution phase explores the various options to resolve the conflict.
Conflicts can be of many types like verbal conflict, religious conflict,
emotional conflict, social conflict, personal conflict, organizational
conflict, community conflict and so on.
Conflicts and fighting with each other never lead to a conclusion. If you
are not on the same line as the other individual, never fight, instead try
your level best to sort out your differences. Discussion is always a
better and wiser way to adopt rather than conflicts.

Self Check Question

1. Conflicts can be of many types like _________________________
2. ______________________is defined as an attempt through a formal
program to integrate employee needs and well being with the intention
of improved productivity

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3.6 Assignments
3.6.1 Class assignment
1. Appreciate each other strength in group of five. Prepare its detail
3.6.2 Home assignment
1. Write short notes on
a. Conflict Management b. Motivation
c. Maslow Theory

3.7 Summing Up
This lesson dealt with various Motivational Methods and it help to
specificity of goal is essential and measurability is desirable, it should
not affect in identifying meaningful and valid objective of goal
attainment.

3.8 Possible answers to self check questions

1. verbal conflict, religious conflict, emotional conflict, social conflict,
personal conflict, organizational conflict, community conflict
2. Quality of Work Life (QWL)

3.9 Terminal Questions

1.What is Motivation? Explain the tools of motivation.
2.Explain various theories of Motivation

3.10 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan, India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

3.11 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi

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2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

3.12 Keywords
Quality Circles (QC) are small groups of workers who meet regularly
with their supervisor as their 'circle leader' to solve work-related
problems

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Unit-III [Media Organizations: Structure and functions]

Lesson 1 Media Organisations : Meaning, Nature, process and
importance
Lesson 2 Ownership patterns of media organizations
Lesson 3 Organisational structure of media organizations :
Print/Electronic and their functions
Lesson 4 Cross media ownership, conglomerates

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Lesson 1 Media Organisations: Meaning, Nature, process and

importance

____________________________________________________________________
STRUCTURE
1.0 Objectives
1.1 Introduction
1.2 Media Organizations: Meaning, Nature & process
1.3 Importance of Media Organization
1.4 Assignments
1.4.1 Class assignment
1.4.2 Home assignment
1.5 Summing Up
1.6 Possible answers to self check questions
1.7 Terminal Questions
1.8 References
1.9 Suggested Further Readings
1.10 Glossary

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Lesson 1 Media Organisations: Meaning, Nature, process and

importance

This unit deals with the Media Management organization Concepts .In
present lesson we will study Nature, concept and importance of media
organization.

1.0 Objective
After going through this lesson you will learn:
• Media Organization – Meaning
• Nature of Media Organization
• Importance and process of media organization

1.1 Introduction
New forms of Media Organizations are geared to make Media
Organizations more receptive, adaptive and generative -- always
focused on meeting the needs of stakeholders.

1.2 Media Organizations: Meaning, Nature & process

Organizational structure refers to the hierarchy of an organization and
how the components of this hierarchy work together to achieve the
objectives of the company. For example, in a particular area, there are
staff reporting to manager, who may report to another manager, or
directly to a CEO (depending on the complexity of the structure or the
size of the organization). Each of this group of persons has their own
distinct task(s) to complete that contributes to a main goal(s).
There are six key elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control

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• Centralization and decentralization

• Formalization
A. Work Specialization

1. Henry Ford became rich and famous by building automobiles on an

assembly line, demonstrating that work can be performed more
efficiently by using a work specialization strategy.

•Every Ford worker was assigned a specific, repetitive task.

•By breaking jobs up into small standardized tasks, Ford was able to
produce cars at the rate of one every ten seconds, while using
employees who had relatively limited skills.
•In essence, an entire job is broken into a number of steps, each
completed by a separate individual.

2. By the late 1940s, most manufacturing jobs in industrialized

countries were being done this way. Management saw this as a means
to make the most efficient use of its employees’ skills.

3. Managers also looked for other efficiencies that could be achieved

through work specialization:
B. Departmentalization
1. Grouping these jobs together so common tasks can be coordinated
is called departmentalization.
2. One of the most popular ways to group activities is by functions
performed. For example, a manufacturing manager might organize
his/her plant by separating engineering, accounting, manufacturing,
personnel, and purchasing specialists into common departments.
3. The advantage to this type of grouping is obtaining efficiencies from
putting like specialists together. Functional departmentalization
achieves economies of scale by placing people with common skills and
orientations into common units.

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4. Tasks can also be departmentalized by the type of product the

Media Organization produces.
• Procter & Gamble recently reorganized along these lines. Each
major product—such as Tide, Pampers, Charmin, and Pringles—will be
placed under the authority of an executive who will have complete
global responsibility for that product.
• The major advantage to this type of grouping is increased
accountability for product performance under a single manager.

5. Another way to departmentalize is on the basis of geography or

territory.
C. Chain of Command
1. Thirty years ago, the chain-of-command was a basic cornerstone in
the design of Media Organizations.
2. The chain of command is "an unbroken line of authority that extends
from the top of the Media Organization to the lowest echelon and
clarifies who reports to whom."
3. It answers the questions: “To whom do I go if I have a problem?”
and “To whom am I responsible?”
4. Two complementary concepts: authority and unity of command.
• Authority—"the rights inherent to management to give orders and
expect the orders to be obeyed."
• The unity-of-command principle helps preserve the concept of an
unbroken line of authority. It states that a person should have only one
superior to whom he/she is directly responsible.
5. Times change, and so do the basic tenets of Media Organizational
design. The concepts of chain of command have less relevance today
because of technology and the trend of empowering employees
D. Span of Control
1. How many employees a manager can efficiently and effectively
direct is an important question.
2. All things being equal, the wider or larger the span, the more
efficient the Media Organization.

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•Wider spans are more efficient in terms of cost.

•However, at some point, wider spans reduce effectiveness.
3. Narrow or small spans have their advocates. By keeping the span of
control to five or six employees, a manager can maintain close control.
4. Narrow spans have three major drawbacks:
•First, as already described, they are expensive because they add
levels of management.
•Second, they make vertical communication in the Media Organization
more complex.
•Third, narrow spans of control encourage overly tight supervision and
discourage employee autonomy.
5. The trend in recent years has been toward wider spans of control.
•They are consistent with recent efforts by companies to reduce costs,
cut overhead, speed up decision-making, increase flexibility, get closer
to customers, and empower employees.
•To ensure that performance does not suffer because of these wider
spans, Media Organizations have been investing heavily in employee
training.
E: Centralization and Decentralization
1. In some Media Organizations, top managers make all the decisions.
This is highly centralized.
2. There are Media Organizations where decision-making is pushed
down to those managers who are closest to the action. This is highly
decentralized.
3. Centralization refers to the degree to which decision-making is
concentrated at a single point. A centralized Media Organization is
inherently different structurally from one that is decentralized.
•The concept includes only formal authority.
•The Media Organization is centralized when top management makes
the Media Organization’s key decisions with little or no input from lower-
level personnel.
•The more that lower-level personnel provide input, the more
decentralization there is.

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4. In a decentralized Media Organization, action can be taken more

quickly to solve problems, more people provide input into decisions, and
employees are less likely to feel alienated.
5. There has been a marked trend toward decentralizing decision
making. For example, Sears and JC Penney have given their store
managers considerably more discretion on what merchandise to stock.
F. Formalization
In general, the Media Organizational process consists of five steps
1. Review plans and objectives.
Objectives are the specific activities that must be completed to achieve
goals. Plans shape the activities needed to reach those goals.
Managers must examine plans initially and continue to do so as plans
change and new goals are developed.
2. Determine the work activities necessary to accomplish objectives.
Although this task may seem overwhelming to some managers, it
doesn't need to be. Managers simply list and analyze all the tasks that
need to be accomplished in order to reach Media Organizational goals.
3. Classify and group the necessary work activities into manageable
units.
A manager can group activities based on four models of
departmentalization: functional, geographical, product, and customer.
4. Assign activities and delegate authority.
Managers assign the defined work activities to specific individuals. Also,
they give each individual the authority (right) to carry out the assigned
tasks.
5. Design a hierarchy of relationships.
A manager should determine the vertical (decision-making) and
horizontal (coordinating) relationships of the Media Organization as a
whole. Next, using the Media Organizational chart, a manager should
diagram the relationships.
Characteristics of Nature of Media Organizations
New forms of Media Organizations are geared to make Media
Organizations more receptive, adaptive and generative -- always

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focused on meeting the needs of stakeholders. New forms of Media

Organizations often exhibit the following characteristics:
1. Strong employee involvement - input to the system starts from those
closest to the outcome preferred by the system, from those most in-the-
know about whether the Media Organization is achieving its preferred
outcomes with its stakeholders or not. This way, the Media Organization
stays highly attuned and adaptive to the needs of stakeholders.
2. Organic in nature - less rules and regulations, sometimes no clear
boundaries and always-changing forms
3. Authority based on capability - ensures the Media Organization
remains a means to an end and not an end in itself
4. Alliances -takes advantage of economies of scale, e.g.,
collaborations, networks, strategic alliances/mergers, etc.
5. Teams -shares activities to take advantage of economies of scale at
the lowest levels of activities and ensures full involvement of employees
at the lowest levels
6. Flatter, decentralized Media Organizations - less middle
management, resulting in top management exchanging more feedback
with those providing products and services; also results in less
overhead costs
7. Mindfulness of environments, changes, patterns and themes - priority
on reflection and inquiry to learn from experience; develop "learning
Media Organizations"

1.3 Importance of Media Organization

Media Organizations are established to attain the different goals related
to the different interest groups. These are attained through the mutual
contribution of all related stakeholders. We can realize the importance
of Media Organization in society in many ways, among which some are
discussed as follows:

A. Synergy effect: In an Media Organization, people having different

skills and expertise work together to produce the synergetic effect with

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the help of latest technology. The result of the work done in group will
be higher as compared to the additional value of individual work. Media
Organizations make possible the complex activities. A very small team
of players and very small number of civil servants can manage the
activities of the government and the nation.

B. Team Spirit: Media Organizations always enhance the team spirit

within its team members. No Media Organization can attain its goal with
a single effort of limited members. So, by naturally Media Organization
strengthen the feeling of team spirit to his components.

C. Attainment of Common goal: Different individuals have different

goals on the basis of their social values and they come to the Media
Organization in the expectation of the fulfillment of those goals. Media
Organizations fulfill their goals by creating the environment of
compliance of Media Organizational goals with the individual goals.
Media Organizations motivate them for the commitment in the common
goal.

D. Employment Opportunity: The Media Organization has thousands of

small tasks and responsibilities in hierarchical form for the goal
attainment obviously creating employment opportunity in variety of
scale.

E. Economic Development: Through the employment, purchasing

power will increase as well as the Media Organization has to pay tax
resulting more revenue collection for government. This revenue will help
in the infrastructure development like roads, hospitals etc. On the other
way, employment generation is the basic tools for the economic
development for any nation. Employment creates income, income
creates purchasing power, purchasing power creates demand, and to
fulfill the increased demand production should be increased. To
produce more, again more employment is necessary. Thus this helps

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for economic development creating a good economic development

circle in the nation.

F. Specified Service: Media Organizations are established to produce or

render specified goods or services to the society giving emphasis on
innovation and creativity. This also helps to fulfill the customer needs
bringing up the social awareness.

G. Minimize Economic Disparities: As the lower level people get the

opportunity to work and get remuneration, the economic gap between
the different levels of society will be lowered.

H. Transfer and adaptation of technology: Any Media Organization is

involved in ongoing process of research to enhance its level of services.
In this course, it adapts the latest technologies available in the market
and indirectly it also imparts these technologies to the society through
its members.
________________________________________________________
Self check question
1. Authority based on capability - ensures the _________remains a
means to an end and not an end in itself
2. The principle helps preserve the concept of an unbroken line of
authority.
_______________________________________________________

1.4 Assignments
1.4 .1 Class assignment
1. Prepare the list of leading media business houses in india.
1.4 .2 Home assignment
1. Write short notes on
a. Synergy Effect
b. Team Spirit

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1.5 Summing Up
These lessons dealt with Media Organizations are established to
produce or render specified goods or services to the society giving
emphasis on innovation and creativity. This also helps to fulfill the
customer needs bringing up the social awareness.

1.6 Possible answers to self check questions

1. Media Organization
2. unity-of-command

1.7 Terminal Questions

1. Write a brief note on Economics of newspapers
2. Write the importance of media organization

1.8 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

1.9 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi
1.10 Glossary
Centralization refers to the degree to which decision-making is
concentrated at a single point.

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Lesson 2 Ownership patterns of media organizations

___________________________________________________________________
STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Ownership patterns of media organizations
2.3 Assignments
2.3.1 Class assignment
2.3.2 Home assignment
2.4 Summing Up
2.5 Possible answers to self check questions
2.6 Terminal Questions
2.7 References
2.8 Suggested Further Readings
2.9 Glossary

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Lesson 2 Ownership patterns of media organizations

In the last lesson we had Media Organisations: Meaning, Nature, process

and importance .In present lesson, we shall study about the ownership
pattern of media organization.

2.0 Objectives
After going through this lesson you will learn:
• Ownership pattern of media organization

2.1 Introduction
Business is simple to form and operate, and may enjoy greater flexibility
of management and fewer legal controls. However, the business owner
is personally liable for all debts incurred by the business.

2.2 Ownership patterns of media organizations

Each type of structure has certain advantages and disadvantages that
should be considered. The descriptions of the structures below are
provided to assist applicants and are not intended to be legal definitions
with the force of law.
A Sole Proprietorship is one individual or married couple in business
alone. Sole proprietorship's are the most common form of business
structure. This type of business is simple to form and operate, and may
enjoy greater flexibility of management and fewer legal controls.
However, the business owner is personally liable for all debts incurred
by the business.
A General Partnership is composed of two or more persons (usually
not a married couple) who agree to contribute money, labor, and/or skill
to a business. Each partner shares the profits, losses, and management
of the business and each partner is personally and equally liable for
debts of the partnership. Formal terms of the partnership are usually

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contained in a written partnership agreement.

A Limited Partnership is composed of one or more general partners
and one or more limited partners. The general partners manage the
business and share fully in its profits and losses. Limited partners share
in the profits of the business, but their losses are limited to the extent of
their investment. Limited partners are usually not involved in the day-to-
day operations of the business.

A Limited Liability Partnership is similar to a General Partnership

except that normally a partner does not have personal liability for the
negligence of another partner. This business structure is used most
commonly by professionals such as accountants and lawyers.

The Limited Liability Company (LLC) An LLC is formed by one or

more individuals or entities through a special written agreement. The
agreement details the organization of the LLC, including: provisions for
management, assign ability of interests, and distribution of profits or
losses. Limited liability companies are permitted to engage in any
lawful, for profit business or activity other than banking or insurance.
A Corporation is a legal entity; a corporation has certain rights,
privileges, and liabilities beyond those of an individual. Doing business
as a corporation may yield tax or financial benefits, but these can be
offset by other considerations, such as decreased personal control.
Corporations may be formed for profit or nonprofit purpose.

A Nonprofit Corporation A nonprofit corporation is a legal entity and is

typically run to further some sort of ideal or goal, rather than in the
interests of profit. Many nonprofits serve the public interest, but some
do engage in private sector activities.
Self-Check Questions
1. A _________________ is composed of two or more persons
(usually not a married couple) who agree to contribute money, labor,
and/or skill to a business..

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2. A _________________ is a legal entity; a corporation has certain

rights, privileges, and liabilities beyond those of an individual.
_________________________________________________________
2.3 Assignments
2.3.1 Class assignment
1. Prepare the Media organization ownership pattern.
2.3.2 Home assignment
1. Write short notes on
a. Partnership
b. Sole Proprietor

2.4 Summing Up
This lesson dealt with various methods of ownership of media
ownership.

2.5 Possible answers to self check questions

1. Partnership
2. Corporation

2.6 References
Hargie O, Dickson D, TourishDenis- Communication Skills for Effective
Management, Palgrave Macmillan,India
Dr. Sakthivel Murughan M -Management Principles & Practices, New
Age International Publishers, New Delhi

2.7 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

2.8 Glossary
A Corporation is a legal entity; a corporation has certain rights,
privileges, and liabilities beyond those of an individual.

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Lesson 3 Organisational structure of media organizations : Print/Electronic

and their functions
__________________________________________________________________

STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 Organisation chart of Electronic Media
3.3 Organisation chart of Print Media
3.4 Assignments
3.4.1 Class assignment
3.4.2 Home assignment
3.5 Summing Up
3.6 Possible answers to self check questions
3.7 Terminal Questions
3.8 References
3.9 Suggested Further Readings
3.10 Glossary

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Lesson 3 Organisational structure of media organizations:

Print/Electronic and their functions

In the last lesson we had discussed ownership patterns of media organizations .In
present lesson, we shall study about organisational structure of media organizations.

3.0 Objectives
After going through this lesson you will learn:
• Organization chart of Media organization

3.1 Introduction
The organization charts indicates how employees are linked to other
employees in the business; the organization chart helps individuals see
their positions in a firm

3.2 Organization chart of Electronic media

Every organization has to have an organization chart which shows the
relationships between individuals, who is in charge, who has authority
to make decisions, who carries out decisions, how information is
communicated, how the positions are coordinate, etc. The structure of
the business allows: to spot communication problems. This can help
them appreciate their responsibilities, who have authority over them and
who they are accountable to; the organization chart also help to pinpoint
where specialists are needed; and organization charts show how
different sections of the firm relate to each other.

The television organization chart has these components as described

by Hall. Below is an illustration of a television organization structure
according (Stovall 2010: 14).

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A Television Organization Chart-

The President- This is the highest executive position at a television
station. He/she is often the owner or the representative of the owner of
a television station. In other television stations this position carries the
name of the Managing Director or the General Manager. This person
overseas all activities done in the organization like production,
advertising, budget issues, community relations, ensuring achieving
goals of mission statement, etc. He is the decision maker of short and
some long term objectives apart from the television board committee.
argues that the General Manager reports to the station owner while
several departments report to the GM, including the news department,
production, sales, business, and engineering.

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The vice president is in second command to the president. Usually his

major work is to ensure active implementation and monitoring of
implemented ideas and programs succeed on behalf of the president.
Such ideas can be like a new youth program sensitizing on positive
living for good health and long life for development of Malawi.
The News Director heads the news department. Checks how news
programs are being run, how producers are coordinating with reporters
and also lead duties designed by producers during production.That a
director is a person in charge of working out production details;
coordinating the activities of the production staff and non-camera talent;
working out positions of camera and talent or actors and presenters on
the set; selecting the camera shots during the production; and
supervising post production work.
The director therefore his main role is to coordinate activities so that his
team produces the desired output worthy to broadcast. argue that
coordination means the dividing up of the total task of the enterprise
into smaller units so as to take advantage of specialization to achieve
the aims of the enterprise as productively as possible. This dividing of
the work into smaller jobs, however, immediately raises the problem of
cooperation or the coordination of the divided tasks and the various
objectives which the various departments are working towards as an
integrated whole to achieve the primary objective of the enterprise.
Producers come up with production concept. In other words the ‘they
hatch the production concept’. He then budget for the entire production
process, makes major decision which guide the production process. He
is the team leader thus works with writers, decides on the key talent,
hires the director where there is no in-house director, and guides the
general direction of the production. The producer is assisted by the
assistant producer throughout the production.

Anchors are those that have personal strength and authority, as though
the bearer of that title, through a combination of experience, personality

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and charisma is holding the program together and somehow grounding

it in reality. They are also newsreaders or news casters

Assignment editors are in charge of assigning duties to reporters.

Where reporters to get news, when to bring news items, are some of
activities they look into. They also write and come up with headlines on
fished stories which they as well edit before broadcast.

Reporters fetch news stories and sometimes do write down those news
ideas into readable stories. These make the news department live and
active.
Writers do write down news stories from news ideas brought by
reporters.
Videographers are also called cameramen. They do shoot shots
assigned by the responsible producers. For example whether it is a
shooting script or treatment script videographers are right people to
manage the shooting job.
Sports editors edit sports news. They do assign sports reporters to
reporting duties.
Meteorologists do prepare news of climate and weather changes.
They even report forecast of climate as well as weather.
All discussed positions above fall under the news department which
comprise program manager who design new programs, control and
monitors them; production manager, who is responsible of making sure
that the programs are produced as intended by the producer as well as
directed and ensures programs are made ready for broadcast. He also
checks matters of decency and laws to comply with laws of the land and
journalistic principles like ethics; talent, includes actors, reporters,
hosts, guests, etc; and studio crew which include all studio personnel
like lighting, technical, camera operators, costume directors, electronic
character generators, audio and visual directors, etc.
Another department is business. This department is composed of
business manager, accounting manager, personnel manager, sales

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manager, local sales manager, national sales manager, account

executives, traffic manager, and building maintenance.

The business manager is responsible for managing all television

business activities across business department as mentioned in above
paragraph including advertising and coverage of public and private
functions which is one way of generating finances for the television.

Another important department is the engineering department. This

department is headed by chief engineer who subordinates transimitter
manager, remote manager, maintenance manager and engineers. The
main duty of this department is to ensure that the broadcast
transmission is perfect and technical faults like picture blurring, sound
jamming are avoided and/or rectified on time with desirably with
improvement like that of picture quality. The engineering department
also expands the transmission network for a television to have wide
viewership.

Finally, the organization chart shows areas of specializationdefine

specialization as the basic principle on which organization rests is that
of specialization or the way in which a task is broken up into smaller
units so as to take advantage of specialized knowledge or skills to
improve productivity

3.3 Organization chart of Electronic media

Self Check Question

1. ________________fetch news stories and sometimes do write
down those news ideas into readable stories.
2. A _______________is a person in charge of working out production
details; coordinating the activities of the production staff and non-
camera talent; working out positions of camera and talent or actors

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and presenters on the set; selecting the camera shots during the
production; and supervising post production work.
____________________________________________________________________
3.4 Assignments
3.4.1 Class assignment
1. Collect the organization chart of any news organization

3.4.2 Home assignment

1. Write short notes on
a. Video editor
b. Business Manager
c. Editor

3.5 Summing Up
This lesson dealt with organization structure of media organisation to
understand hierarchy.

3.6 Possible answers to self check questions

1. Reporters
2. Director

3.7 Terminal Questions

1. Explain the Organisational structure of media organizations.

3.8 References
1) Philip Kotler, Marketing Management, Prentice Hall of India
2) Jethwaney, Jaishri, Advertising, Phoenix Publishing House Pvt.
Delhi
3) Chunawala, S.A., Sethia K.C, Foundations of Advertising Theory
&Practice Himalaya Publication House, Mumbai
4) J.V. Vilanilam & A.K. Verghese, Advertising Basics

3.9 Suggested Further Readings

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BJ(MC) 302 Unit 3 Lesson 3

1. Brand Equity – The Economic Times

2. Pitch
3. Brand Reporter
4. Ogilvy, David, Ogilvy on Advertising, Prion Book Ltd

3.10 Glossary
The President- This is the highest executive position at a television
station.
The business manager is responsible for managing all television
business activities across business department

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BJ(MC) 302 Unit 3 Lesson 4

Lesson 4 Cross media ownership, conglomerates

__________________________________________________________________

STRUCTURE
4.0 Objectives
4.1 Introduction
4.2 Cross media ownership
4.3 conglomerates
4.4 Assignments
4.4.1 Class assignment
4.4.2 Home assignment
4.5 Summing Up
4.6 Possible answers to self check questions
4.7 Terminal Questions
4.8 References
4.9 Suggested Further Readings
4.10 Glossary

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Lesson 4 Cross media ownership, conglomerates

__________________________________________________________________

In the last lesson we had discussed methods of Organisational structure of media

organizations : Print/Electronic. In present lesson, we shall study about the Cross
media ownership, conglomerates

4.0 Objectives
After going through this lesson you will learn:
• Cross media ownership
• conglomerates

4.1 Introduction
In India, there is no general policy on ownership and cross-media
restrictions, as far as restrictions between print and electronic media are
concerned. Debating on regulatory issues for cross-media ownership
the Industry & TRAI have long-term implications for the critical and
booming Indian media industry

4.2 Cross Ownership in Media Industry

Media businesses supply chain includes the following categorizes -
carrier (medium), content (production) and distribution (platform).
Carriers are television, radio, film, and mobile, the Internet, newspapers
and magazines. Content is typically the software—different genres of
programmes for various mediums. Distribution is the carriage services
that deliver content, including cable networks, direct-to-home (DTH) and
Internet service providers. All these operations are heavily technology
driven and are resource & capital intensive projects.
Increasing commercialization of Indian media with the entry of
multinational media corporations and large investments of domestic
media companies has given a silver spoon to the expansion phase.
Inter-corporate investments and interlocking of directorships between
media companies are also clearly emerging. Due to limited information

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on revenue patterns of media groups, especially Private players,

creates hurdles to getting a handle on media dominance and any
emerging media monopolies.
Accumulation of ownership interest across the various carriers such as
television, radio or print; consolidation, including upright combination
among media operations of content, carrier and distributor within a
media segment such as television or radio; and market share
dominance in a given geography within each media segment.
Media business can be run only with advertising and subscription to
meet the expenses and certainly it is not a tool for social reforms. Media
conglomerates are largely run for business interests and not specifically
for any ideology, commercial aspect of media are just not ignorable in
capitalist market.
As per Arguments raised by marketers, Cross ownership Pattern might
be a case of just ‘market-oriented’ competition but keeping in view the
current practices and growing shared interests among corporations, it
does not indicate a healthy sign. Absence of any cross-ownership law
has fostered market forces to run for dominance and monopolization
Media companies in India and abroad are integrating vertically to sell
cross-media, often acquiring or building multimedia platforms. News
Corp.’s Star TV India and Sun TV Network Ltd already own DTH and
cable distribution platforms. Star’s cross-media India operations include
television channels, Internet offerings, radio, mobile entertainment and
home video.
Sun Network has 14 TV channels in four states, cable assets,
magazines, radio stations and newspapers. In Tamil Nadu, the
dominance of Sun in cable and satellite TV (channels and distribution
network) and now in the DTH market is quite visible. Sun TV and its
cable company are known to simply blackout political telecasts by rival
Jaya TV.
Realizing the leverage provided by media, the Dravida Munnetra
Kazhagam government has taken steps to start its own channels and
even a government cable network. Similarly, realizing the dominance of

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the Eenadu group, the Congress government in Andhra Pradesh, in the

form of the son of state chief minister Y.S.R Reddy, went all out to
break this monopoly by starting a newspaper—Sakshi—and a television
channel, besides promoting a few magazines.
Considering the complexity and controversial nature of ownership
issues, the immediate attention is required to understand the sensitivity
from Industry & Viewers pattern. Most importantly, any restrictions on
media ownership must be defensible on grounds of public interest, with
particular reference to media diversity and plurality.
With combination of diverse cultural, lingual and social settings in our
country, it may be difficult to visualize conditions of cross media
ownership dominance leading to market monopoly. In India, there is no
general policy on ownership and cross-media restrictions, as far as
restrictions between print and electronic media are concerned. Debating
on regulatory issues for cross-media ownership the Industry & TRAI
have long-term implications for the critical and booming Indian media
industry.

4.3 ‘Conglomerate’
In a conglomerate, one company owns a controlling stake in a number
of smaller companies, which conduct business separately. Each of a
conglomerate's subsidiary businesses runs independently of the
other business divisions, but the subsidiaries' management reports
to senior management at the parent company. The largest
conglomerates diversify business risk by participating in a number of
different markets, although some conglomerates elect to participate in a
single industry.
These are the two philosophies guiding many conglomerates:
1. By participating in a number of unrelated businesses, the parent
corporation is able to reduce costs by using fewer resources.

2. By diversifying business interests, the risks inherent in operating in a

single market are mitigated.

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Self Check Questions

1. Media companies in India and abroad are integrating vertically to
sell cross-media, often acquiring or building __________.
2. __________________of Indian media with the entry of multinational
media corporations and large investments of domestic media
companies has given a silver spoon to the expansion phase.
____________________________________________________________________
4.4 Assignments
4.4 .1 Class assignment
1. Prepare the Conglomerate of media organizations.
4.4.2 Home assignment
1. Write short notes on
a. Cross ownership
b. Conglomerate

4.5 Summing Up
This lesson dealt with Cross ownership and Conglomerates
importance and the development taken in media expansion

4.6 Possible answers to self check questions

1. multimedia platforms
2. Increasing commercialization

4.7 Terminal Questions

1. Explain the cross-ownership pattern of media organizations.

4.8 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

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4.9 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management, Biztantra,
Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New Delhi

4.10 Glossary
In a conglomerate, one company owns a controlling stake in a number
of smaller companies, which conduct business separately.

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Unit-IV [Economics of Media Organisations]

Lesson 1 Economics of newspapers
Lesson 2 Electronic and Print media organization – cost and
revenue relationship
Lesson 3 FDI in media
Lesson 4 Establishing a media organization – steps involved
Lesson 5 Importance of entrepreneurship and fund-raising

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Lesson 1 Economics of newspapers

_______________________________________________________________

STRUCTURE
1.0 Objectives
1.1 Introduction
1.2 Economics of newspapers
1.3 Media Buying
1.4 Assignments
1.4.1 Class assignment
1.4.2 Home assignment
1.5 Summing Up
1.6 Possible answers to self check questions
1.7 Terminal Questions
1.8 References
1.9 Suggested Further Readings
1.10 Glossary

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Lesson 1 Economics of newspapers

_______________________________________________________________
This unit deals with the Management of media organization & its importance for
entrepreneur and fund raiser .In present lesson we shall study Economies of
newspaper.

1.0 Objectives
After going through this lesson you will learn:
• Newspaper management

1.1 Introduction
Newspapers individually and collectively – need equally strong
promotion to sell their services on account of competition from
other media. It is widely acknowledged that if financial resources
are properly managed and utilized, newspaper publishing may be
profitable activity.

1.2 Economics of newspapers

Management is an extremely important function in every
organization. It provides an invigorating force that brings life in an
organization. It is through effective application of management
principles and techniques that an organization, industry or service
can succeed in achieving goals.

Management has been defined as distinct process consisting of

activities of planning, organizing, actuating and controlling,
performed to determine and accomplish stated objectives with use
of human beings and other resources. In every organization
mangers have to design and maintain an environment in which
individuals work in groups to achieve selected missions and
objectives. Managers direct the effort and activities of other people
toward common objectives. Simply stated, management is to get

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things done through other people. Management is the art id

getting things done through or with informally organized groups.

Management plays a pivotal role in a newspaper organization. The

success of a newspaper organization is determined by the
effectiveness of its management in terms of its competence,
integrity and performance. Management makes the human efforts
in a newspaper organization more productive. The inputs of labor,
capital and news content do not themselves ensure growth of a
newspaper establishment. It requires the catalyst of management
to maximize the results. It is rightly said that management is the
mover and development is the consequence.

Howsoever sound and credible the journalistic product of a

newspaper organization may be, the fact remains that it cannot
succeed without professional management. The managerial
functions of planning, organization, coordination, motivation and
control must be performed effectively and purposefully in the
newspaper organization. The activities in the editorial, advertising,
printing, personnel, accounts and other departments have to be
planned, organized, coordinated and controlled properly failing
which the objective remain unachieved. Intense competition
among newspapers as well as from other media-television,
magazines and radio-has necessitated adopting of suitable and
better marketing strategies in a newspaper organization.

Newspapers individually and collectively – need equally strong

promotion to sell their services on account of competition from
other media. It is widely acknowledged that if financial resources
are properly managed and utilized, newspaper publishing may be
profitable activity. By adopting the modern techniques of human
resource management, the morale of personnel working in a
newspaper organization can be kept high. Equally important is

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employee motivation for it is the driving power which carries out

plans of management through enthusiasm of the group. Truly, the
hazards in a newspaper enterprise that impede stability, profitable
operation and continuance of publication can be removed by
adopting techniques of modern management. The changing
economic, social and technological scenario has wrought
developments that demand aggressiveness and professionalism
in newspaper management.
The chart shows the organizational structure of most newspapers

Newspaper Industry Culture

Generally speaking, newspapers have an Aggressive-

Defensive culture, where people are expected to approach tasks
in forceful ways to protect their status and security. The primary
behavior style (the way employees are expected to interact with
each other) is Perfectionist. Persistence and hard work are valued.
People feel they must avoid all mistakes, keep track of everything
and work long hours to meet narrow objectives. The value of
perfectionism is obvious, particularly in the news business, but an

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over-emphasis can lead employees to lose sight of goals, get lost

in details and develop symptoms of stress.

A secondary strong behavior style is Oppositional, where

confrontation prevails. While questioning is important in any
organization, a highly oppositional culture can lead to unnecessary
conflict, poor group problem-solving and "watered-down" solutions
to problems.

This type of culture is typically found in organizations that

emphasize traditional methods of quality control — evaluating
quality at the unit level rather than system-wide; focusing on
avoiding mistakes rather than achieving improvements; sacrificing
quality in some areas to reach unrealistic or unnecessary levels of
quality in others; and assigning quality responsibilities to
supervisors rather than staff. The culture also tends to be
pervasive in fast-paced environments, where people are required
to think and act very quickly on a regular basis.

The second defensive culture in Impact newspapers is Passive-

Defensive, typified by conflict avoidance and by dependent and
conventional behaviors. In the Passive-Defensive culture, people
do what it takes to please others and avoid interpersonal conflict.
Rules, procedures and orders are followed without question. In
this highly directed environment, jobs are narrowly defined and
supervision is intense. Managers rarely catch employees doing
things right, but never miss when they do things wrong.
Passive-Defensive cultures are often found in "protected"
organizations, such as government agencies, organizations that
are closely regulated by government or ones that operate as
monopolies.
The third type of defensive culture in Impact newspapers is

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mixed Passive/Aggressive, which contains equal measures of

those behaviors.

Current Culture Vs. Ideal Culture

There is a large gap between where newspaper culture is and
where people at both staff and management levels think it should
be. When asked what behaviors should be expected and
encouraged to maximize their organization's effectiveness,
respondents indicated the ideal culture would be Constructive.
This outcome is consistent with ideal cultures envisioned by
hundreds of other organizations that have taken the culture
survey.
Constructive cultures encourage members to work to their full
potential, resulting in high levels of motivation, satisfaction,
teamwork, service quality and sales growth. The primary style in
the ideal newspaper culture is Humanistic, managed in a
participative and person-centered way where people are expected
to be supportive and open to collaboration. The secondary style is
Achievement, where people are expected to know the business,
pursue a standard of excellence and plan well. Benefits include
appropriate problem-solving and effective customer service.

Constructive cultures tend to be found in companies that achieve

steady sales gains, seriously focus on system-wide improvements
and innovations, and practice empowerment and change-oriented
leadership.

When the current newspaper culture is compared with the ideal

culture, the biggest gaps — which can also be viewed as
opportunities for improvement — are in the following items:
• Giving positive rewards to others
• Encouraging others
• Helping others to develop

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• Enjoyment of work
• Opportunity to think in unique and independent ways
• Maintaining personal integrity
In other words, compared to other industries, newspapers operate
more as "silos" both within and among departments, and produce
lower-quality products and services.
NEWSPAPER
Types of Newspaper: it is classified based on
1. Frequency of publication
2. Page size
3. Audience
4. Market
Types of Newspaper advertisements are:
1. Display advertisements
2. Classified Display
3. Preprinted inserts

Advantages of Limitations of
Newspaper advertising Newspaper
advertising

Market penetration Reproduction

constraints
Geographical selectivity Limited
targeting
capability
Response Timings Short life span
Creative flexibility Clutter
Audience interest

2) Advertising in magazines
Three broad audiences they serve are:

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1. Consumer
2. Business
3. Farm
Advantages of advertising Limitations of
in magazines advertising in
magazines

Geographical selectivity Limited reach

and frequency
Audience selectivity Lack of sound
and motion
Creative flexibility Long lead time
Audience interest Clutter
Short life span

Selling the Print Newspaper Advertising Space

I. Design your print newspaper classified advertising section. It
should be easy to read, simple to understand, and consistent.
There is nothing worse than a classified ad section that is all
jumbled with too many display ads. Stay true to the
"classified" aspect of your classifieds. For example, list
everything under headings like Auto, Real Estate, For Sale,
and so on. Include subheadings when necessary. Also include
advertising rate information and your contact information so
that potential advertisers can contact your sales team.
II. Compose the rate sheet for classified ads in your print
publication. The rates must be easy to understand. For
example, be clear about whether you charge by the character,
word or line. Offer clear discounts on classified ad packages
bought in bulk. Specify whether you will help them to actually
compose the ad, along with any other value-added services

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you offer when advertisers go through your print newspaper.

Later, add testimonials to the rate sheet, as the rate sheet
acts as a form of advertising for people to advertise with you.
III. Get a steady stream of sales leads. You can get potential
advertisers' contact information from competing newspapers
(known as "raiding the competition"), the Yellow Pages, or
anywhere else. Be creative, and come up with at least a few
hundred leads before starting your telesales program.
IV. Telemarket your print classified advertising services. Use your
sales leads and telephone all leads one at a time to pitch ad
space. Keep it conversational.
V. Explain the benefits of advertising with you, and elucidate on
the drawbacks of not advertising with you. Keep it short and
simple.
VI. If someone agrees to buy classified ad space in your print
publication, up-sell them. To do this, you can offer discounts
on bulk advertising. Sell ads in bundles over a period of time,
or offer to place two or more differing ads in the same issue of
the newspaper.
VII. Have the advertiser pay by credit card, and do not run the ad
until payment is received. You may have to stand your ground
on this point. Remain polite.
VIII. Constantly prospect to regenerate your classified ad sales
lead list. Make sure you have a bottomless pool of leads from
which your sales team can draw.
IX. Manage your sales team by tracking their progress. Use
quotas as mile markers by which to measure performance.
Make sure everyone is dialing at least a dozen times a day,
talking with at least 20 prospects, and successfully closing at
least five sales. On slow days, they must dial 120 times a day,
talk to at least 10 prospects, and make at least three sales.
Keep your sales team pumped up and happy. Don't be a jerk.
Just be tough.

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X. Help your advertisers by participating in the ad composition

process. Make headlines extremely clear and place them
under appropriate headings. The body of the classified ad
should clearly explain what is being advertised, along with the
contact information so that readers can actually take action
and purchase the product or service.
XI. Track the effectiveness of your print classified advertising
section. To do this, tell your readers to tell your advertisers
that they found them in your publication. Print this prominently
throughout your classified section. That way, you will get
repeat clients. Remember, it is far easier to keep a client than
to get one.
XII. Stay creative, and always strive to improve the sales and
effectiveness of your classified advertising section.

1.3 Media Buying

Buying media is a specialized skill which requires knowledge of
your Target clients, Consumer behavior, the media, and the
criteria used to measure the value of newspaper making, TV and
radio programming. Station sales reps can be very persuasive in
proposing advertising packages and will offer to serve as your
media advisors. A broadcast station sales rep's advice can be very
helpful, but never let a media sales rep talk you into buying a
package. Instead of relying on the sales rep, one may wish to hire
a professional media buyer at no cost since the station pays the
media buyer's commission.
Even if you hire a media buyer, you must learn enough about the
key buying criteria to be in control and make the purchase
decisions based on the proposals. Since you are buying media
only for your company, it is feasible for you to learn enough about
the key factors applicable to the tax industry to buy your own
media.

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The following is a summary of the most important

considerations:
1. Go for the numbers: National mass-market firms buy TV and
radio on a "tonnage" basis. Determine you market and then
attempt to reach as many people in that market as is possible.
Your efficiency goal is to get the lowest cost-per-thousand ("CPM")
for your target market while also satisfying your other media
buying requirements. If you can determine the demographics of
your most lucrative customers, you may wish to advertise to them
first.
2. Adequate Reach and Frequency: You want to reach the
majority of viewers with adequate frequency to make an
impression. Remember the AIDA model of consumer behavior:
Awareness, Interest, Decision, and Action. A prospect may need
to see your ad several times just to become aware of your
company and the services you offer. Another couple of
impressions may be necessary to create interest. Your
commercial should, ideally, reach 100% of the audience with an
average frequency of at least five times. This goal will not likely be
accomplished by advertising only on one broadcast station. At
least two of the four major TV stations (ABC, CBS, NBC and FOX)
should be included. (Cable TV is discussed in Chapter 4 of this
handbook, "Targeted Marketing".) If all network stations are
competitive, you should buy time on all four. Your reach and
frequency can be amplified through radio and other media, as well
as your office sign exposure.

3. TV Program Schedules:You can buy time in specific programs

(higher price), and you can buy "Run of Station" (ROS) spots
within pre-determined time periods (lower cost). Prime time (7:00
p.m. to 11:00 p.m.) is very costly because of high demand. You
should allocate no more than ten percent of your spots to prime
time. At least 1/2 of your spots should be run during "Fringe Time",

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the hour immediately before (6:00 - 7:00 p.m.) and after (11:00 -
12:00 p.m.) prime time. About 20 percent of your spots might be
run during morning news programs. Other departs with high adult
audiences and good cost efficiencies could be added such as
daytime soaps and talk shows, and weekend movies and sports
programs. Given your goal of reaching your audience at the lowest
possible cost per thousand and knowing that he or she is
competing for your business against the other stations, your sales
rep should be able to identify the most efficient programs. You
may want to reserve part of your budget to take advantage of
specials caused by late cancellations of prime spots.
4. Rating Services: TV programs are rated by rating services
(e.g.: Nielson) subscribed to by all stations. New ratings are
published in February, May, and November. You should require
that all stations quote from the most recent book, adjusted for
February. If the TV coverage area extends beyond the metro area
where your offices are located, you should ask all stations to
provide figures on a metro area basis.

5. Negotiating the Best Price: An effective strategy is to ask for

proposals from each of the four major TV stations for a schedule
that would use about 1/2 of your total TV budget over a five-week
period. Instruct each station of your acceptable programming
parameters and the maximum allowable ratio of 10 to 30 second
spots (e.g. no more than 20% 10s).
_______________________________________________________________
Self check question
1. A secondary strong ___________is Oppositional, where
confrontation prevails
_______________________________________________________________
1.4 Assignments
1.4.1 Class assignment
1. Prepare strategy for selling newspaper space.

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1.4.2 Home assignment

1. Write short notes on
a. Media Buying

1.5 Summing Up
This lesson dealt with various methods of newspaper ownership
management.

1.6 Possible answers to self check questions

1. Behaviour style

1.7 Terminal Questions

1. Write a brief note on Economics of newspapers

1.8 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills
for Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

1.9 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi

1.10 Glossary
The second defensive culture in Impact newspapers is Passive-
Defensive, typified by conflict avoidance and by dependent and
conventional behaviours.

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Lesson 2 Electronic and Print media organization – cost and

revenue relationship
_______________________________________________________________

STRUCTURE
2.0 Objectives
2.1 Introduction
2.2 Cost and Revenue Relationship
2.3 Assignments
2.3.1 Class assignment
2.3.2 Home assignment
2.4 Summing Up
2.5 Possible answers to self check questions
2.6 Terminal Questions
2.7 References
2.8 Suggested Further Readings
2.9 Glossary

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Lesson 2 Electronic and Print media organization – cost and

revenue relationship
_______________________________________________________________
In the last lesson we had discussed economics of newspapers .In present
lesson, we shall study about the cost and revenue relationship for media
economies.

2.0 Objectives
After going through this lesson you will learn:
• Cost and Revenue relationship for media economies

2.1 Introduction
Over the last 20 years, digital technologies have rapidly multiplied
the amount of information that can be moved electronically and
multiplied the number and kinds of devices that can access this
information. Economics because the costs of both information
bandwidth and information devices have spiralled steeply
downward.

2.2 Cost and revenue relationship

One of the most important aspects of media is the fact that the
media industry is just that: an industry. Most media producers and
outlets are commercial in nature, with the main objective of
making money. There are several methods or "revenue models"
that media companies use to make money. The four most
common revenue models are discussed below.
Advertising
Advertising is the most common of all revenue models in
traditional media and online. TV shows, newspapers, and
websites offer their content (programming, news stories, etc.) at
no charge (or at a low price) in order to attract a large audience.

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Advertisers wanting to promote the products they're selling pay the

media outlets, who in turn place ads in between their content for
the audience to experience.
Advertising is most commonly used in media outlets that 1) can't
cover their entire costs just by selling their content (like
newspapers and magazines), and 2) would have little to no
audience if they charged (or charged more) for their product. For
example, a newspaper would never sell at $5 per copy, and you
wouldn't pay $30 for a movie ticket, so advertising is there to
subsidize the cost.
Subscription
Subscriptions are great for media types that are continually being
updated - think a newspaper, a magazine, or cable TV - or have
some kind of ongoing value - think websites like LinkedIn or
informational databases. Subscriptions are popular with media
companies because they provide steady revenues over time. This
revenue model doesn't work with media considered a commodity -
something you can get elsewhere for little to no cost. An example
of a media commodity is news - you can get it all over the web, so
paying for a subscription to a news website means that site should
provide significant value beyond the common news found
elsewhere. The Economist and the Wall Street Journal are
examples of news websites that offer significant value beyond
what you might find for free on Google News.
Pay-per-item
The pay-per-item model works for media types that come in an
individual package, offer no ongoing value, and are sustained
through sales alone. An example of this is a pay per view movie
on cable, a movie ticket at your local theater, or a CD or DVD.
Merchandising
Media companies use merchandising as a secondary, or ancillary,
income. This is popular with recognizable media franchises whose
fan base would want to purchase related items. An example might

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be the merchandising efforts of a company like Disney, which

produces and sells merchandise for all of it's big-budget movies
and TV shows. Many times, merchandising efforts earn more
income than the media product it references. For example, the
original Star Wars movies earned more income through
merchandising than through ticket sales.
The cost of moving units of information has fallen from very high in
the Mass Media Era to nearly zero in the Infinite Media Era. As a
direct outcome, in barely 20 years, the barriers of cost and
capacity that formed and defined our global information systems
have been shattered. The remaining limits are fast disappearing
as digital systems gain still more speed and capacity and as digital
devices penetrate every economic level and geography.
This is a change so profound that most of us, being creatures of
the Mass Media Era, barely grasp its implications. Having lived in
this restricted system for so long, we barely understand how its
limits have determined its contents and the behaviors of its users
at both ends of the pipe. And we have only begun to see how
infinite bandwidth will drastically alter content and behaviors.
Facebook is only a hint of what’s to come.
For humanity in total, this is a huge breakthrough. As universal
access to information arrives among the populations around the
globe, it will unlock vast amounts of previously restricted human
potential. Give the world’s people full access to the world’s
information, and huge numbers of them will rise to levels of self-
actualization their parents and grandparents could barely imagine.
This process will accelerate through the 21st century and beyond.
For the old mass media, however, this means hard times from
now on. It’s the end of the scarcity model — the limits that both
restricted them and made them hugely profitable. As the print
business declines and newspaper companies try to transfer their
business into the digital realm, five basic changes are working
against them:

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1. The mass media’s digital advertising must compete with

vast inventories of low-priced space on millions of Web sites.
It’s print dollars vs. digital dimes. As John Paton of Digital First
Media has often said, when the print dollars are going away,
media companies have to get really good at stacking digital dimes.
2. Mass media content is now just a drop in an infinite ocean.
The digital content competition is even stiffer than the advertising
competition. Now that people can get virtually any information they
want, they’re shifting huge amounts of their media time away from
news and other mass-media content into personally relevant
information. Generic, one-size-fits-all content like news and mass
entertainment, which ruled in the Mass Media Era, is now just a
small part of many people’s diet. Where the action is now — for
both individuals and Web companies — is in what people care
about personally. This is why news alone isn’t enough to support
much of a local media business model.

3. Digital audiences for local mass media Web sites are

dwarfed by those of national and international digital players
that meet more individualized needs and interests.
Most newspaper companies are ignoring this, at their great peril.
In the pre-digital era, newspapers dominated the local media
landscape, reaching more people every day than any other single
media outlet. In the digital age, national/global Web sites are the
giants, reaching far larger local audiences, far more often, than the
Web sites of local media.
The 12 Morris Publishing Group daily markets in the United States
with which I’ve been working are typical. Facebook, Google,
Yahoo!, YouTube, Bing, MSN and others dwarf our digital
audiences. Facebook is king, getting about 10% of all local visits
— 20 to 30 times more than Morris news sites. With market
shares that small in the digital realm, traditional local media
companies are distant also-rans. Comparing ourselves to other
local media sites — usually TV and radio — is missing the point:

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the national/global giants are trouncing us. And they are working
harder and harder to sell advertising to local businesses in direct
competition with local media.
4. Social media are unlocking an incredibly vast desire and
capacity among humans to get and give personally relevant
information.
When the cost of information falls to near zero, what happens?
People start using the pipe to get and give tremendous amounts of
information that’s mainly of personal and inter-personal interest.
This is the kind of information that matters to the individual and
maybe his or her network of friends, but not to many others. The
old mass media pipe was too constrained — and therefore too
expensive — to handle stuff like, “I guess I’ll go to Starbucks now,”
but Facebook is full of it.
This appetite for personal and inter-personal information has
always been there, but now that it can be fulfilled for free in digital
media, it’s being liberated. And it’s huge. As the information pipe
goes infinite, this stuff is most of the added volume of content, and
it’s being exchanged in an incredible number of small, overlapping
personal networks rather than in mass systems. The amount of
interpersonal information generated each day is now far greater
than what’s created by the old mass-media providers, including
newspapers.
5. Digital targeting is providing the tools to reach people
across thousands of Web sites and billions of small
networks.
For advertisers, the broken digital media system presents a huge
challenge and a huge opportunity. They need to figure out how to
reach people who are looking for personally relevant information
(often about a purchase) and using dozens of Web sites and
countless tiny personal networks several hours a day. Advertisers
see mass-media audiences splintering, and they’re trying to figure
out how to target the specific people who might buy their products.

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It was far easier in “the old days” of the Mass Media Era, when
virtually all of the people could be reached through just a few
media channels. But there was tremendous waste because the
advertising couldn’t be targeted.
Digital targeting is technology’s answer to this splintered digital
environment. Using detailed profiles compiled from people’s
Internet activity, and serving ads in milliseconds to people whose
data shows the desired characteristics, advertisers can achieve far
higher precision at far lower cost than they could with mass media.
Advertising dollars will flow from inefficient mass media to the new
forms of efficient digital targeting, creating the next painful wave of
disruption for legacy media.
These five factors add up to a massive overall disruption of the
mass-media business model. At the heart of it, it’s an audience
problem. In the old, information-starved days, we could guarantee
market-dominant audiences just by doing news (or, for the
broadcast media, entertainment). Today, news won’t get us
enough audience to be competitive, and our audiences are too
small for digital dimes to make up for the print dollars we’re losing.
Radio and television broadcasters may feel a bit smug these days,
watching what’s happening to newspaper companies. But it’s just
a matter of time before the bandwidth of the “infinite pipe”
becomes great enough, and the devices powerful enough, that
they will suffer the same problems.
It’s the end of the Mass Media Era, and with it, the mass-media
business model.
______________________________________________________
Self check question (True/False)
1. The digital content competition is even stiffer than the
advertising competition.__________
2. The pay-per-item model does not works for media types
that come in an individual package.____________

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_______________________________________________________________
2.3 Assignments
2.3.1 Class assignment
1. Collect the stock position of media organisation.
2.3.2 Home assignment
1. Write short notes on
a. Social media are unlocking an incredibly vast desire
b. Mass media content is now just a drop in an infinite ocean

2.4 Summing Up
This lesson dealt with Mass media economies cost and revenue
relationship.

2.5 Possible answers to self check questions

1.True
2. False

2.6 Terminal Questions

1. Explain the cost and revenue relationship of media economies.

2.7 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

2.8 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi

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2.9 Glossary
Subscriptions are popular with media companies because
they provide steady revenues over time.

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Lesson 3 FDI in media

_______________________________________________________________
STRUCTURE
3.0 Objectives
3.1 Introduction
3.2 FDI In media
3.3 Assignments
3.3.1 Class assignment
3.3.2 Home assignment
3.4 Summing Up
3.5 Possible answers to self check questions
3.6 Terminal Questions
3.7 References
3.8 Suggested Further Readings
3.9 Glossary

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BJ(MC) 302 Unit 4 Lesson 3

Lesson 3 FDI in media

_______________________________________________________________

In the last lesson we had discussed cost and revenue relationship. In present
lesson, we shall study about the Cable TV and private FM radio companies will
be able to seek more foreign participation.

3.0 Objectives
After going through this lesson you will learn:
• FDI in media

3.1 Introduction
FDI cap for news media will continue at 26%, it is the non-news
media which benefits more, with a higher FDI ceiling of 74% —up
from the existing 49%.
3.2 FDI in Media
After scams, this is the next big thing that has caught the fancy of
Indian media over past few months. The former infact seems to
have done more economic damage to the country’s future in many
respects than the latter. Especially if one considers the value of
Foreign Direct Investment (FDIs) stalled due to delays in project
clearances. In addition, the fact that unlike the telecom revenues,
the projects have immense potential to multiply India’s GDP
growth. But as the scam ridden government gets ready for the
Budget session, India Inc may see more green signals coming its
way. Accused of turning a blind eye to economic reforms, the
Prime Minister has assured of steps to get projects rolling.
Cable TV and private FM radio companies will be able to seek
more foreign participation if the government’s proposal for upping
the FDI sails through. The Ministry will plead with the Finance
Ministry for incentives to television distribution companies, the
sources further said, adding that the I&B Minister Ambika Soni had
already given a list of demands on behalf of the entertainment

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industry to Finance Minister Pranab Mukherjee. At present, there

are different FDI limits for the various segments in the
broadcasting industry. The Telecom Regulatory Authority of India
(Trai) had in July last year suggested bringing uniformity and
raising the limits – noting that it was a as low as just 20% in some
cases. Trai had, however, made an exception at 26% for FM radio
and TV news channels.
The broadcast sector consists of channels as well as distribution
media such as DTH, cable etc. At present, 100% foreign
investment is allowed in non-news channels, while most
distribution channels have 51% Indian ownership. Arvind Kumar,
Joint Secretary (Broadcasting) in the Ministry, said that the
broadcasting sector is expected to require Rs 400 to Rs 500 billion
for its expansion in the next few years.
Thus speedy approvals for the private sector and FDI funded
projects are in order. At the same time, the government would not
want only cheap hot money from abroad to flood Indian markets.
While the FII funds may help India’s current account balance, they
are best kept away from the country’s long term investments.
Hence in order to balance out the steady FII inflows with FDI,
more projects may be seen getting the environmental go ahead.
But will FDI at the cost of environment serve India’ long term
needs? Experts believe that allocation of critical resources like
mining rights need to have much more than economic goals in
mind. Protecting the country’s green zones and ensuring a
reasonable quality of ecological balance is paramount to an
economy’s prosperity. A softer stand on environmental issues may
be seen as a near term positive. But these is a fear that such
myopic visions tend to ignore more critical concerns about
sustainability.
Uniform FDI not possible
The government may finalize its views on FDI in the media sector
within one month, a senior government official said. The FDI,

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however, can’t be uniform across all sectors of the media, said

Information and Broadcasting Secretary Raghu Menon. At
present, different FDI limits apply for different segments in the
broadcasting industry and the regulator had suggested bringing
uniformity and raising the limits.
India must reduce its tariff and non-tariff barriers and consider
lifting restrictions on FDI in several areas to help it secure funds to
help fix its infrastructure, U.S. Commerce Secretary Gary Locke
said. Addressing a media roundtable, Mr. Locke said that allowing
more FDI in sectors like infrastructure, banking and insurance and
even the retail sector would greatly help these sectors get access
to more funds and lower their costs. “Only 2% of the roads are
paved in India. It is estimated that India requires up to $1.2 trillion
between now and 2030 to repair and upgrade its infrastructure
which involves an eight-fold increase in per capita spending. That
is clearly beyond the capability of India and that is where FDI will
help.’’ “Besides, higher investments coming in to build food
storage facilities will help streamline the supply chain and also
lower food prices,’’ he said. Although India has made progress in
opening its markets to U.S. companies, a lot more remains to be
done in this direction. “India has been demanding more help in a
whole host of projects — to modernise its defence and security
forces, where it is seeking proposals from all over the world,
education as well as healthcare. However, it is difficult in a high
tariff environment where the tariffs on things like medical devices
are very high. If companies are to do more innovation here, there
is also a need for stronger intellectual property rights (IPRs).’’

Allowing more foreign investment

The government is considering allowing foreign firms to own up to
74% of broadcasting companies, along the lines suggested by the
telecom regulator seven months ago, a top official in charge of the
matter said. At present, different FDI limits apply for different

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segments in the broadcasting industry and the regulator had

suggested bringing uniformity and raising the limits. The
government is set to propose simplified FDI norms for media
companies in India, classifying them into two categories: news
media and non-news media. While the FDI cap for news media
will continue at 26%, it is the non-news media which benefits
more, with a higher FDI ceiling of 74% —up from the existing 49%.
Proposed by the ministry of information and broadcasting, the
fresh norms are expected to help the loss-making direct-to- home
(DTH) industry and multi-system operators (MSOs). Besides,
applications for FDI up to 26% will be put on the automatic route.
Currently, there are different FDI limits for different categories of
media companies ranging from 20% to 100% with mandatory
approvals required from the Foreign Investment Promotion Board.
All media entities engaged in the news business will continue to
have a 26% FDI cap. Private FM radio stations — which currently
face an FDI limit of 20% — will also get a higher limit at 26%, once
the third phase of FM radio privatization (FM-III) is complete. Use
of news and current affairs sourced from All India Radio will also
be allowed in FM-III. For all non news media, there will be a
simplified regime where the FDI limit goes up to 74%, which will
include all kinds of foreign funds — including money from foreign
institutional investors, non-resident Indians and overseas
commercial borrowings. Currently, there are caps on FDI within
the overall foreign investment limits.
The biggest beneficiaries of the I&B proposal will be digital content
distribution platforms including DTH, teleport operations, MSOs,
cable operators, IPTV, Mobile TV and Head end In The Sky
(HITS). Currently, the foreign investment cap for DTH is 49% but
within that, FDI cannot be more than 20%. A similar cap is also
applicable for MSOs and cable operators. However, there is no
FDI policy for mobile TV. Now, all these platforms can attract up to
74% FDI.

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According to media experts, the move is likely to help the fast-

growing, six-player private DTH sector get more investments. This
is because several leading DTH operators including Tata Sky, Sun
Direct and Dish TV have already hit the 20% FDI cap. Currently,
the Tata group owns 70% in Tata Sky while 20% is with Star
group and the remaining is held by Singapore-based Temasek
Holdings. Similarly, Malaysia’s Astro Group holds 20% stake in
Kalanithi Maran’s DTH venture Sun Direct through its subsidiary
South Asia Entertainment Holdings. Both Star (for Tata Sky) and
Astro (for Sun Direct) have increased up their respective stakes in
heir DTH ventures via the indirect route. “The simplified FDI norms
will allow the inflow of foreign investments in both DTH as well as
in digital cable firms as digitalisation will become mandatory from
2012,” a media expert said.
Television Sector

Segment Existing Limit

Teleport (Hub) 49 per cent

DTH 49 per cent

74 per cent (49 per cent in

HITS
automatic route)

Cable Networks-MSOs 49 per cent

Cable Networks-Local 49 per cent

Cable operators

FM Radio 20 per cent

Downlinking of TV 100 per cent

channels

Uplinking of TV News 26 per cent

and Current Affairs
Channels

Uplinking of TV Non-nes 100 per cent

and Current Affairs

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Channels

Mobile TV No policy

Source: FICCI-KPMG Indian Media and Entertainment Industry

Report 2011
_________________________________________________________
Self check question (True/False)
1. The biggest beneficiaries of the I&B proposal will be digital content
distribution platforms including DTH, teleport operations, MSOs,
cable operators, IPTV, Mobile TV and Head end In The Sky
(HITS).______________________
2. For all non news media, there will be a simplified regime where
the FDI limit goes up to _________which will include all kinds of
foreign funds — including
______________________________________________________________
3.3 Assignments
3.3.1 Class assignment
1. Collect the FDI norms any five countries .
3.3.2 Home assignment
1. Write short notes on
a.Cable network
b. DTH
3.4 Summing Up
This lesson dealt with FDI in several areas to help it secure funds
to help fix its infrastructure .

3.5 Possible answers to self check questions

1. True
2. 74%, money from foreign institutional investors, non-
resident Indians and overseas commercial borrowings.

3.6 Terminal Questions

1. Explain the role of FDI in media Expansion

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3.7 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills
for Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

3.8 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi

3.9 Glossary
Proposed by the ministry of information and broadcasting, the
fresh norms are expected to help the loss-making direct-to- home
(DTH) industry and multi-system operators (MSOs).

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Lesson 4 Establishing a media organization – steps involved

_______________________________________________________________
STRUCTURE
4.0 Objectives
4.1 Introduction
4.2 Establishing a media organization – steps involved
4.3 Assignments
4.3.1 Class assignment
4.3.2 Home assignment
4.4 Summing Up
4.5 Possible answers to self check questions
4.6 Terminal Questions
4.7 References
4.8 Suggested Further Readings
4.9 Glossary

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Lesson 4 Establishing a media organization – steps

involved
_______________________________________________________________
In the last lesson we had discussed FDI in media .In present lesson, we
shall study about the methods of establishing a media organization.

4.0 Objectives
After going through this lesson you will learn:
• Establishing a media organization

4.1 Introduction
In present lesson, we shall study about the methods of
establishing a media organization

4.2 Establishing a media organization – steps involved

There are a few essential steps you need to take before starting a
business, any business.
1. Do your market research: Just because you build it or sell it
doesn't necessarily mean anyone will buy it. The first essential
step is to research your potential market. Who needs what you are
offering? Is there space for your product or service in the market
or is the market saturated? Is the market national? Is it a niche?
Can you define your ideal customers? These are all questions that
need to be answered before you even consider starting a
business. Too many entrepreneurs have found out the hard way
that there was not enough market share for them to capture.
Others have realized that their target market audience was far too
limited to make their business work.
2. Show yourself the money: You can't start a business without
capital. Determine what you have, what you will need and how you
will go about getting it. If you plan to seek investor funding or

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financing, start writing a business plan and practice your pitch.

Research the costs associated with your business. Know how
much money you'll need and decide where it could come from.
3. Hire a good business attorney: You don't necessarily need to have
an attorney on a retainer, but you'll want to hire an attorney
experienced with new businesses to help you get started. Your
attorney can advise you about such things as drafting contracts,
reviewing your lease and determining the right business structure.
4. Hire a good accountant: An accountant will work in conjunction
with your attorney and be instrumental in determining the best
form of ownership. He can also help you establish bookkeeping
and other record keeping procedures that can keep you on track
for years. Most important, a good accountant will help with tax
planning. "You will also want an accountant who understands the
state laws, since every state has its own little intricacies, such as
sales tax issues," Talis says, adding that it's important for your
accountant to be familiar with startup ventures.
5. Decide on a business structure: Your choices include sole
proprietorship, partnership, corporation, "S" corporation or limited
liability corporation (LLC). Personal liability, taxes, paperwork and
regulations vary greatly among the different legal business
structures. Your attorney and accountant will play a key role in
assisting you in this important decision.
6. Decide on a business name: It may seem obvious and simple, but
the name is how your business will be known to the world. The
right name says a lot about your company. Make a list of potential
names and narrow the list down to the one that best describes
your company in a few words, while being catchy, easy to
remember, easy to pronounce and easy to spell. You should also
consider how it will translate to a web domain name. You'll also
need to do research to see if there are a) similar business names
and b) similar domain names.

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7. Get all necessary licenses and permits: Along with a business

license, you may need to get additional licenses depending on the
type of business and local laws. Many professionals, such as
contractors and real estate agents, need to be licensed in the
states in which they work. Additionally, you may need licenses to
manufacture and/or sell specific products such as liquor, firearms
or even lottery tickets. Research all licenses applicable in your
county and your state. It's also extremely important to know the
zoning laws before you open a business
_________________________________________________________
Self check question (True/False)
1. Eentrepreneurs’ have found out the hard way that there were not
enough market shares for them to capture.___________
2. Determine what you have, what you will need and how you will go
about getting it.____________________
______________________________________________________________
4.3 Assignments
4.3.1 Class assignment
1. Collect the Business history of various media organization.
4.3.2 Home assignment
1. What are pattern to adopt brand name recall strengthen?

4.4 Summing Up
This lesson dealt with steps to start a media organization. .
Research the costs associated with your business. Know how
much money you'll need and decide where it could come from.

4.5 Possible answers to self check questions

1. True
2. True
4.6 Terminal Questions
1. What are the methods for establishing media organization?

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4.7 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills for
Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles & Practices,
New Age International Publishers, New Delhi

4.8 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi

4.9 Glossary
You may need licenses to manufacture and/or sell specific
products such as liquor, firearms or even lottery tickets.

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BJ(MC) 302 Unit 4 Lesson 5

Lesson 5 Importance of entrepreneurship and fund-raising

_______________________________________________________________
STRUCTURE
5.0 Objectives
5.1 Introduction
5.2 Entrepreneurship
5.3 Importance of Entrepreneurship
5.4 Fund-raising
5.5 Assignments
5.5.1 Class assignment
5.5.2 Home assignment
5.6 Summing Up
5.7 Possible answers to self check questions
5.8 Terminal Questions
5.9 References
5.10 Suggested Further Readings
5.11 Glossary

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BJ(MC) 302 Unit 4 Lesson 5

Lesson 5 Importance of entrepreneurship and fund-raising

_______________________________________________________________

In the last lesson we had discussed establishing a media organization. In

present lesson, we shall study about the entrepreneurship and fund-raising.

5.0 Objectives
After going through this lesson you will learn:
• Entrepreneurship
• Fund-raising

5.1 Introduction
Entrepreneurship can be defined as the propensity of mind to take
calculated risks with confidence to achieve a pre-determined
business or industrial objective. That point out the risk taking
ability coupled with decision making.
5.2 Entrepreneurship
Entrepreneurship is the tendency of a person to organize the
business of his own and to run it profitably, using all the qualities
of leadership, decisions making and managerial caliber etc. The
term “entrepreneur” is often used interchangeably with
“entrepreneurship”. But conceptually they are different.
In a way, entrepreneur precedes entrepreneurship. It is concerned
with the development and co-ordination of entrepreneurial
functions.
Entrepreneurship is an abstraction and entrepreneurs are tangible
persons. Well designed and controlled research studies on
entrepreneurship are very few. If we view entrepreneurship as
opposed to management, it becomes still more difficult to define
entrepreneurship.
Entrepreneurship is a role played by or the task performed by the
entrepreneur. The central task of the entrepreneur is to take

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moderate risk and invest money to earn profits by exploiting an

opportunity. For this he must possess far-sightedness to perceive
an opportunity so that he can exploit it well in time. Although an
entrepreneur has to perform diverse functions yet he must
manifest many qualities in himself to be a good entrepreneur.
The word 'entrepreneurship' typically means to undertake. It owes
its origin to the western societies. But even in the west, it has
undergone changes from time to time. In the early 16th century,
the term was used to denote army leaders. In the 18lh century, it
was used to denote a dealer who buys and sells goods at
uncertain prices. Towards 1961, Schumpeter, used the term
innovator, for an entrepreneur.

5.3 Importance of Entrepreneurship

Entrepreneurship being an intangible factor is the moving force
and development is the consequence. It has an important role in
the context of a developing nation like India which is confronted
with major socio-economic problems. Entrepreneurship can play
an important role not only in the industrial sector of a country but
in the farm and service sectors also.
India is being attacked by baffling problems of over population,
unemployment, under-employment, poverty and the like.
Entrepreneurship is consistently equated with the establishment
and management of small business enterprises and setting up
these units is the solution to these baffling problems.
Concentration of economic power, regional imbalances,
exploitation by monopolists, and many other giant problems find
their solutions in the development of small scale industry which is
another name of entrepreneurship in the developing countries.
Mahatma Gandhi also asserted the same, entrepreneur ship has
not grown much in India but it is gaining importance fast. The
factors which retard the success of entrepreneurship in India are
inadequate infrastructural facilities, shortage of capital, technical

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knowledge, and transport, absence of cheap and good quality raw

material and shortage of power etc. The government has been
taking significant steps to encourage entrepreneurship as
entrepreneurship is the only solution to various problems of
developing countries. Entrepreneurship caught strong waves
during the last three decades and became a worldwide movement
spreading across countries, regardless of their level of
development. Even in Europe and United States, revival of small
business has been seen for more than a decade. Constant
change and innovations are simply a necessity of
entrepreneurship and is becoming essential to survive in a global
economy.
(i) Detect the opportunities
(ii) Pursue the opportunities and rewarded
(iii) to lessen the consequences of failing.
Features of Entrepreneurship:
Entrepreneurship is the tendency of a person to organize the
business of his own and to run it profitably, using various traits like
leadership, decision making, innovation, managerial caliber etc.
Entrepreneurship is a set of activities performed by an
entrepreneur in a way, entrepreneur precedes entrepreneurship.
The main features of entrepreneurship are as follows:
(i) Economic Activity: Although classical economists like Adam
Smith and Richard Cantillon and many others didn't recognize
entrepreneurship as an economic activity but since last few
decades’ entrepreneurship is catching up and is primarily
becoming an economic function because it involves creation and
operation of an enterprise.
Schumpeter's argument was that all important changes in the
economy are set off by an entrepreneur and then these changes
slowly work themselves through economic system, in the form of a
business cycle.

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BJ(MC) 302 Unit 4 Lesson 5

(ii) Innovative Activity: According to Schumpeter,

entrepreneurship is essentially a creative and an innovative
activity. There are five ways of being innovative.
(a) The introduction of a new good;
(b} The introduction of a new method of production ;
(c) Opening of a new market;
(d) The conquest of a new source of supply of raw-material;
(e) The creation of a new organization of an industry.
Schumpeter's entrepreneur combines already existing materials
and thereby produces something novel and innovative. It is only at
that very moment when some one actually puts together such a
combination that he is engaged in entrepreneurship. He suggests
that it is very useful to study the constitutive parts of
entrepreneurship, different motives that drive the entrepreneur and
the main types of innovative behavior that entrepreneurship may
result in.
Entrepreneurs tend to tackle the unknown; they do things in new
and different ways' they weave old ideas into new patterns; they
offer more solutions than exercises. However, just to be innovative
is not enough unless that innovation is carried into production to
benefit consumers.
(iii) A Function of High Achievement: McClelland identified two
features of entrepreneurship, (a) doing things in a different and
better way; (b) decision making under uncertainty. People having
high need for achievement are more likely to succeed as
entrepreneurs. Psychological theories assert that people's
capacity for entrepreneurship is decisively influenced by the way
they are socialized as children.
David McClelland stressed that entrepreneurs are highly
motivated by challenging and competitive work situations.
(iv) Creative and Purposeful Activity: Entrepreneurship is
virtually a creative and purposeful activity. Entrepreneurship is a
creative response to the changing environment. Earning profit may

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not be the sole objective but introduction of something creative

and new is the purpose of entrepreneurship. The benefit of this
creativity must be enjoyed by people at large.
(v) Entrepreneurship: An Organizing Function: As J.B. Say says:
The entrepreneurs function is to combine the productive factors, to
bring them together. According to him, an entrepreneur is one,
who combines the land of one, the labour of another, and capital
of yet another, and thus, produces a product. By selling the
product in the market, he pays interest on capital, rent on land,
wages to labourers and what remains is his profit. Thus, J.B. Say
clearly distinguishes between the role of a capitalist as a financer
and the entrepreneur as an organiser.
Marshall also advocated the significance of organisation among
the services of special class of business undertakers.
(vi) Entrepreneurship: A function of Risk-Bearing : Richard
Cantillon, an Irishman living in France, defined entrepreneur who
buys factors of production with a view to sell it at uncertain prices
in future. Cantillon concerned of an entrepreneur as a bearer of
non-insurable risk. Thus, Cantillon introduces elements of
direction and speculation into the function of entrepreneurship.
Entrepreneurship is a dynamic and multi-dimensional concept. It is
both an art as well science. It is more an art than science. In short,
Entrepreneurship is what entrepreneurs do.

5.4 Fund-raising
An entrepreneur can source for fund through
1. Owner’s Equity
2. Loans
3. Grants
a. Owners Equity: This is the owner’s fund contribution in
business. It is also called risk capital. This is the most reliable
source of funding in business. For it put less pressure on the
entrepreneur even if the business failed. This money is raised

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from past savings of the entrepreneur. It may be contribution from

friends, relations etc. The important thing is that there is no
commitment of repayment on the entrepreneur.
b. Loans: This is a facility given to the entrepreneur with obligation
to pay the sum and accrued interest at an agreed date, This can
be sourced from the private sources or financial institutions such
as microfinance houses or commercial banks, It is not the best
source of financing new business, because the payment put
pressure on the entrepreneur and the business, Where it could not
be totally avoided entrepreneur should be careful in taken it. As
alternative to this option, a starter is advisee to take up
apprenticeship to gather knowledge as well as money to start
business,

Types Of Loans And Facilities

1. Short term loan: This is the type of loans with repayment period
of less than six calendar months. This is the popular type offered
by micro banks and venture capitalist.
2. They are usually sourced to finance working capital and ventures
with short term gestation. They usually attract payment of interest
at high rate.
3. Medium term loan: The duration of payment for this facility does
not exceed twelve months. Both commercial banks and micro
finance institutions are reluctant to grant this type of facility
because they need fund to run their own businesses. They avoid
anything that will tie down their article of trade (money).
4. Long term loan: This type of facility is repaid after two years or
more. It is sourced for capital projects, it is usually provided by
specialized banks such as Bank of Industry, EXIM etc; small scale
business entrepreneur may not be able to access this type of loan
because of stringent conditions attached to it.
5. Overdraft: This is a facility that allows an entrepreneur to
withdraw more than what he/she has in his account. It is an

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arrangement between the bank and it customers to withdraw

above the balance in the account. It is approved from the
appropriate authority in the bank. It is usually for few days or
weeks. Micro finance and commercial banks offer this type of
facility which is subject to renewal..
6. Trade Credit: This refers to different trade arrangement between
sellers and buyers whereby payment for goods purchased is
postponed till agreed date.
7. Loan from Credit/Thrift cooperative societies
8. These associations/organizations are formed to provide credit to
their members at affordable/concessionary interest rate compared
to what obtained at the money market. Small scale entrepreneurs
are encouraged to belong to their associations to enjoy this facility.
9. Equipment Leasing: This involve arrangement between the
financial institution and its clients, whereby the institution agreed
to purchase fixed asset such as equipment/machine for its client
who repay the cost of this equipment and interest accrued on it
over an agreed period of time. This arrangement checkmate
diversion of credit to other uses.

C. Grants- Government and non-government organizations

sometimes give grants to potential entrepreneurs to start small
businesses. This is an allowance that a government or an
organization gives to support small business creation in the country.
Examples include grants given by EcoBank, state and local
governments through their different youth empowerment programmes

An entrepreneur might face the major hurdle of acquiring financing to

jumpstart a business and increase the likelihood for success.
Depending on the services or products provided, your company might
require thousands of dollars to open for business. Fortunately, an
array of finance sources is available. However, you must select the

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source based on your personal financial standing and that best meets
your needs.
1. Small Business Administration Loan
The SBA is a federal government agency that provides financial
assistance to new and existing businesses. Offices exist
throughout the United States to assist small businesses. Business
cash flow is the primary consideration for a loan. Owners with 20
percent or more ownership must personally guarantee the loan.
Because there are three SBA loan programs, contact a local office
or lender before completing an application to determine the plan
best for your company.
2. Private Loan
Execute a loan note that defines the loan amount and terms,
including the interest rate. This document becomes a business
record that might affect business profit and taxes.
3. Personal Credit Card
Although it is best to separate personal and business transactions,
you might consider using your personal credit card to start up a
company. Keep records of business-related charges to your credit
card. This funding might build equity in the company. However,
you might elect instead to reimburse yourself from future revenue.
4. Venture Capital Investors
Generally, venture capital investors provide funds to early-stage
startup companies. These investors are interested in industries
with high-growth potential, such as information technology.
Normally, venture capital investors provide funds to a company in
exchange for company shares. These investors require a business
plan that demonstrates the probability of success.
5. Micro-Loans
Micro-loans are small loans available to small businesses. These
loans can be applied toward working capital, purchasing inventory
or buying office supplies. As with other types of bank loans, micro-
loans have interest rates and require collateral from the borrower.

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6. Venture Capital Financing

Venture capital is money given to companies by investment firms
or individual investors known as venture capitalists. Venture
capitalists are highly selective about where they plant their money,
so only a small percentage of start-up companies with high growth
potential receive this type of funding. Venture capitalists want to
see their investments grow, so they may expect to sit on the
company’s board or share ownership in the company to have a
say in the business’s financial decisions

_______________________________________________________________
Self-Check Questions
1. Execute a private loan note that defines the loan amount
and terms, including the interest
rate._________________________
2. Micro-loans are not for small loans available to small
businesses.___________
_______________________________________________________________
5.5 Assignments
5.5.1 Class assignment
Prepare the execution plan as an entrepreneur for starting online
news portal.
5.5.2 Home assignment
1. Write short notes on
a. Owner Capital
b. Entrepreneur

5.6 Summing Up
This lesson dealt with various methods of reliable source of
funding in business. Entrepreneurship is a dynamic and multi-
dimensional concept.

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5.7 Possible answers to self check questions

1. True
2. False

5.8 Terminal Questions

1. Explain various sources of fundraising.
2. What are the “Entrepreneur” concepts for starting business?

5.9 References
1. Hargie O, Dickson D, TourishDenis- Communication Skills
for Effective Management, Palgrave Macmillan,India
2. Dr. Sakthivel Murughan M -Management Principles &
Practices, New Age International Publishers, New Delhi

5.10 Suggested Further Readings

1. Redmond, J, Trager R -Media Organisation Management,
Biztantra, Delhi
2. Albarran, Alan B- Media Economics, Surjeet Publication, New
Delhi

5.11 Glossary
Entrepreneur buys factors of production with a view to sell it at
uncertain prices in future.

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