Subject: Engineering Management Lecture No.

: (3)
Lecture Title: The Managerial Functions Page: (1) of (29)

Lecture No. (3)

The Managerial Functions Processes

Content:

1. Planning Concept and Definitions:

1.1. Types of Plans

1.1.1. Missions or Purposes
1.1.2. Objectives or Coals
1.1.3. Strategies
1.1.4. Policies
1.1.5. Procedures
1.1.6. Rules
1.1.7. Programs
1.1.8. Budgets
1.2. Steps in Planning
1.2.1. Being Aware of Opportunities
1.2.2. Establishing Objectives
1.2.3. Developing Premises
1.2.4. Determining Alternative Courses
1.2.5. Evaluating Alternative Courses
1.2.6. Selecting a Course
1.2.7. Formulating Derivative Plans
1.2.8. Quantifying Plans by Budgeting
1.3. Characteristics of Planning
2. Organizing Function of Management Definition and Concept
2.1. Organization steps
2.2. Principles of Organizing
2.3. Organization Structure: Departmentation
2.3.1. Departmentation By territory or geography
2.3.2. Departmentation By customer groups
2.3.3. Departmentation By product
2.3.4. Choosing the pattern of Departmentation:
2.3.5. Projectize Organization
2.3.6. Matrix Organizations

3. Staffing Function of Management Definition and Concept

3.1. Nature of Staffing
3.2. Staffing Definition
3.3. Staffing in Steps
4. Leading Function of Management Definition and Concept
4.1. Leading defines as:
4.2. Motivation and Motivator:
4.2.1. Motivation:
4.2.2. Motivators:
4.2.3. Motivation Equation
4.3. Motivation Theories and Practices:
4.3.1. Classical Approach
4.3.2. Need Theories
4.3.2.1. Maslow’s Hierarchy of Needs.
4.3.2.2. Alderfer’s ERG.
4.3.2.3. Hezberg’s Two-factor Hygiene Theory
4.3.3. Mc. Gregor’s Theory ‘X’ and Theory ‘Y’

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (2) of (29)

4.3.4. The Expectation Theory of Motivation

4.3.5. Equity Theory
4.3.6. Goal Setting Theory of Motivation
4.3.7. Special Motivational Techniques
4.3.7.1. Job design
4.3.7.2. Rewards
4.3.7.3. Employee participation
4.3.7.4. Quality-of-work-life programs
4.4. Leadership
4.4.1. Leadership and Management
4.4.2. Leader Vs. Manager
5. Controlling Function of Management Definition and Concept
5.1. Definition
5.2. Controlling Process
5.3. Planning and Controlling

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (3) of (29)

1. Planning Concept and Definitions:

 According to Koontz & O’Donell,

 “Planning is deciding in advance what to do, how to do and who is to do it. Planning bridges the gap
between where we are to, where we want to go. It makes possible things to occur which would not
otherwise occur”.

Planning involves

“Selecting missions and objectives and deciding on the actions to achieve them; it requires decision
making that is, choosing a course of action from among alternatives”.

 Plans thus provide a rational approach to achieving preselected objectives.

 It is a preparatory step.
 Means looking ahead and chalking out future courses of action to be followed.
 It is a systematic activity which determines when, how and who is going to perform a specific job.
 Planning is a detailed programme regarding future courses of action
 It is rightly said “Well plan is half done”.

Therefore planning takes into consideration available & prospective human and physical resources of the
organization so as to get effective co-ordination, contribution & perfect adjustment. It is the basic management
function which includes formulation of one or more detailed plans to achieve optimum balance of needs or demands
with the available resources. (See Fig. 4.1)

•Human
•Material •Objectives
Planning Steps in
Inputs •Manegirial Output •Course of
Process Planning
•Technical Actions
•Others

Goal Inputs of Climates: External Variables and Information:

 Employees  Opportunities
 Customers  Threads
 Suppliers  Others
 Government
 others
Environmental Factors

Fig: 4.1: Planning Process Model

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Subject: Engineering Management Lecture No.: (3)
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1.1. Types of Plans

Plans can be classified as

1. missions or purposes,
2. objectives or goals,
3. strategies,
4. policies,
5. procedures,
6. rules,
7. programs, and
8. budgets.

1.1.1. Missions or Purposes

 Identifies the basic purpose or function or tasks of an enterprise or agency or any part of it.
 Every kind of organized operation has, or at least should have if it is to be meaningful, a mission or purpose. In
every social system, enterprises have a basic function or task assigned to them by society.

1.1.2. Objectives or Coals

 Are the ends toward which activity is aimed.
 They represent not only the end point of planning but also the end toward which organizing, staffing, leading,
and controlling are aimed.

1.1.3. Strategies
 Strategy is defined as the determination of the basic long-term objectives of an enterprise and the adoption
of courses of action and allocation of resources necessary to achieve these goals.

1.1.4. Policies
 Also are plans in that they are general statements or understandings that guide or channel thinking in decision
making.
 Not all policies are "statements"; they are often merely implied from the actions of managers.
 Policies define an area within which a decision is to be made and ensure that the decision will be consistent
with, and contribute to, an objective.
 Policies help decide issues before they become problems, make it unnecessary to analyze the same situation
every time it comes up, and unify other plans, thus permitting managers to delega te authority and still
maintain control over what their subordinates do.

1.1.5. Procedures
 Are plans that establish a required method of handling future activities.
 They are chronological sequences of required actions.
 They are guides to action, rather than to thinking, and they detail the exact manner in which certain
activities must be accomplished.
 A few examples illustrate the relationship between procedures and policies. Company policy may grant
employees vacations; procedures established to implement this policy will provide for scheduling
vacations to avoid disruption of work, setting rates of vacation pay and methods for calculating them,
maintaining records to ensure each employee of a vacation, and spelling out the means for applying for leave.

1.1.6. Rules
 Spell out specific required actions or non-actions, allowing no discretion.
 They are usually the simplest type of plan. "
 The essence of a rule is that it reflects a managerial decision that a certain action must — or must not—be
taken.
 Rules are different from policies in that policies are meant to guide decision making by marking off areas in
which managers can use their discretion, while rules allow no discretion in their application.

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (5) of (29)

1.1.7. Programs
 Are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be
employed, and other elements necessary to carry out a given course of action; they are ordinarily supported
by budgets.

1.1.8. Budgets
 Is a statement of expected results expressed in numerical terms.
 It may be called a "quantified" plan.
 In fact, the financial operating budget is often called a profit plan.
 A budget may be expressed in financial terms; in terms of labor-hours, units of product, or machine-hours; or in
any other numerically measurable terms.
 It may deal with operation, as the expense budget does; it may reflect capital outlays, as the capital expenditure
budget does; or it may show cash flow, as the cash budget does.
 Since budgets are also control devices.

1.2. Steps in Planning

The practical steps listed below, and diagrammed in Fig. 4.2, are of general application, in practice, however, one must
study the feasibility of course of action at each:

1. Being Aware of Opportunities

2. Establishing Objectives
3. Developing Premises
4. Determining Alternative Courses
5. Evaluating Alternative Courses
6. Selecting a Course
7. Formulating Derivative Plans
8. Quantifying Plans by Budgeting

1.2.1. Being Aware of Opportunities

 Although it precedes actual planning and is therefore not strictly a part of the planning process, an awareness of
opportunities in the external environment as well as within the organization is the real starting point for
planning. All managers should take a preliminary look at possible future opportunities and see them clearly and
completely, know where their company stands in light of its strengths and weaknesses, understand what
problems it has to solve and why, and know what it can expect to gain. Setting realistic objectives depends on
this awareness. Planning requires a realistic diagnosis of the opportunity situation.

1.2.2. Establishing Objectives

 The second step in planning is to establish objectives for the entire enterprise and then for each subordinate
work unit. This is to be done for the long term as well as for the short range. Objectives specify the expected
results and indicate the end points of what is to be done, where the primary emphasis is to be placed, and what
is to be accomplished by the network of strategies, policies, procedures, rules, budgets, and programs.

1.2.3. Developing Premises

 The next logical step in planning is to establish, circulate, and obtain agreement to utilize critical planning
premises such as forecasts, applicable basic policies, and existing company plans.
 Premises are assumptions about the environment in which the plan is to be carried out.
 In fact, the major principle of planning premises is this: the more thoroughly individuals charged with planning
understand and agree to utilize consistent planning premises, the more coordinated enterprise planning will be.
 Forecasting is important in premising: What kinds of markets will there be? What volume of sales? What
prices? What products? What technical developments? What costs? What wage rates? What tax rates and
policies? What new plants? What policies with respect to dividends? What political or social environment? How
will expansion be financed? What are the long-term trends?

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (6) of (29)

1.2.4. Determining Alternative Courses

 The fourth step in planning is to search for and examine alternative courses of action, especially those not
immediately apparent. There is seldom a plan for which reasonable alternatives do not exist, and quite often
an alternative that is not obvious proves to be the best.

1.2.5. Evaluating Alternative Courses

 After seeking out alternative courses and examining their strong and weak points, the next step is to evaluate
the alternatives by weighing them in light of premises and goals.

1.2.6. Selecting a Course

 This is the point at which the plan is adopted—the real point of decision making. Occasionally, an analysis and
evaluation of alternative courses will disclose that two or more are advisable, and the manager may decide to
follow several courses rather than the one best course.

1.2.7. Formulating Derivative Plans

 When a decision is made, planning is seldom complete, and a seventh step is indicated. Derivative plans are
almost invariably required to support the basic plan

1.2.8. Quantifying Plans by Budgeting

 After decisions are made and plans are set, the final step in giving them meaning, as was indicated in the
discussion on types of plans, is to quantify them by converting them into budgets. The overall budget of an
enterprise represents the sum total of income and expenses, with resultant profit or surplus, and the budgets of
major balance sheet items such as cash and capital expenditures. Each department or program of a business or
some other enterprise can have its own budgets, usually of expenses and capital expenditures, which tie into
the overall budget. If done well, budgets become a means of adding the various plans and set important
standards against which planning progress can be measured.

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Subject: Engineering Management Lecture No.: (3)
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Fig.4.2: Steps in Planning

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (8) of (29)

2. Organizing Function of Management Definition and Concept

Organizing is the function of management which follows planning. It is a function in which the synchronization
and combination of human, physical and financial resources takes place.

According to Chester Barnard,

“Organizing is a function by which the concern is able to define the role positions, the jobs related
and the co- ordination between authority and responsibility”.

•Objectives Organization
Organizing Steps in
Inputs
Process
Output design and
•Action Plan Organizing
structure

Environmental Factors (Human Resource, Technology, ….. )

Fig: 5.1: Organizing Process Model

2.1. Organization steps: (Fig. 5.2)

A manager performs organizing function with the help of following steps:-

1. Identification of activities - All the activities which have to be performed in a concern have to be
identified first.
2. Departmentally organizing the activities (Grouping Activities) - In this step, the manager tries to
combine and group similar and related activities into units or departments. This organization of
dividing the whole concern into independent units and departments is called departmentalization.
3. Classifying the authority - Once the departments are made, the manager likes to classify the powers and
its extent to the managers. This activity of giving a rank in order to the managerial positions is called
hierarchy.
4. Co-ordination between authority and responsibility - Relationships are established among various
groups to enable smooth interaction toward the achievement of the organizational goal. A clear
organizational structure is drawn and all the employees are made aware of it.

Departmentally Co-ordination between

Identification of Classifying the
organizing the activities authority and
activities authority
(Grouping Activities) responsibility

Fig: 5.2: Steps in Organizing

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (9) of (29)

2.2. Principles of Organizing

The organizing process can be done efficiently if the managers have certain guidelines so that they can take
decisions and can act. To organize in an effective manner, the following principles of organization can be used
by a manager.

1. Principle of Specialization: According to the principle, the whole work of a concern should be
divided amongst the subordinates on the basis of qualifications, abilities and skills. It is through division of
work specialization can be achieved which results in effective organization.
2. Principle of Functional Definition: According to this principle, all the functions in a concern
should be completely and clearly defined to the managers and subordinates. This can be done by
clearly defining the duties, responsibilities, authority and relationships of people towards each other.
Clarifications in authority- responsibility relationships help in achieving co- ordination and thereby
organization can take place effectively. For example, the primary functions of production, marketing
and finance and the authority responsibility relationships in these departments should be clearly defined to
every person attached to that department. Clarification in the authority-responsibility relationship helps in
efficient organization.
3. Principles of Span of Control/Supervision: According to this principle, span of control is a span of
supervision which depicts the number of employees that can be handled and controlled effectively by a
single manager. According to this principle, a manager should be able to handle what number of employees
under him should be decided. This decision can be taken by choosing either from a wide or narrow span.
There are two types of span of control:-
i. Wide span of control- It is one in which a manager can supervise and control effectively a
large group of persons at one time. According to this span, one manager can effectively and
efficiently handle a large number of subordinates at one time. (Fig. 5.3)

Fig. 5.3: Organization with wide span

ii. Narrow span of control- According to this span, the work and authority is divided amongst many
subordinates and a manager doesn't supervises and control a very big group of people under him.
The manager according to a narrow span supervises a selected number of employees at one time.
(fig. 5.4)

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (10) of (29)

Fig. 5.4: Organization with Narrow span

There some factors influencing Span of Control

a) Managerial abilities-
b) Competence of subordinates-
c) Nature of work
d) Delegation of authority
e) Degree of decentralization.
4. Principle of Scalar Chain: Scalar chain is a chain of command or authority which flows from top to
bottom. With a chain of authority available, wastages of resources are minimized, communication is
affected, overlapping of work is avoided and easy organization takes place. A scalar chain of command
facilitates work flow in an organization which helps in achievement of effective results. As the authority
flows from top to bottom, it clarifies the authority positions to managers at all level and that
facilitates effective organization.
5. Principle of Unity of Command: It implies one subordinate-one superior relationship. Every
subordinate is answerable and accountable to one boss at one time. This helps in avoiding
communication gaps and feedback and response is prompt. Unity of command also helps in effective
combination of resources, that is, physical, financial resources which helps in easy co- ordination
and, therefore, effective organization.

Authority Flows from Top to Bottom

Managing Director

Marketing Manager

Sales/ Media Manager

Salesmen

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2.3. Organization Structure: Departmentation:

Departments differ with respect to the basic pattern used to group activities. There is no single best form of
Departmentation that is applicable to all organizations or to all situations. Depends on the nature of these pattern,
developed out of logic and practice, and their merits Departmentation can be respect to:

1. Departmentation By organization functions

2. Departmentation By territory or geography
3. Departmentation By customer groups
4. Departmentation By product
5. Projectize Organization
6. Matrix Organization

2.3.1. Departmentation By organization functions:

Grouping the activities according to the functions of the organization, such as production, sales and financing,
embodies what organizations typically do. (Fig. 5.6) The most widely used Departmentation.

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Fig. 5.6: Departmentation by Function

2.3.2. Departmentation By territory or geography

Grouping of activities by area or territory is common in organization operating over wide geographic area. (Fig. 5.7)

It is attractive for large scale organizations whose activities are physically or geographically dispersed.

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Subject: Engineering Management Lecture No.: (3)
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Fig. 5.7: Departmentation by Area

2.3.3. Departmentation By customer groups

Grouping of activities that reflect a primary interest in customers. (Fig. 5.8)

Fig. 5.8: Departmentation by Customers Group

2.3.4. Departmentation By product

Grouping of activities according to products, or product lines specially in multiline, large organizations. (Fig. 5.9)

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Subject: Engineering Management Lecture No.: (3)
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Fig. 5.9: Departmentation by Product

2.3.5. Choosing the pattern of Departmentation:

Each pattern as seen in the figures has advantages and disadvantages. The is no best way of Departmentation that is
applicable to all organization, and at all situations, so managers must determine what is the best looking at the
situation they face.

Two considerations for the managers:

1. The aim is achieving objectives, so must discuss all patterns of Departmentation I light of advantages and
disadvantages to see which is best for the aim.
2. Mixing the types of Departmentation, can be the best than following only one pattern of Departmentation.

2.3.6. Projectize Organizations:

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Now a days many organizations use project to achieve their objectives. The project is separated from the rest of the
parent system. It becomes a self-contained unit with its own technical staff, its own administration, tied to the parent
firm by the tenuous strands of periodic progress reports and oversight. (Fig. 5.10)

Fig. 5.10: Projectize Organization

2.3.7. Matrix Organization:

The combining of functional and project or product pattern of Departmentation in the same organization structure.
This form is widely use in engineering and research and development and also in product marketing organization.
(Fig. 5.11)

Fig. 5.11: Matrix Organization

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Subject: Engineering Management Lecture No.: (3)
Lecture Title: The Managerial Functions Page: (16) of (29)

3. Staffing Function of Management Definition and Concept

The managerial function of staffing involves manning the organization structure through proper and effective
selection, appraisal and development of the personnels to fill the roles assigned to the employers/workforce.

3.1. Nature of Staffing is:

1. Staffing is an important managerial function- Staffing function is the most important mangerial act along
with planning, organizing, directing and controlling. The operations of these four functions depend upon the
manpower which is available through staffing function.
2. Staffing is a pervasive activity- As staffing function is carried out by all mangers and in all types of concerns
where business activities are carried out.
3. Staffing is a continuous activity- This is because staffing function continues throughout the life of an
organization due to the transfers and promotions that take place.
4. The basis of staffing function is efficient management of personnels- Human resources can be efficiently
managed by a system or proper procedure, that is, recruitment, selection, placement, training and
development, providing remuneration, etc.
5. Staffing helps in placing right men at the right job. It can be done effectively through proper recruitment
procedures and then finally selecting the most suitable candidate as per the job requirements.
6. Staffing is performed by all managers depending upon the nature of business, size of the company,
qualifications and skills of managers,etc. In small companies, the top management generally performs this
function. In medium and small scale enterprise, it is performed especially by the personnel department of
that concern.

3.2. Staffing defined as:

“Staffing is a function by which the manager filling and keep filled positions in the organization structure”.

Staffing including:
• Identifying workforce requirements
• Inventorying the people available
• Recruiting, selecting, placing, promoting, appraising, planning the careers, compensating and training.
So candidates and current job holders can accomplish their task effectively and efficiently.

Organization
Organizing Steps in Filled
Inputs design and Process
Output
Staffing Positions
structure

Environmental Factors
Fig: 6.1: Staffing Process Model

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3.3. Staffing in Steps

1. Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a
concern in order to match them with the job requirements and demands. Therefore, it involves forecasting
and determining the future manpower needs of the concern.
2. Recruitment- Once the requirements are notified, the concern invites and solicits applications according to
the invitations made to the desirable candidates.
3. Selection- This is the screening step of staffing in which the solicited applications are screened out and
suitable candidates are appointed as per the requirements.
4. Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to the
work units and work environment through the orientation programs. Placement takes place by putting right
man on the right job.
5. Training and Development- Training is a part of incentives given to the workers in order to develop and
grow them within the concern. Training is generally given according to the nature of activities and scope of
expansion in it. Along with it, the workers are developed by providing them extra benefits of in-depth
knowledge of their functional areas. Development also includes giving them key and important jobs as a test
or examination in order to analyses their performances.
6. Remuneration- It is a kind of compensation provided monetarily to the employees for their work
performances. This is given according to the nature of job- skilled or unskilled, physical or mental, etc.
Remuneration forms an important monetary incentive for the employees.
7. Performance Evaluation- In order to keep a track or record of the behavior, attitudes as well as opinions of
the workers towards their jobs. For this regular assessment is done to evaluate and supervise different work
units in a concern. It is basically concerning to know the development cycle and growth patterns of the
employees in a concern.
8. Promotion and transfer- Promotion is said to be a non- monetary incentive in which the worker is shifted
from a higher job demanding bigger responsibilities as well as shifting the workers and transferring them to
different work units and branches of the same organization.

Orientation
Manpower Training and Performance Promotion
Recruitment Selection- and Remuneration
requirements Development- Evaluation and transfer
Placement-

Fig: 6.2: Staffing in Steps

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4. Leading Function of Management Definition and Concept

Leading is said to be a process in which the managers instruct, guide and oversee the performance of the workers to
achieve predetermined goals. Leading is said to be the heart of management process. Planning, organizing, staffing
have got no importance if Leading function does not take place.

Leading initiates action and it is from here actual work starts. Leading is said to be consisting of human factors. In
simple words, it can be described as providing guidance to workers is doing work. In field of management, Leading is
said to be all those activities which are designed to encourage the subordinates to work effectively and efficiently.

According to Human, “Leading consists of process or technique by which instruction can be issued and operations can
be carried out as originally planned” Therefore, Leading is the function of guiding, inspiring, overseeing and
instructing people towards accomplishment of organizational goals

4.1. Leading defines as:

“Leading is process of influencing people so that they will contribute to organization and group goals”.

Filled Leading Group

Inputs positions
Motivation Output Performance
Process

Environmental Factors
Fig: 7.1: Leading Process Model

4.2. Motivation and Motivator:

4.2.1. Motivation:

 Defined as the psychological forces within a person that determine:

 direction of behavior in an organization;
 the effort or how hard people work;
 the persistence displayed in meeting goals.
 Intrinsic Motivation:
 behavior performed for its own sake.
 Motivation comes from performing the work.
 Extrinsic Motivation:
 behavior performed to acquire rewards.
 Motivation source is the consequence of an action.

4.2.2. Motivators:

 Are things that induce an individual to perform.

 Are the identified rewards, or incentives, that sharpen the drive to satisfy these wants.

4.2.3. Motivation Equation

 Regardless of the source of motivation, people seek outcomes.

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 Outcome: anything a person gets from a job.

 Examples include pay, autonomy, accomplishment.
 Organizations hire workers to obtain inputs:
 Input: anything a person contributes to their job.
 Examples include skills, knowledge, work behavior.
 Managers thus use outcomes to motivate workers to provide inputs.

Inputs from Performance Outcomes received

Organizational by members
members
• Time • Contribute to • Pay
• Effort organization • Job Security
• Education efficiency, • Benefits
effectiveness
• Experience • Vacation
and attain goals
• Skills • Autonomy
• Knowledge • Responsibility
• Work Behav.

Fig.7.3 Motivation Equation:

4.3. Motivation Theories and Practices:

To help manager motivate their subordinates to act I a desired manner, many contribution been made by
practicing to know the best behavioral model can be apply.

4.3.1. Classical Approach

Carrot and sticks, this approach the most oldest approach and common been used tile now a days. It is simple on
rewarding good behavior (carrot) and punishments for un desired one (stick).

4.3.2. Need Theories

People are motivated to obtain outcomes at work to satisfy their needs.

 A need is a requirement for survival.
 To motivate a person:
1)Managers must determine what needs worker wants satisfied.
2)Ensure that a person receives the outcomes when performing well.
 Several needs theories exist.
 Maslow’s Hierarchy of Needs.
 Alderfer’s ERG.
 Hezberg’s Two-factor Hygiene Theory

4.3.2.1. Maslow’s Hierarchy of Needs.

Table:7.1: Maslow’s Hierarchy of Needs

Need Level Description Examples

Self-Actualization Realize one’s full potential Use abilities to the fullest
Esteem Feel good about oneself Promotions & recognition
Belongingness, Affiliation Social interaction, love Interpersonal relations, parties
Safety Security, stability Job security, health insurance

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Physiological Food, water, shelter Basic pay level to buy items

Lower level needs must be satisfied before higher needs are addressed.

4.3.2.2. Alderfer’s ERG.

Table:7.2: Alderfer’s ERG

Need Level Description Example

Growth Self-development, creative work Worker continually improves skills

Relatedness Interpersonal relations, feelings Good relations, feedback
Existence Food, water, shelter Basic pay level to buy items
After lower level needs satisfied, person seeks higher needs. When unable to satisfy higher needs, lower
needs motivation is raised.

4.3.2.3. Hezberg’s Two-factor Hygiene Theory

Focuses on outcomes that can lead to high motivation, job satisfaction, & those that can prevent dissatisfaction.
 Motivator needs: related to nature of the work and how challenging it is.
 Outcomes are autonomy, responsibility, interesting work.
 Hygiene needs: relate to the physical & psychological context of the work.
 Refers to a good work environment, pay, job security.
 When hygiene needs not met, workers are dissatisfied. Note: when met, they will
NOT lead to higher motivation, just will prevent low motivation.

Fig. 7.5 : Motivation Theories of Need

4.3.3. Mc. Gregor’s Theory ‘X’ and Theory ‘Y’

Theory X and Theory Y framework proposed by McGregor in his classic book The Human Side of Enterprise (1960)
consists of two alternative set of assumptions. Theory X percieves employees to be lazy, irresponsible and
untrustworthy, while according to theory Y employees are approached as one of the most valuable assets of the
company.

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According to Theory X assumptions employees do not like their work, they lack ambition and responsibility and
employees prefer to be led rather than leading others.
In practical levels, McGregor’s Theory X and Theory Y framework aims to demonstrate the potential of employees that
organizations should recognize so that the level of organizational efficiency can be increased.

Table:7.3: Theory ‘X’ and Theory ‘Y’:

4.3.4. The Expectation Theory of Motivation

 Expectancy is the perception that effort (input) will result in a level of performance.
 You will work hard if it leads to high performance.
 You would be less willing to work hard if you knew that the best you would get on a
paper was a D regardless of how hard you tried.
 Instrumentality: Performance leads to outcomes.
 Workers are only motivated if they think performance leads to an outcome.
 Managers should link performance to outcomes.
 Valence: How desirable each outcome is to a person.
 Managers should determine the outcomes workers want most.
 According to the Expectancy Theory, high motivation results from high levels of Expectancy,
Instrumentality, & Valence.
 If just one value is low, motivation will be low.
 This means that even if desired outcomes are closely link to performance, the worker must feel the
task is possible to achieve for high motivation to result.
 Managers need to consider this relationship to build a high performance firm.

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Effort Performance Outcomes

Fig. 7.6 : The Expectancy Theory of Motivation

4.3.5. Equity Theory

 Considers worker’s perceptions of the fairness of work outcomes in proportion to their inputs.
 Adams notes it is the relative rather than the absolute level of outcomes a person receives.
 The Outcome/input ratio is compared by worker with another person called a referent.
 The referent is perceived as similar to the worker.
 Equity exists when a person perceives their outcome/input ratio to be equal to the referent’s ratio.
 If the referent receives more outcomes, they should also give more inputs to achieve equity.
 Inequity exists when worker’s outcome/input ratio is not equal to referent.
 Underpayment inequity: ratio is less than the referent. Worker feels they are not getting the
outcomes they should given inputs.
 Overpayment inequity: ratio is higher than the referent. Worker feels they are getting more
outcomes then they should given inputs.
 Restoring Equity: Inequity creates tension in workers to restore equity.
 In underpayment, workers reduce input levels to correct.
 Overpayment, worker can change the referent to adjust.
 If inequity persists, worker will often leave the firm.

Fig. 7.6 : The Equity Theory of Motivation

4.3.6. Goal Setting Theory of Motivation

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 Focus worker’s inputs in the direction of high performance & achievement of organizational goals.
 Goal is what a worker tries to accomplish.
 Goals must be specific and difficult for high performance results.
 Workers put in high effort to achieve such goals.
 Workers must accept and be committed to them.
 Feedback on goal attainment also is important.
 Goals point out what is important to the firm.
 Managers should encourage workers to develop action plans to attain goals.

Fig. 7.6 : The Goal Setting of Motivation

4.3.7. Special Motivational Techniques

4.3.7.1. Job design
The design of an employee’s job can have a significant impact on their job motivation,. Job design includes designing
jobs that create both a challenging and interesting task for the employee and is effective and efficient for getting the
job done. Four approaches to job design are:
1. Job Simplification: The goal of this job design approach is to standardize and specialize tasks. Unfortunately
this approach does not always lead to increased motivation as the jobs can become mundane.
2. Job Enlargement: The goal of this job design approach is to combine tasks to give the employee a greater
variety of work.
3. Job Rotation: The goal of this job design approach is to move workers to different tasks periodically.
4. Job Enrichment: The key to job design employee motivation, this approach aims to enhance the actual job by
building up the employee through motivational factors.

4.3.7.2. Rewards
Using rewards as motivators divides employee motivation into two categories: intrinsic and extrinsic motivation.
Intrinsic rewards are internal, psychological rewards such as a sense of accomplishment or doing something because
it makes one feel good. Extrinsic rewards are rewards that other people give to you such as a money, compliments,
bonuses, or trophies.

4.3.7.3. Employee participation

Increase employee participation by implementing quality control circles. Quality control circles involve a group of
five to ten problem solving employees that come together to solve work-related problems such as reducing costs,
solving quality problems, and improving production methods. [13] Other benefits from quality control circles include an
improved employee-management relationship, increased individual commitment, and more opportunities for
employee expression and self-development.
Four factors must exist for any employee participation program to be successful:
 Have a profit-sharing or gain-sharing plan where both the employer and employee benefit
 Implement a long-term employment relationship to instill job security
 Make a concerted effort to build and maintain group cohesiveness
 Provide protection of the individual employee’s rights

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4.3.7.4. Quality-of-work-life programs

Work-life balance is an employee’s perception of how a proper balance between personal time, family care, and work
are maintained with minimal conflict. Employers can use work-life balance as a motivational technique by
implementing quality-of-work-life programs. Examples of such programs include flextime, workplace wellness, and
family support. Flexible work schedules can allow an employee to work whenever they can as long as a certain
amount of hours are worked each week and some employers allow their employees to work from home. Sometimes
employers utilize flextime schedules that allow employees to arrive to work when they choose within specified limits.
A wellness program can involve having an exercise facility, offering counseling, or even having programs set up to
help employees lose weight or stop smoking cigarettes. Family support programs involve help with parenting,
childcare, and some programs allow employees to leave for family purposes.

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4.4. Leadership
Leadership has been described as
 "a process of social influence in which a person can enlist the aid and support of others in the
accomplishment of a common task"

Breaking this down even more, while there are a variety of leadership definitions out there, there are specific
components that are central to the majority of these definitions. Leadership:
 Is a process
 Involves influence
 Occurs in a group context (you need to have at least one constituent)▶▶
 Involves goal attainment
No matter how you operationalize leadership, these components play some small role in the definition or theory
utilized.

4.4.1. Leadership and Management

Leadership and management share many similarities. Both leadership and management involve influence, working
with people, and working with effective goal management. However, the fields of leadership and management can also
be considered very different

Still there is an overlap between the two fields; when managers are involved in influencing a group of employees to
meets its goals, they are operating under leadership. In addition, when leaders are involved in aspects such as
planning, organizing, staffing or controlling, they are operating within management. So while we are spending the
majority of this publication distinguishing between leadership and management, suffice it to say that while different,
they may never be completely separate.

So how does one distinguish between leadership and management? In table 7.4 below you will see a direct
comparison between leadership and management activities. An individual can be a great leader, a great manager, or
both, but each area requires the mastery of slightly different skills and competencies.

Table: 7.4: Leadership Vs Management

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With the mastery of each of these skills and behaviors, one can successfully navigate the fields of both management
and leadership. It is usually just as simple as knowing what context is most appropriate to the situation and applying
oneself in a leadership or management capacity.

4.4.2. Leader Vs. Manager

Both a manager and a leader may know the business well. But the leader must know it better and in a
different way, must grasp the essential facts and the underlying forces that determine the past and present
trends in the business, so that can generate a vision and a strategy to bring about its future. One telling sign of
a good leader is an honest attitude towards the facts, towards objective truth. A subjective leader obscures
the facts for the sake of narrow self-interest, partisan interest or prejudice.

Both are necessary and important.

Managers are people who do things right and leaders are people who do the right thing. The difference may
be summarized as activities of vision and judgment — effectiveness —versus activities of mastering routines
— efficiency. The figures below indicate key words that further make the distinction between the two
functions:

Fig. 7.8 : Leading Vs Managing

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Fig. 7.9 : Leader Vs Manager

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5. Controlling Function of Management Definition and Concept

5.1. Definition:
The managerial function of controlling is the:
“measurement and correction of performance in order to make sure that organization objectives and
plans derived to attain them being accomplished”

Acceptable
Group Controlling Measurement
Inputs Output Objectives and
Performance Process correction
plans

Environmental Factors

Fig: 8.1: Controlling Process Model

5.2. Controlling Process

5.2.1. The Basic Control Process:
The basic control process, wherever it is found and whatever is being controlled involved three steps:
i. Establishment and standards
ii. Measurement of performance against these standards; and
iii. Correcting variation from standards and plans
i. Establishment and standards
The first step in the control process would be establish plan, since plans vary in details and complexity, and
since managers cannot usually watch every things, special standards are established.
Standards are simply criteria of performance. They are the selected point in the entire planning program at
which measures of performance are made.
ii. Measurement of performance against these standards
The measurement of performance against standards should ideally be done on forward-looking basis so that
deviation may be detected in advance of their occurrence and avoided by action. Although such
measurements is not always practicable.
iii. Correcting variation from standards and plans
Correction of deviation is the point at which control can be seen as a part of the whole system of
measurement and can be related to other managerial functions.

Measurement of Correcting
Establishment of
Performance Deviation From
Standards
against Standards Standards

Actual
Performance

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Fig: 8.2: The Basic Control Process

5.2.2. Critical Control Points, Standards, and Benchmarking
 Standards are yardstick against which actual or expected performance is measured. A manager should/must
choose points attention and then watch them to be sure that the whole operation is proceeding as planned.
The points selected for control should be critical, in the sense, either of being limiting factors in the operation
or of being better indicators than other factors of whatever plans are working out.
 Principle of critical points control state that:
 “Effective control requires attention to factors critical to evaluating performance against plans”
 Another way of controlling is to comparing company performance with others through benchmarking.
5.3. Planning and Controlling
 Planning and controlling are inseparable – The Siamese Twin of Management.
 Any attempt to control without plans is meaningless, as is no way to tell where they are going “control”
unless the first know where they want to go “plan”.
o Plan thus finishes the standards of control, without objectives and plans control is impossible,
because performance have to be measured against standard criteria.
 Planning without controlling is waste of time, effort and money, you will not know if you achieve your plan or
objectives without measuring against performance.

New Plan

Controlling No
Implementation Undesirable
Planning Comparing
of Plans Deviation
Plans with
Results From plans

Undesirable
Deviation

Corrective
Action

Fig: 8.4: Close Relationship between Planning and Controlling

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