01.

NATURE AND SIGNIFICANCE OF MANAGEMENT

Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum
No of questions 03 01 - - 06
There is NO internal choice question from this chapter

Meaning of Management: Management is defined as a process of getting things done with the aim of
achieving organizational goals or objectives effectively and efficiently.

EFFECTIVENESS vs. EFFICIENCY

Effectiveness means finishing the given task in on time. To say in simple it is concerned with the end
Result. Efficiency means doing the given task correctly and with minimum cost.

CHARACTERISTICS/FEATURES OF MANAGEMENT
Mgt. is a goal It is a goal oriented process, which is undertaken to achieve already specified and
01 oriented process desired objectives by proper utilization of available resources
Management is Mgt is universal in nature. It is used in all types of organizations whether economic,
02 all pervasive social or political irrespective of its size, nature and location and at every level
Management is It is multidimensional as it involves management of work, people and operations.
Multi dimensional Every organization is established for doing some work. The management has to
03 (work, people, ensure the participation, of its people in the realization of the organization goal. Also
operations) mgt. needs to conduct the various operations such as production, sale, purchase etc.
Management is a Management is not a process which can be performed once and for all, but it is a
04 continuous continuous process. Functions of management like planning, organizing, staffing,
process directing and controlling continuously need to be done
Management is a It is a group activity since it involves managing and coordinating activities of
05 group activity different people as a team to attain the desired objectives.
It is a dynamic function since it has to adapt according to need, time and situation of
Management is a
06 dynamic function: the changing environment. In order to be successful, an orgn. must change itself
and its goals.
Management is Management is such a force that cannot be seen; only its presence can
07 an intangible be felt. When the goals of an organization are being realized in accordance with its
force: plans, we can say that the management of the organization is good.

OBJECTIVES OF MANAGEMENT
Organizational An organization has to achieve its different objective like Survival, Profit, Growth
01 objectives
Social An organization has social objectives towards different groups of society like providing
02 objectives quality products at fair prices, generating employment opportunities, etc.,
An organization strives to fulfill personal objectives of its employees and also to
Personal
03 objectives reconcile their objectives with the organizational objectiveness. e.g., Competitive
salaries, personal growth and perks for employees etc.

IMPORTANCE/SIGNIFICANCE OF MANAGEMENT
Mgt. helps in achieving Management creates team work and coordination in the group. Managers give
01 group goals common direction to individual efforts in achieving the overall goals of the orgn.
Mgt. increases Management increases efficiency by using resources in the best possible
02 efficiency manner to reduce cost and increase productivity
Mgt. creates a dynamic Management helps the employees overcome their resistance to change and
03 organization adapt as per changing situation to ensure its survival and growth
Mgt. helps in achieving Management helps the individuals achieve their personal goals while working
04 personal objectives towards organizational objectives.
Mgt. helps in the Management helps in the development of society by producing good quality
05 development of society products, creating employment opportunities and adopting new technology.

NATURE OF MANAGEMENT
1. Existence of theoretical knowledge (√) 2. Personalized application (√)
Mgt as 3. Based on practice and creativity (√)
01 an Art CONCLUSION: Hence, management can be said to be an art since it satisfies the all criteria

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Vishal Sharda, MPS

1. Systematized body of knowledge (√) 2. Principles based on experimentation (√-

3. Universal validity (Χ) human beings)
Mgt as a
02 Science CONCLUSION: Since management deals with human beings and their behaviour, the
outcomes of these experiments are not capable of being accurately predicted or replicated.
Therefore, management can be called an inexact Science//soft science/social science.
1. Well-defined body of knowledge (√) 2 Restricted entry (Χ)
3. Professional association (√) 4. Ethical code of conduct (Χ)
Mgt as a 5 . Service motive (Χ)
3 Profession CONCLUSIION: Since management does not meet the exact criteria of a profession,
hence it is not treated as a Profession. ) {* Fit (√) and Not Fit (Χ)}

LEVELS OF MANAGEMENT
Frames policies for overall attainment of management objectives. Responsible all the
activities of the business and for its impact on society. Ex., Chairman, Chief Executive
Top level Officer, Chief Operating Officer, President and Vice-President).Functions: (a) Integrate
01 Mgt diverse elements and coordinate the activities. (b) Responsible for the welfare and
survival of the organization. (c) Analyze the business environment (d) Formulate
Organizational goals and strategies.
1. They are link between top and lower level managers and known as division heads,
e.g. Production Manager. They are interprets and explains the policies framed by the
top level mgt and collects and reports feedbacks to top level mgt. Responsible for
Middle
02 implementing and controlling plans and strategies and activities of first line managers.
level Mgt
Functions: (a) Interpret the policies. (b) Ensure that their department has the
necessary personnel, (c) Assign necessary duties and responsibilities; (d) Motivate
personnel (e) Co- operate with other departments.
They are mainly concerned with technical and routine work on day-to-day basis. e.g.
Foremen and supervisors Functions: (a) Oversee the efforts of the workforce. (b) Pass
03 Supervisory on instructions to the workers. (c) Ensures quality of output is maintained, wastage of
level Mgt
materials is minimized and safety standards are maintained.

FUNCTIONS OF MANAGEMENT
It refers to deciding in advance what to do, how to do and developing a may of achieving
01 Planning goal efficiently and effectively
It refers to the assigning of duties, grouping tasks, establishing authority and allocating of
02 Organizing resources required to carry out a specific plan.
03 Staffing It implies right people for the right job.

04 Directing It involves leading, influencing. Motivating employees to perform the task assigned to them.
Contro- It refers to the performance measurement and follow up actions that keep the actual
05 lling performance on the path of plan.

COORDINATION
Coordination — The Essence of Management: The process by which a manager synchronizes the
activities of different departments is known as coordination. Coordination is the force that binds all the
other functions of management.

CHARACTERISTICS/FEATURES OF COORDINATION
Coordination integrates It integrates diverse business activities into purposeful group activity ensuring
01 group efforts that all people work in one direction to achieve organizational goals.
Coordination ensures It directs the activities of different departments and employees towards
02 unity of action achievement of common goals and brings unity in individual efforts.
Coordination is a It is not a specific activity matter; it is required at all levels, in all departments
03 continuous process till the organization continues its operations
Coordination is an all It is universal in nature. It synchronizes the activities of all levels and
04 pervasive function departments as they are interdependent to maintain organizational balance
Coordination is the It is equally important at all the Three-Top, Middle and Lower levels of
05 responsibility of all management. Thus it is the responsibility of all managers that they make efforts
managers to establish coordination.
Coordination is never established by itself rather it is a conscious effort on the
Coordination is a
06 deliberate function part of every manager. Cooperation is voluntary effort of employees to help
one another.

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Vishal Sharda, MPS

IMPORTANCE/SIGNIFICANCE OF COORDINATION
When there is a growth in size, the number of people employed by the organization also
01 Growth in size increases. Thus to integrate the efforts. Co-ordination is needed.
Functional In an organization there are separate department and different goals. The process of
02 differentiation linking those activities is achieved by co-ordination
Modern orgn. is characterized by a high degree of specialization. Co-ordination is
03 Specialization required among different specialists because of their different approaches, judgment etc

02. PRINCIPLES OF MANAGEMENT

Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum
No of questions - - - 01 06
There is ONE internal choice question for 06 marks, from this chapter only

Principle: It refers to a statement which reflects the fundamental truth about some phenomenon based on
cause and effect relationship. Management Principles These are the statements of fundamental truth, they
serve as a guide to thought and actions for managerial decision actions and their execution. A managerial
principle is a broad and general guideline for decision-making and behaviour. Principles are guidelines to
take decisions or actions while practicing techniques. Techniques are procedures or methods, which
involve a series of steps to be taken to accomplish desired goals.

NATURE OF PRINCIPLES OF MANAGEMENT

Universal Principles of Mgt. is applicable in all types of orgs., business as well as non-
01 applicability business, small as well as large enterprises depending on the nature of the org.
General Management principle give guidelines to solve the problems, these principles do
02 guidelines not provide readymade solution for all the problems
Formed by practice
03 and experimentation The Mgt. principles are developed only after deep and through research work.
These are not set of rigid statements. These can be modified by the managers
04 Flexible who are using them.
Management principles are formed to guide and influence the behaviour of
05 Mainly behavioural employees.
Cause and effect Mgt principles are based on cause and effect that means these Principles tell us if
06 relationships a particular principle is applied in a situation, what might be the effect.
Management principles are contingent or dependent upon the situation prevailing
07 Contingent in organization.

SIGNIFICANCE OF PRINCIPLES OF MANAGEMENT

Providing managers Principles of management guide managers with useful insights into real world
01 with useful insights situations, adherence to these principles will improve their knowledge, ability and
into reality understanding of various managerial situations and circumstances
Optimum utilization The resources with the company are limited. Management principles equip the
02 of resources and managers to see the cause and effect of their decisions and actions and thus
effective Admn reduce wastage.
Decisions must be based on facts, thoughtful and justifiable in terms of intended
Scientific
03 decisions purpose. Management principles must be timely, realistic and subject to
measurement and evaluation. Principles are free from bias and prejudice
Meeting changing Management principles are effective and dynamic and thus help the organization
04 env. requirements to meet the changing requirements of the environment.
Due to the increased awareness of the public forces all companies are required to
Fulfilling social
05 responsibility fulfill social responsibilities. Principles of mgt. not only help in achieving
organizational goals but also guide managers in performing social responsibilities.
Mgt., trg., education Management principles are the core of management and are helpful in increasing
06 and research knowledge, which forms the basis for management training and research.

SCIENTIFIC MANAGEMENT SUGGESTED BY TAYLOR

Scientific management means knowing exactly what you want men to do and seeing that they do it in the
best and cheapest way.

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Vishal Sharda, MPS

TAYLOR`S PRINCIPLES OF SCIENTIFIC MANAGEMENT

One best method to maximize efficiency that can be
01 Science not Rule of Thumb Developed through study and analysis.
Complete harmony between the mgt. and workers, mental
02 Harmony, Not Discord revolution on the part of both management and workers required
03 Cooperation, Not Individualism Competition should be replaced by cooperation.
Development of Each and Every
04 Person to his or her Greatest Worker training and selection should be scientifically done.
Efficiency and Prosperity

TECHNIQUES OF SCIENTIFIC MANAGEMENT

Functional Extension of the principle of division of work and in contradiction to unity of
01 Foremanship command.
Standardization Standardization refers to the process of setting standards of process, raw material,
02 and simplify- time, product, machinery, methods or working conditions. Simplification aims at
cation of Work eliminating superfluous varieties, sizes and dimensions.
The objective of method study is to find out one best way of doing the job. So that it
03 Method study will minimize the cost of product ion and maximize the quality of the product.
Study of movements like lifting, putting objects, sitting and changing positions, etc.
04 Motion Study Unnecessary movements are sought to be eliminated.
05 Time Study Standard time taken to perform a well-defined job.

06 Fatigue Study Seeks to determine the amount and frequency of rest intervals in completing a task.
Differential Piece Differentiate between efficient and inefficient workers on the basis of thesestandards
07 Wage System and given different rate of wage payment.
08 Mental revolution Complete change in outlook of the relationship between mgt. and workers.

FAYOL`S PRINCIPLES OF MANAGEMENT

01 Division of Work It leads to specialization so that the work can be performed more efficiently
Authority and
02 Responsibility Balance between authority and responsibility.

03 Discipline Obedience to organizational rules and employment agreement.

One and only one boss for every individual employee. Dual subordination
04 Unity of Command should be avoided.

05 Unity of Direction One head and one plan.

Subordination of Individual The interests of an organization should take priority over the interests ofany
06 Interest to General Interest one individual employee.
Remuneration of
07 Employees Fair to both employees and the organization.
Centralization and Balance subordinate involvement through decentralization with managers‟
08 Decentralization retention of final authority through centralization.
The formal lines of authority from highest to lowest ranks are known as
09 Scalar Chain scalar chain. Gang Plank is a shorter route so that communication is not
delayed
A place for everything (everyone) and everything (everyone) in its (her/his)
10 Order place‟.
No discrimination against anyone on account of sex, religion, language,
11 Equity caste, belief or nationality etc.
Selected employees should be kept at their post/ position for a minimum
12 Stability of Personnel fixed tenure. Employee turnover should be minimized.
Workers should be encouraged to develop and carry out plans for
13 Initiative Improvements.
14 Esprit De Corps Promote a team spirit of unity and harmony among employees.

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Vishal Sharda, MPS
03. BUSINESS ENVIRONMENT
Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum 04 - - - 04
No of questions
There is NO internal choice question from this chapter

The term „business environment‟ means the sum total of all(1) individuals, (2) institutional and (3) other
forces that are outside the control of a business enterprise but that may affect the performance of a bus.
Business environment is becoming exceedingly complex day by day.

FEATURES/CHARACTERISTICS OF BUSINESS ENVIRONMENT

Totality of
01 external forces Business environment is the sum total of all the forces/factors external to business firm
Business environment includes both specific (Such a investors, customers, competitors
Specific and
and suppliers) and general forces (such as social, political, legal and technological
02 General conditions. Specific forces influence business firm directly while general forces affect a
Forces
business firm indirectly.
All the forces/factors of a business environment are closely interrelated. For example,
Inter-
03 relatedness increased awareness of health care has raised the demand for organic food an roasted
snacks in turn change the life style of people.
Dynamic Business environment dynamic in nature which keeps on changing with time. It may be
04 nature change in technology, fashion and taste etc
Business environment is uncertain as it is difficult to predict the future environment
05 Uncertainty changes and their impact with full accuracy.
Business environment is complex which is easy to understand in parts separately but it
06 Complexity is difficult to understand in totality
Business environment is a relative concept whose impact differs from country to country,
07 Relativity region to region and firm to firm For example, demand for ready to eat healthy food will
be more in urban areas than in rural areas.

IMPORTANCE/SIGNIFICANCE OF BUSINESS ENVIRONMENT

It enables the firm to
Understanding of business environment helps an organization in
01 identify opportunities and
identifying advantageous opportunities an getting their benefits prior to
getting the first mover
competitors, thus reaping the benefits of being a pioneer
advantage
Correct knowledge of business environment helps a organization to identify
It helps the firm to
those threats which may adversely affect its operations. For example, Bajaj
02 identify threats and early
Auto made considerable improvements in its two wheelers when Honda &
warning signals
other multinational companies enter the auto industry.
Business environment makes available various resources such as capital,
It helps in tapping useful labour, machines, raw material etc. to a business firm. In order to know the
03 resources availability of resources and making them available on time at economical
price, knowledge of business environment is necessary.
Continuous study/scanning business environment helps in knowing the
It helps in coping with
04 changes which are taking place and thus they can be face effectively by
rapid changes
developing suitable course of action.
It helps in assisting in Understanding and analysis of business environment helps an organization in
05 planning and policy planning policy formulation. For example, ITC Hotels planned new hotels in
formulation India after observing boom in tourist sector.
Correct analysis and continuous monitoring of business environment not only
It helps in improving
06 helps an organization in improving its performance but also continue to
performance succeed in the market for longer time.

DIMENSIONS/ELEMENTS/TYPES OF BUSINESS ENVIRONMENT

Interest rates, inflation rates, changes in disposable income of people, stock market indices,
value of rupee, role of private and public sectors, rates of growth of GNP and per capita
income at current and constant prices, Rates of saving and investment, Volume of imports
01 Economic and exports, Balance of payments, foreign exchange reserves, Agricultural and industrial
production trends, Expansion of transportation and communication facilities, Money supply,
Public debt (internal and external).
Customs and traditions, values, social trends, society‟s expectations, product innovations,,
lifestyles, consumer preferences, quality of life, Life expectancy, Expectations from the
02 Social workforce, presence of women in the workforce, Birth and death rates, Population shifts,
Educational system and literacy rates, Consumption habits, Composition of family

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Vishal Sharda, MPS

03 Technological Scientific improvements, innovations, up gradation, new methods and techniques etc.

Political conditions such as general stability and peace, Degree of Politicization of

04 Political business and economic issues, Dominant ideologies of major political parties, nature,
morality and profile of political leadership and thinking of political Personalities, extent
government intervention, nature of relationship with foreign countries
Various legislations passed by the Government Administrative orders issued by
05 Legal government authorities, court judgments

DEMONETIZATION
Demonetization of Indian currency is not the first time in 2016, earlier this, two times our country demone-
tized our currency of various denominations. This is (2016) third time. First time it was done in 1946 with by
banning of Rs. 1,000 and Rs. 10,000 Notes, second time in 1978 by banning of Rs. 1000, Rs. 5000 and Rs.
10000 Notes. Demonetization is an act of cancelling the legal tender status of a currency unit in circulation.
Third time on 8th November, 2016 the Government of India by banning, Rs. 500 & Rs. 1000 notes. In simple
words, demonetized notes are no longer valid as legal currency. Usually, a new currency replaces the old
currency. This led to 86% of the money in circulation invalid. The people of India had to deposit the invalid
currency in the banks which came along with the restrictions placed on cash withdrawals.

AIM OF DEMONETIZATION
The aim of demonetization was to curb corruption, fake notes, counterfeiting/ inauthentic the use of high
denomination notes for illegal activities like terrorism, accumulation of `black money` generated by income
that has not been declared to the tax authorities.

FEATURES OF DEMONETIZATION
Demonetization is viewed as a Cash holdings arising from declared income was readily deposited in
01 tax administration banks and exchanged for new notes. But those with black money had
tool/measure to declare their unaccounted wealth and pay taxes at a penalty rate
It indicates that tax evasion will no longer be tolerated or accepted.
02 Demonetization is a method to Tax collection increased because of increased disclosure of income due
check tax evasion to that tax evasion decreased
Though, much of the cash that has been deposited in the banking
system is bound to be withdrawn but some of the new deposits
03
To channelize the savings schemes is offered by the banks will continue to provide a base loans at
lower interest rates
Demonization is aimed to
Cash transactions declined. Digital transactions using Rupay cards and
04 create a less cash or cash-lite Debit cards, Aadhar Enabled Payment System (AEPS), etc increased
economy/Cash less economy
05 To control corruption Another aim of demonetization was to control corruption
06 To control illegal activities To control use of high denomination notes for illegal activities.

IMPACT OF DEMONETIZATION
01 Money/ (1) Decline in cash transactions (2) Bank deposits increased (3) Increase in
Interest rates financial savings
02 Declined since some high demonetized notes were not returned
Private wealth and real estate prices fell
03 Public sector wealth No effect
04 Digital transactions amongst new users (RuPay/AEPS) (Aadhar Enabled Payment
Digitization
System)increased
05 Real estate Prices declined
06 Tax collection Rise in income tax collection because of increased disclosure

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Vishal Sharda, MPS

04. PLANNING
Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum No of questions - - - 01 06
There is ONE internal choice question for 06 marks, from this chapter only

PLANNING: - Planning is the process of deciding well in advance the future courses of action i.e. What is to
be done? When is to be done? How is to be done? By whom it is to be done? etc. Planning is what managers
at all levels do. It requires taking decisions since it involves making a choice from alternative course of
action

FEATURES OF PLANNING
Focuses on achieving Specific goals are set out in the plans along with the activities to be undertaken
01
objectives to achieve the goals.
Primary function of All other managerial functions are performed within the framework of the plans
02 management
drawn. Thus, planning proceeds other functions
Pervasive Planning is required at all levels of management as well as in all departments of
03
the organization
Continuous Process Continuity of planning is related with t he planning cycle. It means that a plan is
04
framed, it implemented, and is followed by another plan, and so on
Futuristic Planning is essentially involves looking ahead and preparing for the future.
05
Therefore, it is regarded as a forward looking function based on forecasting.
Involves decision Planning essentially involves choice from among various alternatives and
06 making activities. After evaluation each alternative, it will choose appropriate one
Mental exercise Planning requires application of the mind involving foresight, intelligent imagina-
07
tion and sound judgment. It is mostly concerned with thinking rather than doing.

IMPORTANCE OF PLANNING
By stating in advance how work is to be done planning provides
01 Planning provides directions
direction for action.
Planning reduces the risks of By deciding in advance, the tasks to be performed, planning shows the
02
uncertainty way to deal with changes and uncertain events.

03 Planning reduces overlapping In Planning the work of each person and department is clearly decided.
and wasteful activities It helps in avoiding confusion and misunderstanding.

04 Planning promotes innovative During discussions for planning, new ideas may be presented by
ideas managers/individuals.
Planning facilitates decision During planning the manager has to evaluate each alternative. This
05
making helps them in taking decision for selection of best alternative.

06 Planning establishes Planning provides the goals or standards against which actual
standards for controlling performance is measured for controlling.

LIMITATIONS OF PLANNING
Managers have to work according to pre-decided plan they may not be
01 Leads to Rigidity
in a position to change it.
02 Planning includes expenses for collection of information, salary of
Involves Huge Cost
specialists for analysis, paper work, board meeting etc.
Middle management and other decision makers are neither allowed
03 to
Reduces Creativity
deviate from plans nor are they permitted to act on their own.
It reduces their creativity.

04 Does Not Work in Business environment changes very frequently. It becomes difficult to
DynamicEnvironment accurately assess future trends in the environment

05 Does Not Guarantee Generally, manager relies on previous successful plans. Such type of
ofSuccess planning may not give success.

06 Conducting meetings and discussions for preparing plans takes a lot of

Time Consuming Process
time.

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Vishal Sharda, MPS

PROCESS OF PLANNING
01
Setting Objectives Objectives may be set for the entire organization and each department
or unit within the organization.
Developing Premises Planning is concerned with the future which is uncertain and every
02
planner is using conjuncture about what might happen in future.
Identifying alternative courses nce objectives are set, assumptions are made. Then the next step
03 of action would be to find out various alternative to achieve the goal.
04 Evaluating alternative courses The next step is to weigh the pros and cons of each alternative.
Selecting an alternative This is the real point of decision making. The best plan has to be
05
adopted for implementation.
06 Implementing the plan This is concerned with putting the plan into action.
Follow-up action Monitoring the plans are equally important to ensure that objectives
07
are achieved.

TYPES OF PLANS
Objectives are the end points which are numerically expressed, that the management seeks to
achieve within a given time period by its operations. Usually these are designed by top
01 Objective
management as the desired future position that the management would like to reach. Examples
increasing sales by 10% in the next quarter OR getting 20% return on Investment etc.
Strategy provides the broad outline boundary of an organizations` business. Thus strategy is a
comprehensive plan which includes various dimensions i.e., determining long term objectives,
02 Strategy adopting a particular course of action and allocating the necessary resources to achieve the
objectives. Examples, which channel of distribution to use? What is the pricing policy? and how to
advertise the product?
These are general guidelines which facilitate achievement of pre determined objectives. They
03 Policy provide directions to the managers of an organization. Example, selling goods on cash basis only,
reserving some post for women in the organization.
It consists of sequence of routine steps performed in a chronological order to carry out activities
04 Procedure within a broad policy frame work. It deals the exact manner in which any work is to be performed.
Example: Process adopted in the Selection of Employees
Method is the prescribed way or manner in which a task has to be performed considering the
objective. The best method is to be selected out of various methods which carry minimum cost.
05 Method
For imparting training at higher level-orientation programme/lecturer methods may be adopted
whereas at supervisory level on-the-job training methods may be adopted.
Rule is a specific statement that informs what is to be done and what not. It is a guide to
06 Rule behaviour. A rule does not allow for any flexibility or discretion. Example: No smoking in the office
premises, Violation of rules may invite penalty.
Programme is a detailed statement about a project which outlines the objectives, policies,
Pro-
07 procedures, rules, tasks, physical and human resources required to implement any course of
gramme action. Ex: Construction of a shopping mall, opening a new department etc.,
A budget is a statement of expected result expressed in numerical terms for a definite period of
08 Budget
time in the future.

05. ORGANISING
Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum
No of questions 02 - - 01 08
There is NO internal choice question from this chapter

Organizing is the process of defining and grouping the activities of the enterprise and establishing authority
relationship among them. It can also defined as a process that initiates implementation of plans by
clarifying jobs and working relationships and effectively deploying resources for attainment of identified and
desired results.
PROCESS OF ORGANISING
Identification and division The work is divided into manageable activities so that duplication can be
01
of work avoided and the burden of work can be shared among the employees.
Departmentalization means grouping together the activities those which
02 Departmentalization are similar in nature. It facilitates specialization. The grouping process is
called departmentalization
03 Assignment of duties To assign the task to different job positions
04 Establishing authority and After allocating the work by the authorities, each individual should know
reporting relationships who he has to take order s from and to whom he is accountable

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Vishal Sharda, MPS

IMPORTANCE OF ORGANISING
Benefits of Because of the specific workers performing a specific job on a regular basis.
01. specialization Repetitive performance of a particular task leads to Specialization.
Clarity in working
02. relationships The establishment of working relationships clarifies who is to report to whom.

Optimum utilization Organizing provides a clear description of jobs and related duties. This helps to
03. of resources avoid confusion and duplication.
Adaptation to It allows the organization structure to be suitably modified to accommodate
04. change environmental changes.
Effective Organizing provides a clear description of jobs and related duties. This helps to
05. administration avoid confusion and duplication.
Development of Effective delegation allows the managers to reduce their workload by assigning
06. personnel routine jobs to their subordinates. It gives them time to explore areas forgrowth.

SPAN OF MANAGEMENT:- Span of Management refers to the number of subordinates that can beeffectively
managed by a superior.

ORGANISATION STRUCTURE: - Organizing structure can be defined as the framework within which
managerial and operating tasks are performed. (Two Types – Functional and Divisional Structure)

FUNCTIONAL STRUCTURE DIVISIONAL STRUCTURE

The organization structure which is created on the The organizational structure which is created on the
basis of grouping of similar functions such as HR, basis of different products produced such as
Marketing, R&D and Purchasing etc., cosmetics, garments, footwear, skin care etc
Advantages (Le Le MAP) Advantages (Pro Pro Fa Fa Fi)
1. Leads to occupational specialization 1. Product specialization
2. Promotes control and coordination within a 2. Fixation of responsibility-Divisional heads are
department accountable for profits
3. Increasing managerial and operational efficiency 3. Promotes flexibility and initiative
4. Leads to minimal duplication 4.. Facilitates expansion and growth
5. Makes training of employees easier 4.. Faster decision making
6. Attention on every function
Limitations (Less Conflict Leads to Problems) Limitations (Ignore Duplicate Conflict)
1. Less emphasis on overall enterprise objectives 1. Conflict among different divisions
2. Problems in coordination 2. Duplication of activities
3. Conflict of interests 3. Ignore organizational interests
4. Leads to inflexibility
SUITABILITY
SUITABILITY
It is suitable for those business enterprises where a
It is most suitable when the size of the organization
Large variety of products are manufactured using
is large, has a diversified activities and operations
different productive resources. Suitable for growing
require a high degree of specialization.
organizations.

DISTINCTION BETWEEN FUNCTIONAL AND DIVISIONAL STRUCTURE

Basis of distinction FUNCTIONAL STRUCTURE DIVISIONAL STRUCTURE
01 Formation Based on functions Based on product line
02 Specialization Functional specialization Product specialization
03 Responsibility Difficult to fix responsibility Easy to fix responsibility

04 Difficult, as each functional manager Easier, autonomy as well as the chance

Managerial development has to report to the t op mgt to perform multiple functions
05 Cost Economical Costly

06 Co-ordination Easy because all functions related to a

Difficult for a multiproduct company
particular product

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Vishal Sharda, MPS

FORMAL ORGANISATION
It refers to the organization structure which is designed by the management to accomplish task. It specifies
clearly the boundaries of authority and responsibility and there is a systematic coordination among the
various activities to achieve organizational goals.

FEATURES OF FORMAL ORGANISATION

01 In formal organization, job positions and reporting relationships are clearly stated.
02 It is run according to the set rules and procedures.
03 It is the framework of a formal structure in which activities of all departments are coordinated.
04 It is deliberately created by the top management.
05 The main focus is on work and not interpersonal relationships.

MERITS OF FORMAL ORGANISATION

01 Easier to fix responsibility since mutual relationships are clearly defined
02 No overlapping of work as each member has to play their duties as specified.
03 Unity of command is maintained through an established chain of command
04 It leads to effective accomplishment of goals by providing operational framework to the employees
It provides stability in the organization because behavior of employees can be fairly predicted since
05 there are specific rules to guide them.

LIMITATIONS OF FORMAL ORGANISATION

01 The Work is based on rules which cause unnecessary delays.
The employees have to do what they are told to do and they have no opportunity of thinking creatively
02 since it does not allow any deviations from rigid policies.
It is difficult to understand all human relationships in an enterprise as it places more emphasis on
03 structure and work.

INFORMAL ORGANISATION
In the formal structure, individuals are assigned certain job positions. While working on these job positions,
the individuals interact with each other and develop some social and friendly relations in the organist ion.
This new work of social and friendly groups forms another structure in the organization which is called the
informal structure. Informal structure gets created automatically and spontaneously for getting
psychological satisfaction

FEATURES OF INFORMAL ORGANISATION

01 It originates from within the formal organization as a result of personal interaction among employees
02 The standards of behaviour evolve from group norms rather than officially laid down rules.
03 Independent channels of communication without any specified directions
04 It emerges spontaneously and is not deliberately created by the management
05 It is no definite structure or form as it is a social relationships among members.

MERITS OF FORMAL ORGANISATION

01 Prescribed lines of communication are not followed thus the informal organization leads to faster spread
of information as well as quick feedback
It helps to fulfill the social needs of the members to find like mended people and it gives a sense of
02
belongingness.
03 It contributes towards fulfillment of organizational objectives by compensating for inadequacies in the
formal organization.

LIMITATIONS OF FORMAL ORGANISATION

01 It may sometimes work against the interests of formal organization and spread rumors.

02 Sometimes the informal structure may oppose the policies and changes of management, and then it
becomes very difficult to implement them in organization
03 It may force the members to follow group norms. This may be harmful to the interest of the
organization.

10
Vishal Sharda, MPS

DISTINCTION BETWEEN FORMAL AND INFORMAL ORGANISATION

Basis of
distinction FORMAL ORGANISATION INFORMAL RGANISATION
Structure of authority relationships created Network of social relationships arising out of
01 Meaning
by the management interaction among employees
Arises as a result of company rules and Arises as a result of social
02 Authority
policies Interaction
03 Management Arises by virtue of position in management Arises out of personal qualities
04 Behaviour It is directed by rules There is no set behaviour pattern
Flow of Communication takes place through the Flow of communication can take place in
05
communication scalar chain any direction
06 Nature Rigid Flexible
07 Leaders may or may not be managers. They
Leadership Managers are leaders.
are chosen by the group

CENTRALISATION OF AUTHORITY: - When all the authorities are kept with Top Level management, it is
known as centralization of authority.

DELEGATION/DELEGATION OF AUTHORITY: Delegation refers to the downward transfer of authority

from a superior to subordinate to reduce the workload of the superior.

ELEMENTS OF DELEGATION
Authority refers to the right of an individual to command his subordinates and to take
Authority action within the scope of his job position.
Responsibility Responsibility is the obligation of a subordinate to properly perform the assigned duty.
Delegation of authority, Undoubtedly empowers an employee to act for his superior but the
Accountability superior would still be accountable for outcome.

COMPARATIVE STUDY OF AUTHORITY, RESPONSIBILITY AND ACCOUNTABILITY

Basis AUTHORITY RESPONSIBILITY ACCOUNTABILITY
Authority refers to the right Delegation of authority,
of an individual to command Responsibility is the obligation Undoubtedly empowers an
Meaning his subordinates and to take of a subordinate to properly employee to act for his superior
action within the scope of his perform the assigned duty. but the superior would still be
job position. accountable for outcome.
Delegation Can be delegated. Cannot be entirely delegated. Cannot be delegated at all.
Arises from delegated
Origin Arises from formal position. Arises from responsibility
authority.
Flows downward from Flows upward from Flows upward from subordinate
Flow superior to subordinate. subordinate to superior. to superior

IMPORTANCE OF DELEGATION
The managers are able to function more efficiently as they gets more time to
01 Effective management
concentrate on important matters
02 Employee development Employee gets more opportunities to utilize their talent
Responsibility for work builds the self-esteem of an employee and improves
03 Motivation of employees
his confidence
04 Basis of management It is the degree and flow authority which determines who has to report to
hierarchy whom
05 Facilitates growth By providing a ready workforce to take up leading positions in new
Ventures
It helps to avoid overlapping of duties and duplication of effort as it gives a
06 Better coordination
clear picture of the work

DECENTRALISATION/DECENTRALISATION OFAUTHORITY:- Decentralization of authority is delegation

of authority to all the levels of management. It means distribution of authority up to the lowest level.

11
 IMPORTANCE OF DECENTRALISATION
. Develops initiative among It identify those executives who have the necessary potential
01 to become dynamic leaders
Subordinates
Develops managerial talent for the It gives a chance to prove their abilities and creates a reserve
2.
future for future
Quick decision making Since the decisions are taken at levels, decision will be made
03
quickly
04 Relief to top management Top mgt will get free time to concentrate on important issues
05 Facilitates growth It facilitate growth to the employees as there is autonomy
Better control As the performance will evaluate at each levels of mgt, it
06 easier to control the activities and subordinates.

DISTINCTION BETWEEN DELEGATION AND DECENTRALISATION

Basis of
distinction DELEGATION DECENTRALISATION
01 Nature Compulsory act because no individual can Optional policy decision. It is done at the
perform all tasks on his own. discretion of the top management.
02 Freedom More control by superiors hence less Less control over executives‟ hence greater
of action freedom to take own decisions. freedom of action.
03 Status It is the result of the policy decision of the top
It is a process followed to share tasks.
management.
04 Scope Narrow scope as it is limited to superior Wide scope as it implies extension of
and his immediate subordinate. delegation to the lowest level of management.
05 Purpose To increase the role of the subordinates in the
To reduce the workload/burden of the
organization or to give more autonomy to
Superior.
subordinates.

06. STAFFING
Max. Marks 03 04 01
06 Total
Weightage as per CBSE curriculum
No of questions
- 01 01 - 07
There is ONE internal choice question for 04 marks, from this chapter only

Meaning: “Staffing consist of Estimating Manpower requirement, Recruitment, Selection, Training,

Compensation, Promotion of managerial personal.”

IMPORTANCE OF STAFFING
01 Helps in discovering and obtaining competent personnel for various jobs.
02 Makes higher performance, by putting right person on the right job
03 Ensures continuous survival and growth of the enterprise
04 Helps to utilize optimum utilization of the human resources
05 Improves job satisfaction and morale of employees

STAFFING AS A PART OF HRM

In small organizations, the function of staffing is performed by all the managers but in large organizations,
the function of staffing is the responsibility of a separate department called the ''Human Resource
Department''. Following are the activities to be performed by Human Resource Personnel
01 Recruitment
02 Analyzing jobs, collecting information about jobs to prepare job descriptions.
03 Developing compensation and incentive plans.
04 Training and development of employees for efficient performance and career growth.
05 Maintaining labour relations and union management relations.
06 Handling grievances and complaints.
07 Providing for social security and welfare of employees.
08 Defending the company in law suits and avoiding legal complications.

STAFFING PROCESS
Estimating Man- Finding out number and types of employee. It Includes Work Load Analysis
01 power Requirement Number and types of persons required, Work Force Analysis- Persons
Available to do the job.
 It refers to identification of the sources of manpower availability and making
2. Recruitment
efforts to secure applicants for the various job positions in an organization.
It is the process of choosing and appointing the right candidates for various jobs
03 Selection
in an organization through various exams, tests & interviews.
Placement and Placement is telling the employee it‟s place of work. Orientation refers to
04
Orientation introducing a new employee to the organization.
Training helps in increasing the skills and knowledge of employees in doing
Training and
05 their jobs through various methods. Development involves growth of an
Development
employee in all respects.
Performance
06 Checking the performance of the employee on pre-decided standards.
Appraisal/Report
Promotion& career
07 planning Hierarchically upward movement of the employee.
08 Compensation Payment of salary and wages to employee.

TYPES OF SOURCES OF RECRUITMENT (Internal and External)

Shifting of an employee from one job to another, from one department to
01 Transfers
Internal another
sources It refers to shifting an employee to a higher position carrying higher
02. Promotions
responsibilities, prestige, facilities and pay.
A notice is placed on the notice board of the enterprise specifying the
01 Direct Recruitment
details of the jobs available.
Many reputed business organizations keep a data base of unsolicited
02 Casual callers applicants in their office. This list can be used for Recruitment ofcandidate
in future.
03 Advertisement Example–Newspapers, Periodicals, Internet, Radio, Television etc.
Employment A good source of recruitment for unskilled and skilled operative jobs. It is
04
Exchange managed by Government.
Placement Placement agencies provide nation-wide services of matching demand and
External supply of work force. These agencies run by private people. Generally,
05 Agencies and
mgt. sources Placement Agencies place middle and lower level workers and
consultants Management Consultant place Top level managers.
Campus Companies go to the Campuses of reputed technical and non-technical
06
Recruitment colleges and institutions for recruitment
Recommenda- Applicants introduced by present employees, or their friends may prove to
07 tions of employ- be a good source of recruitment. Such applicants are likely to b e good
Yees employees because their background is sufficiently known.
Labour Labour contractors can provide the required number of unskilled workers
08
contractors at short notice.
09 Advertising on The detailed requirements of the job and the qualities required to do it are
Television publicized along with the profile of the organization where vacancy exists.
Certain websites specifically designed for providing information regarding
10 Web publishing
job seekers and companies which have vacancies.

MERITS AND LIMITATIONS OF INTERNAL SOURCES OF RECRUITMENT

MERITS LIMITATIONS
The employees are motivated as they are getting
01 01 The scope for induction of fresh talent is reduced.
promotion to higher position.
It simplifies the process of selection and
02 02 The employee may become lethargic
placement.
People from the same organization do not need A new enterprise cannot use internal sources of
03 03 recruitment
induction training
04 It has the benefit of shifting employees from The spirit of competition among the employees
04 may be hampered.
surplus to shortage departments
Frequent transfers of employees may often
05 Filling of jobs internally is cheaper. 05 reduce the productivity of the Organisation.

MERITS AND LIMITATIONS OF EXTERNAL SOURCES OF RECRUITMENT

MERITS LIMITATIONS
01 Qualified personnel Dissatisfaction among existing staff
02 Wider choice Lethargy process
14
03 Fresh talent Costly process
04 Competitive spirit

SELECTION
Selection is the process of identifying and choosing the best person out of a number of prospective
candidates for a job. . Selection is described as a negative in nature because it aims at rejecting applicants
who are found unsuitable and offering jobs to those who are found perfectly suitable.

SELECTION PROCESS
Preliminary Screening After applications have been received, they are properly checked for
01.
qualification, age, gender etc. by screening committee.
Includes intelligence tests, aptitude test, personality test, trade and
interest tests.
TYPES OF SELECTION TESTS
01 Intelligence To check intelligence quotient and ability to take
Test decisions and learning new skills.
02 Selection Tests 02 Aptitude Test To check person‟s ability to learn new jobs.
Personality To check the emotions, reactions, maturity and value
03 Test system of the candidate.
04 Trade test To check the existing knowledge.
To know the pattern of interest or involvement of a
05 Interest test person.
Employment Interviews Face to face interaction between employer and candidate to check
3
candidate‟s personality confidence, knowledge.
Reference Checks Prior to final selection, the prospective employer makes an investigation of
04
the references supplied by the applicants.
Selection Decisions A list of candidates who clear the employment tests, interviews and
05 reference checks is prepared and then the selected candidates are listed in
order of merit.
06 Medical Examination Is done to check medical conditions of employee before his joining.
07 Job Offer Formally appointed by issuing him an Appointment Letter.
Contract of Employment After acceptance, both employer and employee will sign a contract of
08
employment contains terms & conditions, pay scale, leave etc.

TRAINING
It is the systematic development of knowledge, skills and attitudes required by an individual to perform
adequately a given task or job.

BENEFITS OF TRAINING AND DEVELOPMENT

BENEFITS TO EMPLOYEE BENEFITS TO THE ORGANIZATION
01 Improves skill and knowledge Systematic learning not depending on hit and trails
02 Increasing in the performance It enhances employee productivity leads to higher profits
03 It makes the employees more efficient It equips the future managers in case of emergency
Increases employee morale and reduces absenteeism and
Increases the satisfaction and morale of employee turnover
04
employees increases
Obtaining effective response to fast changing environment

DEVELOPMENT
It denotes the process by which the employees acquire skills and competence to do their present job and
increase their capabilities for handling higher jobs in the future.

DIFFERENCES BETWEEN TRAINING AND DEVELOPMENT

Base Training Development
Concept Teaching of technical skills Teaching technical human and conceptual skills
Nature Focus on developing skills which are
Development of hidden skills
already possessed by employee
Duration Short term and fixed period It is a long-term process
Centered It is work centered It is people centered.

15
Method used On the job and off the job method Normally off the job methods.

EDUCATION
It is the process of increasing the knowledge and understanding of employees‟ interpretation. It develops
a logical and rational mind. Education imparts qualities of mind, character, and understanding of the basic
principles and develops the capacities of analysis, synthesis and objectivity. Education is broader in
scope than training

METHODS OF TRANING
Apprenticeship Trainee/worker is required to work under trainer/master worker for a specific
01 training period of time and acquire skills. It Is used for training of plumbers, electrician.
Here, the superior guides and instructs the trainees as a coach. He sets goals,
02 Coaching gives suggestions to achieve, periodical reviews to know their output.
It is an agreement between corporate sector and professional institutions to
Internship
ON THE

03 send their students to companies to practice theoretical knowledge they

Training learned in professional bodies.
JOB

It involves shifting of trainees from one department to another or from one job
04 to another. This enable the trainee to gain a broader understanding of all part
Job rotation
of the business and how the organization as a whole functions.
Class room
01 It is well adapted to conveying specific information rules, procedures ormethod.
lectures
It used in conjunction with conference discussions; it is a very effective method
02 Films in certain cases.
Taken from actual experiences of organizations, cases represent attempts to
03 Case study describe as accurately as possible real problems that managers have faced.
OFF THE

Computer It encourages the work environment by programming a computer to imitate

04 modeling
JOB

some of the realities of job and allows learning to take place.

Vestibule
05 training Workers work on same types of equipment but away from actual work place.

06 Programmed It incorporates a prearranged and proposed acquisition of some specific skills or

instruction general knowledge from simple to complex

07. DIRECTING
Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum No of questions - - 02 - 08
There is ONE internal choice question for 04 marks, from this chapter only

Directing is telling people what to do and seeing that they do it best of their ability.

FEATURES / CHARACTERISTICS OF DIRECTING

A directing function is performed by the managers along with Planning, staffing,
Imitates
organizing and controlling in order to discharge their duties in the organization. While
01. action
other functions prepare a platform for action, directing initiates action.
It takes place It takes place at all levels of management and shows superior and
02 at every level subordinate relationship
Continuous It is a continuous function as it continues throughout the life or organization irrespective
03 function of the changes in the managers or employees.
Flows from It is a continuous function as it continues throughout the life of organization
04 top to bottom irrespective of the changes in the managers or employees.

IMPORTANCE OF DIRECTING
It initiate action by people in the organization towards attainment of desired
01. It initiate action
objectives
It integrate It integrates employees efforts in the organization in such a way that every
02 employees efforts individual effort contributes to the organizational performance
Means of It guides employees to fully realize their potential and capabilities by
03 motivation motivating and providing effective leadership
It helps to bring stability and balance in the organization since it foresters
Balance in the
04 cooperation and commitment among people and helps to achieve balance among
organization various groups
16
 It facilitates needed changes in the organization through motivation,
05 To facilitate
change communication and leadership.

PRINCIPLES OF DIRECTING
Maximum The directing techniques must help every employee contribute to his maximum
01. Individual potential for the achievement of organizational objectives. They should bring out
Contribution untapped energies of the employees for the efficiency of the organization.
Every individual is assigned a particular task which he is responsible to
Harmony of
02 accomplish. He will do it better if he thinks that it is going to achieve his personal goals
Objectives
which may be different from the organizational goals.
Unity of One superior is for giving instructions to subordinates. If he receives orders from
03 Command more than one superior, he will get confused and will not perform well.
Appropriateness Appropriate motivational and leadership techniques should be used based on people
04
of Techniques needs, capabilities, attitudes and situational variables.
Effective communication is an important for effective direction Two-way
Managerial communication gives subordinates to chance express their feelings, and share
05
communication ideas, suggestions, complaints, grievances and boss will understand and take
actions properly.
The managers must use informal relations for getting correct feedback from the
Use of informal
06
communication employees. The effectiveness of direction would also increase by informal
communication.
A good leader is the biggest asset for any team. Effective leadership produces best
Effective
07 results with their team and subordinates. As a leader, the boss should guide and
leadership
counsel the workers not only on the work problems but also the personal problems.
Follow up is as important as giving instructions. Manager should also follow up by
08 Follow through reviewing continuously and check whether instructions are properly
executed or implemented as per instructions given.

ELEMENTS OF DIRECTING
01. Supervision To see, instruct, guide, monitoring and observing the employees.
02 Motivation Stimulating, inducing employees to perform to their best of ability.
It is a process of influencing the behavior of employees at work towards the
03 Leadership
achievement of the goals of the organization.
It is the exchange of ideas, views, message, information, between two or more
04 Communication
persons using different methods to create common understanding.

SUPERVISION
It is the process of guiding and checking the efforts of employees and other resources to accomplish the
desired objectives.

IMPORTANCE OF SUPERVISION
01. Relations He maintains day-to-day contact and maintains friendly relations with workers
Supervisor conveys the management‟s ideas to the workers on one hand andworkers
02 Acts as a link
problems to the management on the other, thus acting as a link pin.
Plays a While guiding the employees, the supervisor encourages and motivates
03 leadership role
the subordinates to perform at the best of their ability, by good leadership.
Ensures
The supervisor makes sure that all the instructions are communicated to each and
04 performance of
work every employee
Provides on the Supervisor provides good on the job training to the workers andemployees so that
05
job training supervisor can build efficient team of workers.
Builds high Supervisor plays a key role in influencing the workers and he can build up high
06 morale
morale among workers.
Provides During supervision, a supervisor is always in direct contact with his subordinates. As
07 feedback to the a result, ideas, suggestions, complaints, etc of employees with regard to managerial
workers decisions are continuously received by the supervisor. He also gives feedback to
workers on how to improve their work.

MOTIVATION
It is the process of making subordinates to act in a desired manner to achieve certain organizational goals

17
 FEATURES OF MOTIVATION
The urge, drives, desires, aspirations, striving of human being,
01. Motivation is an internal feeling which are internal and influence the human behaviour
02 Motivation produces goal directed It helps to produce a behaviour to improve performance
Motivators can be positive as well as It can act as a positive like promotion, recognition or
03 Negative negative like punishment shopping increments etc
It is a complex process as the individuals are heterogeneous in
04 Motivation is a complex process. the expectations.

PROCESS OF MOTIVATION

IMPORTANCE OF MOTIVATION
01. Improves efficiency It helps to improve performance levels of employees as well as organization
Changes negative attitude It helps to change negative attitudes of employees to positive attitudes so
02 to positive attitude as to achieve organizational goals
Reduction in employee‟s It helps to reduce employee turnover and thereby saves the cost
03 turnover
of new recruitment and training
04 Reduces absenteeism It reduces absenteeism in the organization
Helps to Introduce It helps to the managers to introduce changes smoothly without much
05
changes moothly resistance from people

MASLOW’S THEORY OR NEED BASE THEORY OF MOTIVATION

Stage Explanation
Includes needs for survival and maintenance of life. Like food shelter and
01. Basic Physiology needs
clothing.
02 Safety needs It deals with future needs and safety of human life.
03 Social/Belonging needs It deals with need for love, affection and companionship.
04 Esteem needs It deals with demand of respect for themselves in a group.
It deals with realization of one‟s full potential. It includes growth self
05 Self-actualization needs
fulfillment and achievement of goal.

ASSUMPTIONS OF MASLOW’S THEORY

01 Behavior of people depends upon their needs. Human behavior can be changed motivated by fulfilling
their needs.
02 Generally, needs flow in hierarchy i.e. starting from Physiology needs to self actualization needs.
03 A satisfied need can no longer motivated a person, only the next higher need can motivate him.
04 A person can move to higher level need only when the lower need is satisfied.
18
 FINANCIAL AND NON-FINANCIAL INCENTIVES
S.
N. Incentive Type Explanation
01 Pay and Allowance Regular salary payment and various allowances
Productivity linked The incentive plans aims at linking payment of wages to increase
02 wage incentives in productivity
It is one-time extra reward offered to the employee for higher
03 Bonus
performance.
Profit Sharing Financial Sharing of profit by management with employees.
04
Co-Partnership/
05 Offering of shares to employees and lower rate in form of ESOPs.
Stock Option
Retirement Some organizations offer benefits like gratuity, pension, provident
06 Benefits fund etc. at the time of retirement of employee
Perks/Fringe Special benefits like medical facilities, free education for children,
07 Benefits housing facilities.
01 Status Refers to Rank, authority, responsibilities, recognition and prestige.
Organizational It refers to relationship between superior and subordinate. It
02 Climate Non- directly influences the behavior of employee.
Career Advancement Financial Promotional opportunities given to employees. It improves the
03 opportunity skills of employees.
Making the job of employees more interesting to avoid boredom in
04 Job Enrichment
job by offering more varieties and challenges in job.
Employee Most of people have a need for evaluation of their work and due
05 recognition recognition is required
Employees want certain stability about future income and work so
06 Job security
that they do not feel worried on these aspect s
Employee It means involving employees in decision making of the issues
07 participation related to them.
Employee
08 It means giving more autonomy and powers to subordinates.
empowerment

LEADERSHIP
It is the process of influencing the behavior of people by making them strive voluntarily towards
achievement of organizational goals

FEATERES OF LEADERSHIP
01 Ability of a person to influence others
02 Tries to bring change in the behaviour of other
03 Indicates interpersonal relations between leaders and followers
04 Exercised to achieve common objectives.
05 Continuous process.

IMPORTANCE OF LEADERSHIP
01 Influences the Behaviour of People and makes them to positively contribute their energies for the
benefit of the organization.
02 Maintains personal relations and helps followers in fulfilling their needs
03 Play a key role in introducing required changes in the organization
04 Handles conflicts effectively and does not allow adverse effects resulting from the conflicts.
05 Provides training to their subordinates

QUALITIES OF A GOOD LEADER

Physical A good leader must possess a good height, weight, health and appearance. Health
01 qualities and endurance help a leader to work hard and inspire others also to do so.
A good leader should have required knowledge and competence, so that he can
02 Knowledge influence others.
A leader should possess high level of integrity and honesty, so that he can be a role
03 Integrity model to others.
A leader should have courage and initiative to do things on his own, rather than
04 Initiative waiting for others to do it first.

19
 A leader should be a good communicator. He should be able to clearly explain his
05 Communication views to others. He should not only be a good speaker, ut a good listener, teacherand
skills counselor.
Motivation A leader should understand the needs of his employees and motivate them by
06
skills satisfying their needs.
A leader should have a high level of confidence. He should not lose confidence even in
07 Self-confidence
the most difficult times.
A leader must be decisive in the sense that once he has taken a decision, he should
08 Decisiveness
be firm on it.
A leader should be sociable and friendly with his colleagues and followers, so that he
09 Social skills
can understand them and their needs.

STYLES OF LEADERSHIP
Autocratic/ Laissez Faire/ Free
S.N. Basis Democratic/ Participative
Authoritative Rein
Only leaders make Leaders make decision in Subordinates make the
01 Decision Making
the decisions. consultation with subordinate decisions
Only one way i.e.
02 Communication Two-way of communication Free flow of communication
downward.
Motivation Fear and punishment Reward and involvement Self-direction and self-
03.
technique (negative motivation) (positive motivation) control.
Delegation of Delegation of authority to Complete delegation of
04. No delegation
authority some extent authority
05 Focus Leader control Group control Individual centered
Provides support and
06 Role of leader Provides directions Maintains team work
resources

COMMUNICATION
Communication is the process of exchange of information between two or more persons to reach common
understanding

ELEMENTS OF COMMUNICATION PROCESS

01 The person, who conveys the message, is known as the sender or communicator. He may be
Sender
a speaker, a writer or an actor.
02 It is the subject matter of communication. It may consist of facts, information, ideas,
Message
opinions, etc. It exists in the mind of the sender.
03 The sender translates the message into words, gestures or other symbols, which he feelswill
Encoding
make the receiver understand the message.
04 Channel The encoded message is transmitted through some medium, which is known as the
or media communication channel, e.g. speaking, writing, phone call, internet, etc.
05 Decoding It means process of conversion of symbols into the message by the receiver.
06 The person, who receives the message, is called the receiver. The receiver may be a
Receiver
listener, reader or viewer.
07 The receiver sends his response to the sender of the message. Such response is known as
Feedback
feedback.
08 Noise It means an obstruction or hindrance in the communication process.

IMPORTANCE OF COMMUNICATION
The Basis of The manager explains to the employees the organizational goals, modes of their
01 achievement and also the interpersonal relationships amongst them. Thus,
Co- ordination
communications act as a basis for coordination in the organization.
A manager coordinates the human and physical elements of an organization to run
02 Fluent Working
it smoothly and efficiently
Proper communication provides information to the manager that is useful for
The Basis of
03 decision making. No decisions could be taken in the absence of information. Thus,
Decision Making
communication is the basis for taking the right decisions.
The manager conveys the targets and issues instructions and allocates jobs to
Increases Managerial the subordinates. All of these aspects involve communication. Thus, communication
04
Efficiency is essential for the quick and effective performance of the managers and the entire
Organization.

20
 Increases
05 Cooperation and The two-way communication process promotes co-operation and mutual
understanding amongst the workers and also between them and the management
Organizational Peace
Boosts Morale of the Good communication helps the workers to adjust to the physical and social aspect
06
Employees of work. It also improves good human relations in the industry.

FORMAL COMMUNICATION
It flows through official channels designed in the organizational chart. It may take place between a superior
and a subordinate, a subordinate and a superior or among same cadre employees. Different types of formal
communication net works are explained with the help of images.

Difference between FORMAL and INFORMAL COMMUNICATION

SN Basis Formal Communication Informal Communication
Official communication at official place It is communication taking place
01 Meaning between people who are officially related among employees of the organization
with each other. to fulfill their social needs
Generally, it is upward, downward and It flows in all directions.
02 Flow horizontally.
03 Verbal or written Generally, it is written. It is mostly verbal.
Under this there is no scope for rumors as There is great chance of rumors as it
04 Scope for rumors it is mostly written has no direction
05 Scalar chain It follows scalar chain It does not follow scalar chain.
06 Purpose It is for official purposes only It is for social purposes only.

BARRIERS TO COMMUNICATION (SEMANTIC BARRIERS)

Semantic barriers refer to barriers wherein there is a problem relating to encoding and decoding the
message because of factors such as difficulty in interpretation, wrong translations or use of wrong words.
Badly There may be a difficulty in expressing information because of poor vocabulary or the
expressed 01 wrong use of words. Ex: inadequate vocabulary, usages of wrong words, omission of
message needed words
Symbols with A single word may have many different meanings. In such cases, it may be difficult for
different 02 the receiver to interpret the intended meaning of the word. For example, price and
meanings prize, right and write, and other homonyms may be incorrectly pronounced
It may happen that there is a language barrier between workers such that the level of
Faulty 03 proficiency of a language may be different for the two. For ex: The original draft is
translations written in English and the same is translated in Hindi with some mistakes
Sometimes, there are certain assumptions about a particular communication and so it
might be misinterpreted. For example, if the manager says take good care of the
Unqualified 04 products produced in the factory, the manager may mean to take care of the quality of
assumptions goods whereas the worker interprets it in a way that he is instructing the worker to
keep the products safely.
Sometimes, a senior or specialist uses technical vocabulary which subordinates might
Technical 05 find difficult to understand or interpret. Use of some technical words by the experts in
jargon different fields.
Gestures of the communicator are also seen as part of the communication. There mustbe
Body language a match between what is said and what is conveyed through body language or gesture;
06 else the message would be wrongly interpreted. For example, if a boss cracks
and gesture
a joke but his/her body language shows signs of irritation and frustration, then
decoding employees might get confused

BARRIERS TO COMMUNICATION (PSYCHOLOGICAL/EMOTIONAL BARRIERS)

Various psychological or emotional factors such as anger and frustration might also act as a barrier in
effective communication.
Sometimes the receiver derives the meaning of the message even before the message
Premature
01 is completed. This is possible due to pre-conceived notions or prejudices about
evaluation
communication
Lack of While communication takes place, it may happen that the receiver is preoccupied with
attention 02
something else and that is why he is unable to grasp the message communicated to him
Loss by trans- There can be loss of information or transmission of wrong information due to
mission and 03 information passing through multiple stages. Besides this, there can be a problem of
poor retention poor retention at the receiver‟s end
If the parties do not trust each other, then they will not be able to communicate
Distrust 04 effectively
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 BARRIERS TO COMMUNICATION (ORGANISATIONAL BARRIERS)
An organizational barrier refers to barriers ineffective communication which arises in formal organizations
because of factors such as authority and hierarchical relationships.

Organizational policy 01 Effectiveness of communication may be hampered if organizational policy is

not supportive to free flow of communications.
Rules and regulations 02 Rigid rules and cumbersome procedures may be a hurdle to communication

Status 03 A status conscious manager may not allow his subordinates to express their
feelings freely.
Complexity in organization
structure 04 Communication gets delayed and distorted if there are number of
managerial levels in an organization.
Communications may be hampered if facilities for smooth, clear and timely
Organizational facilities 05 communications are not provided.

BARRIERS TO COMMUNICATION (PERSONAL BARRIERS)

Personal barriers arise out of personal factors affecting the sender and the receiver.
Sometimes, subordinates do not communicate freely with managers due to the fear
Fear to challenge 01 of authority. On the other hand, the manager may also not communicate certain
authority information with subordinates if he feels that it would affect his authoritative power
Lack of confidence
If the manager does not have confidence in the skill and competence of the
of superior on his 02
subordinates subordinates, he would not seek their advice or opinion
Unwillingness to The subordinates, at times, are not willing to share information or communicate
03
communicate with managers if they feel that it would affect their personal interests
Many a times, there is no incentive (in the form of reward or appreciation) for
Lack of proper 04 participation in communication. In such cases, the subordinates do not take
incentives initiative for effective communication with the manager.

IMPROVING COMMUNICATION EFFECTIVENESS

01 Clarifies the ideas before communication Sender should be clear about the message he is about to send.
Communicate according to the needs of The level of understanding of the receiver should be taken into account
02
receiver before the message is delivered.
03 Consult other before communicating It is better to discuss before the message is conveyed to the receiver
Be aware of language, tone and content of message. Language should
04 Be aware of languages, tone and content be clear, content should be meaningful and tone should be appealing to
of message the receiver.
Convey things of help and value to Needs of the receiver should be clearly understood so that the message
05
listeners could be of help and add value to the receiver.
Communicator should ensure if the message has reached the receiver
06 Ensure proper feedback or not.
Communicate for present as well as Communication is needed to meet the present as well as future
07
future commitments to maintain consistency.
08 There should be regular follow up and review on the
Follow up communications instructions given to subordinates.
A message sender can only be good in communication if he listens to
09 Be a good listener the other party properly and then gives his response.

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 08. CONTROLLING
Max. Marks 01 03 04 06 Total
Weightage as per CBSE curriculum No of questions 02 01 - - 05
There is ONE internal choice question for 03 marks, from this chapter only

CONTROLLING
Controlling means ensuring the activities in an organization are performed as per plans. Controlling is a
process of comparison of actual performance with the planned performance. If there is any difference or
deviations finding out the reasons for it and taking corrective actions to remove those deviations
IMPORTANCE OF CONTROLLING
Accomplishing The controlling function measures progress towards the organizational goals
01
organizational goals and brings to light/indicates corrective action.
A good control system enables management to verify whether the standards
02 Judging Accuracy set are accurate or not by careful check on the changes takingplace in
of The Standards the organizational environment.
Making Efficient Use
03 By the process of control, a manager seeks to reduce wastage of resources.
of Resources
Improving Employees An effective control system communicates the goals/standards in advanceto
04
Motivation the employees. A good controlling system thus motivates the employees.

05 Ensure Order and Controlling creates an atmosphere of order and discipline in the
Discipline organization by keeping a close check on the activities of its employees.

06 Facilitate Co-Ordination
A good controlling system maintains equilibrium in means and end. It makes
in Action.
sure that proper direction is taken.

LIMITATIONS OF CONTROLLING
Difficulty in Control system loses its effectiveness when standards of performance cannot be
01 setting defined in quantitative terms. This makes comparison with standards a difficult task.
quantitative e.g areas like human behaviour, employee morale, job satisfaction cannot be
standards measured quantitatively.
Little control on An enterprise cannot control external factors like government policies, technological
02
external factors changes, and competition. etc.
Resistance from Control is resisted by the employees as they feel that their freedom is restricted. e.g
03
employees employees may resist and go against the use of cameras to observe them minutely.
Control involves a lot of expenditure, time and effort. A small enterprise cannot afford to
04 install an expensive control system. Managers must ensure that the cost of insta- lling
Costly affair
and operating a control system should not exceed the benefits derived from it.

RELATION BETWEEN PLANNING AND CONTROLLING

Planning Planning and controlling are inseparable twins of management. A system of control
without presupposes the existence of standards provided by planning. Once a plan becomes
01
controlling is operational, controlling is necessary to monitor the progress, measure it, discover
meaningless deviations and initiate corrective measures to ensure that events conform to the plans.
Controlling is If the standards are not set in advance, managers have nothing to control. When there
02 blind without is no plan, there is no basis of controlling. Planning seeks consistent, integrated while
planning controlling seeks to compels events to conform to plans
Planning is
Planning involving thinking, articulation and analysis to discover and prescribe an
basically an
03 appropriate course of action for achieving objectives. Controlling checks whether
intellectual
decisions have been translated into desired action.
process
planning is However the statement is only partially correct. Plans are prepared for future and are
looking ahead based on forecasts about future conditions. Therefore, planning involves looking ahead.
04 while Controlling is like a postmortem of past activities to find out deviations from the
controlling is standards. So, controlling is a backward-looking function. Thus, planning and controlling
looking back are both Backward-Looking as well as a Forward-Looking Function.
planning and controlling are interrelated and reinforce each other in the sense that
planning and  Planning based on facts makes controlling easier and effective.
05 controlling are
 Controlling improves future planning by providing information derived from the
interrelated past experience.

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 PROCESS OF CONTROLLING
Setting Up of It means parameter against which the actual performance will be measured.
01 Standards/ Standards should be clearly defined and expressed in numeric terms so that all can
Targets understand them.

02 Measuring of Actual Actual performance is measured by evaluating the work done by employees.
Performance While measuring the performance quantitative & qualitative aspect kept in mind.

Compare The manager compares the actual performance with planned performance. The
03 Performance differences between two is known as deviation. It could be positive when actual
Against Standards performance is more than planned performance and negative vis-à-vis.

All deviations need not to be brought to the notice of the management. A range of
deviations has to be established and cases beyond the range are reported to the
management. To analyze the deviations Critical point control and Management
by Exception are used.
CRITICAL POINT CONTROL (CPC): It means keep focus on some KEY RESULT
AREA (KRA)- which are critical to success of the organization. if there is deviation
Analyzing in these areas then it must be attended urgently. For example, if cost of
04
Deviations production increased by Rs. 2 and cost of postage by Rs 10. Cost of production
has more impact on organization than cost of postage. Thus, for an organization
KRA will be cost of production.
MANAGEMENT BY EXCEPTION (MBE): If a manager tries to control everything
he will end up controlling nothing. The deviations beyond the specific range in
KRA should be handled by manger and managers should not waste time in
controlling everything. For example, if increase in cost of production is acceptable
up to Rs. 5 then management will not take the action in above case.
Otherwise, it will take action to control the cost.

Taking After knowing the reasons for deviations, the management takes all necessary
05 Corrective steps to resolve the deviations so that planned performance and actual performance
Action/Measures are matched.

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