PRINCIPLES AND PRACTICES OF MANAGEMENT

SHORT ANSWER

1. Organisation - Definition

“Organising is a process of identifying and grouping the work to be performed, defining and
delegating responsibility and authority and establishing a pattern of relationship for the purpose
of enabling people to work most effectively together in accomplishing objectives”.- Alien

2. Kinds of organization / Comparison

Formal organization Informal organization

It has defined objective that will save It does not have objectives but inspires of
organisation and make it stable. friendship, fame, respect, unity
It is established with particular process and It appears spontaneously and cannot be
shown in an organisational chart. shown in an organisational chart.

3. Organizational Structure

The structure of an organisation is a network of authority and responsibility assumed

by and delegated to the employees. Organisational structure defines the pattern of formal
relationship between superiors and subordinates. It may also be regarded as a network of role,
relationship, assigned work and delegated authority to employees. It provides the basis on
which the managers and non-managerial employees perform the job assigned to them.

4. Motivation

Motivation refers to the state within an individual that determines his behaviour towards
some goals. “Any emotion or desire which so conditions one‟s will that the individual is
propelled in to action.” Stanley Vence

5. Departmentation

Departmentation or Departmentalisation is the process of grouping the activities of an

enterprise into several units for the purpose of administration at all levels. It also provides a
basis on which the top managers can co-ordinate and control the activities of the departmental
units.

6. Directing:

In the words of Urwick and Brech, “directing is the guidance, the inspiration, the
leadership of those men and women that constitutes the real core of the responsibility of
management.”
 7. Delegation of Authority:

Delegation of Authority means division of authority and powers downwards to the

subordinate. Delegation is about entrusting someone else to do parts of your job. Delegation of
authority can be defined as subdivision and sub-allocation of powers to the subordinates in
order to achieve effective results.

8. Span of Management:

Span of management is a way in which many people in an organisation are controlled

and managed by single officer. It can be further called as:  span of management  span of
authority  span of supervision  span of authority  span of responsibility  levels of
organisation. Such principle depends upon principle of relationship. In this number of members
can be more or less as per nature of work done by subordinate or ability of supervision.

9. Mcgregor’s Theory X and Theory Y

US scientist McGregor came up with an approach which encouraged certain

assumptions based on human behaviour. He worked on the theory of X and Y that believes on
assumptions lay down by human behaviour. Though he was a great critic of the classical
approach of management, even then his theory X is related to philosophy of traditional
management, assumptions about employees and the way to manage them. Theory Y is based
on humanistic assumptions about employees and describes the approaches to manage and
motivate them.

10. Leadership

“Leadership is defined as the process of influencing the activities of an organised group

toward goal achievement.” (Rauch and Behling)

11. Trait and Participative theory in leadership

Trait theory in leadership Participative theory in leadership

Trait theory believes that people inherit many Such theory suggests that an ideal leadership style
features and traits which can be suitable for great depends upon input of others. In this the leaders give
leadership. This theory feels that certain confidence while contributions from various group
personality features are shared among by great members thereby assuring members to be committed for
leaders decision making process

12. Communication

 Brown: Communication is the transmission and interchange of facts, ideas, feelings or

course of action.‟
13. Coordination

Co-ordination is the management of interdependence in work situations; it is the orderly

synchronization or fitting together of the inter-dependent efforts of individuals, in order to
attain a common goal.

14. Purpose of Performance Management

 Communicating goals: Clearly define organizational goals and objectives

 Setting expectations: Establish clear expectations for employees and teams
 Providing feedback: Give constructive feedback to help employees improve

15. Types of control

 Feed forward Control

 Concurrent Control
 Feedback Control

16. Different techniques of managerial control

 Traditional techniques – Personal Observation, Statistical Reports

 Modern techniques – Program Evaluation and Review Technique (PERT), Ratio Analysis
Return on Investment

LONG ANSWER

1. DIFFERENT KINDS OF ORGANISATIONAL STRUCTURE

 Line Organisation Structure
 Line and Staff Organisation Structure
 Functional Organisation Structure
 Divisional Organisation Structure
 Project Organisation Structure
 Matrix Organisation Structure

Line Organisation Structure:

It is the oldest organisational structure which is frequently associated with scalar, military or
vertical structure. With this concept, it is narrated that in any organisation or hierarchy which
is acquired from scalar process, there subsists one top head that will run and command the
structure. Moreover it is clear that executives in an organisation will also have power to
delegate work and holds responsible for output.
Line and Staff Organisation Structure

This structure narrates certain arrangement where staff experts advise their line managers to
perform particular task. On increasing work of an executive, its performance will effect and
service of specialists cannot able to give as of restricted capabilities. This type of advice is
mandatory to deliver to line managers by staffs personal which are normally specialists in their
own fields. The staff positions or departments are of purely advisory nature. They have the
right to recommend, but have no authority to enforce their preference on other departments.

Functional Organisation Structure

Functional organisation structure is the most widely used in the medium and large organisations
having a limited number of products. This structure materialises from the idea that the
organisation must perform certain functions in order to carry on its operations. Functional
structure is shaped by grouping the activities on the basis of functions prerequisite for the
achievement of organisational objectives. For this purpose, all the functions required are
classified into basic, secondary and supporting functions according to their nature and
importance. The elementary functions are essential for the organisation.
For example, in a manufacturing organisation, production and marketing are basic functions.
When departments are created based on basic functions and a manager feels that his span of
management is too wide to manage effectively, which invariably happens in large organisations,
several departments are created on the basis of dividing a basic function into sub-functions.
Marketing may be subdivided into marketing research, advertising, sales, and so on.

Divisional Organisation Structure

The second basic structural form employed by organisations is the divisional structure. In India,
many companies have diversified into unrelated businesses and have found functional structure
quite unsuitable for them. For example, companies like D.C.M. Limited, Voltas Limited,
Century Spinning Mills, Gwalior Rayon, etc., have adopted the divisional structure.

Divisional structure, also called profit decentralization by Newman and others is built around
business units. In this form, the organisation is divided into several autonomous units. Each
unit is headed by a manager who is responsible for the organisations investment in facilities,
capital and people as well as for units development and performance.

Divisional structure is similar to dividing an organisation into several smaller organisations but
it is not quite the same, since each smaller organisation is not completely independent. Each
unit is not a separate legal entity; it is still part of the organisation. Each unit is directly
accountable to the organisation.
Project Organisation Structure

Major reforms in the traditional functional structure have come from a group of related
structures such as project management. The basic idea behind this structure is that since
environment changes very rapidly, the organisation must take up various activities on project
basis, i.e. adding the required ones and deleting the unnecessary ones. Thus, the organisation
can be organic-adaptive one

For example, Middleton observes, “A project organisation can also be the beginning of an
organisation cycle. The project may become a long term or permanent effort that eventually
becomes a programme or branch organisation. The latter, in turn, may become separated from
the parent organisation and be established as a full-fledged division, functionally organised.”

Matrix Organisation Structure :

Matrix organisation structure is principally a violation of unity of command and

therefore, in practicality all the classical concepts related to the principle of unity of command
are violated. Matrix structure is the realisation of twodimensional structure, which emanates
directly from two dimensions of authority. Two complementary structures- pure project
structure and functional structureare amalgamated to create the matrix structure.
2. PRINCIPLES AND PROCESS OF ORGANIZING:

I. Principles of Organising

 Principle of Division of Labour: This is the basic principle of organising, which

represents division of work and activities into small tasks and jobs necessary for
achieving a set of objectives.
 Principle of Functional Definition: In order to exonerate assumed responsibility by
concluding the job assigned to the employee, he has to perform many functions.
According to this principle, the tasks to be performed by an individual employee or by
a department must be welldefined.
 Principle of Sealer Chain: This principle is known as sealer chain or line of authority
or chain of command. It states that there exists an unbroken line of authority or sealer
chain from the top to the lowest level.
 Principle of Span of Control: This principle refers to the number of subordinates to
be placed under the command of the manager so that he can manage their work
efficiently.
 Principle of Unity of Command: The principle of unity of command implies oneness
of command and single source of authority over a subordinate.
 Principle of Objective: The organisation and each of its components or sub-systems
should be directed towards the accomplishment of predetermined objectives.
 Principle of Balance: According to this principle, all techniques and principles applied
to particular structure of the organisation must be properly balanced to ensure that one
principle does not contradict with another or benefits of one are not countered by the
benefits of the other.
 Principle of Flexibility: It proposes that the structure of an organisation should be
designed to permit growth and diversification.
 Principle of Absoluteness of Responsibility: According to this principle,
responsibility once assumed by the manager cannot be shifted to subordinates.
 Principle of Delegation by Result Expected: For creating the structure of an
administration, authority should be delegated in such a way as to elucidate performance
potentials in terms of cost, volume, time and efforts.
 Principle of Parity between Authority and Responsibility: The principle suggests
that there should be complete balance or parity between authority and responsibility;
only that much authority should be delegated which is needed for carrying out the
assigned job.
  Principle of Efficiency: According to this principle, the organisational structure should
be designed in such a way as to facilitate efficient accomplishment of objectives.
 Principle of Continuity: The principle of continuity states that while designing the
structure of the organisation, due care should be taken to maintain continuity in respect
of its existence and functioning.
 Principle of Cooperation: According-to this principle, an organisation is considered
as a team aimed at achieving objectives. Therefore, all members should achieve the
allotted work in co-operation with each other.

II. Process of Organizing

Organising as a process can be described as follows:

 Identification of Activities: At the first stage of organising, the manager recognises

those activities, which are indispensable for reaching common goals. The common
goals of organisation provide the basis for determining and identifying the activities.
 Division of Activities: Once the events have been acknowledged, they are divided and
subdivided into jobs and small tasks known as elements of activities.
 Grouping of Activities: After division into small elements known as tasks, the closely
linked ones having similarity may be grouped to form a department.
 Assignment of Group Activities: Once activities are classified into groups, they are
allocated to the particular department or an individual.
 Granting Necessary Authority: Groups of activities are assigned to various
departments and individual employees' demands to grant adequate authority to them
are considered.
 Coordinating the Functioning of Various Departments: In the process of organising,
attempts are made to coordinate each small element or task with departmental activities.
Further, the functioning of each department is coordinated to achieve common goals.

3. STEPS AND PROCESS OF CONTROLLING.

The process of control involves the following steps:

I. Establishment of Standards: The first step in the control process is establishing standards.
Standards are the targets against which subsequent performances will be equated with. They
are, by definition, simply criteria of performance. They serve as the benchmarks because they
specify acceptable levels of performance.

It is found that laying of standards for every operation is an unpreventable work which is
performed by the management such as:

 In the initial phase of setting standards, it is the work of an executive to study about various
characteristics related to work.

 It is the work of executive to consider simple flexible and normally accepting levels of good
performance in case of work characteristics.

 On differing with amount of work related to operations, it is seen that the characteristics
differs along with standards.

 It is found that there are set standards that depends on characteristics of particular task.

II. Measurement of actual performance: Another step in control process is measurement of

actual performance where actual performance of employees is measured in terms of fixed
standards as per his job. Also, measuring performance of a personnel manager at the same time
is difficult.

To make the checking process effective, the manager has to concentrate on three key aspects
of measurement, viz., completeness, objectivity and responsiveness.

 Completeness: Complete measures provide an opportunity for the manager to concentrate

on all aspects of the job instead of neglecting unmeasured tasks in favour of measured ones.

 Objectivity: Objective measures avoid bias that is essentially found in subjective assessment
of task and people.

 Responsiveness: Responsive measures support the belief that effort and performance lead to
improvement in the systems of control.

III. Comparison of actual performance with standard: The comparing step determines the
degree of variation between actual performance and the standard. Some variation in
performance can be expected in all activities. It is, therefore, important to determine the
acceptable range of variation. Deviations in excess of this range become significant and receive
manager‟s attention. All such deviations may be due to errors in planning, defective
implementation or careless performance of the operatives. As a matter of fact, only major or
exceptional deviations should be communicated to top management in the form of reports. This
is known as „management by exception
IV. Taking corrective action: The last and final step in the control process is taking corrective
action, when required. Corrective steps are initiated by managers with a view to rectify the
defects in actual performance. If actual performance for example- falls short of standards due
to non-availability of materials, managers try to procure these materials and thus set things in
order. If it is due to poor results shown by employees, it could be rectified through the
introduction of attractive incentive plans. Thus, a corrective action may involve a change in
methods, rules, procedures, etc. Sometimes, variations might occur due to unrealistic standards.
That is, the goal may be too high or too low. In such cases, managers try to set things in order
by revising the standards altogether.

4. THEORIES OF LEADERSHIP

 Great Man Theories: This theory believes that the volume of leadership capacity is based
on inheritancy. In this theory, the great leaders are posed as daring, mythic and give rise
to leadership as required.
Example: Winston Churchill during World War II: Churchill's leadership during the war
is often viewed as an example of "born leadership." He is remembered for his decisive and
heroic qualities, as well as his ability to inspire a nation during its darkest hours. The theory
suggests that Churchill had inherent traits that made him an effective leader in this
challenging time.
 Trait Theories: Trait theory believes that people inherit many features and traits which
can be suitable for great leadership. This theory feels that certain personality features are
shared among by great leaders.
Example: Steve Jobs at Apple: Steve Jobs exhibited traits commonly associated with
leadership, such as vision, innovation, and determination. His creativity and charisma were
seen as integral parts of his leadership style, aligning with the idea that leadership stems
from inherent personal traits.
 Contingency Theories: It is a leadership theory which focuses on desired variables which
are based on environment that find out which style of leadership is best fitted for particular
situation. In this theory the success is based on the amount of variables which will have
leadership style, qualities of followers and characteristics of the situation.
Example: Nelson Mandela adapting to post-apartheid South Africa: Mandela adjusted
his leadership style depending on the situation. As a freedom fighter, he led with firmness
and resistance. However, as President, he used a more reconciliatory approach,
understanding that healing a divided nation required different leadership qualities. His
success depended on adapting to the specific social and political context.
 Situational Theories: This theory allows the leaders to select the best course of action
which depends on situational variables. Example: Steve Jobs at Apple: Jobs shifted his
leadership style according to the company's needs. For example, in times of innovation
and product development, he was highly directive and detail-oriented. However, at other
times, he empowered his team to be more creative and autonomous, adapting his leadership
style to different business situations.
 Behavioural Theories: It depends on the fact that great leaders are created and not born.
The idea of this leadership theory is to enlight the actions of leaders which are not
concerned with mental or internal states. Example: Herb Kelleher, co-founder of
Southwest Airlines: Kelleher’s leadership was based on his actions, particularly his
emphasis on treating employees well and fostering a positive corporate culture. His style
demonstrated that effective leadership is about behaviors, not necessarily inherent traits.
He would serve drinks on flights and was known for his hands-on approach, focusing on
visible leadership behavior
 Participative Theories: Such theory suggests that an ideal leadership style depends upon
input of others. In this the leaders give confidence while contributions from various group
members thereby assuring members to be committed for decision making process.
Example: Indra Nooyi as CEO of PepsiCo: Nooyi was known for her inclusive leadership
style, involving key stakeholders and employees in decision-making. She listened to her
team’s ideas and feedback, which allowed her to steer the company in new directions, such
as focusing on healthier products. Her participative style made team members feel valued
and invested in PepsiCo’s success.
 Management Theories: Management theories (also known as transactional theories)
focus on the role of supervision organisation and group performance. These theory base
leadership on a system of rewards and punishments. Example: Bill Gates in Microsoft's
early years: Gates focused on clear goals, structured processes, and performance
monitoring to drive Microsoft’s growth. Employees were rewarded based on their ability
to meet targets, and the emphasis on efficiency and productivity reflected a transactional
style where rewards and punishments were integral to motivation
 Relationship Theories: It is a transformational theory which explains about connections
which originates among leaders and followers. In this, the leaders are motivated and will
make the people inspired by way of helping certain group members by finding higher good
of task. Example: Oprah Winfrey and her media empire: Oprah is a transformational
leader, inspiring her team and audience by focusing on self-improvement, personal growth,
and emotional connection. Her leadership style is based on empowering others,
encouraging them to reach their full potential, and forming deep relationships with her
audience and employees alike.