MEANING
A leader is one who guides and directs other people .He gives the efforts of his followers a direction and purpose by influencing their behaviour. Therefore, leadership may be defined as the quality of behaviour of a person by which he is able to persuade others to seek the goals enthusiastically.Its the force which binds a group together and motivates it towards certain goals. According to George R. Terry "Leadership is the activity of influencing people to strive willingly for mutual objectives."
Koontz and O'Donnell have defined leadership as "the ability of a manager to induce subordinates to work with confidence and zeal." In the words of Robert Appleby Leadership is a means of direction. It is the ability of management to induce subordinates to work towards group ideals with confidence and keenness." Simply stated, leadership is a process involving two or more people in which one attempts to influence the other's behaviour towards the accomplishment of some goals.
Friday, December 31, 2010
Thursday, December 30, 2010
OVERALL CONTROL CRITERIA
Most of the control techniques are designed to regulate specific aspects like costs, profits, etc. Such piecemeal control measures are not sufficient for a business enterprise. Control of overall peormance is required to judge the total effectiveness of an organisation. Such control evaluates management's total efforts. Moreover, control of overall performance helps to overcome weaknesses of partial control measures. According to George R. Terry, "Controlling overall performance is advantageous that it encourages a manager to see the forest not simply the trees. The overall point of view is encouraged." Control of overall performance is all the more important in the case of large enterprises which have several autonomous units located in different parts of the country.
Some of the important tools of controlling overall performance are as follows: (i) Budget summaries which are a resume of all individual budgets and which
present an overall picture of the enterprise. (it) Written and comparative reports from different departments. (iii)Inter-firm comparisons. (iv) Internal audit which involves continuous examination of operations by the
managers of the enterprise. (v) Ratio analysis indicating trends in the profitability, liquidity and solvency
of business as a whole. (vi) Value analysis used to judge relationship between cost and function of any
product, material or service. (vii) Control through key result areas, e.g., market position, productivity, product leadership, executive development, etc.
28.8. RETURN ON INVESTMENT CONTROL
Profitability is an important measure of the efficiency of a business enterprise. Profit in relation to the size of investment is popularly known as return on investment (ROI). This approach has been an important part of the control system of Du Pont Company of the U.S.A. since 1919. Since its successful application in Du Pont, several companies have adopted it as the key measure of their control system.
As a control standard, ROI recognises the fundamental fact that capital is a critical factor in business and economic progress. The ROI control system can be seen from Fig. 28.2. The rate of return is calculated by dividing net profit by total investment. Under the Du Pont system, investment consists of total fixed and current assets without subtracting liabilities and reserves. The argument given is that such deduction would lead to fluctuations in operating investments because liabilities and reserves fluctuate. Such fluctuations will distort the rate of return and make it meaningless. In many companies, investment is taken after deducting depreciation on the plea that depreciation write-offs are reinvested in business.
Some of the important tools of controlling overall performance are as follows: (i) Budget summaries which are a resume of all individual budgets and which
present an overall picture of the enterprise. (it) Written and comparative reports from different departments. (iii)Inter-firm comparisons. (iv) Internal audit which involves continuous examination of operations by the
managers of the enterprise. (v) Ratio analysis indicating trends in the profitability, liquidity and solvency
of business as a whole. (vi) Value analysis used to judge relationship between cost and function of any
product, material or service. (vii) Control through key result areas, e.g., market position, productivity, product leadership, executive development, etc.
28.8. RETURN ON INVESTMENT CONTROL
Profitability is an important measure of the efficiency of a business enterprise. Profit in relation to the size of investment is popularly known as return on investment (ROI). This approach has been an important part of the control system of Du Pont Company of the U.S.A. since 1919. Since its successful application in Du Pont, several companies have adopted it as the key measure of their control system.
As a control standard, ROI recognises the fundamental fact that capital is a critical factor in business and economic progress. The ROI control system can be seen from Fig. 28.2. The rate of return is calculated by dividing net profit by total investment. Under the Du Pont system, investment consists of total fixed and current assets without subtracting liabilities and reserves. The argument given is that such deduction would lead to fluctuations in operating investments because liabilities and reserves fluctuate. Such fluctuations will distort the rate of return and make it meaningless. In many companies, investment is taken after deducting depreciation on the plea that depreciation write-offs are reinvested in business.
Wednesday, December 29, 2010
. PRINCIPLES OF DIRECTING
Direction is a complex function as it deals with people whose behaviour is unpredictable. Effective direction is an art which a manager can learn and perfect through practice. However, managers can follow the following principles while directing their subordinates:
1 Harmony o objectives: Individuals join the organisation to satisfy their physiological and psychological needs. They are expected to work for the achievement of organisational objectives. They will perform their tasks better if they feel that it will satisfy their personal goals. Therefore, management should reconcile the personal goals of employees with the organisational goals.
2. Maximum individual contribution. Organisational objectives are achieved at the optimum level when every individual in the organisation makes maximum contribution towards them. Managers should, therefore, try to elicit maximum possible contribution from each subordinate.
3.Unity of command. A subordinate should get orders and instructions from one superior only. If he is made accountable to two bosses simultaneously, there will be confusion, conflict, disorder and indiscipline in the organisation. Therefore, every subordinate should be asked to report to only one manager.
4.Appropriate techniques. The managers should use correct direction techniques to ensure efficiency of direction. The techniques used should be suitable to the superior, the subordinates and the situation.
5 Direct Supervision. Direction becomes more effective when there is a direct personal contact between a superior and his subordinates. Such direct contact improves the morale and commitment of employees. Therefore, wherever possible direct supervision should be used.
„_ 6. Strategic use of informal organisation. Management should try to understand and make use of informal groups to strengthen formal or official relationships. This will improve the effectiveness of direction.
7 Managerial communication. A good system of communication between the superior and his subordinates helps to improve mutual understanding. Upward communication enables a manager to understand the subordinates and gives an opportunity to the subordinates to express their feelings.
8 Comprehension. Communication of orders and instructions is not sufficient. Managers should ensure that subordinates correctly understand what they are to do and how and when they are to do. This will avoid unnecessary queries and explanations.
9 Effective leadership. Managers should act as leaders so that they can influence the activities of their subordinates without dissatisfying them. As leaders, they should guide and counsel subordinates in their personal problems too. In this way, they can win the confidence and trust of their subordinates.
10. Principle of follow through. Directing is a continuous process. Therefore, after issuing orders and instructions, a manager should find out whether the subordinates are working properly and what problems they are facing. He should modify, if necessary, his orders in the light of these findings.
1 Harmony o objectives: Individuals join the organisation to satisfy their physiological and psychological needs. They are expected to work for the achievement of organisational objectives. They will perform their tasks better if they feel that it will satisfy their personal goals. Therefore, management should reconcile the personal goals of employees with the organisational goals.
2. Maximum individual contribution. Organisational objectives are achieved at the optimum level when every individual in the organisation makes maximum contribution towards them. Managers should, therefore, try to elicit maximum possible contribution from each subordinate.
3.Unity of command. A subordinate should get orders and instructions from one superior only. If he is made accountable to two bosses simultaneously, there will be confusion, conflict, disorder and indiscipline in the organisation. Therefore, every subordinate should be asked to report to only one manager.
4.Appropriate techniques. The managers should use correct direction techniques to ensure efficiency of direction. The techniques used should be suitable to the superior, the subordinates and the situation.
5 Direct Supervision. Direction becomes more effective when there is a direct personal contact between a superior and his subordinates. Such direct contact improves the morale and commitment of employees. Therefore, wherever possible direct supervision should be used.
„_ 6. Strategic use of informal organisation. Management should try to understand and make use of informal groups to strengthen formal or official relationships. This will improve the effectiveness of direction.
7 Managerial communication. A good system of communication between the superior and his subordinates helps to improve mutual understanding. Upward communication enables a manager to understand the subordinates and gives an opportunity to the subordinates to express their feelings.
8 Comprehension. Communication of orders and instructions is not sufficient. Managers should ensure that subordinates correctly understand what they are to do and how and when they are to do. This will avoid unnecessary queries and explanations.
9 Effective leadership. Managers should act as leaders so that they can influence the activities of their subordinates without dissatisfying them. As leaders, they should guide and counsel subordinates in their personal problems too. In this way, they can win the confidence and trust of their subordinates.
10. Principle of follow through. Directing is a continuous process. Therefore, after issuing orders and instructions, a manager should find out whether the subordinates are working properly and what problems they are facing. He should modify, if necessary, his orders in the light of these findings.
Tuesday, December 28, 2010
PROCESS OF DELEGATION
The process of delegation involves the following steps:
1. Determination of results expected. First of all, a manager has to define the results he wants to obtain from his subordinates for the achievement of organisational objectives.
2. Assignment of duties. The manager then assigns specific duties or tasks to each subordinate. He must clearly define the function of each subordinate. While assigning duties and responsibilities, he must ensure that the subordinates understand and accept their duties. Duties should be assigned according to the qualifications, experience and aptitude of the subordinates.
3. Granting of authority. Assignment of duties is meaningless unless adequate authority is given to subordinates. They can discharge their responsibilities without adequate authority. By granting authority, subordinates are permitted to use resources, to take decisions and to exercise discretion.
1. Determination of results expected. First of all, a manager has to define the results he wants to obtain from his subordinates for the achievement of organisational objectives.
2. Assignment of duties. The manager then assigns specific duties or tasks to each subordinate. He must clearly define the function of each subordinate. While assigning duties and responsibilities, he must ensure that the subordinates understand and accept their duties. Duties should be assigned according to the qualifications, experience and aptitude of the subordinates.
3. Granting of authority. Assignment of duties is meaningless unless adequate authority is given to subordinates. They can discharge their responsibilities without adequate authority. By granting authority, subordinates are permitted to use resources, to take decisions and to exercise discretion.
Monday, December 27, 2010
TYPES OF DELEGATION
Delegation may be of the following types:
1. General or Specific Delegation. In general delegation, the subordinate is granted
authority to perform all the functions in his department or division. However, the
subordinate exercises this authority under the overall guidance and control of the
superior.
Under specific delegation, a person is given authority regarding specific function or functions. For example, a sales person may be given the authority to collect payments from debtors. Thus, specific delegation is functional in nature. Specific delegation is precise and the subordinate clearly understands what he is expected to do. But it may create inflexibility in the organisation.
2. Formal or Informal Delegation. When authority is delegated as per the
organisation structure, it is called formal delegation. Such delegation is effective
because it leaves no option to the subordinate but to obey the commands of the
superior. For example, a sales person may be granted authority to grant discount
upto 5 per cent on the list price to customers buying goods worth Rs. 5,000 or
more.
Informal delegation takes place when an individual or a group agrees to work under the direction of an informal leader. Need for informal delegation arises due to procedural delays and red tape. When people want to short circuit the formal procedures so as to perform the task quickly, they resort to informal delegation.
3. Written or Oral Delegation. Delegation made by written orders and instructions is known as written delegation. Unwritten or oral delegation is based in custom and conventions.
4. Downward and Sideward Delegation. Downward delegation occurs when a superior assigns duties and grants authority to his immediate subordinate. This is the most common type of delegation.
Sideward delegation takes place when a subordinate assigns some of his duties and authority to another subordinate of the same rank
1. General or Specific Delegation. In general delegation, the subordinate is granted
authority to perform all the functions in his department or division. However, the
subordinate exercises this authority under the overall guidance and control of the
superior.
Under specific delegation, a person is given authority regarding specific function or functions. For example, a sales person may be given the authority to collect payments from debtors. Thus, specific delegation is functional in nature. Specific delegation is precise and the subordinate clearly understands what he is expected to do. But it may create inflexibility in the organisation.
2. Formal or Informal Delegation. When authority is delegated as per the
organisation structure, it is called formal delegation. Such delegation is effective
because it leaves no option to the subordinate but to obey the commands of the
superior. For example, a sales person may be granted authority to grant discount
upto 5 per cent on the list price to customers buying goods worth Rs. 5,000 or
more.
Informal delegation takes place when an individual or a group agrees to work under the direction of an informal leader. Need for informal delegation arises due to procedural delays and red tape. When people want to short circuit the formal procedures so as to perform the task quickly, they resort to informal delegation.
3. Written or Oral Delegation. Delegation made by written orders and instructions is known as written delegation. Unwritten or oral delegation is based in custom and conventions.
4. Downward and Sideward Delegation. Downward delegation occurs when a superior assigns duties and grants authority to his immediate subordinate. This is the most common type of delegation.
Sideward delegation takes place when a subordinate assigns some of his duties and authority to another subordinate of the same rank
OBSTACLES TO EFFECTIVE APPRAISAL
The main barriers to effective performance appraisal are as follows:
Faulty Assumptions
Very often performance appraisal is not effective due to unrealistic assumptions on the part of both superiors and subordinates. Some of these assumptions are given below:
(a) The assumption that managers desire to make accurate and fair appraisals is not always true. Many a time they want to avoid formal appraisal. They assume that personal opinion is better than formal appraisal.
(b) Some managers consider the appraisal system as perfect and expect too much from it. They rely too much on it. In reality no appraisal system is absolutely perfect.
(c) The assumption that subordinates want to know frankly where do they stand and what their superiors think about them are not valid. In fact subordinates resist to be appraised and their reaction against appraisal is often strong.
20.7.2. Psychological Barriers
The effectiveness of appraisal depends upon the psychological characteristics of managers to a great extent. Managers' feeling of insecurity, their being excessively modest or sceptical, the tendency to consider appraisal as extra burden, disliking or resentment to subordinates, etc., are the principal psychological characteristics that inhibit appraisal. These factors make the appraisal biased or subjective thereby defeating the basic purpose of appraisal.
20.7.3. Technical Pitfalls
The main technical difficulties in performance appraisal are as follows: (a) Lack of clear-cut or unambiguous criteria for appraisal. (V) Errors and bias in appraisal due to human weakness, e.g., halo effect, constant error, central tendency, liking or disliking for people, etc.
20.8. ESSENTIALS OF EFFECTIVE APPRAISAL
The following steps may be taken to make performance appraisal accurate, objective and reliable:
(1) Before an appraisal system is established, its objectives should be defined clearly. The specific objectives may be pay increase, promotion, transfer, training and development. The objectives will reveal whether emphasis should be placed on measuring performance on the current job or on potential for higher jobs.
(2) The raters should be carefully selected and trained. They must be familiar with the job and the person to be rated. Two independent persons (one immediate supervisor and the other staff expert) may appraise each employee and their ratings may be averaged. This will help to reduce bias and subjectivity in appraisal.
Faulty Assumptions
Very often performance appraisal is not effective due to unrealistic assumptions on the part of both superiors and subordinates. Some of these assumptions are given below:
(a) The assumption that managers desire to make accurate and fair appraisals is not always true. Many a time they want to avoid formal appraisal. They assume that personal opinion is better than formal appraisal.
(b) Some managers consider the appraisal system as perfect and expect too much from it. They rely too much on it. In reality no appraisal system is absolutely perfect.
(c) The assumption that subordinates want to know frankly where do they stand and what their superiors think about them are not valid. In fact subordinates resist to be appraised and their reaction against appraisal is often strong.
20.7.2. Psychological Barriers
The effectiveness of appraisal depends upon the psychological characteristics of managers to a great extent. Managers' feeling of insecurity, their being excessively modest or sceptical, the tendency to consider appraisal as extra burden, disliking or resentment to subordinates, etc., are the principal psychological characteristics that inhibit appraisal. These factors make the appraisal biased or subjective thereby defeating the basic purpose of appraisal.
20.7.3. Technical Pitfalls
The main technical difficulties in performance appraisal are as follows: (a) Lack of clear-cut or unambiguous criteria for appraisal. (V) Errors and bias in appraisal due to human weakness, e.g., halo effect, constant error, central tendency, liking or disliking for people, etc.
20.8. ESSENTIALS OF EFFECTIVE APPRAISAL
The following steps may be taken to make performance appraisal accurate, objective and reliable:
(1) Before an appraisal system is established, its objectives should be defined clearly. The specific objectives may be pay increase, promotion, transfer, training and development. The objectives will reveal whether emphasis should be placed on measuring performance on the current job or on potential for higher jobs.
(2) The raters should be carefully selected and trained. They must be familiar with the job and the person to be rated. Two independent persons (one immediate supervisor and the other staff expert) may appraise each employee and their ratings may be averaged. This will help to reduce bias and subjectivity in appraisal.
STEPS IN THE PROCESS OF PLANNING
There is no standard planning process. Each enterprise has to develop its own modus operandi for planning depending on its size, nature and environment. However, the main steps in planning process are as follows:
1. Analysing the Environment The first step in planning is a thorough analysis of the external and internal environment of the enterprise. Analysis of external environment will help to identify the opportunities and constraints for the enterprise. To be effective, planning must enable the organisation to adapt itself to the environmental changes (market conditions, government policies, technological developments, cultural norms, etc.). Therefore, managers must carefully analyse and interpret the complex environmental forces. It is necessary to collect and analyse relevant information as the quality of information determines the quality of planning. Analysis of the internal environment (resources and requirement will help to identify the strengths and weaknesses of the enterprise.
2. Establishing Objectives. Plans are formulated to achieve certain objectives. Therefore, establishment of organisational objectives is an important step in planning. The organisational objectives should be established in the light of perceived opportunities and resources of the organisation. They should be clearly specified and measurable as far as possible. They should be spelled in key areas of operations and for different divisions and departments.
3. Determining Planning Premises. Planning is done for future which is uncertain. Therefore, certain assumptions are made in preparing plans. These assumptions or conditions underlying planning should be clearly defined through scientific forecasting of future events. Planning premises are the limitations that lay down the boundary for planning.
Planning premises can be of several types. Controllable or internal premises are under the control of management, e.g., resources, techniques and policies of the enterprise. On the other hand, uncontrollable or external premises are beyond the control of the enterprise. These relate to rate of population growth, general economic conditions, government policies, political situation, etc.
4. Developing Alternative Courses of Action. There can be several ways of achieving the same objectives. The various available alternatives should be identified. For example, in order to increase sales an enterprise may intensify sales efforts, explore new markets or develop new products. In order to develop all possible alternatives, a manager must have imagination, skill and experience.
5. Evaluating Alternatives. The various alternatives are compared and weighed in the light of objectives and premises. Each alternative has its merits and demerits but all alternatives cannot be equally appropriate or practicable. Each alternative should be closely examined to determine its suitability. Several statistical and mathematical techniques are used to evaluate alternative courses of action.
6. Selecting the Best Course. After evaluating the various alternatives, the most appropriate alternative is selected. This is the point at which the plan is adopted. Sometimes, the evaluation may suggest that more than one alternative is good. In such a case, a manager may choose several alternatives and combine them in action.
1. Analysing the Environment The first step in planning is a thorough analysis of the external and internal environment of the enterprise. Analysis of external environment will help to identify the opportunities and constraints for the enterprise. To be effective, planning must enable the organisation to adapt itself to the environmental changes (market conditions, government policies, technological developments, cultural norms, etc.). Therefore, managers must carefully analyse and interpret the complex environmental forces. It is necessary to collect and analyse relevant information as the quality of information determines the quality of planning. Analysis of the internal environment (resources and requirement will help to identify the strengths and weaknesses of the enterprise.
2. Establishing Objectives. Plans are formulated to achieve certain objectives. Therefore, establishment of organisational objectives is an important step in planning. The organisational objectives should be established in the light of perceived opportunities and resources of the organisation. They should be clearly specified and measurable as far as possible. They should be spelled in key areas of operations and for different divisions and departments.
3. Determining Planning Premises. Planning is done for future which is uncertain. Therefore, certain assumptions are made in preparing plans. These assumptions or conditions underlying planning should be clearly defined through scientific forecasting of future events. Planning premises are the limitations that lay down the boundary for planning.
Planning premises can be of several types. Controllable or internal premises are under the control of management, e.g., resources, techniques and policies of the enterprise. On the other hand, uncontrollable or external premises are beyond the control of the enterprise. These relate to rate of population growth, general economic conditions, government policies, political situation, etc.
4. Developing Alternative Courses of Action. There can be several ways of achieving the same objectives. The various available alternatives should be identified. For example, in order to increase sales an enterprise may intensify sales efforts, explore new markets or develop new products. In order to develop all possible alternatives, a manager must have imagination, skill and experience.
5. Evaluating Alternatives. The various alternatives are compared and weighed in the light of objectives and premises. Each alternative has its merits and demerits but all alternatives cannot be equally appropriate or practicable. Each alternative should be closely examined to determine its suitability. Several statistical and mathematical techniques are used to evaluate alternative courses of action.
6. Selecting the Best Course. After evaluating the various alternatives, the most appropriate alternative is selected. This is the point at which the plan is adopted. Sometimes, the evaluation may suggest that more than one alternative is good. In such a case, a manager may choose several alternatives and combine them in action.
Thursday, December 2, 2010
Im OK, You're OK
This is a non- fiction book written by Thomas A.Harris.This talks about human emotions and his reactions to different type of stimulus created by himself.Here there are 4 types namely- 1. Im ok,you're ok 2.Im not ok,you're ok. 3.Im ok,you're not ok and 4.Im not ok,you're not ok. The first and the last does not arise any problem,as both the stimulus are ok and also not ok.The second and the third has issues as it does not correlate with the respective actions.The chapter Parent,Adult and Child talks about various changes that takes place in the human behavior.Changes from one state to another are apparent in manner,appearance,words and gestures.A thirty-four year old woman came to the author(psychologist) for help with a problem of sleeplessness,constant worry over what she is doing to her children, and increasing nervousness.in the course of the first hour she suddenly began to weep and she said, 'You make me feel like Im three years old'.Her voice and manner was that of a small child.At another point in the hour her voice and manner suddenly changed and she became dogmatic and started behaving like a proper mother.During one hour this women changed to multiple different and distinct personalities.
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