Monday, September 17, 2012

Responsibility, Task and Reporting relationship


Ø  Responsibility is the obligation of a person to perform his or her assigned task with his/her best effort. In other words, responsibility is the obligation to obey command, perform assigned task and respect or follow organizations rules and regulations and policies. A person must be responsible effectively lack of responsibility leads the organization to the failure. Lack of responsibility increases indiscipline among employees. And, indiscipline employee is burden to the organization. Task is the distinct work i.e.; assigned to the person to perform. Every person has to perform task in organization. Task may be of different nature. And, employees must be assigned task according to his or her qualification. It is the responsibility of employee to perform assigned task effectively. An organizational structure is based on responsibility, authority, and task and reporting relationship.

Reporting relationship is also necessary to make the organizational structure successful. Reporting relationship makes who is to command and who is to report. Every subordinate has to report his superior about his assigned task and performance in time. Timely reporting about task makes it clear whether task is going to be performed in time or not? What are the weaknesses in task performance? All employees in organization are related with superior subordinate relationship and every subordinate has to report about his task to his immediate superior at a time. To establish effective reporting relationship three principle of management must be strictly followed.
They are: -
a)      Unity of command
b)      Chain of command
c)       Scalar chain and span of management or control

These points are defined as following:-

a)      Unity of command: - Under unity of command a subordinate should to report to only one his immediate superior and he/she should get command or order from only superior or boss.

b)      Chain of command: - According to this principle all employees will be linked with superior subordinate relationship and it makes clear who is to command whom and who is to report whom. According to this principle there will be chain of command and hierarchy of authority. Authority flows downwards and responsibility moves upward in equal.

c)       Span of management: - Span of management/control makes it clear how many employees are working under a superior. The number of subordinates must be limited to the manageable number. Hence, those who are working under one superior must report to their superior. According to span of management many subordinates have to report one superior. There will be narrow span and wide span. In tall organizational structure there will be narrow span of management. That mean less than one superior there will be few subordinates who have to report one superior. In wide span of management there will be many subordinates under one superior and they have to report to him/her.

Process of Decision making



1.       Define problem: - Problem identification is initial state in decision making. Why decision is needed, what is the issue in the problem that must be clearly identified.  Problems must be clearly identified. Problems must be clearly defined. If wrong problem is defined then everything becomes wrong. Therefore, what is the problem faced by the organization. What problem is expected to be solved from decision making must be clearly defined.

2.       Collect information’s: - Information’s are vital in decision making. Without having sufficient information’s, appropriate or correct decision cannot be taken. Therefore, information related to problem must be properly collected. Where it occurred? Why it occurred? When did the problem occur? Why did it occur in that way? To whom the problem occurs? Why did problem occur to him/her? What may be the consequences of problem, if it is not solved? Information’s about all these factors should be collected.

3.       Developing alternatives: - same problems can be managed or solved in different ways. IF there are no alternatives there is no any necessity to solve the problems must be developed or identified. What are the various possibilities to solve the problems must be determined. Information of all alternatives must be collected and they must be carefully analyzed and studied.

4.       Choosing the cost alternatives: -Decision making is the process of choosing best alternative out of available alternatives. Therefore, this is the vital step in decision making process. Choosing best alternative means selecting the alternatives with the highest possible pay off. Before selecting alternatives, all alternatives available must be evaluated and studied on the basis of cast benefit analysis, resource availability, feasibility, etc. After evaluating alternatives best alternative must be selected. Basic factors which must be considered while selecting best alternatives are,

a)      it must be less expensive,
b)      It must take less time
c)       It would be more effective
d)      It should be preferred by employees
e)      It should generate more profit
f)       It should generate greater productivity

5.       Implementing the decision: - When best alternative, is selected that becomes decision. Implementing the decision means putting the decision into action. Now, if the decisions are not implemented properly, there is no meaning of making decision. To make decision is important but implementing decision in time is more important. Implementation of decision means action at work has started. To implement some decisions are easy and some are very difficult. To implement decision successfully commitment from top management, supporting staff, sufficient resources are required. Decision when is implemented, employee may resist decision. Because, decision making may change the role of employees, duties and responsibilities of employees and place of work of employees. It is the responsibility of management to so to convince them.

6.       Evaluating and controlling: - This step is also important. After implementing decisions the progress must be monitored and their success must be evaluated. Whether the decisions are properly implemented or not. Whether the decisions are going to achieve their objective or not. Whether the decision need any correction or not. What is the weakness in implementation of decision must be properly evaluated. Control compares target and performance of decision and takes corrective action. This step provides feedback to the decision makers.

Principles of organizing


1.       Clarity of objectives

2.       Division of work

3.       Unity of command (One boss should give command to one sub-ordinate)

4.       Unity of direction (One boss should direct to one cub-ordinate)

5.       Scalar chain (It is the chain of command, information, authorization from upward to downward)

6.       Span of control (Number of subordinate under one superior must be limited to a manageable number. It depends upon a person’s experience)

7.       Departmentation

8.       Decentralization: - Decentralization is the distribution of authority throughout the organization so that every employee get sufficient authority to perform his/her task. It is the process of pushing down decision making authority to the lower level of management.

9.       Separation of line and staff function: - Line function related with decision making. Line function plays decisive role in decision making. Staff function has no right in decision making. They play an advisory role in decision making. Departmental manager such as marketing, production, financial manager have line function and experts or specialists such as human resource manager, different experts and legal advisor have staff function.

10.   Authority and responsibility: - Authority is the right to make decision, to command others and issue order. Responsibility is the obligation to perform assigned task. There must be balance between authority and responsibility. Authority must be delegated on the basis of responsibility.

11.   Simplicity: - Organizational structure must be very simple. It must be easy to understand. What are the jobs to be performed, what the position is created, what is the relation between authority and responsibility must be very simple and easy to understand.

12.   Flexibility: - Organizational structure must be flexible. It should be rigid. It should be adaptable or adjustable with changing environment.

Characteristics of planning


1.       Intellectual process: - Planning is mental exercise and intellectual process. Managers have to consider various course of action to reach the goal. They have to identify pros and cons of every alternate. Planning is not guess work, it is intellectual process.

2.       Future oriented: - Planning is always future oriented; it is prepared for future not for today. It is looking forward. Planning anticipates future opportunities and threats.


3.       Goal focused: - Planning aims to achieve goal in future. The main objective of formulating planning is to achieve goal in time. It identifies right course of action to reach the goal.

4.       Pervasiveness of plan: - Planning is needed at all level of management. All managers in organization formulate plan, but in nature of plan may differ. Planning is required for all type of organization.


5.       Increase efficiency: -Planning increase efficiency. Planning aims to achieve goal at low cost. Planning basically focus on better utilization of resources. It reduces cost by controlling wastage, scraps and rejects.

6.       Decision making: - Planning and decision making are interrelated. Planning is selecting right course of action to reach the goal. Therefore, it also involves developing and evaluating alternatives. Decision making is also selecting best alternatives out of available alternatives.

Planning


Planning is basic or primary function of management. Planning is the process of setting goal and selecting best course of action to reach the goal. It is looking ahead. Planning is deciding in advance, what to do, who is to do, how to do and when to do. Planning bridge the gap between where we are and where we want to go. Planning provide target, they allocate resources in a coordinate manner. They also solve as standard for control. Planning is mental exercise and intellectual process. Planning may be long term and short term. Planning may be strategic, tactical and operational.

Planning premises


Premises are the assumptions of the future environment on which plans are to be carried out. Premises are anticipated environment. It is to forecast sales volume, cost, political and legal environment, technological change, availability of labor. Premises are important because they give important information’s about future to managers. Establishment of premises is important step in planning. Premises are the forecast of future expectations about:

a)      Demographic trend: - It is related with human population, its distribution, size, composition and migration.

b)       Future economic business condition: - Related to business sycle. Condition of business cycle such as growth, prosperity, recession and recovery.

c)       Forecast about political and legal of the country.

d)      Technological change and innovations

e)      Resource availability

f)       Socio cultural forces

Organizing


Organizing is the process of identifying, classifying and grouping the activities together and assigning them to the individual and group for effective performance. Organizing is the process of creating organizational structure. It is deciding how best to group organizational resources and activities. It defines authority responsibility relationship. It includes delegation of authority to sub ordinate, managers and operating employees so that they can properly carry out their duties.

Organizing functions consists of series of activities which consist of: -

1.       Identification of specific activities
2.       Grouping of activities into jobs
3.       Assignment of jobs to individual and formal group
4.       Establishing a network of authority and responsibility relationship
5.       Providing framework for measurement control and evaluation

According to Louis Allen, “Organizing is the process of identifying and delegating authority, responsibility and establishing for the purpose of enabling people to work must effectively together in receiving an objective.”

Tuesday, September 11, 2012

Organizational architectures


Organizational architecture is the total sum of organizational system. It is the sum total of organizational structure, reward system, control system, incentive, culture and worker of the organization. Structure involves division of work, delegation of authority and
 Authority and responsibility relationship. Reward is anything which is given to the employees to regular pay and wage which is given to employees for their best performance. Incentives are addition to regular pay and wage which is given to employees. Control measures actual performance and compares actual performance and compares actual performance with performance standard. Culture is sum total of shared norms, values, attitudes, beliefs of workers.

# Types of organizational structures

1.       Tall organizational structure
2.       Flat organizational structure
3.       Horizontal organizational structure

Network Technique


Ø  Network technique is also known as program evaluation and review technique (PERT) and critical path method (CPM). Program evaluation and review technique and Critical path method are popular network technique used to plan and control time and cost of a project. It is very must useful in planning, implementing, monitoring and controlling phase of project. The purpose of PERT is to develop a network of activities and their interrelationship to highlight critical time intervals that affect the overall project. PERT is a planning tool that use a network to plan projects involving numerous activities and their interrelationship CPM is the longest path in which the project can be completes in shortest time.

# Steps in PERT

1.       Identify the activities to be performed and events the will mark their completion.

2.       Develop a network showing the relationship among the activities and events.

3.       Calculate the time needed for each event and the time necessary to get from each event to the next.

4.       Identify within the network the longest path that leads to completion of the project. This path is known as critical path.

5.       Refine the network.

6.       Use the network to control the project.

Disadvantages of Multidivisional structure


Disadvantages

a)      There may be conflict between production service and other department as the departments are inter dependent.
b)      There may be under utilization of plant capacity if the demand of the product or service is not sufficient.
c)       It creates the problem of effective control over production division by the top management.
d)      It maximizes administrative cost.
e)      The product or service manager may ignore the overall objective of organization.

Advantages of Multidivisional structure


Advantages

a)      It is suitable for the organization having various line of product and services.
b)      It brings about specialization in a product or service which makes optimum utilization of human resources.
c)       It directs attention towards specific product line and service.
d)      It facilitates to monitor and evaluate the performance of each product and service department.
e)      Product service managers can be held accountable profitability for his product or services.
f)       It permits maximum use of specialized production/service facilities.

Multidivisional structure


 Ø     Functional structure or department by function is suitable for small organizations and where there are one or two product lines. But, these organizations which are big enough and which have different suitable. Therefore, multidivisional structure or department by product must be adopted. Each division is created for one product line and department by product become sub department under division. The departmental manger is responsible for its expenses, revenues, profit, success and failure. Departmental and division managers are free to work. Therefore it facilities to measure the managerial as well as operational result and contribution of each department.

Matrix organizational structure


Ø      It is also called grid structure, multiple command system. It is also called hybrid organizational structure or project structure. It is a hybrid organizational structure. This structure combines functional as well as project structure. This structure superimposes project structure. Matrix organizational structure is a special type of problem solving form of organization. It requires diverse technical and administrative experts to adjust effectively with the dynamic and rapidly changing environment of the business. Matrix structure integrates the efforts of functional and project authority. The authority of the functional manager closes vertically down from the superior to the subordinates. The project authority flows horizontally crossing vertical lines. Under this structure employees have duel responsibility because they have get order from functional manger and project managers at a time and they have to report both managers simultaneously. Unity of command is violated.

This type of organizational structure is basically suitable for various projects. Big organizations carry out different projects at a time and the responsibility of managing project is given to project managers. Required experts specialist ad employees are send to different project from various functional areas of organization such as marketing, finance, production, engineering, human resource, etc. Unless and until the project is completed they work in the project under project manager and after completion of the project they will return to their respective department of functional areas. Therefore, they work under two superiors, functional and project manager. They have to report both project and functional manager hence, principle of unity of command is violated.

Management Science Theory


Management science theory has its origin in Military System of organization. During World War 2, British government saw many problems at warfare. And, the government formed a team consisting mathematicians, scientists and physicians. Then, the team was called operation research team. Operation research team got success in solving the problem of planning, resource allocation, material supplies, etc.
Basically, management science theory focused on development of mathematical model. A mathematical model is a simplified representation of a system, process and relationship. Basically, management science theory focuses on model equation and representation of similar reality. This approach believes that most of the organizational and business problems can be better solved using different mathematical and statistical techniques. Complex problem relating to planning inventory operation and transportation are easily solved through models and other mathematical tools. The development of computer and other information’s technology had extended management science approach in many other areas of business. Management science theory uses linear programming, critical path method, program evaluation and review technique, games theory and break even analysis to make decision.
There are three branches of management science theory:-
1.       Quantitative Management: - Quantitative management utilizes mathematical techniques such as linear programming, modeling, and queuing theory to help managers to make right decision.

2.       Operation Management: - Operation management is concerned with helping the organization more efficiently produce its product and service and can be applied on wide range of problems. Operation management is somehow less mathematical and statistically sophisticated than management science and can be directly applied to managerial situation. Operation management or operation research provides managers with a set of technique that can be used to utilize organizational production system to increase efficiency.


3.       Management Information System: - Management Information system is a comprehensive and systematic system which obtains stores and provides different informations with regards to the business and management. It is a computerized system which provides timely and accurate information.

Making decisions at various conditions


1.       Condition of certainty: - If a manager has all information he/she needs and can predict precisely the consequences of his/her action, he/she is operating under a condition of certainty. In other words condition of certainty is that condition where manager has all information’s required to make decisions, the situation is certain and stable, what happens tomorrow can be easily forecasted, under this condition to take decision is very much simple and easy because managers knows all alternatives and consequences or outcomes of all alternatives. But, such conditions rarely happen these days.

2.       Condition of risk: - Risk is associated in business and risks are associated in decision making. Decisions cannot be made at certainty all time. Some element of risk is involved in decision making. Risk consists or exists when the probability of an action being successful is less than 100%. If the decision is wrong the organization loses money, time other important assets. Decision making is risky when the outcomes of alternatives are difficult to predict. Under this condition manager knows about all alternatives but does not know the outcome of alternatives. Some sort of risk is involved in outcomes of alternatives. Risk means chances of action being failure. There probability of being successful and being failure. Manager will have required information’s but may not be sufficient.


3.       Decision under uncertainty: - Uncertainty means that managers do not have enough information’s about the environment tro understand or predict the future. Under the condition of uncertainty managers will have very much limited information’s to make decisions. Under this condition neither manager knows alternatives and nor he/she knows the outcome or consequences of alternative. The risk associated with each alternative is high. He/she has to identify or generate alternative himself/herself. Under this condition, external conditions are uncertain and they are beyond the control of management. Decision maker or manager may not have access to information. Therefore, manager or decision maker has to make the use of intuition, experience and judgment while making decisions. Managers have to make most of the decisions under the condition of uncertainty.

Level of plan


1.       Strategic plan: - It is also called corporate plan. It is formulated at corporate by top level of management after detailed environmental scanning. It is a grand plan which covers whole organization. Strategic plan is formulated to achieve strategic goal. It established overall corporate mission, goals and strategies. Strategic plans are long term plans, which involve mission and long term goals. They are grand plans.

2.       Tactical plans: - Tactical plans are formulated by middle level managers. The time period of tactical plan Is shorter than strategic plan. Tactical plans translate broad strategic goals and missions and plan into specific goals and plans. Strategic plans are broad and they must be translated into specific plans. Each strategic plan is formulated through various tactical plans. Departmental and divisional plans are tactical plans which are formulated by departmental and divisional managers.

3.       Operational plan: - Operational plan identify specific procedures and process required at the lower level of organization. Operational plans are those plans which contain details for carrying out or implementing tactical plans in day to day business or activities. Tactical plans are related with actual operation and utilization of resources. The frontline managers or supervisors are responsible for developing and implementing operational planning. They deal with routine work or task. These plans are derived from tactical plans. They are developed to translate the tactical objectives into specific operational activities to be assigned to individual and groups.

System theory of management


Ø     System is the combination of different parts, which are interrelated and dependent on each other and work together to achieve common goal. A system is an interrelated set of elements functioning as a whole. IN other words, a system is a group of interrelated and interdependent parts are working towards a similar goal. It is a combination of several parts forming a complex whole. A system is the system of combination of different interrelated and interdependent part which work together to obtain common goal. System theory views organization as a unified purposeful system consisting of different interrelated parts. System theory helps manager to understand organization as a whole and he/she also knows how the different parts of organization are interrelated with each other. Organization is a system consisting of input process, output process and feedback component.

Importance (Advantages) of planning


1.       Uncertainty reduction: - Modern world is full of uncertainty. Organizations have to operate or learn in most uncertain and unstable environment. What happens tomorrow, no one can forecast. Planning reduces uncertainties by anticipating future change in environment. It reduces uncertainty by forecasting opportunities and threat in environment.

2.       Goal focused: - Planning aims to achieve goal in future. The main objective of formulating planning is to achieve goal in time. It identifies right course of action to reach the goal.

3.       Integrate management function: - Planning integrates management functions. It is the basis for other management functions. It is fundamental function which integrates other functions like organizing directing, coordinating and controlling. Without plan no manager can function well.

4.       Gives direction: - Planning gives direction to the total activities of an organization. A plan focuses on the future that forces and organization to think ahead and identify potential options, problems and solution. Planning directs all functions towards achieving goal.

5.       Basis for control: - Planning is the basis for control. Planning and control are interrelated. Planning sets goal which serves as performance standard for controlling purpose. Therefore, control function of management is directly linked with planning. Planning sets goal and control ensures that goal is going to be achieved in time. Control measures progress towards goal and provide information’s about the causes of success and failure. So, that plans may be adjusted for future. Control system provides feedback that tells what went wrong and what kind of solution to seek. Control is not possible without planning.

6.       Ensures better coordination: - Planning ensures better coordination among different activities in organization. It establishes better linkage among different department and activities. Planning expects contribution from all activities and departments. Planning believes that only coordinated effort can achieve organizational goal.

7.       Better utilization of resources: - Planning facilitates in effective utilization of resources. It helps in rational distribution of resources among different functions. It focuses on effective utilization of resources, controls wastages and scraps.

How to overcome the pitfalls of planning?


   Ø              Some of the ways to overcome the pitfalls of plans are as follows: -

1.       Understanding the purposes of goals and planning: - One of the nest ways to facilitate goal setting and planning process is to recognize their basic purposes. Managers should also recognize that there are limits to the effectiveness of setting goals and making plans. It is not that planning will solve all of organizations problems. Effective goals and planning do not necessarily ensure success i.e, adjustments and expectations are to be expected as time passes by.

2.       Communication and participation: - Although goals and plans may be initiated at high levels in the organization, they must also be communicated to others in the organization. Everyone in the planning process should know what the overriding organizational strategy is, what the overriding organizational strategies are and how they are all to be integrated and coordinated. People responsible for achieving goals and implementing plan must have a voice in developing them from the outset. These individuals almost always have valuable information to contribute and because they will be implementing the plans, their involvement is critical. People are usually more committed to plans that they have helped to shape.


3.       Consistency, revision and updating: - Goals should be consistent across the organization from one department to another. Strategic, tactical and operational goals must agree with one another. Because, goal setting and planning are dynamic process, they must also be revised and updated regularly.

4.       Effective reward system; - In general, people should be rewarded both for establishing effective goals and plans and for successfully achieving them. Because failure sometimes results from factors beyond the company’s control.


5.       Coping with the dynamic environment: - The environment outside the organization is always changing rapidly. Manager should be able to make the organization updated along with the changing environment. Like technological change. An organization must be updated technologically, new technologies makes the work easier. So, by coping with the dynamic environment goal can be achieved according to the plan.